Sunlight Financial Holdings, Inc.

Greetings and welcome to the Sunlight Financial fourth quarter and full year 2022 earnings call. At this time, all participants are in a listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Lucia Dempsey, Head of Investor Relations for Sunlight Financial Group. Thank you, Lucia. You may begin.

Good afternoon and welcome to Sunlight Financial's fourth quarter and full year 2022 earnings call. After the close of the market today, we filed our 2022 Form 10-K, announced fourth quarter and full year 2022 financial results, and posted an earnings presentation to our Investor Relations website at ir.sunlightfinancial.com. Before we begin, I'd like to remind everyone that this webcast may contain certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include remarks about future expectations, beliefs, estimates, plans, and prospects. Such statements are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from those indicated or implied by such statements. Forward-looking statements include, but are not limited to, Sunlight Financial's expectation or prediction of financial and business performance and conditions and competitive industry outlooks. Forward-looking statements speak as of the day they are made, are subject to risks, uncertainties, and assumptions, and are not guarantees of performance. Sunlight Financial is under no obligation and expressly disclaims any obligation to update, alter, or otherwise revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. The company also refers participants on this call to the press release issued by the company and filed today with the SEC, the supplemental presentation posted to Sunlight Financial's website, and Sunlight Financial's SEC filings for discussion of the risks that can affect our business. Additionally, during today's call, we will discuss non-GAAP measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures can be found in both our press release and the supplemental presentation. Joining me today are Matt Pateri, Sunlight Financial's Chief Executive Officer, and Rodney Yoder, Sunlight's Chief Financial Officer. Matt will discuss our recently announced financing agreement summarize our fourth quarter and full year 2022 performance, and provide a preview of our first quarter 2023 operational metrics. Rodney will then share additional detail on our financial results before Matt closes with an update on our key priorities for our ongoing success. Given the timing of this call in relation to our first quarter 2023 quiet period, we will not be hosting a Q&A session following these prepared remarks. It is now my pleasure to turn the call over to Matt Pateri.

Thank you, Lucia, and thank you all for joining us. Before I discuss our fourth quarter and full year 2022 results, I'd like to briefly summarize the comprehensive financing agreement we announced earlier this month and closed last week with Crossover Bank, our third-party bank partner that warehouses funded indirect channel loans before they were sold to investors. This agreement builds on our longstanding relationship with Crossover Bank to strengthen our balance sheet and bolster our liquidity. enabling us to remain well positioned to continue to support our contractor partners. The agreement includes a commitment for a new $89 million first lien secured term loan, which was used to repay outstanding borrowings under the company's revolving credit facility with Silicon Valley Bank, and will fund accrued expenses and deferred proceeds that we owe to Cross River Bank. A portion of the loan will also be used for general corporate purposes, With the funding of the term loan and termination of the revolving credit facility, Sunlight will have no debt maturities in 2023 or 2024. We have also modified the Cross River Bank warehouse facility to increase origination capacity, reduce our cost to use the facility, and extend its maturity by nearly two years, improving our ability to continue originating indirect channel loans. Despite a challenging macroeconomic environment, Sunlight funded $2.9 billion of solar and home improvement loans in 2022, reflecting a 15% increase over 2021. Funded volume in the fourth quarter of 2022 was $753 million. That's up 18% year over year. And solar volume came in 13% higher than in the fourth quarter of 2021. And home improvement volume was particularly strong. with $118 million funded in the fourth quarter of 2022. That's a 61% increase relative to the same period last year. We consistently hear that salespeople and homeowners continue to appreciate the ease and efficiency that our Orange platform provides for financing solar installations and home improvement projects. We funded loans with over 19,000 borrowers in the fourth quarter. up 6% from the same period a year ago. And throughout the full year, we funded loans for over 79,000 homeowners, a 12% increase over full year 2021. And we look forward to bringing frictionless financing to even more borrowers in 2023. Average loan balances also continue to rise throughout 2022, driving additional revenue without incurring additional cost. Solar loans averaged over $47,000 in the fourth quarter of 2022. a 13% increase over the prior year period, while home improvement loans were up 23%, averaging nearly $18,000. We also continue to maintain strong relationships with our network of contractors, adding 117 new active contractors to our platform in the fourth quarter. Throughout 2022, 88 new solar installers and 400 new home improvement contractors became active users on our platform. increasing our total contractor relationships by 32% to just under 2,000 at the end of the year. While we're not providing full year 2023 guidance metrics at this time, I'd like to provide you a short preview of the first quarter of 2023's operational results to demonstrate our continued operational strength. Throughout the past three months, we've continued to execute on our core business, funding $627 million in loans in the first quarter of 2023, representing loans to nearly 16,000 borrowers. This volume reflects a 6% increase relative to the first quarter of 2022, or a 12% increase when normalizing for the impact of the solar installer that filed bankruptcy in late 2022. Within the first quarter, we also added 73 new contractors, bringing our total active contractor count to 2,070, at March 31st of this year. With that, I'd like to turn the call over to Rodney Yoder, Sunlight CFO.