OnDeck Capital swung back to a loss in the first quarter, as a result of one-time charges for severance and office closings tied to the online small-business lender's ongoing cost-cutting program.
The New York company recorded a net loss of $2 million, or 3 cents per share, versus a loss of $11 million in the same period a year ago.
OnDeck earned $5.1 in fourth quarter, its first quarterly profit in two years. In a news release Tuesday, the company said that it would have earned $6.4 million in the quarter that ended March 31 if not for charges it took to cover the costs of leases terminations New York and Denver, severance for laid-off workers and other one-time expenses. The lease terminations are expected to save the company $2 million over the next eight years.
OnDeck generated loan growth on a quarterly basis and improved its credit quality, Chairman and CEO Noah Breslow said in a news release. Loan originations were up 3.1% year over year and 8% from the prior quarter, to nearly $591 million, while its charge-off rate fell to 10.9% from 14.9% in last year's first quarter.
“Our first quarter results reflect a strong start to 2018 as we continue to execute on our strategic priorities to position our business for future success,” Breslow said.
The latest results come a year after Breslow
OnDeck also said Tuesday that it had obtained two new sources of funding last month. OnDeck closed a $225 million asset-backed securitization with an average fixed interest rate of 3.75%. It also closed a four-year, $100 million asset-backed revolving credit facility.
The two financing transactions have “very favorable terms that will help our funding costs going forward,” Breslow said. Funding costs in the quarter increased to 6.8% from 5.9% a year earlier.
The transactions had been previously disclosed in a Securities and Exchange Commission filing.
OnDeck's shares were up more than 6% in midday trading, to $5.79.
