Online lender OnDeck reported first quarter 2019 net income of $5.9 million, a decrease from the $14 million net income from Q4/2018, primarily due to higher loan loss provision, higher operating expenses and an accrual for income taxes.

Adjusted net income for the company was $8.3 million, and gross revenue was $110.2 million, up 22% from the first quarter of 2018.

Originations were $636 million, down from $658 million in the fourth quarter and up 8% from $591 million in the year-ago quarter.

Net interest margin was 29.5%, down from 30.0% the prior quarter as lower asset yields more than offset the impact from improved borrowing costs. The increase in net interest margin from 27.8% in the year-ago quarter was driven by improved borrowing costs.

The net charge-off rate increased to 12.2% and remains near the low end of our 12%-14% target range.

Loans grew 3% sequentially and 19% from a year ago to $1.2 billion. The annual growth was broad-based with increases from both domestic and international operations as well as in both term loan and line of credit offerings. The average term loan size was unchanged sequentially at $53 thousand and was down from $58 thousand a year ago. Unit volume decreased 5% sequentially and increased 15% from the year-ago quarter.

“Our first quarter results reflect the continued execution of our strategy as we prudently grew the portfolio and maintained strong margins while investing in our strategic growth initiatives,” said Noah Breslow, OnDeck CEO. “These initiatives are gaining momentum as we closed our business combination with Evolocity Financial Group in Canada, grew ODX volume and advanced our equipment finance offering by insourcing key processes and starting to fund loans on our balance sheet. While the economic environment remains healthy, we continue to monitor customer and market trends and adjust our risk decisioning accordingly.”