Fourth Quarter and Full-Year Highlights:
- Net income of $2.1 million for the fourth quarter and $6.2 million for the full-year 2011
- 15% sequential growth in new lease originations; up 71% year-over-year
- Insured deposit growth of 26% quarter-over-quarter; up 114% year-over-year
- 30+ day delinquencies of 1.02%, an improvement of 96 basis points year-over-year
- Strong capital position, equity to assets ratio of 33.77%
- Total risk-based capital of 39.19%
- Risk adjusted net interest and fee margin of 11.76% for the fourth quarter and 11.43% for the full year 2011
MOUNT LAUREL, N.J., Feb. 23, 2012 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (Nasdaq:MRLN) today reported fourth quarter 2011 net income of $2.1 million, or $0.16 per diluted share. Net income for the full-year 2011 was $6.2 million, or $0.48 per diluted share.
"We're pleased with the solid operating and financial fundamentals in place for all aspects of the business," says Daniel P. Dyer, Marlin's co-founder and Chief Executive Officer. "We expect these same fundamentals will drive asset and profit growth going forward as we look to capitalize on the opportunities to serve the financing needs of small businesses across the country," says Dyer.
Fourth quarter 2011 lease production was $68.4 million based on initial equipment cost, up 15% from $59.7 million for the third quarter of 2011 and 59% higher than the fourth quarter of 2010. On a year-over-year basis, lease equipment volume increased 71%, growing to $229.0 million compared to $134.0 million in 2010.
The average number of monthly originating sources reached 911, up 10% from 831 for the third quarter of 2011 and an increase of 26% from the fourth quarter a year ago.
Net interest and fee margin improved 27 basis points in the fourth quarter of 2011, to 13.04% from 12.77% in the third quarter of 2011, and has increased 94 basis points from the fourth quarter a year ago.
Driving the margin improvement is cost of funds, which improved 49 basis points from the third quarter of 2011 and 130 basis points from the fourth quarter of 2010. The improvement resulted from the Company's shift in funding mix from term funding to lower-cost insured deposits issued by the Company's subsidiary, Marlin Business Bank.
Reflecting positive credit trends, the allowance for credit losses as a percentage of total finance receivables stands at 1.39% as of December 31, 2011 compared to 1.49% as of September 30, 2011. The allowance for credit losses as of December 31, 2011 represents 322% of total 60+ day delinquencies, compared to 282% as of September 30, 2011.
Leases over 30 days delinquent were 1.02% of Marlin's lease portfolio as of December 31, 2011, which is 16 basis points lower than the third quarter of 2011 and 95 basis points lower than the fourth quarter of 2010. Leases over 60 days delinquent were 0.38% of Marlin's lease portfolio as of December 31, 2011, which is 9 basis points lower than the third quarter of 2011 and 51 basis points lower than the fourth quarter of 2010.
Fourth quarter net lease charge-offs were 1.40% of average net investment, representing an improvement of 33 basis points from the third quarter of 2011 and an improvement of 121 basis points from the fourth quarter of 2010.
The Company maintains ample liquidity to support growth through its insured depository, Marlin Business Bank. In addition, the Company also has $78.1 million in unused commitments through its revolver facilities.
The Company maintains strong capital ratios with a consolidated equity to assets ratio of 33.77%.
In conjunction with this release, static pool loss statistics and vintage delinquency analysis have been updated as supplemental information on the Investor Relations section of the Company's website at www.marlincorp.com.
The Board of Directors of Marlin Business Services Corp. declared a $0.06 per share quarterly dividend, payable March 15, 2012 to shareholders of record on March 5, 2012. Based on the closing stock price on February 22, 2012, the annualized dividend yield on the Company's common stock is 1.67%.
The Company repurchased 21,807 shares of its common stock during the fourth quarter ended December 31, 2011 under the stock repurchase program announced in November 2007. In 2011, the Company purchased 400,475 shares of common stock, and since inception of the program the Company has repurchased 964,506 shares of common stock.
Conference Call and Webcast
We will host a conference call on Friday, February 24, 2012 at 9:00 a.m. ET to discuss the Company's fourth quarter and full-year 2011 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 equipment leasing solutions primarily to small and mid-sized businesses. The Company's principal operating subsidiary, Marlin Leasing Corporation, finances over 100 equipment categories in a segment of the market generally referred to as "small-ticket" leasing (i.e., leasing transactions less than $250,000). The Company was founded in 1997 and completed its initial public offering of common stock on November 12, 2003. For more information, visit www.marlincorp.com or call toll free at (888) 479-9111.
The Marlin Business Services Corp. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4087
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) | ||
| December 31, | ||
| 2011 | 2010 | |
|
(Dollars in thousands, except per- share data) |
||
| ASSETS | ||
| Cash and due from banks | $ 1,035 | $ 2,557 |
| Interest-earning deposits with banks | 41,250 | 34,469 |
| Total cash and cash equivalents | 42,285 | 37,026 |
| Restricted interest-earning deposits with banks (includes $24.3 million and $44.7 million at December 31, 2011 and December 31, 2010, respectively, related to consolidated variable interest entities ("VIEs")) | 28,637 | 47,107 |
| Securities available for sale (amortized cost of $1.7 million and $1.5 million at December 31, 2011 and December 31, 2010, respectively) | 1,780 | 1,534 |
| Net investment in leases and loans (includes $60.0 million and $154.1 million at December 31, 2011 and December 31, 2010, respectively, related to consolidated VIEs) | 387,840 | 351,569 |
| Property and equipment, net | 2,052 | 2,180 |
| Property tax receivables | 265 | 197 |
| Other assets | 23,110 | 28,449 |
| Total assets | $ 485,969 | $ 468,062 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Deposits | $ 198,579 | $ 92,919 |
| Long-term borrowings (includes $45.1 million and $128.2 million at December 31, 2011 and December 31, 2010, respectively, related to consolidated VIEs) | 92,004 | 178,650 |
| Other liabilities: | ||
| Sales and property taxes payable | 2,169 | 1,978 |
| Accounts payable and accrued expenses | 8,791 | 8,019 |
| Net deferred income tax liability | 20,325 | 26,493 |
| Total liabilities | 321,868 | 308,059 |
| Stockholders' equity: | ||
| Common Stock, $0.01 par value; 75,000,000 shares authorized; 12,760,266 and 12,864,665 shares issued and outstanding at December 31, 2011 and December 31, 2010, respectively | 128 | 129 |
| Preferred Stock, $0.01 par value; 5,000,000 shares authorized; none issued | — | — |
| Additional paid-in capital | 85,544 | 86,987 |
| Stock subscription receivable | (2) | (2) |
| Accumulated other comprehensive loss | 1 | (132) |
| Retained earnings | 78,430 | 73,021 |
| Total stockholders' equity | 164,101 | 160,003 |
| Total liabilities and stockholders' equity | $ 485,969 | $ 468,062 |
| MARLIN BUSINESS SERVICES CORP. | ||||
| AND SUBSIDIARIES | ||||
| Condensed Consolidated Statements of Operations | ||||
| (Unaudited) | ||||
| Three Months Ended December 31, | Year Ended December 31, | |||
| 2011 | 2010 | 2011 | 2010 | |
| (Dollars in thousands, except per-share data) | ||||
| Interest income | $ 11,433 | $ 11,052 | $ 44,269 | $ 47,296 |
| Fee income | 3,091 | 3,157 | 12,254 | 14,041 |
| Interest and fee income | 14,524 | 14,209 | 56,523 | 61,337 |
| Interest expense | 2,355 | 3,410 | 11,416 | 15,613 |
| Net interest and fee income | 12,169 | 10,799 | 45,107 | 45,724 |
| Provision for credit losses | 1,194 | 1,738 | 4,134 | 9,438 |
| Net interest and fee income after provision for credit losses | 10,975 | 9,061 | 40,973 | 36,286 |
| Other income: | ||||
| Insurance income | 1,070 | 976 | 3,759 | 4,106 |
| Gain (loss) on derivatives | (2) | 12 | (53) | (116) |
| Other income | 655 | 347 | 1,945 | 1,295 |
| Other income | 1,723 | 1,335 | 5,651 | 5,285 |
| Other expense: | ||||
| Salaries and benefits | 5,659 | 5,307 | 22,539 | 19,966 |
| General and administrative | 3,202 | 3,487 | 13,044 | 12,762 |
| Financing related costs | 196 | 247 | 719 | 680 |
| Other expense | 9,057 | 9,041 | 36,302 | 33,408 |
| Income before income taxes | 3,641 | 1,355 | 10,322 | 8,163 |
| Income tax expense (benefit) | 1,581 | (91) | 4,147 | 2,495 |
| Net income | $ 2,060 | $ 1,446 | $ 6,175 | $ 5,668 |
| Basic earnings per share | $ 0.16 | $ 0.11 | $ 0.48 | $ 0.44 |
| Diluted earnings per share | $ 0.16 | $ 0.11 | $ 0.48 | $ 0.44 |
| Cash dividends declared per share | $ 0.06 | $ — | $ 0.06 | $ — |
| SUPPLEMENTAL QUARTERLY DATA | |||||
| (Dollars in thousands, except share amounts) | |||||
| (Unaudited) | |||||
| Quarter Ended: | 12/31/2010 | 3/31/2011 | 6/30/2011 | 9/30/2011 | 12/31/2011 |
| New Asset Production: | |||||
| # of Sales Reps | 87 | 94 | 97 | 95 | 93 |
| # of Leases | 3,669 | 3,984 | 4,522 | 4,580 | 5,016 |
| Leased Equipment Volume | $42,906 | $47,024 | $53,889 | $59,674 | $68,427 |
| Approval Percentage | 54% | 56% | 60% | 60% | 64% |
| Average Monthly Sources | 725 | 740 | 826 | 831 | 911 |
| Implicit Yield on New Leases | 13.98% | 13.39% | 13.04% | 12.55% | 12.57% |
| Net Interest and Fee Margin: | |||||
| Interest Income Yield | 12.38% | 12.48% | 12.37% | 12.32% | 12.25% |
| Fee Income Yield | 3.54% | 3.59% | 3.33% | 3.46% | 3.31% |
| Interest and Fee Income Yield | 15.92% | 16.07% | 15.70% | 15.78% | 15.56% |
| Cost of Funds | 3.82% | 3.77% | 3.49% | 3.01% | 2.52% |
| Net Interest and Fee Margin | 12.10% | 12.30% | 12.21% | 12.77% | 13.04% |
| Average Total Finance Receivables | $357,089 | $349,203 | $351,389 | $359,451 | $373,260 |
| Average Net Investment in Leases | $355,863 | $348,276 | $350,662 | $358,753 | $372,676 |
| End of Period Net Investment in Leases | $350,528 | $347,254 | $353,839 | $366,293 | $387,377 |
| End of Period Loans | $1,041 | $765 | $686 | $707 | $463 |
| Portfolio Asset Quality: | |||||
| Leasing | |||||
| 30+ Days Past Due Delinquencies | 1.97% | 1.67% | 1.31% | 1.18% | 1.02% |
| 30+ Days Past Due Delinquencies | $7,665 | $6,475 | $5,188 | $4,844 | $4,452 |
| 60+ Days Past Due Delinquencies | 0.89% | 0.75% | 0.56% | 0.47% | 0.38% |
| 60+ Days Past Due Delinquencies | $3,460 | $2,891 | $2,220 | $1,934 | $1,663 |
| Total Finance Receivables | |||||
| 30+ Days Past Due Delinquencies | 1.98% | 1.68% | 1.31% | 1.18% | 1.02% |
| 30+ Days Past Due Delinquencies | $7,726 | $6,514 | $5,190 | $4,844 | $4,452 |
| 60+ Days Past Due Delinquencies | 0.90% | 0.75% | 0.56% | 0.47% | 0.38% |
| 60+ Days Past Due Delinquencies | $3,504 | $2,914 | $2,221 | $1,934 | $1,663 |
| Net Charge-offs - Leasing | $2,324 | $2,002 | $1,631 | $1,556 | $1,305 |
| % on Average Net Investment in Leases Annualized | 2.61% | 2.30% | 1.86% | 1.73% | 1.40% |
| Net Charge-offs - Total Finance Receivables | $2,375 | $2,010 | $1,636 | $1,553 | $1,300 |
| % on Average Total Finance Receivables Annualized | 2.66% | 2.30% | 1.86% | 1.73% | 1.39% |
| Allowance for Credit Losses | $7,718 | $6,887 | $6,175 | $5,459 | $5,353 |
| % of 60+ Delinquencies | 220.26% | 236.34% | 278.03% | 282.26% | 321.89% |
|
90+ Day Delinquencies (Non-earning total finance receivables) |
$1,996 | $1,407 | $1,197 | $1,151 | $829 |
| SUPPLEMENTAL QUARTERLY DATA | |||||
| (Dollars in thousands, except share amounts) | |||||
| (Unaudited) | |||||
| Quarter Ended: | 12/31/2010 | 3/31/2011 | 6/30/2011 | 9/30/2011 | 12/31/2011 |
| Balance Sheet: | |||||
| Assets | |||||
| Investment in Leases and Loans | $352,527 | $348,290 | $354,014 | $365,610 | $385,984 |
| Initial Direct Costs and Fees | 6,760 | 6,616 | 6,686 | 6,849 | 7,209 |
| Reserve for Credit Losses | (7,718) | (6,887) | (6,175) | (5,459) | (5,353) |
| Net Investment in Leases and Loans | $351,569 | $348,019 | $354,525 | $367,000 | $387,840 |
| Cash and Cash Equivalents | 37,026 | 40,064 | 51,904 | 48,345 | 42,285 |
| Restricted Cash | 47,107 | 51,212 | 30,910 | 29,419 | 28,637 |
| Other Assets | 32,360 | 34,972 | 29,909 | 28,618 | 27,207 |
| Total Assets | $468,062 | $474,267 | $467,248 | $473,382 | $485,969 |
| Liabilities | |||||
| Total Debt | $178,650 | $178,323 | $143,794 | $115,089 | $92,004 |
| Deposits | 92,919 | 95,731 | 124,522 | 157,398 | 198,579 |
| Other Liabilities | 36,490 | 38,845 | 37,361 | 38,488 | 31,285 |
| Total Liabilities | $308,059 | $312,899 | $305,677 | $310,975 | $321,868 |
| Stockholders' Equity | |||||
| Common Stock | $129 | $130 | $129 | $128 | $128 |
| Paid-in Capital, net | 86,985 | 87,563 | 86,197 | 85,157 | 85,542 |
| Other Comprehensive Income | (132) | (100) | (60) | (14) | 1 |
| Retained Earnings | 73,021 | 73,775 | 75,305 | 77,136 | 78,430 |
| Total Stockholders' Equity | $160,003 | $161,368 | $161,571 | $162,407 | $164,101 |
| Total Liabilities and Stockholders' Equity | $468,062 | $474,267 | $467,248 | $473,382 | $485,969 |
| Capital and Leverage: | |||||
| Equity | $160,003 | $161,368 | $161,571 | $162,407 | $164,101 |
| Debt to Equity | 1.70 | 1.70 | 1.66 | 1.68 | 1.77 |
| Equity to Assets | 34.18% | 34.02% | 34.58% | 34.31% | 33.77% |
| Regulatory Capital Ratios: | |||||
| Tier 1 Leverage Capital | 34.87% | 34.30% | 34.35% | 34.46% | 33.74% |
| Tier 1 Risk-based Capital | 39.58% | 39.88% | 40.10% | 39.23% | 37.94% |
| Total Risk-based Capital | 40.84% | 41.14% | 41.35% | 40.48% | 39.19% |
| Expense Ratios: | |||||
| Salaries and Benefits Expense | $5,307 | $5,937 | $5,384 | $5,559 | $5,659 |
| Salaries and Benefits Expense | |||||
| Annualized % of Avg. Fin. Recbl. | 5.94% | 6.80% | 6.13% | 6.19% | 6.06% |
| Total personnel end of quarter | 234 | 243 | 251 | 247 | 242 |
| General and Administrative Expense | $3,487 | $3,471 | $3,145 | $3,226 | $3,202 |
| General and Administrative Expense | |||||
| Annualized % of Avg. Fin. Recbl. | 3.91% | 3.98% | 3.58% | 3.59% | 3.43% |
| Efficiency Ratio | 72.55% | 78.41% | 70.42% | 68.60% | 63.78% |
| Net Income: | |||||
| Net Income | $1,446 | $754 | $1,530 | $1,831 | $2,060 |
| Annualized Performance Measures: | |||||
| Return on Average Assets | 1.28% | 0.65% | 1.31% | 1.56% | 1.71% |
| Return on Average Stockholders' Equity | 3.72% | 1.88% | 3.78% | 4.53% | 5.04% |
| EPS Data: | |||||
| Net Income Allocated to Common Stock | $1,339 | $696 | $1,411 | $1,699 | $1,916 |
| Number of Shares - Basic | 11,912,655 | 11,934,525 | 11,979,787 | 11,880,834 | 11,900,351 |
| Basic Earnings per Share | $0.11 | $0.06 | $0.12 | $0.14 | $0.16 |
| Number of Shares - Diluted | 11,988,965 | 12,012,930 | 12,055,312 | 11,946,231 | 11,949,505 |
| Diluted Earnings per Share | $0.11 | $0.06 | $0.12 | $0.14 | $0.16 |
| Cash Dividends Declared per share | $0.00 | $0.00 | $0.00 | $0.00 | $0.06 |
| Net investment in total finance receivables includes | |||||
| net investment in direct financing leases and loans. | |||||