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okay welcome everybody and thank you for joining us today at the sudoti september small cap conference my name is brendan mccarthy i'm an analyst here with sudoti and I'm very pleased to welcome Opportune Financial, Tigger's OPRT. Joining us from Opportune is Senior Vice President of Investor Relations, Dorian Hare. Before I hand it over, a quick reminder that the Q&A tab is located right at the bottom of the screen. Feel free to type in any questions throughout the presentation and we can save time for Q&As at the end. But with that said, Dorien, take it away. Thank you, Brennan. I appreciate you inviting me to speak today. And thanks as well to the audience for joining us. I'm Dorian Hare, SVP of Investor Relations at Opportune 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.opportune.com. the key message i want to share today is that opportune 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 of quarters of gap profitability. We've 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 5th guidance, to have an even stronger second half of the year than the first. For those who are less familiar with Opportune, 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've 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 gap earnings. I'd like to now provide some color on recent additions to the company's executive leadership that possession us to carry forward our strong momentum. In April, opportune 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 opportune includes serving as a senior executive at paypal where he ran all consumer businesses including global credit and venno in june we announced the hiring of sean rolls also a former senior executive at pay pal as our new chief risk officer importantly we also have a new cfo just over two weeks ago, Bill Franklin joined Opportunity 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, Opportunity appointed Bernardo Martinez, who was recently at SoFi, as well 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 and 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 details on our product offering. Unsecured personal loans are the largest and most profitable part of Opportunity'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 continue to run substantially lower than those on unsecured personal loans in the second quarter. With higher average loan sizes, secured personal loan originated are expected to generate approximately twice the revenue per loan alongside better risk-adjusted returns compared to unsecure personal loans. The average loan size for secured personal loans was approximately $6,600 in the 2nd 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 in server members. Credit decisioning is centralized and automated rather than branch level manual underwriting. We've used AI machine learning to analyze billions of data points, producing over 1000 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. OPPORTUNE 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 if mark 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 omni-channel engagement in the second quarter 54 of loan applicants use 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 OPPORTUNE branded locations, OPPORTUNE offers over 100,000 partner payment locations to our members. I'd now like to talk to you about our award-winning Set and 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 Opportune while we work on reformulating our strategy under his leadership. Doug's conclusion was clear. Opportune 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 in term. One important step to balance risk and award 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 we're 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 are applying greater discipline to new member growth and our resulting improved credit results. Some of you have been following Opportune for some time, remember the difficulties with our 2022 and 2023 performance and may be wondering how we can avoid a repeat going forward. Opportune and other consumer finance companies experience 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 as about 6% now over the last five quarters versus roughly 15% in the challenge 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 been substantially improved our credit performance. Our annualized net charge off rate improves 65 basis points sequentially in Q2 to 12%, outperforming our guidance range of 12.2% plus or minus 15 basis points. Our Q3 annualized net charge-off rate midpoint guidance presented in our August 5th earnings goal of 11%, which would be our lowest in the last four years, implies another sharp sequential improvement of 100 basis points, along with year-over-year improvement of 80 basis points? As a reminder, our improving credit outlook is supported by the favorable 30 plus day delinquency trends on the right side of the slide here. Now to provide more color on our second quarter performance, total revenue was $233 million above our $227 million to $232 million guidance range supported by modest year-over-year originations growth. We generated $49 million in adjusted EBITDA. This was well above our $34-$39 million guidance range and represented 56% year-over-year growth. Our bottom line performance was also strong. We delivered our 7th consecutive quarter of GAAP profitability with our GAAP EPS of $0.17 growing 21% year over year and adjusted EPS at $0,42 growing 35%. The quarter demonstrated that the company is executing. Revenue was better than expected, profitability improved, credit performance improved sequentially relative to our expectations, and the balance sheet continued to strengthen. Now, I'd like to review a brief review of our ROE performance. Although our long-term targets are gap targets, I'll reference adjusted metrics because they remove non-recurring items and better reflect our future run rate. We generated an adjusted ROE of 20.5% in the second quarter, which is within our 20 to 28% target range and reflects a 463 basis point improvement from the prior year. Drivers of the year-over-year improvement in Q2 adjusted ROE, including reducing our cost of debt from 8.6% to 6.3% through lower interest expense, as well as ongoing expense discipline, which improved our adjusted OpEx ratio from 13.3%, to 12.8% of own principal balance. We drove Q2's ROE improvement while deleveraging the business, and we said on our August 5th earnings call that we continue to expect to approach six times leverage by the end of the year. With originations continuing to ramp and lower credit losses embedded in our full-year guidance, we also said on Our August 5 Earnings Call that we expect to improve on the first half adjusted ROE performance of 15.66% in the balance of the year, and to outpace full- year 2025's 17.5% adjusted ROE. Turning to capital and liquidity, we continue to strengthen our debt capital structure through balance sheet optimization, further reducing high-cost corporate debt and lowering our overall cost of capital and enhancing liquidity. We continue to make meaningful progress deleveraging the balance sheet, ending the quarter with a 6.5 times debt to equity ratio. That is down from 7.3 times a year ago and materially lower than the peak leverage of 8.7 times reported in the third quarter of 2024. Q2 interest expense was $42 million, down $18 million or 30% from the prior year quarter, driven by our ongoing balance sheet optimization efforts and a favorable non-cash change in interest expense recognition. During the second quarter, we paid down $30 million of high-cost corporate debt, reducing a remaining corporate debt principal balance to $135 million. Corporate debt repayments as of the second quarter totaled $100 million following the facilities inception in October 2024, resulting in $15 million in annualized run rate interest expense savings. Strong cash flow generation in the underlying business enabled us to strengthen our liquidity position. As shown on this slide, compared to the prior year quarter, unrestricted cash increased by $43 million to $140 million while we simultaneously reduced debt. The progress made in increasing liquidity, reducing leverage, and reducing interest expense gives us greater strategic and financial flexibility to fund responsible growth and evaluate opportunities to further optimize the debt structure over time. Turning to guidance, on our August 5th earnings call, we lowered our full-year annualized net charge-off rate midpoint guidance by 20 basis points from our original guidance to 11.7% based upon observed credit trends. We increased our full year adjusted DB DACA outlook at the midpoint by $10 million, or 6%, to $168 million, now reflecting 13% growth. And we also reiterated our full-year adjusted EPS guidance of $1.50 to $165, reflecting 16% growth. We said on our August 5th that we expect full- year 2026 revenue to be substantially flat year-to-year due to our tight credit posture. This reflects deliberate risk-adjusted return trade-off given broader macroeconomic uncertainties for the customer segment we serve. To close, Q2 provided encouraging early proof point under new leadership. We exceeded guidance, improved credit performance and product profitability, and continue to strengthen the balance sheet. As we look to the future, we see a larger scale, more financially resilient version of the opportune that exists today. serving significantly more members, delivering more predictable financial outcomes, and creating substantially greater long-term shareholder value. That's the company we're building, and we're excited about the journey ahead. With that, Brendan, I'm happy to take questions from you and the audience. Fantastic. Thank you, Torian, for the overview and the information. We'll open it up for Q&A here, and as a reminder, feel free to type in any questions right at the Q&H tab at the bottom of the screen. let's start off with with the interest rate environment we've seen short-term rates increase recently question here says how is higher rates what impact has that had you know since the last call on on the business and on margins yeah so i think we're all seeing the headlines we know that the fed increased the benchmark rate by 25 basis points recently we've seeing some of the longer term rates increase. I think the good news for Opportune on the liability side is that it's really mostly fixed rate, Brendan. It tends to be about in the 80%, 80 plus percent vicinity in terms of having a fixed rate on our balance sheet. Really what's floating is our warehouse lines that we use for our underwriting. And that's really a temporary place where we hold our loans before we put them in securitizations. And you've seen that we've had really good progress with our securitations. We're rated AAA at the top of a capital stack. We did several securitizations over the last year plus at below 6%. And so that's really been driving that lower cost capital that we've been talking about, in addition to making those prepayments on our corporate debt facility, which being at higher 15%, I talked about that $15 million run rate savings, is also a fixed rate. So I'd see it as really incremental change in terms of our cost of capital, depending on what happens in the capital markets, the timing of when we go to the ABS market and the environment in that given time, Brendan, but we feel good about the fact that most of the balance sheet is fixed from a rate perspective and a liability side. In terms of our fair value and our assets, we do have those loans in the books and our loans do act somewhat like bonds in terms of the fair value accounting. So when rates go up, that does and can impact the value of our loan portfolio. You know, can't make an assessment of that point in time. And we'll see what happens with the rate rate environment towards the end of the quarter. Understood. Appreciate the detail there. Why don't we pivot to the risk based pricing initiative? We have a question here that says, can you discuss the recently announced partnership with Column? Yeah, well, what I'd like to do, first of all, Column is a great new partner for us. So we're excited to bring them in the fold. We also have another bank partner called Pathword. We really have great relationships with both of our partners. So we've signed a column in July, and we're really glad to have two dependable partners that can help us grow the business and further our mission. OK, now, in terms of risk based pricing, I mean, this is a really important initiative for the business that I know that you're familiar with, Brendan. We did start pricing certain loans above 36% starting in July. And it's important for risk-based pricing to understand that it's really a two-sided coin. It's not just about increasing rates. It's about really broadening the funnel, having the opportunity to further our mission, accelerating our mission by serving more customers. And we want to really be able to do that at the appropriate price point. So we have the opportunity of doing that. We have the ability to do this by enacting this policy. But the other side of the coin is that we want to continue to service in our existing members. You know, as you know, our existing numbers tend to be low risk members, very good customers, very predictable outcomes. And we've got very high loyalty for our customers. Nine out of 10 of our customers would recommend recommend opportunity to a friend. So to the extent that we have customers that that are improving in terms of their credit performance, their credit profile, they may have potentially have the opportunity to look at opportunities outside of opportunity. We want the opportunity to retain them. And so we are looking at pricing a little bit below 36% for those best customers. So it's not necessarily about yield enhancement. It really is about providing better risk adjusted returns for the business and broadening the funnel so that we can service more customers. That makes sense. That's helpful. And when you think about borrowed behavior, what have you learned about behavior after a member successfully repays their opportune loan? I guess, what's their propensity to return as a borrower, maybe to increase their borrowed amount or to really maybe utilize additional opportune products over time? Yeah, we've seen a very strong propensity for our customers to learn to return. And they're very loyal to us. And we receive very high reviews online from our customers. So they're Very satisfied with the relationship. And that's why we keep coming back. And so in terms of from a returning member perspective, 82% of our loans in the second quarter were to returning members. I mean, that was up from a number in the 60s in the prior quarter. And that certainly has contributed to our ability into returning to the improved credit performance that you're talking about. So it's really important for us to continue to work with our existing members while we think about responsible ways to grow a new membership at the same time. With regard to servicing our new members, we really are focused on streamlining the process, making sure that they're recognized, that they are welcomed back into the application process, and that we think some of that thinking can be enhancing for our relationships and for Opportune going forward. Got it. And when you think about Opportune's loan fulfillment channels, what does that current mix look like? I know there's a good slide in the presentation deck. What does that curve loan channel mix look like and how do you expect that to evolve over time? Yeah. Yeah. So I mean, we're proud of the fact that we do have this omni-channel approach with our business. Right. And so for the folks in the audience, there's really three ways that alone could be originated with Opportune. We have 125 retail locations in eight states of our own, plus 459 partner locations. So Brendan, so that mixes about a quarter there in terms of our retail fulfillment. We also have a contact center located in Mexico where we're able to take phone calls from prospective customers and answer questions and help fulfill their needs. And then lastly, we have our online, and that's about 50%. And lastly, we have her online mobile digital, which is about 26%, about a quarter right now. And so that includes both our app as well as our website. And in terms of the shift over time, I mean, I think that's really going to depend, you know, on how we continue to roll out the strategy. We're really putting a lot of thought into our stores. You know, they really are a good foundation for our members within their communities. So we find that we're able to make good loans through our stores. So those continue to be important. But we also find the contact center is valuable and the mobile app that we've had for some time now has been really strong as well. So, we're probably less focused on trying to shift this in any given direction at this point in time, and more so making sure that we'RE able to execute across each of these different channels. And we're really proud that we're able to manage, we're able to work with customers fully in English and Spanish across each of these three channels. And that really differentiates Opportunity in the marketplace. Understood. And Doran, you mentioned the rollout of the payment protection offering, I think this past April. Yeah. Do you have any early data read through to share or maybe early financial metrics from that program? What can investors really take away from that? Yeah, nothing new to share on that one. I mean, we said both with payment protection as well as with risk-based pricing, as you're aware, Brendan, that they're not going to be a meaningful impact to our 2026 results, where our guidance as of August 5th still indicates that we're going to be able to grow adjusted EPS by 16% year-over-year. So really, this is about laying a foundation for future growth. I mean, these are really adjacent offerings that are aligned with our core competencies, and certainly payment protection is part of that. It's important that it's really an opt-in offering, right? So we're very careful as we offer it to customers that it is really up to them if they want this type of protection. And they certainly have the opportunity to be a beneficiary of that in terms of being able to still make partial or complete payments if there's some kind of disruption. So I think we'll certainly be sharing more details over time, but we really are in kind of the testing and rollout phase of these initiatives. And we do expect that both of these to have an impact in future years if we're able to scale them and we feel good about the progress we've made so far. Understood. And I'll conclude with one more question. You guys have done a great job turning around the business. You know, expenses have come down. Your credit isn't credit performance is improving. And now the opportunities under new leadership. What can investors really take away and why is now a good time to look at opportunities stock? Yeah, that's a it's a great question to end with, Brendan. Listen, the company is we've really been able to grow earnings the last couple of years. You Know, we've been able to grow earnings by reducing our costs significantly coming out of this 2022 to 2023 years that we talked about. We've taken out $240 million of costs out of the business on about a billion dollar company. So that's quite substantial, right? We've been able to reduce our cost of capital substantially over the last year. That's certainly a good tailwind to earnings this year. We said on our most recent earnings call that we expect interest expense to be reduced 15% or more this year. It's certainly been helpful that we've been able to improve our credit performance. These are all really good trends. When I think about where opportunity is going forward and the reason why we have new leaders like Doug, like Bill within the company, it really is to formulate the next stage of growth for the company. We certainly, this year, we're guiding to relatively flat revenue performance, as you know. But that's really what we're very much focused on is growing the company in a responsible fashion, scaling the company, generating operating leverage as we expand and broaden our mission and serve more customers over time. So that's really what we're building towards. We're really excited about it. We feel like this has been a good year, but we feel like the best is yet to come with opportunity, Brendan. Great. Well, we look forward to continuing to follow the story. And then, Doran, we'll conclude the conference, Sarah. Thank you, everybody, for joining us. Thank you. Thanks, everybody for listening. Bye. Thanks everybody.