TORONTO - Propel Holdings Inc. ('Propel' or the 'Company') (TSX: PRL) today reported its financial results for the three months ended September 30, 2022 ('Q3 2022') and declared a dividend for the fourth quarter of 2022.

The Company has designated this dividend as an eligible dividend within the meaning of the Income Tax Act (Canada). All amounts are expressed in U.S. dollars unless otherwise stated.

Management Commentary

'Propel delivered another successful quarter with record originations and revenue in Q3 2022, as well as record earnings for a nine-month period ending Q3. We have also made excellent progress on our strategy, including continuing to facilitate the graduation of consumers up the credit spectrum, serving lower-risk markets, expanding to new jurisdictions and exploring potential opportunities for new services and products. In addition to our core business, we recently announced a transformational agreement to become Pathward's primary lending-as-a-service ('LaaS') partner which will allow us to facilitate access to credit to lower risk consumers across the United States. We have also announced today that we will be launching our Canadian business before the end of 2022, ahead of schedule, which, in addition to being our home market, will also allow us to tap into a new and underserved market. These new initiatives, together with the strong profitable growth we are experiencing in our existing business provide us with an excellent foundation as we close out 2022 and head into 2023. As the macroeconomic environment remains uncertain and high inflation persists, we are continuing to focus on maintaining profitable growth. We are encouraged by consumers' resiliency through this challenging economic environment and remain as committed as ever to delivering a best-in-class experience for consumers and strong returns for our investors in the months and years to come,' said Clive Kinross, Chief Executive Officer

Financial and Operational Highlights for Q3 2022

Comparable metrics relative to Q3 2021

Loans and Advances Receivable: increased by 121% in Q3 2022 to $166.3 million, a record ending balance

Ending Combined Loan and Advance Balances ('CLAB')1: increased by 115% in Q3 2022 to $208.4 million, a record ending balance

Total Originations Funded1: increased by 75% to $97.7 million in Q3 2022, and increased by 108% to $284.9 million for year-to-date through Q3 2022, representing record performance for both periods

Revenue: increased by 82% to $59.7 million in Q3 2022, and increased by 86% to $164.3 million for year-to-date through Q3 2022, representing record performance for both periods

Adjusted EBITDA1: increased by 75% to $8.8 million in Q3 2022, and increased by 19% to $27.0 million for year-to-date through Q3 2022, representing record performance for a nine-month period ending Q3

Net Income: increased by 570% to $4.2 million in Q3 2022, and increased by 15% to $10.1 million for year-to-date through Q3 2022, representing record performance for a nine-month period ending Q3

Adjusted Net Income1: increased by 71% to $3.8 million in Q3 2022, and increased by 15% to $13.7 million for year-to-date through Q3 2022, representing record performance for a nine-month period ending Q3

Cost of Debt Capital: average effective interest rate increased to 10.5% in Q3 2022 from 9.4% in the comparative period in 2021 and increased to 9.7% year-to-date through Q3 2022 from 9.5% in the comparative period in 2021

Dividend: paid a Q3 2022 dividend of C$0.095 per Share on September 8, 2022, representing a 4.7% dividend yield against Propel's closing share price on November 9, 2022

Discussion of Financial Results

Notwithstanding an uncertain macroeconomic environment, Propel observed strong consumer demand for credit as the economy continued to return to a more normalized state post-COVID. The Company also continued to see a resilience among the subprime consumer who adjusted quickly to current market conditions. As expected, the general tightening of credit throughout the financial services sector has also continued. In continuing with the proactive steps taken beginning in Q1 of this year, Propel and its Bank Partners similarly maintained a conservative approach to underwriting during the quarter. As a result, and notwithstanding record quarterly Total Originations Funded1, the Company experienced slower CLAB1 and revenue growth than otherwise would have been expected in a more normalized macroeconomic environment, albeit with strong credit quality across the portfolio. Propel continues to operate the business with a focus on increasing profitability, which will continue to expand through several factors, including continued revenue growth, ongoing efficiencies in its acquisition and data expense, one of Propel's primary operating costs, the prudent management of discretionary expenses such as headcount, and the inherent operating leverage within the business model.

Despite the dynamics discussed above, loans and advances receivable increased by 121% to $166.3 million as at September 30, 2022, compared to $75.4 million as at September 30, 2021. The growth in these balances was driven by: 1) the growth in the Bank Programs under the CreditFresh brand; 2) facilitating the expansion of Bank Programs into additional states over fiscal year 2021; 3) strong consumer demand for credit driven by the general opening up of the economy following the easing of COVID-19 related restrictions as well as other macroeconomic factors; 4) the expansion of originations through newly established marketing partners and channels; 5) the successful launch and subsequent expansion of variable pricing and graduation capabilities and 6) at a macro level, the continuing industry-wide transition from brick-and-mortar to online lending, and tightening across the credit supply chain, which has increased application volume and quality across Propel's platform. Ending CLAB1 increased by 115% to $208.4 million, which the Company attributes to the factors above, as well as the significant growth in the MoneyKey Bank Service Program.

Revenue increased by 82% to a record $59.7 million in Q3 2022, compared to $32.7 million in Q3 2021. This growth was primarily the result of the growth in Average CLAB1, offset by a decrease in Annualized Revenue Yield1 to 120% in Q3 2022 from 143% in Q3 2021. The decrease in Annualized Revenue Yield1 is a result of a higher concentration of originations in the Bank Programs relative to legacy products, the general lower cost of credit across products facilitated over Propel's platform and the introduction of variable pricing and graduation capabilities. The evolving portfolio composition is consistent with the Company's strategy and is expected to result in higher portfolio growth and lower defaults across the portfolio over time.

Net income increased by 570% to $4.2 million in Q3 2022 from $0.6 million in Q3 2021. Adjusted Net Income1 increased by 71% to $3.8 million in Q3 2022 from $2.2 million in Q3 2021. The increase in net income in Q3 2022 relative to Q3 2021 is primarily a result of the following factors: 1) overall growth of the business; 2) a substantial reduction in our Cost Per Funded Origination1 and 3) effective and prudent cost management and operating leverage. The increase in Adjusted Net Income1 and Adjusted EBITDA1 are attributable to the same factors as the increase in net income.

Updated Launch Date for Entry into Canadian Market

Propel updated its previous guidance for its entry into the Canadian market today to confirm that the Company will be launching a new consumer credit product in Canada in Q4 2022, ahead of schedule. The product will be offered under a new brand through Propel's existing proprietary AI and technology infrastructure. Further details are expected to be released imminently.

Operating and Financial Targets

Given the uncertainty in the current macroeconomic environment, and in line with the Company's commitment to delivering value through profitable growth, a deliberately cautious stance towards credit risk and resultantly, growth, is important for long-term success. Consequently, while the Company anticipates continued growth in Total Originations Funded1 in Q4 2022, the highest seasonal quarter for demand, such growth is expected to be lower than it would otherwise be in a normalized macroeconomic environment. As a result, the Company anticipates that the Ending CLAB1 growth rate for 2022 will come in slightly lower than the 80% to 90% range provided earlier this year in our initial operating and financial outlook for 2022. Propel continues to expect to be in line with the financial targets provided for revenue, net income margin, Adjusted EBITDA Margin1, and Adjusted Net Income Margin1 for 2022. The Company's 2023 guidance remains unchanged, however, as further clarity on launch timing and overall volume roll-out plans for new initiatives, including the LaaS program with Pathward and the Canadian program, become apparent, the Company will update its 2023 outlook accordingly.

About Propel

Propel is an innovative, online financial technology ('fintech') company, committed to credit inclusion by providing and facilitating fair, fast and transparent access to credit with exceptional service using its proprietary online lending platform. Through its operating brands, Propel is focused on providing access to credit to underserved consumers who struggle to access credit from mainstream credit providers. Propel's revenue growth and profitability have accelerated significantly over the past two years as Propel has been able to facilitate access to credit for an increasing number of consumers, helping them move forward in their credit journeys.

Non-IFRS Financial Measures and Industry Metrics

This press release makes reference to certain non-IFRS financial measures and industry metrics. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. Such measures include 'Adjusted EBITDA', 'Adjusted Net Income', 'EBITDA' and 'Ending CLAB'. This press release also includes references to industry metrics such as 'Annualized Revenue Yield' and 'Total Originations Funded', which are supplementary measures under applicable securities laws.

These non-IFRS financial measures and industry metrics are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We believe that securities analysts, investors and other interested parties frequently use non-IFRS financial measures and industry metrics in the evaluation of issuers. The Company's management also uses non-IFRS financial measures and industry metrics in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts, and to determine components of management and executive compensation. The key performance indicators used by the Company may be calculated in a manner different than similar key performance indicators used by other similar companies.

Forward-Looking Information

Certain statements made in this press release may constitute forward-looking information under applicable securities laws. These statements may relate to our ability to profitably grow our business and facilitate access to credit to more and more underserved consumers, the launch of the Pathward partnership and the anticipated benefits derived therefrom, the launch into Canada in Q4 2022, the impact on the macroeconomic environment on our consumers. Particularly, information regarding our expectations of future results, targets, performance achievements, prospects or opportunities is forward-looking information and for which we refer readers to the assumptions set out in our March 21, 2022 press release providing such targets. As the context requires, this may include certain targets as disclosed in the prospectus for our initial public offering, which are based on the factors and assumptions, and subject to the risks, as set out therein and herein. Often but not always, forward-looking statements can be identified by the use of forward-looking terminology such as 'may', 'will', 'expect', 'believe', 'estimate', 'plan', 'could', 'should', 'would', 'outlook', 'forecast', 'anticipate', 'foresee', 'continue' or the negative of these terms or variations of them or similar terminology.

Many factors could cause our actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the factors discussed in the 'Risk Factors' section of the Company's annual information form dated March 21, 2022 for the year ended December 31, 2021 (the 'AIF'). A copy of the AIF and the Company's other publicly filed documents can be accessed under the Company's profile on the System for Electronic Document Analysis and Retrieval ('SEDAR') at www.sedar.com.

The Company cautions that the list of risk factors and uncertainties described in the AIF is not exhaustive and other factors could also adversely affect its results. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such information. The forward-looking information contained in this press release represents our expectations as of the date of this press release (or as the date they are otherwise stated to be made), and are subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

Contact:

Sarika Ahluwalia

Tel: (647) 776-5468

Email: IR@propelholdings.com

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