Oppfi Inc. · NYSE:OPFI
Oppfi — FG New America Acquisition — SPAC Merger (April 2021)
43 slides from Oppfi's SPAC merger presentation, Apr 7, 2021
Slide 1: Analyst Day: A Leading FinTech Platform for the Everyday Consumer
Analyst Day April 7, 2021 A Leading FinTech Platform for the Everyday Consumer Exhibit 99.1
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) is for information purposes only. This Presentation has been prepared to assist parties in making their own evaluation with respect to a proposed transaction (the “Transaction”) as contemplated by a definitive business combination agreement between F
Slide 3: FG New America Acquisition Corp Team
FG New America Acquisition Corp Kyle Cerminara, President Co-Founder and CEO of Fundamental Global (FG) Former Buyside at T. Rowe Price, Point72 and Highside Institutional Investor Magazine Best of Buyside for Financial Sector (2006) FG New America Team Larry Swets, CEO Founded Itasca Financial and
Slide 4: FGNA Investment Thesis
Market Opportunity 150 million have less than $1,000 in savings4 115 million live paycheck to paycheck5 60 million lack access to traditional credit6 Valuation2,3 Implied 2022P Multiples (NOT 2026) 5.0x TEV / Adjusted EBITDA 9.1x P / E 1.4x TEV / Revenue FGNA Investment Thesis Source: Company Filing
Slide 5: OppFi is Built for the Future
OppFi is Built for the Future Note: Reconciliation of non-GAAP to GAAP financials for 2017 through 2020 located in Appendix pages 40-42 Hamdani, Kausar, et al. “UNEQUAL ACCESS TO CREDIT The Hidden Impact of Credit Constraints.” NewYorkFed.org, 2019 As of 4/2/21 Adj. EBITDA pro forma for fair market
Slide 6: This Transaction is Not Just About the Numbers
This Transaction is Not Just About the Numbers Mission-driven organizations TD Ameritrade: To bring financial literacy to every family in America OppFi: To bring financial inclusion to the Everyday Consumer Highly scalable and profitable FinTech business models TD Ameritrade & OppFi We believe OppFi
Slide 7: Today's Presenters
Today’s Presenters Jared Kaplan Chief Executive Officer Shiven Shah Chief Financial Officer 7-Time Executive Sal Hazday Chief Operating Officer Yuri Ter-Saakyants Chief Technology Officer John O’Reilly Chief Marketing Officer Chris McKay Chief Credit Officer Elizabeth Simer General Manager, Credit C
Slide 8: OppFi's Vision
OppFi’s Vision The Digital Financial Services Destination for the Everyday Consumer
Slide 9: OppFi's Mission
OppFi’s Mission Facilitate credit access Enable savings Build wealth Empower Everyday Consumers to Rebuild Financial Health
Slide 10: Most Americans Lack Savings and Credit Access
Most Americans Lack Savings and Credit Access Hamdani, Kausar, et al. “UNEQUAL ACCESS TO CREDIT The Hidden Impact of Credit Constraints.” NewYorkFed.org, 2019 Bureau of Labor Statistics – U.S. Full- and Part-Time Workers; Friedman, Zack. "78% Of Workers Live Paycheck To Paycheck.“ Forbes.com, Januar
Slide 11: We Help Everyday Consumers Solve Everyday Problems
OppFi customers can use proceeds for any unexpected expense We Help Everyday Consumers Solve Everyday Problems Our typical customer: Thick File Median Income Employed Bank Account >30 Years Old Educated No Savings Medical Education Family Car Trouble Housing
Slide 12: OppFi Powers Banks to Unlock Credit Access for the Everyday Consumer
Consumers 5 minute application process Instant access to fair, transparent credit Opportunity to build financial health Best-in-class mobile acquisition Alternative data, AI powered underwriting algorithms Industry-leading, tech enabled customer service Banks Value to Bank Partners Value to Customer
Slide 13: We Leverage Billions of Data Points to Make Credit Scores Obsolete
OppFi’s proprietary algorithms powered by AI better predict ability and willingness to repay We Leverage Billions of Data Points to Make Credit Scores Obsolete 10+ Million Repayments 14+ Million Loans 1.5+ Million Attributes per Repayment ~500 Applications AI-Powered Proprietary Scoring Algorithm ~7
Slide 14: The Digital Financial Services Destination for the Everyday Consumer
Mobile Banking & Debit The Digital Financial Services Destination for the Everyday Consumer Our platform leverages proprietary technology to best serve the Everyday Consumer Near Prime Lending Payroll Deduction Lending Auto Lending Credit Cards Digitally enabled lending platform Best-in-class custom
Slide 15: Vast, Underserved Market Opportunity
Vast, Underserved Market Opportunity Elkins, Kathleen. “Here’s how much money Americans have in their savings accounts.” CNBC.com, Sept 13, 2017 US Census Bureau and Experian – Based on adult population of US (~255mm) multiplied by population within 580-669 credit band (~18%) multiplied by ~30% appr
Slide 16: Key Company Highlights
Robust Customer Demand More than 2.5 million applications annually, of which 80% are mobile generated Leading Proprietary Credit & Technology Platform Real-time AI drives automation for ~75% of decisions Exceptional Customer Satisfaction Net Promoter Score of 85; 10,000+ online customer reviews with
Slide 17: Customers Praise OppFi
Customers Praise OppFi “You gave me a chance when no one else would” “The entire process was a breeze” “Terms were very reasonable...and transparent” “No penalties for early payoff” Accredited Business Unrivaled Customer Satisfaction Regardless of Credit Band1 Note: Loans made or arranged pursuant t
Slide 18: Employees are Highly-Satisfied
Employees are Highly-Satisfied Impressive Growth 2016 2017 2018 2019 2020 #445 #219 #340 #321 #539 Building a Tremendous Employee Culture 2018 & 2019 Best Places to Work 2019 Best Places to Work Chicago 2018 Best Places to Work 2018 Top Chicago Workplace
Slide 19: The OppFi Advantage
The OppFi Advantage A platform that puts you in control
Slide 20: Scalable, Diversified, Next Generation Marketing Platform
Scalable, Diversified, Next Generation Marketing Platform Represents Search Engine Optimization, Email Marketing, Customer Referrals, Strategic Partnerships and Other Represents marketing cost per funded loan for new and refinance loans Marketing Partners powered by OppFi’s proprietary API – “Leads
Slide 21: Proprietary AI Powered, Credit Decisioning Algorithms
Proprietary AI Powered, Credit Decisioning Algorithms… Our proprietary algorithms look beyond credit score to instantly identify borrowers who have the ability and willingness to repay …Result in Stable Write-offs by Cohort…1 Decisions Powered By… Consumer Behavior Bank Data Alternative Bureau Data
Slide 22: Powered by Modern and Leverageable Technology Stack
…Powered by Modern and Leverageable Technology Stack Modern Data Warehouse Real-time Data & Analytics Machine Learning Microservice Infrastructure Bank Verification Income Verification Continuous A/B Testing $18 Million 2020 Technology Spend1 Technology spend represents cash expense of full time emp
Slide 23: Driving Operational Leverage via Automation and Productivity Tools
Driving Operational Leverage via Automation and Productivity Tools Increasing Automated Approvals1 Increasing Application Conversion1 Preliminary March 2021 data Continued increases in operational leverage positions OppFi well for post-COVID demand
Slide 24: Protected by Bank Level Compliance Infrastructure
Integrated framework designed around three layers of defense Protected by Bank Level Compliance Infrastructure Ownership All business units are responsible for identifying and managing risks Assurance Fair Lending, BSA/AML, Compliance and TILA reviewed by external firms Examined by State Licensing A
Slide 25: The OppFi Customer Journey
~~ The OppFi ~.... Customer Journey
Slide 26: Product Demo - Typical Customer Journey
Product Demo - Typical Customer Journey Graduate to Mainstream Credit Provide pathway to lower cost, more mainstream products over time, such as Payroll Deduction Loans and Credit Cards “Turn Up” Process Perform diligent search on customers’ behalf for sub-36% APR ~90% of the time no offers of credi
Slide 27: Credit Access Product – the OppLoan
Simple interest, amortizing installment loans with no balloon payments No origination fees No late fees No NSF fees No prepayment penalties Report to the 3 major credit bureaus Work compassionately with customers who require payment plan modification Credit Access Product – the OppLoan The OppLoan’s
Slide 28: SalaryTap Extends Prime Pricing to Non-Prime Consumers
SalaryTap Extends Prime Pricing to Non-Prime Consumers We believe facilitating credit access through payroll deduction will significantly improve credit performance, preserving strong unit economics while reducing the cost of borrowing for customers Increased Addressable Market Larger, Lower Priced
Slide 29: OppFi Credit Card Serves as Graduation Pathway
OppFi Credit Card Serves as Graduation Pathway Large Opportunity Differentiated Product Mobile Optimized User Experience Graduation product for OppLoans customers that also unlocks ~$21 billion non-prime credit card market1 $1,500 credit limit enabled by sophisticated underwriting that looks beyond
Slide 30: Financial Performance
.. a ~-- Financial _.. Performance
Slide 31: Platform with Proven Ability to Scale Profitably
Platform with Proven Ability to Scale Profitably Revenue1,2 Adj. EBITDA1,3 Adj. Net Income1,4 Note: Reconciliation of non-GAAP to GAAP financials for 2017 through 2020 located in Appendix pages 40-42 2021P projections include impact of recent additional government stimulus and assume a corresponding
Slide 32: Growth Strategy and Drivers
Credit Card Salary Tap Installment Loans Growth Strategy and Drivers Assumed return to pre-COVID demand Improved conversion rate optimization of acquisition funnel Operational leverage driven by technology gains in automation and productivity Stable credit Employer adoption of financial wellness Mat
Slide 33: Exceptional Unit Economics – OppLoan Product
Exceptional Unit Economics – OppLoan Product Illustrative Lifetime Value of a Customer MOIC ~2.2x Note: Customer average length is 2.5 loans, with ~11 month weighted average life. ~75% of lifetime contribution occurs after the first loan Revenue realized based on amortization schedule adjusted for p
Slide 34: Reduced Cost of Financing and Strong Balance Sheet Powers Growth
Reduced Cost of Financing and Strong Balance Sheet Powers Growth Ample debt capacity provides a means to fund future growth without equity Company liquidity position has grown to 5x of 2017 levels Cost of borrowing has decreased 400+ bps since 2017 Diverse list of institutional sources of capital, i
Slide 35: Benchmarking & Valuation
~ Benchmarking & .... Valuation
Slide 36: Upstart, Katapult and Affirm: Business Comparison
Consumer Finance Originator ü ü ü ü Proprietary AI for Credit Decisioning ü ü ü ü Highly Automated Decisioning ü ü ü ü Utilizes Bank Partnership Model ü ü ü ü Diverse Marketing Strategy ü ü Multiple Years of GAAP Profitability ü Core Delivery Model Bank Sponsored Origination Bank Sponsored Originati
Slide 37: Upstart, Katapult and Affirm: Financial Comparison
2020A Revenue $323 million $233 million $250 million $670 million 2020A Adj. EBITDA Margin 31% 13% 16% Negative EBITDA3 ’18A – ’20A Revenue CAGR 55% 53% 141% 86%4 Product 11 months, $1,500 3 to 5 years, $1,000 to $50,000 10 to 18 months, $100 to $3,500 6 weeks to 48 months, up to $17,500 Market Cap
Slide 38: Appendix
ie | Appendix
Slide 39: Non-Prime Customer More Consistent Following Economic Disruption
Coupled with short duration of product, this customer shows more resiliency than higher credit score segments in economic dislocations Non-Prime Customer More Consistent Following Economic Disruption Source: Federal Reserve Bank of New York Consumer Credit Panel, Equifax, “Personal Loan Performance
Slide 40: Resilient Credit Performance during COVID-19
Pre-COVID (Avg. 2019) FY2020 Delinquency1 12.4% 10.8% Active communication with customers and willingness to skip payments when requested Charge-Offs3 33% 28% Stimulus + reduced spending + customer loyalty We demonstrated our ability to withstand the most challenging economic conditions Resilient Cr
Slide 41: EBT to Fair Market Value EBT Reconciliation
OppFi Current Audited Financials EBT to Fair Market Value EBT Reconciliation ($ in millions) 2017A 2018A 2019A 2020A Current Audited Financials EBT1 $2.6 $9.7 $33.0 $77.5 Loan Loss Reserve Adjustment 6.8 18.7 26.0 1.1 Capitalization Adjustment (1.2) (6.5) (8.3) 4.9 Increase / (Decrease) in FMV 4.7 1
Slide 42: EBT to Adjusted EBT Reconciliation
OppFi Current Audited Financials EBT to Adjusted EBT Reconciliation ($ in millions) 2017A 2018A 2019A 2020A Current Audited Financials EBT1 $2.6 $9.7 $33.0 $77.5 Recruiting Fees, Severance & Relocation 0.2 0.4 0.3 0.2 Amortization of Debt Transaction Costs 0.5 0.5 1.8 1.9 Other Addback and One-Time
Slide 43: Fair Market Value EBT to Adj. EBT and EBITDA Reconciliation
OppFi Fair Market Value EBT to Fair Market Value Adj. EBT and EBITDA Reconciliation ($ in millions) 2017A 2018A 2019A 2020A Pro Forma Fair Market Value EBT $12.9 $35.8 $68.4 $66.7 Recruiting Fees, Severance & Relocation 0.2 0.4 0.3 0.2 Amortization of Debt Transaction Costs 0.5 0.5 1.8 1.9 Other Add
FG New America Acquisition — SPAC Merger (April 2021) on 6ix