OPFI - Earnings call transcript Q1 2022

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Operator

Good morning, and welcome to OppFi's First Quarter 2022 Earnings Call. All participants are in a listen-only mode.

As a reminder, this conference call is being recorded. After management's presentation there will be a question-and-answer session. It is now my pleasure to introduce your host, Shaun Smolarz, Head of Investor Relations.

begin. may You

Shaun Smolarz

Good Chief operator. Johnson, today's are call Financial Thank Officer morning. and Schwartz, Executive Pam Executive Todd Officer. you, On Chairman; Chief and

be release Our supplemental earnings quarter investors.oppfi.com. press first presentation XXXX can found at and

GAAP described the A the comparable decisions Risk the press statements issued these forward-looking Company's remarks is be to would I by this to metrics. Any undertakes turn update expected forward-looking call found measures are discuss whether factors and any are and in and During forward-looking factors to new the release statements appropriate. this These trends, as to available Company made call and Important the over could assessment call be statements, assessments including otherwise. measures financial non-GAAP by Commission, being of of the Exchange that management, of are this statements light they in Todd. on made developments no conditions, will and with materially non-GAAP differ sections In morning. business forward-looking during OppFi's assumptions cause historical information. information, and today's management of today, earnings discuss This financial will in future on or live results, website. future our as of such or OppFi can call, a filings reconciliation earlier Factors. other will made webcast result be to events OppFi most believe developments replay certain duty and based their the revise for current from experience now to actual entitled like Securities

Todd Schwartz

OppFi since past good morning, exciting. as and returned to Shaun, The two have been very CEO Thanks, months everyone. I

and publicly company. next to us refocused as mission team a installment business the loan our strategy, efforts have traded build level take to and growth company the continued our on our leadership refined We to

would call the I detail I one, our three, initiatives. like turn the trends; reflections Now topics quarter growth our about on two, and more three strategy; first macro Pam; before regulatory to proactive some over on elaborate in to long-term cover offer discuss

quality in discussing QX, us. While few quarter want Pam I XX% key resulting demand results federal higher dollars, a highlights With receivables to which financial a we discuss more start Moreover, normalized tightened shifted an and for up first credit origination quarter. of robust a stimulus of by detail, beginning from a at first to absence updated in more to our mix underwriting and our out ended rolled in environment the continued since addition, $XXX in demand million, our volume year-over-year, remaining year. originations quarter experienced environment the our parameters the through accelerate the will in year-over-year for growth in The flat QX the scoring model, record XX% customers. we

loans that the originated was net new lower result, a for of measured vintages early we are our of expected XXXX. as quality second XX% The by future are believe delinquency rates loans experiencing QX very originations half charge-off in As strong, rates. the for than

As trend. improved optimistic a are about we result, cautiously this

our operational the efficiency very improved with also are in We pleased quarter.

in from rate approval reached XX%, XX% auto period. Our up just the prior

quarter $XXX funded decreased and In to XXXX. addition, decreased year-over-year new sequentially our cost per XX% fourth XX% loan from

to growth. expectations, our ahead revenue origination million $XXX Turning robust driven of income year-over-year, statement. grew to by XX% the Total

originations lower season. was credit second in quality However, from quarter during elevated last as with combined the refund softer to we charge-offs anticipated, benefit profitability year, half from of muted the a due tax

to $XX diluted to $XXX,XXX net earnings $X.XX share. net with million, result, $XX adjusted adjusted decreased per a adjusted approximately EBITDA million, income As declined revenue was

profitable solid ourselves normalize as pride we record credit already as of view these see Therefore, a to growth. onetime we While we results, are and quarter these starting event, anticipated our we we anticipated. by results first track strong

more our current lenders is to well and market, We environment banks our from In borrowers. our opportunity macro positioned by rates believe the industry, our strong us Within and driving includes our environment addition, strong within to this to back underwriting we customers. and demand which rising are XX-year pulling addressable stronger capitalize platform. high-quality high to nonprime credit our facilitate demand are on demand fueling inflation the target affording market, in be borrower selective interest

discuss affordable safe, my to facilitating be Moving the access as mission who while their and rebuilding have our the long-term million financial strategy everyday health. with on options to currently to Americans more credit simple refined on lack focused return CEO, XX we traditional

All current be inclusion. to initiatives our are prospective to overall credit help financial designed and affordable facilitate of our for growth and access achieve will mission

rate, us enabling our term and helping For not amounts strongly and penetrate loan market that market-based expanding us example, addressable thereby our market served. customer to segments feature we existing have by more offer is historically while on our competing reach also

diversify We business types are product balance XX% adjacent enter with lending market mix. access that actively model loan a segments, sub including less enable us in to business would provide and to credit acquisitions other sheet to our categories would also exploring We product feature adjacent would that risk. and installment extensions customer consider a different

announced multiple augment Chief as companies, large in career a and prior business combination year more and at years leading and team. nine decade late finance accounting our America. with Accounting accounting Chief appointment in bank for began CFO accounting. the FG Pam her regional to to department OppFi Johnson our Officer. In Pam build Financial we last public expanding our New March, continued served Officer, at a was than Pam have of since joined We as consumer leadership

Shiven Pam to five CFO, fortunate Shah, very years. are of his our the are We during leadership former for appreciative promote tremendous and past

banking customer for Manny its business. functions to us greater recently spent also eight from optimize and roles, he operations Officer. Chief years in operations included and Operating where which productivity Chagas Manny attain student team, managing product, Discover and We loans partnerships welcomed people joined our various leadership experiences. and manages marketing customer our as He employee

We are confident employee profitable and enhance achieve market share help us Manny that growth. engagement, stronger will gain

strategy We to We program investors seek as investor a Relations, and coverage by differentiation our we building to as of competitive Shaun We relations believe to so newly Investor best-in-class engaging our Smolarz clearly position. expertise understood. created be with a grow and that more our also Head and OppFi base. commitment investor current analyst forward welcoming look growth are invaluable underscored prospective Shaun's to frequently will

equity capital side and sell confident side both of including markets as successfully We the Investor than will research more that on strategy years are XX him Relations the to buy execution enable our function. and of experience, lead

business, complaint Superior side of update our the State a and in Financial I a proactive want Angeles and to regulatory Commissioner March, of declaratory Turning of we provide Protection to Los relief defend activity filed In Innovation brief the for Department California. to the Court in a of our our of injunctive business the for against California.

cap April intends utilizing declaration service against merit to not counterclaim believes We a by ability a X.X apply are do through aggressively OppFi's defend are Company rate the that defend X, partner access seeking explained counterclaim as complaint. to and DFPI's obtain by Company. complaint OppFi and that their the the claims platform. without in OppFi's law the OppFi and against There set forth credit in California that On loans will technology The set DFPI Californians credit to to in bank the originated the prosecute that itself as filed continue interest is lack our vigorously traditional million position forth our are options platform. to the

by further you undertook of respondents, be had customers bank than recent of statistics at to peers, job this one credit behind or and bankruptcy. their and of platform. losing We their speak litigation, file the down OppFi in risk better would understand that fall on and value by our would we for experience. are think they more pending compelling XX% bills, losing survey While XX% will place and we will Without share a online not positive more or lender. Of were decline XX% another a would XX% XX% than housing comment with themselves. X,XXX-plus our Almost California union the a turned on more on XX% that highlights I or than our these

underscore primary from comment. And to the XX% respondents this choose were conclusion further I the an want leave survey, positive. XX% of of However, optional to these

repurchase the Net even Without XX want the of to believe OppFi's know why there comment. me I facing. potential Score, from Here's corporate because with results long-term facilitating for times these entire would there's don't when is are company know who a to I'm to exactly exist have In and share lead industry an the what honestly difference through is access blessed truly on to "It people and every helping program happened. don't I in to make probably out this survey to These help, credit hand." me reiterate executing price is was illustrate financial one our know during such many Op lives. I the continue get challenging we we disconnected comments people's customers loans there we that the motivates share very committed struggle closing, helped and their value day what our Promoter Company.

to in OppFi have and are I'll call strong been a in family in to to and and long-term first turn the the further more and over In detail. of prepared disconnect support Pam we With addition, quarter stock my believers I market. invest potential the are our such see when that, review the

Pam Johnson

good and Todd, morning, Thanks, everyone.

quarter $XXX revenue XX% Turning million. now increased first to our results. to Total

originations $XX non-direct marketing compared of and XX% we search period. channels, by $XXX more As as year-over-year customer efficient prior and funded stronger engine a our Todd marketing optimization, achieved partnerships cost year utilization XX% the referrals. These other while strategic lowering results per loan such reflect e-mail or new in to increase to mail mentioned,

key loans rate, in We over qualified as have metrics, qualified increase rate, defined funded funded apps. year-over-year and as applications seen defined over as such operational apps a qualified

rate investments year-over-year our to In addition, auto our XX%. in resulted in approval XX% automation increasing

in quarter or origination points more net shift towards a servicing than bank model. to XX up first Total continues quarter, originations percentage XX% model partners XXXX. our facilitation for direct first the Our the a origination mix partners of from bank from increased by to

increase as partners marketing the increased cost-efficient loans loans. continue percentage of with net driving new in a nearly up we an originations from growth through our new loans to the total loans quarter points percentage saw addition, first of to net Total of year. last XX compared percentage marketing XX%, as drive new more of originations refinanced originations loans spend to In increased

quarter. The XX% the ratio are new for quarter in and no of the XXXX Our of towards includes quarter that reflects XX% for segments longer first from year normalization increase annualized XXXX fourth being net was XX% losses levels charge-off the versus approved pre-pandemic a prior and credit XXXX. of for loan

what said from half second less of delinquency reiterate year. originations to quality rates first level of early in than for quarter earlier, leading the higher originations to However, are the Todd are XX% last already that the

We model of tighter charge-off progresses, continue in year second improvement pre-pandemic quarter to the our the trending driven parameters. net as in ratio underwriting beginning expect by levels our towards updated

mentioned, In our Todd addition, addressable credit focus higher opportunity market. we are to quality utilizing within originations this as borrowers on

year ago costs and the to of company increase benefits Operating Turning as investment period. from and higher in and year-over-year headcount, to related total total drive due million $XX $XX backs salaries a XX% expense XX% additional for costs in add infrastructure. direct excluding increase million originations or items to further insurance The new onetime quarter, of interest as increased as public revenue and revenue in first expenses technology XX% expenses. was to increased marketing or to the well

yield However, earnings will fourth launched we savings. first annual as million we in discussed cost efficiency that in call, initiatives $XX after-tax quarter the our in quarter operational anticipate

these of initiatives track are performing All expectations. and our well to on

operating totaled a the year $XX While to run pace exit versus year. the benefit prior year, quarter, of next position to we than full quarter, portion were elevated charge-offs are anticipate more as million increased realizing from by $XX million Adjusted offset for the only revenues down in the we rate on XXXX and $XX expenses. higher EBITDA this million

debt As ago million expenses, period. $X $XXX,XXX EBITDA compressed or year of to approximately adjusted million period million in generated for net income X% $X comparable XX% total first adjusted ago first revenue last or excluding X% total compared the revenue period. totaled for compared the of expected, quarter the the year. to of We $XX XX% for in compared year to margin our Interest quarter the amortization to

March diluted of quarter shares for OppFi the million outstanding, share. XX.X earn-out $X.XX were XXXX, XX, Adjusted earnings As and excluding had per first XX.X shares. million basic adjusted

of equity sheet million. debt total healthy with million, remains cash receivables balance of Our gross of and $XXX million, $XXX $XX million of $XXX

Xx growth plans. Our have approximately net million funding debt-to-equity ample with ratio to available remains in liquidity and our well future total below capacity, $XXX coupled support we

Turning now to our outlook.

As EBITDA origination year, the in full quarter, anticipated Todd reiterating strong of expenses, the volume value XX%. adjusted interest margin between first change adjusted for discussed, net we summarize, XX%, excluding revenues the our expense, issued. To between to gross are net revenue macro net revenue to items, our of and and a and and charge-offs improvement and adjusted onetime percentage receivables margin growth expect XX% operating of our as XX% in fair less margin half XX%, in second recorded and on XX% based XX% XX%, following defined in add-backs X% income outlook ending XX% year between previously XXXX. as Total we revenue guidance the between and as

two, underway. specialty think sheet our Importantly, charge-offs we our less to number committed model; reaffirmed well lending our in operating to ample lines believe Further, stabilizing multiyear number three, affected industry, with the outlook interest and and market profitability weather is disruptions We positioned benefits with based strong; higher capacity. our volumes by some compared initiatives balance is efficiency tightened peers rates. number we three net from and key realizing confidence already one, underwriting areas: expense in on origination remain improving have

originated Our credit very banks. to minimal resiliency reached were agreement the and our have additional rising the financial spreads return party, we loans agreements as but million and $XX third this total banks impact our partner the a continues performance they the swap would the underscoring varying Q&A. return purchased do, which through economic the by to for underlying provides OppFi enables the growth funding provides model the to provides interest like financing of assets. total loan capacity. are rates, protection to while interest in our credit swap that structure since over In capital to resulting now to third on up Through a loans our in are increasing provides in normally mid-April, balance excited we the sheet that, perform to the to contemplate business core weather relief structure, party this cycles. by in We lender to believe are also turn with product OppFi that servicing. the to us maintain With call we operator efficiency. Operator? familiar

Operator

phone First David is of Securities. Instructions] from with the Scharf question [Operator line JMP

David Scharf

these mean, And cost about whether specific? how target comments borrower, a from? has specifically, broad if a underwriting. be you quality any wondering little of credit triple-digit your on of you come Are more primarily expand a get levels? there marketing been to and about to obviously, bit can you've it's can APRs. of reset higher trying how loans, little the higher Just reflection little particular Todd, through the channels which a sort of the sort I levels? I you refined or talk it either guess characteristics, they repositioned pre-XXXX as are sense better But for debt-to-income business is sort

Todd Schwartz

question. you David, that Yes. thank for

early some basically business, Founder, We in the in founded were referrals. marketing coming of referral early all of in robust that core So as didn't were kind days days back the it OppFi I really to program. was when the the the have things our

to cost significantly we've that that overhead referral improved a changes receive from obviously, been the had do is mail, that over right? direct So from originations the actual like also and lot engine efforts, year cost These as far from those program, to higher on cost an was optimization a driving due real search really zero, as channel, higher-quality we is significantly program. channel made we'd our acquisition coming but understanding And channel, on in we're perspective. But that low-cost of improved from channel. thing is have has the new fourth operational have The direct and also ROA our so that of which it. acquisition propel -- some to some there's acquisition attributed borrowers referrals. -- a how granular virtually I revamped mail than One last

look and in strides. you that at rates better the better we've to rebuilt conversion If and the able model customers been ROA, the direct response market significant [indiscernible] mail make targets rates. We

you you Karmas, channel partner -- QuinStreets showing we're if kind -- some marketing testing we're cautiously bit some the obviously, Credit the from those offers little the at if market-based half things testing. call, had on We're in think. are a LendingTree, of back So we bite us the came the channels that the of last second then look I of have quarter. of the our -- being in side, world, We -- optimistic. first we're And doing in we're year to the last remember still issues been the the

-- our the whole, score, borrowers find as which we offers if credit allows average our but and then down us like vintage a as in has segment take borrowers you market-based So is come to risk a and weighted our model significantly. new

quality flow ROA. and higher So free we relatively and still maintain more know that same able the customers we're finding to cash

definitely around higher they're higher think a part do And of is question our the allows the we've first and been And of by And number And and benefit identify volume good the that these we're I attributes the the XX we we to coming XX last with strong into pretty the sheer customers said, those to feel it number serviced years. robust of that of demand. like just so quality. go There's how customer Well, for and years. second that us that scoring I through. about that various get customers really quarter, attributes for data based we improvements quality pull. based on operational over the their we're we've I from these made quality know starting extremely sources transactions, see based bank data the to at was looking are But higher the that pay, on customers. on ability various

the our So are we matching. the we've tightened quarter, feel but model plan growth good and fact the over exceeding the cost that really first is about credit still also acquisition

the of So trifecta. I kind that's what call

David Scharf

obviously, early it. delinquency certainly stage helpful. are that's Got it. No, the very reductions And supporting

Just one follow-up.

As think actually meaningfully lower going guess, we product you that rates. there's not to repeat about any base, funding any obviously, of and of including sub-XX%. existing demonstrate mean ultimately loans. qualified the Is installed APR profile a less And I borrowers business your curious whether curious, you get just I think be a a the lot borrower with. to strategy number if one, be that? and repay for might starting different return continually with underwrite mix referenced the contemplated base? months, based where, had There XX, standpoint a overlap out is to capital, XX I'm And that your from cost on ability adjacencies, -- have or offered that's your existing sub sometimes XX%

Todd Schwartz

Yes.

we plan or the clear, So We the a to to way be to balance is servicer, credit right, sub-XX% risk as from don't a take the risk. an where as servicer. and originator we're sheet play going place

of is brands has the strongest built consumer-facing OppFi one in one world. online thing lending the So that

NPS. have We an XX

for Our installment-based allows tech infrastructure products.

lot the marketing business. us the is partners consistent marketing so sub-XX, play doing with channel the that And already all we're and for core of a to

using we've Unfortunately, think Out we our lenders up provides and customers product these lower and everything income have And make where also And to the of the you're acquisition product. our service and to so and half over this for from we David, consortium find taking that capital, XX It's successful". customers. let's commitment it's our our it match, earn a product I against we to a can our graduation hope last customers built of do that those for fee X% income fee take cost natural getting end they customers. low-cost essentially years it screen current out sure, of if "hey, of approved. before feature, that

a a be customers. third-party the addition, our unfortunately, of that small it providing able kind but product today, the we natural And consortium percentage then match, would for nice provide is of So that reality were a for through in instead it product we of customer graduation it's it's to lenders. if could yes,

their capital maturity graduation So a little when improves, customers are a us bills customer, over and of of and and lower would a which for help be pay do a longer them amounts a it's profile our credit larger natural time successful, dated rate, bit and consolidate to expenses.

Operator

line Mike the of with from is question next Grondahl Northland Our Securities.

Mike Grondahl

talk a kind demand through Could demand of April? little of pacing and kind January bit the you of about

Todd Schwartz

up Specifically, the the picked towards second half? pace like has it

Mike Grondahl

And Yes, understand, inflation quarter, same with of see to of and up quality the what trying have rising a up? things little gas just with pick picked and time? prices saw the in kind later demand did you those credit as delinquencies bit at maybe kind you

Todd Schwartz

think customers And that OppFi our quality in also we're we're needing those us with But for banks the serving may access have for X% just customers borrowers, hitting higher credit whole years I there's heard I now Yes. kind last tightened couple but credit these of season of think of muted mean, the again a pretty to year-over-year of consumers. to not and quarter, their is but definitely pickup. [indiscernible]. in there read an interest demand housing that noticeable we've X% now, them. much anecdotally to And once March, the borrowers a and been benefit rising costs, have are there's rising, with tier prices tax all April, And I happened that been everything seeing. what's first specifically, But -- increase facilitate through from top kind mean models. interacting saw rates we refund I was March COVID a our getting yes, all of there's

Mike Grondahl

in $XX talked will up? financial how Pam, will kind then that? And call about accessing that? should of how it, I'll And it. show we will Or financing we Got see that you think your How up show million, that about, statements? you guys that

Pam Johnson

still that Right researching technical advisers, now, with accounting our we're Mike.

as We off-balance sheet an item. are that having anticipating

see balance you sheet. our on that So won't

However, the Plus the we and see total or be that a on servicer, you'll the see will costs swap. related fees acquisition -- fees sheet product. then balance for return you'll to acquisition derivative

Operator

Instructions] do the [Operator Davidson. line from have question We another of Chris Brendler with D.A.

Chris Brendler

side. wanted to the on I ask credit

Just quarter [indiscernible] you to make some some issues quarter down additional confirm half underperforming. want that of in that that out you've the there an improvements you issues wasn't step that some to in subsequently, have partners those second same had, marketing the and been that sure just vintages of the first seen the with of was called last

Todd Schwartz

mean not first I the model been have made So we early originating. in quarter. the subsequent in We've enhancements to

is end volume of longer but the -- no that made at one or being last also We originated facilitated.

to we they successful give our their -- help them deemed a the customer system. our mean, in I situation and that capital to not then is financial not to stabilize goal be are customers We ultimately, need their health. be rebuild it our can that

to decide and us pay higher full, our takes pay that they or paying need amounts right, system, people want successful into they to whether people back. refinance being they back, they graduate. We So in you whether do that in

kind that go going kind user just be So interest to no and we buckets. delinquency onetime really they're a a of customer in -- of kind the that's to have of

of enhanced definitely in our model we've first significantly at the last year So the end credit quarter.

Chris Brendler

Okay.

a of but it So OppFi like to or sort -- adversely there you really credit selecting standard credit performance? wasn't trying of fintechs have like newer of issue, Is tightened from other my a the were either that box. understanding partner as perspective a also certain up was it these result type, half was second that borrower a a on some and also like FICO be

Todd Schwartz

Yes.

them apply it programs, roughly Neobank these have there's the We in determined they using significant as to make that and was successful customers in from borrowers we quarter could the like they XX% higher-risk Chime is like be example. the remember that that number back. that fourth were a almost call, test customer, set population, successful. And large a So a if us were unfortunately, we to are Neobank that you ran we what specifically, not last pay been try able of an are find seen and -- with to

One is of these is days benefit people be get that is those. installment paid available the neobanks, funds two the sometimes, loans. of things days And real the early pay to technical figure of when time something there difficult kind will three think I in that one that's early, to and back of out

longer that, are no we So in has that originating stopped the fourth quarter.

in macroeconomic the and borrowers with would look to would that the -- thought to fit our good in inflation with like In was first for early be environment, and coming thing January. -- January, addition a demand risk higher us that first also in that and with be so that, have not holistically model quarter, some though, at we find opportunity increased underwriting took the just we

before, really tightened like We've the now expectations. What's make but feel I model, been been said and the is Like we've So that's good. those great I exceed grow acquisition able able tightening. continue trifecta. we've as to costs like to to and also our lower

Chris Brendler

that Yes. actually the quarter originations estimate. No, this first came in my above is

have much we back we from guess So question I would still it's see. XXXX the normal? a to think how I would are in actually, my been consumer to be, I lines, mean On where perspective? improving. those to not environment demand we're demand nice quite back

Todd Schwartz

seeing, like we back. look pay I'm I'm we're at from ROA and what perspective From you people there. I I think said, again, significant But have to once things an seeing demand.

have of So in very still and have cognizant. it flow need We've also that like be to -- be have for to while. see a expectations. P&L. to people around been we're exceeding demand and we're the to think I to our normalization you still know happy collect successful through a system to But We you

actively enhancing we model make quality kind we as sure higher of in we go, not and did the of that same So volume mistake to new the that year. as volume we were going to make find our second half last we're

Chris Brendler

Got it.

a great that easier make funnel the about top should Great. the end hear coming Okay. bigger of to in It's in. things lot demand

little it of how -- back And go the On I OppFi? much in mean yield, or then increased ask yield higher also, bit environment what the lower. rate a much potentially is wanted could versus delinquencies pricing for interest to came how so improves? personalized the up the the as that stabilize does delinquency

Todd Schwartz

about take it Yes. the still right? comfortable the and year holding the talk really like the definitely that in it delinquency, is market-based being keep that Pam, of it's learning percentage about thoughtful a net first that we yield stuff last being -- to interest And driven more of with, from on by from that through very We're quarter. the of and feel Most delinquency. kind kind rate can the offer flowed the yield. approach, taken question. the I'll

Chris Brendler

Okay. Great. Go ahead, Pam.

Pam Johnson

rising interest As environment, interest our rates. rate agreements far credit Chris, the as to incorporate

and performance in results So our spreads. financial a impact it minimal on

projections. into and guidance -- we've our our So baked already and that

of So structured because the agreements. we we've way model credit have these business a resilient

Chris Brendler

[XXX much. Right. -- I at doesn't points lending you're guess that matter basis And when XXX] rely

some perspective? here. this discussions do And and super have recent struggled So with and ago of being tightness whereas lenders? of from year along sit up funding lenders How overall market you Todd, of about have we've seen vision some show support other easy. financing want step those the the get tightening any that lines, you to is seen your company though, to your comments a conditions, up in your a just

Todd Schwartz

funding make to want just question. Just I question, you're up, sure I the understand I so sure the when showing understand make I

Chris Brendler

Just warehouse your sources like beside... other and lines funding of

Todd Schwartz

Yes, I That financing listen, strong that something we've and mean, partners, relationships long-dated mean, we've very with I with. had has issue been had we have not ones. our

But they're the to been the about stabilized. to financing around between some the haven't history think worried I that I this might level been ones may there's success, are of that doing as [indiscernible] there have a going around be And environment. newer lenders to profitably because and be not that entrants and think we've have XX that for you and partners and quality, right? a flight back bifurcation pull the had be if grow continue years inflationary here and

Operator

JMP Our follow-up from line a next with Scharf question question David of the is Securities.

David Scharf

Just number dollar really you items with housekeeping We can the for rate, charge-off but have first, provide some kind for of dollar the there quarter? us I actual number? Pam. is guess, the a

Pam Johnson

Around quarter. $XX million for the

David Scharf

of in going the losses just in we've well. are The we rates. your pre-pandemic Got mean, the guess, it. guess, would should an you're aggressive? XXXX context of to short I from the the the what sort about to sort kind comments you're to -- looking direction. triangulate rate vintages I those imagine quarters anticipating in opposite embedded provide, normalization, loss of dealing to -- as assets too returning Todd, duration sort exiting working Or these of calculation exit guess, And for sort with I as value just levels been of mid-XXs I And be pre-pandemic year But we lenders at? what XXXX surrounding point? levels, other because the few at is I last seeing with fair that trying that's they're loss increased in the are where the you're most during of nuance direction

Todd Schwartz

back second looking I low eventually, we're the little then a to the think to and year, that, for going get But on for of because mean of strong segments. half. maybe kind some the for of push consumer high into to extremely next continue down demand a this to I like mean, health environment year. of you aggressive. XXs into the we'd weakening back get that's I And listen, we're have that's down XXs the

for So consumers, also market's so used we're also but optimistic reason there, backdrop, backdrop that housings things one the the -- demand is interest of is realizing car where also macro our is macroeconomic environment cautiously rates the being because are we're and expensive. the going up, expensive, of are right, we're weakening more the strong

that. So balancing we're

David Scharf

put you basis? that on And context Can into lot slide provided. number that fair And rate. equate adopting question. it. value Slide an of a either of Got mark-to-market default for loss considerably to looks to to at a the the how annualized are the once provide a obviously, go It XX. rates once education that me on then fair I'm like higher into XX.X% looking maybe a Got that rates, better the Pam I'm trying value it. I bit I'm understand little it's context thumbnail of to accounting. just versus how inputs kind lastly, technical into existing future was put default again trying the expectations.

Pam Johnson

Sure.

We customers. refi are able to

the rate. that do we a helpful? Now of just is over refi, Is life customer, a that underwriting but charge-off of that you different that the when rate default think full than --

David Scharf

But Yes. Clearly, going loss borrowers are to lower. no. repeat an the rates annualized is on figure? XX.X%, be that's No, this

Todd Schwartz

this respective an [indiscernible] view OppFi. That is That is of loan. individual is -- average with figure

a repeat start observed you seeing when borrowers, from different what number see on you're So the to start the over blend to you those of that's financial deviation when statements.

Operator

there this at I'll back Schwartz. Todd no over questions further And it to moment. turn are

Todd Schwartz

Well, today. call with you and of forward to for our have appreciation and August. strategic again everyone, second thanks, speaking understanding Hopefully, look We growth a us earnings quarter during mission, strategy in confidence. our joining you better now

Operator

does Thank thank that for that lines. disconnect you. call. today's and gentlemen, and We please participation you ask Ladies conclude you your your

OppFi (OPFI) 7 May 222022 Q1 Earnings call transcript