|
|
|
|
|
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
|
|
|
Delaware
|
42-1709682
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, par value $0.005 per share
|
ONDK
|
New York Stock Exchange
|
|
|
|
Large accelerated filer
|
|
☐
|
|
Accelerated filer
|
|
☒
|
Non-accelerated filer
|
|
☐
|
|
Smaller reporting company
|
|
☒
|
|
|
|
|
Emerging growth company
|
|
☐
|
|
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
|
|
☐
|
|
|
|
Page
|
|
|
|
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
|
|
Item 1.
|
||
Item 1A
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
2020
|
|
2019
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
71,659
|
|
|
$
|
56,344
|
|
Restricted cash
|
77,930
|
|
|
40,524
|
|
||
Loans and finance receivables
|
901,126
|
|
|
1,265,312
|
|
||
Less: Allowance for credit losses
|
(173,607
|
)
|
|
(151,133
|
)
|
||
Loans and finance receivables, net
|
727,519
|
|
|
1,114,179
|
|
||
Property, equipment and software, net
|
24,629
|
|
|
20,332
|
|
||
Other assets
|
66,861
|
|
|
73,204
|
|
||
Total assets
|
$
|
968,598
|
|
|
$
|
1,304,583
|
|
Liabilities, mezzanine equity and stockholders' equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
7,665
|
|
|
$
|
6,470
|
|
Interest payable
|
2,043
|
|
|
2,334
|
|
||
Debt
|
680,371
|
|
|
914,995
|
|
||
Accrued expenses and other liabilities
|
52,563
|
|
|
70,110
|
|
||
Total liabilities
|
742,642
|
|
|
993,909
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
||||
Mezzanine equity:
|
|
|
|
||||
Redeemable noncontrolling interest
|
6,888
|
|
|
14,428
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock—$0.005 par value, 1,000,000,000 shares authorized and 80,745,115 and 80,095,061 shares issued and 58,916,996 and 66,363,555 outstanding at June 30, 2020 and December 31, 2019, respectively.
|
408
|
|
|
405
|
|
||
Treasury stock—at cost
|
(82,503
|
)
|
|
(49,641
|
)
|
||
Additional paid-in capital
|
516,892
|
|
|
513,571
|
|
||
Accumulated deficit
|
(215,339
|
)
|
|
(169,002
|
)
|
||
Accumulated other comprehensive loss
|
(1,985
|
)
|
|
(1,333
|
)
|
||
Total On Deck Capital, Inc. stockholders' equity
|
217,473
|
|
|
294,000
|
|
||
Noncontrolling interest
|
1,595
|
|
|
2,246
|
|
||
Total stockholders' equity
|
219,068
|
|
|
296,246
|
|
||
Total liabilities, mezzanine equity and stockholders' equity
|
$
|
968,598
|
|
|
$
|
1,304,583
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended, June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Interest and finance income
|
$
|
78,308
|
|
|
$
|
105,641
|
|
|
$
|
185,243
|
|
|
$
|
211,440
|
|
Interest expense
|
10,291
|
|
|
11,381
|
|
|
21,860
|
|
|
22,713
|
|
||||
Net interest income
|
68,017
|
|
|
94,260
|
|
|
163,383
|
|
|
188,727
|
|
||||
Provision for credit losses
|
23,720
|
|
|
42,951
|
|
|
131,627
|
|
|
86,242
|
|
||||
Net interest income (loss), after credit provision
|
44,297
|
|
|
51,309
|
|
|
31,756
|
|
|
102,485
|
|
||||
Other revenue
|
2,217
|
|
|
4,605
|
|
|
5,837
|
|
|
8,781
|
|
||||
Operating expense:
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
|
5,473
|
|
|
13,307
|
|
|
17,137
|
|
|
25,267
|
|
||||
Technology and analytics
|
15,088
|
|
|
16,681
|
|
|
31,572
|
|
|
33,487
|
|
||||
Processing and servicing
|
5,452
|
|
|
5,609
|
|
|
12,141
|
|
|
11,098
|
|
||||
General and administrative
|
13,664
|
|
|
16,353
|
|
|
29,944
|
|
|
30,382
|
|
||||
Total operating expense
|
39,677
|
|
|
51,950
|
|
|
90,794
|
|
|
100,234
|
|
||||
Goodwill Impairment
|
10,960
|
|
|
—
|
|
|
10,960
|
|
|
—
|
|
||||
Income (loss) from operations, before provision for income taxes
|
(4,123
|
)
|
|
3,964
|
|
|
(64,161
|
)
|
|
11,032
|
|
||||
Provision for (Benefit from) income taxes
|
—
|
|
|
1,796
|
|
|
—
|
|
|
3,536
|
|
||||
Net income (loss)
|
(4,123
|
)
|
|
2,168
|
|
|
(64,161
|
)
|
|
7,496
|
|
||||
Less: Net income (loss) attributable to noncontrolling interest
|
(6,293
|
)
|
|
(2,127
|
)
|
|
(7,356
|
)
|
|
(2,465
|
)
|
||||
Net income (loss) attributable to On Deck Capital, Inc. common stockholders
|
$
|
2,170
|
|
|
$
|
4,295
|
|
|
$
|
(56,805
|
)
|
|
$
|
9,961
|
|
Net income (loss) per share attributable to On Deck Capital, Inc. common stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.04
|
|
|
$
|
0.06
|
|
|
$
|
(0.94
|
)
|
|
$
|
0.13
|
|
Diluted
|
$
|
0.04
|
|
|
$
|
0.05
|
|
|
$
|
(0.94
|
)
|
|
$
|
0.13
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
58,741,590
|
|
|
76,137,751
|
|
|
60,625,795
|
|
|
75,840,604
|
|
||||
Diluted
|
59,946,591
|
|
|
78,901,601
|
|
|
60,625,795
|
|
|
79,013,757
|
|
||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(4,123
|
)
|
|
$
|
2,168
|
|
|
$
|
(64,161
|
)
|
|
$
|
7,496
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
1,220
|
|
|
405
|
|
|
(1,993
|
)
|
|
771
|
|
||||
Unrealized gain (loss) on derivative instrument
|
234
|
|
|
(124
|
)
|
|
504
|
|
|
(866
|
)
|
||||
Comprehensive income (loss)
|
(2,669
|
)
|
|
2,449
|
|
|
(65,650
|
)
|
|
7,401
|
|
||||
Less: Comprehensive income (loss) attributable to noncontrolling interests
|
516
|
|
|
(58
|
)
|
|
(837
|
)
|
|
(32
|
)
|
||||
Less: Net income (loss) attributable to noncontrolling interest
|
(6,293
|
)
|
|
(2,127
|
)
|
|
(7,356
|
)
|
|
(2,465
|
)
|
||||
Comprehensive income (loss) attributable to On Deck Capital, Inc. common stockholders
|
$
|
3,108
|
|
|
$
|
4,634
|
|
|
$
|
(57,457
|
)
|
|
$
|
9,898
|
|
|
On Deck Capital, Inc.'s stockholders' equity
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Treasury
Stock
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Stockholders' Equity
|
|
Noncontrolling interest
|
|
Total
Equity
|
|
|
Redeemable Noncontrolling Interest
|
|||||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|||||||||||||||||||||||||||||||||
Balance—December 31, 2018
|
75,375,341
|
|
|
$
|
396
|
|
|
$
|
502,003
|
|
|
$
|
(196,959
|
)
|
|
$
|
(5,656
|
)
|
|
$
|
(1,832
|
)
|
|
$
|
297,952
|
|
|
$
|
4,533
|
|
|
$
|
302,485
|
|
|
|
$
|
—
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
2,743
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,743
|
|
|
—
|
|
|
2,743
|
|
|
|
—
|
|
|||||||||
Issuance of common stock through vesting of restricted stock units and option exercises
|
264,364
|
|
|
2
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
—
|
|
|
47
|
|
|
|
—
|
|
|||||||||
Employee stock purchase plan
|
267,688
|
|
|
1
|
|
|
1,659
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,660
|
|
|
—
|
|
|
1,660
|
|
|
|
—
|
|
|||||||||
Tax withholding related to vesting of restricted stock units
|
—
|
|
|
—
|
|
|
(291
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(291
|
)
|
|
—
|
|
|
(291
|
)
|
|
|
—
|
|
|||||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
340
|
|
|
340
|
|
|
26
|
|
|
366
|
|
|
|
—
|
|
|||||||||
Cash flow hedge and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(742
|
)
|
|
(742
|
)
|
|
—
|
|
|
(742
|
)
|
|
|
—
|
|
|||||||||
Net Income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
5,666
|
|
|
—
|
|
|
—
|
|
|
5,666
|
|
|
(338
|
)
|
|
5,328
|
|
|
|
—
|
|
|||||||||
Balance—March 31, 2019
|
75,907,393
|
|
|
$
|
399
|
|
|
$
|
506,159
|
|
|
$
|
(191,293
|
)
|
|
$
|
(5,656
|
)
|
|
$
|
(2,234
|
)
|
|
$
|
307,375
|
|
|
$
|
4,221
|
|
|
$
|
311,596
|
|
|
|
$
|
—
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
2,965
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,965
|
|
|
—
|
|
|
2,965
|
|
|
|
—
|
|
|||||||||
Issuance of common stock through vesting of restricted stock units and option exercises
|
393,994
|
|
|
2
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
28
|
|
|
|
—
|
|
|||||||||
Employee stock purchase plan
|
—
|
|
|
—
|
|
|
335
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
335
|
|
|
—
|
|
|
335
|
|
|
|
—
|
|
|||||||||
Tax withholding related to vesting of restricted stock units
|
—
|
|
|
—
|
|
|
(844
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(844
|
)
|
|
—
|
|
|
(844
|
)
|
|
|
—
|
|
|||||||||
Fair value of redeemable noncontrolling interest resulting from business combination
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
16,444
|
|
|||||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
463
|
|
|
463
|
|
|
(49
|
)
|
|
414
|
|
|
|
(9
|
)
|
|||||||||
Cash flow hedge and Other
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
1
|
|
|
—
|
|
|
(123
|
)
|
|
(133
|
)
|
|
—
|
|
|
(133
|
)
|
|
|
—
|
|
|||||||||
Net Income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
4,295
|
|
|
—
|
|
|
—
|
|
|
4,295
|
|
|
(814
|
)
|
|
3,481
|
|
|
|
(1,313
|
)
|
|||||||||
Balance—June 30, 2019
|
76,301,387
|
|
|
$
|
401
|
|
|
$
|
508,630
|
|
|
$
|
(186,997
|
)
|
|
$
|
(5,656
|
)
|
|
$
|
(1,894
|
)
|
|
$
|
314,484
|
|
|
$
|
3,358
|
|
|
$
|
317,842
|
|
|
|
$
|
15,122
|
|
|
On Deck Capital, Inc.'s stockholders' equity
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Accumulated
Deficit |
|
Treasury
Stock |
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Stockholders' Equity
|
|
Noncontrolling interest
|
|
Total
Equity |
|
|
Redeemable Noncontrolling Interest
|
|||||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|||||||||||||||||||||||||||||||||
Balance—December 31, 2019
|
66,363,555
|
|
|
$
|
405
|
|
|
$
|
513,571
|
|
|
$
|
(169,002
|
)
|
|
$
|
(49,641
|
)
|
|
$
|
(1,333
|
)
|
|
$
|
294,000
|
|
|
$
|
2,246
|
|
|
$
|
296,246
|
|
|
|
$
|
14,428
|
|
Transition to ASU 2016-13 Adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
10,468
|
|
|
—
|
|
|
—
|
|
|
10,468
|
|
|
—
|
|
|
10,468
|
|
|
|
—
|
|
|||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
1,738
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,738
|
|
|
—
|
|
|
1,738
|
|
|
|
—
|
|
|||||||||
Issuance of common stock through vesting of restricted stock units and option exercises
|
152,362
|
|
|
1
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|
|
—
|
|
|||||||||
Employee stock purchase plan
|
—
|
|
|
—
|
|
|
(310
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(310
|
)
|
|
—
|
|
|
(310
|
)
|
|
|
—
|
|
|||||||||
Repurchases of Common Stock
|
(8,096,613
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,862
|
)
|
|
—
|
|
|
(32,862
|
)
|
|
—
|
|
|
(32,862
|
)
|
|
|
—
|
|
|||||||||
Tax withholding related to vesting of restricted stock units
|
—
|
|
|
—
|
|
|
(229
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(229
|
)
|
|
—
|
|
|
(229
|
)
|
|
|
—
|
|
|||||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,860
|
)
|
|
(1,860
|
)
|
|
(253
|
)
|
|
(2,113
|
)
|
|
|
(1,100
|
)
|
|||||||||
Cash flow hedge and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
270
|
|
|
270
|
|
|
2
|
|
|
272
|
|
|
|
—
|
|
|||||||||
Net Income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,975
|
)
|
|
—
|
|
|
—
|
|
|
(58,975
|
)
|
|
(847
|
)
|
|
(59,822
|
)
|
|
|
(216
|
)
|
|||||||||
Balance—March 31, 2020
|
58,419,304
|
|
|
$
|
406
|
|
|
$
|
514,785
|
|
|
$
|
(217,509
|
)
|
|
$
|
(82,503
|
)
|
|
$
|
(2,923
|
)
|
|
$
|
212,256
|
|
|
$
|
1,148
|
|
|
$
|
213,404
|
|
|
|
$
|
13,112
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
2,305
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,305
|
|
|
—
|
|
|
2,305
|
|
|
|
—
|
|
|||||||||
Issuance of common stock through vesting of restricted stock units and option exercises
|
497,692
|
|
|
2
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
|
—
|
|
|||||||||
Tax withholding related to vesting of restricted stock units
|
—
|
|
|
—
|
|
|
(198
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(198
|
)
|
|
—
|
|
|
(198
|
)
|
|
|
—
|
|
|||||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
704
|
|
|
704
|
|
|
128
|
|
|
832
|
|
|
|
388
|
|
|||||||||
Cash flow hedge and other
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
234
|
|
|
235
|
|
|
—
|
|
|
235
|
|
|
|
—
|
|
|||||||||
Net Income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
2,170
|
|
|
—
|
|
|
—
|
|
|
2,170
|
|
|
319
|
|
|
2,489
|
|
|
|
(6,612
|
)
|
|||||||||
Balance—June 30, 2020
|
58,916,996
|
|
|
$
|
408
|
|
|
$
|
516,892
|
|
|
$
|
(215,339
|
)
|
|
$
|
(82,503
|
)
|
|
$
|
(1,985
|
)
|
|
$
|
217,473
|
|
|
$
|
1,595
|
|
|
$
|
219,068
|
|
|
|
$
|
6,888
|
|
|
Six Months Ended, June 30,
|
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
(64,161
|
)
|
|
$
|
7,496
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Provision for credit losses
|
131,627
|
|
|
86,242
|
|
||
Depreciation and amortization
|
3,271
|
|
|
3,574
|
|
||
Amortization of debt issuance costs
|
2,572
|
|
|
1,573
|
|
||
Stock-based compensation
|
3,663
|
|
|
6,331
|
|
||
Amortization of net deferred origination costs
|
27,579
|
|
|
35,277
|
|
||
Changes in servicing rights, at fair value
|
—
|
|
|
69
|
|
||
Unfunded loan commitment reserve
|
—
|
|
|
452
|
|
||
Loss on disposal of fixed assets
|
—
|
|
|
1,537
|
|
||
Amortization of intangibles
|
242
|
|
|
189
|
|
||
Goodwill impairment
|
10,960
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Other assets
|
(5,051
|
)
|
|
(9,595
|
)
|
||
Accounts payable
|
1,267
|
|
|
1,499
|
|
||
Interest payable
|
(287
|
)
|
|
302
|
|
||
Accrued expenses and other liabilities
|
(10,693
|
)
|
|
1,613
|
|
||
Net cash provided by operating activities
|
100,989
|
|
|
136,559
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Purchases of property, equipment and software
|
(2,886
|
)
|
|
(1,360
|
)
|
||
Capitalized internal-use software
|
(4,673
|
)
|
|
(4,220
|
)
|
||
Originations of loans and finance receivables, excluding rollovers into new originations
|
(567,238
|
)
|
|
(1,029,348
|
)
|
||
Payments of net deferred origination costs
|
(19,230
|
)
|
|
(33,505
|
)
|
||
Principal repayments of loans and finance receivables
|
813,128
|
|
|
946,025
|
|
||
Acquisition of shares in business combination
|
—
|
|
|
(3,004
|
)
|
||
Net cash provided by (used in) investing activities
|
219,101
|
|
|
(125,412
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Tax withholding related to vesting of restricted stock units
|
(427
|
)
|
|
(1,135
|
)
|
||
Repurchases of common stock
|
(32,862
|
)
|
|
—
|
|
||
Proceeds from exercise of stock options
|
17
|
|
|
71
|
|
||
Issuance of common stock under employee stock purchase plan
|
—
|
|
|
1,281
|
|
||
Proceeds from the issuance of debt
|
274,429
|
|
|
355,840
|
|
||
Payments of debt issuance costs
|
(661
|
)
|
|
(2,812
|
)
|
||
Repayments of debt principal
|
(508,363
|
)
|
|
(359,392
|
)
|
||
Net cash (used in) provided by financing activities
|
(267,867
|
)
|
|
(6,147
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
498
|
|
|
(558
|
)
|
||
|
|
|
|
||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
52,721
|
|
|
4,442
|
|
||
Cash and cash equivalents at beginning of period
|
96,868
|
|
|
97,638
|
|
||
Cash and cash equivalents at end of period
|
$
|
149,589
|
|
|
$
|
102,080
|
|
|
Six Months Ended, June 30,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
|
||||
Reconciliation to amounts on consolidated balance sheets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
71,659
|
|
|
$
|
58,744
|
|
Restricted cash
|
77,930
|
|
|
43,336
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
149,589
|
|
|
$
|
102,080
|
|
|
|
|
|
||||
Supplemental disclosure of other cash flow information
|
|
|
|
||||
Cash paid for interest
|
$
|
19,077
|
|
|
$
|
20,038
|
|
Cash paid for income taxes
|
$
|
67
|
|
|
$
|
8,496
|
|
Supplemental disclosures of non-cash investing and financing activities
|
|
|
|
||||
Stock-based compensation included in capitalized internal-use software
|
$
|
70
|
|
|
$
|
109
|
|
Unpaid principal balance of term loans rolled into new originations
|
$
|
88,667
|
|
|
$
|
198,319
|
|
|
Three Months Ended June 30,
|
Six Months Ended, June 30,
|
|||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net Income (loss)
|
$
|
(4,123
|
)
|
|
$
|
2,168
|
|
|
$
|
(64,161
|
)
|
|
$
|
7,496
|
|
Less: Net income (loss) attributable to noncontrolling interest
|
(6,293
|
)
|
|
(2,127
|
)
|
|
(7,356
|
)
|
|
(2,465
|
)
|
||||
Net income (loss) attributable to On Deck Capital, Inc. common stockholders
|
$
|
2,170
|
|
|
$
|
4,295
|
|
|
$
|
(56,805
|
)
|
|
$
|
9,961
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding, basic
|
58,741,590
|
|
|
76,137,751
|
|
|
60,625,795
|
|
|
75,840,604
|
|
||||
Net income (loss) per common share, basic
|
$
|
0.04
|
|
|
$
|
0.06
|
|
|
$
|
(0.94
|
)
|
|
$
|
0.13
|
|
Effect of dilutive securities
|
1,205,001
|
|
|
2,763,850
|
|
|
—
|
|
|
3,173,153
|
|
||||
Weighted-average common shares outstanding, diluted
|
59,946,591
|
|
|
78,901,601
|
|
|
60,625,795
|
|
|
79,013,757
|
|
||||
Net income (loss) per common share, diluted
|
$
|
0.04
|
|
|
$
|
0.05
|
|
|
$
|
(0.94
|
)
|
|
$
|
0.13
|
|
Anti-dilutive securities excluded
|
8,806,925
|
|
|
6,747,782
|
|
|
8,428,661
|
|
|
5,591,794
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended, June 30,
|
||||||||
Dilutive Common Share Equivalents
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
Weighted-average common shares outstanding
|
58,741,590
|
|
|
76,137,751
|
|
|
60,625,795
|
|
|
75,840,604
|
|
RSUs and PRSUs
|
239,187
|
|
|
489,080
|
|
|
—
|
|
|
755,731
|
|
Stock options
|
965,814
|
|
|
2,274,770
|
|
|
—
|
|
|
2,413,951
|
|
Employee stock purchase plan
|
—
|
|
|
—
|
|
|
—
|
|
|
3,471
|
|
Total dilutive common share equivalents
|
59,946,591
|
|
|
78,901,601
|
|
|
60,625,795
|
|
|
79,013,757
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended, June 30,
|
||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
Anti-Dilutive Common Share Equivalents
|
|
|
|
|
|
|
|
||||
RSUs and PRSUs
|
4,806,354
|
|
|
2,361,583
|
|
|
4,428,090
|
|
|
1,633,192
|
|
Stock options
|
4,000,571
|
|
|
4,176,551
|
|
|
4,000,571
|
|
|
3,958,602
|
|
Employee stock purchase plan
|
—
|
|
|
209,648
|
|
|
—
|
|
|
—
|
|
Total anti-dilutive common share equivalents
|
8,806,925
|
|
|
6,747,782
|
|
|
8,428,661
|
|
|
5,591,794
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended, June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Interest and finance income
|
$
|
90,167
|
|
|
$
|
122,799
|
|
|
$
|
212,449
|
|
|
$
|
246,234
|
|
Amortization of net deferred origination costs
|
(12,035
|
)
|
|
(17,451
|
)
|
|
(27,618
|
)
|
|
(35,344
|
)
|
||||
Interest and finance income, net
|
78,132
|
|
|
105,348
|
|
|
184,831
|
|
|
210,890
|
|
||||
Interest on deposits and investments
|
176
|
|
|
293
|
|
|
412
|
|
|
550
|
|
||||
Total interest and finance income
|
$
|
78,308
|
|
|
$
|
105,641
|
|
|
$
|
185,243
|
|
|
$
|
211,440
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Term loans
|
$
|
663,600
|
|
|
$
|
946,322
|
|
Lines of credit
|
204,487
|
|
|
277,843
|
|
||
Other loans and finance receivables (1)
|
15,912
|
|
|
14,244
|
|
||
Total Unpaid Principal Balance
|
883,999
|
|
|
1,238,409
|
|
||
Net deferred origination costs
|
17,127
|
|
|
26,903
|
|
||
Total loans and finance receivables
|
$
|
901,126
|
|
|
$
|
1,265,312
|
|
(1)
|
Includes loans secured by equipment and our variable pay product in Canada.
|
|
Three Months Ended June 30,
|
||||||||||||||
|
2020
|
|
2019
|
||||||||||||
|
Term Loans and Finance Receivables
|
|
Lines of Credit
|
|
Total
|
|
Total
|
||||||||
Balance at beginning of period
|
$
|
156,803
|
|
|
$
|
48,900
|
|
|
$
|
205,703
|
|
|
$
|
147,406
|
|
Recoveries of previously charged off amounts
|
5,142
|
|
|
741
|
|
|
5,883
|
|
|
4,523
|
|
||||
Loans and finance receivables charged off
|
(52,667
|
)
|
|
(9,735
|
)
|
|
(62,402
|
)
|
|
(49,141
|
)
|
||||
Provision for credit losses
|
30,826
|
|
|
(7,106
|
)
|
|
23,720
|
|
|
42,951
|
|
||||
Foreign Currency Translation Adjustment
|
703
|
|
|
—
|
|
|
703
|
|
|
—
|
|
||||
Allowance for credit losses at end of period
|
$
|
140,807
|
|
|
$
|
32,800
|
|
|
$
|
173,607
|
|
|
$
|
145,739
|
|
|
Six Months Ended June 30,
|
||||||||||||||
|
2020
|
|
2019
|
||||||||||||
|
Term Loans and Finance Receivables
|
|
Lines of Credit
|
|
Total
|
|
Total
|
||||||||
Balance at beginning of period
|
116,752
|
|
|
34,381
|
|
|
151,133
|
|
|
$
|
140,040
|
|
|||
Recoveries of previously charged off amounts
|
10,184
|
|
|
1,296
|
|
|
11,480
|
|
|
$
|
8,437
|
|
|||
Loans and finance receivables charged off
|
(98,334
|
)
|
|
(19,296
|
)
|
|
(117,630
|
)
|
|
$
|
(88,980
|
)
|
|||
Provision for credit losses
|
109,104
|
|
|
22,523
|
|
|
131,627
|
|
|
86,242
|
|
||||
Transition to ASU 2016-13 Adjustment
|
2,800
|
|
|
(6,104
|
)
|
|
(3,304
|
)
|
|
—
|
|
||||
Foreign Currency Translation Adjustment
|
301
|
|
|
—
|
|
|
301
|
|
|
—
|
|
||||
Allowance for credit losses at end of period
|
$
|
140,807
|
|
|
$
|
32,800
|
|
|
$
|
173,607
|
|
|
$
|
145,739
|
|
|
June 30, 2020
|
||||||||||
|
Term Loans and Finance Receivables
|
|
Lines of Credit
|
|
Total
|
||||||
Current loans and finance receivables
|
$
|
360,587
|
|
|
$
|
141,429
|
|
|
$
|
502,016
|
|
Delinquent: paying (accrual status)
|
203,772
|
|
|
37,745
|
|
|
241,517
|
|
|||
Delinquent: non-paying (non-accrual status)
|
115,153
|
|
|
25,313
|
|
|
140,466
|
|
|||
Total
|
679,512
|
|
|
204,487
|
|
|
883,999
|
|
|
December 31, 2019
|
||||||||||
|
Term Loans and Finance Receivables
|
|
Lines of Credit
|
|
Total
|
||||||
Current loans and finance receivables
|
$
|
842,083
|
|
|
$
|
255,981
|
|
|
$
|
1,098,064
|
|
Delinquent: paying (accrual status)
|
33,512
|
|
|
5,002
|
|
|
38,514
|
|
|||
Delinquent: non-paying (non-accrual status)
|
84,971
|
|
|
16,860
|
|
|
101,831
|
|
|||
Total
|
$
|
960,566
|
|
|
$
|
277,843
|
|
|
$
|
1,238,409
|
|
|
June 30, 2020
|
||||||||||||||||||||||
|
Term Loans and Finance Receivables
|
|
Lines of Credit
|
|
Total
|
||||||||||||||||||
|
Origination Year
|
|
|
||||||||||||||||||||
By delinquency status:
|
2017 and prior
|
|
2018
|
|
2019
|
|
2020
|
|
|
|
|
||||||||||||
Current loans and finance receivables
|
$
|
—
|
|
|
$
|
717
|
|
|
$
|
151,093
|
|
|
$
|
208,777
|
|
|
$
|
141,429
|
|
|
$
|
502,016
|
|
1-14 calendar days past due
|
—
|
|
|
26
|
|
|
14,523
|
|
|
14,772
|
|
|
3,258
|
|
|
32,579
|
|
||||||
15-29 calendar days past due
|
—
|
|
|
118
|
|
|
22,607
|
|
|
18,010
|
|
|
5,309
|
|
|
46,044
|
|
||||||
30-59 calendar days past due
|
—
|
|
|
186
|
|
|
42,124
|
|
|
35,185
|
|
|
10,787
|
|
|
88,282
|
|
||||||
60-89 calendar days past due
|
—
|
|
|
168
|
|
|
46,597
|
|
|
32,836
|
|
|
13,933
|
|
|
93,534
|
|
||||||
90 + calendar days past due
|
424
|
|
|
3,543
|
|
|
69,346
|
|
|
18,460
|
|
|
29,771
|
|
|
121,544
|
|
||||||
Total unpaid principal balance
|
$
|
424
|
|
|
$
|
4,758
|
|
|
$
|
346,290
|
|
|
$
|
328,040
|
|
|
$
|
204,487
|
|
|
$
|
883,999
|
|
|
December 31, 2019
|
||||||||||
By delinquency status:
|
Term Loans and Finance Receivables
|
|
Lines of Credit
|
|
Total
|
||||||
Current loans and finance receivables
|
$
|
842,083
|
|
|
$
|
255,981
|
|
|
$
|
1,098,064
|
|
1-14 calendar days past due
|
$
|
23,426
|
|
|
$
|
4,949
|
|
|
28,375
|
|
|
15-29 calendar days past due
|
$
|
15,153
|
|
|
$
|
2,230
|
|
|
17,383
|
|
|
30-59 calendar days past due
|
$
|
20,647
|
|
|
$
|
4,419
|
|
|
25,067
|
|
|
60-89 calendar days past due
|
$
|
18,527
|
|
|
$
|
3,477
|
|
|
22,004
|
|
|
90 + calendar days past due
|
$
|
40,730
|
|
|
$
|
6,787
|
|
|
47,516
|
|
|
Total unpaid principal balance
|
$
|
960,566
|
|
|
$
|
277,843
|
|
|
$
|
1,238,409
|
|
|
June 30, 2020
|
||||||||||||||||||
|
Origination Year
|
||||||||||||||||||
Risk Grade
|
2020
|
|
2019
|
|
2018
|
|
2017 and prior
|
|
Total
|
||||||||||
W
|
$
|
115,034
|
|
|
$
|
116,965
|
|
|
$
|
1,284
|
|
|
$
|
118
|
|
|
$
|
233,401
|
|
X
|
65,508
|
|
|
70,178
|
|
|
1,198
|
|
|
7
|
|
|
136,891
|
|
|||||
Y
|
47,918
|
|
|
60,585
|
|
|
1,094
|
|
|
20
|
|
|
109,617
|
|
|||||
Z
|
62,230
|
|
|
62,731
|
|
|
641
|
|
|
265
|
|
|
124,867
|
|
|||||
|
$
|
290,690
|
|
|
$
|
310,459
|
|
|
$
|
4,217
|
|
|
$
|
410
|
|
|
$
|
604,776
|
|
|
|
|
|
|
Outstanding
|
||||||||
|
Type
|
|
Maturity Date
|
|
Weighted Average Interest
Rate at June 30, 2020 |
|
June 30, 2020
|
|
December 31, 2019
|
||||
Debt:
|
|
|
|
|
|
|
|
||||||
OnDeck Asset Securitization Trust II - Series 2018-1
|
Securitization
|
|
April 2022
|
(1)
|
3.9%
|
|
$
|
159,195
|
|
|
$
|
225,000
|
|
OnDeck Asset Securitization Trust II - Series 2019-1
|
Securitization
|
|
November 2024
|
(2)
|
3.1%
|
|
101,740
|
|
|
125,000
|
|
||
OnDeck Account Receivables Trust 2013-1
|
Revolving
|
|
March 2022
|
(3)
|
1.9%
|
|
80,295
|
|
|
129,512
|
|
||
Receivable Assets of OnDeck, LLC
|
Revolving
|
|
September 2021
|
(4)
|
1.8%
|
|
61,838
|
|
|
94,099
|
|
||
OnDeck Asset Funding II LLC
|
Revolving
|
|
August 2022
|
(5)
|
3.2%
|
|
89,798
|
|
|
123,840
|
|
||
Prime OnDeck Receivable Trust II
|
Revolving
|
|
March 2022
|
(6)
|
1.8%
|
|
—
|
|
|
—
|
|
||
Loan Assets of OnDeck, LLC
|
Revolving
|
|
October 2022
|
(7)
|
1.9%
|
|
65,159
|
|
|
120,665
|
|
||
Corporate line of credit
|
Revolving
|
|
January 2021
|
(8)
|
3.2%
|
|
86,875
|
|
|
40,000
|
|
||
International and other agreements
|
Various
|
|
Various
|
(9)
|
3.6%
|
|
41,216
|
|
|
64,585
|
|
||
|
|
|
|
|
3.0%
|
|
686,116
|
|
|
922,701
|
|
||
Deferred debt issuance cost
|
|
|
|
|
|
|
(5,745
|
)
|
|
(7,706
|
)
|
||
Total Debt
|
|
|
|
|
|
|
$
|
680,371
|
|
|
$
|
914,995
|
|
(1)
|
The period during which new loans may be purchased under this securitization transaction expired in March 2020.
|
(2)
|
The period during which new loans may be purchased under this securitization transaction expired in May 2020.
|
(3)
|
The period during which new borrowings may be made under this facility expires in March 2021. Amendments were made to this facility on May 20, 2020 and August 3, 2020, which are described below and in Note 13 in further detail.
|
(4)
|
The period during which new borrowings of Class A revolving loans may be made under this debt facility expires in December 2020. An amendment was made to this facility on May 14, 2020, which is described below in further detail.
|
(5)
|
The period during which new borrowings may be made under this facility expires in August 2021. An amendment was made to this facility on May 19, 2020, which is described below in further detail.
|
(6)
|
The period during which new borrowings may be made under this facility expires in March 2021.
|
(7)
|
The period during which new borrowings may be made under this debt facility expires in April 2022. Amendments were made to the facility on April 27, 2020 and July 15, 2020, which are described below and in Note 13 in further detail.
|
(8)
|
The period during which new borrowings may be made under this facility expired May 2020.
|
(9)
|
Other Agreements include, among others, our local currency debt facilities in Australia and Canada. The periods during which new borrowings may be made under the various agreements expire between June 2021 and March 2023. Maturity dates range from December 2021 through March 2023.
|
|
June 30, 2020
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Interest rate cap
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Total assets
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
December 31, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Interest rate cap
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
June 30, 2020
|
||||||||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans and finance receivables, net
|
$
|
727,519
|
|
|
$
|
762,322
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
762,322
|
|
Total assets
|
$
|
727,519
|
|
|
$
|
762,322
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
762,322
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-rate debt
|
$
|
260,935
|
|
|
$
|
246,126
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
246,126
|
|
Total fixed-rate debt
|
$
|
260,935
|
|
|
$
|
246,126
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
246,126
|
|
|
December 31, 2019
|
||||||||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans and finance receivables, net
|
$
|
1,114,179
|
|
|
$
|
1,241,893
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,241,893
|
|
Total assets
|
$
|
1,114,179
|
|
|
$
|
1,241,893
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,241,893
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-rate debt
|
$
|
350,000
|
|
|
$
|
337,510
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
337,510
|
|
Total fixed-rate debt
|
$
|
350,000
|
|
|
$
|
337,510
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
337,510
|
|
|
Number of
Options |
|
Weighted-
Average Exercise Price |
|
Weighted-
Average Remaining Contractual Term (in years) |
|
Aggregate
Intrinsic Value (in thousands) |
||||||
Outstanding at January 1, 2020
|
6,822,219
|
|
|
$
|
5.68
|
|
|
—
|
|
|
—
|
|
|
Exercised
|
(43,771
|
)
|
|
$
|
0.40
|
|
|
—
|
|
|
—
|
|
|
Forfeited
|
(84,876
|
)
|
|
$
|
6.39
|
|
|
—
|
|
|
—
|
|
|
Expired
|
(530,718
|
)
|
|
$
|
6.26
|
|
|
—
|
|
|
—
|
|
|
Outstanding at June 30, 2020
|
6,162,854
|
|
|
$
|
5.66
|
|
|
4.5
|
|
|
$
|
357
|
|
Exercisable at June 30, 2020
|
5,758,457
|
|
|
$
|
5.66
|
|
|
4.3
|
|
|
$
|
357
|
|
Vested or expected to vest as of June 30, 2020
|
6,143,505
|
|
|
$
|
5.66
|
|
|
4.5
|
|
|
$
|
357
|
|
|
Number of RSUs and PRSUs
|
|
Weighted-Average Grant Date Fair Value Per Share
|
|||
Unvested at January 1, 2020
|
4,185,560
|
|
|
$
|
5.32
|
|
RSUs and PRSUs Granted
|
3,548,066
|
|
|
$
|
2.49
|
|
RSUs and PRSUs Vested
|
(832,425
|
)
|
|
$
|
5.68
|
|
RSUs and PRSUs Forfeited/Expired
|
(450,837
|
)
|
|
$
|
5.46
|
|
Unvested at June 30, 2020
|
6,450,364
|
|
|
$
|
3.71
|
|
Expected to vest after June 30, 2020
|
5,193,087
|
|
|
$
|
3.69
|
|
|
For the three months ending June 30,
|
|
Six Months Ended, June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Sales and marketing
|
$
|
165
|
|
|
$
|
474
|
|
|
$
|
142
|
|
|
$
|
1,033
|
|
Technology and analytics
|
744
|
|
|
889
|
|
|
1,204
|
|
|
1,717
|
|
||||
Processing and servicing
|
47
|
|
|
49
|
|
|
146
|
|
|
139
|
|
||||
General and administrative
|
1,291
|
|
|
1,836
|
|
|
2,171
|
|
|
3,442
|
|
||||
Total
|
$
|
2,247
|
|
|
$
|
3,248
|
|
|
$
|
3,663
|
|
|
$
|
6,331
|
|
|
Fair Value at Combination
|
||
Loans and finance receivables
|
$
|
36,763
|
|
Intangibles and other assets (1)
|
2,810
|
|
|
Debt and other liabilities
|
(34,437
|
)
|
|
Goodwill (1)
|
11,585
|
|
|
Net assets acquired
|
$
|
16,721
|
|
Balance at December 31, 2019
|
$
|
11,532
|
|
Foreign currency translation adjustment
|
(572
|
)
|
|
Impairment charge
|
(10,960
|
)
|
|
Balance at June 30, 2020
|
$
|
—
|
|
Derivative Type
|
|
Classification
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Assets:
|
|
|
|
|
|
|
||||
Interest rate cap agreement
|
|
Other Assets
|
|
$
|
1
|
|
|
$
|
—
|
|
|
June 30, 2020
|
|
June 30, 2019
|
||||
Amount Recognized in OCI on Derivative:
|
|
|
|
||||
Interest rate cap agreement
|
$
|
504
|
|
|
$
|
866
|
|
|
|
Location and Amount of Gain or (Loss) Recognized in Income on Cash Flow Hedging Relationships
|
||||||||||||||
|
|
Three Months Ended June 30,
|
|
Six Months Ended, June 30,
|
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Interest expense
|
|
$
|
(236
|
)
|
|
$
|
(204
|
)
|
|
$
|
(503
|
)
|
|
$
|
(338
|
)
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
|
|
As of or for the Three Months Ended June 30,
|
|
As of or for the Six Months Ended, June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
(dollars in thousands)
|
|
(dollars in thousands)
|
||||||||||||
Gross Revenue
|
$
|
80,525
|
|
|
$
|
110,246
|
|
|
$
|
191,080
|
|
|
$
|
220,221
|
|
Originations
|
65,573
|
|
|
591,848
|
|
|
657,437
|
|
|
1,227,354
|
|
||||
Portfolio Yield (a)
|
28.4
|
%
|
|
35.0
|
%
|
|
31.4
|
%
|
|
35.3
|
%
|
||||
Cost of Funds Rate
|
4.6
|
%
|
|
5.5
|
%
|
|
4.8
|
%
|
|
5.4
|
%
|
||||
Net Interest Margin (a)
|
21.5
|
%
|
|
29.0
|
%
|
|
25.0
|
%
|
|
29.3
|
%
|
||||
Reserve Ratio
|
19.6
|
%
|
|
12.3
|
%
|
|
19.6
|
%
|
|
12.3
|
%
|
||||
15+ Day Delinquency Ratio
|
39.5
|
%
|
|
8.5
|
%
|
|
39.5
|
%
|
|
8.5
|
%
|
||||
Net Charge-off Rate
|
20.9
|
%
|
|
15.1
|
%
|
|
18.4
|
%
|
|
13.6
|
%
|
||||
Efficiency Ratio (a)
|
49.3
|
%
|
|
47.1
|
%
|
|
47.5
|
%
|
|
45.5
|
%
|
||||
Adjusted Efficiency Ratio*
|
43.0
|
%
|
|
44.2
|
%
|
|
44.1
|
%
|
|
42.6
|
%
|
||||
Return on Assets (a)
|
0.7
|
%
|
|
1.4
|
%
|
|
(9.2
|
)%
|
|
1.6
|
%
|
||||
Adjusted Return On Assets*
|
4.6
|
%
|
|
2.2
|
%
|
|
(7.1
|
)%
|
|
2.5
|
%
|
||||
Return on Equity (a)
|
4.1
|
%
|
|
5.5
|
%
|
|
(46.4
|
)%
|
|
6.5
|
%
|
||||
Adjusted Return On Equity*
|
25.5
|
%
|
|
8.8
|
%
|
|
(35.9
|
)%
|
|
9.8
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended, June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
101,836
|
|
|
$
|
51,530
|
|
|
$
|
77,597
|
|
|
$
|
48,356
|
|
Restricted cash
|
65,305
|
|
|
45,677
|
|
|
54,993
|
|
|
47,258
|
|
||||
Loans and finance receivables
|
1,104,690
|
|
|
1,206,503
|
|
|
1,180,482
|
|
|
1,205,250
|
|
||||
Less: Allowance for credit losses
|
(190,512
|
)
|
|
(146,612
|
)
|
|
(173,672
|
)
|
|
(146,002
|
)
|
||||
Loans and finance receivables, net
|
914,178
|
|
|
1,059,891
|
|
|
1,006,810
|
|
|
1,059,248
|
|
||||
Property, equipment and software, net
|
24,082
|
|
|
17,413
|
|
|
23,036
|
|
|
17,064
|
|
||||
Other assets
|
75,287
|
|
|
58,022
|
|
|
74,038
|
|
|
48,404
|
|
||||
Total assets
|
$
|
1,180,688
|
|
|
$
|
1,232,533
|
|
|
$
|
1,236,474
|
|
|
$
|
1,220,330
|
|
Liabilities, mezzanine equity and stockholders' equity
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
6,683
|
|
|
$
|
5,120
|
|
|
$
|
6,827
|
|
|
$
|
5,121
|
|
Interest payable
|
2,667
|
|
|
2,812
|
|
|
2,579
|
|
|
2,718
|
|
||||
Debt
|
891,816
|
|
|
834,582
|
|
|
910,179
|
|
|
835,926
|
|
||||
Accrued expenses and other liabilities
|
53,300
|
|
|
63,690
|
|
|
57,932
|
|
|
59,792
|
|
||||
Total liabilities
|
954,466
|
|
|
906,204
|
|
|
977,517
|
|
|
903,557
|
|
||||
Mezzanine equity:
|
|
|
|
|
|
|
|
||||||||
Redeemable noncontrolling interest
|
11,105
|
|
|
11,634
|
|
|
12,448
|
|
|
6,647
|
|
||||
Stockholders’ equity:
|
|
|
|
|
|
|
|
||||||||
Total On Deck Capital, Inc. stockholders' equity
|
213,852
|
|
|
310,858
|
|
|
244,908
|
|
|
305,990
|
|
||||
Noncontrolling interest
|
1,265
|
|
|
3,837
|
|
|
1,602
|
|
|
4,136
|
|
||||
Total stockholders' equity
|
215,117
|
|
|
314,695
|
|
|
246,510
|
|
|
310,126
|
|
||||
Total liabilities, mezzanine equity and stockholders' equity
|
$
|
1,180,688
|
|
|
$
|
1,232,533
|
|
|
$
|
1,236,475
|
|
|
$
|
1,220,330
|
|
|
|
|
|
|
|
|
|
||||||||
Memo:
|
|
|
|
|
|
|
|
||||||||
Unpaid Principal Balance
|
$
|
1,081,946
|
|
|
$
|
1,183,056
|
|
|
$
|
1,155,733
|
|
|
$
|
1,180,831
|
|
Interest Earning Assets
|
$
|
1,271,831
|
|
|
$
|
1,303,709
|
|
|
$
|
1,313,072
|
|
|
$
|
1,300,864
|
|
Loans and Finance Receivables
|
$
|
1,104,690
|
|
|
$
|
1,206,503
|
|
|
$
|
1,180,482
|
|
|
$
|
1,205,250
|
|
•
|
Adjusted Net Income (Loss) does not reflect the potentially dilutive impact of stock-based compensation; and
|
•
|
Adjusted Net Income (Loss) excludes charges we are required to incur in connection with real estate dispositions, severance obligations, debt extinguishment costs and sales tax refunds.
|
|
Three Months Ended June 30,
|
|
Six Months Ended, June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
(per share)
|
|
(per share)
|
||||||||||||
Reconciliation of Net Income (Loss) per Basic Share to Adjusted Net Income (Loss) per Basic Share
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per basic share attributable to On Deck Capital, Inc. common stockholders
|
$
|
0.04
|
|
|
$
|
0.06
|
|
|
$
|
(0.94
|
)
|
|
$
|
0.13
|
|
Add / (Subtract):
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense
|
0.04
|
|
|
0.03
|
|
|
0.06
|
|
|
0.07
|
|
||||
Restructuring Costs
|
0.04
|
|
|
—
|
|
|
0.05
|
|
|
—
|
|
||||
Goodwill Impairment
|
$
|
0.11
|
|
|
$
|
—
|
|
|
$
|
0.11
|
|
|
$
|
—
|
|
Adjusted Net Income (Loss) per Basic Share
|
$
|
0.23
|
|
|
$
|
0.09
|
|
|
$
|
(0.72
|
)
|
|
$
|
0.20
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended, June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
(per share)
|
|
(per share)
|
||||||||||||
Reconciliation of Net Income (Loss) per Diluted Share to Adjusted Net Income (Loss) per Diluted Share
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per diluted share attributable to On Deck Capital, Inc. common stockholders
|
$
|
0.04
|
|
|
$
|
0.05
|
|
|
$
|
(0.94
|
)
|
|
$
|
0.13
|
|
Add / (Subtract):
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense
|
0.04
|
|
|
0.04
|
|
|
0.06
|
|
|
0.06
|
|
||||
Restructuring Costs
|
0.04
|
|
|
—
|
|
|
0.05
|
|
|
—
|
|
||||
Goodwill Impairment
|
$
|
0.11
|
|
|
$
|
—
|
|
|
$
|
0.11
|
|
|
$
|
—
|
|
Adjusted Net Income (Loss) per Diluted Share
|
$
|
0.23
|
|
|
$
|
0.09
|
|
|
$
|
(0.72
|
)
|
|
$
|
0.19
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended, June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Reconciliation of Efficiency Ratio to Adjusted Efficiency Ratio
|
|
|
|
|
|
|
|
||||||||
Total operating expense
|
$
|
39,677
|
|
|
$
|
51,950
|
|
|
$
|
90,794
|
|
|
$
|
100,234
|
|
Gross revenue
|
$
|
80,525
|
|
|
$
|
110,246
|
|
|
$
|
191,080
|
|
|
$
|
220,221
|
|
Efficiency Ratio
|
49.3
|
%
|
|
47.1
|
%
|
|
47.5
|
%
|
|
45.5
|
%
|
||||
Adjustments (pre-tax):
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense
|
$
|
2,247
|
|
|
$
|
3,249
|
|
|
$
|
3,663
|
|
|
$
|
6,331
|
|
Restructuring Costs
|
2,802
|
|
|
—
|
|
|
2,802
|
|
|
—
|
|
||||
Operating expenses less adjustments
|
$
|
34,628
|
|
|
$
|
48,701
|
|
|
$
|
84,329
|
|
|
$
|
93,903
|
|
Gross revenue
|
$
|
80,525
|
|
|
$
|
110,246
|
|
|
$
|
191,080
|
|
|
$
|
220,221
|
|
Adjusted Efficiency Ratio
|
43.0
|
%
|
|
44.2
|
%
|
|
44.1
|
%
|
|
42.6
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended, June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Reconciliation of Return on Assets to Adjusted Return on Assets
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to On Deck Capital, Inc. common stockholders
|
$
|
2,170
|
|
|
$
|
4,295
|
|
|
$
|
(56,805
|
)
|
|
$
|
9,961
|
|
Average total assets
|
$
|
1,180,688
|
|
|
$
|
1,232,533
|
|
|
$
|
1,236,474
|
|
|
$
|
1,220,330
|
|
Return on Assets
|
0.7
|
%
|
|
1.4
|
%
|
|
(9.2
|
)%
|
|
1.6
|
%
|
||||
Adjustments (after tax):
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense
|
$
|
2,247
|
|
|
$
|
2,581
|
|
|
$
|
3,663
|
|
|
$
|
5,017
|
|
Restructuring Costs
|
2,802
|
|
|
—
|
|
|
2,802
|
|
|
—
|
|
||||
Goodwill Impairment(a)
|
6,412
|
|
|
—
|
|
|
6,412
|
|
|
—
|
|
||||
Adjusted Net Income (Loss)
|
$
|
13,631
|
|
|
$
|
6,876
|
|
|
$
|
(43,928
|
)
|
|
$
|
14,978
|
|
Average total assets
|
$
|
1,180,688
|
|
|
$
|
1,232,533
|
|
|
$
|
1,236,474
|
|
|
$
|
1,220,330
|
|
Adjusted Return on Assets
|
4.6
|
%
|
|
2.2
|
%
|
|
(7.1
|
)%
|
|
2.5
|
%
|
||||
(a) Net of $4.5 million attributable to noncontrolling interest for the three and six months ended June 30, 2020.
|
|
Three Months Ended June 30,
|
|
Six Months Ended, June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Reconciliation of Return on Equity to Adjusted Return on Equity
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to On Deck Capital, Inc. common stockholders
|
$
|
2,170
|
|
|
$
|
4,295
|
|
|
$
|
(56,805
|
)
|
|
$
|
9,961
|
|
Average OnDeck stockholders' equity
|
$
|
213,852
|
|
|
$
|
310,858
|
|
|
$
|
244,908
|
|
|
$
|
305,990
|
|
Return on Equity
|
4.1
|
%
|
|
5.5
|
%
|
|
(46.4
|
)%
|
|
6.5
|
%
|
||||
Adjustments (after tax):
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense
|
$
|
2,247
|
|
|
$
|
2,581
|
|
|
$
|
3,663
|
|
|
$
|
5,017
|
|
Restructuring Costs
|
2,802
|
|
|
—
|
|
|
2,802
|
|
|
—
|
|
||||
Goodwill Impairment(a)
|
6,412
|
|
|
—
|
|
|
6,412
|
|
|
—
|
|
||||
Adjusted Net Income (Loss)
|
$
|
13,631
|
|
|
$
|
6,876
|
|
|
$
|
(43,928
|
)
|
|
$
|
14,978
|
|
Average total On Deck Capital, Inc. stockholders' equity
|
$
|
213,852
|
|
|
$
|
310,858
|
|
|
$
|
244,908
|
|
|
$
|
305,990
|
|
Adjusted Return on Equity
|
25.5
|
%
|
|
8.8
|
%
|
|
(35.9
|
)%
|
|
9.8
|
%
|
||||
(a) Net of $4.5 million attributable to noncontrolling interest for the three and six months ended June 30, 2020.
|
•
|
Focus on growing U.S. Term and Line of Credit originations;
|
•
|
Prudent portfolio management;
|
•
|
Automation and improving operating efficiencies; and
|
•
|
Enhancing liquidity by proactively seeking to amend our debt facilities, and protecting our financial resources.
|
|
Three Months Ended June 30,
|
|
Six Months Ended, June 30,
|
||||||||
Percentage of Originations (Dollars)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
Direct
|
50
|
%
|
|
43
|
%
|
|
39
|
%
|
|
43
|
%
|
Strategic Partner
|
31
|
%
|
|
31
|
%
|
|
34
|
%
|
|
30
|
%
|
Funding Advisor
|
19
|
%
|
|
26
|
%
|
|
27
|
%
|
|
27
|
%
|
•
|
the business must be approximately 50% paid down on its existing loan;
|
•
|
the business must be current on its outstanding OnDeck loan with no material delinquency history; and
|
•
|
the business must be fully re-underwritten and determined to be of adequate credit quality.
|
|
Three Months Ended June 30,
|
|
Six Months Ended, June 30,
|
||||||||
Percentage of Originations (Dollars)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
New
|
64
|
%
|
|
47
|
%
|
|
52
|
%
|
|
48
|
%
|
Repeat
|
36
|
%
|
|
53
|
%
|
|
48
|
%
|
|
52
|
%
|
Portfolio Yield
|
|||||||||||||||
For the Year
|
|
For the Quarter
|
|||||||||||||
2017
|
|
2018
|
|
2019
|
|
Q1 2019
|
|
Q2 2019
|
|
Q3 2019
|
|
Q4 2019
|
|
Q1 2020
|
Q2 2020
|
33.7%
|
|
36.2%
|
|
35.1%
|
|
35.6%
|
|
35.0%
|
|
35.1%
|
|
34.8%
|
|
33.3%
|
28.4%
|
•
|
Channel Mix - In general, loans originated from the strategic partner channel have lower Portfolio Yields than loans from the direct and funding advisor channel. This is primarily due to the strategic partner channel's higher commissions as compared to the direct channel, and lower pricing as compared to the funding advisor channel.
|
•
|
Term Mix - In general, term loans with longer durations have lower annualized interest rates. Despite lower yields, total revenues from customers with longer loan durations are typically higher than the revenue of customers with shorter-term, higher Portfolio Yield loans because total payback is typically higher compared to a shorter length term for the same principal loan amount. For the three months ended June 30, 2020, the average length of new term loan originations was 11.5 months which decreased from 13.8 months for the three months ended March 31, 2020 and 12.3 months for the three months ended June 30, 2019. The decrease in average term length reflects the shift of our strategy from booking longer-term loans with larger balances of higher credit quality to shorter term loans in the current COVID-19 credit environment.
|
•
|
Customer Type Mix - In general, loans originated from repeat customers historically have had lower Portfolio Yields than loans from new customers. This is primarily because repeat customers typically have a higher OnDeck Score and are therefore deemed to be lower risk. In addition, repeat customers are more likely to be approved for longer terms than new customers given their established payment history and lower risk profiles. Finally, origination fees can be reduced or waived for repeat customers, contributing to lower Portfolio Yields.
|
•
|
Loan Mix - In general, lines of credit have lower Portfolio Yields than term loans. For the three months ended June 30, 2020, the weighted average line of credit APR was 35.3%, compared to 49.6% for term loans. Draws by line of credit customers increased to 50.2% of total originations for the three months ended June 30, 2020 from 22.8% in three months ended June 30, 2019. due to the pullback of new originations during the second quarter of 2020.
|
|
For the Year
|
|
For the Quarter
|
|||||||
|
2016
|
2017
|
2018
|
|
Q1 2019
|
Q2 2019
|
Q3 2019
|
Q4 2019
|
Q1 2020
|
Q2 2020
|
Principal Outstanding as of June 30, 2020 by Period of Origination
|
—%
|
—%
|
0.2%
|
|
1.3%
|
6.5%
|
21.0%
|
42.6%
|
66.4%
|
83.0%
|
|
For the Year
|
|
For the Quarter
|
|||||||||||||||||||||||||
Originations
|
2016
|
2017
|
2018
|
|
Q1 2019
|
Q2 2019
|
Q3 2019
|
Q4 2019
|
Q1 2020
|
Q2 2020
|
||||||||||||||||||
All term loans
(in millions)
|
$
|
2,052
|
|
$
|
1,697
|
|
$
|
1,972
|
|
|
$
|
486
|
|
$
|
452
|
|
$
|
492
|
|
$
|
467
|
|
$
|
432
|
|
$
|
32
|
|
Weighted average term (months) at origination
|
13.2
|
|
12.1
|
|
11.8
|
|
|
11.7
|
|
12.2
|
|
13.5
|
|
13.2
|
|
13.3
|
|
11.1
|
|
|
Three Months Ended June 30,
|
|
Year-over-Year Change
|
|||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||
|
(dollars in thousands)
|
|
|
|||||
Interest and finance income
|
78,308
|
|
|
105,641
|
|
|
(25.9
|
)%
|
Interest expense
|
10,291
|
|
|
11,381
|
|
|
(9.6
|
)%
|
Net interest income
|
68,017
|
|
|
94,260
|
|
|
(27.8
|
)%
|
Provision for credit losses
|
23,720
|
|
|
42,951
|
|
|
(44.8
|
)%
|
Net interest income (loss), after credit provision
|
44,297
|
|
|
51,309
|
|
|
(13.7
|
)%
|
Other revenue
|
2,217
|
|
|
4,605
|
|
|
(51.9
|
)%
|
Operating expense:
|
|
|
|
|
|
|||
Sales and marketing
|
5,473
|
|
|
13,307
|
|
|
(58.9
|
)%
|
Technology and analytics
|
15,088
|
|
|
16,681
|
|
|
(9.5
|
)%
|
Processing and servicing
|
5,452
|
|
|
5,609
|
|
|
(2.8
|
)%
|
General and administrative
|
13,664
|
|
|
16,353
|
|
|
(16.4
|
)%
|
Total operating expense
|
39,677
|
|
|
51,950
|
|
|
(23.6
|
)%
|
Goodwill Impairment
|
10,960
|
|
|
—
|
|
|
—
|
%
|
Income (loss) from operations, before provision for income taxes
|
(4,123
|
)
|
|
3,964
|
|
|
(204.0
|
)%
|
Provision for (Benefit from) income taxes
|
—
|
|
|
1,796
|
|
|
(100.0
|
)%
|
Net income (loss)
|
(4,123
|
)
|
|
2,168
|
|
|
(290.2
|
)%
|
|
Three Months Ended June 30,
|
|
Year-over-Year Change
|
|||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||
|
(dollars in thousands)
|
|
|
|||||||
Interest and finance income
|
$
|
78,308
|
|
|
$
|
105,641
|
|
|
(25.9
|
)%
|
Interest expense
|
10,291
|
|
|
11,381
|
|
|
(9.6
|
)%
|
||
Net interest income
|
$
|
68,017
|
|
|
$
|
94,260
|
|
|
(27.8
|
)%
|
|
Three Months Ended June 30,
|
|
Year-over-Year Change
|
|||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||
|
(dollars in thousands)
|
|
|
|||||||
Provision for credit losses
|
$
|
23,720
|
|
|
$
|
42,951
|
|
|
(44.8
|
)%
|
|
Three Months Ended June 30,
|
|
Year-over-Year Change
|
|||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||
|
(dollars in thousands)
|
|
|
|||||
Other revenue
|
2,217
|
|
|
4,605
|
|
|
(51.9
|
)%
|
|
Three Months Ended June 30,
|
|
Year-over-Year Change
|
|||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||
|
(dollars in thousands)
|
|
|
|||||||
Sales and marketing
|
$
|
5,473
|
|
|
$
|
13,307
|
|
|
(58.9
|
)%
|
|
Three Months Ended June 30,
|
|
Year-over-Year Change
|
|||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||
|
(dollars in thousands)
|
|
|
|||||||
Technology and analytics
|
$
|
15,088
|
|
|
$
|
16,681
|
|
|
(9.5
|
)%
|
|
Three Months Ended June 30,
|
|
Year-over-Year Change
|
|||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||
|
(dollars in thousands)
|
|
|
|||||||
Processing and servicing
|
$
|
5,452
|
|
|
$
|
5,609
|
|
|
(2.8
|
)%
|
|
Three Months Ended June 30,
|
|
Year-over-Year Change
|
|||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||
|
(dollars in thousands)
|
|
|
|||||||
General and administrative
|
$
|
13,664
|
|
|
$
|
16,353
|
|
|
(16.4
|
)%
|
|
Three Months Ended June 30,
|
|
Year-over-Year Change
|
|||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||
|
(dollars in thousands)
|
|
|
|||||||
Goodwill Impairment
|
$
|
10,960
|
|
|
$
|
—
|
|
|
—
|
%
|
|
Three Months Ended June 30,
|
|
Year-over-Year Change
|
|||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||
|
(dollars in thousands)
|
|
|
|||||||
Provision for Income Taxes
|
$
|
—
|
|
|
$
|
1,796
|
|
|
(100.0
|
)%
|
|
Six Months Ended, June 30,
|
|
Year-over-Year Change
|
|||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||
|
(dollars in thousands)
|
|
|
|||||||
Interest and finance income
|
185,243
|
|
|
211,440
|
|
|
(12.4
|
)%
|
||
Interest expense
|
21,860
|
|
|
22,713
|
|
|
(3.8
|
)%
|
||
Net interest income
|
163,383
|
|
|
188,727
|
|
|
(13.4
|
)%
|
||
Provision for credit losses
|
131,627
|
|
|
86,242
|
|
|
52.6
|
%
|
||
Net interest income (loss), after credit provision
|
31,756
|
|
|
102,485
|
|
|
(69.0
|
)%
|
||
Other revenue
|
5,837
|
|
|
8,781
|
|
|
(33.5
|
)%
|
||
Operating expense:
|
|
|
|
|
|
|||||
Sales and marketing
|
17,137
|
|
|
25,267
|
|
|
(32.2
|
)%
|
||
Technology and analytics
|
31,572
|
|
|
33,487
|
|
|
(5.7
|
)%
|
||
Processing and servicing
|
12,141
|
|
|
11,098
|
|
|
9.4
|
%
|
||
General and administrative
|
29,944
|
|
|
30,382
|
|
|
(1.4
|
)%
|
||
Total operating expense
|
90,794
|
|
|
100,234
|
|
|
(9.4
|
)%
|
||
Goodwill Impairment
|
10,960
|
|
|
—
|
|
|
—
|
%
|
||
Income (loss) from operations, before provision for income taxes
|
(64,161
|
)
|
|
11,032
|
|
|
(681.6
|
)%
|
||
Provision for (Benefit from) income taxes
|
—
|
|
|
3,536
|
|
|
(100.0
|
)%
|
||
Net income (loss)
|
$
|
(64,161
|
)
|
|
$
|
7,496
|
|
|
(955.9
|
)%
|
|
Six Months Ended, June 30,
|
|
Year-over-Year Change
|
|||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||
|
(dollars in thousands)
|
|
|
|||||||
Interest and finance income
|
$
|
185,243
|
|
|
$
|
211,440
|
|
|
(12.4
|
)%
|
Interest expense
|
21,860
|
|
|
22,713
|
|
|
(3.8
|
)%
|
||
Net interest income
|
$
|
163,383
|
|
|
$
|
188,727
|
|
|
(13.4
|
)%
|
|
Six Months Ended, June 30,
|
|
Year-over-Year Change
|
|||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||
|
(dollars in thousands)
|
|
|
|||||||
Provision for credit losses
|
$
|
131,627
|
|
|
$
|
86,242
|
|
|
52.6
|
%
|
|
Six Months Ended, June 30,
|
|
Year-over-Year Change
|
|||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||
|
(dollars in thousands)
|
|
|
|||||
Other revenue
|
5,837
|
|
|
8,781
|
|
|
(33.5
|
)%
|
|
Six Months Ended, June 30,
|
|
Year-over-Year Change
|
|||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||
|
(dollars in thousands)
|
|
|
|||||||
Sales and marketing
|
$
|
17,137
|
|
|
$
|
25,267
|
|
|
(32.2
|
)%
|
|
Six Months Ended, June 30,
|
|
Year-over-Year Change
|
|||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||
|
(dollars in thousands)
|
|
|
|||||||
Technology and analytics
|
$
|
31,572
|
|
|
$
|
33,487
|
|
|
(5.7
|
)%
|
|
Six Months Ended, June 30,
|
|
Year-over-Year Change
|
|||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||
|
(dollars in thousands)
|
|
|
|||||||
Processing and servicing
|
$
|
12,141
|
|
|
$
|
11,098
|
|
|
9.4
|
%
|
|
Six Months Ended, June 30,
|
|
Year-over-Year Change
|
|||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||
|
(dollars in thousands)
|
|
|
|||||||
General and administrative
|
$
|
29,944
|
|
|
$
|
30,382
|
|
|
(1.4
|
)%
|
|
Six Months Ended, June 30,
|
|
Year-over-Year Change
|
|||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||
|
(dollars in thousands)
|
|
|
|||||||
Goodwill Impairment
|
$
|
10,960
|
|
|
$
|
—
|
|
|
—
|
%
|
|
Six Months Ended, June 30,
|
|
Year-over-Year Change
|
|||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||
|
(dollars in thousands)
|
|
|
|||||||
Provision for Income Taxes
|
$
|
—
|
|
|
$
|
3,536
|
|
|
(100.0
|
)%
|
|
Maturity
Date |
|
Weighted
Average Interest Rate |
|
Borrowing
Commitments |
|
Principal
Outstanding |
||||
|
|
|
|
|
(in millions)
|
||||||
Debt:
|
|
|
|
|
|
||||||
OnDeck Asset Securitization Trust II LLC 2018-1
|
April 2022
|
(1)
|
3.9%
|
|
$
|
159.2
|
|
|
$
|
159.2
|
|
OnDeck Asset Securitization Trust II LLC 2019-1
|
November 2024
|
(2)
|
3.1%
|
|
101.7
|
|
|
101.7
|
|
||
OnDeck Account Receivables Trust 2013-1 LLC
|
March 2022
|
(3)
|
1.9%
|
|
125.0
|
|
|
80.3
|
|
||
Receivable Assets of OnDeck, LLC
|
September 2021
|
(4)
|
1.8%
|
|
100.0
|
|
|
61.8
|
|
||
OnDeck Asset Funding II LLC
|
August 2022
|
(5)
|
3.2%
|
|
175.0
|
|
|
89.8
|
|
||
Prime OnDeck Receivable Trust II, LLC
|
March 2022
|
(6)
|
1.8%
|
|
75.0
|
|
|
—
|
|
||
Loan Assets of OnDeck, LLC
|
October 2022
|
(7)
|
1.9%
|
|
150.0
|
|
|
65.2
|
|
||
Corporate line of credit
|
January 2021
|
(8)
|
3.2%
|
|
86.9
|
|
|
86.9
|
|
||
International and other agreements
|
Various
|
(9)
|
3.6%
|
|
132.0
|
|
|
41.2
|
|
||
Total Debt
|
|
|
3.0%
|
|
$
|
1,104.8
|
|
|
$
|
686.1
|
|
(1)
|
The period during which new loans may be purchased under this securitization transaction expires in March 2020.
|
(2)
|
The period during which new loans may be purchased under this securitization transaction expired in May 2020.
|
(3)
|
The period during which new borrowings may be made under this facility expires in March 2021. Amendments were made to this facility on May 20, 2020 and August [_], 2020, which are described in Note 5 and 13.
|
(4)
|
The period during which new borrowings of Class A revolving loans may be made under this debt facility expires in December 2020. An amendment was made to this facility on May 14, 2020, which is described in Note 5 and 13.
|
(5)
|
The period during which new borrowings may be made under this facility expires in August 2021. An amendment was made to this facility on May 19, 2020, which is described in Note 5 and 13.
|
(6)
|
The period during which new borrowings may be made under this facility expires in March 2021.
|
(7)
|
The period during which new borrowings may be made under this debt facility expires in April 2022. Amendments were made to the facility on April 27, 2020 and July 15, 2020, which are described in Note 5 and 13..
|
(8)
|
The period during which new borrowings may be made under this facility expired May 2020.
|
(9)
|
Other Agreements include, among others, our local currency debt facilities in Australia and Canada. The periods during which new borrowings may be made under the various agreements expire between June 2021 and March 2023. Maturity dates range from December 2021 through March 2023.
|
|
As of or for the Six Months Ended, June 30,
|
||||||
|
2020
|
|
2019
|
||||
|
(in thousands)
|
||||||
Cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
100,989
|
|
|
$
|
136,559
|
|
Investing activities
|
$
|
219,101
|
|
|
$
|
(125,412
|
)
|
Financing activities
|
$
|
(267,867
|
)
|
|
$
|
(6,147
|
)
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
•
|
we may experience negative reactions from financial markets and our stock price could decline;
|
•
|
management’s focus on completing the Merger and integration planning over a significant time period would have limited its ability to pursue other opportunities, including alternative transactions to the Merger, that could have been beneficial to us;
|
•
|
we will not realize the expected benefits from the Merger, which may reduce or slow the effectiveness of our efforts to adequately respond to the COVID-19 pandemic;
|
•
|
we may experience negative reactions from employees, customers, suppliers or other third parties;
|
•
|
we may be unable to obtain or continue current waivers or amendments with respect to our debt facilities, in which case, we may (i) lose our ability to refinance, amend or replace our existing third party debt, (ii) be subject to early amortization events, and/or (iii) default under our debt facilities;
|
•
|
if we are unable to access the capital markets, we may be unable to originate new loans to our customers;
|
•
|
the Merger Agreement, subject to certain exceptions, restricts us from taking specified actions until the effectiveness of the Merger or until the Merger Agreement terminates. These restrictions may prevent us from pursuing otherwise attractive business opportunities, incurring expenses to grow our business or making other changes to our business that may be necessary prior to the effective time of the Merger or termination of the Merger Agreement;
|
•
|
we may become subject to litigation related to any failure to consummate the Merger; and
|
•
|
under certain circumstances, the termination of the Merger Agreement will trigger a termination fee of $2.8 million payable by us to Enova.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
|
||||||
April 1, 2020 - April 30, 2020
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
23,153,836
|
|
May 1, 2020 - May 31, 2020
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
23,153,836
|
|
June 1, 2020 - June 30, 2020
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
23,153,836
|
|
Total
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
|
On Deck Capital, Inc.
|
|
|
|
/s/ Kenneth A. Brause
|
|
Kenneth A. Brause
Chief Financial Officer
(Principal Financial Officer)
|
Date: August 7, 2020
|
|
|
|
|
/s/ Mark Torossian
|
|
Mark Torossian
Senior Vice President, Finance (Principal Accounting Officer) |
Date: August 7, 2020
|
|
Exhibit
Number
|
|
Description
|
|
Filed /
Incorporated by
Reference from
Form *
|
|
Incorporated
by Reference
from Exhibit
Number
|
|
Date Filed
|
|
|
8-K
|
|
3.1
|
|
12/22/2014
|
||
|
|
10-Q
|
|
3.2
|
|
11/6/2018
|
||
|
|
S-1
|
|
4.1
|
|
11/10/2014
|
||
|
|
Filed herewith.
|
|
|
|
|
||
|
|
Filed herewith.
|
|
|
|
|
||
|
|
|
Filed herewith.
|
|
|
|
|
|
|
|
|
Filed herewith.
|
|
|
|
|
|
|
|
Filed herewith.
|
|
|
|
|
||
|
|
Filed herewith.
|
|
|
|
|
||
|
|
Filed herewith.
|
|
|
|
|
||
|
|
Filed herewith.
|
|
|
|
|
||
|
|
Filed herewith.
|
|
|
|
|
||
|
|
Filed herewith.
|
|
|
|
|
||
|
|
Filed herewith.
|
|
|
|
|
||
101.INS
|
|
XBRL Instance Document
|
|
Filed herewith.
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
Filed herewith.
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
Filed herewith.
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
Filed herewith.
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
Filed herewith.
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Filed herewith.
|
|
|
|
|
*
|
Exhibit incorporated by reference to the Registrant's Form S-1 Registration Statement, Registration No. 333-200043
|
|
|
|
|
1.
|
CASH RETAINERS
|
2.
|
EQUITY COMPENSATION
|
3.
|
TRAVEL EXPENSES
|
4.
|
ADDITIONAL PROVISIONS
|
5.
|
REVISIONS
|
ON DECK CAPITAL, INC.,
as Company
By: /s/ Kenneth A. Brause Name: Kenneth A. Brause
Title: Chief Financial Officer
|
|
TRUIST BANK,
as Administrative Agent
By: /s/ Amanda Parks Name: Amanda Parks
Title: SVP
|
|
TRUIST BANK,
as a Lender
By: /s/ Amanda Parks Name: Amanda Parks
Title: SVP
|
SILICON VALLEY BANK,
as a Lender
By: /s/ Alexander Addario
Name: Alexander Addario
Title: Director
|
|
FIFTH THIRD BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ Lise Hinton
Name: Lise Hinton
Title: Sr. Vice President
|
|
REGIONS BANK,
as a Lender
By: /s/ Hichem Kerma
Name: Hichem Kerma
Title: Managing Director
CONGRESSIONAL BANK,
as a Lender
By: /s/ James H. Peterson
Name: James H. Peterson
Title: EVP & CCO
BANCALLIANCE INC.,
as a Lender
BY: ALLIANCE PARTNERS LLC, ITS ATTORNEY-IN-FACT
By: /s/ John Gray
Name: John Gray
Title: Executive Vice President
|
|
ON DECK CAPITAL, INC.,
as Company
By: /s/ Kenneth A. Brause Name: Kenneth A. Brause
Title: Chief Financial Officer
|
|
|
TRUIST BANK,
as Administrative Agent
By: /s/ Amanda Parks Name: Amanda Parks
Title: Senior Vice President
|
|
|
TRUIST BANK,
as a Lender
By: /s/ Amanda Parks Name: Amanda Parks
Title: Senior Vice President
|
|
|
SILICON VALLEY BANK,
as a Lender
By: /s/ John Lapides
Name: John Lapides
Title: Vice President
|
|
|
FIFTH THIRD BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ Lise Hinton
Name: Lise Hinton
Title: Senior Vice President
|
|
|
REGIONS BANK,
as a Lender
By: /s/ William Soo
Name: William Soo
Title: Director
CONGRESSIONAL BANK,
as a Lender
By: /s/ James H. Peterson
Name: James H. Peterson
Title: Executive Vice President & Chief Credit Officer
BANCALLIANCE INC.,
as a Lender
BY: ALLIANCE PARTNERS LLC, ITS ATTORNEY-IN-FACT
By: /s/ John Gray
Name: John Gray
Title: Executive Vice President
|
|
ON DECK CAPITAL, INC.,
as Company
By: /s/ Kenneth A. Brause Name: Kenneth A. Brause
Title: Chief Financial Officer
|
|
|
TRUIST BANK,
as Administrative Agent
By: /s/ Amanda Parks Name: Amanda Parks
Title: Senior Vice President
|
|
|
TRUIST BANK,
as a Lender
By: /s/ Amanda Parks Name: Amanda Parks
Title: Senior Vice President
|
|
SILICON VALLEY BANK,
as a Lender
By: /s/ John Lapides
Name: John Lapides
Title: Vice President
|
|
|
FIFTH THIRD BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ James Beltz
Name: James Beltz
Title: Vice President
|
|
|
REGIONS BANK,
as a Lender
By: /s/ William Soo
Name: William Soo
Title: Director
CONGRESSIONAL BANK,
as a Lender
By: /s/ James H. Peterson
Name: James H. Peterson
Title: Executive Vice President & Chief Credit Officer
BANCALLIANCE INC.,
as a Lender
BY: ALLIANCE PARTNERS LLC, ITS ATTORNEY-IN-FACT
By: /s/ John Gray
Name: John Gray
Title: Executive Vice President
|
|
ON DECK CAPITAL, INC.,
as Company
By: /s/ Kenneth A. Brause Name: Kenneth A. Brause
Title: Chief Financial Officer
|
|
|
TRUIST BANK,
as Administrative Agent
By: /s/ Amanda Parks Name: Amanda Parks
Title: Senior Vice President
|
|
|
TRUIST BANK,
as a Lender
By: /s/ Amanda Parks Name: Amanda Parks
Title: Senior Vice President
|
|
SILICON VALLEY BANK,
as a Lender
By: /s/ John Lapides_______________
Name: John Lapides
Title: Vice President
|
|
|
FIFTH THIRD BANK, NATIONAL ASSOCIATION,
as a Lender
By: _/s/ James Beltz
Name: James Beltz
Title: Vice President
|
|
|
REGIONS BANK,
as a Lender
By: /s/ William Soo______________
Name: William Soo
Title: Director
CONGRESSIONAL BANK,
as a Lender
By: /s/ James H. Peterson
Name: James H. Peterson
Title: Executive Vice President & Chief Credit Officer
BANCALLIANCE INC.,
as a Lender
BY: ALLIANCE PARTNERS LLC, ITS ATTORNEY-IN-FACT
By: /s/ John Gray
Name: John Gray
Title: Executive Vice President
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of On Deck Capital, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Noah Breslow
|
|
Noah Breslow
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of On Deck Capital, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Kenneth A. Brause
|
|
Kenneth A. Brause
Chief Financial Officer
|
|
/s/ Noah Breslow
|
|
Noah Breslow
Chief Executive Officer
|
|
/s/ Kenneth A. Brause
|
|
Kenneth A. Brause
Chief Financial Officer
|