Opportunity Financial, LLC (“OppFi“), a leading financial technology platform that empowers banks to provide credit access for the everyday consumer, today reported financial highlights for the fourth quarter and full year that ended December 31, 2020. OppFi and FG New America Acquisition Corp. (NYSE: FGNA), a special purpose acquisition corporation (“SPAC”), recently entered into a definitive agreement for a business combination that would result in OppFi becoming a public company.
“We believe our results reinforce our platform’s strength and durability regardless of market condition,” said Jared Kaplan, Chief Executive Officer of OppFi. “Looking ahead into 2021, we expect the acceleration of growth and profitability as we shift to a more normalized macroeconomic environment. In addition, we plan to launch new products to help empower the nearly 60 million consumers who lack access to mainstream financial offerings. We believe we are well positioned to build upon our mission driven business model and to scale our customer acquisition model, artificial intelligence-powered credit decisioning and proprietary technology, coupled with exceptional customer service.”
“Finally, we are excited about the pending business combination with FG New America Acquisition Corp., which we expect will amplify our voice as one of the premier financial services destinations for the tens of millions of everyday consumers who have been locked out of the traditional financial ecosystem,” concluded Kaplan.
Fourth Quarter 2020 versus Fourth Quarter 2019
- Revenue increased 24.5% to $90 million from $73 million
- Adjusted Revenue increased 2.4% to $87 million from $85 million1
- GAAP Net Income increased 123.9% to $16 million from $7 million
- Adjusted Net Income improved 49.6% to $21 million from $14 million1
- Adjusted EBITDA increased 29.8% to $35 million from $27 million1
Full Year 2020 versus Full Year 2019
- Revenue increased 27.0% to $291 million from $229 million
- Adjusted Revenue grew 20.5% to $323 million from $268 million1
- GAAP Net Income increased 134.9% to $78 million from $33 million
- Adjusted Net Income stayed flat at $53 million compared to $53 million1
- Adjusted EBITDA increased 1.6% to $99 million from $97 million1
Fourth Quarter and Full Year Financial Summary
The following table presents a summary of OppFi’s Revenue, Adjusted Revenue, GAAP Net Income, Adjusted Net Income and Adjusted EBITDA for the quarters ended December 31, 2020 and December 31, 2019 and the years ended December 31, 2020 and December 31, 2019.
|
($ in 000s) |
Q4-20a |
Q4-19a |
Variance (%) |
FY 20 |
FY 19 |
Variance (%) |
|
Q4-20 vs Q4-19 |
FY 20 vs FY19 |
|||||
|
Revenue |
$ 90,461 |
$ 72,660 |
24.5% |
$ 291,014 |
$ 229,122 |
27.0% |
|
Adjusted Revenue1 |
$ 86,800 |
$ 84,804 |
2.4% |
$ 322,955 |
$ 268,090 |
20.5% |
|
GAAP Net Income |
$ 16,158 |
$7,216 |
123.9% |
$ 77,516 |
$ 32,995 |
134.9% |
|
Adjusted Net Income1 |
$ 21,126 |
$ 14,122 |
49.6% |
$ 53,276 |
$ 53,273 |
0.0% |
|
Adjusted EBITDA1 |
$ 34,706 |
$ 26,730 |
29.8% |
$ 98,578 |
$ 97,029 |
1.6% |
|
(a) |
Fourth quarter financials unaudited |
Fourth Quarter and Full Year Key Performance Metrics
The following table presents total net originations, percentage of originations by bank partners, net charge-offs as a percentage of average receivables and auto-approval rates for the quarters ended December 31, 2020 and December 31, 2019 and the years ended December 31, 2020, December 31, 2019 and December 31, 2018.
|
($ in 000s) |
Q4-20 |
Q4-19 |
FY 20 |
FY 19 |
FY 18 |
|
|
Total Net Originations(a) |
$ 149,869 |
$ 156,394 |
$ 483,350 |
$ 496,530 |
$ 273,797 |
|
|
% of Originations by Bank Partners |
66.5% |
59.6% |
65.0% |
53.2% |
29.8% |
|
|
Net Charge-Offs as % of Average Receivables(b) |
31.0% |
47.8% |
35.6% |
42.2% |
37.2% |
|
|
Auto-Approval Rate(c) |
25.7% |
18.3% |
25.7% |
18.3% |
6.5% |
|
(a) |
Total net originations include both originations by bank partners on the OppFi platform, as well as direct originations by OppFi. |
|
(b) |
Net charge-offs as a percentage of average receivables represents total charge offs from the period less recoveries as a percent of average receivables. OppFi charges off loans after they are more than 90 days delinquent. |
|
(c) |
Auto-Approval Rate is calculated by taking the number of approved loans that are not decisioned by a loan advocate or underwriter (auto-approval) divided by the total number of loans approved. |
Liquidity and Capital Resources
As of December 31, 2020, the Company had $26 million in unrestricted cash and over $100 million in immediate availability under its financing facilities, including undrawn debt related to eligible but unpledged collateral from its SPV financing facilities. As of December 31, 2020, the Company had an additional $338 million of unused debt capacity under its financing facilities for future availability, representing a 70% overall undrawn capacity.
Full Year 2021 Outlook
OppFi reaffirms its financial outlook for the full year 2021. The Company expects:
- Revenue of approximately $418 million
- Adjusted EBITDA of approximately $132 million2
- Adjusted Net Income of approximately $66 million2
OppFi’s expectations for its full year 2021 revenue, Adjusted EBITDA and Adjusted Net Income were developed by OppFi’s management and considered various material assumptions, including the following:
- Ending receivables of approximately $500 million
- Net charge-offs as a percentage of average receivables of approximately 40%
- Yield consistent with historical levels
Recent Developments
OppFi previously announced that it had entered into a business combination agreement with FG New America Acquisition Corp. (NYSE: FGNA). Completion of the proposed business combination is subject to approval by the stockholders of FG New America Acquisition Corp. and certain other conditions. The proposed business combination is expected to close in the second quarter of 2021.
Fourth Quarter and Full Year Results of Operations
The following table presents OppFi’s consolidated results of operations for the quarters ended December 31, 2020 and 2019 and the years ended December 31, 2020 and 2019:
|
($ in 000s) |
Q4-20a |
Q4-19a |
FY 20 |
FY 19 |
|
|
Interest and Loan Related Income, Gross |
$ 86,514 |
$ 84,522 |
$ 322,165 |
$ 267,166 |
|
|
Other Income |
283 |
282 |
789 |
924 |
|
|
Interest, Loan Related, and Other Income |
$ 86,797 |
$ 84,804 |
$ 322,954 |
$ 268,090 |
|
|
Amortization of Loan Origination Costs |
3,664 |
(12,144) |
(31,940) |
(38,968) |
|
|
Total Revenue |
$ 90,461 |
$ 72,660 |
$ 291,014 |
$ 229,122 |
|
|
Total Provision |
28,031 |
39,237 |
90,787 |
114,254 |
|
|
Net Revenue |
$ 62,430 |
$ 33,423 |
$ 200,227 |
$ 114,868 |
|
|
Expenses |
46,272 |
26,207 |
122,711 |
81,873 |
|
|
EBT b |
$ 16,158 |
$7,216 |
$ 77,516 |
$ 32,995 |
