OnDeck Swings to Q4 Profit on Lower Provision Charges


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OnDeck announced Q4/17 and full year 2017 gross revenue of $87.7 million and $351.0 million, respectively, was up from $81.8 million and $291.3 million a year earlier. Q4/17 net income of $5.1 million compared to a net loss of $35.9 million in Q4/16. For the full-year 2017, OnDeck reported a net loss of $11.5 million compared to a net loss a year earlier of $83.0 million.

The following highlights were excerpted from the news release:

  • The provision for loan losses in Q4/17 and full-year 2017 of $34.4 million and $152.9 million, respectively, compared to $55.7 million and $150 million for the same periods a year earlier.
  • Originations of $546.4 billion and $2,114.7 million in Q4/17 and full-year 2017, respectively, compared to $631.9 million and $2,403.8 million for the same periods in 2016.
  • The effective interest yield of 35.6% and 33.9% in Q4/17 and full-year 2017, respectively, compared to 33.2% and 33.3% for the same periods a year earlier.
  • The net charge-off rate for full-year 2017 of 15.8% was up 380 basis points from 12.0% a year earlier.
  • The net provision rate for full-year 2017 was 7.5% compared to 7.4% for the same period a year earlier. OnDeck noted the net provision rate in Q4/17 was 6.4% compared to 10.2% in Q4/16.

“2017 was a transformative year for OnDeck, marked by our strategic decision to strengthen our financial profile and accelerate our path to profitability,” said Noah Breslow, OnDeck’s CEO. “In the fourth quarter, we delivered on this objective, achieving over $5 million of GAAP profit, $41 million better than 2016’s fourth quarter results. In addition to this significant profit growth, we grew origination volume, controlled expenses and increased our effective interest yield to its highest levels since 2015. Credit performance continued improving in the fourth quarter while our provision rate, 15+ day delinquency ratio and net charge-off rate all achieved their lowest quarterly levels of 2017.”

Breslow added, “Looking ahead to 2018, we expect to drive double digit loan growth due to our strong customer demand, disciplined risk management and focus on scaling responsibly. With improved credit performance and loan yields, our realigned cost structure and a secure funding base, we are well-positioned to build on our success and continue margin expansion.”

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Terry Mulreany
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Frank Battista
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