Company Quick10K Filing
Oportun Financial Corporation
10-Q 2020-03-31 Filed 2020-05-15
10-K 2019-12-31 Filed 2020-02-28
10-Q 2019-09-30 Filed 2019-11-13
S-1 2019-07-17 Public Filing
8-K 2020-05-14 Earnings, Exhibits
8-K 2020-04-02 Earnings, Regulation FD, Exhibits
8-K 2020-03-09 Leave Agreement, Exhibits
8-K 2020-02-27 Earnings, Exhibits
8-K 2019-11-12 Earnings, Exhibits

OPRT 10Q Quarterly Report

Part I ‑ Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II ‑ Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibit Index
EX-31.1 ceocertexhibitq12020.htm
EX-31.2 cfocertexhibitq12020.htm
EX-32.1 section1350certsq12020.htm

Oportun Financial Corporation Earnings 2020-03-31

Balance SheetIncome StatementCash Flow

Document
--12-31Q12020000153871600000.00011000000000YesYesYesYesYesYesYesYesYesYesYesYesYesYesYes0.00010.000110000000000000.0909 0001538716 2020-01-01 2020-03-31 0001538716 us-gaap:LineOfCreditMember 2020-01-01 2020-03-31 0001538716 us-gaap:SecuredDebtMember 2020-01-01 2020-03-31 0001538716 2020-05-08 0001538716 2020-03-31 0001538716 2019-12-31 0001538716 2019-01-01 2019-03-31 0001538716 oprt:APICCommonStockMember 2020-03-31 0001538716 oprt:APICConvertiblePreferredStockMember 2019-12-31 0001538716 us-gaap:CommonStockMember 2019-12-31 0001538716 us-gaap:CommonStockMember 2020-03-31 0001538716 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0001538716 us-gaap:RetainedEarningsMember 2020-03-31 0001538716 oprt:APICCommonStockMember 2020-01-01 2020-03-31 0001538716 us-gaap:WarrantMember 2020-03-31 0001538716 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001538716 us-gaap:WarrantMember 2019-12-31 0001538716 us-gaap:WarrantMember 2020-03-31 0001538716 us-gaap:WarrantMember 2019-12-31 0001538716 us-gaap:CommonStockMember 2020-03-31 0001538716 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001538716 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001538716 us-gaap:RedeemablePreferredStockMember 2019-12-31 0001538716 us-gaap:TreasuryStockMember 2019-12-31 0001538716 us-gaap:PreferredStockMember 2019-12-31 0001538716 oprt:APICCommonStockMember 2019-12-31 0001538716 us-gaap:PreferredStockMember 2020-03-31 0001538716 us-gaap:RetainedEarningsMember 2019-12-31 0001538716 us-gaap:RedeemablePreferredStockMember 2020-03-31 0001538716 us-gaap:CommonStockMember 2019-12-31 0001538716 us-gaap:TreasuryStockMember 2020-03-31 0001538716 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001538716 oprt:APICConvertiblePreferredStockMember 2020-03-31 0001538716 us-gaap:CommonStockMember 2019-03-31 0001538716 us-gaap:WarrantMember 2018-12-31 0001538716 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0001538716 us-gaap:WarrantMember 2018-12-31 0001538716 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001538716 us-gaap:PreferredStockMember 2019-03-31 0001538716 us-gaap:TreasuryStockMember 2018-12-31 0001538716 us-gaap:RedeemablePreferredStockMember 2019-03-31 0001538716 oprt:APICConvertiblePreferredStockMember 2019-03-31 0001538716 us-gaap:CommonStockMember 2018-12-31 0001538716 us-gaap:WarrantMember 2019-03-31 0001538716 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001538716 us-gaap:PreferredStockMember 2018-12-31 0001538716 us-gaap:WarrantMember 2019-03-31 0001538716 oprt:APICConvertiblePreferredStockMember 2018-12-31 0001538716 oprt:APICCommonStockMember 2019-01-01 2019-03-31 0001538716 2019-03-31 0001538716 us-gaap:CommonStockMember 2019-03-31 0001538716 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001538716 oprt:APICCommonStockMember 2018-12-31 0001538716 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001538716 us-gaap:RetainedEarningsMember 2019-03-31 0001538716 2018-12-31 0001538716 us-gaap:RetainedEarningsMember 2018-12-31 0001538716 us-gaap:CommonStockMember 2018-12-31 0001538716 oprt:APICCommonStockMember 2019-03-31 0001538716 us-gaap:TreasuryStockMember 2019-03-31 0001538716 us-gaap:RedeemablePreferredStockMember 2018-12-31 0001538716 2019-09-30 2019-09-30 0001538716 oprt:SeriesF1PreferredMember us-gaap:WarrantMember 2019-09-26 2019-09-26 0001538716 us-gaap:IPOMember 2019-09-30 2019-09-30 0001538716 us-gaap:CommonStockMember 2019-09-30 2019-09-30 0001538716 us-gaap:PreferredStockMember 2019-09-30 2019-09-30 0001538716 us-gaap:CommonStockMember 2019-09-26 2019-09-26 0001538716 us-gaap:IPOMember 2019-09-30 0001538716 2019-09-09 2019-09-09 0001538716 2020-01-01 0001538716 us-gaap:StockOptionMember 2019-01-01 2019-03-31 0001538716 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-03-31 0001538716 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-03-31 0001538716 us-gaap:StockOptionMember 2020-01-01 2020-03-31 0001538716 us-gaap:WarrantMember 2019-01-01 2019-03-31 0001538716 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-03-31 0001538716 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-03-31 0001538716 us-gaap:WarrantMember 2020-01-01 2020-03-31 0001538716 us-gaap:ConvertiblePreferredStockMember 2019-01-01 2019-03-31 0001538716 us-gaap:ConvertiblePreferredStockMember 2020-01-01 2020-03-31 0001538716 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-03-31 0001538716 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-03-31 0001538716 us-gaap:FinanceReceivablesMember 2019-12-31 0001538716 oprt:LoansReceivableatAmortizedCostMember 2020-03-31 0001538716 oprt:RestrictedCashMember 2020-03-31 0001538716 oprt:SecuredFinancingMember 2019-12-31 0001538716 oprt:LiabilitiesatFairValueMember 2020-03-31 0001538716 oprt:LoansReceivableatAmortizedCostMember 2019-12-31 0001538716 oprt:LiabilitiesatFairValueMember 2019-12-31 0001538716 us-gaap:LoansReceivableMember 2020-03-31 0001538716 oprt:AssetbackedNotesatAmortizedCostMember 2020-03-31 0001538716 oprt:RestrictedCashMember 2019-12-31 0001538716 oprt:SecuredFinancingMember 2020-03-31 0001538716 us-gaap:LoansReceivableMember 2019-12-31 0001538716 oprt:AssetbackedNotesatAmortizedCostMember 2019-12-31 0001538716 us-gaap:FinanceReceivablesMember 2020-03-31 0001538716 us-gaap:ConsumerLoanMember 2020-03-31 0001538716 us-gaap:ConsumerLoanMember 2019-12-31 0001538716 us-gaap:ConsumerLoanMember oprt:TotalDelinquentPrincipleMember 2019-12-31 0001538716 us-gaap:ConsumerLoanMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2020-03-31 0001538716 us-gaap:ConsumerLoanMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2019-12-31 0001538716 us-gaap:ConsumerLoanMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2020-03-31 0001538716 us-gaap:ConsumerLoanMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2019-12-31 0001538716 us-gaap:ConsumerLoanMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2020-03-31 0001538716 us-gaap:ConsumerLoanMember oprt:TotalDelinquentPrincipleMember 2020-03-31 0001538716 us-gaap:ConsumerLoanMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2019-12-31 0001538716 oprt:TroubledDebtRestructuringMember us-gaap:ConsumerLoanMember us-gaap:FinancingReceivables1To29DaysPastDueMember 2019-12-31 0001538716 oprt:TroubledDebtRestructuringMember us-gaap:ConsumerLoanMember oprt:FinancialAsset30DaysorMorePastDueMember 2019-12-31 0001538716 oprt:TroubledDebtRestructuringMember us-gaap:ConsumerLoanMember 2020-03-31 0001538716 oprt:TroubledDebtRestructuringMember us-gaap:ConsumerLoanMember 2019-12-31 0001538716 oprt:TroubledDebtRestructuringMember us-gaap:ConsumerLoanMember us-gaap:FinancingReceivables1To29DaysPastDueMember 2020-03-31 0001538716 oprt:TroubledDebtRestructuringMember us-gaap:ConsumerLoanMember oprt:FinancialAsset30DaysorMorePastDueMember 2020-03-31 0001538716 us-gaap:ConsumerLoanMember 2020-01-01 2020-03-31 0001538716 us-gaap:ConsumerLoanMember 2019-01-01 2019-03-31 0001538716 oprt:TroubledDebtRestructuringMember us-gaap:ConsumerLoanMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2020-03-31 0001538716 oprt:NonTroubledDebtRestructuringMember us-gaap:ConsumerLoanMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2019-12-31 0001538716 oprt:NonTroubledDebtRestructuringMember us-gaap:ConsumerLoanMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2020-03-31 0001538716 oprt:TroubledDebtRestructuringMember us-gaap:ConsumerLoanMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2019-12-31 0001538716 oprt:SecuredWarehouseFacilityMember us-gaap:LineOfCreditMember 2019-12-31 0001538716 oprt:SecuredWarehouseFacilityMember us-gaap:LineOfCreditMember 2018-12-10 2018-12-10 0001538716 oprt:SecuredWarehouseFacilityMember us-gaap:LineOfCreditMember 2019-01-01 2019-12-31 0001538716 oprt:FairValueMember oprt:AssetBackedNotesSeries2018DMember us-gaap:SecuredDebtMember 2018-12-07 0001538716 oprt:FairValueMember oprt:InitialCollateralMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:FairValueMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:FairValueMember oprt:AssetBackedNotesSeries2018AMember us-gaap:SecuredDebtMember 2018-03-08 0001538716 oprt:FairValueMember oprt:AssetBackedNotesSeries2018CMember us-gaap:SecuredDebtMember 2018-10-22 2018-10-22 0001538716 oprt:FairValueMember oprt:CurrentCollateralMember oprt:AssetBackedNotesSeries2018BMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:FairValueMember oprt:AssetBackedNotesSeries2018BMember us-gaap:SecuredDebtMember 2018-07-09 2018-07-09 0001538716 oprt:FairValueMember oprt:AssetbackedNotesSeries2019AMember us-gaap:SecuredDebtMember 2019-08-01 2019-08-01 0001538716 oprt:FairValueMember oprt:InitialCollateralMember oprt:AssetBackedNotesSeries2018CMember us-gaap:SecuredDebtMember 2018-10-22 0001538716 oprt:AmortizedCostMember oprt:AssetBackedNotesSeries2017AMember us-gaap:SecuredDebtMember 2017-06-08 0001538716 oprt:AmortizedCostMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:AmortizedCostMember oprt:CurrentCollateralMember oprt:AssetBackedNotesSeries2017BMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:AmortizedCostMember oprt:AssetBackedNotesSeries2017BMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:AmortizedCostMember oprt:AssetBackedNotesSeries2017BMember us-gaap:SecuredDebtMember 2017-10-11 0001538716 oprt:FairValueMember oprt:AssetBackedNotesSeries2018DMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:FairValueMember oprt:AssetBackedNotesSeries2018CMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:FairValueMember oprt:AssetBackedNotesSeries2018BMember us-gaap:SecuredDebtMember 2018-07-09 0001538716 oprt:AmortizedCostMember oprt:InitialCollateralMember oprt:AssetBackedNotesSeries2017AMember us-gaap:SecuredDebtMember 2017-06-08 0001538716 oprt:AmortizedCostMember oprt:InitialCollateralMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:FairValueMember oprt:CurrentCollateralMember oprt:AssetBackedNotesSeries2018AMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:FairValueMember oprt:AssetbackedNotesSeries2019AMember us-gaap:SecuredDebtMember 2019-08-01 0001538716 oprt:AmortizedCostMember oprt:InitialCollateralMember oprt:AssetBackedNotesSeries2017BMember us-gaap:SecuredDebtMember 2017-10-11 0001538716 oprt:FairValueMember oprt:InitialCollateralMember oprt:AssetBackedNotesSeries2018AMember us-gaap:SecuredDebtMember 2018-03-08 0001538716 oprt:FairValueMember oprt:CurrentCollateralMember oprt:AssetbackedNotesSeries2019AMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:AmortizedCostMember oprt:AssetBackedNotesSeries2017AMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:FairValueMember oprt:AssetBackedNotesSeries2018AMember us-gaap:SecuredDebtMember 2018-03-08 2018-03-08 0001538716 oprt:AmortizedCostMember oprt:CurrentCollateralMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:FairValueMember oprt:AssetbackedNotesSeries2019AMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:AmortizedCostMember oprt:AssetBackedNotesSeries2017BMember us-gaap:SecuredDebtMember 2017-10-11 2017-10-11 0001538716 oprt:FairValueMember oprt:AssetBackedNotesSeries2018CMember us-gaap:SecuredDebtMember 2018-10-22 0001538716 oprt:AmortizedCostMember oprt:CurrentCollateralMember oprt:AssetBackedNotesSeries2017AMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:FairValueMember oprt:CurrentCollateralMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:FairValueMember oprt:CurrentCollateralMember oprt:AssetBackedNotesSeries2018CMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:FairValueMember oprt:AssetBackedNotesSeries2018AMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:FairValueMember oprt:AssetBackedNotesSeries2018BMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:FairValueMember oprt:InitialCollateralMember oprt:AssetBackedNotesSeries2018DMember us-gaap:SecuredDebtMember 2018-12-07 0001538716 oprt:FairValueMember oprt:AssetBackedNotesSeries2018DMember us-gaap:SecuredDebtMember 2018-12-07 2018-12-07 0001538716 oprt:FairValueMember oprt:InitialCollateralMember oprt:AssetbackedNotesSeries2019AMember us-gaap:SecuredDebtMember 2019-08-01 0001538716 oprt:AmortizedCostMember oprt:AssetBackedNotesSeries2017AMember us-gaap:SecuredDebtMember 2017-06-08 2017-06-08 0001538716 oprt:FairValueMember oprt:CurrentCollateralMember oprt:AssetBackedNotesSeries2018DMember us-gaap:SecuredDebtMember 2019-12-31 0001538716 oprt:FairValueMember oprt:InitialCollateralMember oprt:AssetBackedNotesSeries2018BMember us-gaap:SecuredDebtMember 2018-07-09 0001538716 oprt:SecuredWarehouseFacilityMember us-gaap:LineOfCreditMember 2020-01-01 2020-03-31 0001538716 oprt:SecuredWarehouseFacilityMember us-gaap:LineOfCreditMember 2020-03-31 0001538716 oprt:FairValueMember us-gaap:SecuredDebtMember 2020-03-31 0001538716 oprt:FairValueMember oprt:CurrentCollateralMember oprt:AssetBackedNotesSeries2018CMember us-gaap:SecuredDebtMember 2020-03-31 0001538716 oprt:AmortizedCostMember oprt:InitialCollateralMember us-gaap:SecuredDebtMember 2020-03-31 0001538716 oprt:FairValueMember oprt:CurrentCollateralMember us-gaap:SecuredDebtMember 2020-03-31 0001538716 oprt:FairValueMember oprt:CurrentCollateralMember oprt:AssetbackedNotesSeries2019AMember us-gaap:SecuredDebtMember 2020-03-31 0001538716 oprt:AmortizedCostMember oprt:AssetBackedNotesSeries2017BMember us-gaap:SecuredDebtMember 2020-03-31 0001538716 oprt:AmortizedCostMember oprt:CurrentCollateralMember oprt:AssetBackedNotesSeries2017BMember us-gaap:SecuredDebtMember 2020-03-31 0001538716 oprt:AmortizedCostMember us-gaap:SecuredDebtMember 2020-03-31 0001538716 oprt:FairValueMember oprt:CurrentCollateralMember oprt:AssetBackedNotesSeries2018AMember us-gaap:SecuredDebtMember 2020-03-31 0001538716 oprt:FairValueMember oprt:AssetbackedNotesSeries2019AMember us-gaap:SecuredDebtMember 2020-03-31 0001538716 oprt:FairValueMember oprt:AssetBackedNotesSeries2018CMember us-gaap:SecuredDebtMember 2020-03-31 0001538716 oprt:FairValueMember oprt:InitialCollateralMember us-gaap:SecuredDebtMember 2020-03-31 0001538716 oprt:FairValueMember oprt:CurrentCollateralMember oprt:AssetBackedNotesSeries2018BMember us-gaap:SecuredDebtMember 2020-03-31 0001538716 oprt:FairValueMember oprt:AssetBackedNotesSeries2018DMember us-gaap:SecuredDebtMember 2020-03-31 0001538716 oprt:FairValueMember oprt:AssetBackedNotesSeries2018BMember us-gaap:SecuredDebtMember 2020-03-31 0001538716 oprt:FairValueMember oprt:AssetBackedNotesSeries2018AMember us-gaap:SecuredDebtMember 2020-03-31 0001538716 oprt:AmortizedCostMember oprt:CurrentCollateralMember us-gaap:SecuredDebtMember 2020-03-31 0001538716 oprt:FairValueMember oprt:CurrentCollateralMember oprt:AssetBackedNotesSeries2018DMember us-gaap:SecuredDebtMember 2020-03-31 0001538716 oprt:AssetBackedNotesSeries2018AMember us-gaap:SecuredDebtMember 2020-01-01 2020-03-31 0001538716 oprt:AssetBackedNotesSeries2017AMember us-gaap:SecuredDebtMember 2019-01-01 2019-03-31 0001538716 oprt:AssetBackedNotesSeries2018BMember us-gaap:SecuredDebtMember 2019-01-01 2019-03-31 0001538716 oprt:AssetBackedNotesSeries2018DMember us-gaap:SecuredDebtMember 2019-01-01 2019-03-31 0001538716 oprt:AssetbackedNotesSeries2019AMember us-gaap:SecuredDebtMember 2020-01-01 2020-03-31 0001538716 oprt:AssetbackedNotesSeries2019AMember us-gaap:SecuredDebtMember 2019-01-01 2019-03-31 0001538716 oprt:AssetBackedNotesSeries2018DMember us-gaap:SecuredDebtMember 2020-01-01 2020-03-31 0001538716 oprt:AssetBackedNotesSeries2018AMember us-gaap:SecuredDebtMember 2019-01-01 2019-03-31 0001538716 oprt:SecuredWarehouseFacilityMember us-gaap:LineOfCreditMember 2019-01-01 2019-03-31 0001538716 oprt:AssetBackedNotesSeries2018CMember us-gaap:SecuredDebtMember 2019-01-01 2019-03-31 0001538716 oprt:AssetBackedNotesSeries2018BMember us-gaap:SecuredDebtMember 2020-01-01 2020-03-31 0001538716 oprt:AssetBackedNotesSeries2017BMember us-gaap:SecuredDebtMember 2019-01-01 2019-03-31 0001538716 oprt:AssetBackedNotesSeries2018CMember us-gaap:SecuredDebtMember 2020-01-01 2020-03-31 0001538716 oprt:AssetBackedNotesSeries2017BMember us-gaap:SecuredDebtMember 2020-01-01 2020-03-31 0001538716 oprt:SeriesGPreferredMember us-gaap:WarrantMember 2019-09-30 2019-09-30 0001538716 oprt:SeriesGPreferredMember us-gaap:CommonStockMember 2019-09-30 2019-09-30 0001538716 us-gaap:PreferredStockMember 2019-09-26 2019-09-26 0001538716 us-gaap:WarrantMember 2019-09-30 2019-09-30 0001538716 us-gaap:RestrictedStockUnitsRSUMember 2019-12-31 0001538716 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-12-31 0001538716 oprt:A2019EmployeeStockPurchasePlanMember 2019-09-25 2019-09-25 0001538716 oprt:A2019EquityIncentivePlanMember 2020-03-04 2020-03-04 0001538716 us-gaap:RestrictedStockUnitsRSUMember 2019-08-22 2019-08-22 0001538716 2019-09-25 2019-09-25 0001538716 oprt:A2019EquityIncentivePlanMember 2019-09-25 2019-09-25 0001538716 us-gaap:OptionOnSecuritiesMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2020-01-01 2020-03-31 0001538716 us-gaap:OptionOnSecuritiesMember 2020-01-01 2020-03-31 0001538716 us-gaap:OptionOnSecuritiesMember 2019-12-31 0001538716 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-03-31 0001538716 us-gaap:RestrictedStockUnitsRSUMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2020-01-01 2020-03-31 0001538716 us-gaap:OptionOnSecuritiesMember 2020-03-31 0001538716 oprt:A2019EmployeeStockPurchasePlanMember 2020-03-04 2020-03-04 0001538716 us-gaap:OptionOnSecuritiesMember 2019-08-22 2019-08-22 0001538716 us-gaap:OptionOnSecuritiesMember 2019-01-01 2019-12-31 0001538716 us-gaap:RestrictedStockUnitsRSUMember 2020-03-31 0001538716 oprt:TechnologyandFacilitiesMember 2019-01-01 2019-03-31 0001538716 oprt:PersonnelMember 2019-01-01 2019-03-31 0001538716 oprt:TechnologyandFacilitiesMember 2020-01-01 2020-03-31 0001538716 oprt:SalesandMarketingMember 2020-01-01 2020-03-31 0001538716 oprt:PersonnelMember 2020-01-01 2020-03-31 0001538716 oprt:SalesandMarketingMember 2019-01-01 2019-03-31 0001538716 us-gaap:FairValueInputsLevel3Member 2019-12-31 0001538716 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-12-31 0001538716 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-12-31 0001538716 us-gaap:FairValueInputsLevel2Member 2019-12-31 0001538716 us-gaap:FairValueInputsLevel1Member 2019-12-31 0001538716 srt:WeightedAverageMember us-gaap:FairValueInputsLevel3Member us-gaap:MeasurementInputDefaultRateMember 2020-03-31 0001538716 srt:MinimumMember us-gaap:FairValueInputsLevel3Member us-gaap:MeasurementInputPrepaymentRateMember 2020-03-31 0001538716 srt:WeightedAverageMember us-gaap:FairValueInputsLevel3Member us-gaap:MeasurementInputPrepaymentRateMember 2020-03-31 0001538716 srt:WeightedAverageMember us-gaap:FairValueInputsLevel3Member us-gaap:MeasurementInputPrepaymentRateMember 2019-12-31 0001538716 srt:MaximumMember us-gaap:FairValueInputsLevel3Member us-gaap:MeasurementInputDefaultRateMember 2020-03-31 0001538716 srt:WeightedAverageMember us-gaap:FairValueInputsLevel3Member us-gaap:MeasurementInputDiscountRateMember 2020-03-31 0001538716 srt:WeightedAverageMember us-gaap:FairValueInputsLevel3Member us-gaap:MeasurementInputDefaultRateMember 2019-12-31 0001538716 srt:MaximumMember us-gaap:FairValueInputsLevel3Member us-gaap:MeasurementInputExpectedTermMember 2020-03-31 0001538716 srt:MaximumMember us-gaap:FairValueInputsLevel3Member us-gaap:MeasurementInputPrepaymentRateMember 2020-03-31 0001538716 srt:MinimumMember us-gaap:FairValueInputsLevel3Member us-gaap:MeasurementInputExpectedTermMember 2020-03-31 0001538716 srt:MinimumMember us-gaap:FairValueInputsLevel3Member us-gaap:MeasurementInputDefaultRateMember 2020-03-31 0001538716 srt:WeightedAverageMember us-gaap:FairValueInputsLevel3Member us-gaap:MeasurementInputExpectedTermMember 2020-03-31 0001538716 srt:WeightedAverageMember us-gaap:FairValueInputsLevel3Member us-gaap:MeasurementInputDiscountRateMember 2019-12-31 0001538716 srt:WeightedAverageMember us-gaap:FairValueInputsLevel3Member us-gaap:MeasurementInputExpectedTermMember 2019-12-31 0001538716 us-gaap:LoansReceivableMember us-gaap:FairValueInputsLevel3Member 2020-01-01 2020-03-31 0001538716 us-gaap:LoansReceivableMember us-gaap:FairValueInputsLevel3Member 2019-01-01 2019-03-31 0001538716 us-gaap:LoansReceivableMember us-gaap:FairValueInputsLevel3Member 2019-12-31 0001538716 us-gaap:LoansReceivableMember us-gaap:FairValueInputsLevel3Member 2019-03-31 0001538716 us-gaap:LoansReceivableMember us-gaap:FairValueInputsLevel3Member 2020-03-31 0001538716 us-gaap:LoansReceivableMember us-gaap:FairValueInputsLevel3Member 2018-12-31 0001538716 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2020-03-31 0001538716 us-gaap:FairValueInputsLevel1Member 2020-03-31 0001538716 us-gaap:FairValueInputsLevel2Member 2020-03-31 0001538716 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2020-03-31 0001538716 us-gaap:FairValueInputsLevel3Member 2020-03-31 0001538716 2019-01-01 2019-12-31 iso4217:USD xbrli:pure xbrli:shares iso4217:USD xbrli:shares
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number 001-39050
OPORTUN FINANCIAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware
 
45-3361983
State or Other Jurisdiction of
Incorporation or Organization
 
I.R.S. Employer Identification No.
 
 
 
 
2 Circle Star Way
 
 
San Carlos,
CA
 
94070
Address of Principal Executive Offices
 
Zip Code
(650) 810-8823
Registrant’s Telephone Number, Including Area Code

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.0001 par value per share
OPRT
Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes      No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes     No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Smaller reporting company
Accelerated filer
Emerging growth company
Non-accelerated filer
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes     No 
The number of shares of registrant’s common stock outstanding as of May 8, 2020 was 27,171,802.



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


2


GLOSSARY

Terms and abbreviations used in this report are defined below.
Term or Abbreviation
 
Definition
30+ Day Delinquency Rate (1)

Unpaid principal balance for our owned loans that are 30 or more calendar days contractually past due as of the end of the period divided by Owned Principal Balance as of such date
Access Loan Program

A program intended to make credit available to select borrowers who do not qualify for credit under Oportun's core loan origination program
Active Customers (1)

Number of customers with an outstanding loan serviced by us at the end of a period. Active Customers includes customers whose loans are owned by us and loans that have been sold that we continue to service. Customers with charged-off accounts are excluded from Active Customers
Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure calculated as net income (loss), adjusted for the impact of our election of the fair value option and further adjusted to eliminate the effect of the following items: income tax expense (benefit), stock-based compensation, depreciation and amortization, litigation reserve, origination fees for Fair Value Loans, net and fair value mark-to-market adjustment
Adjusted Earnings Per Share ("EPS")

Adjusted EPS is a non-GAAP financial measure calculated by dividing Adjusted Net Income by adjusted weighted-average diluted common shares outstanding. Weighted-average diluted common shares outstanding have been adjusted to reflect the conversion of all preferred shares as of the beginning of each annual period
Adjusted Net Income

Adjusted Net Income is a non-GAAP financial measure calculated by adjusting our net income (loss), for the impact of our election of the fair value option, and further adjusted to exclude income tax expense (benefit), stock-based compensation expense and litigation reserve, net of tax
Adjusted Operating Efficiency

Adjusted Operating Efficiency is a non-GAAP financial measure calculated by dividing total operating expenses (excluding stock-based compensation expense and litigation reserve) by Fair Value Pro Forma Total Revenue
Adjusted Return on Equity ("ROE")

Adjusted Return on Equity is a non-GAAP financial measure calculated by dividing annualized Adjusted Net Income by Average Fair Value Pro Forma total stockholders’ equity
Adjusted Tangible Book Value
 
Fair Value Pro Forma total stockholders' equity, excluding intangible assets and system development costs
Adjusted Tangible Book Value Per Share
 
Adjusted Tangible Book Value divided by common shares outstanding at period end. Common shares outstanding at period end have been adjusted to reflect the conversion of all preferred shares as of the beginning of each annual period.
Aggregate Originations (1)

Aggregate amount disbursed to borrowers during a specific period. Aggregate Originations excludes any fees in connection with the origination of a loan
Annualized Net Charge-Off Rate (1)

Annualized loan principal losses (net of recoveries) divided by the Average Daily Principal Balance of owned loans for the period
AOCI

Accumulated other comprehensive income (loss)
APR

Annual Percentage Rate
Average Daily Debt Balance

Average of outstanding debt principal balance at the end of each calendar day during the period
Asset-Backed Notes at Fair Value (or "Fair Value Notes")
 
All asset-backed notes issued by Oportun on or after January 1, 2018
Average Daily Principal Balance (1)

Average of outstanding principal balance of owned loans at the end of each calendar day during the period
Board

Oportun’s Board of Directors
Book Value
 
Total assets less total liabilities, or equal to total stockholders' equity
Book Value Per Share
 
Book Value divided by common shares outstanding at period end
Cost of Debt

Annualized interest expense divided by Average Daily Debt Balance
Customer Acquisition Cost (1)

Sales and marketing expenses, which include the costs associated with various paid marketing channels, including direct mail, digital marketing and brand marketing and the costs associated with our telesales and retail operations divided by number of loans originated to new and returning customers during a period
Emergency Hardship Deferral
 
Any receivable that has had one or more payments deferred and added at the end of the loan payment schedule in connection with a local or wide-spread emergency declared by local, state or federal government such as a natural disaster, government shutdown or pandemic
Fair Value Loans (or "Loans Receivable at Fair Value")

All loans receivable held for investment that were originated on or after January 1, 2018
Fair Value Pro Forma

In order to facilitate comparisons to periods prior to January 1, 2018, certain metrics included in this presentation have been shown on a pro forma basis, or the Fair Value Pro Forma, as if we had elected the fair value option since our inception for all loans originated and held for investment and all asset-backed notes issued
Fair Value Pro Forma Total Revenue

Fair Value Pro Forma Total Revenue is calculated as the sum of Fair Value Pro Forma interest income and non-interest income. Fair Value Pro Forma interest income includes interest on loans and fees; origination fees are recognized upon disbursement. Non-interest income includes gain on sales, servicing fees and other income. The Company adopted ASU 2019-05 as of January 1, 2020 and as a result Fair Value Pro Forma Total Revenue and GAAP Total Revenue are equal for all prospective reporting periods.
Fair Value Notes (or "Asset-Backed Notes at Fair Value")

All asset-backed notes issued by Oportun on or after January 1, 2018
FICO® score or FICO®

A credit score created by Fair Isaac Corporation
GAAP

Generally Accepted Accounting Principles
Initial Fair Value Loans
 
All loans receivable held for investment that were originated on or after January 1, 2018

3


Term or Abbreviation
 
Definition
Leverage

Average Daily Debt Balance divided by Average Daily Principal Balance
Loans Receivable at Amortized Cost

Loans held for investment that were originated prior to January 1, 2018. Upon the adoption of ASU 2019-05 as of January 1, 2020 this line item has been eliminated for all prospective reporting periods.
Loans Receivable at Fair Value (or "Fair Value Loans")

All Initial Fair Value Loans, together with the Subsequent Fair Value Loans
Managed Principal Balance at End of Period (1)

Total amount of outstanding principal balance for all loans, including loans sold, which we continue to service, at the end of the period
Net Revenue
 
Net Revenue is calculated by subtracting interest expense and provision (release) for loan losses from total revenue and adding the net increase (decrease) in fair value.
Operating Efficiency
 
Total operating expenses divided by total revenue
Owned Principal Balance at End of Period (1)
 
Total amount of outstanding principal balance for all loans, excluding loans sold, at the end of the period
Principal Balance
 
Original principal balance reduced by principal payments received to date
Return on Equity
 
Annualized net income divided by average stockholders' equity for a period
Subsequent Fair Value Loans
 
All loans receivable held for investment, previously measured at amortized cost for which the Company elected the fair value option upon adoption of ASU 2019-05, effective January 1, 2020
TDR Finance Receivables
 
Troubled debt restructured finance receivables. This is only applicable to Loans Receivable at Amortized Cost. Debt restructuring in which a concession is granted to the borrower as a result of economic or legal reasons related to the borrower’s financial difficulties. Upon the adoption of ASU 2019-05 as of January 1, 2020 this line item has been eliminated for all prospective reporting periods.
Secured Financing
 
Asset-backed revolving debt facility
VIEs
 
Variable interest entities
Weighted Average Interest Rate
 
Annualized interest expense as a percentage of average debt
Yield
 
Annualized interest income as a percentage of Average Daily Principal Balance
(1) Credit card data has been excluded from these metrics for the three months ended March 31, 2020 because they are de minimis.


4


PART I ‑ FINANCIAL INFORMATION

Item 1. Financial Statements

OPORTUN FINANCIAL CORPORATION
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share data)
 
 
March 31,
 
December 31,

 
2020
 
2019
Assets
 
 
 
 
Cash and cash equivalents
 
$
144,836

 
$
72,179

Restricted cash
 
61,258

 
63,962

Loans receivable at fair value
 
1,760,481

 
1,882,088

Loans receivable at amortized cost
 

 
42,546

Less:
 
 
 
 
Unamortized deferred origination costs and fees, net
 

 
(103
)
Allowance for loan losses
 

 
(3,972
)
Loans receivable at amortized cost, net
 

 
38,471

Loans held for sale
 
141

 
715

Interest and fees receivable, net
 
18,254

 
17,185

Right of use assets - operating
 
50,973

 
50,503

Deferred tax assets
 
1,261

 
1,563

Other assets
 
80,116

 
75,208

Total assets
 
$
2,117,320

 
$
2,201,874

 
 
 
 
 
Liabilities and stockholders' equity
 
 
 
 
Liabilities
 
 
 
 
Secured financing
 
$
279,064

 
$
60,910

Asset-backed notes at fair value
 
999,113

 
1,129,202

Asset-backed notes at amortized cost
 
199,602

 
359,111

Amount due to whole loan buyer
 
33,259

 
33,354

Lease liabilities
 
53,825

 
53,357

Deferred tax liabilities
 
24,666

 
24,868

Other liabilities
 
44,250

 
52,306

Total liabilities
 
1,633,779

 
1,713,108

Stockholders' equity
 
 
 
 
Preferred stock, $0.0001 par value - 100,000,000 shares authorized at March 31, 2020 and December 31, 2019; 0 shares issued and outstanding at March 31, 2020 and December 31, 2019
 

 

Preferred stock, additional paid-in capital
 

 

Common stock, $0.0001 par value - 1,000,000,000 shares authorized at March 31, 2020 and December 31, 2019; 27,403,279 shares issued and 27,143,797 shares outstanding at March 31, 2020; 27,262,639 shares issued and 27,003,157 shares outstanding at December 31, 2019
 
6

 
6

Common stock, additional paid-in capital
 
421,657

 
418,299

Common stock warrants
 
63

 
63

Accumulated other comprehensive loss
 
(279
)
 
(162
)
Retained earnings
 
68,213

 
76,679

Treasury stock at cost, 259,482 shares at March 31, 2020 and December 31, 2019
 
(6,119
)
 
(6,119
)
Total stockholders’ equity
 
483,541

 
488,766

Total liabilities and stockholders' equity
 
$
2,117,320

 
$
2,201,874

See Notes to the Condensed Consolidated Financial Statements.


5


OPORTUN FINANCIAL CORPORATION
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)
(in thousands, except share and per share data)
 
 
Three Months Ended March 31,

 
2020

2019
Revenue
 
 
Interest income
 
$
150,700

 
$
126,746

Non-interest income
 
12,728

 
11,582

Total revenue
 
163,428

 
138,328

Less:
 
 
 
 
Interest expense
 
16,361

 
14,619

Provision (release) for loan losses
 

 
(366
)
Decrease in fair value
 
(66,469
)
 
(25,416
)
Net revenue
 
80,598


98,659

 
 
 
 
 
Operating expenses:
 
 
 
 
Technology and facilities
 
30,774

 
21,641

Sales and marketing
 
24,827

 
21,266

Personnel
 
25,582

 
18,877

Outsourcing and professional fees
 
13,618

 
13,549

General, administrative and other
 
3,813

 
3,358

Total operating expenses
 
98,614

 
78,691

 
 
 
 
 
Income before taxes
 
(18,016
)

19,968

Income tax expense (benefit)
 
(4,715
)
 
5,354

Net income (loss)
 
$
(13,301
)

$
14,614

Change in post-termination benefit obligation
 
(117
)
 
(3
)
Total comprehensive income (loss)
 
$
(13,418
)
 
$
14,611

 
 
 
 
 
Net income (loss) attributable to common stockholders
 
$
(13,301
)
 
$
1,688

 
 
 
 
 
Share data:
 
 
 
 
Earnings (loss) per share:
 
 
 
 
Basic
 
$
(0.49
)
 
$
0.57

Diluted
 
$
(0.49
)
 
$
0.51

Weighted average common shares outstanding:
 
 
 
 
Basic
 
27,015,730

 
2,938,006

Diluted
 
27,015,730

 
3,314,387

See Notes to the Condensed Consolidated Financial Statements.

6


OPORTUN FINANCIAL CORPORATION
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
(in thousands, except share data)
For the Three Months Ended March 31, 2020
 
 
Convertible Preferred Stock
 
Common Stock Warrants
 
Common Stock
 
 
 
 
 
 
 
 
 
 
Shares
 
Par Value
 
Additional Paid-in Capital
 
Shares
 
Par Value
 
Shares
 
Par Value
 
Additional Paid-in Capital
 
Accumulated Other Comprehensive Income (Loss)
 
Retained Earnings
 
Treasury Stock
 
Total Stockholders' Equity
Balance – January 1, 2020
 

 
$

 
$

 
23,512

 
$
63

 
27,003,157

 
$
6

 
$
418,299

 
$
(162
)
 
$
76,679

 
$
(6,119
)
 
$
488,766

Issuance of common stock upon exercise of stock options
 

 

 

 

 

 
3,161

 

 
20

 

 

 

 
20

Stock-based compensation expense
 

 

 

 

 

 

 

 
4,151

 

 

 

 
4,151

Vesting of restricted stock units, net
 

 

 

 

 

 
137,479

 

 
(813
)
 

 

 

 
(813
)
Cumulative effect of adoption of ASU 2019-05
 

 

 

 

 

 

 

 

 

 
4,835

 

 
4,835

Change in post-termination benefit obligation
 

 

 

 

 

 

 

 

 
(117
)
 

 

 
(117
)
Net loss
 

 

 

 

 

 

 

 

 

 
(13,301
)
 

 
(13,301
)
Balance – March 31, 2020
 

 
$

 
$

 
23,512

 
$
63

 
27,143,797

 
$
6

 
$
421,657

 
$
(279
)
 
$
68,213

 
$
(6,119
)
 
$
483,541



For the Three Months Ended March 31, 2019
 
 
Convertible Preferred Stock
 
Convertible Preferred and Common Stock Warrants
 
Common Stock
 
 
 
 
 
 
 
 
 
 
Shares
 
Par Value
 
Additional Paid-in Capital
 
Shares
 
Par Value
 
Shares
 
Par Value
 
Additional Paid-in Capital
 
Accumulated Other Comprehensive Income (Loss)
 
Retained Earnings
 
Treasury Stock
 
Total Stockholders' Equity
Balance – January 1, 2019
 
14,043,977

 
$
16

 
$
257,887

 
24,959

 
$
130

 
2,935,249

 
$
3

 
$
44,411

 
$
(132
)
 
$
52,662

 
$
(8,428
)
 
$
346,549

Issuance of common stock upon exercise of stock options
 

 

 

 

 

 
7,317

 

 
142

 

 

 

 
142

Stock-based compensation expense
 

 

 

 

 

 

 

 
1,980

 

 

 

 
1,980

Cumulative effect of adoption of ASC 842
 

 

 

 

 

 

 

 

 

 
(125
)
 

 
(125
)
Change in post-termination benefit obligation
 

 

 

 

 

 

 

 

 
(3
)
 

 

 
(3
)
Net income
 

 

 

 

 

 

 

 

 

 
14,614

 

 
14,614

Balance – March 31, 2019
 
14,043,977

 
$
16

 
$
257,887

 
24,959

 
$
130

 
2,942,566

 
$
3

 
$
46,533

 
$
(135
)
 
$
67,151

 
$
(8,428
)
 
$
363,157

See Notes to the Condensed Consolidated Financial Statements.

7


OPORTUN FINANCIAL CORPORATION
Condensed Consolidated Statements of Cash Flow (Unaudited)
(in thousands)
 
 
Three Months Ended March 31,
 
 
2020

2019
Cash flows from operating activities
 
 
Net income (loss)
 
$
(13,301
)
 
$
14,614

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
4,658

 
2,879

Fair value adjustment, net
 
66,469

 
25,416

Origination fees for loans receivable at fair value, net
 
1,542

 
(106
)
Gain on loan sales
 
(7,532
)
 
(7,312
)
Stock-based compensation expense
 
4,151

 
1,980

Provision (release) for loan losses
 

 
(366
)
Deferred tax provision, net
 
101

 
5,163

Other, net
 
3,521

 
582

Originations of loans sold and held for sale
 
(74,530
)
 
(70,734
)
Proceeds from sale of loans
 
82,636

 
76,046

Changes in operating assets and liabilities:
 
 
 
 
Interest and fee receivable, net
 
(1,987
)
 
(478
)
Other assets
 
(5,818
)
 
(39,723
)
Amount due to whole loan buyer
 
(95
)
 
2,549

Other liabilities
 
(7,693
)
 
36,668

Net cash provided by operating activities
 
52,122

 
47,178

Cash flows from investing activities
 
 
 
 
Originations of loans
 
(314,484
)
 
(300,226
)
Repayments of loan principal
 
282,212

 
247,257

Purchase of fixed assets, net
 
(1,615
)
 
(2,231
)
Capitalization of system development costs
 
(5,461
)
 
(2,509
)
Net cash used in investing activities
 
(39,348
)
 
(57,709
)
Cash flows from financing activities
 
 
 
 
Borrowings under secured financing
 
235,000

 

Repayments of secured financing
 
(17,001
)
 

Repayments of asset-backed notes
 
(160,001
)
 

Repayments of capital lease obligations
 
(26
)
 
(42
)
Net payments related to stock-based activities
 
(793
)
 
143

Net cash provided by financing activities
 
57,179

 
101

Net increase (decrease) in cash and cash equivalents and restricted cash
 
69,953

 
(10,430
)
Cash and cash equivalents and restricted cash, beginning of period
 
136,141

 
129,175

Cash and cash equivalents and restricted cash, end of period
 
$
206,094

 
$
118,745

 
 
 
 
 
Supplemental disclosure of cash flow information
 
 
 
 
Cash and cash equivalents
 
$
144,836

 
$
58,109

Restricted cash
 
61,258

 
60,636

Total cash and cash equivalents and restricted cash
 
$
206,094

 
$
118,745

 
 
 
 
 
Cash paid for income taxes, net of refunds
 
$
455

 
$
142

Cash paid for interest and prepayment fees
 
$
16,378

 
$
13,863

Cash paid for amounts included in the measurement of operating lease liabilities
 
$
4,051

 
$
3,093

Supplemental disclosures of non-cash investing and financing activities
 
 
 
 
Right of use assets obtained in exchange for operating lease obligations
 
$
3,429

 
$
44,778

Non-cash investments in capitalized assets
 
$
702

 
$
667

See Notes to the Condensed Consolidated Financial Statements.

8


OPORTUN FINANCIAL CORPORATION
Notes to the Condensed Consolidated Financial Statements (Unaudited)
March 31, 2020

1.
Organization and Description of Business

Oportun Financial Corporation (together with its subsidiaries, "Oportun" or the " Company") is a technology-powered and mission-driven provider of inclusive, affordable financial services to customers who do not have a credit score, known as credit invisibles, or who may have a limited credit history and are "mis-scored," meaning that the Company believes that traditional credit scores do not properly reflect such customers’ credit worthiness. The Company's primary product offerings are small dollar, unsecured installment loans that are affordably priced and that help customers establish a credit history. The Company has begun to expand beyond its core offering into other financial services that a significant portion of its customers already use, such as auto loans, credit cards and personal loans secured by a vehicle. The Company has developed a proprietary lending platform that enables the Company to underwrite the risk of low-to-moderate income customers that are credit invisible or mis-scored, leveraging data collected through the application process and data obtained from third-party data providers, and a technology platform for application processing, loan accounting and servicing. The Company is headquartered in San Carlos, California. The Company has been certified by the United States Department of the Treasury as a Community Development Financial Institution ("CDFI") since 2009.

The Company uses securitization transactions, warehouse facilities and whole loan sales, to finance the principal amount of most of the loans it makes to its customers.

Segments

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

Initial Public Offering

On September 30, 2019, the Company completed its initial public offering (“IPO”), in which it issued and sold 4,873,356 shares of common stock and selling stockholders sold 2,314,144 shares of common stock, including the underwriters' over-allotment, at a price of $15.00 per share with net proceeds to the Company of approximately $60.5 million, after deducting underwriting discounts and commissions of $5.1 million and offering expenses paid by the Company of approximately $7.5 million. In connection with the IPO, all 14,043,977 shares of the Company’s outstanding redeemable convertible preferred stock automatically converted into 19,075,167 shares of common stock. Additionally, on September 26, 2019, 3,969 shares of common stock were issued in connection with the cashless exercise of 9,090 Series F-1 convertible preferred stock warrants.

On September 9, 2019, the Company effected a one-for-eleven reverse stock split of its issued and outstanding shares of common stock and convertible preferred stock. The par value of the common and convertible preferred stock was not adjusted as a result of the reverse stock split. Accordingly, all share and per share amounts for all periods presented in the accompanying condensed consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock split.

2.
Summary of Significant Accounting Policies

Basis of Presentation ‑ The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These statements are unaudited and reflect all normal, recurring adjustments that are, in management's opinion, necessary for the fair presentation of results. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain prior-period financial information has been reclassified to conform to current period presentation. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 ("the Annual Report"), filed with the Securities and Exchange Commission ("SEC") on February 28, 2020. All share and per share amounts for all periods presented in the accompanying condensed consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the Company's one-for-eleven reverse stock split. See "Initial Public Offering" above for additional information.

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

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

9



Recently Adopted Accounting Standards

Allowance for Loan Losses and Fair Value OptionIn June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. This guidance significantly changes the way entities are required to measure credit losses. Under the new standard, estimated credit losses are based upon an expected credit loss approach rather than an incurred loss approach that was previously required. In May 2019, the FASB issued ASU 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition. This ASU provides an option to irrevocably elect the fair value option applied on an instrument-by-instrument basis for certain financial assets upon the adoption of Topic 326. In November 2019, the FASB issued ASU 2019-10, Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), which deferred the effective date for public filers that are considered smaller reporting companies as defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted in fiscal years beginning after December 15, 2018, including interim periods in those fiscal years. The Company elected to early adopt ASU 2016-13 and ASU 2019-05 effective January 1, 2020.

The Company previously elected the fair value option for all loans originated after January 1, 2018. Upon adoption of ASU 2019-05, the Company elected the fair value option on all loans receivable originated prior to January 1, 2018 that were previously measured at amortized cost. As a result, adoption of ASU 2016-13 did not have impact on the Company's condensed consolidated financial statements and disclosures. The Company made an accounting policy election not to measure an allowance for credit losses on accrued interest receivable amounts as the Company writes off the uncollectible accrued interest receivable balance in a timely manner and makes relevant disclosures.

The adoption of ASU 2019-05 and fair value election resulted in (i) the release of the remaining allowance for loan losses on Loans Receivable at Amortized Cost as of December 31, 2019; (ii) recognition of the unamortized net originations fee income as of December 31, 2019; and (iii) measurement of the remaining loans originated prior to January 1, 2018 at fair value. These adjustments resulted in an increase to opening retained earnings as of January 1, 2020 of approximately $4.8 million. ASU 2019-05 does not allow for the fair value option to be elected on our asset-backed notes carried at amortized cost.
 
Fair Value DisclosuresIn August 2018, the FASB issued ASU 2018-13, Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which amends ASC 820, Fair Value Measurement. This ASU simplifies the disclosure requirements for fair value measurements. The Company adopted this ASU effective January 1, 2020. The simplified disclosure requirements included a new disclosure for the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty. These new disclosure requirements were applied prospectively.
 
Cloud Computing Arrangements - In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use-Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The Company adopted the amendments of this ASU effective January 1, 2020 on a prospective basis with no impact upon adoption. All eligible implementation costs related to cloud computing arrangements are now recorded as part of "prepaid expenses" within "Other assets" on the Condensed Consolidated Balance Sheets (Unaudited). The amortization expense is presented in the same line on the income statement as the fees for the associated hosted service within "Operating expenses" on the Company's Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited), and the cash payments related to implementation of cloud computing arrangements are classified as "cash flows from operating activities" within the Condensed Consolidated Statements of Cash Flow (Unaudited).

Accounting Standards to be Adopted

Income Taxes - In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and to improve the consistent application of GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. The ASU is effective for fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the effect that the new guidance will have on its consolidated financial statements and disclosures.

Reference rate reform - In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this ASU provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform if certain criteria are met. An entity may elect to apply the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020. The amendments in this ASU must be applied prospectively for all eligible contract modifications. The Company is currently evaluating the effect that the new guidance will have on its consolidated financial statements and disclosures.



10


3.
Earnings (Loss) per Share

Basic and diluted earnings (loss) per share are calculated as follows:
 
 
Three Months Ended March 31,
(in thousands, except share and per share data)
 
2020
 
2019
Net income (loss)
 
$
(13,301
)
 
$
14,614

Less: Net income allocated to participating securities (1)
 

 
(12,926
)
Net (loss) income attributable to common stockholders
 
$
(13,301
)
 
$
1,688

 
 
 
 
 
Basic weighted-average common shares outstanding
 
27,015,730

 
2,938,006

Weighted average effect of dilutive securities:
 
 
 
 
Stock options
 

 
317,433

Restricted stock units
 

 
46,512

Warrants
 

 
12,436

Diluted weighted-average common shares outstanding
 
27,015,730

 
3,314,387

 
 
 
 
 
Earnings (loss) per share:
 
 
 
 
Basic
 
$
(0.49
)
 
$
0.57

Diluted
 
$
(0.49
)
 
$
0.51

(1) In a period of net income, both earnings and dividends (if any) are allocated to participating securities. In a period of net loss, only dividends (if any) are allocated to participating securities.

The following common share equivalent securities have been excluded from the calculation of diluted weighted-average common shares outstanding because the effect is anti-dilutive for the periods presented:
 
 
Three Months Ended March 31,
 
 
2020
 
2019
Stock options
 
4,086,128

 

Restricted stock units
 
1,757,010

 

Warrants
 
23,512

 

Convertible preferred stock
 

 
17,201,639

Total anti-dilutive common share equivalents
 
5,866,650

 
17,201,639



Restricted stock units granted with performance criterion were not reflected in the computation of diluted earnings (loss) per share for the three months ended March 31, 2019 as the performance condition was not considered probable. Per the provisions of ASC Topic 260, Earnings Per Share, diluted earnings (loss) per share only reflects those shares that would be issued if the reporting period were the end of the contingency period. Accordingly, total outstanding restricted stock units of 0 and 455,821 were not reflected in the denominator in the computation of diluted earnings per share for the three months ended March 31, 2020 and 2019.

The income available to common stockholders, which is the numerator in calculating diluted earnings per share, does not include any compensation cost related to these restricted stock unit awards for the three months ended March 31, 2019.

4.
Variable Interest Entities

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. The Company has determined that it is the primary beneficiary of these VIEs 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. Such power arises from the Company’s contractual right to service the loans receivable securing the VIEs’ asset-backed debt obligations. The Company has an obligation to absorb losses or the right to receive benefits that are potentially significant to the VIEs because it retains the residual interest of each asset-backed financing transaction either in the form of an asset-backed certificate or as an uncertificated residual interest. Accordingly, the Company includes the VIEs’ assets, including the assets securing the financing transactions, and related liabilities in its consolidated financial statements.

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

11


to repurchase loans receivable that initially satisfied the financing transaction’s eligibility criteria but subsequently became delinquent or a defaulted loans receivable.
 
The following table represents the assets and liabilities of consolidated VIEs recorded on the Company’s Condensed Consolidated Balance Sheets (Unaudited):
 
 
March 31,
 
December 31,
(in thousands)
 
2020
 
2019
Consolidated VIE assets
 
 
 
 
Restricted cash
 
$
25,963

 
$
28,821

Loans receivable at fair value
 
1,693,903

 
1,745,465

Loans receivable at amortized cost
 

 
41,747

Interest and fee receivable
 
17,274

 
15,874

Total VIE assets
 
1,737,140

 
1,831,907

Consolidated VIE liabilities
 
 
 
 
Secured financing (1)
 
279,999

 
62,000

Asset-backed notes at fair value
 
999,113

 
1,129,202

Asset-backed notes at amortized cost (1)
 
200,000

 
360,001

Total VIE liabilities
 
$
1,479,112

 
$
1,551,203

 
(1) Amounts exclude deferred financing costs. See Note 8, Borrowings for additional information.

5.
Loans Receivable at Amortized Cost, Net

Upon adoption of ASU 2019-05, effective January 1, 2020, the Company elected the fair value option on all loans receivable previously measured at amortized cost as of December 31, 2019. Accordingly, for the three months ended March 31, 2020, the Company did not have any loans receivable measured at amortized cost. Therefore, the relevant disclosures related to loans receivable at amortized cost, net, such as credit quality information, past due loans receivable, troubled debt restructurings, and allowance for loan losses are not applicable for the three months ended March 31, 2020. The disclosures below relate to the prior year and are disclosed for comparative period purposes.

Loans receivable at amortized cost, net, consisted of the following:
 
 
March 31,
 
December 31,
(in thousands)
 
2020
 
2019
Loans receivable at amortized cost
 
$

 
$
42,546

Deferred origination costs and fees, net
 

 
(103
)
Allowance for loan losses
 

 
(3,972
)
Loans receivable at amortized cost, net
 
$

 
$
38,471



Loans receivable at amortized cost are the unpaid principal balances of the loans. Accrued and unpaid interest and late fees on the loans estimated to be collected from customers are included in interest and fees receivable in the condensed consolidated balance sheets. At December 31, 2019, accrued and unpaid interest on loans were $0.3 million. Accrued and unpaid late fees were immaterial at December 31, 2019.

Credit Quality Information - The Company uses a proprietary credit scoring algorithm to assess the creditworthiness of individuals who have limited or no credit profile. Data used in the algorithm is obtained from customers, alternative credit reporting agencies, commercially available data sources, as well as information from traditional credit bureaus.

The Company’s proprietary credit scoring platform determines the amount and duration of the loan. The amount of the loan is determined based on the credit risk and cash flow of the individual. Lower risk individuals with higher cash flows are eligible for larger loans with longer duration. Higher risk individuals with lower cash flows are eligible for smaller loans with shorter duration. Larger loans typically have lower interest rates than smaller loans.

After the loan is disbursed, the Company monitors the credit quality of its loans receivable on an ongoing and a total portfolio basis. The following is a credit quality indicator that the Company uses to monitor its exposure to credit risk, to evaluate allowance for loan losses and help set the Company’s strategy in granting future loans:

Delinquency Status ‑ The delinquency status of the Company’s loan receivables reflects, among other factors, changes in the mix of loans in the portfolio, the quality of receivables, the success of collection efforts and general economic conditions.


12


The recorded investment in loans receivable at amortized cost based on this credit quality indicator was as follows:
 
 
March 31,
 
December 31,
Credit Quality Indicator (in thousands)
 
2020
 
2019
Delinquency Status
 
 
 
 
30-59 days past due
 
$

 
$
2,304

60-89 days past due
 

 
1,615

90-119 days past due
 

 
1,459

 
 
$

 
$
5,378



Past Due Loans Receivable - In accordance with the Company’s policy, for loans recorded at amortized cost, income from interest and fees continues to be recorded for loans that are delinquent 90 days or more. The Company addresses the valuation risk on loans recorded at amortized cost that are delinquent 90 days or more by reserving them at 100%.

The recorded investment in loans receivable at amortized cost that are 90 or more days delinquent and still accruing income from interest and fees were as follows:
 
 
March 31,
 
December 31,
(in thousands)
 
2020
 
2019
Non-TDRs
 
$

 
$
720

TDRs
 

 
739

Total
 
$

 
$
1,459



Troubled Debt Restructurings ("TDR") - For the three months ended March 31, 2019, TDRs were primarily related to concessions involving interest rate reduction and extension of term.

As of December 31, 2019, TDRs comprised 21% of the Company’s total loan portfolio at amortized cost.

The amount of unamortized origination fees, net of origination costs, that were written off as a result of TDR restructurings of loans recorded at amortized cost during the three months ended March 31, 2019 was not material.

The Company’s TDR loans receivable at amortized cost based on delinquency status were as follows:
 
 
March 31,
 
December 31,
(in thousands)
 
2020
 
2019
TDRs current to 29 days delinquent
 
$

 
$
6,367

TDRs 30 or more days delinquent
 

 
2,462

Total
 
$

 
$
8,829



A loan that has been classified as a TDR remains so until the loan is paid off or charged off. A TDR loan that misses its first two scheduled payments is charged off at the end of the month upon reaching 30 days' delinquency. A TDR loan that makes the first two scheduled payments is charged off according to the Company’s normal charge-off policy at 120 days' delinquency.

For loans recorded at amortized cost, previously accrued but unpaid interest and fees are also written off when the loan is charged off upon reaching 120 days' delinquency or when collection is not deemed probable.

Information on TDRs that defaulted and were charged off during the periods indicated were as follows:
 
 
Three Months Ended March 31,
(in thousands)
 
2020
 
2019
Recorded investment in TDRs that subsequently defaulted and were charged off
 
$

 
$
3,254

Unpaid interest and fees charged off
 

 
419



When a loan recorded at amortized cost is restructured as a TDR, a portion of all of the accrued but unpaid interest and late fees may be forgiven. The following table shows the financial effects of TDRs that occurred during the periods indicated:
 
 
Three Months Ended March 31,
(in thousands)
 
2020
 
2019
Contractual interest and fees forgiven
 
$

 
$




13


Allowance for Loan Losses - For loans receivable at amortized cost, the Company sets the allowance for loan losses on a total portfolio by analyzing historical charge-off rates for the loan portfolio and the credit quality indicators discussed earlier.

The provision (release) for loan losses reflects the activity for the applicable period and provides an allowance at a level that management believes is adequate to cover probable loan losses at the balance sheet date. The Company estimates an allowance for loan losses only for loans receivable at amortized cost.

Activity in the allowance for loan losses was as follows:
 
 
Three Months Ended March 31,
(in thousands)
 
2020
 
2019
Balance - beginning of period
 
$
3,972

 
$
26,326

Adjustment upon adoption of ASU 2019-05
 
(3,972
)
 

Provision (release) for loan losses
 

 
(366
)
Loans charged off
 

 
(12,083
)
Recoveries
 

 
3,315

Balance - end of period
 
$

 
$
17,192



6.
Loans Held for Sale


The originations of loans sold and held for sale during the three months ended March 31, 2020 was $74.5 million and the Company recorded a gain on sale of $7.5 million and servicing revenue of $4.5 million. The originations of loans sold and held for sale during the three months ended March 31, 2019 was $70.7 million and the Company recorded a gain on sale of $7.3 million and servicing revenue of $3.5 million.

Whole Loan Sale Program ‑ In November 2014, the Company entered into a whole loan sale agreement with an institutional investor, which agreement has been amended from time to time. The term of the current agreement expires on November 10, 2020. Pursuant to this agreement, the Company has committed to sell 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.

In addition, in July 2017, the Company entered into a separate whole loan sale arrangement with an institutional investor, which agreement has been amended from time to time, providing for a commitment to sell 100% of the Company’s loans originated under its Access Loan Program.

7.
Other Assets

Other assets consist of the following:
 
 
March 31,
 
December 31,
(in thousands)
 
2020
 
2019
Fixed assets
 
 
 
 
Computer and office equipment
 
$
10,697

 
$
10,432

Furniture and fixtures
 
10,805

 
10,768

Purchased software
 
4,900

 
4,527

Vehicles
 
79

 
171

Leasehold improvements
 
28,673

 
27,701

Total cost
 
55,154

 
53,599

Less: Accumulated depreciation
 
(33,086
)
 
(30,765
)
Total fixed assets, net
 
$
22,068