What changed in this filing

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Item 1. Financial Statements

2024-05-10 compared with 2023-11-09 · 171 added, 212 removed, 456 unchanged (46% 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 $ 69,200 $ 91,187

1 unchanged sentence

Loans receivable at fair value 2,841,525 2,962,352

Interest and fees receivable, net 29,021 31,796

Capitalized software and other intangibles, net 106,370 114,735

11 unchanged sentences

Stockholders' equity

Common stock, $ 0.0001 par value - 1,000,000,000 shares authorized at September 30, 2023 and December 31, 2022;

34,502,195 shares issued and 34,230,172 shares outstanding at September 30, 2023;

Common stock, $ 0.0001 par value - 1,000,000,000 shares authorized at March 31, 2024 and December 31, 2023;

35,861,277 shares issued and 35,589,254 shares outstanding at March 31, 2024;

34,741,076 shares issued and 34,469,053 shares outstanding at December 31, 2023

Common stock, additional paid-in capital 588,562 584,555

Retained earnings (accumulated deficit) ( 132,025 ) 6,102

Treasury stock at cost, 272,023 shares at September 30, 2023 and December 31, 2022

Retained deficit ( 200,288 ) ( 173,849 )

Treasury stock at cost, 272,023 shares at March 31, 2024 and December 31, 2023

( 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,

2023 2022 2023 2022

Three Months Ended March 31,

Interest income $ 230,590 $ 237,619

10 unchanged sentences

General, administrative and other 11,777 19,162

Goodwill impairment — 108,472 — 108,472

Total operating expenses 109,642 146,338

Income (loss) before taxes ( 30,475 ) ( 141,533 )

Income tax expense (benefit) ( 16,232 ) ( 6,536 ) ( 58,247 ) 1,956

Income tax benefit ( 4,036 ) ( 39,443 )

Net loss $ ( 26,439 ) $ ( 102,090 )

10 unchanged sentences

(in thousands, except share data)

For the Nine Months Ended September 30, 2023

Common Stock Warrants

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

For the Three Months Ended March 31, 2024

Warrants Common Stock

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

Balance – January 1, 2024 4,193,453 $ 19,431 34,469,053 $ 7 $ 565,124 $ ( 173,849 ) $ ( 6,309 ) $ 404,404

1 unchanged sentence

Vesting of restricted stock units, net of shares withheld — — 1,120,201 — ( 232 ) — — ( 232 )

Issuance of warrants to purchase common stock in connection with debt financing — — — 2,096,727 6,672 — — 6,672

Net loss — — — — — ( 26,439 ) — ( 26,439 )

Balance – March 31, 2024 4,193,453 $ 19,431 35,589,254 $ 7 $ 569,131 $ ( 200,288 ) $ ( 6,309 ) $ 381,972

Issuance of common stock upon exercise of stock options, net of shares withheld 26,458 — ( 95 ) — — — — ( 95 )

Stock-based compensation expense — — 4,754 — — — — 4,754

Vesting of restricted stock units, net of shares withheld 116,539 — ( 267 ) — — — — ( 267 )

Issuance of warrants to purchase common stock in connection with debt financing — — — 2,096,726 12,759 — — 12,759

Net loss — — — — — ( 14,899 ) — ( 14,899 )

Balance – June 30, 2023 34,027,343 $ 7 $ 556,156 4,193,453 $ 19,431 $ ( 110,887 ) $ ( 6,309 ) $ 458,398

Issuance of common stock upon exercise of stock options, net of shares withheld 10,856 — 49 — — — — 49

Stock-based compensation expense — — 4,706 — — — — 4,706

Vesting of restricted stock units, net of shares withheld 191,973 — ( 652 ) — — — — ( 652 )

Issuance of warrants to purchase common stock in connection with debt financing — — — — — — — —

Net loss — — — — — ( 21,138 ) — ( 21,138 )

Balance – September 30, 2023 34,230,172 $ 7 $ 560,259 4,193,453 $ 19,431 $ ( 132,025 ) $ ( 6,309 ) $ 441,363

See Notes to the Condensed Consolidated Financial Statements.

2 unchanged sentences

(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

Warrants Common Stock

Shares Additional Paid-in Capital Shares Par Value 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 2,096,727 $ 6,672 33,884,346 $ 7 $ 551,764 $ ( 95,988 ) $ ( 6,309 ) $ 456,146

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 13,198 13,389

Goodwill impairment — 108,472

Fair value adjustment, net 116,850 215,710

5 unchanged sentences

Proceeds from sale of loans 23,355 11,125

Changes in other assets and other liabilities ( 27,283 ) ( 86,052 )

Changes in operating assets and liabilities

( 17,038 ) ( 15,507 )

Net cash provided by operating activities 85,882 76,814

Cash flows from investing activities

Originations of loans ( 1,179,886 ) ( 2,178,675 )

Originations and purchases of loans held for investment

( 298,139 ) ( 376,280 )

Proceeds from loan sales originated as held for investment 1,393 1,041

2 unchanged sentences

Other, net ( 124 ) ( 770 )

Net cash used in investing activities ( 189,368 ) ( 915,877 )

Net cash provided by (used in) investing activities 36,461 ( 39,648 )

Cash flows from financing activities

1 unchanged sentence

Repayments of secured financing ( 218,246 ) ( 2,614 )

Borrowings under asset-backed notes at fair value — 967,761

Repayments of asset-backed notes at fair value ( 105,273 ) ( 136,369 )

4 unchanged sentences

Payments of deferred financing costs ( 2,427 ) ( 775 )

Borrowings allocated to warrants — 6,632

Net payments related to stock-based activities ( 232 ) ( 1,364 )

Net cash provided by (used in) financing activities ( 101,258 ) 835,781

Net increase (decrease) in cash and cash equivalents and restricted cash ( 4,172 ) 79,247

Net cash used in financing activities ( 131,806 ) ( 39,062 )

Net decrease in cash and cash equivalents and restricted cash ( 9,463 ) ( 1,896 )

Cash and cash equivalents and restricted cash, beginning of period 206,016 203,817

14 unchanged sentences

Notes to the Condensed Consolidated Financial Statements (Unaudited)

September 30, 2023

March 31, 2024

Organization and Description of Business

Oportun Financial Corporation (together with its subsidiaries, "Oportun" or the "Company") is a mission-driven fintech that puts its members’ financial goals within reach.

Oportun Financial Corporation (together with its subsidiaries unless the context indicates otherwise, "Oportun" or the "Company") is a mission driven fintech that puts its members’ financial goals within reach.

With intelligent borrowing, savings, and budgeting 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.

The Company's credit products include personal loans, secured personal loans and credit cards.

The Company's digital banking products include automated savings, long-term investing and retirement savings.

Oportun offers access to a comprehensive suite of products powered by A.I., offered either directly or through partners, including unsecured and secured lending, and savings.

The Company is headquartered in San Carlos, California.

5 unchanged sentences

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").

Basis of Presentation ‑ The Company meets the SEC's definition of a “Smaller Reporting Company”, and therefore qualifies for the SEC's reduced disclosure requirements for smaller reporting companies.

The accompanying 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.

9 unchanged sentences

Recently Adopted Accounting Standards

Accounting Standards to be Adopted

Income Taxes - In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures.

This ASU requires entities to disclose in their rate reconciliation table additional categories or information about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories if the items meet a quantitative threshold and requires annual disclosure of income taxes paid to be disaggregated by federal, state and foreign taxes and to disaggregate the information by jurisdiction based on a quantitative threshold.

The ASU is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted.

The Company has evaluated the effect of the new guidance and determined the ASU expands tax disclosures but it will not have a material impact on the consolidated financial statements.

Segment Reporting - In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures .

The ASU enhances disclosures about significant segment expenses, provides new segment disclosure requirements for entities with a single reportable segment, enhances interim disclosure requirements, clarifies circumstances in which an entity is permitted to disclose multiple segment measures of profit or loss and other disclosure requirements.

The ASU is effective for fiscal years beginning after December 15, 2023.

Early adoption is permitted.

The Company has evaluated the effect of the new guidance and determined that the expanded segment disclosures will not have a material impact on the consolidated financial statements.

Earnings (Loss) per Share

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

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

Three Months Ended March 31,

(in thousands, except share and per share data) 2024 2023

8 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,

2023 2022 2023 2022

Three Months Ended March 31,

Stock options 2,543,871 3,261,871

5 unchanged sentences

In circumstances where the Company has 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, it would conclude that it is the primary beneficiary of the VIE, and it consolidates the VIE.

In situations where the Company is not deemed to be the primary beneficiary of the VIE, it does not consolidate the VIE and only recognizes our interests in the VIE.

In situations where the Company is not deemed to be the primary beneficiary of the VIE, it does not consolidate the VIE and only recognizes its interests in the VIE.

In addition, on June 16, 2023 and August 3, 2023, the Company entered into forward flow whole loan sale agreements that are considered secured borrowings and are not considered VIEs.

1 unchanged sentence

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.

As part of the Company’s overall funding strategy, the Company transfers a pool of designated loans receivable to wholly owned special-purpose subsidiaries 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.

8 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) 2024 2023

2 unchanged sentences

Loans receivable at fair value 2,393,160 2,539,186

Interest and fee receivable 26,689 30,443

Total VIE assets 2,497,278 2,630,652

3 unchanged sentences

Asset-backed notes at fair value 1,701,854 1,780,005

Asset-backed borrowings at amortized cost

383,856 195,057

Acquisition financing (1)

4 unchanged sentences

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, including non-performing loans and credit card receivables originated as held for investment.

1 unchanged sentence

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.

On June 16, 2023 and August 3, 2023, the Company entered into forward flow whole loan sale agreements that do not qualify as a sale for accounting purposes and are reported as a secured borrowing.

See Note 8, Borrowings for additional information on the secured borrowing under the caption of asset-backed borrowings at amortized cost.

The originations of loans sold and held for sale during the three months ended September 30, 2023 was $ 15.9 million and the Company recorded a gain on sale of $ 2.4 million and servicing revenue of $ 2.2 million.

The originations of loans sold and held for sale during the three months ended September 30, 2022 were insignificant.

The gain on sale recorded during the three months ended September 30, 2022 was insignificant as a result of our whole loan sale agreement expiration on March 4, 2022.

Whole Loan Sale Program ‑ The Company enters into whole loan sale agreements with third parties in which we agree to sell newly originated unsecured personal loans and secured personal loans.

The originations of loans sold and held for sale during the three months ended March 31, 2024 was $ 22.2 million and the Company recorded a gain on sale of $ 1.5 million and servicing revenue of $ 1.6 million.

The originations of loans sold and held for sale during the three months ended March 31, 2023 was $ 10.0 million.

The gain on sale recorded during the three months ended March 31, 2023 was $ 1.4 million.

Servicing revenue during the same time period was $ 3.0 million.

The originations of loans sold and held for sale during the nine months ended September 30, 2023 was $ 41.6 million and the Company recorded a gain on sale of $ 6.1 million and servicing revenue of $ 7.7 million.

The originations of loans sold and held for sale during the nine months ended September 30, 2022 was $ 50.6 million and the Company recorded a gain on sale of $ 5.7 million and servicing revenue of $ 15.5 million.

Capitalized Software and Other Intangibles

Capitalized software, net consists of the following:

September 30, December 31,

March 31, December 31,

(in thousands) 2024 2023

5 unchanged sentences

Capitalized software, net

Amortization of system development costs and acquired developed technology for three months ended September 30, 2023 and 2022 was $ 10.8 million and $ 9.0 million, respectively.

System development costs capitalized in the three months ended September 30, 2023 and 2022 were $ 7.0 million and $ 13.8 million, respectively.

Amortization of system development costs and acquired developed technology for nine months ended September 30, 2023 and 2022 was $ 31.6 million and $ 24.7 million, respectively.

System development costs capitalized in the nine months ended September 30, 2023 and 2022 were $ 25.3 million and $ 39.2 million, respectively.

Acquired developed technology was $ 48.5 million and is related to the acquisition of Oportun Savings (formerly known as Digit) on December 22, 2021.

Amortization of system development costs and acquired developed technology for three months ended March 31, 2024 and 2023 was $ 10.2 million and $ 10.1 million, respectively.

System development costs capitalized in the three months ended March 31, 2024 and 2023 were $ 3.8 million and $ 10.6 million, respectively.

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

Intangible Assets

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

September 30, December 31,

March 31, December 31,

(in thousands) 2024 2023

5 unchanged sentences

Total intangible assets, net $ 25,551 $ 27,468

On March 8, 2023, the Company revealed its rebranding of Oportun and Oportun Savings (formerly known as Digit) as a single brand.

Amortization of intangible assets for the three months ended March 31, 2024 and 2023 was $ 1.9 million and $ 1.6 million, respectively.

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 September 30, 2023 and 2022 was $ 1.9 million and $ 2.0 million, respectively.

Amortization of intangible assets for the nine months ended September 30, 2023 and 2022 was $ 5.5 million and $ 6.0 million, respectively.

Expected future amortization expense for intangible assets as of September 30, 2023 is as follows:

Expected future amortization expense for intangible assets as of March 31, 2024 is as follows:

(in thousands) Fiscal Years

2023 (remaining three months) $ 1,931

2024 (remaining nine months) $ 5,621

Other assets consist of the following:

September 30, December 31,

March 31, December 31,

(in thousands) 2024 2023

9 unchanged sentences

Total other assets $ 114,138 $ 107,680

Depreciation and amortization expense related to fixed assets for the three months ended September 30, 2023 and 2022 was $ 0.9 million and $ 1.3 million, respectively, and for the nine months ended September 30, 2023 and 2022 it was $ 3.2 million, and $ 3.8 million, respectively.

Depreciation and amortization expense related to fixed assets for the three months ended March 31, 2024 and 2023 was $ 1.1 million and $ 1.3 million, respectively.

Secured Financing

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Variable Interest Entity Facility Amount Maturity Date Interest Rate Balance Balance

1 unchanged sentence

Oportun CCW Trust (1)

$ 120,000 December 1, 2024 Variable (2)

$ 80,000 December 1, 2024 Adjusted SOFR + 3.41 %

$ 63,559 $ 68,409

2 unchanged sentences

Total secured financing $ 680,000 $ 72,106 $ 289,951

(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 adjusted SOFR plus 3.41 % on the outstanding principal balance as of September 30, 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.

(1) As of December 31, 2023, the facility amount of the Secured Financing - CCW facility (Oportun CCW Trust) was $ 100.0 million.

On January 31, 2024, the Company entered into an amendment to the Credit Card Warehouse facility to reduce the commitment amount from $ 100.0 million to $ 80.0 million and adjusted the minimum payment rate requirement, advance rate, and the amount of other loan sales permissable.

Asset-backed Notes at Fair Value

The following table presents information regarding asset-backed notes:

September 30, 2023

March 31, 2024

Variable Interest Entity Initial note amount issued (1)

12 unchanged sentences

Oportun Funding XIV, LLC (Series 2021-A) 375,000 383,632 140,728 155,838 1.78 % 2 years

Oportun Funding XIII, LLC (Series 2019-A) 279,412 294,118 80,635 97,229 3.46 % 3 years

Total asset-backed notes recorded at fair value $ 2,475,000 $ 2,540,569 $ 1,701,854 $ 1,864,073

20 unchanged sentences

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

There were no notes retained by the Company as of June 30, 2023.

There were no notes retained by the Company as of March 31, 2024.

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.

(4) The revolving period for 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.

Asset-backed borrowings at amortized cost - On June 16, 2023, and August 3, 2023, the Company entered into forward flow whole loan sale agreements and has agreed to sell up to $ 300 million and $ 400 million of its personal loan originations over the next twelve months, respectively.

The Company will continue to service these loans upon transfer of the receivables.

While the economics of these transactions are structured as a whole loan sale, the transfer of these loans receivable does not qualify as a sale for accounting purposes.

Accordingly, the related assets remain on the Company's balance sheet and cash proceeds received are reported as a secured borrowing under the caption of asset-backed borrowings at amortized cost with related interest expense recognized over the life of the related borrowing.

As part of these agreements, as of September 30, 2023, the Company transferred loans receivable totaling $ 145.0 million and $ 105.9 million, respectively.

Asset-backed Borrowings at Amortized Cost

The following table represents information regarding the Company's Asset-backed borrowings at amortized cost:

March 31, 2024 December 31, 2023

Balance Balance

Asset-backed borrowings at amortized cost

Pledged Asset (1)

Associated Liability Pledged Asset (1)

Associated Liability

(in thousands)

Oportun Issuance Trust 2024-1

$ 190,033 $ 188,608 $ — $ —

Oportun CL Trust 2023-A

197,390 195,248 197,390 195,057

Other Asset Backed Borrowings

402,124 403,668 382,712 386,411

Total asset-backed borrowings recorded at amortized cost:

$ 789,547 $ 787,524 $ 580,102 $ 581,468

(1) The amount of pledged assets are recognized within the Loans Receivable at Fair Value within the Consolidated Balance Sheet.

On February 13, 2024, the Company announced the issuance of $ 199.5 million of Series 2024-1 fixed-rate asset-backed notes secured by a pool of its unsecured and secured personal installment loans (the "2024-1 Securitization").

The 2024-1 Securitization included four classes of fixed rate notes.

The notes were offered and sold in a private placement in reliance on Rule 144A under the U.S.

Securities Act of 1933, as amended, and were priced with a weighted average yield of 8.600 % per annum and weighted average coupon of 8.434 % per annum.

Acquisition and Corporate Financing

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Entity Original Balance Maturity Date Interest Rate Balance Balance

4 unchanged sentences

Oportun RF, LLC (2)

116,000 October 1, 2024 SOFR (minimum of 0.00 %) + 11.00 %

116,000 January 10, 2025 SOFR (minimum of 0.00 %) + 11.00 %

43,315 54,646

Total acquisition and corporate financings $ 266,000 $ 243,413 $ 258,746

$ 266,000 $ 268,103 $ 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 (Oportun Financial Corporation) 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 funds associated with 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.

Pursuant to the Second Amendment, the Company issued 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, under the Amended Credit Agreement, the Company borrowed an additional $ 25.0 million of incremental term loans (the "Incremental Tranche B Loans") and issued Warrants to the lenders to purchase 1,048,363 shares of the Company's common stock at an exercise price of $ 0.01 per share.

The Company determined that the terms of the new debt instrument upon issuance of Tranche B was substantially different when compared to the Original Credit Agreement resulting in an insignificant net loss on debt extinguishment.

Accordingly, the Company extinguished the carrying value of the Corporate Financing Facility prior to issuance of Tranche B and recorded the new Corporate Financing Facility upon issuance of Tranche B at fair value of $ 179.5 million.

This resulted in an insignificant net loss on extinguishment.

On June 30, 2023, under the Amended Credit Agreement, the Company borrowed an additional $ 25.0 million of incremental term loans (the "Incremental Tranche C Loans") and issued Warrants to the lenders to purchase 1,048,363 shares of the Company's common stock at an exercise price of $ 0.01 per share.

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.

(2) As of December 31, 2023, the maturity date of the Acquisition Financing facility (Oportun RF, LLC) was October 10, 2024.

Amendments to Corporate Financing

On March 12, 2024, the Company entered into Amendment No.

3 to the Corporate Financing (the “Third 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 the Agent.

The Third Amendment includes modifications to the minimum asset coverage ratio covenant levels, provides for an interest rate step-up of 3.00 % per annum for certain months beginning in August 2024 in which the asset coverage ratio is less than 1.00 to 1.00, and requires certain principal payments in amounts equal to $ 5.7 million per month to be made on the last business day of each of March, April and May 2024.

In addition, the Third Amendment requires principal payments equal to 100 % of the net cash proceeds of any indebtedness junior in priority to the obligations under the Corporate Financing.

Amendments to Acquisition Financing

On March 8, 2024, the Acquisition Financing facility (Oportun RF, LLC) was amended to provide for a three-month principal payment holiday for the months of March, April and May 2024, in amounts equal to $ 5.7 million per month.

In addition, the amendment extended the term of the Acquisition Financing facility to January 10, 2025.

See Note 10, Stockholders' Equity for additional information on the Warrants.

On October 20, 2023, in connection with the closing of a new private structured financing facility (the “Structured Financing Facility”), Oportun CL Trust 2023-A, as borrower, and Oportun, Inc.

and Oportun CL Depositor, LLC, each as seller and depositor, respectively, entered into a Receivables Loan and Security Agreement (the “Receivables Loan and Security Agreement”) with certain lenders from time-to-time party thereto (the “Lenders”) and Wilmington Trust, National Association as administrative agent, paying agent and account bank, pursuant to which the borrower borrowed $ 197 million.

Certain funds and affiliates of Castlelake, L.P.

(“Castlelake”) participated as Lenders under the Structured Financing Facility.

Borrowings under the Receivables Loan and Security Agreement accrue interest at a weighted average interest rate equal to 10.05 %.

As of September 30, 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.

As of March 31, 2024, and December 31, 2023, 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) 2024 2023

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Amount due to whole loan buyer 4,031 4,169

Deferred tax liabilities — 30,575

Current tax liabilities 7,134 7,139

3 unchanged sentences

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, 2023 or December 31, 2022.

Common Stock - As of September 30, 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 September 30, 2023, 34,502,195 and 34,230,172 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, 2024 or December 31, 2023.

Common Stock - As of March 31, 2024 and December 31, 2023, 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, 2024, 35,861,277 and 35,589,254 shares were issued and outstanding, respectively, and 272,023 shares were held in treasury stock.

As of December 31, 2023, 34,741,076 and 34,469,053 shares were issued and outstanding, respectively, and 272,023 shares were held in treasury stock.

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On June 30, 2023, in connection with the funding of the Incremental Tranche C Loans, the Company issued 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.

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

See Liquidity and Capital Resources section for additional information on the Second Amendment of the Corporate Financing facility.

Equity Compensation and Other Benefits

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Stock-based Compensation - Total stock-based compensation expense 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) 2024 2023

4 unchanged sentences

$ 3,982 $ 4,878

(1) Amounts shown are net of $ 0.3 million and $ 1.1 million of capitalized stock-based compensation for the three and nine months ended September 30, 2023, respectively, and 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.

As of September 30, 2023, and December 31, 2022, the Company’s total unrecognized compensation cost related to unvested stock-based option awards granted to employees was $ 3.2 million and $ 6.2 million, respectively, which will be recognized over a weighted-average vesting period of approximately 2.1 years and 2.6 years, respectively.

As of September 30, 2023 and December 31, 2022, the Company's total unrecognized compensation cost related to unvested restricted stock unit awards granted to employees was $ 26.8 million and $ 51.6 million, respectively, which will be recognized over a weighted average vesting period of approximately 2.5 years and 2.7 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 Company recognized $ 3.8 million and $ 6.1 million of income tax benefit in its consolidated statement of operations related to stock-based compensation expense during the nine months ended September 30, 2023 and 2022, respectively.

Additionally, the total income tax expense recognized in the income statement for share-based compensation exercises was $ 0.4 million and $ 3.0 million for the three and nine months ended September 30, 2023, respectively.

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

(1) Amounts shown are net of $ 0.3 million of capitalized stock-based compensation for the three months ended March 31, 2024 and net of $ 0.5 million of capitalized stock-based compensation for the three months ended March 31, 2023.

As of March 31, 2024, and December 31, 2023, the Company’s total unrecognized compensation cost related to unvested stock-based option awards granted to employees was $ 1.9 million and $ 2.6 million, respectively, which will be recognized over a weighted-average vesting period of approximately 1.9 years for both periods.

As of March 31, 2024 and December 31, 2023, the Company's total unrecognized compensation cost related to time-based and performance-based unvested restricted stock unit awards granted to employees was $ 18.6 million and $ 24.8 million, respectively, which will be recognized over a weighted average vesting period of approximately 2.0 years and 2.1 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 $ 1.1 million and

$ 1.4 million of income tax benefit in its consolidated statement of operations related to stock-based compensation expense for the three months ended March 31, 2024 and 2023, respectively.

Additionally, the total income tax expense (benefit) recognized in the income statement for share-based compensation exercises was $ 1.6 million and $ 2.4 million for the three months ended March 31, 2024 and 2023, 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) 2024 2023

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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) 2024 2023

Non-interest income

Gain on loan sales (loss)

Gain on loan sales

$ 1,501 $ 1,326

1 unchanged sentence

Subscription revenue 6,519 6,878

Interest on member accounts

Other income 3,796 4,781

Total non-interest income $ 19,892 $ 21,893

For the three and nine months ended September 30, 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 and nine months ended September 30, 2023, the Company recorded income tax benefit of $ 16.2 million and $ 58.2 million, respectively, related to continuing operations, representing an effective income tax rate of 43.4 % and 29.7 %, respectively.

Income tax expense (benefit) for the three and nine months ended September 30, 2022 was $( 6.5 ) million and $ 2.0 million, respectively, representing an effective income tax rate of 5.8 % and ( 2.9 )%, respectively.

Income tax benefit increased by $ 9.7 million or 148 %, from $ 6.5 million for the three months ended September 30, 2022 to $ 16.2 million benefit for the three months ended September 30, 2023, primarily as a result of having a larger pretax loss for the three months ended September 30, 2023.

Income tax expense decreased by $ 60.2 million or 3078 %, from $ 2.0 million expense for the nine months ended September 30, 2022 to $( 58.2 ) million benefit for the nine months ended September 30, 2023, primarily as a result of having a larger pretax loss for the nine months ended September 30, 2023.

The Company's effective tax rates for the three and nine months ended September 30, 2023 and 2022 differ from the statutory tax rates primarily due to the impacts of the R&D tax credit, exercise of stock-based awards, and the 2022 goodwill impairment adjustment not present in the current year.

It is reasonably possible that the balance of gross unrecognized tax benefits could change in the next twelve months, although the timing of the resolution and/or closure of audits is highly uncertain.

Given the number of years remaining subject to examination and the number of matters being examined, the Company is unable to estimate a range at this time.

For the three months ended March 31, 2024 and 2023, 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, 2024 and 2023, the Company recorded income tax benefit of $ 4.0 million and $ 39.4 million, respectively, related to continuing operations.

The Company’s reported effective tax rates were 13.2 % and 27.9 % for the three months ended March 31, 2024 and 2023, respectively.

Income tax benefit decreased by $ 35.4 million or 89.8 % , from $ 39.4 million for the three months ended March 31, 2023 to $ 4.0 million for the three months ended March 31, 2024, primarily as a result of having a smaller pretax loss for the three months ended March 31, 2024.

The Company's effective tax rates for the three months ended March 31, 2024 differ from the statutory tax rates primarily due to the impacts of the research and development tax credit and stock-based compensation.

The Company’s policy is to recognize interest and penalties associated with income taxes in income tax expense.

The Company expects to release $ 3.6 million of the uncertain tax positions within the next twelve months due to the expiration of various statute of limitations at the end of 2024.

In December 2021, the Organization for Economic Co-operation and Development Inclusive Framework on Base Erosion Profit Shifting released Model Global Anti-Base Erosion rules (“Model Rules”) under Pillar Two.

The Model Rules set forth the “common approach” for a Global Minimum Tax at 15 percent for multinational enterprises with a turnover of more than 750 million euros.

Rules under Pillar Two were effective from January 1, 2024.

The Company does not expect adoption of Pillar Two rules to have a significant impact on its consolidated financial statements during fiscal year 2024.

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, 2023 December 31, 2022

March 31, 2024 December 31, 2023

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

7 unchanged sentences

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.

The personal loans receivable balance at fair value as of September 30, 2023, consists of $ 2,702.4 million of unsecured personal loans receivable and $ 126.2 million of secured personal loans receivable.

September 30, 2023 December 31, 2022

The personal loans receivable balance at fair value as of March 31, 2024, consists of $ 2,624.1 million of unsecured personal loans receivable and $ 120.3 million of secured personal loans receivable.

March 31, 2024 December 31, 2023

Personal Loans Receivable

9 unchanged sentences

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Credit Card Receivables Range Range

7 unchanged sentences

The Company has derivative instruments in connection with its bank partnership program with Pathward, N.A.

(formerly known as MetaBank, N.A.) related to excess interest proceeds it expects to receive on loans retained by Pathward, N.A.

related to excess interest proceeds it expects to receive on loans retained by Pathward, N.A.

Based on the agreement underlying the bank partnership program, for all loans originated and retained by Pathward, Pathward receives a fixed interest rate.

The Company bears the risk of credit loss and has the benefit of any excess interest proceeds after satisfying various obligations under the agreement.

The fair value of the derivative instrument was $ 16.0 million as of September 30, 2023.

The underlying cash flows were 21.8 million as of September 30, 2023.

The fair value of the derivative instrument and underlying cash flows were not material as of December 31, 2022.

The fair value of the derivative instrument as of March 31, 2024 and December 31, 2023, were $ 10.5 million and $ 9.3 million, respectively.

The underlying cash flows as of March 31, 2024 and December 31, 2023, were $ 13.6 million and $ 12.2 million, respectively.

The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements for derivative instruments presented within Other Assets in the Condensed Consolidated Balance Sheets (Unaudited):

September 30, 2023*

Low High Weighted Average

March 31, 2024 December 31, 2023

Low High Weighted Average Low High Weighted Average

Remaining cumulative charge-offs 0.76 % 31.71 % 10.24 % 1.09 % 30.38 % 10.56 %

2 unchanged sentences

Discount rate 17.74 % 17.74 % 17.74 % 17.00 % 17.00 % 17.00 %

* Inputs as of December 31, 2022 were not disclosed as the balance was not yet material

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, 2023 and 2022.

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, 2024 and 2023.

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.

8 unchanged sentences

For the derivative, the Company uses a base set of cash flows derived from historical data and management assumptions.

From this base set of cash flows, funds that are projected to be released to the Company according to the contractual terms outlined in the waterfall agreement are

calculated on an aggregate basis then discounted at a rate that is representative of equity yield.

From this base set of cash flows, funds that are projected to be released to the Company according to the contractual terms outlined in the waterfall agreement are calculated on an aggregate basis then discounted at a rate that is representative of equity yield.

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) 2024 2023

1 unchanged sentence

Principal disbursements 584,162 673,935

Principal payments from customers ( 450,536 ) ( 453,054 ) ( 1,349,465 ) ( 1,525,126 )

Principal and interest payments from members

( 596,033 ) ( 621,972 )

Other loan sales

( 34,857 ) ( 38,209 )

Gross charge-offs ( 103,037 ) ( 107,406 )

1 unchanged sentence

Balance – end of period $ 2,841,525 $ 3,044,478

As of September 30, 2023, the aggregate fair value of loans that are 90 days or more past due and in non-accrual status was $ 6.3 million, and the aggregate unpaid principal balance for loans that are 90 days or more past due was $ 40.7 million.

As of March 31, 2024, the aggregate fair value of loans that are 90 days or more past due and in non-accrual status was $ 6.1 million, and the aggregate unpaid principal balance for loans that are 90 days or more past due was $ 36.3 million.

As of December 31, 2023, the aggregate fair value of loans that are 90 days or more past due and in non-accrual status was $ 5.2 million, and the aggregate unpaid principal balance for loans that are 90 days or more past due was $ 41.5 million.

Pursuant to the Second Amendment of the Corporate Financing facility, the Company issued detachable Warrants to the lenders.

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 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 3.41 % - 4.13 %

Expected Volatility 72.00 % - 78.00 %

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, 2023

March 31, 2024

Carrying value Estimated fair value Estimated fair value

8 unchanged sentences

Acquisition and corporate financing (Note 8) 268,516 276,137 — 276,137 —

(1) As of September 30, 2023, the Company estimates the carrying value of asset-backed borrowings at amortized cost to approximate their fair value due to the short period of time since origination of the underlying collateral.

(1) As of March 31, 2024, the Company estimates the carrying value of the Level 3 other asset-backed borrowings at amortized cost to approximate their fair value as the underlying cash flows and associated assumptions are reviewed and updated each period.

December 31, 2023

5 unchanged sentences

Secured financing (Note 8) 290,949 285,231 — 285,231 —

Asset-backed borrowings at amortized cost (Note 8) (1)

580,101 580,101 — — 580,101

Acquisition and corporate financing (Note 8) 285,682 286,865 — 286,865 —

As of December 31, 2023, the Company estimates the carrying value of asset-backed borrowings at amortized cost to approximate their fair value as the underlying cash flows and associated assumptions are reviewed and updated each period.

The Company uses the following methods and assumptions to estimate fair value:

3 unchanged sentences

• Asset-backed borrowings at amortized cost ‑ The fair values of the asset-backed borrowings at amortized cost have been calculated by discounting the contractual cash flows at the interest rate the Company estimates such arrangement would bear if executed in the current market, which is a Level 3 input measure.

There were no transfers in or out of Level 3 assets and liabilities for the three and nine months ended September 30, 2023 and 2022 and the year ended December 31, 2022.

There were no transfers in or out of Level 3 assets and liabilities for the three months ended March 31, 2024 and 2023 and the year ended December 31, 2023.

Leases, Commitments and Contingencies

10 unchanged sentences

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

As of September 30, 2023, maturities of lease liabilities, excluding short-term leases and leases on a month-to-month basis, were as follows:

As of March 31, 2024, 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

2023 (remaining three months) $ 3,291

Thereafter 10

2024 (remaining nine months) $ 9,314

Total lease payments 27,455

6 unchanged sentences

Lease expense

Thereafter 25

Total lease payments 30,473

3 unchanged sentences

Weighted average discount rate 4.72 %

Rental expenses under operating leases for the three and nine months ended September 30, 2023, were $ 4.3 million, and $ 13.4 million, respectively, and for the three and nine months ended September 30, 2022, were $ 4.2 million, and $ 14.2 million, respectively.

Rental expenses under operating leases for the three months ended March 31, 2024 and 2023, w a s $ 3.9 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 2027.

5 unchanged sentences

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, 2023, the Company has a commitment to purchase an additional $ 17.7 million of program loans based on originations through September 30, 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.

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 September 30, 2023 and December 31, 2022 were $ 44.7 million and $ 45.0 million, respectively.

Lending under the partnership was launched in August of 2021 and as of March 31, 2024, the Company has a commitment to purchase an additional $ 20.5 million of program loans based on originations through March 31, 2024.

Unfunded Loan and Credit Card Commitments - Unfunded loan and credit card commitments at March 31, 2024 and December 31, 2023 were $ 31.7 million and $ 32.9 million, respectively.

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

2 unchanged sentences

The Company disputes that there were underpayments in any of those years, and intends to pursue all available administrative and legal avenues of appeal to assert its position.

No accrual related to this matter has been recorded as of September 30, 2023, as the Company believes it is not probable to be incurred.

No accrual related to this matter has been recorded as of March 31, 2024, as the Company believes it is not probable to be incurred.

However, it is reasonably possible the Company will be unsuccessful in asserting at least some of these claims, and for those claims, the Company believes it may be exposed to a liability ranging from zero to $ 3.8 million, consisting of $ 1.2 million of value-added tax and $ 2.6 million of inflationary adjustments, fines and penalties.

12 unchanged sentences

The Company will continue to service these loans upon transfer of the receivables.

As part of this agreement, during the three and nine months ended September 30, 2023 the Company transferred loans receivable totaling $ 120.0 million and $ 145.0 million, respectively.

See Note 8, Borrowings - Asset-backed borrowings at amortized cost for additional information on the forward flow whole loan sale agreement.

For the three and nine months ended September 30, 2023, the Company recorded interest expense under these agreements of $ 14.5 million and $ 29.9 million, respectively, primarily related to the Corporate Financing facility.

As part of this agreement, during the three months ended March 31, 2024 the Company transferred loans receivable totaling $ 0.4 million.

See Liquidity and Capital Resources section for additional information on the forward flow whole loan sale agreement.

For the three months ended March 31, 2024, the Company recorded interest expense under these agreements of $ 11.5 million, primarily related to the Corporate Financing agreement and $ 6.5 million related to the secured borrowing agreement.

The expected cash flows are used to calculate interest expense on the secured borrowing, using the effective interest method.

The Company also recorded $ 6.7 million and $ 6.9 million of interest income in the Company's Condensed Consolidated Statements of Operations (Unaudited) for the three and nine months ended September 30, 2023 related to transferred loans.

Loans receivable at fair value underlying the secured borrowing with Neuberger was $ 138.9 million as of September 30, 2023.

The Company had Asset-backed borrowings at amortized costs of $ 140.5 million and corporate financing of $ 202.5 million due to Neuberger as of September 30, 2023.

The Company also had an insignificant amount of Interest and fee receivable, net and Other liabilities in its Condensed Consolidated Balance Sheets (Unaudited) as of September 30, 2023 related to these transactions.

The Company also recorded $ 4.8 million of interest income in the Company's Condensed Consolidated Statements of Operations (Unaudited) for the three months ended March 31, 2024 related to transferred loans.

The Company had corporate financing of $ 200.1 million and $ 204.1 million due to Neuberger as of March 31, 2024 and December 31, 2023 , respectively .

The Company also had an insignificant amount of interest payable in Other liabilities in its Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2024 related to this transaction.

The Company had loans receivable at fair value underlying the secured borrowing of $ 180.9 million and Asset-backed borrowings at amortized cost of $ 180.2 million, respectively, due to Neuberger as of March 31, 2024.

The Company also had an insignificant amount in Other liabilities in its Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2024 related to these transactions.

The Company believes that it has executed all the transactions described herein on terms no less favorable to it than it could have obtained from unaffiliated third parties.

Subsequent Events

On November 6, 2023, the Company announced that it is taking a series of measures to streamline its operations, including reducing the size of its corporate staff by approximately 18 %, impacting approximately 185 employees, and reducing its expenditures on external contractors.

In relation to these and other personnel related activities, management expects to incur non-recurring, pre-tax charges of $ 7 to $ 8 million in the fourth quarter of 2023.

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