What changed in this filing

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Item 1. Financial Statements

2023-05-10 compared with 2022-11-08 · 178 added, 226 removed, 405 unchanged (50% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

September 30, December 31,

March 31, December 31,

Cash and cash equivalents $ 74,075 $ 98,817

3 unchanged sentences

Capitalized software and other intangibles, net 137,856 139,801

Goodwill — 104,014

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

9 unchanged sentences

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;

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

Common stock, additional paid-in capital 558,436 547,799

Retained earnings 14,525 83,846

Treasury stock at cost, 272,023 shares at September 30, 2022 and December 31, 2021

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 )

5 unchanged sentences

(in thousands, except share and per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Interest income $ 237,619 $ 192,237

2 unchanged sentences

Interest expense 38,997 13,677

Net decrease in fair value ( 76,422 ) ( 8,987 ) ( 135,935 ) ( 26,457 )

Net increase (decrease) in fair value ( 215,710 ) 3,971

Net revenue 4,805 205,014

5 unchanged sentences

General, administrative and other 19,162 13,361

Goodwill impairment 108,472 — 108,472 —

Total operating expenses 146,338 147,344

9 unchanged sentences

Diluted 33,979,050 33,323,134

Notes to the Condensed Consolidated Financial Statements.

See Notes to the Condensed Consolidated Financial Statements.

OPORTUN FINANCIAL CORPORATION

1 unchanged sentence

(in thousands, except share data)

For the Nine Months Ended September 30, 2022

Shares Par Value Additional Paid-in Capital Retained Earnings Treasury Stock Total Stockholders' Equity

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

Issuance of common stock upon exercise of stock options 505,945 1 ( 4,749 ) — — ( 4,748 )

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

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

Net income — — — 45,663 — 45,663

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

Issuance of common stock upon exercise of stock options 32,345 — 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 withheld 63,064 — ( 273 ) — — ( 273 )

Net loss — — — ( 9,157 ) — ( 9,157 )

Balance – June 30, 2022 32,899,596 $ 7 $ 534,148 $ 120,352 $ ( 6,309 ) $ 648,198

Issuance of common stock upon exercise of stock options 5,261 — 29 — — 29

Stock-based compensation expense — — 7,666 — — 7,666

Vesting of restricted stock units, net of shares withheld 283,281 — ( 953 ) — — ( 953 )

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 – September 30, 2022 33,188,138 $ 7 $ 540,890 $ 14,525 $ ( 6,309 ) $ 549,113

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.

2 unchanged sentences

(in thousands, except share data)

For the Nine Months Ended September 30, 2021

For the Three Months Ended March 31, 2022

Shares Par Value Additional Paid-in Capital Retained Earnings Treasury Stock Total Stockholders' Equity

2 unchanged sentences

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

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

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

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 )

Net income — — — 7,250 — 7,250

Balance – June 30, 2021 28,033,924 $ 6 $ 444,183 $ 46,701 $ ( 6,309 ) $ 484,581

Issuance of common stock upon exercise of stock options 139,096 — 2,140 — — 2,140

Stock-based compensation expense — — 4,868 — — 4,868

Vesting of restricted stock units, net 211,902 — ( 2,977 ) — — ( 2,977 )

Net income — — — 22,979 — 22,979

Balance – September 30, 2021 28,384,922 $ 6 $ 448,214 $ 69,680 $ ( 6,309 ) $ 511,591

See Notes to the Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities

2 unchanged sentences

Depreciation and amortization 13,389 10,697

Goodwill impairment 108,472 —

Fair value adjustment, net 215,710 ( 3,971 )

16 unchanged sentences

Borrowings under secured financing 87,900 699,000

Borrowings under asset-backed notes, acquisition and corporate financing 967,761 867,251

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

Repayments of asset-backed notes, acquisition and corporate financing ( 87,253 ) ( 875,007 )

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 financing activities 835,781 268,178

Net increase in cash and cash equivalents and restricted cash 79,247 55,165

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

14 unchanged sentences

Notes to the Condensed Consolidated Financial Statements (Unaudited)

September 30, 2022

March 31, 2023

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.

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.

22 unchanged sentences

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

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands, except share and per share data) 2023 2022

10 unchanged sentences

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,

2022 2021 2022 2021

Three Months Ended March 31,

Stock options 3,261,871 2,723,777

18 unchanged sentences

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,

March 31, December 31,

(in thousands) 2023 2022

16 unchanged sentences

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 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.

1 unchanged sentence

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 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.

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.

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.

1 unchanged sentence

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.

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).

Capitalized Software, Other Intangibles and Goodwill

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.

Capitalized Software and Other Intangibles

Capitalized software, net consists of the following:

September 30, December 31,

March 31, December 31,

(in thousands) 2023 2022

5 unchanged sentences

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.

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.

1 unchanged sentence

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

September 30, December 31,

March 31, December 31,

(in thousands) 2023 2022

5 unchanged sentences

Total intangible assets, net $ 33,247 $ 35,677

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:

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

2022 (remaining three months) $ ( 1,998 )

2024 ( 7,798 )

2025 ( 4,929 )

2026 ( 4,929 )

2027 ( 4,929 )

Thereafter ( 4,780 )

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

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

Impairment ( 108,472 )

Balance as of September 30, 2022

2023 (remaining nine months) $ 5,777

Other assets consist of the following:

September 30, December 31,

March 31, December 31,

(in thousands) 2023 2022

8 unchanged sentences

Total other assets $ 89,094 $ 64,180

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.

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.

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

September 30, 2022 December 31, 2021

Variable Interest Entity Facility Amount Maturity Date (1)

Interest Rate Balance Balance

March 31, 2023 December 31, 2022

Variable Interest Entity Facility Amount Maturity Date Interest Rate Balance Balance

(in thousands)

5 unchanged sentences

Total secured financing $ 720,000 $ 403,225 $ 317,568

(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.

(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:

September 30, 2022

March 31, 2023

Variable Interest Entity Initial note amount issued (1)

7 unchanged sentences

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

13 unchanged sentences

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

7 unchanged sentences

(3) Weighted average interest rate excludes notes retained by the Company.

There were no notes retained by the Company as of September 30, 2022.

The weighted average interest rate for Series 2022-2 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 the asset-backed notes have been amortizing since then.

Series 2022-2 is an amortizing deal with no revolving period.

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:

September 30, 2022 December 31, 2021

Entity Original Balance (1)

Maturity Date Interest Rate (2)

Balance Balance

March 31, 2023 December 31, 2022

Entity Original Balance Maturity Date Interest Rate Balance Balance

(in thousands)

Oportun Financial Corporation $ 150,000 September 14, 2026 SOFR (minimum of 0.00 % + 9.00 %

Oportun Financial Corporation (1)

$ 150,000 September 14, 2026 SOFR (minimum of 0.00 % + 12.00 %

$ 160,892 $ 141,957

Oportun RF, LLC 116,000 October 1, 2024 SOFR (minimum of 0.00 %) + 8.00 %

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 Acquisition Financing Facility (Oportun RF, LLC) was amended on May 24, 2022 and upsized for an additional $ 20.9 million and was amended again on July 28, 2022 and upsized for an additional $ 9.1 million.

(2) The interest rate on the Acquisition Financing Facility (Oportun RF, LLC) was LIBOR (minimum of 0.00 %) plus 8.00 % as of December 31, 2021.

On May 24, 2022 the Company completed the issuance of $ 400.0 million of two-year asset-backed notes in a private asset-backed securitization secured by a pool of its unsecured and secured personal installment loans (the “2022-A Securitization”).

The 2022-A Securitization included four classes of fixed rate notes:

Class A, Class B, Class C and Class D notes.

The Class A, Class B and Class C notes were priced with a weighted average yield of 5.68 % per annum.

The Class D notes were initially retained by an affiliate of the Company and subsequently sold to third parties on July 28, 2022.

Also on May 24, 2022, pursuant to an amended indenture, Oportun RF, LLC, a wholly owned subsidiary of the Company issued an additional $ 20.9 million asset-backed floating rate variable funding note, and an asset-backed residual certificate, both of which were initially secured by Class D Notes and residual cash flows from the Company's 2022-A Securitization and guaranteed by Oportun, Inc.

The amendment also replaced the Acquisition Financing interest rate based on LIBOR with an interest rate based on the secured overnight financing rate (“SOFR”).

The notes bear interest at a rate of SOFR plus 8.00 %.

The amendment did not modify the maturity date of the Acquisition Financing facility, it is still scheduled to pay down based on an amortization schedule with a final payment in October 2024.

On July 28, 2022, Oportun RF, LLC further amended the indenture to incorporate the transfer of certain residual certificates and notes from and to Oportun RF, LLC and increasing the size of the Acquisition Financing facility to $ 119.5 million.

On July 22, 2022 the Company completed the issuance of $ 400.0 million of Series 2022-2 fixed rate asset-backed notes in a private asset-backed securitization transaction secured by a pool of unsecured and secured installment loans.

The notes were priced with a weighted average yield of 8.00 % per annum and weighted average interest rate over the term of the transaction of 7.77 % per annum.

On September 14, 2022, the Company entered into a credit agreement to borrow $ 150.0 million of a senior secured term loan (the “Corporate Financing”).

The term loan bears interest, payable in cash, at an amount equal to 1-month term SOFR plus 9.00 %.

The term loan is scheduled to mature on September 14, 2026, and is not subject to amortization.

Certain prepayments of the term loan is subject to a prepayment premium.

The obligations under the credit agreement are secured by the assets of the Company and certain of its subsidiaries guaranteeing the term loan, including pledges of the equity interests of certain subsidiaries that are directly or indirectly owned by the Company, subject to customary exceptions.

On November 3, 2022, the Company completed the issuance of $ 300 million of Series 2022-3 fixed rate asset-backed notes in a private asset-backed securitization transaction secured by a pool of unsecured and secured installment loans.

The notes were priced with a weighted average yield of 10.94 % per annum and weighted average interest rate of 9.51 % per annum.

As of September 30, 2022, and December 31, 2021, the Company was in compliance with all covenants and requirements of the Secured Financing, Acquisition and Corporate Financing facilities and asset-backed notes.

(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.

Other Liabilities

Other liabilities consist of the following:

September 30, December 31,

March 31, December 31,

(in thousands) 2023 2022

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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 September 30, 2022 or December 31, 2021.

Common Stock - As of September 30, 2022 and December 31, 2021, 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 September 30, 2022, 33,460,161 and 33,188,138 shares were issued and outstanding, respectively, and 272,023 shares were held in treasury stock.

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.

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), net of amounts capitalized to system development costs is as follows:

Three Months Ended September 30, Nine Months Ended September 30,

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

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$ 4,878 $ 6,773

(1) Amounts shown are net of $ 0.6 million and $ 2.0 million of capitalized stock-based compensation for the three and nine months ended September 30, 2022, respectively, and net of $ 0.3 million and $ 0.8 million of capitalized stock-based compensation for the three and nine months ended September 30, 2021, respectively.

As of September 30, 2022, and December 31, 2021, the Company’s total unrecognized compensation cost related to nonvested stock-based option awards granted to employees was $ 7.2 million and $ 6.9 million, respectively, which will be recognized over a weighted-average vesting period of approximately 2.7 years and 2.2 years, respectively.

As of September 30, 2022 and December 31, 2021, the Company's total unrecognized compensation cost related to nonvested restricted stock unit awards granted to employees was $ 58.5 million and $ 54.1 million, respectively, which will be recognized over a weighted average vesting period of approximately 2.9 years and 2.6 years, respectively.

Cash flows from the tax shortfalls or benefits for tax deductions resulting from the exercise of stock options in comparison to the compensation expense recorded for those options are required to be classified as cash from financing activities.

The total income tax expense recognized in the income statement for stock-based compensation arrangements for the three and nine months ended September 30, 2022 was $ 1.4 million and $ 2.4 million, respectively.

The total income tax expense recognized in the income statement for stock-based compensation arrangements for the three and nine months ended September 30, 2021 was $ 0.3 million and $ 0.2 million, respectively.

(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 $ 6.2 million, respectively, which will be recognized over a weighted-average vesting period of approximately 2.3 years and 2.6 years, respectively.

As of March 31, 2023 and December 31, 2022, the Company's total unrecognized compensation cost related to unvested restricted stock unit awards granted to employees was $ 39.2 million and $ 51.6 million, respectively, which will be recognized over a weighted average vesting period of approximately 2.8 years and 2.7 years, respectively.

Cash flows from the tax benefits for tax deductions resulting from the exercise of stock options in excess of the compensation expense recorded for those options (excess tax benefits) are required to be classified as cash from financing activities.

The Company recognized $ 1.4 million and $ 2.0 million of income tax benefit in its consolidated statement of operations related to stock-based compensation expense for the three months ended March 31, 2023 and 2022, respectively.

Additionally, the total income tax expense (benefit) recognized in the income statement for share-based compensation exercises was $ 2.4 million and $ 0.7 million for the three months ended March 31, 2023 and 2022, respectively.

Interest Income - Total interest income included in the Condensed Consolidated Statements of Operations (Unaudited) is as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2023 2022

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Non-interest Income - Total non-interest income included in the Condensed Consolidated Statements of Operations (Unaudited) is as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2023 2022

Non-interest income

Gain (loss) on loan sales $ ( 6 ) $ 7,328 $ 5,708 $ 17,083

Gain on loan sales $ 1,326 $ 5,715

Servicing fees 3,680 3,957

Subscription revenue 6,878 9,340

Other income 10,009 3,471

Total non-interest income $ 21,893 $ 22,483

For the three and nine months ended September 30, 2022 and 2021, the Company calculates its year-to-date income tax expense (benefit) by applying the estimated annual effective tax rate to the year-to-date income from operations before income taxes and adjusts the income tax expense (benefit) for discrete tax items recorded in the period.

During the three and nine months ended September 30, 2022, the Company recorded income tax expense (benefit) of $( 6.5 ) million and $ 2.0 million, respectively, related to continuing operations, representing an effective income tax rate of 5.8 % and ( 2.9 )%, respectively.

Income tax expense for the three and nine months ended September 30, 2021 was $ 5.1 million and $ 8.7 million, respectively, representing an effective income tax rate of 18.3 % and 20.7 %, respectively.

Income tax expense decreased by $ 11.7 million or 227 %, from $ 5.1 million for the three months ended September 30, 2021 to $ 6.5 million benefit for the three months ended September 30, 2022, primarily resulting from having lower pretax income and discrete tax benefits for the three months ended September 30, 2022.

Income tax expense decreased by $ 6.7 million or 77 %, from $ 8.7 million for the nine months ended September 30, 2021 to $ 2.0 million for the nine months ended September 30, 2022, primarily as a result of the discrete tax benefit of the return-to-provision adjustments for the nine months ended September 30, 2022.

The Company's effective tax rates for the three and nine months ended September 30, 2022 and 2021 differ from the statutory tax rates primarily due to the impacts of the non-deductible goodwill impairment, return-to-provision adjustments associated with tax optimization and planning, a one-time exercise of stock-based awards, and research and development tax credits.

For the three months ended March 31, 2023 and 2022, the Company calculates its year-to-date income tax expense (benefit) by applying the estimated annual effective tax rate to the year-to-date income from operations before income taxes and adjusts the income tax expense (benefit) for discrete tax items recorded in the period.

During the three months ended March 31, 2023 and 2022, the Company recorded income tax expense (benefit) of $( 39.4 ) million and $ 12.0 million, respectively, related to continuing operations.

The Company’s reported effective tax rates were 27.9 % and 20.8 % for the three months ended March 31, 2023 and 2022, respectively.

Income tax expense decreased by $ 51.4 million or 428.5 % , from $ 12.0 million for the three months ended March 31, 2022 to $ 39.4 million benefit for the three months ended March 31, 2023, primarily as a result of having a pretax loss for the three months ended March 31, 2023.

Our effective tax rates for the three months ended March 31, 2023 and 2022 differ from the statutory tax rates primarily due to the impacts of the research and development tax credit and a one-time exercise of stock-based awards.

Fair Value of Financial Instruments

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The table below compares the fair value of loans receivable and asset-backed notes to their contractual balances for the periods shown:

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

(in thousands) Unpaid Principal Balance Fair Value Unpaid Principal Balance Fair Value

Loans receivable $ 2,969,656 $ 2,991,334 $ 2,272,864 $ 2,386,807

Loans receivable - personal loans $ 2,885,354 $ 2,902,087 $ 2,967,266 $ 3,027,401

Loans receivable - credit cards 119,644 110,639 131,343 116,252

Total Loans Receivable at Fair Value $ 3,004,998 $ 3,012,726 $ 3,098,609 $ 3,143,653

Asset-backed notes 2,445,656 2,300,201 2,582,025 2,387,674

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The following tables present quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements for Loans Receivable at Fair Value.

September 30, 2022 December 31, 2021

Minimum Maximum Weighted Average (3)

The personal loan receivables balance at fair value as of March 31, 2023, consists of $ 2,771.0 million of unsecured personal loan receivables and $ 131.1 million of secured personal loan receivables.

March 31, 2023 December 31, 2022

Personal Loans Receivables Minimum Maximum Weighted Average (2)

Minimum Maximum Weighted Average (2)

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— % 33.00 % 27.78 % — % 33.59 % 28.73 %

Average life (years) 0.08 1.47 0.97 0.05 1.52 1.01

Discount rate 10.94 % 10.94 % 10.94 % 11.34 % 11.34 % 11.34 %

(1) Figure disclosed as a percentage of outstanding principal balance.

(2) Unobservable inputs were weighted by outstanding principal balance, which are grouped by risk (type of customer, original loan maturity terms).

March 31, 2023 December 31, 2022

Credit Card Receivables Range Range

Remaining cumulative charge-offs (1)

20.70 % 22.80 %

Principal payment rate (1)

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(1) Figure disclosed as a percentage of outstanding principal balance.

(2) Remaining cumulative prepayments are estimated to calculate fair value on the unsecured and secured loan receivables and principal payment rates are estimated on the credit card receivables.

(3) Unobservable inputs were weighted by outstanding principal balance, which are grouped by risk (type of customer, original loan maturity terms).

Fair value adjustments related to financial instruments where the fair value option has been elected are recorded through earnings for the nine months ended September 30, 2022 and 2021.

Fair value adjustments related to financial instruments where the fair value option has been elected are recorded through earnings for the three months ended March 31, 2023 and 2022.

Certain unobservable inputs may (in isolation) have either a directionally consistent or opposite impact on the fair value of the financial instrument for a given change in that input.

When multiple inputs are used within the valuation techniques for loans, a change in one input in a certain direction may be offset by an opposite change from another input.

The Company developed internal models to estimate the fair value of loans receivable held for investment.

To generate future expected cash flows, the models combine receivable characteristics with assumptions about borrower behavior based on the Company’s historical loan performance.

For personal loan receivables, the Company developed an internal model to estimate the fair value of loans receivable held for investment.

To generate future expected cash flows, the model combines receivable characteristics with assumptions about borrower behavior based on the Company’s historical loan performance.

These cash flows are then discounted using a required rate of return that management estimates would be used by a market participant.

The Company tested the fair value models by comparing modeled cash flows to historical loan performance to ensure that the models were complete, accurate and reasonable for the Company’s use.

The Company also engaged a third party to create an independent fair value estimate for substantially all Loans Receivable at Fair Value, which provides a set of fair value marks using the Company’s historical loan performance data and whole loan sale prices to develop independent forecasts of borrower behavior.

Their model generates expected cash flows which were then aggregated and compared to the Company’s actual cash flows within an acceptable range.

The Company's internal valuation committee provides governance and oversight over the fair value pricing calculations and related financial statement disclosures.

Additionally, this committee provides a challenge of the assumptions used and outputs of the model, including the appropriateness of such measures and periodically reviews the methodology and process to determine the fair value pricing.

Any significant changes to the process must be approved by the committee.

The Company tested the unsecured personal loan fair value model by comparing modeled cash flows to historical loan performance to ensure that the model was complete, accurate and reasonable for the Company’s use.

The Company also engaged a third party to create an independent fair value estimate for the Loans Receivable at Fair Value, which provides a set of fair value marks using the Company’s historical loan performance data and whole loan sale prices to develop independent forecasts of borrower behavior.

For credit card receivables, the Company uses historical data to derive assumptions about certain loan portfolio characteristics such as principal payment rates, interest yields and fee yields.

Similar to the model used for personal loan receivables, the Company engaged a third party to create an independent fair value estimate, which provides a range of fair values that are compared for reasonableness.

The table below presents a reconciliation of Loans Receivable at Fair Value on a recurring basis using significant unobservable inputs:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2023 2022

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Balance – end of period $ 3,012,726 $ 2,450,987

As of September 30, 2022, the aggregate fair value of loans that are 90 days or more past due and in non-accrual status was $ 7.0 million, and the aggregate unpaid principal balance for loans that are 90 days or more past due was $ 39.2 million.

As of March 31, 2023, the aggregate fair value of loans that are 90 days or more past due and in non-accrual status was $ 7.6 million, and the aggregate unpaid principal balance for loans that are 90 days or more past due was $ 38.5 million.

As of December 31, 2022, the aggregate fair value of loans that are 90 days or more past due and in non-accrual status was $ 4.1 million, and the aggregate unpaid principal balance for loans that are 90 days or more past due was $ 35.2 million.

During the first quarter of 2023, under the Amended Credit Agreement of the Corporate Financing facility, the Company borrowed an additional $ 20.8 million on March 10, 2023 and an additional $ 4.2 million on March 27, 2023.

Pursuant to the Second Amendment, the Company issued warrants (the “Warrants”) to the lenders providing these incremental borrowings.

The value of the proceeds allocated to the Corporate Financing facility and the Warrants in the first quarter of 2023 was $ 17.8 million and $ 6.7 million, respectively.

See Note 8, Borrowings for additional information on the Second Amendment of the Corporate Financing facility and Note 10, Stockholders' Equity for additional information on the Warrants.

The fair value of the non-recurring (level 3) incremental borrowings upon issuance were estimated using a discounted cash flow analysis.

The fair value of the of non-recurring (level 3) warrants to purchase shares of the Company’s common stock were estimated using a Black Scholes valuation model with the following significant unobservable inputs at the date of issuance:

Expected Term (years) 5.0

Risk free rate 3.56 % - 3.96 %

Expected Volatility 72.00 % - 77.00 %

Financial Instruments Disclosed But Not Carried at Fair Value

The following table presents the carrying value and estimated fair values of financial assets and liabilities disclosed but not carried at fair value and the level within the fair value hierarchy:

September 30, 2022

March 31, 2023

Carrying value Estimated fair value Estimated fair value

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Restricted cash 127,846 127,846 127,846 — —

Loans held for sale (Note 5) 310 339 — — 339

Accounts payable 6,989 6,989 6,989 — —

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Restricted cash 105,000 105,000 105,000 — —

Loans held for sale (Note 5) 491 547 — — 547

Accounts payable 9,670 9,670 9,670 — —

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• Secured financing and acquisition and corporate financing ‑ The fair values of the secured financing and acquisition and corporate financing facilities have been calculated using discount rates equivalent to the weighted-average market yield of comparable debt securities, which is a Level 2 input measure.

There were no transfers in or out of Level 3 assets and liabilities for the three and nine months ended September 30, 2022 and 2021 and the year ended December 31, 2021.

There were no transfers in or out of Level 3 assets and liabilities for the three months ended March 31, 2023 and 2022 and the year ended December 31, 2022.

Leases, Commitments and Contingencies

Leases - The Company’s leases are primarily for real property consisting of retail locations and office space and have remaining lease terms of 10 years or less.

During the first quarter of 2022, we made the decision to close an additional 27 retail locations in April 2022.

These activities were substantially complete through the second quarter of 2022 and as such we incurred no additional expenses related to the accelerated amortization of right of use assets for the three months ended September 30, 2022.

We incurred in $ 1.4 million in expenses related to the accelerated amortization of right of use assets for the nine months ended September 30, 2022.

The Company has elected the practical expedient to keep leases with terms of 12 months or less off the balance sheet as no recognition of a lease liability and a right-of-use asset is required.

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The Company uses its contractual borrowing rate to determine lease discount rates.

As of September 30, 2022, maturities of lease liabilities, excluding short-term leases and leases on a month-to-month basis, were as follows:

As of March 31, 2023, maturities of lease liabilities, excluding short-term leases and leases on a month-to-month basis, were as follows:

(in thousands) Operating Leases

Lease expense

2022 (remaining three months) $ 3,721

Thereafter 14

2023 (remaining nine months) $ 10,354

Total lease payments 38,453

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Total leases $ 35,669

Sublease income

Total sublease income $ —

Net lease liabilities $ 40,149

Weighted average remaining lease term 3.1 years

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Total leases $ 37,947

Sublease income

2023 and thereafter —

Total lease payments ( 896 )

Imputed interest 11

Total sublease income ( 885 )

Net lease liabilities 47,699

Weighted average remaining lease term 3.2 years

Weighted average discount rate 4.06 %

Rental expenses under operating leases for the three and nine months ended September 30, 2022, were $ 4.2 million, and $ 14.2 million, respectively, and for the three and nine months ended September 30, 2021, were $ 4.3 million, and $ 19.9 million, respectively.

Rental expenses under operating leases for the three months ended March 31, 2023 and 2022, w a s $ 4.4 million and $ 4.4 million, respectively.

Purchase Commitments ‑ The Company has commitments to purchase information technology and communication services in the ordinary course of business, with various terms through 2026.

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Bank Partnership Program and Servicing Agreement - The Company entered into a bank partnership program with Pathward, N.A.

(formerly known as MetaBank, N.A.) on August 11, 2020.

on August 11, 2020.

In accordance with the agreements underlying the bank partnership program, Oportun has a commitment to purchase an increasing percentage of program loans originated by Pathward based on thresholds specified in the agreements.

Lending under the partnership was launched in August of 2021 and as of September 30, 2022, the Company has a commitment to purchase an additional $ 0.2 million of program loans based on originations through September 30, 2022.

Lending under the partnership was launched in August of 2021 and as of March 31, 2023, the Company has a commitment to purchase an additional $ 4.9 million of program loans based on originations through March 31, 2023.

Whole Loan Sale Program ‑ Through March 4, 2022, the Company had a commitment to sell to a third-party institutional investor 10 % of its unsecured loan originations that satisfy certain eligibility criteria, and an additional 5 % at the Company’s sole option.

The Company chose not to renew the arrangement and allowed the agreement to expire on its terms on March 4, 2022.

For details regarding the whole loan sale program, refer to Note 5, Loans Held for Sale and Loans Sold .

Unfunded Loan and Credit Card Commitments - Unfunded loan and credit card commitments at September 30, 2022 and December 31, 2021 were $ 49.9 million and $ 39.8 million, respectively.

In November 2022, the Company entered into a forward flow whole loan sale agreement with an institutional investor.

For details regarding the whole loan sale programs, refer to Note 5, Loans Held for Sale and Loans Sold .

Unfunded Loan and Credit Card Commitments - Unfunded loan and credit card commitments at March 31, 2023 and December 31, 2022 were $ 53.2 million and $ 45.0 million, respectively.

WebBank has a direct obligation to borrowers to fund such credit card commitments subject to the respective account agreements with such borrowers;

however, pursuant to the Receivables Purchase Agreement between WebBank and Oportun, Inc., the Company has the obligation to purchase receivables from WebBank representing these unfunded amounts.

Legal Proceedings Resolved in 2021

For legal proceedings resolved in 2021, please refer to Note 16 of the Notes to the Consolidated Financial Statements in the Company's Form 10-K filed on March 1, 2022.

Regulatory Proceedings

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The Company received additional information requests related to the CID.

The information requests are focused on the Company's legal collection practices from 2019 to 2021 and hardship treatments offered to members during the COVID-19 pandemic.

The information requests were focused on the Company's legal collection practices from 2019 to 2021 and hardship treatments offered to members during the COVID-19 pandemic.

On September 15, 2022, the Company received a Notice and Opportunity to Respond and Advise (“NORA”) letter from the staff of the CFPB in connection with the CID, stating that it is considering whether to recommend that the CFPB take legal action against the Company based on alleged violations focused on the Company's failure to timely dismiss certain lawsuits and the hardship treatments offered during the COVID-19 pandemic, including credit reporting related thereto.

On October 14, 2022, the Company provided the CFPB with its written response to the NORA letter disputing the allegations.

The Company is cooperating fully with the CFPB with respect to this matter and the Company believes that its business practices have been in full compliance with applicable laws.

Because the CFPB has broad authority to determine what it views as potentially unfair, deceptive or abusive acts or practices, at this time, the Company is unable to predict the ultimate outcome of this matter.

Digit received a CID from the CFPB in June 2020.

The CID was disclosed and discussed during the acquisition process.

The stated purpose of the CID is to determine whether Digit, in connection with offering its products or services, misrepresented the terms, conditions, or costs of the products or services in a manner that is unfair, deceptive, or abusive.

While the Company believes that the business practices of the Company, including Digit, have been in full compliance with applicable laws, in the interest of resolving this matter, on August 11, 2022, Digit agreed to a consent order with the CFPB resolving such CID.

In connection with such consent order, Digit agreed to implement a redress and compliance plan to pay at least $ 68,145 in consumer redress to consumers who may have been harmed and paid a $ 2.7 million civil penalty to the CFPB.

The Company had previously established a reserve for the redress and civil penalty in the second quarter of 2022 .

On March 28, 2023, the Company announced that the CFPB had completed its investigation and concluded that it would not recommend pursuing an enforcement action against the Company.

The Company continues to believe that its business practices have been in full compliance with applicable laws.

From time to time, the Company may bring or be subject to other legal proceedings and claims in the ordinary course of business, including legal proceedings with third parties asserting infringement of their intellectual property rights, consumer litigation, and regulatory proceedings.

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Legal Proceedings for additional information regarding legal proceedings in which the Company is involved.

Subsequent Events

On May 8, 2023, the Company announced that it is taking a series of personnel and other cost saving measures to reduce expenses and streamline efficiency.

These measures include a headcount reduction of 255 employees, representing approximately 19 % of the Company's corporate staff, which excludes retail and contact center agents.

The Company also announced additional measures to reduce its expenditures on external contractors and vendors.

In relation to these and other personnel related activities, management expects to incur non-recurring, pre-tax charges of approximately $ 8.0 million in the second quarter of 2023.

The estimates of the charges and expenditures that the Company expects to incur in connection with these activities, and the timing thereof, are subject to a number of assumptions, and actual amounts may differ materially from estimates.

The Company may also incur charges and expenditures not currently contemplated due to unanticipated events that may occur in connection with these measures.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements