NEW YORK, July 28, 2020 /PRNewswire/ -- OnDeck® (NYSE:
ONDK), the leader in online lending for small business, today
announced second quarter 2020 Gross Revenue of $80.5 million, Net income of $2.2 million, and Adjusted Net income of
$13.6 million.
"The ongoing COVID-19 pandemic is placing unprecedented pressure
on small businesses in the U.S. and around the globe. After
curtailing originations in May, I am pleased that we are once again
providing vital financing to our small business clients through our
term loan and line of credit products, with a credit strategy
calibrated to the new environment," said Noah Breslow, chief executive officer. "We
reported a second quarter profit, substantially increased the
proportion of customers in paying relationships, amended several of
our debt facilities, and significantly reduced our operating
expense base. We continue to take actions to position the company
for growth and success when the pandemic abates."
Review of Financial Results for the Second Quarter of
2020
Net income was $2.2 million, or
$0.04 per diluted share, compared to
a Net loss of $59.0 million,
$0.94 per diluted share, in the prior
quarter and Net income of $4.3
million, or $0.05 per diluted
share, in the year-ago period.
Adjusted Net income was $13.6
million, or $0.23 per diluted
share, compared to an Adjusted Net loss of $57.6 million, or $0.92 per diluted share, in the prior quarter and
Adjusted Net income of $6.9 million,
or $0.09 per diluted share, in the
year-ago period. Adjustments in the second quarter include a
goodwill impairment charge of $6.4
million, restructuring charge of $2.8
million and stock-based compensation of $2.2 million.
Loans and finance receivables decreased $390 million, or 30%, sequentially and
$306 million, or 25%, from a year ago
to $901 million reflecting strong
portfolio collections, including a higher than expected level of
prepayments, and a sharp pullback in loan originations. Origination
volume of $66 million decreased 89%
from the prior and year-ago quarters reflecting our decision to
temporarily suspend originating new term loans and lines of credit.
Lines of credit accounted for 23% of total loans and finance
receivables at quarter-end, down from 24% at March 31, 2020 and up from 20% a year ago.
Gross Revenue of $80.5 million was
down 27% from the prior and year-ago quarters largely due to
portfolio and yield contraction. Portfolio Yield of 28.4% decreased
from 33.3% in the prior quarter and 35.0% in the year-ago quarter
primarily reflecting COVID related impacts. Other revenue decreased
from the prior periods reflecting reduced business activity,
partially mitigated by fees earned from facilitating Paycheck
Protection Program loans.
Interest expense decreased from the prior and year-ago quarters
to $10.3 million as debt balances
declined at a level commensurate with portfolio run-off. The
Cost of Funds Rate of 4.6% improved from 4.8% in the prior quarter
and 5.5% in the year-ago quarter primarily reflecting lower market
interest rates.
Net Interest Margin declined to 21.5%, as the benefit from the
lower Cost of Funds Rate was more than offset by impacts from the
decline in Portfolio Yield and a higher proportion of average cash
in earning assets.
Provision for credit losses was $23.7
million, down from $107.9
million in the prior quarter which included a significant
reserve build for COVID-impacted loans, and down from $43.0 million in the year-ago quarter primarily
reflecting the significant decrease in origination volume. The
Allowance for credit losses decreased $32.1
million from March 31, 2020 to
$173.6 million at June 30, 2020, reflecting the realization of
expected losses and portfolio pay down, but increased $27.9 million from a year ago due to impacts from
COVID-19. The Reserve Ratio was 19.6% at June 30, 2020, up from 16.3% at March 31, 2020 and 12.3% a year ago reflecting
portfolio trends. The Net Charge-off Rate increased as expected to
20.9%, as delinquency on the earliest COVID-impacted loans in our
portfolio seasoned and were charged off. The 15+ Day Delinquency
Ratio increased to 39.5% from 10.3% the prior quarter and 8.5% a
year-ago as COVID-impacted loans aged, however, the ratio improved
from its peak of 42% in May. Likewise, total U.S. 1+ Day
Delinquency increased from prior quarter but declined from its peak
of 47% in May to 43% at June 30,
2020. Additionally, the percentage of total U.S. customers
who made a payment of at least 25% of the original contractual
amount due in the last seven days increased from a low of 75% in
April to 87% at June 30, 2020.
Total operating expense of $39.7
million declined $11.4 million
from the prior quarter reflecting the actions we took in April to
significantly reduce expenses in response to COVID uncertainties.
The second quarter expense includes a $2.8
million restructuring charge related to the reduction of
approximately 20% of U.S. staff in July, with an expected payback
period of approximately one quarter. Excluding the
restructuring charge, operating expenses decreased $14.2 million from the prior quarter as the
company exceeded its targeted second quarter expense savings. The
Efficiency Ratio increased to 49.3% from 46.2% the prior quarter
and 47.1% the year-ago quarter, while the Adjusted Efficiency
Ratio*, which excludes the restructuring charge, improved to 43.0%
from 45.0% the prior quarter and 44.2% the year-ago quarter, as the
percentage decline in adjusted operating expenses exceeded the
percentage decline in revenue.
We recorded an $11.0 million
non-cash goodwill impairment reflecting the entire goodwill
recorded when we combined our Canadian businesses with Evolocity
during the second quarter of 2019, of which $4.6 million was attributable to non-controlling
interests.
We did not record an income tax benefit on the second or first
quarter's pre-tax loss due to uncertainties in our 2020 financial
forecast related to the COVID-19 pandemic. There was a $1.8 million income tax provision in the year-ago
quarter.
Total assets decreased 28% from March 31,
2020 to $969 million driven by
a $358 million decrease in net loans
and finance receivables resulting from the high level of
collections relative to new originations. Total cash and cash
equivalents of $150 million was
essentially unchanged from March 31,
2020, with the proportion of restricted cash increasing
primarily due to the early amortization of our securitization. Debt
decreased $364 million from
March 31, 2020 to $680 million as cash proceeds from principal and
interest collections were primarily used to pay-down debt
balances.
Total OnDeck stockholders' equity of $217
million increased $5 million
from the prior quarter primarily reflecting the second quarter 2020
net income and decreased from $314
million a year ago reflecting the net loss and share
repurchases over the period. Our diluted share count decreased to
60.1 million from 60.8 million at March 31,
2020 and 79.1 million a year ago. Book value per diluted
common share outstanding increased to $3.62 from $3.49 at
March 31, 2020 and decreased from
$3.98 a year ago.
2020 Outlook
OnDeck withdrew its financial guidance for 2020 on March 23, 2020 and is not providing updated
guidance due to the significant and ongoing uncertainties stemming
from the COVID-19 pandemic. Our second half 2020 priorities focus
on prudently increasing originations, portfolio management,
automation and operating efficiency, and funding flexibility.
We expect to report a modest net loss in the third quarter
reflecting the following trends:
- Lower revenue reflecting continued, albeit slower, portfolio
contraction,
- Net Interest Margin stabilization,
- Provision for credit losses consistent with increasing
originations and portfolio quality trends, and
- Operating expenses of approximately $40
million per quarter.
Our Allowance for credit losses and financial outlook for 2020
assume US and global economic activity remains muted throughout the
second half of 2020 with a slow recovery commencing in 2021.
* Net income (loss) as used in the narrative of this
release is Net income (loss) attributable to On Deck Capital, Inc.
common stockholders in the accompanying tables. Adjusted Net
income (loss) and Adjusted Efficiency Ratio are Non-GAAP financial
measures. See "About Non-GAAP Financial Measures."
Conference Call
OnDeck will host a conference call to discuss its second quarter
2020 financial results on July 29,
2020 at 8:00 AM ET. Hosting
the call will be Noah Breslow, Chief
Executive Officer, Ken Brause, Chief
Financial Officer, and Nick Brown,
Chief Risk Officer. The conference call can be accessed toll free
by dialing (866) 393-4306 for calls within the U.S., or by dialing
(734) 385-2616 for international calls. The Conference ID is
7386363. A live webcast of the call will also be available at
https://investors.ondeck.com under the Press, Events &
Presentations menu.
About OnDeck
OnDeck (NYSE: ONDK) is the proven leader in transparent and
responsible online lending to small business. Founded in 2006, the
company pioneered the use of data analytics and technology to make
real-time lending decisions and deliver capital rapidly to small
businesses. Today, OnDeck offers a wide range of online term
loans and lines of credit customized for the needs of small
business owners. The company also offers bank clients a
comprehensive technology and services platform that facilitates
online lending to small business customers through ODX, a wholly
owned subsidiary. OnDeck has provided over $13 billion in loans to customers in 700
different industries across the United
States, Canada and
Australia. The company has an A+
rating with the Better Business Bureau and is rated 5 stars by
Trustpilot. For more information, visit www.ondeck.com.
About Non-GAAP Financial Measures
This press release and its attachments include historical and
projected "Adjusted" metrics including Adjusted Net income (loss),
Adjusted Net income (loss) per share, Adjusted Efficiency Ratio,
Adjusted Return on Assets and Adjusted Return on Equity. These
financial measures are not calculated or presented in accordance
with United States generally
accepted accounting principles, or GAAP, because they all exclude
items required to be included in the most directly comparable
measure calculated and presented in accordance with GAAP.
Adjusted metrics exclude items management deems to be
non-representative of operating results or trends ("noteworthy
items") and expenses related to stock-based compensation, which are
non-cash expenses. We believe these non-GAAP measures provide
useful supplemental information for period-to-period comparisons of
our business and can assist investors and others in understanding
and evaluating our operating results. However, these non-GAAP
measures should not be considered in isolation or as a substitute
for or superior to any measures of financial performance calculated
and presented in accordance with GAAP. Other companies may
calculate these or similarly titled non-GAAP measures differently
than we do. See "Non-GAAP Reconciliation" and "Non-GAAP Guidance
Reconciliation" later in this press release for a description of
these non-GAAP measures and a reconciliation to the most directly
comparable financial measures prepared in accordance with GAAP.
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
and other legal authority. Forward-looking statements can be
identified by words such as "will," "enables," "targets,"
"expects," "intends," "may," "allows," "plans," "continues,"
"believes," "anticipates," "estimates" or similar expressions.
These include statements regarding our 2020 outlook and second half
2020 priorities and trends related to revenue, the portfolio,
originations, Net Interest Margin, net charge-offs, credit quality,
operating expenses, the small business lending and capital market
environments, economic conditions and other external factors. They
are based only on our current beliefs, expectations and assumptions
regarding the future of our business, anticipated events and
trends, the economy and other future conditions. As such, they are
subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict and in many cases
outside our control. Therefore, you should not rely on any of these
forward-looking statements. Our expected results may not be
achieved, and actual results may differ materially from our
expectations. The impact of the novel strain of coronavirus
SARs-CoV-2, causing the Coronavirus Disease 2019, also known as
COVID-19 could cause or contribute to such differences. The
COVID-19 health crisis is fast moving and complex, creating
material risks and uncertainties that cannot be predicted with
accuracy. Other important factors that could cause or
contribute to such differences, include the following, many of
which may be exacerbated due to the impact of COVID-19: (1) our
ability to achieve consistent profitability in the future in light
of our prior loss history and competition; (2) our growth
strategies or changes to our near-term priorities resulting from
COVID-19-related factors, including the introduction of new
products or features, expanding our platform to other lenders
through ODX and maintaining ODX's current clients, expansion into
international markets, business development, suspension of
equipment financing and our ability to effectively manage and fund
our growth; (3) possible future acquisitions of complementary
assets, businesses, technologies or products with the goal of
growing our business, and the integration of any such acquisitions;
(4) any material reduction in our interest rate spread and our
ability to successfully mitigate this risk through interest rate
hedging or raising interest rates or other means; (5) worsening
economic conditions that may result in decreased demand for our
loans or services and increase our customers' default rates; (6)
supply and demand driven changes in credit and increases in the
availability of capital for our competitors that negatively impacts
our loan pricing; (7) our ability to accurately assess
creditworthiness and forecast and reserve for loan losses; (8) our
ability to prevent or discover security breaches, disruption in
service and comparable events that could compromise confidential
information held in our data systems or adversely impact our
ability to service our loans; (9) incorrect or fraudulent
information provided to us by customers causing us to misjudge
their qualifications to receive a loan; (10) the effectiveness of
our efforts to identify, manage and mitigate our credit, market,
liquidity, operational and other risks associated with our business
and strategic objectives; (11) our ability to continue to innovate
or respond to evolving technological changes and protect our
intellectual property; (12) our reputation and possible adverse
publicity about us or our industry; (13) failure of operating
controls, including customer or partner experience degradation, and
related legal expenses, increased regulatory cost, significant
fraud losses and vendor risk; (14) changes in federal or state laws
or regulations, or judicial decisions involving licensing or
supervision of commercial lenders, interest rate limitations, the
enforceability of choice of law provisions in loan agreements, the
validity of bank sponsor partnerships, the use of brokers or other
significant changes; and (15) risks associated with pursuing a bank
charter, and risks associated with either failing to obtain or
obtaining a bank charter; and other risks, including those
described in Part I - Item 1A. Risk Factors in our Annual
Report on From 10-K for the year ended December 31, 2019, Part II - Item 1A. Risk
Factors in our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2020, and other documents
that we file with the Securities and Exchange Commission, or SEC,
from time to time which are or will be available on the SEC website
at www.sec.gov.
Investor Contact:
Steve
Klimas
646.668.3582
sklimas@ondeck.com
Media Contact:
Patrick
Cuff
708.846.7827
pcuff@ondeck.com
OnDeck, the OnDeck logo, OnDeck Score, OnDeck
Marketplace, and ODX are trademarks of On Deck
Capital, Inc. or its subsidiaries.
|
On Deck Capital,
Inc. and Subsidiaries
|
|
Consolidated
Statements of Operations
|
|
(unaudited, $ in
thousands, except share and per share data)
|
|
|
Three Months
Ended,
|
|
Six Months
Ended,
|
|
June 30,
2020
|
|
March 31,
2020
|
|
June 30,
2019
|
|
June 30,
2020
|
|
June 30,
2019
|
|
Interest and finance
income
|
$
|
78,308
|
|
|
$
|
106,935
|
|
|
$
|
105,641
|
|
|
$
|
185,243
|
|
|
$
|
211,440
|
|
|
Interest
expense
|
10,291
|
|
|
11,569
|
|
|
11,381
|
|
|
21,860
|
|
|
22,713
|
|
|
Net interest
income
|
68,017
|
|
|
95,366
|
|
|
94,260
|
|
|
163,383
|
|
|
188,727
|
|
|
Provision for credit
losses
|
23,720
|
|
|
107,907
|
|
|
42,951
|
|
|
131,627
|
|
|
86,242
|
|
|
Net interest income
(loss), after credit provision
|
44,297
|
|
|
(12,541)
|
|
|
51,309
|
|
|
31,756
|
|
|
102,485
|
|
|
Other
revenue
|
2,217
|
|
|
3,620
|
|
|
4,605
|
|
|
5,837
|
|
|
8,781
|
|
|
Operating
expense:
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
5,473
|
|
|
11,664
|
|
|
13,307
|
|
|
17,137
|
|
|
25,267
|
|
|
Technology and
analytics
|
15,088
|
|
|
16,484
|
|
|
16,681
|
|
|
31,572
|
|
|
33,487
|
|
|
Processing and
servicing
|
5,452
|
|
|
6,689
|
|
|
5,609
|
|
|
12,141
|
|
|
11,098
|
|
|
General and
administrative
|
13,664
|
|
|
16,280
|
|
|
16,353
|
|
|
29,944
|
|
|
30,382
|
|
|
Total operating
expense
|
39,677
|
|
|
51,117
|
|
|
51,950
|
|
|
90,794
|
|
|
100,234
|
|
|
Goodwill
Impairment
|
10,960
|
|
|
—
|
|
|
—
|
|
|
10,960
|
|
|
—
|
|
|
Income (loss) from
operations, before provision for income taxes
|
(4,123)
|
|
|
(60,038)
|
|
|
3,964
|
|
|
(64,161)
|
|
|
11,032
|
|
|
Provision for
(Benefit from) income taxes
|
—
|
|
|
—
|
|
|
1,796
|
|
|
—
|
|
|
3,536
|
|
|
Net income
(loss)
|
(4,123)
|
|
|
(60,038)
|
|
|
2,168
|
|
|
(64,161)
|
|
|
7,496
|
|
|
Less: Net income
(loss) attributable to noncontrolling interest
|
(6,293)
|
|
|
(1,063)
|
|
|
(2,127)
|
|
|
(7,356)
|
|
|
(2,465)
|
|
|
Net income (loss)
attributable to On Deck Capital, Inc. common
stockholders
|
$
|
2,170
|
|
|
$
|
(58,975)
|
|
|
$
|
4,295
|
|
|
$
|
(56,805)
|
|
|
$
|
9,961
|
|
|
Net income (loss) per
share attributable to On Deck Capital, Inc. common
stockholders:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.04
|
|
|
$
|
(0.94)
|
|
|
$
|
0.06
|
|
|
$
|
(0.94)
|
|
|
$
|
0.13
|
|
|
Diluted
|
$
|
0.04
|
|
|
$
|
(0.94)
|
|
|
$
|
0.05
|
|
|
$
|
(0.94)
|
|
|
$
|
0.13
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
58,741,590
|
|
|
62,534,517
|
|
|
76,137,751
|
|
|
60,625,795
|
|
|
75,840,604
|
|
|
Diluted
|
59,946,591
|
|
|
62,534,517
|
|
|
78,901,601
|
|
|
60,625,795
|
|
|
79,013,757
|
|
|
On Deck Capital,
Inc. and Subsidiaries
|
|
Percentage of
Average Interest Earning Assets
|
|
(unaudited, $ in
thousands)
|
|
|
Three Months
Ended,
|
|
|
Six Months
Ended,
|
|
June 30,
2020
|
|
March 31,
2020
|
|
June 30,
2019
|
|
|
June 30,
2020
|
|
June 30,
2019
|
|
Interest and finance
income
|
24.7
|
%
|
|
30.9
|
%
|
|
32.5
|
%
|
|
|
28.3
|
%
|
|
32.8
|
%
|
|
Interest
expense
|
3.2
|
%
|
|
3.3
|
%
|
|
3.5
|
%
|
|
|
3.3
|
%
|
|
3.5
|
%
|
|
Net interest
income:
|
21.5
|
%
|
|
27.6
|
%
|
|
29.0
|
%
|
|
|
25.0
|
%
|
|
29.3
|
%
|
|
Provision for credit
losses
|
7.5
|
%
|
|
31.2
|
%
|
|
13.2
|
%
|
|
|
20.1
|
%
|
|
13.4
|
%
|
|
Net interest income
(loss), after credit provision:
|
14.0
|
%
|
|
(3.6)
|
%
|
|
15.8
|
%
|
|
|
4.9
|
%
|
|
15.9
|
%
|
|
Other
revenue
|
0.7
|
%
|
|
1.1
|
%
|
|
1.4
|
%
|
|
|
0.9
|
%
|
|
1.4
|
%
|
|
Operating
expense:
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
1.7
|
%
|
|
3.4
|
%
|
|
4.1
|
%
|
|
|
2.6
|
%
|
|
3.9
|
%
|
|
Technology and
analytics
|
4.8
|
%
|
|
4.8
|
%
|
|
5.1
|
%
|
|
|
4.7
|
%
|
|
5.2
|
%
|
|
Processing and
servicing
|
1.7
|
%
|
|
1.9
|
%
|
|
1.7
|
%
|
|
|
1.9
|
%
|
|
1.7
|
%
|
|
General and
administrative
|
4.3
|
%
|
|
4.7
|
%
|
|
5.0
|
%
|
|
|
4.6
|
%
|
|
4.7
|
%
|
|
Total operating
expense
|
12.5
|
%
|
|
14.8
|
%
|
|
15.9
|
%
|
|
|
13.9
|
%
|
|
15.5
|
%
|
|
Goodwill
Impairment
|
3.5
|
%
|
|
—
|
%
|
|
—
|
%
|
|
|
1.7
|
%
|
|
—
|
%
|
|
Income (loss) from
operations, before provision for income taxes
|
(1.3)
|
%
|
|
(17.4)
|
%
|
|
1.3
|
%
|
|
|
(9.8)
|
%
|
|
1.8
|
%
|
|
Provision for
(Benefit from) income taxes
|
—
|
%
|
|
—
|
%
|
|
0.6
|
%
|
|
|
—
|
%
|
|
0.6
|
%
|
|
Net income
(loss)
|
(1.3)
|
%
|
|
(17.4)
|
%
|
|
0.7
|
%
|
|
|
(9.8)
|
%
|
|
1.2
|
%
|
|
Memo:
|
|
|
|
|
|
|
|
|
|
|
|
Average Interest
Earning Assets
|
$1,271,831
|
|
|
$1,386,501
|
|
|
$1,303,709
|
|
|
|
$1,313,072
|
|
|
$1,300,864
|
|
|
On Deck Capital,
Inc. and Subsidiaries
|
|
Consolidated
Balance Sheets
|
|
(unaudited, $ in
thousands, except share and per share data)
|
|
|
June 30,
2020
|
|
March 31,
2020
|
|
December 31,
2019
|
|
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
71,659
|
|
|
$
|
121,148
|
|
|
$
|
56,344
|
|
|
Restricted
cash
|
77,930
|
|
|
29,094
|
|
|
40,524
|
|
|
Loans and finance
receivables
|
901,126
|
|
|
1,291,586
|
|
|
1,265,312
|
|
|
Less: Allowance for
credit losses
|
(173,607)
|
|
|
(205,703)
|
|
|
(151,133)
|
|
|
Loans and finance
receivables, net
|
727,519
|
|
|
1,085,883
|
|
|
1,114,179
|
|
|
Property, equipment
and software, net
|
24,629
|
|
|
23,714
|
|
|
20,332
|
|
|
Other
assets
|
66,861
|
|
|
77,339
|
|
|
73,204
|
|
|
Total
assets
|
$
|
968,598
|
|
|
$
|
1,337,178
|
|
|
$
|
1,304,583
|
|
|
Liabilities,
mezzanine equity and stockholders' equity
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
$
|
7,665
|
|
|
$
|
6,804
|
|
|
$
|
6,470
|
|
|
Interest
payable
|
2,043
|
|
|
3,100
|
|
|
2,334
|
|
|
Debt
|
680,371
|
|
|
1,043,924
|
|
|
914,995
|
|
|
Accrued expenses and
other liabilities
|
52,563
|
|
|
56,834
|
|
|
70,110
|
|
|
Total
liabilities
|
742,642
|
|
|
1,110,662
|
|
|
993,909
|
|
|
Mezzanine
equity:
|
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
6,888
|
|
|
13,112
|
|
|
14,428
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
Common stock—$0.005
par value, 1,000,000,000 shares authorized and 80,745,115,
80,247,423, and 80,095,061 shares issued and 58,916,996,
58,419,304, and 66,363,555
outstanding at June 30, 2020, March 31, 2020, and December 31,
2019, respectively.
|
408
|
|
|
406
|
|
|
405
|
|
|
Treasury stock—at
cost
|
(82,503)
|
|
|
(82,503)
|
|
|
(49,641)
|
|
|
Additional paid-in
capital
|
516,892
|
|
|
514,785
|
|
|
513,571
|
|
|
Accumulated
deficit
|
(215,339)
|
|
|
(217,509)
|
|
|
(169,002)
|
|
|
Accumulated other
comprehensive loss
|
(1,985)
|
|
|
(2,923)
|
|
|
(1,333)
|
|
|
Total On Deck
Capital, Inc. stockholders' equity
|
217,473
|
|
|
212,256
|
|
|
294,000
|
|
|
Noncontrolling
interest
|
1,595
|
|
|
1,148
|
|
|
2,246
|
|
|
Total stockholders'
equity
|
219,068
|
|
|
213,404
|
|
|
296,246
|
|
|
Total liabilities,
mezzanine equity and stockholders' equity
|
$
|
968,598
|
|
|
$
|
1,337,178
|
|
|
$
|
1,304,583
|
|
|
|
|
|
|
|
|
Memo:
|
|
|
|
|
|
|
Unpaid Principal
Balance1
|
$
|
883,999
|
|
|
$
|
1,263,364
|
|
|
$
|
1,238,409
|
|
|
Loans and finance
receivables2
|
$
|
901,126
|
|
|
$
|
1,291,586
|
|
|
$
|
1,265,312
|
|
|
Interest Earning
Assets3
|
$
|
1,050,716
|
|
|
$
|
1,441,828
|
|
|
$
|
1,362,181
|
|
|
Book Value Per
Diluted Share
|
$
|
3.62
|
|
|
$
|
3.49
|
|
|
$
|
4.26
|
|
|
On Deck Capital,
Inc. and Subsidiaries
|
|
Consolidated
Average Balance Sheets4
|
|
(unaudited, $ in
thousands)
|
|
|
Average Three
Months Ended,
|
|
Average Six Months
Ended,
|
|
June 30,
2020
|
|
March 31,
2020
|
|
June 30,
2019
|
|
June 30,
2020
|
|
June 30,
2019
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
101,836
|
|
|
$
|
64,245
|
|
|
$
|
51,530
|
|
|
$
|
77,597
|
|
|
$
|
48,356
|
|
|
Restricted
cash
|
65,305
|
|
|
38,206
|
|
|
45,677
|
|
|
54,993
|
|
|
47,258
|
|
|
Loans and finance
receivables
|
1,104,690
|
|
|
1,284,050
|
|
|
1,206,503
|
|
|
1,180,482
|
|
|
1,205,250
|
|
|
Less: Allowance for
credit losses
|
(190,512)
|
|
|
(164,840)
|
|
|
(146,612)
|
|
|
(173,672)
|
|
|
(146,002)
|
|
|
Loans and finance
receivables, net
|
914,178
|
|
|
1,119,210
|
|
|
1,059,891
|
|
|
1,006,810
|
|
|
1,059,248
|
|
|
Property, equipment
and software, net
|
24,082
|
|
|
22,159
|
|
|
17,413
|
|
|
23,036
|
|
|
17,064
|
|
|
Other
assets
|
75,287
|
|
|
73,614
|
|
|
58,022
|
|
|
74,038
|
|
|
48,404
|
|
|
Total
assets
|
$
|
1,180,688
|
|
|
$
|
1,317,434
|
|
|
$
|
1,232,533
|
|
|
$
|
1,236,474
|
|
|
$
|
1,220,330
|
|
|
Liabilities,
mezzanine equity and stockholders' equity
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
$
|
6,683
|
|
|
$
|
6,965
|
|
|
$
|
5,120
|
|
|
$
|
6,827
|
|
|
$
|
5,121
|
|
|
Interest
payable
|
2,667
|
|
|
2,621
|
|
|
2,812
|
|
|
2,579
|
|
|
2,718
|
|
|
Debt
|
891,816
|
|
|
961,977
|
|
|
834,582
|
|
|
910,179
|
|
|
835,926
|
|
|
Accrued expenses and
other liabilities
|
53,300
|
|
|
62,287
|
|
|
63,690
|
|
|
57,932
|
|
|
59,792
|
|
|
Total
liabilities
|
954,466
|
|
|
1,033,850
|
|
|
906,204
|
|
|
977,517
|
|
|
903,557
|
|
|
Mezzanine
equity:
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
11,105
|
|
|
13,958
|
|
|
11,634
|
|
|
12,448
|
|
|
6,647
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
Total On Deck
Capital, Inc. stockholders' equity
|
213,852
|
|
|
267,800
|
|
|
310,858
|
|
|
244,908
|
|
|
305,990
|
|
|
Noncontrolling
interest
|
1,265
|
|
|
1,826
|
|
|
3,837
|
|
|
1,602
|
|
|
4,136
|
|
|
Total stockholders'
equity
|
215,117
|
|
|
269,626
|
|
|
314,695
|
|
|
246,510
|
|
|
310,126
|
|
|
Total liabilities,
mezzanine equity and stockholders' equity
|
$
|
1,180,688
|
|
|
$
|
1,317,434
|
|
|
$
|
1,232,533
|
|
|
$
|
1,236,475
|
|
|
$
|
1,220,330
|
|
|
|
|
|
|
|
|
|
|
|
|
Memo:
|
|
|
|
|
|
|
|
|
|
|
Unpaid Principal
Balance
|
$
|
1,081,946
|
|
|
$
|
1,256,429
|
|
|
$
|
1,183,056
|
|
|
$
|
1,155,733
|
|
|
$
|
1,180,831
|
|
|
Loans and finance
receivables
|
$
|
1,104,690
|
|
|
$
|
1,284,050
|
|
|
$
|
1,206,503
|
|
|
$
|
1,180,482
|
|
|
$
|
1,205,250
|
|
|
Interest Earning
Assets
|
$
|
1,271,831
|
|
|
$
|
1,386,501
|
|
|
$
|
1,303,709
|
|
|
$
|
1,313,072
|
|
|
$
|
1,300,864
|
|
|
Supplemental
Information
|
|
Key Performance
Metrics
|
|
($ in thousands,
except percentage data)
|
|
|
Three Months
Ended,
|
|
Six Months
Ended,
|
|
June 30,
2020
|
|
March 31,
2020
|
|
June 30,
2019
|
|
June 30,
2020
|
|
June 30,
2019
|
|
Originations5
|
$
|
65,573
|
|
|
$
|
591,863
|
|
|
$
|
591,848
|
|
|
$
|
657,437
|
|
|
$
|
1,227,354
|
|
|
Gross
Revenue6
|
80,525
|
|
|
110,555
|
|
|
110,246
|
|
|
191,080
|
|
|
220,221
|
|
|
Portfolio
Yield7
|
28.4
|
%
|
|
33.3
|
%
|
|
35.0
|
%
|
|
31.4
|
%
|
|
35.3
|
%
|
|
Cost of Funds
Rate8
|
4.6
|
%
|
|
4.8
|
%
|
|
5.5
|
%
|
|
4.8
|
%
|
|
5.4
|
%
|
|
Net Interest
Margin9
|
21.5
|
%
|
|
27.6
|
%
|
|
29.0
|
%
|
|
25.0
|
%
|
|
29.3
|
%
|
|
Reserve
Ratio10
|
19.6
|
%
|
|
16.3
|
%
|
|
12.3
|
%
|
|
19.6
|
%
|
|
12.3
|
%
|
|
15+ Day Delinquency
Ratio11
|
39.5
|
%
|
|
10.3
|
%
|
|
8.5
|
%
|
|
39.5
|
%
|
|
8.5
|
%
|
|
Net Charge-off
Rate12
|
20.9
|
%
|
|
15.8
|
%
|
|
15.1
|
%
|
|
18.4
|
%
|
|
13.6
|
%
|
|
Efficiency
Ratio13
|
49.3
|
%
|
|
46.2
|
%
|
|
47.1
|
%
|
|
47.5
|
%
|
|
45.5
|
%
|
|
Adjusted Efficiency
Ratio14 (a)
|
43.0
|
%
|
|
45.0
|
%
|
|
44.2
|
%
|
|
44.1
|
%
|
|
42.6
|
%
|
|
Return on
Assets15
|
0.7
|
%
|
|
(17.9)
|
%
|
|
1.4
|
%
|
|
(9.2)
|
%
|
|
1.6
|
%
|
|
Adjusted Return on
Assets16 (a)
|
4.6
|
%
|
|
(17.5)
|
%
|
|
2.2
|
%
|
|
(7.1)
|
%
|
|
2.5
|
%
|
|
Return on
Equity17
|
4.1
|
%
|
|
(88.1)
|
%
|
|
5.5
|
%
|
|
(46.4)
|
%
|
|
6.5
|
%
|
|
Adjusted Return on
Equity18 (a)
|
25.5
|
%
|
|
(86.0)
|
%
|
|
8.8
|
%
|
|
(35.9)
|
%
|
|
9.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended,
|
|
Six Months
Ended,
|
|
June 30,
2020
|
|
March 31,
2020
|
|
June 30,
2019
|
|
June 30,
2020
|
|
June 30,
2019
|
|
Activity in the
Allowance for Credit Losses
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses beginning of period
|
$
|
205,703
|
|
|
$
|
151,133
|
|
|
$
|
147,406
|
|
|
$
|
151,133
|
|
|
$
|
140,040
|
|
|
+
Provision for credit losses
|
23,720
|
|
|
107,907
|
|
|
42,951
|
|
|
131,627
|
|
|
86,242
|
|
|
- Gross
charge-offs
|
(62,402)
|
|
|
(55,228)
|
|
|
(49,141)
|
|
|
(117,630)
|
|
|
(88,980)
|
|
|
+
Recoveries
|
5,883
|
|
|
5,597
|
|
|
4,523
|
|
|
11,480
|
|
|
8,437
|
|
|
-
Transition to CECL Adjustment
|
—
|
|
|
(3,304)
|
|
|
—
|
|
|
(3,304)
|
|
|
—
|
|
|
-
Foreign Currency Translation
|
703
|
|
|
(402)
|
|
|
—
|
|
|
301
|
|
|
—
|
|
|
Allowance for credit
losses end of period
|
$
|
173,607
|
|
|
$
|
205,703
|
|
|
$
|
145,739
|
|
|
$
|
173,607
|
|
|
$
|
145,739
|
|
|
|
|
|
|
|
|
|
|
|
|
Activity in Loans
and Finance Receivables Held for Investment Balances
|
Three Months
Ended,
|
|
Six Months
Ended,
|
|
June 30,
2020
|
|
March 31,
2020
|
|
June 30,
2019
|
|
June 30,
2020
|
|
June 30,
2019
|
|
Unpaid Principal
Balance beginning of period
|
$
|
1,263,364
|
|
|
$
|
1,238,409
|
|
|
$
|
1,177,609
|
|
|
$
|
1,238,409
|
|
|
$
|
1,144,954
|
|
|
+ Total
originations(b)
|
65,573
|
|
|
591,863
|
|
|
591,848
|
|
|
657,437
|
|
|
1,227,354
|
|
|
+
Purchase of Loans and finance receivables
|
—
|
|
|
—
|
|
|
37,454
|
|
|
—
|
|
|
37,454
|
|
|
- Net
charge-offs
|
(56,518)
|
|
|
(49,631)
|
|
|
(44,618)
|
|
|
(106,150)
|
|
|
(80,543)
|
|
|
-
Principal paid down
|
(388,420)
|
|
|
(517,277)
|
|
|
(577,171)
|
|
|
(905,697)
|
|
|
(1,144,097)
|
|
|
Unpaid Principal
Balance end of period
|
883,999
|
|
|
1,263,364
|
|
|
1,185,122
|
|
|
883,999
|
|
|
1,185,122
|
|
|
+ Net
deferred origination costs
|
17,127
|
|
|
28,222
|
|
|
22,487
|
|
|
17,127
|
|
|
22,487
|
|
|
Loans and finance
receivables held for investment
|
901,126
|
|
|
1,291,586
|
|
|
1,207,609
|
|
|
901,126
|
|
|
1,207,609
|
|
|
-
Allowance for credit losses
|
(173,607)
|
|
|
(205,703)
|
|
|
(145,739)
|
|
|
(173,607)
|
|
|
(145,739)
|
|
|
Loans and finance
receivables held for investment, net
|
$
|
727,519
|
|
|
$
|
1,085,883
|
|
|
$
|
1,061,870
|
|
|
$
|
727,519
|
|
|
$
|
1,061,870
|
|
|
(a) Non-GAAP measure. See "About
Non-GAAP Financial Measures," and "Non-GAAP Reconciliations" and
related footnotes elsewhere in this press release.
|
|
(b) Includes Unpaid Principal Balance
of term loans rolled into new originations of $8.9 million, $79.7
million, and $95.2 million in the three months ended June 30, 2020,
March 31, 2020, and June 30, 2019, respectively and $88.7 million,
and $193.7 million, in the six months ended June 30, 2020 and June
30, 2019, respectively
|
|
Supplemental
Information
|
|
|
Non-GAAP
Reconciliations
|
|
(in thousands, except
share and per share data)
|
|
|
Three Months
Ended,
|
|
Six Months
Ended,
|
|
Reconciliation of
Net Income to Adjusted Net Income
|
June 30,
2020
|
|
March 31,
2020
|
|
June 30,
2019
|
|
June 30,
2020
|
|
June 30,
2019
|
|
Net income (loss)
attributable to On Deck Capital, Inc. common
stockholders
|
$
|
2,170
|
|
|
$
|
(58,975)
|
|
|
$
|
4,295
|
|
|
$
|
(56,805)
|
|
|
$
|
9,961
|
|
|
Adjustments
(after-tax):
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
2,247
|
|
|
1,416
|
|
|
2,581
|
|
|
3,663
|
|
|
5,017
|
|
|
Goodwill
Impairment(c)
|
6,412
|
|
|
—
|
|
|
—
|
|
|
6,412
|
|
|
—
|
|
|
Restructuring
Costs
|
2,802
|
|
|
—
|
|
|
—
|
|
|
2,802
|
|
|
—
|
|
|
Adjusted Net Income
(Loss)19
|
$
|
13,631
|
|
|
$
|
(57,559)
|
|
|
$
|
6,876
|
|
|
$
|
(43,928)
|
|
|
$
|
14,978
|
|
|
Adjusted Net Income
(Loss) per Share20:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.23
|
|
|
$
|
(0.92)
|
|
|
$
|
0.09
|
|
|
$
|
(0.72)
|
|
|
$
|
0.20
|
|
|
Diluted
|
$
|
0.23
|
|
|
$
|
(0.92)
|
|
|
$
|
0.09
|
|
|
$
|
(0.72)
|
|
|
$
|
0.19
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
58,741,590
|
|
|
62,534,517
|
|
|
76,137,751
|
|
|
60,625,795
|
|
|
75,840,604
|
|
|
Diluted
|
59,946,591
|
|
|
62,534,517
|
|
|
78,901,601
|
|
|
60,625,795
|
|
|
79,013,757
|
|
|
(c) Net of $4.5 million attributable
to noncontrolling interest for the three and six months ended June
30, 2020.
|
|
|
|
Three Months
Ended,
|
|
Six Months
Ended,
|
|
Reconciliation of
Return on Assets to Adjusted Return on Assets
|
June 30,
2020
|
|
March 31,
2020
|
|
June 30,
2019
|
|
June 30,
2020
|
|
June 30,
2019
|
|
Net income (loss)
attributable to On Deck Capital, Inc. common
stockholders
|
$
|
2,170
|
|
|
$
|
(58,975)
|
|
|
$
|
4,295
|
|
|
$
|
(56,805)
|
|
|
$
|
9,961
|
|
|
Average Total
Assets
|
1,180,688
|
|
|
1,317,434
|
|
|
1,232,533
|
|
|
1,236,474
|
|
|
1,220,330
|
|
|
Return on
Assets
|
0.7
|
%
|
|
(17.9)
|
%
|
|
1.4
|
%
|
|
(9.2)
|
%
|
|
1.6
|
%
|
|
Adjustments
(after-tax):
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
2,247
|
|
|
1,416
|
|
|
2,581
|
|
|
3,663
|
|
|
5,017
|
|
|
Goodwill
Impairment(c)
|
6,412
|
|
|
—
|
|
|
—
|
|
|
6,412
|
|
|
—
|
|
|
Restructuring
Costs
|
2,802
|
|
|
—
|
|
|
—
|
|
|
2,802
|
|
|
—
|
|
|
Adjusted Net Income
(Loss)
|
$
|
13,631
|
|
|
$
|
(57,559)
|
|
|
$
|
6,876
|
|
|
$
|
(43,928)
|
|
|
$
|
14,978
|
|
|
Average Total
Assets
|
1,180,688
|
|
|
1,317,434
|
|
|
1,232,533
|
|
|
1,236,474
|
|
|
1,220,330
|
|
|
Adjusted Return on
Assets
|
4.6
|
%
|
|
(17.5)
|
%
|
|
2.2
|
%
|
|
(7.1)
|
%
|
|
2.5
|
%
|
|
(c) Net of $4.5 million attributable
to noncontrolling interest for the three and six months ended June
30, 2020.
|
|
|
|
Three Months
Ended,
|
|
Six Months
Ended,
|
|
Reconciliation of
Return on Equity to Adjusted Return on Equity
|
June 30,
2020
|
|
March 31,
2020
|
|
June 30,
2019
|
|
June 30,
2020
|
|
June 30,
2019
|
|
Net income (loss)
attributable to On Deck Capital, Inc. common
stockholders
|
$
|
2,170
|
|
|
$
|
(58,975)
|
|
|
$
|
4,295
|
|
|
$
|
(56,805)
|
|
|
$
|
9,961
|
|
|
Average OnDeck
Stockholders' Equity
|
213,852
|
|
|
267,800
|
|
|
310,858
|
|
|
244,908
|
|
|
305,990
|
|
|
Return on
Equity
|
4.1
|
%
|
|
(88.1)
|
%
|
|
5.5
|
%
|
|
(46.4)
|
%
|
|
6.5
|
%
|
|
Adjustments
(after-tax):
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
2,247
|
|
|
1,416
|
|
|
2,581
|
|
|
3,663
|
|
|
5,017
|
|
|
Goodwill
Impairment(c)
|
6,412
|
|
|
—
|
|
|
—
|
|
|
6,412
|
|
|
—
|
|
|
Restructuring
Costs
|
2,802
|
|
|
—
|
|
|
—
|
|
|
2,802
|
|
|
—
|
|
|
Adjusted Net Income
(Loss)
|
$
|
13,631
|
|
|
$
|
(57,559)
|
|
|
$
|
6,876
|
|
|
$
|
(43,928)
|
|
|
$
|
14,978
|
|
|
Average OnDeck
Stockholders' Equity
|
213,852
|
|
|
267,800
|
|
|
310,858
|
|
|
244,908
|
|
|
305,990
|
|
|
Adjusted Return on
Equity
|
25.5
|
%
|
|
(86.0)
|
%
|
|
8.8
|
%
|
|
(35.9)
|
%
|
|
9.8
|
%
|
|
(c) Net of $4.5 million attributable
to noncontrolling interest for the three and six months ended June
30, 2020.
|
|
|
|
Three Months
Ended,
|
|
Six Months
Ended,
|
|
Reconciliation of
Efficiency Ratio to Adjusted Efficiency Ratio
|
June 30,
2020
|
|
March 31,
2020
|
|
June 30,
2019
|
|
June 30,
2020
|
|
June 30,
2019
|
|
Total operating
expense
|
$
|
39,677
|
|
|
$
|
51,117
|
|
|
$
|
51,950
|
|
|
$
|
90,794
|
|
|
$
|
100,234
|
|
|
Gross
revenue
|
80,525
|
|
|
110,555
|
|
|
110,246
|
|
|
191,080
|
|
|
220,221
|
|
|
Efficiency
Ratio
|
49.3
|
%
|
|
46.2
|
%
|
|
47.1
|
%
|
|
47.5
|
%
|
|
45.5
|
%
|
|
Adjustments
(pre-tax):
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
2,247
|
|
|
1,416
|
|
|
3,249
|
|
|
3,663
|
|
|
6,331
|
|
|
Restructuring
Costs
|
2,802
|
|
|
—
|
|
|
—
|
|
|
2,802
|
|
|
—
|
|
|
Operating Expenses
Less Noteworthy Items
|
$
|
34,627
|
|
|
$
|
49,701
|
|
|
$
|
48,701
|
|
|
$
|
84,329
|
|
|
$
|
93,903
|
|
|
Gross
revenue
|
80,525
|
|
|
110,555
|
|
|
110,246
|
|
|
191,080
|
|
|
220,221
|
|
|
Adjusted Efficiency
Ratio
|
43.0
|
%
|
|
45.0
|
%
|
|
44.2
|
%
|
|
44.1
|
%
|
|
42.6
|
%
|
|
|
|
|
Adjusted Net Income
is used in the calculation of Adjusted Return on Assets and
Adjusted Return on Equity, all of which are Non-GAAP
measures. Additionally, the same adjustment items contained
in the above reconciliation of Net Income to Adjusted Net Income
are used to adjust operating expense in the calculation of the
Adjusted Efficiency Ratio, a Non-GAAP measure. Amounts may
differ due to taxes.
|
|
Supplemental
Channel Information
|
|
|
Quarterly
Origination Channel Distribution
|
|
|
Three Months
Ended,
|
|
Six Months
Ended,
|
|
June 30,
2020
|
|
March 31,
2020
|
|
June 30,
2019
|
|
June 30,
2020
|
|
June 30,
2019
|
|
Percentage of
originations (dollars)
|
|
|
|
|
|
|
|
|
|
|
Direct
|
50
|
%
|
|
38
|
%
|
|
43
|
%
|
|
39
|
%
|
|
43
|
%
|
|
Strategic
Partner
|
31
|
%
|
|
34
|
%
|
|
31
|
%
|
|
34
|
%
|
|
30
|
%
|
|
Funding
Advisor
|
19
|
%
|
|
28
|
%
|
|
26
|
%
|
|
27
|
%
|
|
27
|
%
|
|
Notes:
|
|
(1)Unpaid
Principal Balance represents the total amount of principal
outstanding on Loans, plus outstanding advances relating to other
finance receivables and the amortized cost of loans purchased from
other than our issuing bank partner at the end of the period. It
excludes net deferred origination costs, allowance for credit
losses and any loans sold or held for sale at the end of the
period.
|
|
(2)Loans
and finance receivables represents the sum of term loans, lines of
credit, equipment finance loans and finance receivables.
|
|
(3)Interest Earning Assets represents the
sum of Loans and finance receivables plus Cash and cash equivalents
plus Restricted cash.
|
|
(4)Average
Balance Sheet line items for the period represent the average of
the balance at the beginning of the first month of the period and
the end of each month in the period.
|
|
(5)Originations represent the total
principal amount of Loans made during the period plus the total
amount advanced on other finance receivables. Many of our
repeat term loan customers renew their term loans before their
existing term loan is fully repaid. In accordance with industry
practice, originations of such repeat term loans are presented as
the full renewal loan principal, rather than the net funded amount,
which would be the renewal term loan's principal net of the Unpaid
Principal Balance on the existing term loan. Loans referred to, and
funded by, our issuing bank partner and later purchased by us are
included as part of our originations.
|
|
(6)Gross
Revenue represents the sum of interest and finance income, gain on
sales of loans and other revenue.
|
|
(7)Portfolio Yield is the rate of return
we achieve on Loans and finance receivables outstanding during a
period. It is calculated as annualized Interest and finance income
on Loans and finance receivables including amortization of net
deferred origination costs divided by average loans and finance
receivables. Annualization is based on 365 days per year and is
calendar day-adjusted.
|
|
(8)Cost of
Funds Rate is calculated as interest expense divided by average
debt outstanding for the period. For periods of less than one
year, the metric is annualized based on four quarters per year and
is not business day or calendar day-adjusted.
|
|
(9)Net
Interest Margin is calculated as annualized net interest and
finance income divided by average Interest Earning Assets. Net
interest and finance income represents Interest and finance
receivable income less Interest expense during the period.
Annualization is based on 365 days per year and is calendar
day-adjusted.
|
|
(10)Reserve Ratio is our allowance for
credit losses at the end of the period divided by the Unpaid
Principal Balance at the end of the period.
|
|
(11)15+
Day Delinquency Ratio equals the aggregate Unpaid Principal Balance
for our Loans that are 15 or more calendar days contractually past
due and for our finance receivables that are 15 or more payments
behind schedule, as a percentage of the Unpaid Principal Balance at
the end of the period. The Unpaid Principal Balance for our loans
and finance receivables that are 15 or more calendar days or
payments past due includes Loans and finance receivables that are
paying and non-paying.
|
|
(12)Net
Charge-off Rate is calculated as our annualized net charge-offs for
the period divided by the average Unpaid Principal Balance
outstanding during the period. Net charge-offs are charged-off
loans and finance receivables in the period, net of recoveries of
prior charged-off loans and finance receivables in the
period. For periods of less than one year, the metric is
annualized based on four quarters per year and is not business day
or calendar day-adjusted.
|
|
(13)Efficiency Ratio is a measure of
operating efficiency and is calculated as Total operating expense
for the period divided by Gross Revenue for the period.
|
|
(14)Adjusted Efficiency Ratio is non-GAAP
measure calculated as total operating expense divided by Gross
Revenue for the period, adjusted to exclude (a) stock-based
compensation expense and (b) items management deems to be
non-representative of operating results or trends, all as shown in
the non-GAAP reconciliation presentation of this metric. We believe
Adjusted Efficiency Ratio is useful because it provides investors
and others with a supplemental operating efficiency metric to
present our operating efficiency across multiple periods without
the effects of stock-based compensation, which is a non-cash
expense based on equity grants made to participants in our equity
plans at specified prices and times but which does not necessarily
reflect how our business is performing, and items which may only
affect our operating results periodically. Our use of Adjusted
Efficiency Ratio has limitations as an analytical tool and you
should not consider it in isolation, as a substitute for or
superior to our Efficiency Ratio, which is the most comparable GAAP
metric.
|
|
(15)Return
on Assets is calculated as annualized net income (loss)
attributable to On Deck Capital, Inc. common stockholders for the
period divided by average total assets for the period. For periods
of less than one year, the metric is annualized based on four
quarters per year and is not business day or calendar
day-adjusted.
|
|
(16)Adjusted Return on Assets is a
non-GAAP measure calculated as Adjusted Net Income (Loss) for the
period divided by average total assets for the period. For periods
of less than one year, the metric is annualized based on four
quarters per year and is not business day or calendar day-adjusted.
We believe Adjusted Return on Assets is useful because it provides
investors and others with a supplemental metric to assess our
performance across multiple periods without the effects of
stock-based compensation, which is a non-cash expense based on
equity grants made to participants in our equity plans at specified
prices and times but which does not necessarily reflect how our
business is performing, and items which may only affect our
operating results periodically, all as shown in the non-GAAP
reconciliation presentation of this metric. Our use of Adjusted
Return on Assets has limitations as an analytical tool and you
should not consider it in isolation, as a substitute for or
superior to Return on Assets, which is the most comparable GAAP
metric.
|
|
(17)Return
on Equity is calculated as annualized net income (loss)
attributable to On Deck Capital, Inc. common stockholders for the
period divided by average total On Deck Capital, Inc. stockholders'
equity for the period. For periods of less than one year, the
metric is annualized based on four quarters per year and is not
business day or calendar day-adjusted.
|
|
(18)Adjusted Return on Equity is a
non-GAAP measure calculated as Adjusted Net Income (Loss)
attributable to On Deck Capital, Inc. common stockholders for the
period divided by average total On Deck Capital, Inc. stockholders'
equity for the period. For periods of less than one year, the
metric is annualized based on four quarters per year and is not
business day or calendar day-adjusted. We believe Adjusted Return
on Equity is useful because it provides investors with a
supplemental metric to assess our performance across multiple
periods without the effects of stock-based compensation, which is a
non-cash expense based on equity grants made to participants in our
equity plans at specified prices and times but which does not
necessarily reflect how our business is performing, and items which
may only affect our operating results periodically, all as shown in
the non-GAAP reconciliation presentation of this metric. Our use of
Adjusted Return on Equity has limitations as an analytical tool and
you should not consider it in isolation, as a substitute or
superior to Return on Equity, which is the most comparable GAAP
metric.
|
|
(19)Adjusted Net Income (Loss) is a
non-GAAP measure calculated as net income (loss) attributable to On
Deck Capital, Inc. common stockholders adjusted to exclude from net
income (loss) attributable to On Deck Capital, Inc. common
stockholders (a) stock-based compensation expense and (b) items
management deems to be non-representative of operating results or
trends, all as shown in the non-GAAP reconciliation presentation of
this metric. We believe Adjusted Net Income (Loss) is useful
because it provides investors and others with a supplemental
profitability metric to present our performance across multiple
periods without the effects of stock-based compensation, which is a
non-cash expense based on equity grants made to participants in our
equity plans at specified prices and times but which does not
necessarily reflect how our business is performing, and items which
may only affect our operating results periodically. Our use of
Adjusted Net Income (Loss) has limitations as an analytical tool
and you should not consider it in isolation, as a substitute for or
superior to net income (loss) attributable to On Deck Capital, Inc.
common stockholders, which is the most comparable GAAP
metric.
|
|
(20)Adjusted Net Income (Loss) per Share
is a non-GAAP measure calculated as Adjusted Net Income (Loss)
divided by the weighted average common shares outstanding during
the period. We believe Adjusted Net Income (Loss) per Share is
useful because it provides investors and others with a supplemental
profitability metric to present our performance across multiple
periods without the effects of stock-based compensation, which is a
non-cash expense based on equity grants made to participants in our
equity plans at specified prices and times but which does not
necessarily reflect how our business is performing, and items which
may only affect our operating results periodically. Our use of
Adjusted Net Income (Loss) per Share has limitations as an
analytical tool and you should not consider it in isolation, as a
substitute for or superior to net income (loss) attributable to On
Deck Capital, Inc. common stockholders per share, which is the most
comparable GAAP metric.
|
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SOURCE On Deck Capital, Inc.