What changed in this filing

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Item 1. Financial Statements

2024-11-12 compared with 2024-08-09 · 169 added, 114 removed, 572 unchanged (33% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

June 30, December 31,

September 30, December 31,

Cash and cash equivalents $ 71,838 $ 91,187

15 unchanged sentences

Stockholders' equity

Common stock, $ 0.0001 par value - 1,000,000,000 shares authorized at June 30, 2024 and December 31, 2023;

35,994,744 shares issued and 35,722,721 shares outstanding at June 30, 2024;

Common stock, $ 0.0001 par value - 1,000,000,000 shares authorized at September 30, 2024 and December 31, 2023;

36,243,060 shares issued and 35,971,037 shares outstanding at September 30, 2024;

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

1 unchanged sentence

Accumulated deficit ( 261,269 ) ( 173,849 )

Treasury stock at cost, 272,023 shares at June 30, 2024 and December 31, 2023

Treasury stock at cost, 272,023 shares at September 30, 2024 and December 31, 2023

( 6,309 ) ( 6,309 )

5 unchanged sentences

(in thousands, except share and per share data)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

2024 2023 2024 2023

26 unchanged sentences

(in thousands, except share data)

For the Six Months Ended June 30, 2024

For the Nine Months Ended September 30, 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

Shares Additional Paid-in Capital Shares Par Value Additional Paid-in Capital 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

7 unchanged sentences

Balance – June 30, 2024 4,193,453 $ 19,431 35,722,721 $ 7 $ 572,300 $ ( 231,313 ) $ ( 6,309 ) $ 354,116

Stock-based compensation expense — — — — 3,436 — — 3,436

Vesting of restricted stock units, net of shares withheld — — 248,316 — ( 40 ) — — ( 40 )

Net loss — — — — — ( 29,956 ) — ( 29,956 )

Balance – September 30, 2024 4,193,453 $ 19,431 35,971,037 $ 7 $ 575,696 $ ( 261,269 ) $ ( 6,309 ) $ 327,556

See Notes to the Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands, except share data)

For the Six Months Ended June 30, 2023

For the Nine Months Ended September 30, 2023

Warrants Common Stock

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

Shares Additional Paid-in Capital Shares Par Value Additional Paid-in Capital Retained Earnings (Accumulated Deficit)

Treasury Stock Total Stockholders' Equity

Balance – January 1, 2023 — $ — 33,354,607 $ 7 $ 547,799 $ 6,102 $ ( 6,309 ) $ 547,599

10 unchanged sentences

Balance – June 30, 2023 4,193,453 $ 19,431 34,027,343 $ 7 $ 556,156 $ ( 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 )

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

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

See Notes to the Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities

49 unchanged sentences

Notes to the Condensed Consolidated Financial Statements (Unaudited)

June 30, 2024

September 30, 2024

Organization and Description of Business

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.

Oportun Financial Corporation (together with its subsidiaries unless the context indicates otherwise, "Oportun" or the "Company") is a mission driven financial services company 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.

25 unchanged sentences

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

Early adoption is permitted.

While early adoption is permitted, the Company will adopt the standard, effective January 1, 2025.

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.

2 unchanged sentences

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

Early adoption is permitted.

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.

1 unchanged sentence

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

Three Months Ended June 30, Six Months Ended June 30,

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

(in thousands, except share and per share data) 2024 2023 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 June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

21 unchanged sentences

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

June 30, December 31,

September 30, December 31,

(in thousands) 2024 2023

19 unchanged sentences

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 June 30, 2024 was $ 28.4 million and the Company recorded a gain on sale of $ 2.1 million and servicing revenue of $ 1.6 million.

The originations of loans sold and held for sale during the three months ended June 30, 2023 was $ 15.6 million.

The gain on sale recorded during the three months ended June 30, 2023 was $ 2.3 million.

The originations of loans sold and held for sale during the three months ended September 30, 2024 was $ 32.3 million and the Company recorded a gain on sale of $ 0.7 million and servicing revenue of $ 1.6 million.

The originations of loans sold and held for sale during the three months ended September 30, 2023 was $ 15.9 million.

The gain on sale recorded during the three months ended September 30, 2023 was $ 2.4 million.

Servicing revenue during the same time period was $ 2.2 million.

The originations of loans sold and held for sale during the six months ended June 30, 2024 was $ 50.7 million and the Company recorded a gain on sale of $ 3.6 million and servicing revenue of $ 3.2 million.

The originations of loans sold and held for sale during the six months ended June 30, 2023 was $ 25.7 million.

The gain on sale recorded during the six months ended June 30, 2023 was $ 3.7 million.

The originations of loans sold and held for sale during the nine months ended September 30, 2024 was $ 83.0 million and the Company recorded a gain on sale of $ 4.3 million and servicing revenue of $ 4.8 million.

The originations of loans sold and held for sale during the nine months ended September 30, 2023 was $ 41.6 million.

The gain on sale recorded during the nine months ended September 30, 2023 was $ 6.1 million.

Servicing revenue during the same time period was $ 7.7 million.

Oportun® Visa® Credit Card - On June 21, 2024, the Company entered into a nonbinding letter of intent with a third-party to sell the credit card receivable portfolio originated under the Company's credit card program.

Following the execution of the nonbinding letter of intent, the portfolio is considered to be held for sale and is presented within Credit cards receivable held for sale on the Condensed Consolidated Balance Sheet (Unaudited).

The Company has elected the fair value option for the credit card portfolio and, as a result, we recorded a net decrease in fair value of $ 36.2 million associated with the terms contained within the nonbinding letter of intent.

The Company has chosen to sell the credit card receivables portfolio because it believes it can achieve higher returns on its capital from allocating it to the Company's other products.

Oportun® Visa® Credit Card - On June 21, 2024, the Company entered into a nonbinding letter of intent with a third-party to sell the credit cards receivable portfolio originated under the Company's credit card program.

Following the execution of the nonbinding letter of intent, the portfolio was considered to be held for sale and is presented within credit cards receivable held for sale on the Condensed Consolidated Balance Sheet (Unaudited).

The Company has elected the fair value option for the credit card portfolio and, as a result, the Company recorded a net decrease in fair value of $ 36.2 million associated with the terms contained within the nonbinding letter of intent.

On September 24, 2024, the Company entered into a definitive agreement to sell its credit cards receivable portfolio.

Capitalized Software and Other Intangibles

Capitalized software, net consists of the following:

June 30, December 31,

September 30, December 31,

(in thousands) 2024 2023

5 unchanged sentences

Capitalized software, net

Amortization of system development costs and acquired developed technology for the three months ended June 30, 2024 and 2023 was $ 10.1 million and $ 10.6 million, respectively.

System development costs capitalized in the three months ended June 30, 2024 and 2023 were $ 5.4 million and $ 7.7 million, respectively.

Amortization of system development costs and acquired developed technology for the six months ended June 30, 2024 and 2023 was $ 20.4 million and $ 20.7 million, respectively.

System development costs capitalized in the six months ended June 30, 2024 and 2023 were $ 9.2 million and $ 18.3 million, respectively.

Amortization of system development costs and acquired developed technology for the three months ended September 30, 2024 and 2023 was $ 10.8 million and $ 10.8 million, respectively.

System development costs capitalized in the three months ended September 30, 2024 and 2023 were $ 5.0 million and $ 7.0 million, respectively.

Amortization of system development costs and acquired developed technology for the nine months ended September 30, 2024 and 2023 was $ 31.1 million and $ 31.6 million, respectively.

System development costs capitalized in the nine months ended September 30, 2024 and 2023 were $ 14.2 million and $ 25.3 million, respectively.

Acquired developed technology was $ 48.5 million and is related to the acquisition of Hello Digit, Inc.

2 unchanged sentences

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

June 30, December 31,

September 30, December 31,

(in thousands) 2024 2023

5 unchanged sentences

Total intangible assets, net $ 21,703 $ 27,468

Amortization of intangible assets for the three months ended June 30, 2024 and 2023 was $ 1.9 million and $ 1.9 million, respectively.

Amortization of intangible assets for the six months ended June 30, 2024 and 2023 was $ 3.8 million and $ 3.5 million, respectively.

Amortization of intangible assets for the three months ended September 30, 2024 and 2023 was $ 1.9 million and $ 1.9 million, respectively.

Amortization of intangible assets for the nine months ended September 30, 2024 and 2023 was $ 5.8 million and $ 5.5 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.

Expected future amortization expense for intangible assets as of June 30, 2024 is as follows:

Expected future amortization expense for intangible assets as of September 30, 2024 is as follows:

(in thousands) Fiscal Years

2024 (remaining six months) $ 3,704

2024 (remaining three months) $ 1,773

Other assets consist of the following:

June 30, December 31,

September 30, December 31,

(in thousands) 2024 2023

10 unchanged sentences

Total other assets $ 139,954 $ 107,680

Depreciation and amortization expense related to fixed assets for the three months ended June 30, 2024 and 2023 was $ 1.0 million and $ 0.9 million, respectively, and for the six months ended June 30, 2024 and 2023 was $ 2.0 million, and $ 2.2 million, respectively.

The Company recognized an impairment of the right-of-use asset related to the leased office space in San Carlos, California due to a significant decrease in observed market rents for commercial office space, and the inability to find a sub-lessee given the remaining lease term and market conditions.

Depreciation and amortization expense related to fixed assets for the three months ended September 30, 2024 and 2023 was $ 0.8 million and $ 0.9 million, respectively, and for the nine months ended September 30, 2024 and 2023 was $ 2.8 million, and $ 3.2 million, respectively.

During the second quarter of 2024, the Company recognized an impairment of the right-of-use asset related to the leased office space in San Carlos, California due to a significant decrease in observed market rents for commercial office space, and the inability to find a sub-lessee given the remaining lease term and market conditions.

As a result, the Company disposed of all related fixed assets of $ 3.7 million and related accumulated depreciation of $ 3.5 million resulting in a loss on disposal of $ 0.2 million.

1 unchanged sentence

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Variable Interest Entity Facility Amount Maturity Date Interest Rate Balance Balance

3 unchanged sentences

$ 53,223 $ 68,409

Oportun PLW Trust 600,000 September 1, 2024 Adjusted SOFR + 2.17 %

Oportun PLW Trust (2)

306,452 September 1, 2026 Term SOFR + 3.40 %

4,710 221,542

Oportun PLW II Trust

245,200 August 1, 2027 Term SOFR + 3.08 %

Total secured financing $ 611,652 $ 125,393 $ 289,951

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

(2) As of December 31, 2023, the facility amount of the Secured Financing - PLW facility (Oportun PLW Trust) was $ 600.0 million and the interest rate was adjusted SOFR plus 2.17 %.

CCW Warehouse Facility

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.

On September 24, 2024, the Company entered into an amendment to the Credit Card Warehouse facility to reduce the commitment amount from $ 80.0 million to $ 60.0 million and adjusted the minimum payment rate requirement for the months of September and October 2024 from 8.60 % to 8.00 %.

On August 29, 2024, the Company (Oportun PLW Trust) entered into the Seventh Amendment to the PLW facility (the “PLW Facility”) to modify certain terms of the loan and security agreement to reduce the number of lenders thereunder and to extend the PLW Facility Termination Date until October 8, 2024, during which time no draws were available, and no unused fees accrued.

On September 20, 2024, the Company entered into an amendment to the loan and security agreement and other related documents (the “Master Amendment”) under the PLW Facility.

Following the Master Amendment, the PLW Facility has a two-year term and a borrowing capacity of $ 306.45 million.

Borrowings under the PLW Facility loan and security agreement accrue interest at a rate equal to Term SOFR plus a weighted average spread of 3.40 % and the advance rate for the PLW Facility is 95.0 %, subject to certain triggers that could lower the advance rate to 92.0 %.

PLW II Facility

On August 5, 2024, in connection with the closing of a new warehouse facility (the “PLW II Facility”), Oportun PLW II Trust, entered into a loan and security agreement with certain lenders from time to time party thereto, Wilmington Trust, National Association as collateral agent, administrative agent, paying agent, securities intermediary and depositary bank.

The PLW II Facility has a three year term and a borrowing capacity of $ 245.2 million.

Borrowings under the loan and security agreement accrue interest at a rate equal to Term SOFR plus a weighted average spread of 3.08 %.

The advance rate for the PLW II Facility is 95.0 %, subject to certain triggers that could lower the advance rate to 92.0 %.

Asset-backed Notes at Fair Value

The following table presents information regarding asset-backed notes at fair value:

June 30, 2024

September 30, 2024

Variable Interest Entity Initial note amount issued (1)

34 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, 2024.

There were no notes retained by the Company as of September 30, 2024.

The weighted average interest rate for Series 2022-A, Series 2022-2 and Series 2022-3 will change over time as the notes pay sequentially (in class priority order).

4 unchanged sentences

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Balance Balance

6 unchanged sentences

$ 223,250 $ 221,843 $ — $ —

Oportun Issuance Trust 2024-1 118,020 117,430 — —

Oportun CL Trust 2023-A

4 unchanged sentences

$ 1,109,461 $ 1,109,370 $ 580,102 $ 581,468

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

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

On August 29, 2024, the Company announced the issuance of $ 223.3 million of series 2024-2 fixed-rate asset-backed notes secured by a pool of its unsecured and secured personal installment loans (the "2024-2 Securitization").

The 2024-2 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 8.22 % per annum and weighted average coupon of 8.07 % per annum.

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").

4 unchanged sentences

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

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.

Acquisition and Corporate Financing

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Entity Original Balance Maturity Date Interest Rate Balance Balance

7 unchanged sentences

Total acquisition and corporate financings $ 266,000 $ 215,697 $ 258,746

(1) The Corporate Financing facility (Oportun Financial Corporation) was amended and upsized to $ 75.0 million on March 10, 2023.

(1) The Corporate Financing facility (Oportun Financial Corporation) was amended and upsized by $ 75.0 million on March 10, 2023.

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

8 unchanged sentences

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

As of June 30, 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.

As of September 30, 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:

June 30, December 31,

September 30, December 31,

(in thousands) 2024 2023

9 unchanged sentences

Preferred Stock - The board of directors of the Company (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 June 30, 2024 or December 31, 2023.

Common Stock - As of June 30, 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 June 30, 2024, 35,994,744 and 35,722,721 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 September 30, 2024 or December 31, 2023.

Common Stock - As of September 30, 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 September 30, 2024, 36,243,060 and 35,971,037 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.

7 unchanged sentences

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

Three Months Ended June 30, Six Months Ended June 30,

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

(in thousands) 2024 2023 2024 2023

4 unchanged sentences

$ 3,217 $ 4,362 $ 10,141 $ 13,709

(1) Amounts shown are net of $ 0.2 million and $ 0.5 million of capitalized stock-based compensation for the three and six months ended June 30, 2024, respectively, and net of $ 0.3 million and $ 0.7 million of capitalized stock-based compensation for the three and six months ended June 30, 2023, respectively.

As of June 30, 2024, and December 31, 2023, the Company’s total unrecognized compensation cost related to unvested stock-based option awards granted to employees was $ 1.5 million and $ 2.6 million, respectively, which will be recognized over a weighted-average vesting period of approximately 1.7 years and 1.9 years, respectively.

As of June 30, 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 $ 21.0 million and $ 24.8 million, respectively, which will be recognized over a weighted average vesting period of approximately 2.2 years and 2.1 years, respectively.

(1) Amounts shown are net of $ 0.2 million and $ 0.7 million of capitalized stock-based compensation for the three and nine months ended September 30, 2024, respectively, and 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.

As of September 30, 2024, and December 31, 2023, the Company’s total unrecognized compensation cost related to unvested stock-based option awards granted to employees was $ 1.2 million and $ 2.6 million, respectively, which will be recognized over a weighted-average vesting period of approximately 1.5 years and 1.9 years, respectively.

As of September 30, 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 $ 16.3 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 $ 2.0 million and $ 2.6 million of income tax benefit in its consolidated statement of operations related to stock-based compensation expense during the six months ended June 30, 2024 and 2023, respectively.

Additionally, the total income tax expense (benefit) recognized in the income statement for share-based compensation exercises was $ 0.2 million and $ 1.7 million for the three and six months ended June 30, 2024, respectively.

The total income tax expense recognized in the income statement for share-based compensation exercises was $ 0.3 million and $ 2.7 million for the three and six months ended June 30, 2023, respectively.

The Company recognized $ 2.8 million and $ 3.8 million of income tax benefit in its consolidated statement of operations related to stock-based compensation expense during the nine months ended September 30, 2024 and 2023, respectively.

Additionally, the total income tax expense (benefit) recognized in the income statement for share-based compensation exercises was $ 0.4 million and $ 2.2 million for the three and nine months ended September 30, 2024, respectively.

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.

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

Three Months Ended June 30, Six Months Ended June 30,

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

(in thousands) 2024 2023 2024 2023

4 unchanged sentences

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

Three Months Ended June 30, Six Months Ended June 30,

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

(in thousands) 2024 2023 2024 2023

7 unchanged sentences

Total non-interest income $ 19,907 $ 24,962 $ 58,822 $ 72,955

For the three and six months ended June 30, 2024 and 2023, the Company calculated 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 six months ended June 30, 2024, the Company recorded income tax benefit of $ 18.1 million and $ 22.2 million, respectively, related to continuing operations, representing an effective tax rate of 36.9 % and 27.8 %, respectively.

Income tax benefit for the three and six months ended June 30, 2023 was $ 2.6 million and $ 42.0 million, representing an effective income tax rate of 14.7 % and 26.4 %, respectively.

Income tax benefit increased by $ 15.6 million or 605 %, from $ 2.6 million for the three months ended June 30, 2023 to $ 18.1 million benefit for the three months ended June 30, 2024, primarily as a result of having a larger pretax loss for the three months ended June 30, 2024.

Income tax benefit decreased by $ 19.9 million or 47 %, from $ 42.0 million for the six months ended June 30, 2023 to $ 22.2 million for the six months ended June 30, 2024, primarily as a result of having a lower pretax loss for the six months ended June 30, 2024.

The Company's effective tax rates for the three and six months ended June 30, 2024 and 2023 differ from the statutory tax rates primarily due to the impacts of the research and development tax credit, and stock-based compensation.

For the three and nine months ended September 30, 2024 and 2023, the Company calculated 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, 2024, the Company recorded income tax benefit of $ 9.5 million and $ 31.7 million, respectively, related to continuing operations, representing an effective tax rate of 24.1 % and 26.6 %, respectively.

Income tax benefit for the three and nine months ended September 30, 2023 was $ 16.2 million and $ 58.2 million, representing an effective income tax rate of 43.4 % and 29.7 %, respectively.

Income tax benefit decreased by $ 6.7 million or 41 %, from $ 16.2 million for the three months ended September 30, 2023 to $ 9.5 million benefit for the three months ended September 30, 2024, primarily as a result of the discrete tax impacts of unrecognized tax benefits and return to provision adjustments for the three months ended September 30, 2023.

Income tax benefit decreased by $ 26.6 million or 46 %, from $ 58.2 million for the nine months ended September 30, 2023 to $ 31.7 million for the nine months ended September 30, 2024, primarily as a result of having a lower pretax loss for the nine months ended September 30, 2024.

The Company's effective tax rates for the three and nine months ended September 30, 2024 and 2023 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 unrecognized tax positions in income tax expense.

9 unchanged sentences

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

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

9 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 June 30, 2024, consists of $ 2,578.9 million of unsecured personal loans receivable and $ 135.5 million of secured personal loans receivable.

June 30, 2024 December 31, 2023

The personal loans receivable balance at fair value as of September 30, 2024, consists of $ 2,572.7 million of unsecured personal loans receivable and $ 155.8 million of secured personal loans receivable.

September 30, 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).

June 30, 2024 December 31, 2023

Credit Card Receivables Range (2)

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, 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.

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.

For personal loans receivable, 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 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.

September 30, 2024 December 31, 2023

Credit Cards Receivables

Remaining cumulative charge-offs (1)

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

(2) As of June 30, 2024, the Company determined the fair value of the credit card receivables held for sale based on the terms outlined in the non-binding letter of intent.

(2) On September 24, 2024, the Company entered into a definitive agreement to sell its credit cards receivable portfolio to a third-party credit card marketer and servicer.

As of September 30, 2024, the Company determined the fair value of the credit cards receivable portfolio based on the terms outlined in the definitive agreement signed September 24, 2024.

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

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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 as of June 30, 2024 and December 31, 2023, were $ 11.4 million and $ 9.3 million, respectively.

The underlying cash flows as of June 30, 2024 and December 31, 2023, were $ 14.2 million and $ 12.2 million, respectively.

The fair value of the derivative instrument as of September 30, 2024 and December 31, 2023, were $ 12.7 million and $ 9.3 million, respectively.

The underlying cash flows as of September 30, 2024 and December 31, 2023, were $ 16.1 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):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Low High Weighted Average Low High Weighted Average

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Discount rate 17.09 % 17.09 % 17.09 % 17.00 % 17.00 % 17.00 %

Fair value adjustments related to financial instruments where the fair value option has been elected are recorded through earnings for the six months ended June 30, 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.

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.

For personal loans receivable, 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.

On June 21, 2024, the Company entered into a nonbinding letter of intent with a third-party to sell the credit card receivable portfolio originated under the Company's credit card program.

Following the decision to sell the credit card receivable portfolio the Company used the agreed upon sale price to determine the fair value.

On September 24, 2024, the Company signed a definitive agreement to sell the credit cards receivable portfolio originated under the Company's Credit Card program.

Following the decision to sell the credit cards receivable portfolio the Company used the agreed upon sale price to determine the fair value.

Prior to this decision, the Company used historical data to derive assumptions about certain loan portfolio characteristics such as principal payment rates, interest yields and fee yields.

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

Three Months Ended June 30, Six Months Ended June 30,

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

(in thousands) 2024 2023 2024 2023

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Balance – end of period $ 2,728,515 $ 2,969,879 $ 2,728,515 $ 2,969,879

As of June 30, 2024, the aggregate fair value of loans that are 90 days or more past due and in non-accrual status was $ 4.7 million, and the aggregate unpaid principal balance for loans that are 90 days or more past due was $ 34.2 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.

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:

June 30, 2024

September 30, 2024

Carrying value Estimated fair value Estimated fair value

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Restricted cash 156,699 156,699 156,699 — —

Loans held for sale (Note 5) 502 520 — — 520

Accounts payable 4,522 4,522 4,522 — —

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Acquisition and corporate financing (Note 8) 234,222 230,772 — 230,772 —

(1) As of June 30, 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

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Fair values of secured borrowings included in 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 six months ended June 30, 2024 and 2023 and the year ended December 31, 2023.

There were no transfers in or out of Level 3 assets and liabilities for the three and nine months ended September 30, 2024 and 2023 and the year ended December 31, 2023.

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 less than 7 years.

The Company recognized an impairment of the right-of-use asset related to the leased office space in San Carlos, California of $ 6.2 million due to a significant decrease in observed market rents for commercial office space, and the inability to find sub-lessee given the remaining lease term and market conditions.

During the second quarter of 2024, the Company recognized an impairment of the right-of-use asset related to the leased office space in San Carlos, California of $ 6.2 million due to a significant decrease in observed market rents for commercial office space, and the inability to find sub-

lessee given the remaining lease term and market conditions.

The impairment charges were recognized in General, administrative and other in the Consolidated Statements of Operations.

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

As of June 30, 2024, maturities of lease liabilities, excluding short-term leases and leases on a month-to-month basis, were as follows:

As of September 30, 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

2024 (remaining six months) $ 6,212

2024 (remaining three months) $ 3,117

Thereafter 95

Total lease payments 23,010

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Sublease income

2024 (remaining six months) $ ( 241 )

2024 (remaining three months) $ ( 145 )

2028 and thereafter

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Weighted average discount rate 4.72 %

Rental expenses under operating leases for the three and six months ended June 30, 2024, were $ 3.3 million, and $ 7.1 million, respectively, and for the three and six months ended June 30, 2023, were $ 4.7 million, and $ 9.1 million, respectively.

Rental expenses under operating leases for the three and nine months ended September 30, 2024, were $ 2.6 million, and $ 9.8 million, respectively, and for the three and nine months ended September 30, 2023, were $ 4.3 million, and $ 13.4 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.

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After Pathward has met its retention requirement, the Company has a commitment to purchase all additional program loans.

Unfunded Loan and Credit Card Commitments - Unfunded loan and credit card commitments at June 30, 2024 and December 31, 2023 were $ 28.5 million and $ 32.9 million, respectively.

Unfunded Loan and Credit Card Commitments - Unfunded loan and credit card commitments at September 30, 2024 and December 31, 2023 were $ 27.2 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;

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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 June 30, 2024, as the Company believes it is not probable to be incurred.

No accrual related to this matter has been recorded as of September 30, 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.

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

As part of this agreement, during the three and six months ended June 30, 2024 the Company transferred loans receivable totaling $ 70.2 million and $ 70.6 million, respectively.

As part of this agreement, during the three and nine months ended September 30, 2024 the Company transferred loans receivable totaling $ 75.1 million and $ 145.7 million, respectively.

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

For the three months ended June 30, 2024 and 2023 the Company recorded interest expense under these agreements of $ 11.0 million and $ 9.0 million, respectively, primarily related to the Corporate Financing agreement and $ 7.2 million and $ 0.1 million, respectively, related to the secured borrowing agreement.

For the three months ended September 30, 2024 and 2023 the Company recorded interest expense of $ 10.9 million and $ 11.3 million, respectively, related to the Corporate Financing facility.

In addition, the Company recorded interest expense of $ 7.9 million and $ 3.2 million, respectively, related to the secured borrowings associated with the forward flow whole loan sale agreement.

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

Related to transferred loans, the Company also recorded $ 14.7 million and $ 0.1 million of interest income in the Company's Condensed Consolidated Statements of Operations (Unaudited) for the three months ended June 30, 2024 and 2023, respectively.

For the six months ended June 30, 2024 and 2023, the Company recorded interest expense under these agreements of $ 22.5 million and $ 15.3 million, respectively, primarily related to the Corporate Financing agreement and, $ 13.6 million and $ 0.1 million, respectively, related to the secured borrowing agreement.

Related to transferred loans, the Company also recorded $ 18.9 million and $ 6.7 million of interest income in the Company's Condensed Consolidated Statements of Operations (Unaudited) for the three months ended September 30, 2024 and 2023, respectively.

For the nine months ended September 30, 2024 and 2023, the Company recorded interest expense of $ 33.5 million and $ 26.7 million, respectively, related to the Corporate Financing facility.

In addition, the Company recorded interest expense of $ 21.5 million and $ 3.2 million, respectively, related to the secured borrowings associated with the forward flow whole loan sale agreement.

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

Related to the transferred loans, the Company also recorded $ 19.5 million and $ 0.1 million of interest income in the Company's Condensed Consolidated Statements of Operations (Unaudited) for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024 and December 31, 2023, loans receivable at fair value underlying the secured borrowing with Neuberger was $ 227.8 million and $ 200.8 million, respectively, The Company had Asset-backed borrowings at amortized costs of $ 229.8 million and corporate financing of $ 192.0 million due to Neuberger as of June 30, 2024 and, $ 201.8 million and $ 204.1 million, respectively, as of December 31, 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 June 30, 2024 related to these transactions.

Related to the transferred loans, the Company also recorded $ 38.4 million and $ 6.9 million of interest income in the Company's Condensed Consolidated Statements of Operations (Unaudited) for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024 and December 31, 2023, loans receivable at fair value underlying the secured borrowing with Neuberger was $ 272.6 million and $ 200.8 million, respectively, The Company had Asset-backed borrowings at amortized costs of $ 276.6 million and corporate financing of $ 193.8 million due to Neuberger as of September 30, 2024 and, $ 201.8 million and $ 204.1 million, respectively, as of December 31, 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, 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

Secured Financing - On August 5, 2024, the Company entered into a new personal loan warehouse facility (the “PLW II Warehouse Facility”).

In connection with the PLW II Warehouse Facility, Oportun PLW II Trust, a wholly-owned subsidiary of the Company, entered into a Loan and Security Agreement with certain lenders from time to time party thereto, Wilmington Trust, National Association as collateral agent, administrative agent, paying agent, securities intermediary and depositary bank.

The PLW II Warehouse Facility has a three year term and a borrowing capacity of $245.2 million.

Borrowings under the Loan and Security Agreement accrue interest at a rate equal to Term SOFR plus a weighted average spread of 3.08%.

The advance rate for the PLW II Warehouse Facility is 95.0%, subject to certain delinquency and liquidity triggers that could lower the advance rate to 92.0%.

Credit Cards Receivable Sale

On November 12, 2024, (the “Credit Cards Receivable Sale Closing”) the Company completed the sale of the credit cards receivable portfolio to Continental Finance, a leading U.S.

credit card marketer and servicer.

As a result, the Company de-recognized its Credit Card Receivables Held for Sale in exchange for cash proceeds of $ 51.2 million.

The Company used the proceeds from the sale to pay off the Credit Card Warehouse facility.

Termination of the Card Program Agreements - In connection with the Credit Cards Receivable Sale Closing and pursuant to a program winddown agreement, the Amended and Restated Credit Card Program and Servicing Agreement, dated as of February 5, 2021, by and between the Company and WebBank, and other related documents, terminated effective November 10, 2024.

Termination of the CCW Facility - In connection with the Credit Cards Receivable Sale Closing, the Indenture Termination Date as defined in the Indenture by and between Oportun CCW Trust and Wilmington Trust, National Association, dated as of December 20, 2021 (as may from time to time have been amended, restated, or otherwise modified, the “CCW Indenture”), occurred and the CCW Indenture was terminated effective November 10, 2024.

Refinance of Corporate Financing

On October 23, 2024, the Company entered into a Credit Agreement with the Company's wholly-owned subsidiary Oportun, Inc., as borrower, certain affiliates of Castlelake and funds managed by Neuberger as lenders, and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent (the “Refinancing Credit Agreement”), pursuant to which the Company will borrow $ 235 million of senior secured term loans (the “Term Loans”).

The funding of the Term Loans (the “Closing”) shall be subject to certain closing conditions, including the repayment of the Company's existing senior secured term loans and residual financing facility , and is conditioned upon the completion of the sale of the Company's credit cards receivable portfolio, which occurred on November 12, 2024.

The Refinancing Credit Agreement contains certain representations, warranties and covenants, as well as indemnification obligations, in respect of the Company and certain of its subsidiaries, subject to specified exceptions and qualifications contained in the Refinancing Credit Agreement.

The Term Loans will bear interest at an amount equal to 15 % per year, of which 2.5 % may be payable in-kind at the Company’s election.

The Term Loans are scheduled to mature four years from the date of the Closing.

Under the Refinancing Credit Agreement, the Company will be required to repay $ 12.5 million of the Term Loans on or prior to July 31, 2025 and an additional $ 27.5 million of the Term Loans on or prior to January 31, 2026.

In addition, the Company has the flexibility to make additional prepayments of $ 10 million at any time, and an additional $ 10 million after the

one-year anniversary of the Closing, in each case not subject to a prepayment premium.

Voluntary prepayment of the Term Loans in excess of certain thresholds and with certain other exceptions as set forth in the Refinancing Credit Agreement, will be subject to a prepayment premium.

The obligations under the Refinancing Credit Agreement are secured by the assets of the Company and certain of its subsidiaries guaranteeing the Term Loans, including pledges of the equity interests of certain subsidiaries that are directly or indirectly owned by the Company, subject to customary exceptions.

The Refinancing Credit Agreement contains financial covenants requiring the maintenance of minimum liquidity and a maximum adjusted EBITDA-based corporate leverage covenant, together with other customary affirmative and negative covenants, representations and warranties and events of default.

Under the Refinancing Credit Agreement, at the Closing the Company will also issue warrants (the “Warrants”), at an exercise price of $ 0.01 per share, to affiliates of Castlelake and Neuberger to purchase an aggregate amount of shares of the Company’s common stock equal to 9.8 % of the fully-diluted shares outstanding of the Company, excluding out-of-the-money options, on a pro-forma basis for the warrants.

The Company also entered into a Registration Rights Agreement with the applicable holders of the Warrants (the “Registration Rights Agreement”), which stipulates that the Company will file a registration statement with the Securities and Exchange Commission with respect to the shares underlying the Warrants.

PLW II Facility Amendment

On November 1, 2024, Oportun PLW II Trust, a subsidiary of the Company, Wilmington Trust, National Association as collateral agent, administrative agent, paying agent, securities intermediary and depositary bank and certain lenders from time to time party thereto, entered into an Amendment to the Loan and Security Agreement (the “PLW II Amendment”), and other related documents (together with the PLW II Amendment, the “Amendment”) to amend certain provisions to increase the borrowing capacity to $ 337.1 million.

Under the Amendment, borrowings will accrue interest at a rate equal to Term SOFR plus a weighted average spread of 3.07 %.

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