NEW YORK, Feb. 16, 2017 /PRNewswire/ -- OnDeck®
(NYSE:ONDK), the leader in online lending for small business, today
announced fourth quarter and full year 2016 financial results
highlighted by continued execution of the company's long-term plan,
leading to record levels of Loans Under Management, Originations
and gross revenue. For the fourth quarter of 2016, OnDeck
increased Loans Under Management by 35% year-over-year to
$1.2 billion, Originations by 13% to
$632 million, and gross revenue by
21% to $81.8 million. For the
full year of 2016, OnDeck loaned over $2.4
billion to small businesses in the U.S., Canada and Australia and earned $291.3 million of gross revenue.
"OnDeck made further progress executing our long-term plan
during the fourth quarter of 2016," said Noah Breslow, OnDeck's chief executive
officer. "We continued to benefit from steady growth of Loans
Under Management, the expansion of our funding sources, and the
signing of new strategic partners. We also drove continued
efficiencies across our operating expense base as our Adjusted
Expense Ratio* improved over 400 basis points from the prior
year."
"Portfolio delinquencies in the quarter continued to be
generally consistent with historical levels," continued Mr.
Breslow. "However, we recorded a higher provision expense,
reflecting overall portfolio growth and a $19 million addition to reserves resulting from a
recalibration of loss estimates for loans with original maturities
of 15 months or longer. Most of these loans were originated
in 2016 as part of our expanded offerings to OnDeck customers and,
even with the updated loss estimates, continue to generate
attractive returns."
Mr. Breslow added, "We are committed to achieving positive
Adjusted EBITDA in 2017 and GAAP profitability in 2018. To
that end, we are taking a number of actions to realign our cost
structure while continuing to invest in OnDeck's future growth and
market leadership. These actions will produce about
$20 million of annual savings
relative to our 2016 exit operating expense run rate and will
accelerate our path towards achieving our long-term financial
targets."
Review of Financial Results for the Fourth Quarter of
2016
Loans Under Management increased to $1.2 billion, up 35% from the comparable prior
year period, driven primarily by 13% growth in originations.
Originations were $632 million during
the fourth quarter of 2016 and reflected double-digit growth
year-over-year across all three of OnDeck's customer acquisition
channels. The company's Direct and Strategic channels,
combined, grew 12% year-over-year, contributing 72% of total dollar
volume, and its Funding Advisor channel grew 17% versus the prior
year, contributing 28% of total dollar volume.
Gross revenue increased to $81.8
million during the fourth quarter of 2016, up 21% from the
comparable prior year period. The increase in gross revenue
was primarily driven by higher interest income, partially offset by
lower gain on sale revenue. Interest income increased to
$76.1 million during the quarter, up
60% from the comparable prior year period, and primarily reflected
the growth of average loans, which increased 68% versus the
comparable prior year period. The Effective Interest Yield
for the fourth quarter of 2016 was 33.2%, down from 34.2% in the
comparable prior year period, primarily reflecting the mix shift of
the loan portfolio toward longer average term loans and more Lines
of Credit.
Gain on sale was $1.8 million
during the fourth quarter of 2016, down 90% from the comparable
prior year period. The decline in gain on sale primarily reflected
a lower Gain on Sale Rate during the quarter and our decision to
reduce the amount of loans sold through OnDeck
Marketplace. OnDeck sold $85.6
million1 of loans through OnDeck
Marketplace at a 2.1% Gain on Sale Rate during the fourth
quarter of 2016, compared to $201.9
million of loans at a 9.0% Gain on Sale Rate in the fourth
quarter of 2015. Loans sold or designated as held for sale
through OnDeck Marketplace represented 15.8% of term loan
originations in the fourth quarter of 2016 compared to 39.8% of
term loan originations in the comparable prior year period.
Net revenue was $16.3 million
during the fourth quarter of 2016, down 62% versus the comparable
prior year period. The decline in net revenue reflected the
reduction of OnDeck Marketplace sales, which led to lower
gain on sale revenue, and higher provision expense in the fourth
quarter. Net revenue margin decreased to 19.9% during the
fourth quarter of 2016 from 62.6% in the prior year period,
primarily reflecting the decline in net revenue.
Provision for loan losses during the fourth quarter of 2016
increased to $55.7 million, up from
$20.0 million in the comparable prior
year period. The increase in provision expense reflected the
53% increase in originations of loans designated as held for
investment in the period. The increase also reflected an
$18.7 million addition to loan loss
reserves for loans with original maturities of 15 months or longer
whose performance has deviated, or is expected to deviate, from our
reserve model's prior estimates. As a result, the Provision
Rate in the fourth quarter of 2016 was 10.2% compared to 5.6% in
the comparable prior year period. For the full year of 2016,
the Provision Rate was 7.4%.
The 15+ Day Delinquency Ratio was 6.6% in the fourth quarter of
2016, flat with the prior year period but higher sequentially from
6.2% due to the continued seasoning of the portfolio and the
increase in delinquency roll rates from historically low
levels. The Net Charge-off rate decreased to 14.2% in the
fourth quarter of 2016 from 14.6% in the prior year period, but
increased sequentially from 11.0%.
The Cost of Funds Rate during the fourth quarter of 2016 was
5.8%, unchanged from the comparable prior year period.
Operating expenses were $52.5
million during the fourth quarter of 2016, up 11% over the
comparable prior year period. The increase primarily
reflected the overall growth of the company, partially offset by
the company's ongoing focus to drive operating efficiencies.
OnDeck has launched a cost rationalization plan that is expected
to produce approximately $20 million
of annual savings relative to our 2016 exit operating expense run
rate. The plan includes an approximately 11% reduction in
total headcount from announced layoffs and actual and scheduled
attrition. OnDeck incurred a $1.8
million charge in the fourth quarter of 2016 in connection
with this initiative. The cost rationalization plan also
includes a reduction in non-labor expenses, primarily within Sales
& Marketing and Technology & Analytics.
OnDeck had GAAP net loss attributable to On Deck Capital, Inc.
common stockholders of $35.9 million,
or $0.50 per basic and diluted share,
for the quarter, which compares to GAAP net loss attributable to On
Deck Capital, Inc. common stockholders of $4.6 million, or $0.07 per basic and diluted share, in the
comparable prior year period.
Adjusted EBITDA was negative $29.2
million for the quarter, versus positive $0.3 million in the comparable prior year
period. Adjusted Net Loss was $31.4
million, or $0.44 per basic
and per diluted share for the quarter versus Adjusted Net Loss of
$1.1 million, or $0.02 per basic and per diluted share, in the
comparable prior year period.
Unpaid Principal Balance was $980
million at the end of the fourth quarter, up 80% over the
prior year period. The increase primarily reflected OnDeck's
decision to retain more loans on its balance sheet in connection
with reducing OnDeck Marketplace loan sales throughout
2016.
Total Funding Debt at the end of the fourth quarter of 2016 was
$727 million, up 93% over the prior
year period, which reflected the growth of Unpaid Principal Balance
during the period. OnDeck continued to diversify its funding
sources during the fourth quarter, including the expansion of its
corporate line of credit and the addition of a new warehouse
facility with Credit Suisse. More recently, the company also
expanded the funding capacity and extended the maturity of its
existing warehouse facility with Ares. The company remains in
active discussions to further strengthen its financial flexibility,
including opportunities to add new debt facilities, upsize or
extend existing debt facilities and enter into additional
securitizations.
At the end of the fourth quarter of 2016, cash and cash
equivalents were $80 million, as
compared to $86 million at
September 30, 2016 and $160 million at December
31, 2015. The decrease in cash and cash equivalents from
December 31, 2015 primarily reflected
the company's increased funding of loans on its balance sheet.
Guidance for First Quarter and Full Year 2017
OnDeck
provided the following guidance for the three months ending
March 31, 2017 and full year ending
December 31, 2017.
First Quarter 2017
- Gross revenue between $89 million and
$93 million.
- Adjusted EBITDA between negative $4
million and negative $8
million.
Full Year 2017
- Gross revenue between $377 million and
$387 million.
- Adjusted EBITDA between positive $5
million and $15 million.
Conference Call
OnDeck will host a conference call to
discuss fourth quarter 2016 financial results on February 16, 2017 at 8:00
AM ET. Hosting the call will be Noah
Breslow, Chief Executive Officer, and Howard Katzenberg, Chief Financial
Officer. The conference call can be accessed toll free by
dialing (877) 201-0168 for calls within the U.S., or by dialing
(647) 788-4901 for international calls. The conference ID is
64904880. A live webcast of the call will also be available at
https://investors.ondeck.com under the Press & Events
menu.
About OnDeck
OnDeck (NYSE: ONDK) is the leader in
online small business lending. Since 2007, the company has
powered Main Street's growth through advanced lending
technology and a constant dedication to customer service. OnDeck's
proprietary credit scoring system - the OnDeck Score® -
leverages advanced analytics, enabling OnDeck to make real-time
lending decisions and deliver capital to small businesses in as
little as 24 hours. OnDeck offers business owners a complete
financing solution, including the online lending industry's widest
range of term loans and lines of credit. To date, the company has
deployed over $6 billion to more than
60,000 customers in 700 different industries across the United
States, Canada and Australia. OnDeck has an A+
rating with the Better Business Bureau and operates the
educational small business financing website BusinessLoans.com. For
more information, please visit www.ondeck.com.
*About Non-GAAP Financial Measures
This press release
and its attachments include Adjusted EBITDA, Adjusted Net Income
(Loss), Adjusted Expense Ratio and Adjusted Operating Yield which
exclude stock-based compensation, as well as Net Interest Margin
and Net Interest Margin After Credit Losses, all of which are
financial measures not calculated or presented in accordance with
United States generally accepted
accounting principles, or GAAP. 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 an alternative 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" 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," "expects," "intends, "may," "allows,"
"continues," "believes," "anticipates," "estimates" or similar
expressions. These include statements regarding guidance on gross
revenue and Adjusted EBITDA for the first quarter and full year
2017, and the timing and anticipated savings from our cost
rationalization plan and our plan and the timing for achieving
positive Adjusted EBITDA and GAAP profitability. Forward-looking
statements are neither historical facts nor assurances of future
performance. 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. Factors that could cause or
contribute to actual results to differing from our forward-looking
statements include risks relating to: our ability to attract
potential customers to our platform; the degree to which potential
customers apply for, are approved for and actually borrow from us;
our future financial performance, including our expectations
regarding our revenue, cost of revenue, expectations of future
losses, net profit or net margin, operating expenses, ability to
generate cash flow, and ability to achieve, and maintain, future
profitability; our liquidity and working capital requirements,
including the availability and pricing of debt facilities,
securitizations and OnDeck Marketplace sales to fund our
existing operations and planned growth, and the consequences of
mismatches in the timing or amounts of resources available to fund
additional loans or draws on lines of credit; the effect on our
business of originating loans without third-party funding sources;
the impact of increased utilization of cash to fund originations;
the effect on our business of utilizing cash for voluntary loan
purchases from third parties; anticipated trends, growth rates and
challenges in our business and in the markets in which we operate;
the ability of our customers to repay loans; changes in product
distribution channel mix; our ability to anticipate market needs
and develop new and enhanced products and services to meet those
needs; interest rates and origination fees on loans; maintaining
and expanding our customer base; the impact of increased
competition in our industry and innovation by our competitors; our
anticipated growth and growth strategies, including through the
possible introduction of new products and the possible expansion in
existing or new international markets, and our ability to
effectively manage that growth and our expenses; our ability to
sell our products and expand; our reputation and possible adverse
publicity about us or our industry; the availability and cost of
our funding, including the availability and pricing of possible
warehouse financing and securitization and OnDeck
Marketplace transactions; our failure to anticipate or adapt
to future changes in our industry; our ability to hire and retain
necessary qualified employees to expand our operations; the impact
of any failure of our solutions; our reliance on our third-party
service providers; the evolution of technology affecting our
products, services and markets; our compliance with applicable
local, state and federal laws, rules and regulations and their
application and interpretation, whether existing, modified or new;
our ability to adequately protect our intellectual property; the
effect of litigation or other disputes to which we are or may be a
party; the increased expenses and administrative workload
associated with being a public company; failure to maintain an
effective system of internal controls necessary to accurately
report our financial results and prevent fraud; the estimates and
estimate methodologies used in preparing our consolidated financial
statements; the future trading prices of our common stock, the
impact of securities analysts' reports and shares eligible for
future sale on these prices; and our ability to prevent or discover
security breaks, disruption in service and comparable events that
could compromise the personal and confidential information held in
our data systems, reduce the attractiveness of the platform or
adversely impact our ability to service the loans; and other risks,
including those described in our Annual Report on Form 10-K for the
year ended December 31, 2015, our
Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, and in other documents that
we file with the Securities and Exchange Commission from time to
time which are or will be available on the Commission's website at
www.sec.gov. Except as required by law, we undertake no duty to
update the information in this press release.
Investor Contact:
Kathryn
Harmon Miller
646.558.7860
kmiller@ondeck.com
Media Contact:
Jim
Larkin
646.553.2498
jlarkin@ondeck.com
OnDeck, the OnDeck logo, OnDeck Score and OnDeck
Marketplace are trademarks of On Deck Capital, Inc.
|
On Deck Capital,
Inc. and Subsidiaries
Consolidated
Balance Sheets
(in thousands, except
share and per share data)
|
|
|
December 31,
2016
|
|
December 31,
2015
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
79,554
|
|
|
$
|
159,822
|
|
Restricted
cash
|
44,432
|
|
|
38,463
|
|
Loans held for
investment
|
1,000,445
|
|
|
552,742
|
|
Less: Allowance for
loan losses
|
(110,162)
|
|
|
(53,311)
|
|
Loans held for
investment, net
|
890,283
|
|
|
499,431
|
|
Loans held for
sale
|
373
|
|
|
706
|
|
Property, equipment
and software, net
|
29,405
|
|
|
26,187
|
|
Other
assets
|
20,044
|
|
|
20,416
|
|
Total
assets
|
$
|
1,064,091
|
|
|
$
|
745,025
|
|
Liabilities and
equity
|
|
|
|
Liabilities:
|
|
|
|
Accounts
payable
|
$
|
5,271
|
|
|
$
|
2,701
|
|
Interest
payable
|
2,122
|
|
|
757
|
|
Funding
debt
|
726,639
|
|
|
375,890
|
|
Corporate
debt
|
27,966
|
|
|
2,695
|
|
Accrued expenses and
other liabilities
|
38,496
|
|
|
33,560
|
|
Total
liabilities
|
800,494
|
|
|
415,603
|
|
Stockholders' equity
(deficit):
|
|
|
|
Common stock—$0.005
par value, 1,000,000,000 shares authorized and 74,801,825 and
73,107,848 shares issued and 71,605,708 and 70,060,208 outstanding
at December 31, 2016 and 2015, respectively.
|
374
|
|
|
366
|
|
Treasury stock—at
cost
|
(6,697)
|
|
|
(5,843)
|
|
Additional paid-in
capital
|
477,526
|
|
|
457,003
|
|
Accumulated
deficit
|
(211,299)
|
|
|
(128,341)
|
|
Accumulated other
comprehensive loss
|
(379)
|
|
|
(372)
|
|
Total On Deck
Capital, Inc. stockholders' equity
|
259,525
|
|
|
322,813
|
|
Noncontrolling
interest
|
4,072
|
|
|
6,609
|
|
Total
equity
|
263,597
|
|
|
329,422
|
|
Total liabilities
and equity
|
$
|
1,064,091
|
|
|
$
|
745,025
|
|
|
|
|
|
Memo:
|
|
|
|
Unpaid Principal
Balance2
|
$
|
980,451
|
|
|
$
|
543,790
|
|
Interest Earning
Assets3
|
$
|
980,821
|
|
|
$
|
544,486
|
|
Loans4
|
$
|
1,000,818
|
|
|
$
|
553,448
|
|
Loans Under
Management5
|
$
|
1,202,791
|
|
|
$
|
890,351
|
|
|
On Deck Capital,
Inc. and Subsidiaries
Consolidated
Average Balance Sheets6
(in thousands, except
share and per share data)
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
2016
|
2015
|
|
2016
|
2015
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
73,636
|
|
$
|
138,076
|
|
|
$
|
85,524
|
|
$
|
152,803
|
|
Restricted
cash
|
49,004
|
|
34,651
|
|
|
41,695
|
|
31,170
|
|
Loans held for
investment
|
946,884
|
|
536,738
|
|
|
790,897
|
|
532,040
|
|
Less: Allowance for
loan losses
|
(95,059)
|
|
(52,010)
|
|
|
(75,433)
|
|
(53,013)
|
|
Loans held for
investment, net
|
851,825
|
|
484,728
|
|
|
715,465
|
|
479,027
|
|
Loans held for
sale
|
941
|
|
28,034
|
|
|
7,176
|
|
18,569
|
|
Property, equipment
and software, net
|
29,902
|
|
22,166
|
|
|
29,668
|
|
17,925
|
|
Other
assets
|
19,680
|
|
19,013
|
|
|
20,970
|
|
12,522
|
|
Total
assets
|
$
|
1,024,988
|
|
$
|
726,668
|
|
|
$
|
900,498
|
|
$
|
712,016
|
|
Liabilities and
equity
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
3,906
|
|
$
|
3,821
|
|
|
$
|
4,120
|
|
$
|
3,888
|
|
Interest
payable
|
1,821
|
|
728
|
|
|
1,254
|
|
736
|
|
Funding
debt
|
682,144
|
|
364,404
|
|
|
548,530
|
|
366,019
|
|
Corporate
debt
|
19,583
|
|
2,021
|
|
|
8,662
|
|
1,529
|
|
Accrued expenses and
other liabilities
|
34,401
|
|
28,222
|
|
|
33,095
|
|
21,612
|
|
Total
liabilities
|
741,855
|
|
399,196
|
|
|
595,661
|
|
393,784
|
|
|
|
|
|
|
|
Total On Deck
Capital, Inc. stockholders' equity
|
278,649
|
|
320,970
|
|
|
299,447
|
|
313,695
|
|
Noncontrolling
interest
|
4,484
|
|
6,502
|
|
|
5,390
|
|
4,537
|
|
Total
equity
|
283,133
|
|
327,472
|
|
|
304,837
|
|
318,232
|
|
Total liabilities
and equity
|
$
|
1,024,988
|
|
$
|
726,668
|
|
|
$
|
900,498
|
|
$
|
712,016
|
|
|
|
|
|
|
|
Memo6:
|
|
|
|
|
|
Unpaid Principal
Balance
|
$
|
929,304
|
|
$
|
528,235
|
|
|
$
|
776,793
|
|
$
|
521,082
|
|
Interest Earning
Assets
|
$
|
930,238
|
|
$
|
555,423
|
|
|
$
|
783,763
|
|
$
|
539,096
|
|
Loans
|
$
|
947,825
|
|
$
|
564,772
|
|
|
$
|
798,073
|
|
$
|
550,609
|
|
Loans Under
Management
|
$
|
1,155,687
|
|
$
|
835,930
|
|
|
$
|
1,050,505
|
|
$
|
726,215
|
|
|
|
On Deck Capital,
Inc.
Unaudited
Consolidated Statements of Operations
(in thousands, except
share and per share data)
|
|
|
|
|
Three Months
Ended December
31,
|
|
Twelve Months
Ended
December 31,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Interest
income
|
$
|
76,118
|
|
$
|
47,477
|
|
$
|
264,844
|
|
$
|
195,048
|
|
Gain on sales of
loans
|
1,817
|
|
18,176
|
|
14,411
|
|
53,354
|
|
Other
revenue
|
3,894
|
|
1,946
|
|
12,062
|
|
6,365
|
|
Gross
revenue
|
81,829
|
|
67,599
|
|
291,317
|
|
254,767
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
Provision for loan
losses
|
55,669
|
|
19,998
|
|
149,963
|
|
74,863
|
|
Funding
costs
|
9,900
|
|
5,302
|
|
32,448
|
|
20,244
|
|
Total cost of
revenue
|
65,569
|
|
25,300
|
|
182,411
|
|
95,107
|
|
Net
revenue
|
16,260
|
|
42,299
|
|
108,906
|
|
159,660
|
|
Operating
expense:
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
16,917
|
|
17,072
|
|
67,011
|
|
60,575
|
|
Technology and
analytics
|
16,005
|
|
12,749
|
|
58,899
|
|
42,653
|
|
Processing and
servicing
|
5,458
|
|
3,983
|
|
19,719
|
|
13,053
|
|
General and
administrative
|
14,112
|
|
13,583
|
|
48,345
|
|
45,304
|
|
Total operating
expense
|
52,492
|
|
47,387
|
|
193,974
|
|
161,585
|
|
Loss from
operations
|
(36,232)
|
|
(5,088)
|
|
(85,068)
|
|
(1,925)
|
|
Other
expense:
|
|
|
|
|
|
|
|
|
Interest
expense
|
(228)
|
|
(56)
|
|
(414)
|
|
(306)
|
|
Total other
expense
|
(228)
|
|
(56)
|
|
(414)
|
|
(306)
|
|
Loss before provision
for income taxes
|
(36,460)
|
|
(5,144)
|
|
(85,482)
|
|
(2,231)
|
|
Provision for income
taxes
|
—
|
|
—
|
|
—
|
|
—
|
|
Net loss
|
(36,460)
|
|
(5,144)
|
|
(85,482)
|
|
(2,231)
|
|
Net loss attributable
to noncontrolling interest
|
603
|
|
500
|
|
2,524
|
|
958
|
|
Net loss attributable
to On Deck Capital, Inc. common stockholders
|
$
|
(35,857)
|
|
$
|
(4,644)
|
|
$
|
(82,958)
|
|
$
|
(1,273)
|
|
Net loss per share
attributable to On Deck Capital, Inc. common
shareholders:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
|
(0.50)
|
|
$
|
(0.07)
|
|
$
|
(1.17)
|
|
$
|
(0.02)
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
71,487,566
|
|
69,915,114
|
|
70,934,937
|
|
69,545,238
|
|
|
Supplemental
Information
|
|
Key Performance
Metrics
(in thousands, except
percentage data)
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Originations7
|
$
|
631,890
|
|
|
$
|
556,766
|
|
|
$
|
2,403,796
|
|
|
$
|
1,874,438
|
|
Effective Interest
Yield8
|
33.2
|
%
|
|
34.2
|
%
|
|
33.3
|
%
|
|
35.4
|
%
|
Net Interest
Margin9
|
29.4
|
%
|
|
30.9
|
%
|
|
29.8
|
%
|
|
32.4
|
%
|
Marketplace
Gain on Sale Rate10
|
2.1
|
%
|
|
9.0
|
%
|
|
3.8
|
%
|
|
8.6
|
%
|
Cost of Funds
Rate11
|
5.8
|
%
|
|
5.8
|
%
|
|
5.9
|
%
|
|
5.5
|
%
|
Provision
Rate12
|
10.2
|
%
|
|
5.6
|
%
|
|
7.4
|
%
|
|
5.8
|
%
|
Reserve
Ratio13
|
11.2
|
%
|
|
9.8
|
%
|
|
11.2
|
%
|
|
9.8
|
%
|
15+ Day Delinquency
Ratio14
|
6.6
|
%
|
|
6.6
|
%
|
|
6.5
|
%
|
|
6.6
|
%
|
Net Charge-off
Rate15
|
14.2
|
%
|
|
14.6
|
%
|
|
12.0
|
%
|
|
13.7
|
%
|
Net Interest Margin
After Credit Losses (NIMAL)16
|
14.8
|
%
|
|
16.7
|
%
|
|
17.8
|
%
|
|
19.2
|
%
|
Adjusted Expense
Ratio (AER)17
|
17.2
|
%
|
|
21.3
|
%
|
|
17.0
|
%
|
|
20.7
|
%
|
Adjusted Operating
Yield (AOY)18
|
(2.4)
|
%
|
|
(4.6)
|
%
|
|
0.8
|
%
|
|
(1.5)
|
%
|
|
|
|
|
Marketplace Gain on Sale
Rate10
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Gain on sales of
loans(a)
|
$
|
1,817
|
|
|
$
|
18,176
|
|
|
$
|
14,411
|
|
|
$
|
53,354
|
|
Carrying value of
loans sold
|
$
|
85,617
|
|
|
$
|
201,920
|
|
|
$
|
378,537
|
|
|
$
|
617,682
|
|
Marketplace
Gain on Sale Rate(a)
|
2.1
|
%
|
|
9.0
|
%
|
|
3.8
|
%
|
|
8.6
|
%
|
|
(a) Three
and twelve months ended December 31, 2015 includes amounts
resulting from transfers of financial assets and changes in inputs
or assumptions used in valuation model as shown in the following
table.
|
|
|
|
|
Activity in
Servicing Rights
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December
31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Fair value at the
beginning of period
|
$
|
1,687
|
|
|
$
|
2,252
|
|
|
$
|
3,489
|
|
|
$
|
—
|
|
Addition:
|
|
|
|
|
|
|
|
Servicing resulting
from transfers of financial assets
|
399
|
|
|
2,164
|
|
|
2,690
|
|
|
3,708
|
|
Changes in fair
value:
|
|
|
|
|
|
|
|
Change in inputs or
assumptions used in the valuation model
|
—
|
|
|
79
|
|
|
—
|
|
|
1,051
|
|
Other changes in fair
value(b)
|
(955)
|
|
|
(1,006)
|
|
|
(5,048)
|
|
|
(1,270)
|
|
Fair value at the end
of period
|
$
|
1,131
|
|
|
$
|
3,489
|
|
|
$
|
1,131
|
|
|
$
|
3,489
|
|
|
(b)
Represents changes due to collection of expected cash flows through
December 31, 2015.
|
|
|
|
|
Marketplace Originations as Percent
of Term Loan Originations
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Marketplace
originations
|
$
|
84,155
|
|
|
$
|
198,668
|
|
|
$
|
377,097
|
|
|
$
|
584,936
|
|
Origination of term
loans
|
$
|
531,287
|
|
|
$
|
499,407
|
|
|
$
|
2,051,849
|
|
|
$
|
1,703,617
|
|
Marketplace
originations as percent of term loan originations
|
15.8
|
%
|
|
39.8
|
%
|
|
18.4
|
%
|
|
34.3
|
%
|
|
|
|
|
|
|
|
|
Activity in Loan
Held for Investment Balances
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Unpaid Principal
Balance beginning of period
|
$
|
889,303
|
|
|
$
|
504,314
|
|
|
$
|
543,790
|
|
|
$
|
490,563
|
|
+ Total
originations(c)
|
631,890
|
|
|
556,766
|
|
|
2,403,796
|
|
|
1,874,438
|
|
+
Loans transferred from loans held for sale to loans held for
investment and loan purchases
|
—
|
|
|
186
|
|
|
939
|
|
|
1,534
|
|
-
Marketplace originations
|
(84,155)
|
|
|
(198,668)
|
|
|
(377,097)
|
|
|
(584,936)
|
|
- Sales
of other loans(d)
|
—
|
|
|
—
|
|
|
(548)
|
|
|
(32,783)
|
|
+
Purchase of Loans
|
—
|
|
|
—
|
|
|
6,672
|
|
|
—
|
|
- Net
charge-offs
|
(32,875)
|
|
|
(19,274)
|
|
|
(93,112)
|
|
|
(71,356)
|
|
-
Principal paid down(c)(e)
|
(423,712)
|
|
|
(299,534)
|
|
|
(1,503,989)
|
|
|
(1,133,670)
|
|
Unpaid Principal
Balance end of period
|
980,451
|
|
|
543,790
|
|
|
980,451
|
|
|
543,790
|
|
+ Net
deferred origination costs
|
19,994
|
|
|
8,952
|
|
|
19,994
|
|
|
8,952
|
|
Loans held for
investment
|
1,000,445
|
|
|
552,742
|
|
|
1,000,445
|
|
|
552,742
|
|
-
Allowance for loan losses
|
(110,162)
|
|
|
(53,311)
|
|
|
(110,162)
|
|
|
(53,311)
|
|
Loans held for
investment, net
|
$
|
890,283
|
|
|
$
|
499,431
|
|
|
$
|
890,283
|
|
|
$
|
499,431
|
|
|
(c)
Includes Unpaid Principal Balance of term loans rolled into new
originations of $72.8 and $71.7 million in the three months ended
December 31, 2016 and 2015, respectively, and $273.5 million and
$265.9 million for the twelve months ended December 31, 2016 and
2015, respectively.
|
(d)
Includes loans sold that were previously designated as held for
investment in at least one fiscal quarter prior to the quarter in
which they were sold.
|
(e)
Excludes principal that was paid down related to renewed loans sold
in the period which were designated as held for investment in the
amount of $0.3 million and $2.8 million, in the three months ended
December 31, 2016 and 2015, respectively, and $1.6 million and $4.8
million for the twelve months ended December 31, 2016 and 2015,
respectively.
|
|
|
|
|
|
|
Activity in the
Allowance for Loan Losses
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Allowance for loan
losses beginning of period
|
$
|
87,368
|
|
|
$
|
52,587
|
|
|
$
|
53,311
|
|
|
$
|
49,804
|
|
+ Provision
for loan losses(f)
|
55,669
|
|
|
19,998
|
|
|
149,963
|
|
|
74,863
|
|
- Net
charge-offs
|
(32,875)
|
|
|
(19,274)
|
|
|
(93,112)
|
|
|
(71,356)
|
|
Allowance for loan
losses end of period
|
$
|
110,162
|
|
|
$
|
53,311
|
|
|
$
|
110,162
|
|
|
$
|
53,311
|
|
|
(f)
Excludes provision of $0.1 million and $1.0 million for the three
months ended December 31, 2016 and 2015, respectively, and
provision release of $0.3 million and provision of $2.9 million for
the twelve months ended December 31, 2016 and 2015, respectively,
in each case for unfunded loan commitments. The provision for
unfunded loan commitments is included in general and administrative
expense.
|
|
Supplemental
Information
|
|
Non-GAAP
Reconciliation19
(in thousands, except
share and per share data)
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net income
(loss)
|
$
|
(36,460)
|
|
|
$
|
(5,144)
|
|
|
$
|
(85,482)
|
|
|
$
|
(2,231)
|
|
|
Interest
expense
|
228
|
|
|
56
|
|
|
414
|
|
|
306
|
|
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Depreciation and
amortization
|
2,575
|
|
|
1,886
|
|
|
9,462
|
|
|
6,508
|
|
|
Stock-based
compensation
|
4,492
|
|
|
3,517
|
|
|
15,915
|
|
|
11,582
|
|
|
Adjusted
EBITDA20
|
$
|
(29,165)
|
|
|
$
|
315
|
|
|
$
|
(59,691)
|
|
|
$
|
16,165
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net income
(loss)
|
$
|
(36,460)
|
|
|
$
|
(5,144)
|
|
|
$
|
(85,482)
|
|
|
$
|
(2,231)
|
|
|
Net loss attributable
to noncontrolling interest
|
603
|
|
|
500
|
|
|
2,524
|
|
|
958
|
|
|
Stock-based
compensation
|
4,492
|
|
|
3,517
|
|
|
15,915
|
|
|
11,582
|
|
|
Adjusted Net Income
(Loss)21
|
$
|
(31,365)
|
|
|
$
|
(1,127)
|
|
|
$
|
(67,043)
|
|
|
$
|
10,309
|
|
|
Adjusted Net Income
(Loss) per share22:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.44)
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.95)
|
|
|
$
|
0.15
|
|
|
Diluted
|
$
|
(0.44)
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.95)
|
|
|
$
|
0.14
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
71,487,566
|
|
|
69,915,114
|
|
|
70,934,937
|
|
|
69,545,238
|
|
|
Diluted
|
71,487,566
|
|
|
69,915,114
|
|
|
70,934,937
|
|
|
75,353,410
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest
Margin (NIM) Reconciliation and
Calculation9
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Interest
income
|
$
|
76,118
|
|
|
$
|
47,477
|
|
|
$
|
264,844
|
|
|
$
|
195,048
|
|
Less: Funding
costs
|
(9,900)
|
|
|
(5,302)
|
|
|
(32,448)
|
|
|
(20,244)
|
|
Net interest
margin (NIM)
|
66,218
|
|
|
42,175
|
|
|
232,396
|
|
|
174,804
|
|
Divided by: business
days in period
|
61
|
|
|
62
|
|
|
251
|
|
|
252
|
|
Net interest
income per business day
|
1,086
|
|
|
680
|
|
|
926
|
|
|
694
|
|
Multiplied by:
average business days per year
|
252
|
|
|
252
|
|
|
252
|
|
|
252
|
|
Annualized net
interest income
|
273,672
|
|
|
171,360
|
|
|
233,352
|
|
|
174,804
|
|
Divided by: average
Interest Earning Assets
|
$
|
930,238
|
|
|
$
|
555,423
|
|
|
$
|
783,762
|
|
|
$
|
539,096
|
|
Net Interest
Margin (NIM)
|
29.4
|
%
|
|
30.9
|
%
|
|
29.8
|
%
|
|
32.4
|
%
|
|
|
|
|
|
|
|
|
|
Net Interest
Margin After Credit Losses (NIMAL) Reconciliation and
Calculation16
|
(in
thousands)
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Interest
income
|
$
|
76,118
|
|
|
$
|
47,477
|
|
|
$
|
264,844
|
|
|
$
|
195,048
|
|
Less: Funding
costs
|
(9,900)
|
|
|
(5,302)
|
|
|
(32,448)
|
|
|
(20,244)
|
|
Net interest
margin (NIM)
|
66,218
|
|
|
42,175
|
|
|
232,396
|
|
|
174,804
|
|
Less: Net
charge-offs
|
(32,875)
|
|
|
(19,274)
|
|
|
(93,112)
|
|
|
(71,356)
|
|
Net interest
income after credit losses
|
33,343
|
|
|
22,901
|
|
|
139,284
|
|
|
103,448
|
|
Divided by: business
days in period
|
61
|
|
|
62
|
|
|
251
|
|
|
252
|
|
Net interest
income after credit losses per business day
|
547
|
|
|
369
|
|
|
555
|
|
|
411
|
|
Multiplied by:
average business days per year
|
252
|
|
|
252
|
|
|
252
|
|
|
252
|
|
Annualized net
interest income after credit losses
|
137,844
|
|
|
92,988
|
|
|
139,860
|
|
|
103,448
|
|
Divided by: average
Interest Earning Assets
|
$
|
930,238
|
|
|
$
|
555,423
|
|
|
$
|
783,762
|
|
|
$
|
539,096
|
|
Net Interest
Margin After Credit Losses (NIMAL)
|
14.8
|
%
|
|
16.7
|
%
|
|
17.8
|
%
|
|
19.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Expense
Ratio (AER) Reconciliation and
Calculation17
|
(in
thousands)
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Operating
expense
|
$
|
52,492
|
|
|
$
|
47,387
|
|
|
$
|
193,974
|
|
|
$
|
161,585
|
|
Less: stock based
compensation
|
(4,492)
|
|
|
(3,517)
|
|
|
(15,915)
|
|
|
(11,582)
|
|
Operating expense
(Ex. SBC)
|
48,000
|
|
|
43,870
|
|
|
178,059
|
|
|
150,003
|
|
Divided by: business
days in period
|
61
|
|
|
62
|
|
|
251
|
|
|
252
|
|
Operating expense
(Ex. SBC) per business day
|
787
|
|
|
708
|
|
|
709
|
|
|
595
|
|
Multiplied by:
average business days per year
|
252
|
|
|
252
|
|
|
252
|
|
|
252
|
|
Operating expense
(Ex. SBC)
|
198,324
|
|
|
178,416
|
|
|
178,668
|
|
|
150,003
|
|
Divided by: average
Loans Under Management
|
$
|
1,155,687
|
|
|
$
|
835,930
|
|
|
$
|
1,050,504
|
|
|
$
|
726,215
|
|
Adjusted Expense
Ratio (AER)
|
17.2
|
%
|
|
21.3
|
%
|
|
17.0
|
%
|
|
20.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Yield (AOY) Reconciliation and
Calculation18
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net Interest Margin
After Losses (NIMAL)
|
14.8
|
%
|
|
16.7
|
%
|
|
17.8
|
%
|
|
19.2
|
%
|
Less: Adjusted
expense ratio (AER)
|
(17.2)%
|
|
|
(21.3)%
|
|
|
(17.0)%
|
|
|
(20.7)%
|
|
Adjusted Operating
Yield (AOY)
|
(2.4)%
|
|
|
(4.6)%
|
|
|
0.8
|
%
|
|
(1.5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
Compensation (in thousands)
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Sales and
marketing
|
$
|
1,253
|
|
|
$
|
901
|
|
|
$
|
4,002
|
|
|
$
|
3,081
|
|
Technology and
analytics
|
762
|
|
|
632
|
|
|
3,199
|
|
|
2,351
|
|
Processing and
servicing
|
311
|
|
|
245
|
|
|
1,092
|
|
|
775
|
|
General and
administrative
|
2,166
|
|
|
1,739
|
|
|
7,622
|
|
|
5,375
|
|
Total stock-based
compensation
|
$
|
4,492
|
|
|
$
|
3,517
|
|
|
$
|
15,915
|
|
|
$
|
11,582
|
|
|
Supplemental
Channel Information
|
|
Quarterly
Origination Channel Distribution
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
Percentage of
originations (number of loans23)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Direct &
Strategic Partner
|
78.0
|
%
|
|
79.9
|
%
|
|
79.7
|
%
|
|
79.5
|
%
|
Funding
Advisor
|
22.0
|
%
|
|
20.1
|
%
|
|
20.3
|
%
|
|
20.5
|
%
|
Percentage of
originations (dollars)
|
|
|
|
|
|
|
|
Direct &
Strategic Partner
|
71.6
|
%
|
|
72.4
|
%
|
|
72.7
|
%
|
|
72.0
|
%
|
Funding
Advisor
|
28.4
|
%
|
|
27.6
|
%
|
|
27.3
|
%
|
|
28.0
|
%
|
Notes:
|
(1)
Amounts represent carrying value of loans sold, which includes both
unpaid principal balance sold and the remaining carrying value of
the net deferred origination costs.
|
(2) Unpaid
Principal Balance represents the total amount of principal
outstanding of term loans held for investment, amounts outstanding
under lines of credit and the amortized cost of loans purchased
from other than issuing bank partners at the end of the period. It
excludes net deferred origination costs, allowance for loan losses
and any loans sold or held for sale at the end of the
period.
|
(3)
Interest Earning Assets represents the sum of Unpaid Principal
Balance plus the amount of principal outstanding of loans held for
sale in the period. It excludes net deferred origination costs,
allowance for loan losses and any loans sold or held for sale at
the end of the period.
|
(4) Loans
represents the sum of loans held for investment and loans held for
sale during the period.
|
(5) Loans
Under Management represents the Unpaid Principal Balance plus the
unpaid principal balance of loans held for sale, excluding net
deferred origination costs, plus the amount of principal
outstanding of term loans we serviced for others at the end of the
period.
|
(6)
Average Balance Sheet Items for the period represent the average as
of the beginning of the month in the period and as of the end of
each month in the period.
|
(7)
Originations represent the total principal amount of the term loans
we made during the period, plus the total amount drawn on lines of
credit during the period. 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 partners and later purchased by us are included as part of our
originations.
|
(8)
Effective Interest Yield is the rate of return we achieve on loans
outstanding during a period. It is calculated as our business day
adjusted annualized interest income divided by average Loans.
Annualization is based on 252 business days per year, which is
typical weekdays per year less U.S. Federal Reserve Bank holidays.
Net deferred origination costs in loans held for investment and
loans held for sale consist of deferred origination fees and costs.
Deferred origination fees include fees paid up front to us by
customers when loans are funded and decrease the carrying value of
loans, thereby increasing the Effective Interest Yield earned.
Deferred origination costs are limited to costs directly
attributable to originating loans such as commissions, vendor costs
and personnel costs directly related to the time spent by the
personnel performing activities related to loan origination and
increase the carrying value of loans, thereby decreasing the
Effective Interest Yield earned.
|
(9) Net
Interest Margin, is calculated as business day adjusted annualized
Net Interest Income divided by average Interest Earning Assets. Net
Interest Income represents interest income less funding cost during
the period. Interest income is net of fees on loans held for
investment and held for sale. Net deferred origination costs in
loans held for investment and loans held for sale consist of
deferred origination costs as offset by corresponding deferred
origination fees. Deferred origination fees include fees paid up
front to us by customers when loans are funded. Deferred
origination costs are limited to costs directly attributable to
originating loans such as commissions, vendor costs and personnel
costs directly related to the time spent by the personnel
performing activities related to loan origination. Funding cost is
the interest expense, fees, and amortization of deferred debt
issuance costs we incur in connection with our lending activities
across all of our debt facilities. Annualization is based on 252
business days per year, which is typical weekdays per year less
U.S. Federal Reserve Bank holidays.
|
(10)
Marketplace Gain on Sale Rate equals our gain on sale revenue from
loans sold through OnDeck Marketplace divided by the carrying value
of loans sold, which includes both unpaid principal balance sold
and the remaining carrying value of the net deferred origination
costs. A portion of loans regularly sold through OnDeck
Marketplace are or may be loans which were initially
designated as held for investment upon origination. The portion of
such loans sold in a given period may vary materially depending
upon market conditions and other circumstances.
|
(11) Cost
of Funds Rate is our funding cost, which is the interest expense,
fees and amortization of deferred debt issuance costs we incur in
connection with our lending activities across all of our debt
facilities. For full years, it is calculated as our funding cost
divided by average funding debt outstanding and for interim periods
it is calculated as our annualized funding cost for the period
divided by average funding debt outstanding.
|
(12)
Provision Rate equals the provision for loan losses divided by the
new originations volume of loans held for investment, net of
originations of sales of such loans within the period.
Because we reserve for probable credit losses inherent in the
portfolio upon origination, this rate is significantly impacted by
the expectation of credit losses for the period's originations
volume. This rate may also be impacted by changes in loss
expectations for loans originated prior to the commencement of the
period. The denominator of the Provision Rate formula includes the
full amount of originations in a period. A portion of loans
regularly sold through OnDeck Marketplace are or may be
loans which were initially designated as held for investment upon
origination. The portion of such loans sold in a given period may
vary materially depending upon market conditions and other
circumstances.
|
(13)
Reserve Ratio is our allowance for loan losses as of the end of the
period divided by the Unpaid Principal Balance as of the end of the
period.
|
(14) 15+
Day Delinquency Ratio equals the aggregate Unpaid Principal Balance
for our loans that are 15 or more calendar days past due as of the
end of the period as a percentage of the Unpaid Principal Balance
for such period. The Unpaid Principal Balance for our loans that
are 15 or more calendar days past due includes loans that are
paying and non-paying. Because our loans require daily and weekly
repayments, excluding weekends and holidays, they may be deemed
delinquent more quickly than loans from traditional lenders that
require only monthly payments. 15+ Day Delinquency Ratio is not
annualized, but reflects balances as of the end of the
period.
|
(15) Net
Charge-off Rate is calculated as our annualized net charge-offs for
the period divided by the average Unpaid Principal Balance
outstanding. Annualization is based on 4 quarters per year and is
not business day adjusted. Net charge-offs are charged-off loans in
the period, net of recoveries.
|
(16) Net
Interest Margin After Credit Losses (NIMAL), is calculated as our
business day adjusted annualized Net Interest Income After Credit
Losses divided by average Interest Earning Assets. Net Interest
Income After Credit Losses represents interest income less funding
cost and net charge-offs during the period. Interest income is net
of deferred costs and fees on loans held for investment and held
for sale. Net deferred origination costs in loans held for
investment and loans held for sale consist of deferred origination
costs as offset by corresponding deferred origination fees.
Deferred origination fees include fees paid up front to us by
customers when loans are funded. Deferred origination costs are
limited to costs directly attributable to originating loans such as
commissions, vendor costs and personnel costs directly related to
the time spent by the personnel performing activities related to
loan origination. Funding cost is the interest expense, fees, and
amortization of deferred debt issuance costs we incur in connection
with our lending activities across all of our debt facilities. Net
charge-offs are charged-off loans in the period, net of recoveries.
Annualization is based on 252 business days per year, which is
typical weekdays per year less U.S. Federal Reserve Bank
holidays.
|
(17)
Adjusted Expense Ratio (AER) represents our annualized operating
expense, adjusted to exclude the impact of stock-based
compensation, divided by average Loans Under Management.
Annualization is based on 252 business days per year, which is
typical weekdays per year less U.S. Federal Reserve Bank
holidays.
|
(18)
Adjusted Operating Yield (AOY) represents our Net Interest Margin
After Credit Losses (NIMAL) less the Adjusted Expense Ratio
(AER).
|
(19) Due
to the uncertainty regarding and variability of certain items that
will affect our expected U.S. GAAP net income (loss) for the first
quarter of 2017 and full year 2017, such as stock-based
compensation and other items, we are currently unable to provide a
reasonable estimate of our U.S. GAAP net income (loss) for these
future periods or a corresponding reconciliation to U.S. GAAP net
income (loss). Our U.S. GAAP net income (loss) for these future
periods will be less favorable than our Adjusted EBITDA for these
periods.
|
(20)
Adjusted EBITDA represents our net income (loss), adjusted to
exclude interest expense associated with debt used for corporate
purposes (rather than funding costs associated with lending
activities), income tax expense, depreciation and amortization and
stock-based compensation expense. Our use of Adjusted EBITDA has
limitations as an analytical tool, and you should not consider it
in isolation or as a substitute for analysis of our results as
reported under GAAP. Some of these limitations are: Although
depreciation and amortization are non-cash charges, the assets
being depreciated and amortized may have to be replaced in the
future, and Adjusted EBITDA does not reflect cash capital
expenditure requirements for such replacements or for new capital
expenditure requirements; Adjusted EBITDA does not reflect changes
in, or cash requirements for, our working capital needs; Adjusted
EBITDA does not reflect the potentially dilutive impact of
stock-based compensation; Adjusted EBITDA does not reflect interest
associated with debt used for corporate purposes or tax payments
that may represent a reduction in cash available to us.
|
(21)
Adjusted Net Income (Loss) represents our net loss adjusted to
exclude net loss attributable to non-controlling interest and
stock-based compensation expense, each on the same basis and with
the same limitations as described above for Adjusted
EBITDA.
|
(22)
Adjusted Net Income (Loss) per share represents our net loss
adjusted to exclude net loss attributable to non-controlling
interest and stock-based compensation expense, each on the same
basis and with the same limitations as described above for Adjusted
EBITDA, divided by the weighted average common shares outstanding
during the period.
|
(23)
Number of loans, or units, equals the total number of term loans
funded, plus the total number of lines of credit drawn on for the
first time during the period.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/ondeck-reports-fourth-quarter-and-full-year-2016-financial-results-300408243.html
SOURCE On Deck Capital, Inc.