oprt-20230331

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 March 31, 2023

☐ 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		45-3361983
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

(650) 810-8823

Registrant’s Telephone Number, Including Area Code

Securities registered pursuant to Section 12(b) of the Act:


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

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 May 3, 2023 was 33,887,992.


TABLE OF CONTENTS

PART I ‑ FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Changes in Stockholders' Equity	5
	Condensed Consolidated Statements of Cash Flow	6
	Notes to the Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	40

PART II ‑ OTHER INFORMATION
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	66
Item 3.	Defaults Upon Senior Securities	66
Item 4.	Mine Safety Disclosures	66
Item 5.	Other Information	66

	GLOSSARY	68

Item 6.	Exhibit Index	70

Signature		71

PART I ‑ FINANCIAL INFORMATION

Item 1. Financial Statements

OPORTUN FINANCIAL CORPORATION

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share and per share data)


	March 31,		December 31,
	2023		2022
Assets
Cash and cash equivalents	$	74,075	$	98,817
Restricted cash	127,846		105,000
Loans receivable at fair value	3,012,726		3,143,653






Interest and fees receivable, net	31,752		31,796
Capitalized software and other intangibles, net	137,856		139,801

Right of use assets - operating	28,708		30,448

Other assets	89,094		64,180
Total assets	$	3,502,057	$	3,613,695

Liabilities and stockholders' equity
Liabilities
Secured financing	$	403,225	$	317,568
Asset-backed notes at fair value	2,300,201		2,387,674
Acquisition and corporate financing	232,316		222,879

Lease liabilities	35,669		37,947

Other liabilities	74,500		100,028
Total liabilities	3,045,911		3,066,096
Stockholders' equity


Common stock, $0.0001 par value - 1,000,000,000 shares authorized at March 31, 2023 and December 31, 2022; 34,156,369 shares issued and 33,884,346 shares outstanding at March 31, 2023; 33,626,630 shares issued and 33,354,607 shares outstanding at December 31, 2022	7		7
Common stock, additional paid-in capital	558,436		547,799


Retained earnings (deficit)	(95,988)		6,102
Treasury stock at cost, 272,023 shares at March 31, 2023 and December 31, 2022	(6,309)		(6,309)
Total stockholders’ equity	456,146		547,599
Total liabilities and stockholders' equity	$	3,502,057	$	3,613,695

See Notes to the Condensed Consolidated Financial Statements.

OPORTUN FINANCIAL CORPORATION

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except share and per share data)


	Three Months Ended March 31,
	2023		2022
Revenue
Interest income	$	237,619	$	192,237
Non-interest income	21,893		22,483
Total revenue	259,512		214,720
Less:
Interest expense	38,997		13,677

Net increase (decrease) in fair value	(215,710)		3,971
Net revenue	4,805		205,014

Operating expenses:
Technology and facilities	56,874		49,189
Sales and marketing	19,182		34,541
Personnel	37,318		35,926
Outsourcing and professional fees	13,802		14,327
General, administrative and other	19,162		13,361

Total operating expenses	146,338		147,344

Income (loss) before taxes	(141,533)		57,670
Income tax expense (benefit)	(39,443)		12,007
Net income (loss)	$	(102,090)	$	45,663

Net income (loss) attributable to common stockholders	$	(102,090)	$	45,663

Share data:
Earnings (loss) per share:
Basic	$	(3.00)	$	1.42
Diluted	$	(3.00)	$	1.37
Weighted average common shares outstanding:
Basic	33,979,050		32,216,641
Diluted	33,979,050		33,323,134

See Notes to the Condensed Consolidated Financial Statements.

OPORTUN FINANCIAL CORPORATION

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)

(in thousands, except share data)


For the Three Months Ended March 31, 2023
	Common Stock		Warrants
		Shares	Par Value		Additional Paid-in Capital		Shares		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Total Stockholders' Equity
Balance – January 1, 2023		33,354,607	$	7	$	547,799	$	—	$	—	$	6,102	$	(6,309)	$	547,599




Stock-based compensation expense		—	—		5,329		—		—		—		—		5,329



Vesting of restricted stock units, net of shares withheld		529,739	—		(1,364)		—		—		—		—		(1,364)



Issuance of warrants to purchase common stock in connection with debt financing		—	—		—		2,096,727		6,672		—		—		6,672
Net loss		—	—		—		—		—		(102,090)		—		(102,090)
Balance – March 31, 2023		33,884,346	$	7	$	551,764	2,096,727		$	6,672	$	(95,988)	$	(6,309)	$	456,146

See Notes to the Condensed Consolidated Financial Statements.

OPORTUN FINANCIAL CORPORATION

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)

(in thousands, except share data)


For the Three Months Ended March 31, 2022
	Common Stock
		Shares	Par Value		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Total Stockholders' Equity
Balance – January 1, 2022		32,004,396	$	6	$	526,338	$	83,846	$	(6,309)	$	603,881
Issuance of common stock upon exercise of stock options		505,945	1		(4,749)		—		—		(4,748)



Stock-based compensation expense		—	—		7,467		—		—		7,467



Vesting of restricted stock units, net of shares withheld		296,552	—		(2,327)		—		—		(2,327)





Net income		—	—		—		45,663		—		45,663
Balance – March 31, 2022		32,806,893	$	7	$	526,729	$	129,509	$	(6,309)	$	649,936

See Notes to the Condensed Consolidated Financial Statements.

OPORTUN FINANCIAL CORPORATION

Condensed Consolidated Statements of Cash Flow (Unaudited)

(in thousands)


	Three Months Ended March 31,
	2023		2022
Cash flows from operating activities
Net income (loss)	$	(102,090)	$	45,663
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	13,389		10,697

Fair value adjustment, net	215,710		(3,971)
Origination fees for loans receivable at fair value, net	(4,743)		(4,685)
Gain on loan sales	(1,352)		(5,715)
Stock-based compensation expense	4,878		6,773


Other, net	(34,564)		20,226
Originations of loans sold and held for sale	(10,032)		(48,665)
Proceeds from sale of loans	11,125		54,872
Changes in other assets and other liabilities	(15,507)		(36,630)




Net cash provided by operating activities	76,814		38,565
Cash flows from investing activities
Originations of loans	(376,280)		(707,108)
Proceeds from loan sales originated as held for investment	1,041		245,019
Repayments of loan principal	348,104		351,324
Capitalization of system development costs	(11,743)		(10,641)


Other, net	(770)		(1,090)

Net cash used in investing activities	(39,648)		(122,496)
Cash flows from financing activities
Borrowings under secured financing	87,900		699,000

Repayments of secured financing	(2,614)		(620,000)

Repayments of asset-backed notes	(136,369)		(10,395)
Borrowings under acquisition and corporate financing	17,723		—

Repayments of acquisition and corporate financing	(10,195)		—
Payments of deferred financing costs	(775)		—
Borrowings allocated to warrants	6,632		—
Net payments related to stock-based activities	(1,364)		(7,076)
Net cash provided by (used in) financing activities	(39,062)		61,529
Net decrease in cash and cash equivalents and restricted cash	(1,896)		(22,402)
Cash and cash equivalents and restricted cash, beginning of period	203,817		192,960
Cash and cash equivalents and restricted cash, end of period	$	201,921	$	170,558

Supplemental disclosure of cash flow information
Cash and cash equivalents	$	74,075	$	109,864
Restricted cash	127,846		60,694
Total cash and cash equivalents and restricted cash	$	201,921	$	170,558

Cash paid for income taxes, net of refunds	$	307	$	328
Cash paid for interest	$	37,459	$	13,816
Cash paid for amounts included in the measurement of operating lease liabilities	$	3,725	$	4,238
Supplemental disclosures of non-cash investing and financing activities
Right of use assets obtained in exchange for operating lease obligations	$	1,179	$	1,064



Non-cash investments in capitalized assets	$	(1,143)	$	565
Non-cash financing activities	$	6,672	$	—

See Notes to the Condensed Consolidated Financial Statements.

OPORTUN FINANCIAL CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

March 31, 2023


1.			Organization and Description of Business

Oportun Financial Corporation (together with its subsidiaries, "Oportun" or the "Company") is a digital banking platform that puts its members’ financial goals within reach. With intelligent borrowing, savings, budgeting, and spending capabilities, the Company empowers members with the confidence to build a better financial future. Oportun 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. Oportun offers 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, 2022 (the "Annual Report"), filed with the Securities and Exchange Commission ("SEC") on March 14, 2023.

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.


3.			Earnings (Loss) per Share

Basic and diluted earnings (loss) per share are calculated as follows:


	Three Months Ended March 31,
(in thousands, except share and per share data)	2023		2022
Net income (loss)	$	(102,090)	$	45,663


Net income (loss) attributable to common stockholders	$	(102,090)	$	45,663

Basic weighted-average common shares outstanding	33,979,050		32,216,641
Weighted average effect of dilutive securities:
Stock options	—		733,503
Restricted stock units	—		372,990

Diluted weighted-average common shares outstanding	33,979,050		33,323,134

Earnings (loss) per share:
Basic	$	(3.00)	$	1.42
Diluted	$	(3.00)	$	1.37

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 March 31,
	2023	2022
Stock options	3,261,871	2,723,777
Restricted stock units	3,953,396	1,692,599


Total anti-dilutive common share equivalents	7,215,267	4,416,376


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.

The following table represents the assets and liabilities of consolidated VIEs recorded on the Company’s Condensed Consolidated Balance Sheets (Unaudited):


	March 31,		December 31,
(in thousands)	2023		2022
Consolidated VIE assets
Restricted cash	$	114,382	$	91,395
Loans receivable at fair value	2,984,619		3,081,557

Interest and fee receivable	31,449		30,443
Total VIE assets	3,130,450		3,203,395
Consolidated VIE liabilities
Secured financing (1)	405,286		320,000
Asset-backed notes at fair value	2,300,201		2,387,674
Acquisition financing (1)	75,484		85,679
Total VIE liabilities	$	2,780,971	$	2,793,353

(1) Amounts exclude deferred financing costs. See Note 8, 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. 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 Condensed Consolidated Balance Sheets (Unaudited).

Other Loan Sales - The Company enters into agreements to sell certain populations of its personal loans and credit card receivables from time to time. The sold loans were accounted for under the fair value option. The loan sales qualified for sale accounting treatment and the Company derecognized these loans from its Condensed Consolidated Balance Sheets (Unaudited) 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.

In November 2022, the Company entered into a forward flow whole loan sale agreement with an institutional investor. Pursuant to this agreement, the Company has a commitment to sell a minimum of $2.0 million of its unsecured loan originations each month, with an option to sell an additional $4.0 million each month, over an approximately one-year period, subject to certain eligibility criteria.

The originations of loans sold and held for sale during the three months ended March 31, 2023 was $10.0 million and the Company recorded a gain on sale of $1.4 million and servicing revenue of $3.0 million. The originations of loans sold and held for sale during the three months ended March 31, 2022 was $48.7 million and the Company recorded a gain on sale of $5.7 million and servicing revenue of $4.0 million.


6.			Capitalized Software and Other Intangibles

Capitalized software, net consists of the following:


	March 31,		December 31,
(in thousands)	2023		2022
Capitalized software, net:
System development costs	$	145,934	$	135,303
Acquired developed technology	48,500		48,500
Less: Accumulated amortization	(89,825)		(79,679)
Total capitalized software, net	$	104,609	$	104,124

Capitalized software, net

Amortization of system development costs and acquired developed technology for three months ended March 31, 2023 and 2022 was $10.1 million and $7.4 million, respectively. System development costs capitalized in the three months ended March 31, 2023 and 2022 were $10.6 million and $11.2 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:


	March 31,		December 31,
(in thousands)	2023		2022
Intangible assets:
Member relationships	$	34,500	$	34,500
Trademarks	5,626		6,426
Other	3,000		3,000
Less: Accumulated amortization	(9,879)		(8,249)
Total intangible assets, net	$	33,247	$	35,677

On March 8, 2023, the Company revealed its rebranding of Oportun and Digit as a single brand. Therefore, the Company wrote off its $0.8 million Digit trademark. Amortization of intangible assets for the three months ended March 31, 2023 and 2022 was $1.6 million and $2.0 million, respectively.

Expected future amortization expense for intangible assets as of March 31, 2023 is as follows:


(in thousands)	Fiscal Years
2023 (remaining nine months)	$	5,777
2024	7,539
2025	4,929
2026	4,929
2027	4,929
2028	4,780
Thereafter	—
Total	$	32,883


7.			Other Assets

Other assets consist of the following:


	March 31,		December 31,
(in thousands)	2023		2022
Fixed assets
Total fixed assets	$	48,941	$	48,212
Less: Accumulated depreciation	(38,984)		(37,688)
Total fixed assets, net	$	9,957	$	10,524

Other Assets

Loans held for sale	$	310	$	50
Prepaid expenses	20,108		24,167
Deferred tax assets	16,942		1,793
Current tax assets	8,112		8,245
Other	33,665		19,401
Total other assets	$	89,094	$	64,180

Fixed Assets

Depreciation and amortization expense related to Other Assets for the three months ended March 31, 2023 and 2022 was $1.3 million and $1.3 million, respectively.


8.			Borrowings

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


					March 31, 2023		December 31, 2022
Variable Interest Entity	Facility Amount		Maturity Date	Interest Rate	Balance		Balance
(in thousands)
Oportun CCW Trust (1)	$	120,000	December 1, 2024	Variable (2)	$	74,029	$	76,574
Oportun PLW Trust	600,000		September 1, 2024	LIBOR (minimum of 0.00%) + 2.17%	329,196		240,994
Total secured financing	$	720,000			$	403,225	$	317,568

(1) The facility amount and maturity date on the Secured Financing - CCW facility (Oportun CCW Trust) were $150.0 million and December 1, 2023, respectively, as of December 31, 2022.

(2) The interest rate on the Secured Financing - CCW facility (Oportun CCW Trust) is LIBOR (minimum of 0.00%) plus 3.41% on the outstanding principal balance as of March 31, 2023. The interest rate on the CCW was 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 as of December 31, 2022.

The following table presents information regarding asset-backed notes:


	March 31, 2023
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 2022-3)	$	300,000	$	310,993	$	248,158	$	274,205	8.59	%	N/A
Oportun Issuance Trust (Series 2022-2)	400,000		410,212		265,132		292,891		7.24	%	N/A
Oportun Issuance Trust (Series 2022-A)	400,000		410,211		385,424		414,827		5.44	%	2 years
Oportun Issuance Trust (Series 2021-C)	500,000		512,762		447,610		518,999		2.48	%	3 years
Oportun Issuance Trust (Series 2021-B)	500,000		512,759		447,635		518,347		2.05	%	3 years
Oportun Funding XIV, LLC (Series 2021-A)	375,000		383,632		354,674		387,676		1.79	%	2 years
Oportun Funding XIII, LLC (Series 2019-A)	279,412		294,118		151,568		171,833		3.46	%	3 years
Total asset-backed notes recorded at fair value	$	2,754,412	$	2,834,687	$	2,300,201	$	2,578,778


	December 31, 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 2022-3)	$	300,000	$	310,993	$	285,218	$	301,967	8.43	%	N/A
Oportun Issuance Trust (Series 2022-2)	400,000		410,212		313,689		344,218		7.03	%	N/A
Oportun Issuance Trust (Series 2022-A)	400,000		410,211		380,313		414,293		5.44	%	2 years
Oportun Issuance Trust (Series 2021-C)	500,000		512,762		435,951		518,929		2.48	%	3 years
Oportun Issuance Trust (Series 2021-B)	500,000		512,759		432,123		519,182		2.05	%	3 years
Oportun Funding XIV, LLC (Series 2021-A)	375,000		383,632		348,046		389,740		1.79	%	2 years
Oportun Funding XIII, LLC (Series 2019-A)	279,412		294,118		192,334		218,571		3.46	%	3 years




Total asset-backed notes recorded at fair value	$	2,754,412	$	2,834,687	$	2,387,674	$	2,706,900

(1)Initial note amount issued includes notes retained by the Company as applicable. The current balances are measured at fair value for asset-backed notes recorded at fair value.

(2)Includes the unpaid principal balance of loans receivable, the balance of required reserve funds, cash, cash equivalents and restricted cash pledged by the Company.

(3)Weighted average interest rate excludes notes retained by the Company. There were no notes retained by the Company as of March 31, 2023. The weighted average interest rate for Series 2022-2 and Series 2022-3 will change over time as the notes pay sequentially (in class priority order).

(4)The revolving period for Series 2019-A ended on August 1, 2022 and Series 2021-A ended on March 1, 2023. These asset-backed notes have been amortizing since then. Series 2022-2 and Series 2022-3 are both amortizing deals with no revolving period.

The following table presents information regarding the Company's Acquisition and Corporate Financings:


					March 31, 2023		December 31, 2022
Entity	Original Balance		Maturity Date	Interest Rate	Balance		Balance
(in thousands)
Oportun Financial Corporation (1)	$	150,000	September 14, 2026	SOFR (minimum of 0.00% + 12.00%	$	160,892	$	141,957
Oportun RF, LLC (2)	116,000		October 1, 2024	SOFR (minimum of 0.00%) + 11.00%	71,424		80,922
Total acquisition and corporate financing	$	266,000			$	232,316	$	222,879

(1) The Corporate Financing facility (Oportun Financial Corporation) was upsized and amended on March 10, 2023 to provide the ability to be able to borrow up to an additional $75.0 million. The interest rate on the Corporate Financing facility was SOFR (minimum of 0.00%) plus 9.00% as of December 31, 2022.

(2) The Acquisition Financing facility (Oportun RF, LLC) was amended and upsized several times in 2022 increasing the size of the facility to $119.5 million and amending the maturity date. The maturity date and interest rate of the Acquisition Financing facility was May 1, 2024 and SOFR (minimum of 0.00%) plus 8.00% as of December 31, 2022.

On February 10, 2023, the Acquisition Financing facility (Oportun RF, LLC) was further amended, including among other things, revising the interest rate to SOFR plus 11.00% and adjusting the amortization schedule to defer $42.0 million in principal payments through July 2023, with final payment in October 2024.

On March 8, 2023, the Credit Card Warehouse (Oportun CCW Trust) was amended. This amendment, among other things, extends the revolving period by a year, to December 31, 2024, and reduces the commitment amount from $150.0 million to $120.0 million.

On March 10, 2023 (the “Second Amendment Closing Date”), the Company amended its Corporate Financing facility by entering into an Amendment No. 2 (the “Second Amendment”) by and among the Company, as borrower, the subsidiaries of the Company party thereto as guarantors, certain affiliates of Neuberger Berman Specialty Finance as lenders, and Wilmington Trust, National Association, as administrative agent and collateral agent (the “Agent”), which amended the Credit Agreement, dated as of September 14, 2022 (as amended, supplemented or otherwise modified, including by the Second Amendment, the “Amended Credit Agreement”), by and among the Company, the lenders from time to time party thereto and the Agent.

On the Second Amendment Closing Date, the Company borrowed $20.8 million of incremental term loans (the “Incremental Tranche A-1 Loans”) and borrowed an additional $4.2 million of incremental term loans (the “Incremental Tranche A-2 Loans”) on March 27, 2023. Under the Amended Credit Agreement, the Company borrowed an additional $25.0 million of incremental term loans (the "Incremental Tranche B Loans") on May 5, 2023 and may borrow up to an additional amount of $25.0 million on an uncommitted basis (the “Incremental Tranche C Loans”) expected to be available, if provided by the applicable lenders, on or about June 23, 2023.

The loans (the “Loans”) and other obligations under the Amended Credit Agreement are secured by the assets of the Company and certain of its subsidiaries guaranteeing the Loans, including pledges of the equity interests of certain subsidiaries that are directly or indirectly owned by the Company, subject to customary exceptions.

Following the Second Amendment Closing Date the Loans bear interest, at (a) an amount equal to 1-month term SOFR plus 9.00% plus (b) an amount payable in cash or in kind, at the Company's option, equal to 3.00%. The Loans are scheduled to mature on September 14, 2026, and are not subject to amortization. Certain prepayments of the Loans are subject to a prepayment premium.

Pursuant to the Amended Credit Agreement, as of the three months ended March 31, 2023, the Company issued warrants (the “Warrants”) to the lenders providing the Incremental Tranche A-1 and Incremental Tranche A-2 Loans. The Company allocated proceeds from the incremental borrowings of the Corporate Financing facility to the Corporate Financing facility and the Warrants based on their relative fair values at time of issuance. The value of the proceeds allocated to the Corporate Financing facility, net of discount, and the Warrants in the first quarter 2023, was $17.8 million and $6.7 million, respectively. The value of the Warrants are accounted for as a discount on the incremental borrowings and will be amortized into interest expense over the term of the loans using the effective interest method.

In addition, pursuant to the Amended Credit Agreement, on May 5, 2023, the Company issued to the lenders providing the Incremental Tranche B Loans warrants to purchase 1,048,363 shares of the Company’s common stock, at an exercise price of $0.01 per share. There may be further warrants issued to the lenders in connection with the potential future incremental tranche loans described above. See Note 10, Stockholders' Equity for additional information on the Warrants.

As of March 31, 2023, and December 31, 2022, the Company was in compliance with all covenants and requirements of the Secured Financing, Acquisition and Corporate Financing facilities and asset-backed notes.


9.			Other Liabilities

Other liabilities consist of the following:


	March 31,		December 31,
(in thousands)	2023		2022
Accounts payable	$	6,989	$	9,670
Accrued compensation	14,302		12,502
Accrued expenses	28,083		26,193
Accrued interest	8,773		8,445
Amount due to whole loan buyer	1,738		3,073
Deferred tax liabilities	5,133		30,575
Current tax liabilities and other	9,482		9,570
Total other liabilities	$	74,500	$	100,028


10.			Stockholders' Equity

Preferred Stock - The Board has the authority, without further action by the Company's stockholders, to issue up to 100,000,000 shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by the Board. There were no shares of undesignated preferred stock issued or outstanding as of March 31, 2023 or December 31, 2022.

Common Stock - As of March 31, 2023 and December 31, 2022, the Company was authorized to issue 1,000,000,000 shares of common stock with a par value of $0.0001 per share. As of March 31, 2023, 34,156,369 and 33,884,346 shares were issued and outstanding, respectively, and 272,023 shares were held in treasury stock. As of December 31, 2022, 33,626,630 and 33,354,607 shares were issued and outstanding, respectively, and 272,023 shares were held in treasury stock.

Warrants - On March 10, 2023, pursuant to the Second Amendment of the Corporate Financing facility, the Company issued detachable warrants (the “Warrants”) to the lenders providing the Incremental Tranche A-1 Loans to purchase 1,980,242 shares of the Company’s common stock at an exercise price of $0.01 per share. On March 27, 2023, in connection with the funding of the Incremental Tranche A-2 Loans, the Company issued Warrants to the lenders providing the Incremental Tranche A-2 Loans to purchase 116,485 shares of the Company’s common stock at an exercise price of $0.01 per share. On May 5, 2023, in connection with the funding of the Incremental Tranche B Loans, the Company issued Warrants to the lenders providing the Incremental Tranche B loans to purchase 1,048,363 shares of the Company's common stock at an exercise prices of $0.01 per share. In addition, in connection with the funding of the Incremental Tranche C Loans, the Company will issue Warrants to the lenders providing the Incremental Tranche C Loans to purchase 1,048,363 shares of the Company’s common stock at an exercise price of $0.01 per share.

The value of the proceeds allocated to the Corporate Financing facility and the Warrants in the first quarter 2023 was $17.8 million and $6.7 million, respectively. The portion of the proceeds so allocated to the warrants has been recorded as part of additional paid-in capital.

See Note 8, Borrowings for additional information on the Second Amendment of the Corporate Financing facility.


11.			Equity Compensation and Other Benefits

The Company's stock-based plans are described and informational disclosures are provided in the Notes to the Consolidated Financial Statements included in the Annual Report.

Stock-based Compensation - Total stock-based compensation expense included in the Condensed Consolidated Statements of Operations (Unaudited) is as follows:


	Three Months Ended March 31,
(in thousands)	2023		2022
Technology and facilities	$	1,049	$	1,870
Sales and marketing	33		31
Personnel	3,796		4,872
Total stock-based compensation (1)	$	4,878	$	6,773

(1) Amounts shown are net of $0.5 million of capitalized stock-based compensation for the three months ended March 31, 2023 and net of $0.7 million of capitalized stock-based compensation for the three months ended March 31, 2022.

As of March 31, 2023, and December 31, 2022, the Company’s total unrecognized compensation cost related to unvested stock-based option awards granted to employees was $4.9 million and $