OnDeck Reports Lower Q1 Loss on Substantial Drop in Provision Charges

OnDeck announced Q1/18 gross revenue of $90.3 million was down 2.8% from $92.9 million for the same quarter a year earlier. The Q1/18 net loss of $1.9 million was down 82.7% from $11.1 million in Q1/17. The provision for loan losses of $36.3 million was down $9.9 million from $46.2 million for the same quarter in 2017.

Q1/18 originations of $590.6 million were up 3% from $573.0 million for the same quarter in 2017.

The effective interest yield for Q1/18 was 35.6%, which was up 180 basis points from 33.8% a year earlier. The net interest margin of 31.3% was up from 30.0% in Q1/17.

The net charge off rate in Q1/18 of 10.9% was down from 14.9% a year earlier.

OnDeck closed on two significant financing transactions in Q1/18, which included a $225 million securitization and a new four-year, $100 million asset-backed revolving credit facility.

“Our first quarter results reflect a strong start to 2018 as we continue to execute on our strategic priorities to position our business for future success,” said Noah Breslow, CEO of OnDeck. “We delivered 8% sequential loan growth while managing our sales and marketing costs, and had positive credit performance, as the 15+ day delinquency ratio and net charge-off rate both improved significantly from a year ago.

“On the product front, in April we began our pilot of instant funding with positive reviews from our initial customers, and we are excited to expand our pilot in May. We also further reduced our occupancy costs, and, in April, closed two financing transactions with very favorable terms that will help our funding cost going forward.”

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