OnDeck Beats Expectations With Rising Origination Volume In Q3

OnDeck beat expectations with its Q3 earnings report on Thursday (Oct. 24), with a rise in loan origination volume.

“We had a solid third quarter as origination volume increased, credit quality improved and we commenced our share repurchase program, clearly steps in the right direction as we advanced our strategic initiatives,” Chief Executive Officer Noah Breslow said on a conference call with analysts.

Adjusted net income came in at $7.8 million, or 10 cents per diluted share, which was above analyst estimates of 7 cents. Loan originations were $629 million, which was up 6 percent from the prior quarter and down 3 percent from the year-ago quarter. Interest and finance income was $108.2 million.

For the full year 2019, OnDeck forecasts an adjusted net income of $28 million to $32 million. Gross revenue is expected to be $442 million to $446 million. And the company forecasts net income of $21 million to $25 million.

In July, shares in OnDeck fell 22 percent after its disclosure that JPMorgan Chase would no longer originate new small business loans via OnDeck’s platform hosting Chase Business Quick Capital. The company, however, will still function as a servicer for up to two years when it comes to loans originated previously via the platform per a past report. Breslow said at the time that JPMorgan’s decision was a “setback” for the company.

The bank said in a written statement, according to a report at the time, “It’s been a great collaboration with OnDeck.” It continued, “They helped us create and launch an online loan application process that gave business owners faster decisions and easier access to credit, something we will continue to do on our own platform.”

In October, Investors Bank announced a collaboration with OnDeck to digitize its own small to medium-sized business (SMB) lending operations. They outlined an alliance that sees Investors Bancorp subsidiary Investors Bank collaborating with OnDeck Capital subsidiary ODX to digitize the loan origination platform of the bank for digital loan services in certain markets.