First Quarter Summary:
Marlin (NASDAQ: MRLN), a nationwide provider of
capital solutions to small businesses (“Marlin” or the “Company”),
today reported first quarter 2019 net income of $5.1 million, or
$0.41 per diluted share, compared with net income of $6.2 million,
or $0.50 per share a year ago. First quarter net income on an
adjusted basis was $5.0 million, or $0.40 per diluted share,
compared with $6.2 million or $0.50 per diluted share a year ago.
Commenting on the Company’s results, Jeffrey A.
Hilzinger, Marlin’s President and CEO, said, “We enjoyed a solid
start to 2019 as strong execution delivered excellent origination
volume growth and stable portfolio performance. First quarter
total sourced origination volume was $208.4 million, up 27.1%
year-over-year, and a record for a first quarter. Growth in
the quarter was driven by increased customer demand for both our
Equipment Finance and Working Capital Loan products and was strong
in both our Direct and Indirect origination channels. We also
referred or sold $56.5 million of leases and loans as part of our
capital markets initiatives. Because of these origination and
capital markets activities, our Net Investment in Leases and Loans
is now consistently in excess of $1 billion and up 10% from a year
ago. Total managed assets, which includes both our balance
sheet portfolio and assets we sell but continue to service for
others, grew to more than $1.2 billion, an increase of 19.1% from
the first quarter last year. In addition, our focus on maintaining
disciplined underwriting standards continues to be a top priority
and portfolio performance during the quarter was stable and within
expectations.”
Mr. Hilzinger concluded, “First quarter net
income of $0.41 per diluted share was negatively impacted by $0.04
because of the timing of expense recognition due to the adoption of
a new lease accounting standard. We expect the timing impact
to normalize over the course of the year and we continue to expect
earnings to be more heavily-weighted towards the second half of
2019, as our recent investments in our salesforce continue to
generate returns. Importantly, we are affirming our
previously issued earnings guidance for the full year.”
Results of OperationsTotal
sourced origination volume for the first quarter of $208.4 million
was up 27.1% from a year ago. Direct origination volume of $43.6
million in the first quarter was up 41.1% from $30.9 million in the
first quarter of 2018. Indirect origination volume in the first
quarter of 2019 was $149.9 million, up 16.3% from $128.8 million in
the first quarter last year. Assets originated for sale in the
first quarter of $11.3 million compared with none in the first
quarter last year. Referral volume totaled $3.6 million, down from
$4.2 million in the first quarter last year.
Net interest and fee margin as a percentage of
average finance receivables was 9.59% for the first quarter, down
17 basis points from the fourth quarter of 2018 and down 84 basis
points from a year ago. The year-over-year decrease in margin
percentage was primarily a result of an increase in interest
expense resulting from the higher cost of funds associated with the
securitization that was executed in the second half of 2018,
partially offset by an increase of 32 basis points in new
origination loan and lease yield. The Company’s interest expense as
a percent of average total finance receivables increased to 239
basis points in the first quarter of 2019 compared with 220 basis
points for the fourth quarter of 2018 and 149 basis points for the
first quarter of 2018. The sequential quarter increase was
primarily due to an increase in deposits costs, while the
year-over-year increase was due to a higher cost of funds
associated with both deposits and long-term borrowings from the
securitization.
On an absolute basis, net interest and fee
income was $24.0 million for the first quarter of 2019 compared
with $23.8 million for the first quarter last year.
Non-interest income was $12.9 million for the
first quarter of 2019, compared with $7.1 million in the prior
quarter and $5.2 million in the prior year period. The increase
compared with the prior and year-ago quarters is primarily due to
the Company’s January 1, 2019 adoption of ASC 842 – Lease
Accounting, which increased non-interest income by $5.6 million, as
certain lessor costs, including property taxes that are paid by the
lessee to the lessor are required to be presented gross in the
consolidated statement of operations. To a lesser extent, the
increase was due to an increase in gains-on-sale and an increase in
insurance-related income. Non-interest expense was $24.8 million
for the first quarter of 2019, compared with $16.4 million in the
prior quarter and $16.6 million in the first quarter last year. The
increase in non-interest expense compared with the prior and
year-ago quarters was primarily due to the aforementioned adoption
of ASC 842, which increased non-interest expense by $6.2 million
due to the change in presentation of property taxes paid by the
lessee to the lessor gross in the consolidated statement of
operations.
The Company’s efficiency ratio for the first
quarter was 67.2% compared with 57.1% in the first quarter last
year. The Company’s non-GAAP efficiency ratio for the first quarter
was 57.8% compared with 55.8% in the first quarter last year.
Marlin expects its efficiency ratio to improve in the
remainder of 2019 as the Company continues to generate returns from
recent investments in sales and marketing, leverages its fixed
costs through continued portfolio growth and generates continued
operational efficiencies through its various process improvement
activities.
Marlin recorded an income tax expense of $1.6
million, representing an effective tax rate of 23.8% for the first
quarter of 2019, compared with an income tax expense of $1.7
million, representing an effective tax rate of 21.4%, for the first
quarter of 2018.
Portfolio PerformanceAllowance
for credit losses as a percentage of total finance receivables was
1.66% at March 31, 2019 relatively consistent with 1.62% at
December 31, 2018 and 1.68% at March 31, 2018.
Finance receivables over 30 days delinquent were
1.11% of the Company’s total finance receivables portfolio as of
March 31, 2019, up 2 basis points from December 31, 2018 and up 6
basis points from March 31, 2018. Finance receivables over 60 days
delinquent were 0.66% of the Company’s total finance receivables
portfolio as of March 31, 2019, up 1 basis point from December 31,
2018 and up 2 basis points from March 31, 2018. Annualized first
quarter net charge-offs were 1.83% of average total finance
receivables versus 2.30% in the fourth quarter of 2018 and 1.68% a
year ago.
As of March 31, 2019, the Company’s consolidated
equity to assets ratio was 16.17%. This compares to 17.01% and
17.17%, in the prior quarter and year ago quarter,
respectively.
Corporate DevelopmentsOn
February 7, 2019 the Company announced the launch of its new brand,
Marlin Capital Solutions, to better reflect the breadth of services
it offers to small businesses and equipment finance partners. The
new brand reflects Marlin’s transformation and serves to inform
existing and prospective customers and partners that the company
isn’t just a source of capital, but a source of solutions. The
transformation is accompanied by a new logo, website, and
tagline.
Marlin’s Board of Directors today declared a
$0.14 per share quarterly dividend. The dividend is payable May 23,
2019, to shareholders of record on May 13, 2019. Based on the
closing stock price on May 1, 2019, the annualized dividend yield
on the Company’s common stock is 2.57%.
Business Outlook The Company is
affirming its previously issued guidance for the full year ending
December 31, 2019 as follows:
- Total Sourced Origination volume is
expected to finish approximately 20% above 2018 levels
- Portfolio performance is expected
to remain in line with the results observed over the last 12
months
- Net interest and fee margin, as a
percentage of average finance receivables, is expected to be
between 9.5% and 10.0%
- ROE is expected to continue to
improve in 2019 as the Company continues to improve operating
scale
- Adjusted EPS is expected to be
between $2.30 and $2.40 per share
Conference Call and Webcast
Marlin will host a conference call on Friday, May 3, 2019 at 9:00
a.m. ET to discuss the Company’s first quarter 2019 results. The
conference call details are as follows:
First Quarter 2019 Financial Results Conference Call
Date: |
Friday, May 3, 2019 |
Time: |
9:00 a.m. Eastern Time /
6:00 a.m. Pacific Time |
Dial-in: |
1-877-407-0792
(Domestic)1-201-689-8263 (International) |
Conference ID: |
13689688 |
Webcast: |
http://public.viavid.com/index.php?id=134034 |
For those unable to participate during the live
broadcast, a replay of the call will also be available from 7:30
p.m. Eastern Time on May 3, 2019 through 11:59 p.m. Eastern Time on
May 17, 2019 by dialing 1-844-512-2921 (domestic) and
1-412-317-6671 (international) and referencing the replay pin
number: 13689688.
About MarlinMarlin 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. For more information about Marlin, visit
marlincapitalsolutions.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, executive severance, certain acquisition related
expenses, and the impact of pass-through lease expenses that are
required to be presented on a gross basis in the income statement,
as applicable. The Company adjusts the denominator in the “as
reported” ratio for pass-through lease revenue that is required to
be presented on a gross basis in the income statement, as
applicable. The Company believes that these non-GAAP measures are
useful performance metrics for management, investors and lenders,
because it provides a 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:Mike BoganskySenior Vice
President & Chief Financial Officer856-505-4108
Lasse GlassenAddo Investor Relationslglassen@addoir.com
424-238-6249
---Tables to Follow--
|
MARLIN BUSINESS SERVICES
CORP. AND SUBSIDIARIES |
Consolidated Balance
Sheets |
(Unaudited) |
|
|
|
March 31, |
|
|
December 31, |
|
|
2019 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
(Dollars in thousands, except per-share
data) |
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
Cash and due from banks |
$ |
4,737 |
|
|
$ |
5,088 |
|
Interest-earning deposits with banks |
|
136,215 |
|
|
|
92,068 |
|
Total cash and cash equivalents |
|
140,952 |
|
|
|
97,156 |
|
Time deposits with banks |
|
11,239 |
|
|
|
9,659 |
|
Restricted interest-earning deposits (includes $9.1 and $10.0
million at March 31, 2019, and |
|
13,174 |
|
|
|
14,045 |
|
December 31, 2018, respectively, related to consolidated
VIEs) |
|
|
|
|
|
Investment securities (amortized cost of $10.8 million and
$11.2 million at |
|
10,676 |
|
|
|
10,956 |
|
March 31, 2019 and December 31, 2018, respectively) |
|
|
|
|
|
Net investment in leases and loans: |
|
|
|
|
|
Leases |
|
480,766 |
|
|
|
489,299 |
|
Loans |
|
559,306 |
|
|
|
527,541 |
|
Net investment in leases and loans, excluding allowance
for credit losses |
|
1,040,072 |
|
|
|
1,016,840 |
|
(includes $129.4 million and $150.2 million at March 31,
2019 and December 31, 2018, |
|
|
|
|
|
respectively, related to consolidated VIEs) |
|
|
|
|
|
Allowance for credit losses |
|
(16,882 |
) |
|
|
(16,100 |
) |
Total net investment in leases and loans |
|
1,023,190 |
|
|
|
1,000,740 |
|
Intangible assets |
|
8,149 |
|
|
|
7,912 |
|
Goodwill |
|
6,735 |
|
|
|
7,360 |
|
Operating lease right-of-use assets |
|
6,048 |
|
|
|
— |
|
Property and equipment, net |
|
3,992 |
|
|
|
4,317 |
|
Property tax receivables |
|
9,133 |
|
|
|
5,245 |
|
Other assets |
|
13,437 |
|
|
|
9,656 |
|
Total assets |
$ |
1,246,725 |
|
|
$ |
1,167,046 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Deposits |
$ |
840,167 |
|
|
$ |
755,776 |
|
Long-term borrowings related to consolidated VIEs |
|
129,171 |
|
|
|
150,055 |
|
Operating lease liabilities |
|
9,104 |
|
|
|
— |
|
Other liabilities: |
|
|
|
|
|
Sales and property taxes payable |
|
8,590 |
|
|
|
3,775 |
|
Accounts payable and accrued expenses |
|
34,105 |
|
|
|
36,369 |
|
Net deferred income tax liability |
|
23,938 |
|
|
|
22,560 |
|
Total liabilities |
|
1,045,075 |
|
|
|
968,535 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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; |
|
|
|
|
|
12,349,076 and 12,367,724 shares issued and
outstanding at March 31, 2019 and |
|
123 |
|
|
|
124 |
|
December 31, 2018, respectively |
|
|
|
|
|
Additional paid-in capital |
|
83,215 |
|
|
|
83,498 |
|
Stock subscription receivable |
|
(2 |
) |
|
|
(2 |
) |
Accumulated other comprehensive loss |
|
(4 |
) |
|
|
(44 |
) |
Retained earnings |
|
118,318 |
|
|
|
114,935 |
|
Total stockholders’ equity |
|
201,650 |
|
|
|
198,511 |
|
Total liabilities and stockholders’ equity |
$ |
1,246,725 |
|
|
$ |
1,167,046 |
|
|
|
MARLIN BUSINESS SERVICES
CORP. AND SUBSIDIARIES |
Consolidated Statements of
Operations |
(Unaudited) |
|
|
Three Months Ended March 31, |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per-share
data) |
|
|
|
|
|
|
|
|
Interest income |
$ |
25,883 |
|
|
$ |
23,279 |
|
Fee income |
|
4,042 |
|
|
|
3,959 |
|
Interest and fee income |
|
29,925 |
|
|
|
27,238 |
|
Interest expense |
|
5,962 |
|
|
|
3,399 |
|
Net interest and fee income |
|
23,963 |
|
|
|
23,839 |
|
Provision for credit losses |
|
5,363 |
|
|
|
4,612 |
|
Net interest and fee income after provision for credit
losses |
|
18,600 |
|
|
|
19,227 |
|
|
|
|
|
|
|
|
|
Non-interest income: |
|
|
|
|
|
|
|
Insurance premiums written and earned |
|
2,132 |
|
|
|
1,939 |
|
Other income |
|
10,816 |
|
|
|
3,295 |
|
Non-interest income |
|
12,948 |
|
|
|
5,234 |
|
Non-interest expense: |
|
|
|
|
|
|
|
Salaries and benefits |
|
11,451 |
|
|
|
10,023 |
|
General and administrative |
|
13,354 |
|
|
|
6,571 |
|
Non-interest expense |
|
24,805 |
|
|
|
16,594 |
|
Income before income taxes |
|
6,743 |
|
|
|
7,867 |
|
Income tax expense |
|
1,602 |
|
|
|
1,682 |
|
Net income |
$ |
5,141 |
|
|
$ |
6,185 |
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.42 |
|
|
$ |
0.50 |
|
Diluted earnings per share |
$ |
0.41 |
|
|
$ |
0.50 |
|
|
|
|
|
|
|
|
|
|
MARLIN BUSINESS SERVICES CORP. AND
SUBSIDIARIES |
Reconciliation of GAAP to Non-GAAP Financial
Measures |
|
|
Three Months Ended March 31, |
|
|
2019 |
|
|
|
2018 |
|
|
|
|
(Dollars in thousands, except per-share
data) |
|
(Unaudited) |
|
|
|
|
|
|
Net income as
reported |
$ |
5,141 |
|
|
$ |
6,185 |
|
Deduct: |
|
|
|
|
|
Reversal of
charges in connection with executive separation |
|
218 |
|
|
|
- |
|
Tax effect |
|
(56 |
) |
|
|
- |
|
Reversal of charges in
connection with executive separation, net of tax |
|
162 |
|
|
|
- |
|
Net Income on an
adjusted basis |
$ |
4,979 |
|
|
$ |
6,185 |
|
|
|
|
|
|
|
Diluted earnings per
share as reported |
$ |
0.41 |
|
|
$ |
0.50 |
|
Diluted earnings per
share on an adjusted basis |
$ |
0.40 |
|
|
$ |
0.50 |
|
|
|
|
|
|
|
|
|
Return on Average
Assets as reported |
|
1.70 |
% |
|
|
2.37 |
% |
Return on Average
Assets on an adjusted basis |
|
1.64 |
% |
|
|
2.37 |
% |
|
|
|
|
|
|
|
|
Return on Average
Equity as reported |
|
10.45 |
% |
|
|
13.69 |
% |
Return on Average
Equity on an adjusted basis |
|
10.12 |
% |
|
|
13.69 |
% |
|
|
Efficiency Ratio
numerator as reported |
$ |
24,805 |
|
|
$ |
16,594 |
|
Adjustments to
Numerator: |
|
|
|
|
Expense
adjustments as seen in Net Income reconciliation above |
|
218 |
|
|
|
- |
|
Acquisition related expenses |
|
(716 |
) |
|
|
(365 |
) |
Pass-through expenses |
|
(6,233 |
) |
|
|
- |
|
Efficiency ratio
numerator on an adjusted basis |
$ |
18,074 |
|
|
$ |
16,229 |
|
Adjustments to
Denominator: |
|
|
|
|
|
Efficiency Ratio
denominator as reported |
$ |
36,911 |
|
|
$ |
29,073 |
|
Pass-through revenue |
|
(5,643 |
) |
|
|
- |
|
Efficiency Ratio
denominator on an adjusted basis |
$ |
31,268 |
|
|
$ |
29,073 |
|
|
|
|
|
|
|
Efficiency Ratio as
reported |
|
67.20 |
% |
|
|
57.08 |
% |
Efficiency Ratio on an
adjusted basis |
|
57.80 |
% |
|
|
55.82 |
% |
|
Net Income on an Adjusted Basis is defined as net income
excluding the following: First quarter 2019 partial reversal
of a prior period charges related to executive
separation. |
Efficiency on an Adjusted Basis is defined as Efficiency ratio
adjusted for the following: First quarter 2019 partial
reversal of prior period charges related to executive
separation, acquisition related expenses, and pass through lease
revenue and expense that is required to be presented on a gross
basis in the income statement |
|
|
MARLIN BUSINESS SERVICES CORP. AND
SUBSIDIARIES |
Supplemental Quarterly Data |
(Dollars in thousands, except share
amounts) |
(Unaudited) |
|
Quarter
Ended: |
|
3/31/2018 |
|
|
6/30/2018 |
|
|
9/30/2018 |
|
|
12/31/2018 |
|
|
3/31/2019 |
|
|
|
|
|
|
|
Net
Income: |
|
|
|
|
|
Net Income |
$ |
6,185 |
|
$ |
6,467 |
|
$ |
5,906 |
|
$ |
6,422 |
|
$ |
5,141 |
|
|
|
|
|
|
|
Annualized
Performance Measures: |
|
|
|
|
|
Return on Average
Assets |
|
2.37 |
% |
|
2.41 |
% |
|
2.04 |
% |
|
2.28 |
% |
|
1.69 |
% |
Return on Average
Stockholders' Equity |
|
13.69 |
% |
|
13.93 |
% |
|
12.36 |
% |
|
13.16 |
% |
|
10.45 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
EPS
Data: |
|
|
|
|
|
Net Income Allocated to
Common Stock |
$ |
6,065 |
|
$ |
6,352 |
|
$ |
5,808 |
|
$ |
6,322 |
|
$ |
5,069 |
|
Number of Shares -
Basic |
|
12,188,906 |
|
|
12,199,089 |
|
|
12,214,913 |
|
|
12,202,652 |
|
|
12,165,646 |
|
Basic Earnings per
Share |
$ |
0.50 |
|
$ |
0.52 |
|
$ |
0.48 |
|
$ |
0.52 |
|
$ |
0.42 |
|
|
|
|
|
|
|
Number of Shares -
Diluted |
|
12,245,019 |
|
|
12,269,989 |
|
|
12,296,726 |
|
|
12,286,748 |
|
|
12,252,116 |
|
Diluted Earnings per
Share |
$ |
0.50 |
|
$ |
0.52 |
|
$ |
0.47 |
|
$ |
0.51 |
|
$ |
0.41 |
|
|
|
|
|
|
|
Cash Dividends Declared
per share |
$ |
0.14 |
|
$ |
0.14 |
|
$ |
0.14 |
|
$ |
0.14 |
|
$ |
0.14 |
|
|
|
|
|
|
|
New Asset
Production: |
|
|
|
|
|
Direct
Originations |
$ |
30,869 |
|
$ |
36,338 |
|
$ |
35,469 |
|
$ |
40,381 |
|
$ |
43,565 |
|
Indirect
Originations |
$ |
128,833 |
|
$ |
135,865 |
|
$ |
137,605 |
|
$ |
159,534 |
|
$ |
149,875 |
|
Total
Originations |
$ |
159,702 |
|
$ |
172,203 |
|
$ |
173,074 |
|
$ |
199,915 |
|
$ |
193,440 |
|
|
|
|
|
|
|
Equipment Finance
Originations |
$ |
141,646 |
|
$ |
155,385 |
|
$ |
153,503 |
|
$ |
180,116 |
|
$ |
169,831 |
|
Working Capital Loans
Originations |
$ |
18,056 |
|
$ |
16,818 |
|
$ |
19,571 |
|
$ |
19,799 |
|
$ |
23,609 |
|
Total
Originations |
$ |
159,702 |
|
$ |
172,203 |
|
$ |
173,074 |
|
$ |
199,915 |
|
$ |
193,440 |
|
|
|
|
|
|
|
Assets originated for
sale in the period |
$ |
0 |
|
$ |
1,801 |
|
$ |
3,890 |
|
$ |
11,905 |
|
$ |
11,298 |
|
Assets referred in the
period |
$ |
4,201 |
|
$ |
5,638 |
|
$ |
2,540 |
|
$ |
4,451 |
|
$ |
3,617 |
|
Total Sourced
Originations |
$ |
163,903 |
|
$ |
179,642 |
|
$ |
179,504 |
|
$ |
216,271 |
|
$ |
208,355 |
|
Assets sold in the
period |
$ |
22,981 |
|
$ |
16,890 |
|
$ |
40,986 |
|
$ |
58,138 |
|
$ |
52,867 |
|
|
|
|
|
|
|
Implicit Yield on
Direct Originations |
|
19.47 |
% |
|
18.59 |
% |
|
22.39 |
% |
|
21.79 |
% |
|
23.09 |
% |
Implicit Yield on
Indirect Originations |
|
10.75 |
% |
|
10.54 |
% |
|
10.29 |
% |
|
9.97 |
% |
|
9.76 |
% |
Total Implicit Yield on
Total Originations |
|
12.44 |
% |
|
12.24 |
% |
|
12.77 |
% |
|
12.36 |
% |
|
12.76 |
% |
|
|
|
|
|
|
Implicit Yield on
Equipment Finance Originations |
|
9.99 |
% |
|
9.94 |
% |
|
9.96 |
% |
|
9.68 |
% |
|
9.59 |
% |
Implicit Yield on
Working Capital Loans Originations |
|
31.68 |
% |
|
33.52 |
% |
|
34.85 |
% |
|
36.67 |
% |
|
35.55 |
% |
|
|
|
|
|
|
# of Leases / Loans
Equipment Finance |
|
7,764 |
|
|
8,238 |
|
|
7,603 |
|
|
7,873 |
|
|
7,467 |
|
Equipment Finance
Approval Percentage |
|
56 |
% |
|
56 |
% |
|
57 |
% |
|
59 |
% |
|
58 |
% |
Average Monthly
Equipment Finance Sources |
|
1,190 |
|
|
1,240 |
|
|
1,174 |
|
|
1,140 |
|
|
1,074 |
|
|
|
|
|
|
|
Notes and Footnotes:
(1) COF is defined as interest expense for the period divided by
average interest bearing liabilities, annualized.(2) Net investment
in total finance receivables includes net investment in Equipment
Finance leases and loans and Working Capital Loans.
(3) Adjusted General and administrative
expense excludes Non-GAAP General and administrative expense items
as defined in the reconciliation of GAAP to Non-GAAP financial
measures and acquisition related intangible amortization and
pass-through lease expense that is required to be presented on a
gross basis in the income statement.(4) Adjusted non-interest
expense excludes Non-GAAP non-interest expense items as defined in
the reconciliation of GAAP to Non-GAAP financial measures and
acquisition related sales commissions, acquisition related
intangible amortization, and pass-through lease expense that is
required to be presented on a gross basis in the income
statement.**Equipment Finance consists of equipment leases and
loans; Working Capital Loans consist of small business loans.
|
MARLIN BUSINESS SERVICES CORP. AND
SUBSIDIARIES |
Supplemental Quarterly Data |
(Dollars in thousands, except share
amounts) |
(Unaudited) |
|
Quarter
Ended: |
|
3/31/2018 |
|
|
6/30/2018 |
|
|
9/30/2018 |
|
|
12/31/2018 |
|
|
3/31/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest and
Fee Margin (NIM) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent of
Average Total Finance Receivables: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Income |
|
10.19 |
% |
|
10.24 |
% |
|
10.37 |
% |
|
10.28 |
% |
|
10.36 |
% |
Fee Income |
|
1.73 |
% |
|
1.66 |
% |
|
1.64 |
% |
|
1.68 |
% |
|
1.62 |
% |
Interest and Fee
Income |
|
11.92 |
% |
|
11.90 |
% |
|
12.01 |
% |
|
11.96 |
% |
|
11.98 |
% |
Interest Expense |
|
1.49 |
% |
|
1.59 |
% |
|
2.07 |
% |
|
2.20 |
% |
|
2.39 |
% |
Net Interest and Fee
Margin (NIM) |
|
10.43 |
% |
|
10.31 |
% |
|
9.94 |
% |
|
9.76 |
% |
|
9.59 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Funds (1) |
|
1.63 |
% |
|
1.76 |
% |
|
2.15 |
% |
|
2.43 |
% |
|
2.49 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Income
Equipment Finance |
$ |
20,639 |
|
$ |
21,082 |
|
$ |
21,489 |
|
$ |
21,590 |
|
$ |
21,722 |
|
Interest Income Working
Capital Loans |
$ |
2,321 |
|
$ |
2,463 |
|
$ |
2,626 |
|
$ |
2,824 |
|
$ |
3,228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Total Finance
Receivables |
$ |
913,804 |
|
$ |
936,007 |
|
$ |
957,755 |
|
$ |
970,785 |
|
$ |
999,432 |
|
Average Net Investment
Equipment Finance |
$ |
884,946 |
|
$ |
905,583 |
|
$ |
925,900 |
|
$ |
937,004 |
|
$ |
960,501 |
|
Average Working Capital
Loans |
$ |
28,858 |
|
$ |
30,424 |
|
$ |
31,855 |
|
$ |
33,781 |
|
$ |
38,931 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of Period Net
Investment Equipment Finance |
$ |
900,763 |
|
$ |
933,261 |
|
$ |
937,897 |
|
$ |
965,351 |
|
$ |
981,664 |
|
End of Period Working
Capital Loans |
$ |
29,864 |
|
$ |
29,848 |
|
$ |
32,528 |
|
$ |
35,389 |
|
$ |
41,526 |
|
Total Owned Net
Investment in Leases and Loans (2) |
$ |
930,627 |
|
$ |
963,109 |
|
$ |
970,425 |
|
$ |
1,000,740 |
|
$ |
1,023,190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets Serviced
for Others |
$ |
90,701 |
|
$ |
98,442 |
|
$ |
128,539 |
|
$ |
164,029 |
|
$ |
192,731 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Managed
Assets |
$ |
1,021,328 |
|
$ |
1,061,551 |
|
$ |
1,098,964 |
|
$ |
1,164,769 |
|
$ |
1,215,921 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Total Managed
Assets |
$ |
996,334 |
|
$ |
1,030,579 |
|
$ |
1,071,246 |
|
$ |
1,117,069 |
|
$ |
1,177,812 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Asset
Quality: |
|
|
|
|
|
|
|
|
|
|
|
Total Finance
Receivables |
|
|
|
|
|
30+ Days Past Due
Delinquencies |
|
1.05 |
% |
|
0.96 |
% |
|
1.02 |
% |
|
1.09 |
% |
|
1.11 |
% |
30+ Days Past Due
Delinquencies |
$ |
10,994 |
|
$ |
10,438 |
|
$ |
11,270 |
|
$ |
12,295 |
|
$ |
12,849 |
|
|
|
|
|
|
|
60+ Days Past Due
Delinquencies |
|
0.64 |
% |
|
0.55 |
% |
|
0.57 |
% |
|
0.65 |
% |
|
0.66 |
% |
60+ Days Past Due
Delinquencies |
$ |
6,735 |
|
$ |
6,007 |
|
$ |
6,244 |
|
$ |
7,292 |
|
$ |
7,626 |
|
|
|
|
|
|
|
Equipment Finance |
|
|
|
|
|
30+ Days Past Due
Delinquencies |
|
1.07 |
% |
|
0.97 |
% |
|
1.02 |
% |
|
1.08 |
% |
|
1.13 |
% |
30+ Days Past Due
Delinquencies |
$ |
10,942 |
|
$ |
10,286 |
|
$ |
10,913 |
|
$ |
11,803 |
|
$ |
12,565 |
|
|
|
|
|
|
|
60+ Days Past Due
Delinquencies |
|
0.66 |
% |
|
0.56 |
% |
|
0.57 |
% |
|
0.65 |
% |
|
0.68 |
% |
60+ Days Past Due
Delinquencies |
$ |
6,735 |
|
$ |
5,952 |
|
$ |
6,137 |
|
$ |
7,100 |
|
$ |
7,626 |
|
|
|
|
|
|
|
Working Capital
Loans |
|
|
|
|
|
15+ Days Past Due
Delinquencies |
|
0.53 |
% |
|
0.59 |
% |
|
1.17 |
% |
|
1.44 |
% |
|
1.41 |
% |
15+ Days Past Due
Delinquencies |
$ |
162 |
|
$ |
183 |
|
$ |
394 |
|
$ |
526 |
|
$ |
605 |
|
|
|
|
|
|
|
30+ Days Past Due
Delinquencies |
|
0.17 |
% |
|
0.49 |
% |
|
1.06 |
% |
|
1.35 |
% |
|
0.66 |
% |
30+ Days Past Due
Delinquencies |
$ |
52 |
|
$ |
152 |
|
$ |
357 |
|
$ |
492 |
|
$ |
284 |
|
|
|
|
|
|
|
Notes and Footnotes:
(1) COF is defined as interest expense
for the period divided by average interest bearing liabilities,
annualized.(2) Net investment in total finance receivables includes
net investment in Equipment Finance leases and loans and Working
Capital Loans. (3)
Adjusted General and administrative expense excludes Non-GAAP
General and administrative expense items as defined in the
reconciliation of GAAP to Non-GAAP financial measures and
acquisition related intangible amortization and pass-through lease
expense that is required to be presented on a gross basis in the
income statement.(4) Adjusted non-interest expense excludes
Non-GAAP non-interest expense items as defined in the
reconciliation of GAAP to Non-GAAP financial measures and
acquisition related sales commissions, acquisition related
intangible amortization, and pass-through lease expense that is
required to be presented on a gross basis in the income
statement.**Equipment Finance consists of equipment leases and
loans; Working Capital Loans consist of small business loans.
|
MARLIN BUSINESS SERVICES CORP. AND
SUBSIDIARIES |
Supplemental Quarterly Data |
(Dollars in thousands, except share
amounts) |
(Unaudited) |
|
Quarter
Ended: |
|
3/31/2018 |
|
|
6/30/2018 |
|
|
9/30/2018 |
|
|
12/31/2018 |
|
|
3/31/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Asset
Quality: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Charge-offs - Total
Finance Receivables |
$ |
3,843 |
|
$ |
4,306 |
|
$ |
4,546 |
|
$ |
5,578 |
|
$ |
4,581 |
|
% on Average Total
Finance Receivables |
|
|
|
|
|
Annualized |
|
1.68 |
% |
|
1.84 |
% |
|
1.90 |
% |
|
2.30 |
% |
|
1.83 |
% |
|
|
|
|
|
|
Net Charge-offs -
Equipment Finance |
$ |
3,618 |
|
$ |
3,851 |
|
$ |
4,194 |
|
$ |
5,132 |
|
$ |
3,927 |
|
% on Average Net
Investment in Equipment Finance |
|
|
|
|
|
Annualized |
|
1.64 |
% |
|
1.70 |
% |
|
1.81 |
% |
|
2.19 |
% |
|
1.64 |
% |
|
|
|
|
|
|
Net Charge-offs -
Working Capital Loans |
$ |
224 |
|
$ |
456 |
|
$ |
352 |
|
$ |
446 |
|
$ |
654 |
|
% of Average Working
Capital Loans |
|
|
|
|
|
Annualized |
|
3.10 |
% |
|
6.00 |
% |
|
4.42 |
% |
|
5.28 |
% |
|
6.72 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total Allowance for
Credit Losses |
$ |
15,620 |
|
$ |
15,570 |
|
$ |
15,917 |
|
$ |
16,100 |
|
$ |
16,882 |
|
% of Total Finance
Receivables |
|
1.68 |
% |
|
1.62 |
% |
|
1.65 |
% |
|
1.62 |
% |
|
1.66 |
% |
% of 60+
Delinquencies |
|
231.92 |
% |
|
259.19 |
% |
|
254.92 |
% |
|
220.79 |
% |
|
221.37 |
% |
|
|
|
|
|
|
Allowance for Credit
Losses - Equipment Finance |
$ |
14,310 |
|
$ |
14,236 |
|
$ |
14,498 |
|
$ |
14,633 |
|
$ |
15,198 |
|
% of Net Investment
Equipment Finance |
|
1.60 |
% |
|
1.53 |
% |
|
1.55 |
% |
|
1.52 |
% |
|
1.56 |
% |
% of 60+
Delinquencies |
|
212.48 |
% |
|
239.18 |
% |
|
236.24 |
% |
|
206.10 |
% |
|
199.28 |
% |
|
|
|
|
|
|
Allowance for Credit
Losses - Working Capital Loans |
$ |
1,310 |
|
$ |
1,334 |
|
$ |
1,419 |
|
$ |
1,467 |
|
$ |
1,684 |
|
% of Total Working
Capital Loans |
|
4.25 |
% |
|
4.32 |
% |
|
4.22 |
% |
|
4.02 |
% |
|
3.94 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Non-accrual - Equipment
Finance |
$ |
3,626 |
|
$ |
3,211 |
|
$ |
3,392 |
|
$ |
3,720 |
|
$ |
4,390 |
|
Non-accrual - Equipment
Finance |
|
0.36 |
% |
|
0.30 |
% |
|
0.32 |
% |
|
0.34 |
% |
|
0.39 |
% |
|
|
|
|
|
|
Non-accrual - Working
Capital Loans |
$ |
27 |
|
$ |
147 |
|
$ |
217 |
|
$ |
492 |
|
$ |
284 |
|
Non-accrual - Working
Capital Loans |
|
0.09 |
% |
|
0.48 |
% |
|
0.65 |
% |
|
1.35 |
% |
|
0.66 |
% |
|
|
|
|
|
|
Non-accrual - Total
Finance Receivables |
$ |
3,653 |
|
$ |
3,358 |
|
$ |
3,609 |
|
$ |
4,212 |
|
$ |
4,674 |
|
Non-accrual - Total
Finance Receivables |
|
0.35 |
% |
|
0.31 |
% |
|
0.33 |
% |
|
0.37 |
% |
|
0.40 |
% |
|
|
|
|
|
|
Restructured - Total
Finance Receivables |
$ |
4,366 |
|
$ |
3,747 |
|
$ |
3,456 |
|
$ |
3,636 |
|
$ |
3,363 |
|
|
|
|
|
|
|
Expense
Ratios: |
|
|
|
|
|
Salaries and Benefits
Expense |
$ |
10,023 |
|
$ |
9,527 |
|
$ |
10,292 |
|
$ |
9,908 |
|
$ |
11,451 |
|
Salaries and Benefits
Expense |
|
|
|
|
|
Annualized % of
Avg. Fin. Recbl. |
|
4.39 |
% |
|
4.07 |
% |
|
4.30 |
% |
|
4.08 |
% |
|
4.58 |
% |
|
|
|
|
|
|
Total personnel end of
quarter |
|
326 |
|
|
320 |
|
|
339 |
|
|
341 |
|
|
352 |
|
|
|
|
|
|
|
General and
Administrative Expense |
$ |
6,571 |
|
$ |
6,449 |
|
$ |
5,445 |
|
$ |
6,450 |
|
$ |
13,354 |
|
General and
Administrative Expense |
|
|
|
|
|
Annualized % of
Avg. Fin. Recbl. |
|
2.88 |
% |
|
2.76 |
% |
|
2.27 |
% |
|
2.66 |
% |
|
5.34 |
% |
Adjusted General and
Administrative Expense |
|
|
|
|
|
Annualized % of
Avg. Fin. Recbl. (3) |
|
2.79 |
% |
|
2.73 |
% |
|
2.25 |
% |
|
2.57 |
% |
|
2.75 |
% |
Notes and Footnotes:
(1) COF is defined as interest expense
for the period divided by average interest bearing liabilities,
annualized.(2) Net investment in total finance receivables includes
net investment in Equipment Finance leases and loans and Working
Capital Loans. (3)
Adjusted General and administrative expense excludes Non-GAAP
General and administrative expense items as defined in the
reconciliation of GAAP to Non-GAAP financial measures and
acquisition related intangible amortization and pass-through lease
expense that is required to be presented on a gross basis in the
income statement.
(4) Adjusted non-interest expense
excludes Non-GAAP non-interest expense items as defined in the
reconciliation of GAAP to Non-GAAP financial measures and
acquisition related sales commissions, acquisition related
intangible amortization, and pass-through lease expense that is
required to be presented on a gross basis in the income
statement.**Equipment Finance consists of equipment leases and
loans; Working Capital Loans consist of small business loans.
|
MARLIN BUSINESS SERVICES CORP. AND
SUBSIDIARIES |
Supplemental Quarterly Data |
(Dollars in thousands, except share
amounts) |
(Unaudited) |
|
|
Quarter
Ended: |
|
3/31/2018 |
|
|
6/30/2018 |
|
|
9/30/2018 |
|
|
12/31/2018 |
|
|
3/31/2019 |
|
|
|
|
|
|
|
Expense
Ratios: |
|
|
|
|
|
Non-Interest
Expense/Average Total Managed Assets |
|
6.66 |
% |
|
6.20 |
% |
|
5.88 |
% |
|
5.86 |
% |
|
8.42 |
% |
Adjusted Non-Interest
Expense/Average Total Managed Assets (4) |
|
6.52 |
% |
|
6.06 |
% |
|
5.46 |
% |
|
5.61 |
% |
|
6.14 |
% |
|
|
|
|
|
|
Efficiency Ratio |
|
57.08 |
% |
|
55.56 |
% |
|
55.69 |
% |
|
53.11 |
% |
|
67.20 |
% |
Adjusted Efficiency
Ratio (4) |
|
55.82 |
% |
|
54.31 |
% |
|
51.70 |
% |
|
50.90 |
% |
|
57.80 |
% |
|
|
|
|
|
|
Balance
Sheet: |
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
Investment in Leases
and Loans |
$ |
927,752 |
|
$ |
959,452 |
|
$ |
966,659 |
|
$ |
996,384 |
|
$ |
1,019,311 |
|
Initial Direct Costs
and Fees |
|
18,495 |
|
|
19,227 |
|
|
19,683 |
|
|
20,456 |
|
|
20,761 |
|
Reserve for Credit
Losses |
|
(15,620 |
) |
|
(15,570 |
) |
|
(15,917 |
) |
|
(16,100 |
) |
|
(16,882 |
) |
Net Investment in
Leases and Loans |
$ |
930,627 |
|
$ |
963,109 |
|
$ |
970,425 |
|
$ |
1,000,740 |
|
$ |
1,023,190 |
|
Cash and Cash
Equivalents |
|
84,891 |
|
|
99,227 |
|
|
88,448 |
|
|
97,156 |
|
|
140,942 |
|
Restricted Cash |
|
- |
|
|
- |
|
|
10,049 |
|
|
14,045 |
|
|
13,174 |
|
Other Assets |
|
55,707 |
|
|
50,975 |
|
|
57,811 |
|
|
55,105 |
|
|
69,409 |
|
Total Assets |
$ |
1,071,225 |
|
$ |
1,113,311 |
|
$ |
1,126,733 |
|
$ |
1,167,046 |
|
$ |
1,246,725 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Deposits |
|
833,145 |
|
|
863,568 |
|
|
700,107 |
|
|
755,776 |
|
|
840,167 |
|
Total Debt |
|
- |
|
|
- |
|
|
174,519 |
|
|
150,055 |
|
|
129,171 |
|
Other Liabilities |
|
54,153 |
|
|
60,101 |
|
|
58,564 |
|
|
62,704 |
|
|
75,737 |
|
Total Liabilities |
$ |
887,298 |
|
$ |
923,669 |
|
$ |
933,190 |
|
$ |
968,535 |
|
$ |
1,045,075 |
|
|
|
|
|
|
|
Stockholders'
Equity |
|
|
|
|
|
Common Stock |
$ |
124 |
|
$ |
124 |
|
$ |
124 |
|
$ |
124 |
|
$ |
123 |
|
Paid-in Capital,
net |
|
82,507 |
|
|
83,472 |
|
|
83,315 |
|
|
83,496 |
|
|
83,209 |
|
Other Comprehensive
Income (Loss) |
|
(98 |
) |
|
(73 |
) |
|
(149 |
) |
|
(44 |
) |
|
(4 |
) |
Retained Earnings |
|
101,394 |
|
|
106,119 |
|
|
110,253 |
|
|
114,935 |
|
|
118,318 |
|
Total Stockholders'
Equity |
$ |
183,927 |
|
$ |
189,642 |
|
$ |
193,543 |
|
$ |
198,511 |
|
$ |
201,650 |
|
|
|
|
|
|
|
Total Liabilities
and |
|
|
|
|
|
Stockholders'
Equity |
$ |
1,071,225 |
|
$ |
1,113,311 |
|
$ |
1,126,733 |
|
$ |
1,167,046 |
|
$ |
1,246,725 |
|
|
|
|
|
|
|
Capital and
Leverage: |
|
|
|
|
|
Equity |
$ |
183,927 |
|
$ |
189,642 |
|
$ |
193,543 |
|
$ |
198,511 |
|
$ |
201,650 |
|
Debt to Equity |
|
4.53 |
|
|
4.55 |
|
|
4.52 |
|
|
4.56 |
|
|
4.81 |
|
Equity to Assets |
|
17.17 |
% |
|
17.03 |
% |
|
17.18 |
% |
|
17.01 |
% |
|
16.17 |
% |
|
|
|
|
|
|
Regulatory
Capital Ratios: |
|
|
|
|
|
Tier 1 Leverage
Capital |
|
17.35 |
% |
|
17.04 |
% |
|
15.57 |
% |
|
16.38 |
% |
|
15.41 |
% |
Common Equity Tier 1
Risk-based Capital |
|
18.33 |
% |
|
18.07 |
% |
|
17.46 |
% |
|
17.50 |
% |
|
17.25 |
% |
Tier 1 Risk-based
Capital |
|
18.33 |
% |
|
18.07 |
% |
|
17.46 |
% |
|
17.50 |
% |
|
17.25 |
% |
Total Risk-based
Capital |
|
19.58 |
% |
|
19.33 |
% |
|
18.72 |
% |
|
18.76 |
% |
|
18.50 |
% |
|
|
|
|
|
|
Notes and Footnotes:
(1) COF is defined as interest expense
for the period divided by average interest bearing liabilities,
annualized.(2) Net investment in total finance receivables includes
net investment in Equipment Finance leases and loans and Working
Capital Loans. (3)
Adjusted General and administrative expense excludes Non-GAAP
General and administrative expense items as defined in the
reconciliation of GAAP to Non-GAAP financial measures and
acquisition related intangible amortization and pass-through lease
expense that is required to be presented on a gross basis in the
income statement.
(4) Adjusted non-interest expense
excludes Non-GAAP non-interest expense items as defined in the
reconciliation of GAAP to Non-GAAP financial measures and
acquisition related sales commissions, acquisition related
intangible amortization, and pass-through lease expense that is
required to be presented on a gross basis in the income
statement.**Equipment Finance consists of equipment leases and
loans; Working Capital Loans consist of small business loans.
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