Oportun Financial Corp
For the period ended Jun 30, 2024. Filed Aug 9, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 9, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
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Borrowings
| 8. | Borrowings |
Secured Financing
The following table presents information regarding the Company's Secured Financing facilities:
| June 30, 2024 · December 31, 2023 | |||||
|---|---|---|---|---|---|
| Variable Interest Entity | Facility Amount | Maturity Date | Interest Rate | Balance | Balance |
| (in thousands) | |||||
| Oportun CCW Trust (1) | $80,000 | December 1, 2024 | Adjusted SOFR + 3.41% | $57,978 | $68,409 |
| Oportun PLW Trust | 600,000 | September 1, 2024 | Adjusted SOFR + 2.17% | 98,458 | 221,542 |
| Total secured financing | $680,000 | $156,436 | $289,951 | ||
(1) As of December 31, 2023, the facility amount of the Secured Financing - CCW facility (Oportun CCW Trust) was $100.0 million.
On January 31, 2024, the Company entered into an amendment to the Credit Card Warehouse facility to reduce the commitment amount from $100.0 million to $80.0 million and adjusted the minimum payment rate requirement, advance rate.
Asset-backed Notes at Fair Value
The following table presents information regarding asset-backed notes at fair value:
| Variable Interest Entity | Initial note amount issued (1) | Initial collateral balance (2) | Current balance (1) | Current collateral balance (2) | Weighted average interest rate(3) | Original revolving period (4) |
|---|---|---|---|---|---|---|
| (in thousands) | ||||||
| Asset-backed notes recorded at fair value: | ||||||
| Oportun Issuance Trust (Series 2022-3) | $300,000 | $310,993 | $93,233 | $106,868 | 10.35% | N/A |
| Oportun Issuance Trust (Series 2022-2) | 400,000 | 410,212 | 78,006 | 90,145 | 9.87% | N/A |
| Oportun Issuance Trust (Series 2022-A) | 400,000 | 410,211 | 394,945 | 415,204 | 5.44% | 2 years |
| Oportun Issuance Trust (Series 2021-C) | 500,000 | 512,762 | 466,863 | 519,349 | 2.48% | 3 years |
| Oportun Issuance Trust (Series 2021-B) | 500,000 | 512,759 | 443,817 | 486,952 | 2.05% | 3 years |
| Oportun Funding XIV, LLC (Series 2021-A) | 375,000 | 383,632 | 106,224 | 119,066 | 1.79% | 2 years |
| Total asset-backed notes recorded at fair value | $2,475,000 | $2,540,569 | $1,583,088 | $1,737,584 | ||
| Variable Interest Entity | Initial note amount issued (1) | Initial collateral balance (2) | Current balance (1) | Current collateral balance (2) | Weighted average interest rate(3) | Original revolving period (4) |
|---|---|---|---|---|---|---|
| (in thousands) | ||||||
| Asset-backed notes recorded at fair value: | ||||||
| Oportun Issuance Trust (Series 2022-3) | $300,000 | $310,993 | $145,732 | $165,079 | 9.34% | N/A |
| Oportun Issuance Trust (Series 2022-2) | 400,000 | 410,212 | 135,825 | 156,027 | 8.46% | N/A |
| Oportun Issuance Trust (Series 2022-A) | 400,000 | 410,211 | 390,755 | 415,448 | 5.44% | 2 years |
| Oportun Issuance Trust (Series 2021-C) | 500,000 | 512,762 | 459,212 | 519,612 | 2.47% | 3 years |
| Oportun Issuance Trust (Series 2021-B) | 500,000 | 512,759 | 466,317 | 519,115 | 2.05% | 3 years |
| Oportun Funding XIV, LLC (Series 2021-A) | 375,000 | 383,632 | 182,164 | 200,758 | 1.78% | 2 years |
| Oportun Funding XIII, LLC (Series 2019-A) | 279,412 | 294,118 | — | — | —% | 3 years |
| Total asset-backed notes recorded at fair value | $2,754,412 | $2,834,687 | $1,780,005 | $1,976,039 | ||
(1)Initial note amount issued includes notes retained by the Company as applicable. The current balances are measured at fair value for asset-backed notes recorded at fair value.
(2)Includes the unpaid principal balance of loans receivable, the balance of required reserve funds, cash, cash equivalents and restricted cash pledged by the Company.
(3)Weighted average interest rate excludes notes retained by the Company. There were no notes retained by the Company as of June 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)The revolving period for Series 2021-A ended on March 1, 2023, Series 2021-B ended on May 1, 2024, and Series 2022-A ended on June 1, 2024. These asset-backed notes have been amortizing since then. Series 2022-2 and Series 2022-3 are both amortizing deals with no revolving period.
Asset-backed Borrowings at Amortized Cost
The following table represents information regarding the Company's Asset-backed borrowings at amortized cost:
| June 30, 2024 · December 31, 2023 | ||||
|---|---|---|---|---|
| Balance | Balance | |||
| Asset-backed borrowings at amortized cost | Pledged Asset (1) | Associated Liability | Pledged Asset (1) | Associated Liability |
| (in thousands) | ||||
| Oportun Issuance Trust 2024-1 | $150,656 | $149,728 | $— | $— |
| Oportun CL Trust 2023-A | 197,390 | 195,444 | 197,390 | 195,057 |
| Other Asset Backed Borrowings | 488,613 | 491,721 | 382,712 | 386,411 |
| Total asset-backed borrowings recorded at amortized cost: | $836,659 | $836,893 | $580,102 | $581,468 |
(1)The amount of pledged assets are recognized within the Loans Receivable at Fair Value on the Consolidated Balance Sheet.
On February 13, 2024, the Company announced the issuance of $199.5 million of Series 2024-1 fixed-rate asset-backed notes secured by a pool of its unsecured and secured personal installment loans (the "2024-1 Securitization"). The 2024-1 Securitization included four classes of fixed rate notes. The notes were offered and sold in a private placement in reliance on Rule 144A under the U.S. Securities Act of 1933, as amended, and were priced with a weighted average yield of 8.600% per annum and weighted average coupon of 8.434% per annum.
On October 20, 2023, the Company entered into a Receivables Loan and Security Agreement (the “Receivables Loan and Security Agreement”), pursuant to which the Company borrowed $197 million. Borrowings under the Receivables Loan and Security Agreement accrue interest at a weighted average interest rate equal to 10.05%.
Acquisition and Corporate Financing
The following table presents information regarding the Company's Acquisition and Corporate Financings:
| June 30, 2024 · December 31, 2023 | |||||
|---|---|---|---|---|---|
| Entity | Original Balance | Maturity Date | Interest Rate | Balance | Balance |
| (in thousands) | |||||
| Oportun Financial Corporation (1) | $150,000 | September 14, 2026 | SOFR (minimum of 0.00%) + 12.00% | $192,049 | $204,100 |
| Oportun RF, LLC (2) | 116,000 | January 10, 2025 | SOFR (minimum of 0.00%) + 11.00% | 38,333 | 54,646 |
| Total acquisition and corporate financings | $266,000 | $230,382 | $258,746 | ||
(1) The Corporate Financing facility (Oportun Financial Corporation) was amended and upsized to $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.
Amendments to Corporate Financing
On March 12, 2024, the Company entered into Amendment No. 3 to the Corporate Financing (the “Third Amendment”). The Third Amendment included modifications to the minimum asset coverage ratio covenant levels, provided for an interest rate step-up of 3.00% per annum for certain months beginning in August 2024 in which the asset coverage ratio is less than 1.00 to 1.00, and required certain principal payments in amounts equal to $5.7 million per month to be made on the last business day of each of March, April and May 2024. In addition, the Third Amendment required principal payments equal to 100% of the net cash proceeds of any future issuance of indebtedness junior in priority to the obligations under the Corporate Financing.
Amendments to Acquisition Financing
On March 8, 2024, the Acquisition Financing facility (Oportun RF, LLC) was amended to provide for athree-month principal payment holiday for the months of March, April and May 2024, in amounts equal to $5.7 million per month. In addition, the amendment extended the term of the Acquisition Financing facility to January 10, 2025.
See Note 10, Stockholders' Equity for additional information on the Warrants.
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.
| 9. | Other Liabilities |
Other liabilities consist of the following:
| June 30, | December 31, | |
|---|---|---|
| (in thousands) | 2024 | 2023 |
| Accounts payable | $9,872 | $5,288 |
| Accrued compensation | 10,670 | 15,359 |
| Accrued expenses | 20,521 | 24,791 |
| Accrued interest | 10,117 | 8,415 |
| Amount due to whole loan buyer | 5,795 | 4,169 |
| Current tax liabilities | 7,472 | 7,139 |
| Other | 3,265 | 3,777 |
| Total other liabilities | $67,712 | $68,938 |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.