OppFi trims 2026 outlook as credit costs rise, but holds 2028 earnings targets
The digital bank reported record second-quarter revenue but lowered its full-year guidance due to tightened underwriting and higher charge-offs, while progressing with its acquisition of BNC National Bank.
OppFi (NYSE:OPFI) has lowered its full-year 2026 guidance after reporting record second-quarter revenue of $145 million, a 1.9 per cent increase from the same period last year. Despite the top-line growth, adjusted net income fell 27 per cent to approximately $29 million, with adjusted earnings per share dropping to $0.33 from $0.45 in the prior year period.
Management attributed the profit decline to deliberate strategic choices, including a delay in launching a new lending product and an internal system upgrade designed to ensure quality. The company also tightened underwriting in segments viewed as less attractive on a risk-adjusted basis, causing originations to fall nine per cent to $212 million. Consequently, OppFi revised its 2026 revenue guidance to $600 million–$625 million, adjusted net income to $115 million–$130 million, and adjusted earnings per share to $1.34–$1.51.
Credit quality metrics also moved unfavourably during the quarter. Net charge-offs climbed to approximately 40 per cent of revenue, up from 32 per cent a year earlier, and reached 52 per cent of receivables, compared with 43 per cent in the prior period. Unadjusted operating expenses rose to 43 per cent of revenue from 39 per cent, largely due to one-time costs associated with the BNC transaction and corporate simplification efforts.
Despite the near-term headwinds, OppFi maintained its long-term target of roughly $3 in earnings per share by 2028. The company’s most significant strategic move is its pending acquisition of BNC National Bank. Regulatory applications have been submitted to the Office of the Comptroller of the Currency and other agencies, with a target close in the fourth quarter of 2026. Management projects the combination will achieve a return on assets of at least 10 per cent and a return on equity of at least 35 per cent by 2028.
The company is also advancing its product development, with a new line of credit product set to launch next month. Developed in under six months using a modular technology platform, the product was tested with a bank partner to examine pricing and customer behaviour. OppFi ended the quarter with $92 million in cash and equivalents and $541.8 million in total funding capacity, of which $173.5 million remains unused.
To support shareholder value, the Board authorised a $40 million share repurchase program, which the company has begun executing. Recoveries on delinquent loans also rose to $15 million, up from $11 million a year earlier. Hedge fund ownership increased slightly to 28 funds from 27 in the previous quarter, while short interest remains low at 2.82 per cent of the float.
