Oportun Financial Corp

We monitor and evaluate the following key metrics in order to measure our current performance, develop and refine our growth strategies, and make strategic decisions.

See “Glossary” at the end of Part II of this report for formulas and definitions of our key performance metrics.

Aggregate Originations

Aggregate Originations decreased to $338.2 million for the three months ended March 31, 2024 from $408.0 million for the three months ended March 31, 2023, representing a 17.1% decrease. The decrease is primarily driven by a $115.8 million decrease driven by a reduction in average loan size from $4,075 to $2,918 for the three months ended March 31, 2023 and March 31, 2024, respectively, which was partially offset by a $46.1 million increase as a result of a 15.8 thousand increase in the number of loans originated. We originated 115,912 and 100,122 loans for the three months ended March 31, 2024 and 2023, respectively. Theincrease is primarily due to increased approval rates and additional marketing efforts to new members.

Portfolio Yield

Portfolio yield increased to 32.5% for the three months ended March 31, 2024, from 31.4% for the three months ended March 31,2023, primarily attributable to higher fees on loans originated through our bank partnership.

30+ Day Delinquency Rate

Our 30+ Day Delinquency Rate was 5.2% and 5.5% as of March 31, 2024 and 2023, respectively. The decrease was primarily due to improved credit quality as a result of our 2023 efforts to tighten credit standards throughout the second half of 2023 after significantly tightening underwriting standards in 2022.

Annualized Net Charge-Off Rate

Annualized Net Charge-Off Rate for the three months ended March 31, 2024 and 2023 was 12.0% and 12.1%, respectively. Net Charge-offs for the three months ended March 31, 2024 decreased primarily due to our efforts to tighten our credit underwriting standards and focus lending towards existing and returning members to improve credit outcomes. Beginning in July 2022, we took numerous actions to improve the credit performance on newly originated loans, including significantly tightening our underwriting standards for all borrowers, particularly for higher risk digital marketing channels, and adjusting loan size based on member free cash flow. We also focused lending towards existing and returning members to improve credit outcomes as existing and returning members historically have had lower loss rates. We refer to the post-July 2022 underwriting vintages as our front book and the originations made prior to our significant credit-tightening in July 2022 we refer to as the back book. As the average life of our loans is only one year, we expect the back book to become less impactful on our losses throughout 2024. We anticipate our Annualized Net Charge-Off Rate will decline during 2024 as our back book of loans amortize down.