Press Release: Oportun First Quarter 2020 Revenue Up 18 Percent

Oportun First Quarter 2020 Revenue Up 18 Percent

Managed Principal Balance at End of Period Up 20 Percent

Book Value Per Share of $17.81 and Adjusted Tangible Book Value Per Share of $17.27

SAN CARLOS, Calif., May 14, 2020 (GLOBE NEWSWIRE) -- Oportun Financial Corporation (Nasdaq: OPRT) ("Oportun" and the "Company") today reported financial results for the first quarter ended March 31, 2020.

"Oportun is demonstrating its resiliency in this challenging environment as we remain focused and responsive to the needs of our customers and employees," said Raul Vazquez, CEO of Oportun. "The decisive and proactive actions to adapt our credit underwriting, enhance our customer servicing and manage our liquidity will help ensure that we can continue serving as many of our customers as possible, and I am confident that our company will be even stronger when this crisis finally recedes. I want to express my gratitude once again to our employees for living our values and making it possible to continue fulfilling our mission of serving our communities."

First Quarter 2020 Financial Results

-- Aggregate Originations were $432.8M, up 4% year-over-year ("Y/Y")

-- Active Customers of 777,194, up 11% Y/Y

-- Managed Principal Balance at End of Period was $2.2B, up 20% Y/Y

-- 30+ Day Delinquency Rate of 3.8% as compared to 3.6% for the prior-year
period

-- Annualized Net Charge-Off Rate of 8.9% as compared to 8.3% for the
prior-year period

-- Total revenue and Fair Value Pro Forma ("FVPF") Total Revenue of $163.4M,
up 18% and 19% Y/Y, respectively

-- Net loss of $13.3M as compared to net income of $14.6M in the prior-year
period

-- Adjusted Net Loss of $1.2M as compared to Adjusted Net Income of $9.6M in
the prior-year period

-- Loss per share of $0.49 as compared to earnings per share of $0.57 in the
prior-year period

-- Adjusted Loss Per Share of $0.04 as compared to Adjusted Earnings Per
Share of $0.43 in the prior-year period

-- Book Value of $483.5 million, or $17.81 per share, and Adjusted Tangible
Book Value of $468.8 million, or $17.27 per share, and

-- Adjusted EBITDA of $17.9M as compared to $18.9M in the prior-year period

Operating Results

Metric GAAP Adjusted(1)
1Q20 1Q19 1Q20 1Q19
Total revenue $163.4 $138.3 $163.4 $137.4
Net income (loss) ($13.3) $14.6 ($1.2) $9.6
Diluted earnings (loss)
per share ($0.49) $0.51 ($0.04) $0.43
Annualized Net Charge-Off
Rate 8.9% 8.3% 8.9% 8.3%

Dollars in millions, except net charge-off rate and per share amounts.

(1) To facilitate useful measures for period-to-period comparisons of
its business, the Company presents key financial information on an
adjusted basis, as if the fair value option had been elected since
inception for all loans originated and held for investment and all
asset-backed notes issued. FVPF total revenue and the other adjusted
figures are non-GAAP financial measures, which the Company reports in
addition to, and not as a substitute for, financial measures
calculated in accordance with GAAP. See the section entitled "About
Non--GAAP Financial Measures" for an explanation of non--GAAP
measures, and the table entitled "Reconciliation of Non--GAAP
Financial Measures" for a reconciliation of non--GAAP to GAAP
measures.

First Quarter 2020 -- Financial and Operating Highlights

To facilitate useful measures for period-to-period comparisons, the Company has provided below unaudited financial information for the three-month periods ended March 31, 2020 and 2019 on a GAAP basis as well as a FVPF Adjusted basis. The FVPF and adjusted financial results reflect the Company's performance as if the fair value option had been elected since inception for all loans originated and held for investment and all asset-backed notes issued. All figures are as of March 31, 2020, unless otherwise noted.

Since late January, Oportun has consistently monitored and proactively navigated the COVID-19 pandemic. The Company has taken actions to manage its business in a thoughtful and conservative manner throughout this fluid situation, while ensuring the health and safety of employees and prudently pursuing its mission to provide customers with greater access to affordable financial services. Oportun believes it is well positioned strategically and financially to adapt its business to the current environment.

Safeguarding employees and customers

The health and safety of Oportun's employees and customers is paramount as the Company fulfills its responsibility as part of an "Essential Critical Infrastructure Sector" of maintaining operations to support customers in need. Oportun is taking all necessary healthcare precautions in accordance with the guidelines of the Center for Disease Control and Prevention and state and local authorities. The Company has adopted social distancing procedures and other safety protocols within its retail locations and contact centers. As of April 30, 2020, 337 of Oportun's 342 retail locations remained open and all six of its contact centers continue to operate. Additionally, Oportun has increased the benefits it offers to employees, including increased sick leave, stipends to cover incremental childcare expenses, cash advances and access to its employee assistance fund. Whenever necessary, the Company's teams have seamlessly adapted to working remotely.

First Quarter 2020 Financial Results

Total Revenue and FVPF Total Revenue -- Total revenue for the first quarter was $163.4 million, increasing 18% compared to the prior-year quarter. FVPF Total Revenue was $163.4 million for the first quarter, up 19% compared to the prior-year quarter. The increase in total revenue and FVPF Total Revenue is primarily attributable to growth in our Average Daily Principal Balance, which grew from $1.5 billion for the three months ended March 31, 2019 to $1.9 billion for the three months ended March 31, 2020, an increase of 22.0%. This was partially offset by a decrease in portfolio yield of 14 basis points due to returning customers receiving lower interest rates.

Net Income (Loss) and Adjusted Net Income (Loss) -- Net income (loss) was $(13.3) million, as compared to $14.6 million in the prior-year quarter. Adjusted Net Income (Loss) was $(1.2) million compared to $9.6 million in the prior-year quarter. The decreases in net income and Adjusted Net Income reflect a reduction in the fair value of the Company's loan portfolio in the first quarter as a result of the macro-economic changes associated with the COVID-19 pandemic and higher interest rates and credit spreads as compared to the prior-year quarter. The decrease in fair value associated with the mark-to-market decrease in loans receivable was partially offset by a mark-to-market increase related to the reduction in value of the Company's asset-backed notes and current period charge-offs.

Earnings (Loss) Per Share and Adjusted EPS -- GAAP net loss per share, basic and diluted, were both $(0.49), as compared to basic and diluted earnings per share of $0.57 and $0.51, respectively, in the prior-year quarter. Adjusted EPS was $(0.04) as compared to $0.43 in the prior-year quarter.

Adjusted EBITDA -- Adjusted EBITDA was $17.9 million, down from $18.9 million in the prior-year quarter. The Company believes that Adjusted EBITDA is a useful metric because it is a proxy for Oportun's pre-tax cash profitability. In addition to adding back taxes, depreciation, amortization, stock-based compensation and one-time events, Adjusted EBITDA also excludes the non-cash impact of fair value accounting. Adjusted EBITDA as a percentage of FVPF Total Revenue was 10.9% and 13.7% for the first quarter 2020 and 2019, respectively. The lower Adjusted EBITDA Margin compared to the prior-year quarter was primarily due to reduced originations and lower application volumes in the second half of March, along with investments associated with new products and services as well as additional investments in technology, engineering, data science and public company expenses.

Credit and Operating Metrics

As news of the pandemic's spread began to surface, Oportun proactively implemented a series of changes to its underwriting criteria to reduce the Company's credit-loss exposure. Oportun has also reduced loan sizes by credit tier to better manage credit outcomes. Oportun remains committed to working with its customers during this uncertain time. Starting the last week of March, the Company began offering initial emergency hardship deferments of one month to customers who indicated they had been economically impacted by the COVID-19 pandemic. Oportun may consider Emergency Hardship Deferrals, granted one month at a time, for borrowers who continue to be impacted. As of April 30, 2020, 14.6% of its Owned Principal Balance at End of Period was in deferral status under the Emergency Hardship Deferral program. This number had decreased to 8.6% as of May 12, 2020.

Net Charge-Off Rate -- The Annualized Net Charge-Off Rate for the quarter was 8.9%, compared to 8.3% for the prior-year quarter. The Annualized Net Charge-Off Rate for the month of April was 9.4%.

Delinquency Rate -- 30+ day delinquencies were 3.8% at the end of the quarter, compared to 3.6% at the end of the prior-year quarter, consistent with the Company's preliminary estimate. For the periods ending April 30, 2020 and May 12, 2020, the 30+ day delinquencies were 4.0% and 4.1%, respectively.

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