News: $MRLN – Marlin Business Services Corp. Reports Third Quarter 2015 Earnings and a Cash Dividend of $0.14 Per Share

Third Quarter Highlights:

  • Net income of $4.8 million, EPS of $0.38 per share
  • Net investments in leases and loans of $659 million, up 6.6% year-over-year
  • Return on average equity of 10.95% for the third quarter
  • Risk adjusted net interest and fee margin of 10.72% for the quarter
  • $100.5 million of lease and loan volume originated, up 22% year-over-year
  • $580 million of insured deposits, up 8.4% year-over-year
  • $2.00 per share special dividend declared during the third quarter
  • Capital position remains strong, equity to assets ratio of 19.14%

MOUNT LAUREL, N.J., Nov. 2, 2015 (GLOBE NEWSWIRE) — Marlin Business Services Corp. (NASDAQ:MRLN) today reported third quarter 2015 net income of $4.8 million, or $0.38 per diluted share, compared to $4.9 million and $0.38 per share for third quarter 2014.

“We are pleased with our results across the board in the third quarter, in particular surpassing $100 million in new originations,” said Edward Siciliano, Interim CEO and Chief Sales Officer. “We are well-positioned to continue to execute on our growth plan heading into the fourth quarter of 2015,” said Siciliano.

Lease and loan origination volume was $100.5 million for the third quarter 2015, compared to $92.6 million for the quarter ended June 30, 2015. Third quarter lease origination volume was $98.2 million, an increase of $6.3 million compared to second quarter 2015 and $15.8 million compared to the comparable prior year period. Loan origination volume was $2.3 million for the third quarter, compared to $0.7 million for the quarter ended June 30, 2015.

The yield on new lease and loan originations for the quarter was 11.06%, compared to 11.16% for the second quarter ended June 30, 2015. 

Net interest and fee margin of 11.96% was down 9 basis points from the second quarter of 2015 due, in part, to the competitive interest rate environment and a slight increase in cost of funds, partially offset by higher fee income. The Company’s third quarter 2015 cost of funds was 89 basis points, compared to 85 basis points for second quarter 2015 and 82 basis points for the comparable 2014 period. 

The allowance for credit losses as a percentage of total finance receivables was 1.31% at September 30, 2015, and represents 270% of total 60+ day delinquencies.

Finance receivables over 30 days delinquent were 0.75% of the Company’s portfolio as of September 30, 2015, 5 basis points higher than the second quarter of 2015 and 6 basis points lower than third quarter 2014.  Finance receivables over 60 days delinquent were 0.43% of the Company’s portfolio as of September 30, 2015, versus 0.40% at June 30, 2015 and 0.47% at September 2014.

Third quarter net charge-offs were 1.23% of total finance receivables down from 1.84% of total finance receivables for the second quarter ended June 30, 2015 and down from 1.36% a year ago.

The Company’s efficiency ratio was 54% for the quarter ended September 30, 2015 compared to 56% for the quarter ended June 30, 2015 and 48% for the quarter ended September 30, 2014.

In conjunction with this release, static pool loss statistics and a vintage delinquency analysis have been updated as supplemental information on the Investor Relations section of the Company’s website at www.marlinfinance.com.

The Company continued to execute on its stock repurchase plan and repurchased 196,196 shares of its common stock during the third quarter ended September 30, 2015. Through the third quarter, the Company has repurchased 406,719 shares in 2015.

On September 14, 2015, the Company declared a $2.00 per share special dividend to shareholders. Capital levels remain strong with an equity to assets ratio of 19.14% at September 30, 2015. 

The Board of Directors of Marlin Business Services Corp. today declared a $0.14 per share regular quarterly dividend.  The dividend is payable November 23, 2015, to shareholders of record on November 12, 2015.  Based on the closing stock price on October 30, 2015, the annualized dividend yield on the Company’s common stock is 3.17%.

Conference Call and Webcast

We will host a conference call on Tuesday, November 3, 2015 at 9:00 a.m. ET to discuss the Company’s third quarter 2015 results. If you wish to participate, please call 877-312-5414 approximately 10 minutes in advance of the call time. The conference ID will be: “Marlin.” The call will also be webcast on the Investor Relations page of the Company’s website, www.marlinfinance.com. An audio replay will also be available on the Investor Relations section of Marlin’s website for approximately 45 days.

About Marlin Business Services Corp.

Marlin Business Services Corp. is a nationwide provider of commercial lending solutions for small and mid-size businesses. Through its wholly-owned operating subsidiary, Marlin Business Bank, Marlin provides innovative commercial financing programs. Our equipment financing and loan products are offered directly to businesses, and through third party vendor programs, which includes manufacturers, distributors, independent dealers and brokers. Since its inception in 1997, Marlin has extended credit to over a quarter of a million business customers. Our mission is to offer convenient financing products while providing the highest level of personalized customer service. Marlin is publicly traded (NASDAQ:MRLN). For more information about Marlin, visit www.marlincorp.com or call toll free at (888) 479-9111.

Forward-Looking Statements

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements (including statements regarding future financial and operating results) involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words “anticipate,” “believe,” “expect,” “estimate,” “plan,” “may,” “intend” and similar expressions are generally intended to identify forward-looking statements. Economic, business, funding, market, competitive, legal and/or regulatory factors, among others, affecting our business are examples of factors that could cause actual results to differ materially from those described in the forward-looking statements. More detailed information about these factors is contained in our filings with the Securities and Exchange Commission, including the sections captioned “Risk Factors” and “Business” in the Company’s Form 10-K filed with the Securities and Exchange Commission. We are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.

 
MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
 
  September 30, December 31,
  2015 2014
     
  (Dollars in thousands, except per-share data)
     
ASSETS    
Cash and due from banks $ 4,366 $ 2,437
Interest-earning deposits with banks 100,852 108,219
Total cash and cash equivalents 105,218 110,656
Time deposits with banks 7,368
Restricted interest-earning deposits with banks 389 711
Securities available for sale (amortized cost of $6.1 million and $5.8 million at September 30, 2015 and December 31, 2014, respectively) 6,048 5,722
Net investment in leases and loans 659,253 629,507
Property and equipment, net 4,003 2,846
Property tax receivables 885 690
Other assets 7,290 8,317
Total assets $ 790,454 $ 758,449
     
LIABILITIES AND STOCKHOLDERS’ EQUITY    
Deposits $ 579,625 $ 550,119
Other liabilities:    
Dividends payable 25,508
Sales and property taxes payable 5,409 2,739
Accounts payable and accrued expenses 13,279 14,406
Net deferred income tax liability 15,319 17,221
Total liabilities 639,140 584,485
     
     
     
Stockholders’ equity:    
Common Stock, $0.01 par value; 75,000,000 shares authorized; 12,617,269 and 12,838,449 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively 126 128
Preferred Stock, $0.01 par value; 5,000,000 shares authorized; none issued
Additional paid-in capital 84,004 89,130
Stock subscription receivable (2) (2)
Accumulated other comprehensive loss (27) (17)
Retained earnings 67,213 84,725
Total stockholders’ equity 151,314 173,964
Total liabilities and stockholders’ equity $ 790,454 $ 758,449
     
 
MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
 
  Three Months Ended September 30, Nine Months Ended September 30,
  2015 2014 2015 2014
         
  (Dollars in thousands, except per-share data)
         
Interest income $ 16,690 $ 16,705 $ 49,665 $ 50,182
Fee income 3,915 3,881 11,762 11,016
Interest and fee income 20,605 20,586 61,427 61,198
Interest expense 1,433 1,250 4,087 3,647
Net interest and fee income 19,172 19,336 57,340 57,551
Provision for credit losses 1,986 2,706 7,542 6,562
Net interest and fee income after provision for credit losses 17,186 16,630 49,798 50,989
         
Other income:        
Insurance income 1,470 1,341 4,294 3,996
Other income 572 400 1,336 1,176
Other income 2,042 1,741 5,630 5,172
Other expense:        
Salaries and benefits 7,058 6,313 21,290 19,962
General and administrative 4,357 3,818 12,780 11,975
Financing related costs 34 297 184 881
Other expense 11,449 10,428 34,254 32,818
Income before income taxes 7,779 7,943 21,174 23,343
Income tax expense 2,982 3,039 8,173 8,860
Net income $ 4,797 $ 4,904 $ 13,001 $ 14,483
         
Basic earnings per share $ 0.38 $ 0.38 $ 1.01 $ 1.12
Diluted earnings per share $ 0.38 $ 0.38 $ 1.01 $ 1.12
         
Cash dividends declared per share $ 2.14 $ 0.13 $ 2.39 $ 0.35
           
SUPPLEMENTAL QUARTERLY DATA          
(Dollars in thousands, except share amounts)          
(Unaudited)          
           
           
Quarter Ended: 9/30/2014 12/31/2014 3/31/2015 6/30/2015 9/30/2015
           
Net Income:          
Net Income $4,904 $4,867 $4,055 $4,149 $4,797
           
Annualized Performance Measures:          
Return on Average Assets 2.67% 2.64% 2.17% 2.18% 2.51%
Return on Average Stockholders’ Equity 11.50% 11.21% 9.33% 9.47% 10.95%
           
           
EPS Data:          
Net Income Allocated to Common Stock $4,762 $4,731 $3,932 $4,031 $4,661
Number of Shares – Basic 12,487,968 12,466,264 12,487,241 12,450,283 12,406,767
Basic Earnings per Share $0.38 $0.38 $0.31 $0.32 $0.38
           
Number of Shares – Diluted 12,539,717 12,515,904 12,523,258 12,464,638 12,413,497
Diluted Earnings per Share $0.38 $0.38 $0.31 $0.32 $0.38
           
Cash Dividends Declared per share $0.125 $0.125 $0.125 $0.125 $2.14
           
New Asset Production:          
Leased Equipment Volume $82,459 $89,362 $80,084 $91,981 $98,237
Loan Origination Volume $0 $0 $235 $654 $2,264
New Originations $82,459 $89,362 $80,319 $92,635 $100,501
           
Syndication Volume $0 $91 $1,272 $606 $1,394
Total Asset Origination $82,459 $89,453 $81,591 $93,241 $101,895
           
Implicit Yield on New Lease Originations 11.06% 10.89% 10.78% 11.04% 10.48%
Implicit Yield on New Loan Originations n/a n/a 35.61% 27.73% 36.00%
Total Implicit Yield on New Originations 11.06% 10.89% 10.85% 11.16% 11.06%
           
# of Sales Reps 116 115 125 127 131
# of Leases 6,130 6,290 5,691 6,366 6,476
Lease Approval Percentage 65% 66% 63% 64% 66%
Average Monthly Lease Sources 1,125 1,147 1,015 1,143 1,106
           
Net Interest and Fee Margin:          
Interest Income Leasing $16,633 $16,500 $16,405 $16,347 $16,473
Interest Income Loans $11 $15 $17 $62 $139
           
Interest Income Yield 10.98% 10.80% 10.60% 10.52% 10.41%
Fee Income Yield 2.55% 2.54% 2.65% 2.38% 2.44%
Interest and Fee Income Yield 13.53% 13.34% 13.25% 12.90% 12.85%
Cost of Funds 0.82% 0.86% 0.85% 0.85% 0.89%
Net Interest and Fee Margin 12.71% 12.48% 12.40% 12.05% 11.96%
           
Average Total Finance Receivables $608,290 $614,068 $622,120 $627,079 $641,020
Average Net Investment in Leases $607,055 $612,910 $620,937 $625,347 $638,358
Average Loans $1,235 $1,158 $1,183 $1,732 $2,662
           
End of Period Net Investment in Leases $617,518 $628,384 $626,617 $639,065 $655,458
End of Period Loans $1,173 $1,123 $1,402 $2,017 $3,795
           
Portfolio Asset Quality:          
           
Total Finance Receivables          
30+ Days Past Due Delinquencies 0.81% 0.85% 0.87% 0.70% 0.75%
30+ Days Past Due Delinquencies $5,668 $5,997 $6,208 $5,053 $5,562
           
60+ Days Past Due Delinquencies 0.47% 0.51% 0.57% 0.40% 0.43%
60+ Days Past Due Delinquencies $3,290 $3,602 $4,057 $2,899 $3,186
           
Net Charge-offs – Total Finance Receivables $2,060 $2,388 $2,646 $2,880 $1,965
% on Average Total Finance Receivables          
Annualized 1.36% 1.56% 1.70% 1.84% 1.23%
           
Net Charge-offs – Leasing $2,060 $2,388 $2,646 $2,880 $1,954
% on Average Net Investment in Leases          
Annualized 1.36% 1.56% 1.71% 1.84% 1.22%
           
Net Charge-offs – Loans $0 $0 $0 $0 $11
% of Average Loans          
Annualized n/a n/a n/a n/a 1.65%
           
Allowance for Credit Losses $8,371 $8,537 $9,231 $8,567 $8,588
% of 60+ Delinquencies 254.44% 237.01% 227.53% 295.52% 269.55%
           
90+ Day Delinquencies (Non-earning total finance receivables) $1,903 $1,742 $1,975 $1,433 $1,684
           
Expense Ratios:          
Salaries and Benefits Expense $6,313 $6,666 $6,967 $7,265 $7,058
Salaries and Benefits Expense          
Annualized % of Avg. Fin. Recbl. 4.15% 4.34% 4.48% 4.63% 4.40%
           
Total personnel end of quarter 279 285 296 302 307
           
General and Administrative Expense $3,818 $3,630 $4,093 $4,330 $4,357
General and Administrative Expense          
Annualized % of Avg. Fin. Recbl. 2.51% 2.36% 2.63% 2.76% 2.72%
           
Efficiency Ratio 48.07% 48.86% 52.37% 56.19% 53.81%
           
Balance Sheet:          
           
Assets          
Investment in Leases and Loans $616,916 $627,922 $627,167 $639,333 $657,143
Initial Direct Costs and Fees 10,146 10,122 10,083 10,316 10,697
Reserve for Credit Losses (8,371) (8,537) (9,231) (8,567) (8,588)
Net Investment in Leases and Loans $618,691 $629,507 $628,019 $641,082 $659,252
Cash and Cash Equivalents 104,211 110,656 113,129 90,740 105,218
Restricted Cash 945 711 1,545 543 389
Other Assets 16,338 17,575 26,536 32,607 25,595
Total Assets $740,185 $758,449 $769,229 $764,972 $790,454
           
Liabilities          
Deposits  534,556  550,119  557,835  554,190  579,625
Other Liabilities 35,583 34,366 36,305 34,292 59,515
Total Liabilities $570,139 $584,485 $594,140 $588,482 $639,140
           
Stockholders’ Equity          
Common Stock $128 $128 $128 $128 $126
Paid-in Capital, net 88,543 89,128 87,832 86,723 84,002
Other Comprehensive Income (Loss) (84) (17) (35) (75) (27)
Retained Earnings 81,459 84,725 87,164 89,714 67,213
Total Stockholders’ Equity $170,046 $173,964 $175,089 $176,490 $151,314
           
Total Liabilities and          
Stockholders’ Equity $740,185 $758,449 $769,229 $764,972 $790,454
           
Capital and Leverage:          
Equity $170,046 $173,964 $175,089 $176,490 $151,314
Debt to Equity 3.14 3.16 3.19 3.14 3.83
Equity to Assets 22.97% 22.94% 22.76% 23.07% 19.14%
           
Regulatory Capital Ratios:          
Tier 1 Leverage Capital 23.06% 23.43% 23.21% 23.07% 19.72%
Common Equity Tier 1 Risk-based Capital     26.00% 25.72% 21.54%
Tier 1 Risk-based Capital 26.11% 26.14% 26.00% 25.72% 21.54%
Total Risk-based Capital 27.36% 27.39% 27.25% 26.97% 22.76%
           
           
Notes:          
Net investment in total finance receivables includes net investment in direct financing leases and loans.
Common Equity Tier 1 Risk-based Capital became effective on January 1, 2015.
CONTACT: Investor Relations Dept.
         (877) 864-MRLN (6756)
         investorrelations@marlincorp.com