First Quarter Financial Summary:
- Total first quarter originations of $108.4 million, up 35% over Q1 2015
- Total loan originations of $7.9 million, more than doubling Q4 2015 loan volume
- Net income of $3.7 million with EPS of $0.29 per share
- ROE increased 41 basis points from prior year to 9.74%
- Total loan and lease yield of 11.69% increased 30 basis points from prior quarter and 84 basis points from prior year
- Credit quality remained strong with delinquencies at 85 basis points and 52 basis points for the 30+ day and 60+ day delinquencies, respectively
- Net investment in leases and loans ended the quarter at $702.1 million, up 11.8% over Q1 2015
- Strong capital position with equity to assets ratio of 19.03%
Strategic Business Highlights:
- Second straight quarter of record origination volume with low credit losses
- Surpassed $800 million in total assets
- Record origination volume accelerated progress towards goal of generating additional fee income
- Continued expansion of working capital loan product (Funding Stream), and Franchise and Transportation initiatives
- Continued to realign operating and sales functions and invest in talent pool to support strategic goals
MOUNT LAUREL, N.J., April 28, 2016 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. MRLN today reported first quarter 2016 net income of $3.7 million, or $0.29 per diluted share, compared to $4.1 million, or $0.31 per diluted share, for first quarter 2015. Return on equity for the quarter was 9.74%, up from 9.33% a year ago.
Edward Siciliano, Interim CEO and Chief Sales Officer, said, "The record origination growth the Company experienced in the first quarter demonstrates that our strategic investments in talent and new channels are beginning to pay off, and we expect this momentum to continue throughout the year. I want to thank all Marlin employees for their hard work and dedication in the first quarter."
Combined lease and loan production for the first quarter ended March 31, 2016 of $108.4 million was the second consecutive quarter of record originations for the Company. Historically, first quarter origination has been the softest of the year; however, 2016 first quarter lease production of $100.5 million was down only slightly from our record fourth quarter of $103.9 million and up 26% compared to the first quarter of 2015. The company also experienced solid loan production in the first quarter of $7.9 million, up from $3.7 million in the fourth quarter of 2015. The strong performance in all channels was mainly attributable to a more focused marketing strategy, the deployment of a re-energized and optimized salesforce and strategic investments in the expansion of the Company's origination platform.
Net interest and fee margin as a percentage of average finance receivables was 11.58% for the first quarter ended March 31, 2016, up 6 basis points from the fourth quarter of 2015 and down 82 basis points from a year ago. The decrease in margin percentage from a year ago was a result of the roll-off of higher yielding assets, a decline in late fees and a slight increase in the Company's cost of funds. The Company's cost of funds increased to 100 basis points, compared to 98 basis points for the fourth quarter of 2015 and 85 basis points for the first quarter of 2015.
On an absolute basis, net interest and fee margin increased to $19.7 million for the quarter ended March 31, 2016, compared to $19.3 million for the quarter ended March 31, 2015.
Allowance for credit losses as a percentage of total finance receivables was 1.31% at March 31, 2016, and represented 223% coverage of total 60+ day delinquencies. The allowance was 16 basis points lower than the March 31, 2015 allowance percentage of 1.47% and the coverage ratio was about the same as the coverage ratio a year ago.
Credit quality remained strong as finance receivables over 30 days delinquent were 0.85% of the Company's total finance receivables portfolio as of March 31, 2016, down two basis points from March 31, 2015. Finance receivables over 60 days delinquent were 0.52% of the Company's total finance receivables portfolio as of March 31, 2016, down five basis points from 0.57% at March 31, 2015. First quarter net charge-offs were 1.35% of average total finance receivables versus 1.70% a year ago.
The Company's efficiency ratio for the first quarter was 58.2% compared to 52.4% for the quarter ended March 31, 2015. The increase was a direct result of Marlin's investments in new initiatives over the last year and the ratio is expected to improve as those initiatives gain traction.
The Company's consolidated equity to assets ratio and risk based capital ratio were 19.03% and 21.74%, respectively.
The Board of Directors of Marlin Business Services Corp. today declared a $0.14 per share quarterly dividend. The dividend is payable May 19, 2016, to shareholders of record on May 9, 2016. Based on the closing stock price on April 26, 2016, the annualized dividend yield on the Company's common stock is 3.68%.
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.marlincorp.com.
Conference Call and Webcast
We will host a conference call on Friday, April 29, 2016 at 9:00 a.m. ET to discuss the Company's first quarter 2016 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.marlincorp.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 innovative equipment financing solutions for small and mid-size businesses. Since its inception in 1997, Marlin has financed a wide array of commercial equipment and software for a quarter of a million business customers. Marlin's mission is to offer convenient and cost-effective financing products while providing the highest level of customer service. Marlin is publicly traded MRLN and owns and operates a federally regulated commercial bank, Marlin Business Bank. For more information, 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) | ||||||||||||||||||||
| March 31, | December 31, | |||||||||||||||||||
| 2016 | 2015 | |||||||||||||||||||
| (Dollars in thousands, except per-share data) | ||||||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and due from banks | $ | 3,402 | $ | 4,946 | ||||||||||||||||
| Interest-earning deposits with banks | 61,691 | 55,183 | ||||||||||||||||||
| Total cash and cash equivalents | 65,093 | 60,129 | ||||||||||||||||||
| Time deposits with banks | 8,613 | 7,368 | ||||||||||||||||||
| Restricted interest-earning deposits with banks | 112 | 216 | ||||||||||||||||||
| Securities available for sale (amortized cost of $6.4 million and $6.6 million at | ||||||||||||||||||||
| March 31, 2016 and December 31, 2015, respectively) | 6,276 | 6,399 | ||||||||||||||||||
| Net investment in leases and loans | 702,126 | 682,432 | ||||||||||||||||||
| Property and equipment, net | 3,687 | 3,872 | ||||||||||||||||||
| Property tax receivables | 5,866 | 47 | ||||||||||||||||||
| Other assets | 9,333 | 12,521 | ||||||||||||||||||
| Total assets | $ | 801,106 | $ | 772,984 | ||||||||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||
| Deposits | $ | 612,721 | $ | 587,940 | ||||||||||||||||
| Other liabilities: | ||||||||||||||||||||
| Sales and property taxes payable | 7,911 | 2,686 | ||||||||||||||||||
| Accounts payable and accrued expenses | 11,709 | 15,371 | ||||||||||||||||||
| Net deferred income tax liability | 16,289 | 16,849 | ||||||||||||||||||
| Total liabilities | 648,630 | 622,846 | ||||||||||||||||||
| Stockholders' equity: | ||||||||||||||||||||
| Common Stock, $0.01 par value; 75,000,000 shares authorized; | ||||||||||||||||||||
| 12,492,310 and 12,410,899 shares issued and outstanding at March 31, 2016 | ||||||||||||||||||||
| and December 31, 2015, respectively | 125 | 124 | ||||||||||||||||||
| Preferred Stock, $0.01 par value; 5,000,000 shares authorized; none issued | — | — | ||||||||||||||||||
| Additional paid-in capital | 82,056 | 81,703 | ||||||||||||||||||
| Stock subscription receivable | (2 | ) | (2 | ) | ||||||||||||||||
| Accumulated other comprehensive loss | (49 | ) | (129 | ) | ||||||||||||||||
| Retained earnings | 70,346 | 68,442 | ||||||||||||||||||
| Total stockholders' equity | 152,476 | 150,138 | ||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 801,106 | $ | 772,984 | ||||||||||||||||
| MARLIN BUSINESS SERVICES CORP. | ||||||||
| AND SUBSIDIARIES | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2016 | 2015 | |||||||
| (Dollars in thousands, except per-share data) | ||||||||
| Interest income | $ | 17,531 | $ | 16,487 | ||||
| Fee income | 3,834 | 4,120 | ||||||
| Interest and fee income | 21,365 | 20,607 | ||||||
| Interest expense | 1,692 | 1,318 | ||||||
| Net interest and fee income | 19,673 | 19,289 | ||||||
| Provision for credit losses | 3,075 | 3,340 | ||||||
| Net interest and fee income after provision for credit losses | 16,598 | 15,949 | ||||||
| Other income: | ||||||||
| Insurance income, net | 1,622 | 1,466 | ||||||
| Other income | 455 | 365 | ||||||
| Other income | 2,077 | 1,831 | ||||||
| Other expense: | ||||||||
| Salaries and benefits | 8,200 | 6,967 | ||||||
| General and administrative | 4,465 | 4,093 | ||||||
| Financing related costs | 34 | 108 | ||||||
| Other expense | 12,699 | 11,168 | ||||||
| Income before income taxes | 5,976 | 6,612 | ||||||
| Income tax expense | 2,325 | 2,557 | ||||||
| Net income | $ | 3,651 | $ | 4,055 | ||||
| Basic earnings per share | $ | 0.29 | $ | 0.31 | ||||
| Diluted earnings per share | $ | 0.29 | $ | 0.31 | ||||
| Cash dividends declared and paid per share | $ | 0.140 | $ | 0.125 | ||||
| SUPPLEMENTAL QUARTERLY DATA | ||||||||||||||||
| (Dollars in thousands, except share amounts) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Quarter Ended: | 3/31/2015 | 6/30/2015 | 9/30/2015 | 12/31/2015 | 3/31/2016 | |||||||||||
| Net Income: | ||||||||||||||||
| Net Income | $ | 4,055 | $ | 4,149 | $ | 4,797 | $ | 2,965 | $ | 3,651 | ||||||
| Annualized Performance Measures: | ||||||||||||||||
| Return on Average Assets | 2.17 | % | 2.18 | % | 2.51 | % | 1.56 | % | 1.88 | % | ||||||
| Return on Average Stockholders' Equity | 9.33 | % | 9.47 | % | 10.95 | % | 7.96 | % | 9.74 | % | ||||||
| EPS Data: | ||||||||||||||||
| Net Income Allocated to Common Stock | $ | 3,932 | $ | 4,031 | $ | 4,661 | $ | 2,891 | $ | 3,548 | ||||||
| Number of Shares - Basic | 12,487,241 | 12,450,283 | 12,406,767 | 12,118,789 | 12,120,934 | |||||||||||
| Basic Earnings per Share | $ | 0.31 | $ | 0.32 | $ | 0.38 | $ | 0.24 | $ | 0.29 | ||||||
| Number of Shares - Diluted | 12,523,258 | 12,464,638 | 12,413,497 | 12,128,613 | 12,126,812 | |||||||||||
| Diluted Earnings per Share | $ | 0.31 | $ | 0.32 | $ | 0.38 | $ | 0.24 | $ | 0.29 | ||||||
| Cash Dividends Declared per share | $ | 0.125 | $ | 0.125 | $ | 2.14 | $ | 0.14 | $ | 0.14 | ||||||
| New Asset Production: | ||||||||||||||||
| Leased Equipment Volume | $ | 80,084 | $ | 91,981 | $ | 98,237 | $ | 103,921 | $ | 100,492 | ||||||
| Loan Origination Volume | $ | 235 | $ | 654 | $ | 2,264 | $ | 3,695 | $ | 7,901 | ||||||
| New Originations | $ | 80,319 | $ | 92,635 | $ | 100,501 | $ | 107,616 | $ | 108,393 | ||||||
| Syndication Volume | $ | 1,272 | $ | 606 | $ | 1,394 | $ | 317 | $ | 0 | ||||||
| Total Asset Origination | $ | 81,591 | $ | 93,241 | $ | 101,895 | $ | 107,933 | $ | 108,393 | ||||||
| Implicit Yield on New Lease Originations | 10.78 | % | 11.04 | % | 10.48 | % | 10.66 | % | 10.35 | % | ||||||
| Implicit Yield on New Loan Originations | 35.61 | % | 27.73 | % | 36.00 | % | 31.99 | % | 28.64 | % | ||||||
| Total Implicit Yield on New Originations | 10.85 | % | 11.16 | % | 11.06 | % | 11.39 | % | 11.69 | % | ||||||
| # of Sales Reps | 125 | 127 | 131 | 136 | 136 | |||||||||||
| # of Leases | 5,691 | 6,366 | 6,476 | 6,625 | 6,316 | |||||||||||
| Lease Approval Percentage | 63 | % | 64 | % | 66 | % | 62 | % | 62 | % | ||||||
| Average Monthly Lease Sources | 1,015 | 1,143 | 1,106 | 1,109 | 1,075 | |||||||||||
| Net Interest and Fee Margin: | ||||||||||||||||
| Interest Income Leasing | $ | 16,405 | $ | 16,347 | $ | 16,473 | $ | 16,582 | $ | 16,785 | ||||||
| Interest Income Loans | $ | 17 | $ | 62 | $ | 139 | $ | 332 | $ | 641 | ||||||
| Interest Income Yield | 10.60 | % | 10.52 | % | 10.41 | % | 10.35 | % | 10.32 | % | ||||||
| Fee Income Yield | 2.65 | % | 2.38 | % | 2.44 | % | 2.15 | % | 2.26 | % | ||||||
| Interest and Fee Income Yield | 13.25 | % | 12.90 | % | 12.85 | % | 12.50 | % | 12.58 | % | ||||||
| Cost of Funds | 0.85 | % | 0.85 | % | 0.89 | % | 0.98 | % | 1.00 | % | ||||||
| Net Interest and Fee Margin | 12.40 | % | 12.05 | % | 11.96 | % | 11.52 | % | 11.58 | % | ||||||
| Average Total Finance Receivables | $ | 622,120 | $ | 627,079 | $ | 641,020 | $ | 656,942 | $ | 679,252 | ||||||
| Average Net Investment in Leases | $ | 620,937 | $ | 625,347 | $ | 638,358 | $ | 652,158 | $ | 670,416 | ||||||
| Average Loans | $ | 1,183 | $ | 1,732 | $ | 2,662 | $ | 4,784 | $ | 8,836 | ||||||
| End of Period Net Investment in Leases | $ | 626,617 | $ | 639,065 | $ | 655,458 | $ | 676,253 | $ | 690,843 | ||||||
| End of Period Loans | $ | 1,402 | $ | 2,017 | $ | 3,795 | $ | 6,179 | $ | 11,283 | ||||||
| Portfolio Asset Quality: | ||||||||||||||||
| Total Finance Receivables | ||||||||||||||||
| 30+ Days Past Due Delinquencies | 0.87 | % | 0.70 | % | 0.75 | % | 0.73 | % | 0.85 | % | ||||||
| 30+ Days Past Due Delinquencies | $ | 6,208 | $ | 5,053 | $ | 5,562 | $ | 5,618 | $ | 6,698 | ||||||
| 60+ Days Past Due Delinquencies | 0.57 | % | 0.40 | % | 0.43 | % | 0.41 | % | 0.52 | % | ||||||
| 60+ Days Past Due Delinquencies | $ | 4,057 | $ | 2,899 | $ | 3,186 | $ | 3,163 | $ | 4,114 | ||||||
| Net Charge-offs - Total Finance Receivables | $ | 2,646 | $ | 2,880 | $ | 1,965 | $ | 2,628 | $ | 2,297 | ||||||
| % on Average Total Finance Receivables | ||||||||||||||||
| Annualized | 1.70 | % | 1.84 | % | 1.23 | % | 1.60 | % | 1.35 | % | ||||||
| Net Charge-offs - Leasing | $ | 2,646 | $ | 2,880 | $ | 1,954 | $ | 2,628 | $ | 2,222 | ||||||
| % on Average Net Investment in Leases | ||||||||||||||||
| Annualized | 1.71 | % | 1.84 | % | 1.22 | % | 1.61 | % | 1.33 | % | ||||||
| Net Charge-offs - Loans | $ | 0 | $ | 0 | $ | 11 | $ | 0 | $ | 75 | ||||||
| % of Average Loans | ||||||||||||||||
| Annualized | n/a | n/a | 1.65 | % | n/a | 3.40 | % | |||||||||
| Allowance for Credit Losses | $ | 9,231 | $ | 8,567 | $ | 8,588 | $ | 8,413 | $ | 9,191 | ||||||
| % of Total Finance Receivables | 1.47 | % | 1.34 | % | 1.31 | % | 1.24 | % | 1.31 | % | ||||||
| % of 60+ Delinquencies | 227.53 | % | 295.52 | % | 269.55 | % | 265.98 | % | 223.41 | % | ||||||
| 90+ Day Delinquencies (Non-earning total finance receivables) | $ | 1,975 | $ | 1,433 | $ | 1,684 | $ | 1,677 | $ | 2,352 | ||||||
| Expense Ratios: | ||||||||||||||||
| Salaries and Benefits Expense | $ | 6,967 | $ | 7,265 | $ | 7,058 | $ | 9,884 | $ | 8,200 | ||||||
| Salaries and Benefits Expense | ||||||||||||||||
| Annualized % of Avg. Fin. Recbl. | 4.48 | % | 4.63 | % | 4.40 | % | 6.02 | % | 4.83 | % | ||||||
| Total personnel end of quarter | 296 | 302 | 307 | 314 | 309 | |||||||||||
| General and Administrative Expense | $ | 4,093 | $ | 4,330 | $ | 4,357 | $ | 4,671 | $ | 4,465 | ||||||
| General and Administrative Expense | ||||||||||||||||
| Annualized % of Avg. Fin. Recbl. | 2.63 | % | 2.76 | % | 2.72 | % | 2.84 | % | 2.63 | % | ||||||
| Efficiency Ratio | 52.37 | % | 56.19 | % | 53.81 | % | 68.99 | % | 58.23 | % | ||||||
| Balance Sheet: | ||||||||||||||||
| Assets | ||||||||||||||||
| Investment in Leases and Loans | $ | 627,167 | $ | 639,333 | $ | 657,143 | $ | 679,737 | $ | 699,672 | ||||||
| Initial Direct Costs and Fees | 10,083 | 10,316 | 10,697 | 11,108 | 11,645 | |||||||||||
| Reserve for Credit Losses | (9,231 | ) | (8,567 | ) | (8,588 | ) | (8,413 | ) | (9,191 | ) | ||||||
| Net Investment in Leases and Loans | $ | 628,019 | $ | 641,082 | $ | 659,252 | $ | 682,432 | $ | 702,126 | ||||||
| Cash and Cash Equivalents | 113,129 | 90,740 | 105,218 | 60,129 | 65,093 | |||||||||||
| Restricted Cash | 1,545 | 543 | 389 | 216 | 112 | |||||||||||
| Other Assets | 26,536 | 32,607 | 25,595 | 30,207 | 33,775 | |||||||||||
| Total Assets | $ | 769,229 | $ | 764,972 | $ | 790,454 | $ | 772,984 | $ | 801,106 | ||||||
| Liabilities | ||||||||||||||||
| Deposits | 557,835 | 554,190 | 579,625 | 587,940 | 612,721 | |||||||||||
| Other Liabilities | 36,305 | 34,292 | 59,515 | 34,906 | 35,909 | |||||||||||
| Total Liabilities | $ | 594,140 | $ | 588,482 | $ | 639,140 | $ | 622,846 | $ | 648,630 | ||||||
| Stockholders' Equity | ||||||||||||||||
| Common Stock | $ | 128 | $ | 128 | $ | 126 | $ | 124 | $ | 125 | ||||||
| Paid-in Capital, net | 87,832 | 86,723 | 84,002 | 81,701 | 82,054 | |||||||||||
| Other Comprehensive Income (Loss) | (35 | ) | (75 | ) | (27 | ) | (129 | ) | (49 | ) | ||||||
| Retained Earnings | 87,164 | 89,714 | 67,213 | 68,442 | 70,346 | |||||||||||
| Total Stockholders' Equity | $ | 175,089 | $ | 176,490 | $ | 151,314 | $ | 150,138 | $ | 152,476 | ||||||
| Total Liabilities and | ||||||||||||||||
| Stockholders' Equity | $ | 769,229 | $ | 764,972 | $ | 790,454 | $ | 772,984 | $ | 801,106 | ||||||
| Capital and Leverage: | ||||||||||||||||
| Equity | $ | 175,089 | $ | 176,490 | $ | 151,314 | $ | 150,138 | $ | 152,476 | ||||||
| Debt to Equity | 3.19 | 3.14 | 3.83 | 3.92 | 4.02 | |||||||||||
| Equity to Assets | 22.76 | % | 23.07 | % | 19.14 | % | 19.42 | % | 19.03 | % | ||||||
| Regulatory Capital Ratios: | ||||||||||||||||
| Tier 1 Leverage Capital | 23.21 | % | 23.07 | % | 19.72 | % | 19.63 | % | 19.39 | % | ||||||
| Common Equity Tier 1 Risk-based Capital | 26.00 | % | 25.72 | % | 21.54 | % | 20.86 | % | 20.51 | % | ||||||
| Tier 1 Risk-based Capital | 26.00 | % | 25.72 | % | 21.54 | % | 20.86 | % | 20.51 | % | ||||||
| Total Risk-based Capital | 27.25 | % | 26.97 | % | 22.76 | % | 22.02 | % | 21.74 | % | ||||||
| Notes: | ||||||||||||||||
| Net investment in total finance receivables includes net investment in direct financing leases and loans. | ||||||||||||||||
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