Third Quarter Summary:
Marlin (NASDAQ: MRLN), a nationwide provider
of capital solutions to small businesses (“Marlin” or the
“Company”), today reported third quarter 2018 net income of $5.9
million, or $0.47 per diluted share, compared with net income of
$3.3 million, or $0.26 per share a year ago. Third quarter net
income on an adjusted basis was $6.4 million, or $0.51 per diluted
share, compared with $3.9 million or $0.31 per diluted share a year
ago.
Commenting on the Company’s results, Jeffrey A.
Hilzinger, Marlin’s President and CEO, said, “The third quarter was
another productive period for Marlin highlighted by solid growth in
origination volume, continued stable credit quality, strong
earnings performance, the successful completion of an asset-backed
securitization transaction and an important strategic acquisition
to augment our organic growth initiatives. Excluding referral
volume, total origination volume was $173.1 million for the quarter
compared with $147.4 million last year, resulting in a
year-over-year increase of 17.4%. This increase included strong
growth from both our Equipment Finance and Working Capital Loan
products as well as from our Direct origination channel. In
addition, as part of Marlin’s capital markets activities, we
referred or sold $43.5 million of leases and loans that were better
suited for our capital markets partners’ balance sheets. Due to
these origination and capital markets activities, our Net
Investment in Leases and Loans increased to $970.4 million, up 9%
from a year ago and our total managed assets grew to approximately
$1.1 billion, an increase of 18% from last year. Our ability to
achieve this robust growth while maintaining our disciplined
underwriting standards and stable portfolio performance is evidence
of how core risk management is to Marlin’s culture. At the bottom
line, earnings expanded sharply on both a sequential quarter and
year-over-year basis.”
Mr. Hilzinger concluded, “Consistent with our
stated strategy of augmenting organic growth with strategic
corporate development activities, late in the quarter we announced
the acquisition of Fleet Financing Resources—or FFR. FFR, a broker
platform that originated approximately $75 million in 2017, is a
well-established originator focused on financing commercial
transportation equipment that brings significant domain expertise
to the Company while also substantially accelerating the growth of
our existing commercial transportation equipment finance business.
We expect the transaction to be accretive to Marlin’s earnings per
share in 2018 and to generate strong returns on invested capital
over time by accelerating our growth and further leveraging the
Company’s fixed infrastructure costs.”
Results of OperationsTotal
origination volume (excluding referral and originated for sale
volume) for the third quarter of $173.1 million was up 17% from a
year ago. Direct origination volume of $35.5 million in the third
quarter was up 51% from $23.4 million in the third quarter of 2017.
Indirect origination volume in the third quarter of 2018 was $137.6
million, up from $124.0 million in the same period a year ago.
Referral volume totaled $2.5 million, down from $13.0 million in
the third quarter last year, largely due to the transition of
leases originated by Marlin’s Horizon Keystone Financial division
to Marlin’s balance sheet over the past year.
Net interest and fee margin as a percentage of
average finance receivables was 9.94% for the third quarter, down
37 basis points from the second quarter of 2018 and down 79 basis
points from a year ago. The decrease in margin percentage was
primarily a result of an increase in interest expense, partially
offset by an increase of 59 basis points in new origination loan
and lease yield over last year. The Company’s interest expense as a
percent of average finance receivables increased to 207 basis
points compared with 159 basis points for the previous quarter and
139 basis points for the third quarter of 2017, primarily because
of the impact on funding costs from the recent debt
securitization.
On an absolute basis, net interest and fee
income was $23.8 million for the third quarter of 2018 compared
with $23.1 million for the third quarter last year. The increase
continues to reflect the strong growth in the portfolio and the
underlying earnings power of the business as the Company continues
to grow and scale.
Non-interest income was $4.4 million for the
third quarter of 2018, compared with $4.6 million in the prior
quarter and $3.6 million in the prior year period. The
year-over-year increase in non-interest income is primarily due to
an increase in gains-on-sale and to a lesser extent an increase in
insurance-related income. Non-interest expense was $15.7 million
for the third quarter of 2018, compared with $16.0 million in the
prior quarter and $15.7 million in the third quarter last
year. Third quarter 2018 non-interest expense included $0.6
million of expense related to the departure of the Company’s Chief
Financial Officer. The
Company’s efficiency ratio for the third quarter was 55.7% compared
with 58.7% in the third quarter last year. Excluding acquisition
related sales commissions and intangible amortization, the non-GAAP
efficiency ratio in the third quarter of 2018 was 54.5% as compared
to 56.1% in the third quarter last year. Marlin expects its
efficiency ratio to continue to improve as the Company leverages
its fixed costs through continued portfolio growth and from
continued operational efficiencies generated by its various process
improvement activities.
Marlin recorded an income tax expense of $1.7
million, representing an effective tax rate of 22.6% for the third
quarter of 2018, compared with an income tax expense of $2.0
million, representing an effective tax rate of 38.3 % for the third
quarter of 2017.
Portfolio PerformanceAllowance
for credit losses as a percentage of total finance receivables was
1.65% at September 30, 2018 relatively consistent with 1.62% at
June 30, 2018 and 1.64% at September 30, 2017.
Finance receivables over 30 days delinquent were
1.02% of the Company’s total finance receivables portfolio as of
September 30, 2018, up 6 basis points from June 30, 2018 and down
11 basis points from September 30, 2017. Finance receivables over
60 days delinquent were 0.57% of the Company’s total finance
receivables portfolio as of September 30, 2018, up 2 basis points
from June, 2018 and down 4 basis points from September 30, 2017.
Annualized third quarter net charge-offs were 1.90% of average
total finance receivables versus 1.84% in the second quarter of
2018 and 1.73% a year ago.
As of September 30, 2018, the Company’s
consolidated equity to assets ratio was 17.18%. This compares to
17.03% and 16.42%, in the prior quarter and year ago quarter,
respectively.
Corporate DevelopmentsDuring
the third quarter, Marlin completed a $201.7 million asset-backed
notes (“Notes”) term securitization. This transaction was Marlin's
eleventh term securitization and its first since 2010. The Notes,
which were issued in seven classes, have fixed interest rates
ranging from 2.55% to 5.02% (with a weighted averaged fixed
interest rate of 3.41%) and legal final maturity dates ranging from
July 22, 2019 to May 20, 2025. Marlin intends to use proceeds from
the transaction to fund the growth of its portfolio of loans and
leases and for general corporate purposes.
Also during the third quarter, the Company
announced the acquisition of Fleet Financing Resources, a leading
provider of equipment finance credit products focused on the
commercial vehicle market. This acquisition allows Marlin to
significantly accelerate growth in the commercial vehicle and
titled transportation markets with a proven and successful team
that has significant expertise in these attractive markets.
On September 4, 2018, the Company announced that
W. Taylor Kamp left his position as Senior Vice President and Chief
Financial Officer. Mr. Kamp will remain with Marlin as a consultant
through the end of 2018 to assist in the transition of the
Company’s finance and accounting functions.
Marlin’s Board of Directors today declared a
$0.14 per share quarterly dividend. The dividend is payable
November 23, 2018, to shareholders of record on November 12, 2018.
Based on the closing stock price on October 31, 2018, the
annualized dividend yield on the Company’s common stock is
2.11%.
Business Outlook The Company is
maintaining guidance for the full year ending December 31, 2018 as
follows:
- Total origination volume (including referral volume) is
expected to finish approximately 15% to 20% above 2017 levels
- Portfolio performance is expected to remain in-line with the
results observed over the past twelve months
- Net interest margin, as a percentage, is expected to be between
9.75% and 10.00%
- ROE is expected to improve in 2018 as the Company continues to
improve operating scale
- EPS on an adjusted basis is expected to be between $2.00 and
$2.10 per share
Conference Call and Webcast
Marlin will host a conference call on Friday, November 2, 2018 at
9:00 a.m. ET to discuss the Company’s third quarter 2018 results.
If you wish to participate, please call 877-407-0792 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 45 days.
About Marlin
Marlin is a nationwide provider of capital
solutions to small businesses with a mission of helping small
businesses fulfill their American dream. Our products and services
are offered directly to small businesses and through financing
programs with independent equipment dealers and other
intermediaries. Marlin Business Services Corp. is publicly traded
(NASDAQ: MRLN). For more information about Marlin, visit
www.marlinfinance.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.
Regulation G – Non-GAAP Financial
Measures In this release the Company uses certain
financial measures which are not calculated and presented in
accordance with U.S. generally accepted accounting principles
(“GAAP”). The Company defines net income on an adjusted basis as
net income excluding an after-tax charge related to a reserve for
restitution in connection with certain payment processing practices
in effect prior to February 2016 and charges for associated legal
and consulting fees, the after-tax hurricane credit and insurance
loss reserves, the after-tax executive severance, and the net tax
benefit from the tax cut and jobs act, as applicable. The Company
defines diluted earnings per share on an adjusted basis, return on
average assets on an adjusted basis and return on average equity on
an adjusted basis as the calculation used for the “as reported”
number substituting net income as reported with net income on an
adjusted basis while using the same denominator in the “as
reported” number, where appropriate. The Company defines
efficiency ratio on an adjusted basis as the calculation used for
the “as reported” ratio adjusting the numerator for the reserve for
restitution in connection with certain payment processing practices
in effect prior to February 2016, hurricane insurance loss
reserves, and executive severance, as applicable. The Company
believes that these non-GAAP measures are useful performance
metrics for management, investors and lenders, because it means to
evaluate period-to-period comparisons of the Company's financial
performance without the effects of certain adjustments in
accordance with GAAP that may not necessarily be indicative of
current operating performance.
Non-GAAP financial measures should not be
considered as an alternative to GAAP financial measures. They may
not be indicative of the historical operating results of the
Company nor are they intended to be predictive of potential future
results. Investors should not consider non-GAAP financial measures
in isolation or as a substitute for performance measures calculated
in accordance with GAAP.
Investor Contacts:Ed DietzSenior Vice President
& General Counsel856-505-4458
Lasse GlassenAddo Investor Relationslglassen@addoir.com
424-238-6249
MARLIN BUSINESS SERVICES CORP. AND
SUBSIDIARIES |
Condensed Consolidated Balance
Sheets |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per-share
data) |
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
Cash and
due from banks |
$ |
5,442 |
|
|
$ |
3,544 |
|
Interest-earning deposits with banks |
|
83,006 |
|
|
|
63,602 |
|
Total cash and cash equivalents |
|
88,448 |
|
|
|
67,146 |
|
Time
deposits with banks |
|
9,410 |
|
|
|
8,110 |
|
Restricted
interest-earning deposits with banks related to consolidated |
|
10,049 |
|
|
|
— |
|
variable
interest entities ("VIEs") |
|
|
|
|
|
Securities
available for sale (amortized cost of $11.4 million and $11.7
million at |
|
|
|
|
|
September
30, 2018 and December 31, 2017, respectively) |
|
10,973 |
|
|
|
11,533 |
|
Net
investment in leases and loans: |
|
|
|
|
|
Net
investment in leases and loans, excluding allowance for credit
losses |
|
986,342 |
|
|
|
929,271 |
|
(includes $172.9 million and $0 million at September 30, 2018
and December 31, 2017, |
|
|
|
|
|
respectively, related to consolidated VIEs) |
|
|
|
|
|
Allowance
for credit losses |
|
(15,917 |
) |
|
|
(14,851 |
) |
Total net investment in leases and loans |
|
970,425 |
|
|
|
914,420 |
|
Intangible
assets |
|
8,131 |
|
|
|
1,128 |
|
Goodwill |
|
7,360 |
|
|
|
1,160 |
|
Property
and equipment, net |
|
3,924 |
|
|
|
4,204 |
|
Property
tax receivables |
|
6,281 |
|
|
|
6,292 |
|
Other
assets |
|
11,732 |
|
|
|
26,167 |
|
Total assets |
$ |
1,126,733 |
|
|
$ |
1,040,160 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Deposits |
$ |
700,107 |
|
|
$ |
809,315 |
|
Long-term
borrowings related to consolidated VIEs |
|
174,519 |
|
|
|
— |
|
Other
liabilities: |
|
|
|
|
|
Sales and property taxes payable |
|
6,247 |
|
|
|
2,963 |
|
Accounts payable and accrued expenses |
|
34,587 |
|
|
|
31,492 |
|
Net deferred income tax liability |
|
17,730 |
|
|
|
16,741 |
|
Total liabilities |
|
933,190 |
|
|
|
860,511 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
Preferred Stock, $0.01 par value; 5,000,000 shares
authorized; none issued |
|
— |
|
|
|
— |
|
Common Stock, $0.01 par value; 75,000,000 shares
authorized; |
|
|
|
|
|
12,400,465 and 12,449,458 shares issued and outstanding at
September 30, 2018 and |
|
124 |
|
|
|
124 |
|
December 31, 2017, respectively |
|
|
|
|
|
Additional paid-in capital |
|
83,317 |
|
|
|
82,588 |
|
Stock subscription receivable |
|
(2 |
) |
|
|
(2 |
) |
Accumulated other comprehensive loss |
|
(149 |
) |
|
|
(96 |
) |
Retained earnings |
|
110,253 |
|
|
|
97,035 |
|
Total stockholders’ equity |
|
193,543 |
|
|
|
179,649 |
|
Total liabilities and stockholders’ equity |
$ |
1,126,733 |
|
|
$ |
1,040,160 |
|
|
|
|
|
|
|
|
|
MARLIN BUSINESS SERVICES CORP. AND
SUBSIDIARIES |
Condensed Consolidated Statements of
Operations |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per-share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
$ |
24,836 |
|
$ |
22,363 |
|
$ |
72,079 |
|
$ |
64,461 |
Fee
income |
|
3,930 |
|
|
3,780 |
|
|
11,765 |
|
|
11,055 |
Interest
and fee income |
|
28,766 |
|
|
26,143 |
|
|
83,844 |
|
|
75,516 |
Interest
expense |
|
4,955 |
|
|
3,000 |
|
|
12,065 |
|
|
7,952 |
Net
interest and fee income |
|
23,811 |
|
|
23,143 |
|
|
71,779 |
|
|
67,564 |
Provision
for credit losses |
|
4,893 |
|
|
5,680 |
|
|
13,761 |
|
|
13,878 |
Net
interest and fee income after provision for credit losses |
|
18,918 |
|
|
17,463 |
|
|
58,018 |
|
|
53,686 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest income: |
|
|
|
|
|
|
|
|
|
|
|
Insurance premiums written and earned |
|
2,047 |
|
|
1,817 |
|
|
5,979 |
|
|
5,274 |
Other income |
|
2,401 |
|
|
1,785 |
|
|
8,330 |
|
|
6,160 |
Non-interest income |
|
4,448 |
|
|
3,602 |
|
|
14,309 |
|
|
11,434 |
Non-interest expense: |
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits |
|
10,292 |
|
|
9,302 |
|
|
29,842 |
|
|
27,763 |
General and administrative |
|
5,445 |
|
|
6,409 |
|
|
18,465 |
|
|
22,689 |
Non-interest expense |
|
15,737 |
|
|
15,711 |
|
|
48,307 |
|
|
50,452 |
Income before income taxes |
|
7,629 |
|
|
5,354 |
|
|
24,020 |
|
|
14,668 |
Income tax
expense |
|
1,723 |
|
|
2,049 |
|
|
5,462 |
|
|
5,270 |
Net income |
$ |
5,906 |
|
$ |
3,305 |
|
$ |
18,558 |
|
$ |
9,398 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share |
$ |
0.48 |
|
$ |
0.26 |
|
$ |
1.49 |
|
$ |
0.75 |
Diluted
earnings per share |
$ |
0.47 |
|
$ |
0.26 |
|
$ |
1.49 |
|
$ |
0.75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
dividends declared per share |
$ |
0.14 |
|
$ |
0.14 |
|
$ |
0.42 |
|
$ |
0.42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARLIN BUSINESS SERVICES CORP. AND
SUBSIDIARIES |
Reconciliation of GAAP to Non-GAAP Financial
Measures |
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
(Dollars in thousands, except per-share
data) |
|
(Dollars in thousands, except per-share
data) |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
Net income as
reported |
$ |
5,906 |
|
|
$ |
3,305 |
|
|
$ |
18,558 |
|
|
$ |
9,398 |
|
|
|
|
|
|
|
|
|
Deduct: |
|
|
|
|
|
|
|
Executive
separation |
|
(631 |
) |
|
|
- |
|
|
|
(631 |
) |
|
|
- |
|
Charge in connection
with regulatory matters |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(4,816 |
) |
Hurricane credit loss
reserve |
|
- |
|
|
|
(500 |
) |
|
|
|
|
(500 |
) |
Hurricane insurance
loss reserve |
|
- |
|
|
|
(437 |
) |
|
|
|
|
(437 |
) |
Tax effect |
|
162 |
|
|
|
358 |
|
|
|
162 |
|
|
|
2,198 |
|
Charges in connection
with executive separation, regulatory matters, & hurricane
reserves, net of tax |
|
(469 |
) |
|
|
(579 |
) |
|
|
(469 |
) |
|
|
(3,555 |
) |
Net Income on an
adjusted basis |
$ |
6,375 |
|
|
$ |
3,884 |
|
|
$ |
19,027 |
|
|
$ |
12,953 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share as reported |
$ |
0.47 |
|
|
$ |
0.26 |
|
|
$ |
1.49 |
|
|
$ |
0.75 |
|
Diluted earnings per
share on an adjusted basis |
$ |
0.51 |
|
|
$ |
0.31 |
|
|
$ |
1.52 |
|
|
$ |
1.03 |
|
|
|
|
|
|
|
|
|
Return on Average
Assets as reported |
|
2.04% |
|
|
|
1.31% |
|
|
|
2.27% |
|
|
|
1.31% |
|
Return on Average
Assets on an adjusted basis |
|
2.20% |
|
|
|
1.54% |
|
|
|
2.32% |
|
|
|
1.80% |
|
|
|
|
|
|
|
|
|
Return on Average
Equity as reported |
|
12.36% |
|
|
|
8.01% |
|
|
|
13.31% |
|
|
|
7.66% |
|
Return on Average
Equity on an adjusted basis |
|
13.35% |
|
|
|
9.42% |
|
|
|
13.65% |
|
|
|
10.56% |
|
|
|
|
|
|
|
|
|
Efficiency Ratio as
reported |
|
55.69% |
|
|
|
58.74% |
|
|
|
56.11% |
|
|
|
63.87% |
|
Efficiency Ratio on an
adjusted basis |
|
53.46% |
|
|
|
57.11% |
|
|
|
55.35% |
|
|
|
57.22% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
on an Adjusted Basis is defined as net income excluding the
following: Third quarter 2018 charge of $0.6 million related
to the departure of the Company's Chief Financial Officer. A
third quarter 2017 $0.9 million charge related to credit and
insurance hurricane loss reserves. A first quarter 2017 $4.2
million charge associated with recent regulatory matters and
charges for associated legal and consulting fees in the amounts of
$0.3 million and $0.4 million for the first quarter and second
quarter 2017, respectively. The appropriate tax effect, where
appropriate, on the aforementioned items. The efficiency
ratio as reported and the efficiency ratio on an adjusted basis are
not impacted by the $0.5 million hurricane credit loss reserve
charge as the provision for credit losses is not included as part
of the ratio numerator. |
MARLIN BUSINESS SERVICES CORP. AND
SUBSIDIARIES |
Supplemental Quarterly
Data |
(Dollars in thousands, except share
amounts) |
(Unaudited) |
|
|
|
|
|
|
Quarter
Ended: |
9/30/2017 |
12/31/2017 |
3/31/2018 |
6/30/2018 |
9/30/2018 |
|
|
|
|
|
|
Net
Income: |
|
|
|
|
|
Net Income |
$3,305 |
|
$15,894 |
|
$6,185 |
|
$6,467 |
|
$5,906 |
|
|
|
|
|
|
|
Annualized
Performance Measures: |
|
|
|
|
|
Return on Average
Assets |
|
1.31% |
|
|
6.21% |
|
|
2.37% |
|
|
2.41% |
|
|
2.04% |
|
Return on Average
Stockholders' Equity |
|
8.01% |
|
|
38.08% |
|
|
13.69% |
|
|
13.93% |
|
|
12.36% |
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS
Data: |
|
|
|
|
|
Net Income Allocated to
Common Stock |
$3,225 |
|
$15,532 |
|
$6,065 |
|
$6,352 |
|
$5,808 |
|
Number of Shares -
Basic |
|
12,220,381 |
|
|
12,187,666 |
|
|
12,188,906 |
|
|
12,199,089 |
|
|
12,214,913 |
|
Basic Earnings per
Share |
$0.26 |
|
$1.27 |
|
$0.50 |
|
$0.52 |
|
$0.48 |
|
|
|
|
|
|
|
Number of Shares -
Diluted |
|
12,257,922 |
|
|
12,230,858 |
|
|
12,245,019 |
|
|
12,269,989 |
|
|
12,296,726 |
|
Diluted Earnings per
Share |
$0.26 |
|
$1.27 |
|
$0.50 |
|
$0.52 |
|
$0.47 |
|
|
|
|
|
|
|
Cash Dividends Declared
per share |
$0.14 |
|
$0.14 |
|
$0.14 |
|
$0.14 |
|
$0.14 |
|
|
|
|
|
|
|
New Asset
Production: |
|
|
|
|
|
Direct
Originations |
$23,444 |
|
$31,610 |
|
$30,869 |
|
$36,338 |
|
$35,469 |
|
Indirect
Originations |
$123,977 |
|
$148,468 |
|
$128,833 |
|
$135,865 |
|
$137,605 |
|
Total
Originations |
$147,421 |
|
$180,078 |
|
$159,702 |
|
$172,203 |
|
$173,074 |
|
|
|
|
|
|
|
Equipment Finance
Originations |
$133,646 |
|
$163,562 |
|
$141,646 |
|
$155,385 |
|
$153,503 |
|
Working Capital Loans
Originations |
$13,775 |
|
$16,516 |
|
$18,056 |
|
$16,818 |
|
$19,571 |
|
Total
Originations |
$147,421 |
|
$180,078 |
|
$159,702 |
|
$172,203 |
|
$173,074 |
|
|
|
|
|
|
|
Assets originated for
sale in the period |
$0 |
|
$0 |
|
$0 |
|
$1,801 |
|
$3,890 |
|
Assets referred in the
period |
$13,024 |
|
$6,466 |
|
$4,201 |
|
$5,638 |
|
$2,540 |
|
Total Sourced
Originations |
$160,445 |
|
$186,544 |
|
$163,903 |
|
$179,642 |
|
$179,504 |
|
Assets sold in the
period |
$9,649 |
|
$36,037 |
|
$22,981 |
|
$16,890 |
|
$40,986 |
|
|
|
|
|
|
|
Implicit Yield on
Direct Originations |
|
21.44% |
|
|
19.22% |
|
|
19.47% |
|
|
18.59% |
|
|
22.39% |
|
Implicit Yield on
Indirect Originations |
|
10.43% |
|
|
9.93% |
|
|
10.75% |
|
|
10.54% |
|
|
10.29% |
|
Total Implicit Yield on
Total Originations |
|
12.18% |
|
|
11.59% |
|
|
12.44% |
|
|
12.24% |
|
|
12.77% |
|
|
|
|
|
|
|
Implicit Yield on
Equipment Finance Originations |
|
9.99% |
|
|
9.46% |
|
|
9.99% |
|
|
9.94% |
|
|
9.96% |
|
Implicit Yield on
Working Capital Loans Originations |
|
33.51% |
|
|
32.73% |
|
|
31.68% |
|
|
33.52% |
|
|
34.85% |
|
|
|
|
|
|
|
# of Leases / Loans
Equipment Finance |
|
7,447 |
|
|
8,346 |
|
|
7,764 |
|
|
8,238 |
|
|
7,603 |
|
Equipment Finance
Approval Percentage |
|
56% |
|
|
56% |
|
|
56% |
|
|
56% |
|
|
57% |
|
Average Monthly
Equipment Finance Sources |
|
1,185 |
|
|
1,244 |
|
|
1,190 |
|
|
1,240 |
|
|
1,174 |
|
|
|
|
|
|
|
Net Interest
and Fee Margin (NIM) |
|
|
|
|
|
Percent of
Average Total Finance Receivables: |
|
|
|
|
|
Interest Income |
|
10.37% |
|
|
10.31% |
|
|
10.19% |
|
|
10.24% |
|
|
10.37% |
|
Fee Income |
|
1.75% |
|
|
1.71% |
|
|
1.73% |
|
|
1.66% |
|
|
1.64% |
|
Interest and Fee
Income |
|
12.12% |
|
|
12.02% |
|
|
11.92% |
|
|
11.90% |
|
|
12.01% |
|
Interest Expense |
|
1.39% |
|
|
1.45% |
|
|
1.49% |
|
|
1.59% |
|
|
2.07% |
|
Net Interest and Fee
Margin (NIM) |
|
10.73% |
|
|
10.57% |
|
|
10.43% |
|
|
10.31% |
|
|
9.94% |
|
|
|
|
|
|
|
Cost of Funds (1) |
|
1.49% |
|
|
1.58% |
|
|
1.63% |
|
|
1.76% |
|
|
2.15% |
|
|
|
|
|
|
|
Interest Income
Equipment Finance |
$19,840 |
|
$20,382 |
|
$20,639 |
|
$21,082 |
|
$21,489 |
|
Interest Income Working
Capital Loans |
$2,213 |
|
$2,322 |
|
$2,321 |
|
$2,463 |
|
$2,626 |
|
|
|
|
|
|
|
Average Total Finance
Receivables |
$862,718 |
|
$891,819 |
|
$913,804 |
|
$936,007 |
|
$957,755 |
|
Average Net Investment
Equipment Finance |
$836,713 |
|
$864,665 |
|
$884,946 |
|
$905,583 |
|
$925,900 |
|
Average Working Capital
Loans |
$26,005 |
|
$27,154 |
|
$28,858 |
|
$30,424 |
|
$31,855 |
|
|
|
|
|
|
|
End of Period Net
Investment Equipment Finance |
$861,102 |
|
$887,328 |
|
$900,763 |
|
$933,261 |
|
$937,897 |
|
End of Period Working
Capital Loans |
$25,328 |
|
$27,092 |
|
$29,864 |
|
$29,848 |
|
$32,528 |
|
Total
Owned Net Investment in Leases and Loans (2) |
$886,430 |
|
$914,420 |
|
$930,627 |
|
$963,109 |
|
$970,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets Serviced
for Others |
$42,657 |
|
$74,359 |
|
$90,701 |
|
$98,442 |
|
$128,539 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Managed Assets |
$929,087 |
|
$988,779 |
|
$1,021,328 |
|
$1,061,551 |
|
$1,098,964 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Total Managed
Assets |
$902,288 |
|
$950,327 |
|
$996,334 |
|
$1,030,579 |
|
$1,071,246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Asset
Quality: |
|
|
|
|
|
|
|
|
|
|
|
Total Finance
Receivables |
|
|
|
|
|
30+ Days Past Due
Delinquencies |
|
1.13% |
|
|
1.02% |
|
|
1.05% |
|
|
0.96% |
|
|
1.02% |
|
30+ Days Past Due
Delinquencies |
$11,370 |
|
$10,565 |
|
$10,994 |
|
$10,438 |
|
$11,270 |
|
|
|
|
|
|
|
60+ Days Past Due
Delinquencies |
|
0.61% |
|
|
0.55% |
|
|
0.64% |
|
|
0.55% |
|
|
0.57% |
|
60+ Days Past Due
Delinquencies |
$6,157 |
|
$5,647 |
|
$6,735 |
|
$6,007 |
|
$6,244 |
|
|
|
|
|
|
|
Equipment Finance |
|
|
|
|
|
30+ Days Past Due
Delinquencies |
|
1.15% |
|
|
1.04% |
|
|
1.07% |
|
|
0.97% |
|
|
1.02% |
|
30+ Days Past Due
Delinquencies |
$11,260 |
|
$10,446 |
|
$10,942 |
|
$10,286 |
|
$10,913 |
|
|
|
|
|
|
|
60+ Days Past Due
Delinquencies |
|
0.63% |
|
|
0.56% |
|
|
0.66% |
|
|
0.56% |
|
|
0.57% |
|
60+ Days Past Due
Delinquencies |
$6,157 |
|
$5,647 |
|
$6,735 |
|
$5,952 |
|
$6,137 |
|
|
|
|
|
|
|
Working Capital
Loans |
|
|
|
|
|
15+ Days Past Due
Delinquencies |
|
0.77% |
|
|
0.95% |
|
|
0.53% |
|
|
0.59% |
|
|
1.17% |
|
15+ Days Past Due
Delinquencies |
$200 |
|
$264 |
|
$162 |
|
$183 |
|
$394 |
|
|
|
|
|
|
|
30+ Days Past Due
Delinquencies |
|
0.42% |
|
|
0.43% |
|
|
0.17% |
|
|
0.49% |
|
|
1.06% |
|
30+ Days Past Due
Delinquencies |
$110 |
|
$119 |
|
$52 |
|
$152 |
|
$357 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Charge-offs - Total
Finance Receivables |
$3,735 |
|
$4,169 |
|
$3,843 |
|
$4,306 |
|
$4,546 |
|
% on Average Total
Finance Receivables |
|
|
|
|
|
Annualized |
|
1.73% |
|
|
1.87% |
|
|
1.68% |
|
|
1.84% |
|
|
1.90% |
|
|
|
|
|
|
|
Net Charge-offs -
Equipment Finance |
$3,537 |
|
$3,944 |
|
$3,618 |
|
$3,851 |
|
$4,194 |
|
% on Average Net
Investment in Equipment Finance |
|
|
|
|
|
Annualized |
|
1.69% |
|
|
1.82% |
|
|
1.64% |
|
|
1.70% |
|
|
1.81% |
|
|
|
|
|
|
|
Net Charge-offs -
Working Capital Loans |
$198 |
|
$225 |
|
$224 |
|
$456 |
|
$352 |
|
% of Average Working
Capital Loans |
|
|
|
|
|
Annualized |
|
3.05% |
|
|
3.31% |
|
|
3.10% |
|
|
6.00% |
|
|
4.42% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Allowance for
Credit Losses |
$14,504 |
|
$14,851 |
|
$15,620 |
|
$15,570 |
|
$15,917 |
|
% of Total Finance
Receivables |
|
1.64% |
|
|
1.63% |
|
|
1.68% |
|
|
1.62% |
|
|
1.65% |
|
% of 60+
Delinquencies |
|
235.57% |
|
|
262.99% |
|
|
231.92% |
|
|
259.19% |
|
|
254.92% |
|
|
|
|
|
|
|
Allowance for Credit
Losses - Equipment Finance |
$13,422 |
|
$13,815 |
|
$14,310 |
|
$14,236 |
|
$14,498 |
|
% of Net Investment
Equipment Finance |
|
1.56% |
|
|
1.56% |
|
|
1.60% |
|
|
1.53% |
|
|
1.55% |
|
% of 60+
Delinquencies |
|
218.00% |
|
|
244.64% |
|
|
212.48% |
|
|
239.18% |
|
|
236.24% |
|
|
|
|
|
|
|
Allowance for Credit
Losses - Working Capital Loans |
$1,082 |
|
$1,036 |
|
$1,310 |
|
$1,334 |
|
$1,419 |
|
% of Total Working
Capital Loans |
|
4.14% |
|
|
3.73% |
|
|
4.25% |
|
|
4.32% |
|
|
4.22% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-accrual - Equipment
Finance |
$2,933 |
|
$3,065 |
|
$3,626 |
|
$3,211 |
|
$3,392 |
|
Non-accrual - Equipment
Finance |
|
0.30% |
|
|
0.30% |
|
|
0.36% |
|
|
0.30% |
|
|
0.32% |
|
|
|
|
|
|
|
Non-accrual - Working
Capital Loans |
$17 |
|
$118 |
|
$27 |
|
$147 |
|
$217 |
|
Non-accrual - Working
Capital Loans |
|
0.07% |
|
|
0.42% |
|
|
0.09% |
|
|
0.48% |
|
|
0.65% |
|
|
|
|
|
|
|
Non-accrual - Total
Finance Receivables |
$2,950 |
|
$3,183 |
|
$3,653 |
|
$3,358 |
|
$3,609 |
|
Non-accrual - Total
Finance Receivables |
|
0.29% |
|
|
0.31% |
|
|
0.35% |
|
|
0.31% |
|
|
0.33% |
|
|
|
|
|
|
|
Restructured - Total
Finance Receivables |
$2,543 |
|
$4,489 |
|
$4,366 |
|
$3,747 |
|
$3,456 |
|
|
|
|
|
|
|
Expense
Ratios: |
|
|
|
|
|
Salaries and Benefits
Expense |
$9,302 |
|
$9,806 |
|
$10,023 |
|
$9,527 |
|
$10,292 |
|
Salaries and Benefits
Expense |
|
|
|
|
|
Annualized % of Avg. Fin. Recbl. |
|
4.31% |
|
|
4.40% |
|
|
4.39% |
|
|
4.07% |
|
|
4.30% |
|
|
|
|
|
|
|
Total personnel end of
quarter |
|
331 |
|
|
330 |
|
|
326 |
|
|
320 |
|
|
339 |
|
|
|
|
|
|
|
General and
Administrative Expense |
$6,409 |
|
$5,583 |
|
$6,571 |
|
$6,449 |
|
$5,445 |
|
General and
Administrative Expense |
|
|
|
|
|
Annualized % of Avg. Fin. Recbl. |
|
2.97% |
|
|
2.50% |
|
|
2.88% |
|
|
2.76% |
|
|
2.27% |
|
|
|
|
|
|
|
Non-Interest
Expense/Average Total Managed Assets |
|
6.96% |
|
|
6.48% |
|
|
6.66% |
|
|
6.20% |
|
|
5.88% |
|
Adjusted Non-Interest
Expense/Average Total Managed Assets (3) |
|
6.65% |
|
|
6.16% |
|
|
6.52% |
|
|
6.06% |
|
|
5.46% |
|
|
|
|
|
|
|
Efficiency Ratio |
|
58.74% |
|
|
53.30% |
|
|
57.08% |
|
|
55.56% |
|
|
55.69% |
|
|
|
|
|
|
|
Balance
Sheet: |
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
Investment in Leases
and Loans |
$883,778 |
|
$911,242 |
|
$927,752 |
|
$959,452 |
|
$966,659 |
|
Initial Direct Costs
and Fees |
|
17,156 |
|
|
18,029 |
|
|
18,495 |
|
|
19,227 |
|
|
19,683 |
|
Reserve for Credit
Losses |
|
(14,504 |
) |
|
(14,851 |
) |
|
(15,620 |
) |
|
(15,570 |
) |
|
(15,917 |
) |
Net Investment in
Leases and Loans |
$886,430 |
|
$914,420 |
|
$930,627 |
|
$963,109 |
|
$970,425 |
|
Cash and Cash
Equivalents |
|
82,937 |
|
|
67,146 |
|
|
84,891 |
|
|
99,227 |
|
|
88,448 |
|
Restricted Cash |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
10,049 |
|
Other Assets |
|
43,650 |
|
|
58,594 |
|
|
55,707 |
|
|
50,975 |
|
|
57,811 |
|
Total Assets |
$1,013,017 |
|
$1,040,160 |
|
$1,071,225 |
|
$1,113,311 |
|
$1,126,733 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Deposits |
|
806,954 |
|
|
809,315 |
|
|
833,145 |
|
|
863,568 |
|
|
700,107 |
|
Total Debt |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
174,519 |
|
Other Liabilities |
|
39,768 |
|
|
51,196 |
|
|
54,153 |
|
|
60,101 |
|
|
58,564 |
|
Total Liabilities |
$846,722 |
|
$860,511 |
|
$887,298 |
|
$923,669 |
|
$933,190 |
|
|
|
|
|
|
|
Stockholders'
Equity |
|
|
|
|
|
Common Stock |
$125 |
|
$124 |
|
$124 |
|
$124 |
|
$124 |
|
Paid-in Capital,
net |
|
83,391 |
|
|
82,586 |
|
|
82,507 |
|
|
83,472 |
|
|
83,315 |
|
Other Comprehensive
Income (Loss) |
|
(82 |
) |
|
(96 |
) |
|
(98 |
) |
|
(73 |
) |
|
(149 |
) |
Retained Earnings |
|
82,861 |
|
|
97,035 |
|
|
101,394 |
|
|
106,119 |
|
|
110,253 |
|
Total Stockholders'
Equity |
$166,295 |
|
$179,649 |
|
$183,927 |
|
$189,642 |
|
$193,543 |
|
|
|
|
|
|
|
Total Liabilities
and |
|
|
|
|
|
Stockholders'
Equity |
$1,013,017 |
|
$1,040,160 |
|
$1,071,225 |
|
$1,113,311 |
|
$1,126,733 |
|
|
|
|
|
|
|
Capital and
Leverage: |
|
|
|
|
|
Equity |
$166,295 |
|
$179,649 |
|
$183,927 |
|
$189,642 |
|
$193,543 |
|
Debt to Equity |
|
4.85 |
|
|
4.50 |
|
|
4.53 |
|
|
4.55 |
|
|
4.52 |
|
Equity to Assets |
|
16.42% |
|
|
17.27% |
|
|
17.17% |
|
|
17.03% |
|
|
17.18% |
|
|
|
|
|
|
|
Regulatory
Capital Ratios: |
|
|
|
|
|
Tier 1 Leverage
Capital |
|
16.24% |
|
|
17.25% |
|
|
17.35% |
|
|
17.04% |
|
|
15.57% |
|
Common Equity Tier 1
Risk-based Capital |
|
17.64% |
|
|
18.22% |
|
|
18.33% |
|
|
18.07% |
|
|
17.46% |
|
Tier 1 Risk-based
Capital |
|
17.64% |
|
|
18.22% |
|
|
18.33% |
|
|
18.07% |
|
|
17.46% |
|
Total Risk-based
Capital |
|
18.90% |
|
|
19.47% |
|
|
19.58% |
|
|
19.33% |
|
|
18.72% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes and
Footnotes: |
|
|
|
|
|
(1) COF is
defined as interest expense for the period divided by average
interest bearling liabilities, annualized |
(2) Net
investment in total finance receivables includes net investment in
Equipment Finance leases and loans and Working Capital Loans. |
(3)
Adjusted non-interest expense excludes NON-GAAP non-interest
expense items as defined in the reconciliation of GAAP to NON-GAAP
financial measures and acquistion related sales commissions and
intangible amortization. |
**
Equipment Finance consists of equipment leases and loans; Working
Capital Loans consist of small business loans. |
|
|
|
|
|
|
Marlin Business Services (NASDAQ:MRLN)
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From Mar 2024 to Apr 2024
Marlin Business Services (NASDAQ:MRLN)
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From Apr 2023 to Apr 2024