Oportun Financial Corporation Common Stock Small-Cap Virtual Conference

Thank you, Brendan. I appreciate you inviting me to speak today. Thanks as well to the audience for joining us. I am Dorian Hare, SVP of Investor Relations at Oportun Financial. Today, I will be presenting our current investor presentation, dated September 2026, which you can see on the screen here, which is available on our investor relations website at investor.oportun.com. The key message I want to share today is that Oportun has built a more resilient, disciplined earnings platform reflected in sustained profitability, improving credit performance, lower funding costs, and stronger liquidity. We are now focused on translating that foundation into durable risk-adjusted growth. We have delivered seven consecutive quarters of GAAP profitability.

We have reduced funding costs and strengthened liquidity, and these factors, along with our improving credit trends under a tight credit posture, including recording our lowest 30-plus day delinquency rate since the fourth quarter of 2021, position us, as per our August 5 guidance, to have an even stronger second half of the year than the first. For those who are less familiar with Oportun, we offer borrowing and saving solutions that help our members build a better financial future. Our products address two of the most fundamental challenges to financial health and resilience: access to affordable credit and the ability to build adequate savings. Since our founding in 2005, we have originated approximately $8 million in loans, extended approximately $23 billion in credit, and helped 1.3 million members build credit histories.

To give you a sense of scale, we finished full year 2025 with $957 million of total revenue, along with $148 million of adjusted EBITDA, $65 million in adjusted net income, and $25 million in GAAP earnings. I would like to now provide some color on recent additions to the company's executive leadership that position us to carry forward our strong momentum. In April, Oportun appointed a new CEO, Doug Bland, a consumer lending industry veteran, to lead the next phase of growth for the company. Doug's experience prior to joining Oportun includes serving as a senior executive at PayPal, where he ran all consumer businesses, including Global Credit and Venmo. In June, we announced the hiring of Sean Rowles, also a former senior executive at PayPal, as our new Chief Risk Officer. Importantly, we also have a new CFO.

Just over 2 weeks ago, Bill Franklin joined Oportun in this capacity. At Discover Financial Services, he most recently served as Senior Vice President and Chief Financial Officer of Consumer Banking, overseeing financial planning and analysis for Discover's consumer lending and deposits businesses, including personal loans. Lastly, on Monday, Oportun appointed Bernardo Martinez, who was recently at SoFi, as Chief Retail and Sales Officer, and Garrett Hope, most recently at PayPal, as Chief Product Officer. The team and I are excited about these changes as we build on a strong foundation to deliver durable growth for the business. Excuse me for a second. Our mission continues to be to empower our members to build a better future, and we're focused on accelerating it. We do this through our three products: unsecured personal loans, secured personal loans, and our award-winning Set & Save savings product.

Our target market is comprised of thin-file and no-file, low to moderate income individuals who are traditionally underserved. I will now share more detail. Excuse me. I will now share more details on our product offering. Unsecured personal loans are the largest and most profitable part of Oportun's business. They allow our members a fast and convenient way to address pressing financial needs, such as a car repair or security deposit on an apartment they want to rent. Our competitive differentiation in personal loans stems from our focus on underserved communities, our advanced technology and data capabilities, our AI-driven underwriting, and our ability to tailor our product to meet and exceed our members' expectations. For loans originated in the second quarter, the average size of our unsecured personal loans was approximately $3,400.

The average term was 27 months, and the weighted average APR was 35.7%, which, as I'll discuss soon, provides a strong value proposition for our members. We also offer a secured personal loan product, which is secured by a member's automobile. We are excited about our expansion of secured personal loans, where we grew originations 15% year-over-year, reaching 9% of our own portfolio in the second quarter, up from 7% a year prior. Importantly, average losses on secured personal loans continued to run substantially lower than those on unsecured personal loans in the second quarter. With higher average loan sizes, secured personal loans originated are expected to generate approximately twice the revenue per loan alongside better risk-adjusted returns compared to unsecured personal loans.

The average loan size for our secured personal loans was approximately $6,600 in the second quarter, while the average term was 35 months, and the weighted average APR was 33.4%. As I alluded to, our value proposition is strong compared to the alternatives for our members. We deliver significantly savings in comparison. Utilizing a 2025 external survey relating to competing product loans, we've determined that alternatives are, on average, five times more expensive, while payday loans are up to eight times more expensive. I'd like to now take a moment to explain our proprietary underwriting engine, which is a key differentiator for how we operate and serve our members. Credit decisioning is centralized and automated rather than branch-level manual underwriting.

We have used AI machine learning to analyze billions of data points, producing over 1,000 end nodes that enable highly precise credit and fraud decisions, including who we approve and for how much. We leverage multiple independent frameworks in our decisioning, including our alternative data score, which allows us to score 100% of consumers, even those without a credit file. This includes having successfully used Plaid to access bank transaction data for underwriting for several years now. We also leverage raw data from the credit bureaus to formulate our own custom bureau score, and we verify incomes, thus formulating a borrower's ability to pay. Oportun maintains robust governance, compliance, and monitoring practice in support of management credit oversight. I'd note that we've built an underwriting platform that can respond quickly. We're able to modify our underwriting parameters overnight as needed, as market dynamics shift.

Now I'd like to provide you with some more color on our loan fulfillment and servicing capabilities, which are focused on lowering friction, better repayment infrastructure, and scalable omnichannel engagement. In the second quarter, 54% of loan applicants used multiple fulfillment channels, including our retail stores, contact centers, and mobile digital platform to complete their applications. Notably, 79% of applicants use our mobile digital channel for at least part of their application. And 91% of payments received during the second quarter were made either debit or ACH. In addition to our Oportun-branded locations, Oportun offers over 100,000 partner payment locations to our members. I'd now like to talk to you about our award-winning Set & Save savings product. This subscription-based product enables ongoing engagement with members who may not have an immediate need for a personal loan.

It was rated the number one app in its category by Bankrate in 2025 and is recognized by Forbes as an outstanding personal finance app for simplifying your money. Members can seamlessly integrate their existing bank account into the platform and set personal savings goals. Our AI engine then analyzes members' income and spending patterns to determine a safe, optimal allocation towards their goals. Funds are automatically transferred over time to help members reach their targets effortlessly. On average, our savings product helps members to set aside $1,800 annually, contributing to more than $13.2 billion saved since its launch. I'd like to now share some initial observations and initiatives that we're working on under Doug's leadership. He presented this slide on our Q2 earnings call following his first 100 days at Oportun while we work on reformulating our strategy under his leadership. Doug's conclusion was clear. Oportun has a strong mission, a differentiated member franchise, and a much stronger financial foundation than it had a year ago.

The company is now focused on translating these advantages into durable growth and more predictable returns. He also said that we are increasing our operating cadence and accountability across the business, and our new leadership structure, which I discussed earlier, will be integral to that. With an eye on longer-term financial performance and earnings growth, we've recently launched two new initiatives that, while we expect to have limited financial impact this year at scale, have the potential to enhance profits in future years. We are focused on optimizing the balance between risk and reward, using data and analytics to make the best decisions about approving, pricing, amount, and term. One important step to balance risk and reward was the launch of risk-based pricing in July.

It gives us better flexibility to differentiate terms more precisely across risk tiers. This can help us retain attractive, lower-risk, and returning members while responsibly serving additional qualified applicants. In April, we launched a payment protection offering that we expect will provide more certainty for our members. Payment protection is an opt-in offering that members can elect during the loan application process, which provides protection against unforeseen events like involuntary unemployment, death, or disability by completely or partially paying off the loan. With that foundation, let me turn to how we're applying greater discipline to new member growth and our resulting improved credit results. Some of you who have been following Oportun for some time remember the difficulties with our 2022 and 2023 performance and may be wondering how we can avoid a repeat going forward.

Oportun and other consumer finance companies experienced higher losses from the vintages' underwriting leading up to that time period, with our members impacted by 40-year high inflation. Aside from high inflation and rising benchmark rates, which were beyond our control, we learned that rapid online affiliate-led new member growth resulted in weaker vintages. We exited those channels, tightened selection, and reintroduced risk-based pricing in July, in part to appropriately calibrate for higher-risk new members. The first six months' bad rate is about 6% now over the last five quarters versus roughly 15% in the challenged vintages. Our focus is to scale new member growth over time without relaxing credit discipline. The outcome of this is more disciplined underwriting approach that has substantially improved our credit performance.