Fourth Quarter and Full Year Highlights:
- EPS of $1.49 per share up 19% year over year
- Dividend of $0.47 per share for the full year
- Return on average assets of 2.64%, and return on average equity of 11.47% for the full year
- Strong capital position, equity to assets ratio of 22.94%
- Efficiency ratio for the full year improved to 50.4%
- Total average finance receivables of $603 million up 12% year over year
- 211,391 shares repurchased for the full year under the Company's stock repurchase program
MOUNT LAUREL, N.J., Feb. 4, 2015 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (Nasdaq:MRLN) today reported fourth quarter 2014 net income of $4.9 million, or $0.38 per diluted share, compared to $3.4 million, or $0.26 per diluted share, for fourth quarter 2013.
For the year ended December 31, 2014, net income is $19.4 million, or $1.49 per diluted share, compared to $16.2 million and $1.25 per diluted share for the year ended December 31, 2013.
"We had a solid year of performance," said Daniel P. Dyer, Co-founder and Chief Executive Officer. "Core earnings grew 19% and we delivered strong asset quality results. In 2015, our focus is to continue to grow our highly profitable lease business along with focusing on new value creating opportunities aimed to serve small businesses," said Dyer.
Fourth quarter 2014 lease production is $89.5 million based on initial equipment cost, compared to $82.5 million in the third quarter of 2014 and $90.9 million in fourth quarter of 2013. Full year lease origination volume is $334.8 million.
Net interest and fee margin as a percentage of average finance receivables is 12.48% for the fourth quarter ended December 31, 2014, down 23 basis points from the third quarter of 2014 and down 88 basis points from a year ago. The decrease in margin percentage is a result of the competitively low interest rate environment and a slight increase in cost of funds. The Company's cost of funds increased slightly to 86 basis points, compared to 82 basis points for the third quarter of 2014 and 76 basis points for the fourth quarter of 2013.
On a dollar basis, net interest and fee margin increased 6% to $76.7 million for the year ended December 31, 2014 versus $72.5 million for the year ended December 31, 2013.
The allowance for credit losses as a percentage of total finance receivables is 1.36% at December 31, 2014, and represents 237% of total 60+ day delinquencies.
Finance receivables over 30 days delinquent are 0.85% of the Company's lease portfolio as of December 31, 2014. Finance receivables over 60 days delinquent are 0.51% of the Company's lease portfolio as of December 31, 2014, up slightly 4 basis points from 0.47% at September 30, 2014. Fourth quarter net charge-offs are 1.56% of average total finance receivables versus 1.36% for the third quarter ended September 30, 2014 and 1.30% a year ago.
The Company's efficiency ratio for the fourth quarter is 48.9% compared to an efficiency ratio of 48.1% for the quarter ended September 30, 2014 and 56.9% for the quarter ended December 31, 2013. For the full year the efficiency ratio is 50.4% versus 53.6% at December 31, 2013.
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.
In 2014, the Company purchased 211,391 shares of common stock under its stock repurchase program.
The Board of Directors of Marlin Business Services Corp. today declared a $0.125 per share quarterly dividend. The dividend is payable February 26, 2015, to shareholders of record on February 16, 2015. Based on the closing stock price on February 3, 2015, the annualized dividend yield on the Company's common stock is 3.05%.
Conference Call and Webcast
We will host a conference call on Thursday, February 5, 2015 at 9:00 a.m. ET to discuss the Company's fourth quarter 2014 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 (Nasdaq: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) | ||
| December 31, | December 31, | |
| 2014 | 2013 | |
| (Dollars in thousands, except per-share data) | ||
| ASSETS | ||
| Cash and due from banks | $ 2,437 | $ 3,534 |
| Interest-earning deposits with banks | 108,219 | 82,119 |
| Total cash and cash equivalents | 110,656 | 85,653 |
| Restricted interest-earning deposits with banks | 711 | 1,273 |
| Securities available for sale (amortized cost of $5.8 million and $5.8 million at December 31, 2014 and December 31, 2013, respectively) | 5,722 | 5,387 |
| Net investment in leases and loans | 629,507 | 597,075 |
| Property and equipment, net | 2,846 | 2,265 |
| Property tax receivables | 690 | 377 |
| Other assets | 8,317 | 10,177 |
| Total assets | $758,449 | $702,207 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Deposits | $550,119 | $503,038 |
| Other liabilities: | ||
| Sales and property taxes payable | 2,739 | 4,035 |
| Accounts payable and accrued expenses | 14,406 | 14,220 |
| Net deferred income tax liability | 17,221 | 17,876 |
| Total liabilities | 584,485 | 539,169 |
| Stockholders' equity: | ||
| Common Stock, $0.01 par value; 75,000,000 shares authorized; 12,838,449 and 12,994,758 shares issued and outstanding at December 31, 2014 and December 31, 2013, respectively | 128 | 130 |
| Preferred Stock, $0.01 par value; 5,000,000 shares authorized; none issued | — | — |
| Additional paid-in capital | 89,130 | 91,730 |
| Stock subscription receivable | (2) | (2) |
| Accumulated other comprehensive loss | (17) | (257) |
| Retained earnings | 84,725 | 71,437 |
| Total stockholders' equity | 173,964 | 168,038 |
| Total liabilities and stockholders' equity | $758,449 | $702,207 |
| MARLIN BUSINESS SERVICES CORP. | ||||
| AND SUBSIDIARIES | ||||
| Condensed Consolidated Statements of Operations | ||||
| (Unaudited) | ||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||
| 2014 | 2013 | 2014 | 2013 | |
| (Dollars in thousands, except per-share data) | ||||
| Interest income | $ 16,582 | $ 16,610 | $ 66,764 | $ 63,685 |
| Fee income | 3,904 | 3,657 | 14,920 | 13,390 |
| Interest and fee income | 20,486 | 20,267 | 81,684 | 77,075 |
| Interest expense | 1,318 | 1,087 | 4,965 | 4,545 |
| Net interest and fee income | 19,168 | 19,180 | 76,719 | 72,530 |
| Provision for credit losses | 2,554 | 3,257 | 9,116 | 9,617 |
| Net interest and fee income after provision for credit losses | 16,614 | 15,923 | 67,603 | 62,913 |
| Other income: | ||||
| Insurance income | 1,467 | 1,352 | 5,463 | 4,924 |
| Loss on derivatives | — | — | — | (2) |
| Other income | 438 | 476 | 1,614 | 1,676 |
| Other income | 1,905 | 1,828 | 7,077 | 6,598 |
| Other expense: | ||||
| Salaries and benefits | 6,666 | 8,137 | 26,628 | 27,680 |
| General and administrative | 3,630 | 3,807 | 15,606 | 14,725 |
| Financing related costs | 294 | 297 | 1,174 | 1,106 |
| Other expense | 10,590 | 12,241 | 43,408 | 43,511 |
| Income before income taxes | 7,929 | 5,510 | 31,272 | 26,000 |
| Income tax expense | 3,062 | 2,084 | 11,922 | 9,769 |
| Net income | $ 4,867 | $ 3,426 | $ 19,350 | $ 16,231 |
| Basic earnings per share | $ 0.38 | $ 0.26 | $ 1.50 | $ 1.26 |
| Diluted earnings per share | $ 0.38 | $ 0.26 | $ 1.49 | $ 1.25 |
| Cash dividends declared per share | $ 0.125 | $ 0.11 | $ 0.47 | $ 2.42 |
| SUPPLEMENTAL QUARTERLY DATA | |||||
| (Dollars in thousands, except share amounts) | |||||
| (Unaudited) | |||||
| Quarter Ended: | 12/31/2013 | 3/31/2014 | 6/30/2014 | 9/30/2014 | 12/31/2014 |
| Net Income: | |||||
| Net Income | $3,426 | $4,643 | $4,936 | $4,904 | $4,867 |
| Annualized Performance Measures: | |||||
| Return on Average Assets | 1.98% | 2.58% | 2.69% | 2.67% | 2.64% |
| Return on Average Stockholders' Equity | 8.46% | 11.31% | 11.88% | 11.50% | 11.21% |
| EPS Data: | |||||
| Net Income Allocated to Common Stock | $3,294 | $4,485 | $4,821 | $4,762 | $4,731 |
| Number of Shares - Basic | 12,493,370 | 12,546,680 | 12,582,313 | 12,487,968 | 12,466,264 |
| Basic Earnings per Share | $0.26 | $0.36 | $0.38 | $0.38 | $0.38 |
| Number of Shares - Diluted | 12,560,018 | 12,612,997 | 12,635,520 | 12,539,717 | 12,515,904 |
| Diluted Earnings per Share | $0.26 | $0.36 | $0.38 | $0.38 | $0.38 |
| Cash Dividends Declared per share | $0.11 | $0.11 | $0.11 | $0.125 | $0.125 |
| New Asset Production: | |||||
| # of Sales Reps | 124 | 117 | 117 | 116 | 115 |
| # of Leases | 6,265 | 5,385 | 6,423 | 6,130 | 6,290 |
| Leased Equipment Volume | $90,923 | $73,995 | $88,928 | $82,459 | $89,453 |
| Approval Percentage | 67% | 65% | 67% | 65% | 66% |
| Average Monthly Sources | 1,166 | 1,001 | 1,197 | 1,125 | 1,147 |
| Implicit Yield on New Leases | 11.65% | 11.27% | 11.35% | 11.06% | 10.89% |
| Net Interest and Fee Margin: | |||||
| Interest Income Yield | 11.57% | 11.35% | 11.17% | 10.98% | 10.80% |
| Fee Income Yield | 2.55% | 2.50% | 2.30% | 2.55% | 2.54% |
| Interest and Fee Income Yield | 14.12% | 13.85% | 13.47% | 13.53% | 13.34% |
| Cost of Funds | 0.76% | 0.80% | 0.81% | 0.82% | 0.86% |
| Net Interest and Fee Margin | 13.36% | 13.05% | 12.66% | 12.71% | 12.48% |
| Average Total Finance Receivables | $574,132 | $589,922 | $599,413 | $608,290 | $614,068 |
| Average Net Investment in Leases | $573,334 | $588,729 | $598,143 | $607,055 | $612,910 |
| End of Period Net Investment in Leases | $596,121 | $599,307 | $613,856 | $617,518 | $628,384 |
| Portfolio Asset Quality: | |||||
| Total Finance Receivables | |||||
| 30+ Days Past Due Delinquencies | 1.08% | 0.85% | 0.79% | 0.81% | 0.85% |
| 30+ Days Past Due Delinquencies | $7,411 | $5,815 | $5,491 | $5,668 | $5,997 |
| 60+ Days Past Due Delinquencies | 0.47% | 0.50% | 0.51% | 0.47% | 0.51% |
| 60+ Days Past Due Delinquencies | $3,204 | $3,404 | $3,544 | $3,290 | $3,602 |
| Net Charge-offs - Total Finance Receivables | $1,865 | $2,040 | $2,558 | $2,060 | $2,388 |
| % on Average Total Finance Receivables Annualized | 1.30% | 1.38% | 1.71% | 1.36% | 1.56% |
| Allowance for Credit Losses | $8,467 | $8,159 | $7,725 | $8,371 | $8,537 |
| % of 60+ Delinquencies | 264.26% | 239.69% | 217.97% | 254.44% | 237.01% |
| 90+ Day Delinquencies (Non-earning total finance receivables) | $1,665 | $1,686 | $1,903 | $1,903 | $1,742 |
| Expense Ratios: | |||||
| Salaries and Benefits Expense | $8,137 | $7,186 | $6,463 | $6,313 | $6,666 |
| Salaries and Benefits Expense | |||||
| Annualized % of Avg. Fin. Recbl. | 5.67% | 4.87% | 4.31% | 4.15% | 4.34% |
| Total personnel end of quarter | 285 | 283 | 279 | 279 | 285 |
| General and Administrative Expense | $3,807 | $4,189 | $3,969 | $3,818 | $3,630 |
| General and Administrative Expense | |||||
| Annualized % of Avg. Fin. Recbl. | 2.65% | 2.84% | 2.65% | 2.51% | 2.36% |
| Efficiency Ratio | 56.85% | 54.32% | 50.38% | 48.07% | 48.86% |
| Balance Sheet: | |||||
| Assets | |||||
| Investment in Leases and Loans | $595,253 | $598,590 | $612,722 | $616,916 | $627,922 |
| Initial Direct Costs and Fees | 10,289 | 10,085 | 10,135 | 10,146 | 10,122 |
| Reserve for Credit Losses | (8,467) | (8,159) | (7,725) | (8,371) | (8,537) |
| Net Investment in Leases and Loans | $597,075 | $600,516 | $615,132 | $618,691 | $629,507 |
| Cash and Cash Equivalents | 85,653 | 118,595 | 98,612 | 104,211 | 110,656 |
| Restricted Cash | 1,273 | 1,190 | 963 | 945 | 711 |
| Other Assets | 18,206 | 20,735 | 21,538 | 16,338 | 17,575 |
| Total Assets | $702,207 | $741,036 | $736,245 | $740,185 | $758,449 |
| Liabilities | |||||
| Deposits | 503,038 | 538,209 | 531,930 | 534,556 | 550,119 |
| Total Debt | $0 | $0 | $0 | $0 | $0 |
| Other Liabilities | 36,131 | 36,676 | 36,013 | 35,583 | 34,366 |
| Total Liabilities | $539,169 | $574,885 | $567,943 | $570,139 | $584,485 |
| Stockholders' Equity | |||||
| Common Stock | $130 | $129 | $129 | $128 | $128 |
| Paid-in Capital, net | 91,728 | 91,567 | 90,115 | 88,543 | 89,128 |
| Other Comprehensive Income (Loss) | (257) | (191) | (106) | (84) | (17) |
| Retained Earnings | 71,437 | 74,646 | 78,164 | 81,459 | 84,725 |
| Total Stockholders' Equity | $163,038 | $166,151 | $168,302 | $170,046 | $173,964 |
| Total Liabilities and Stockholders' Equity | $702,207 | $741,036 | $736,245 | $740,185 | $758,449 |
| Capital and Leverage: | |||||
| Equity | $163,038 | $166,151 | $168,302 | $170,046 | $173,964 |
| Debt to Equity | 3.09 | 3.24 | 3.16 | 3.14 | 3.16 |
| Equity to Assets | 23.22% | 22.42% | 22.86% | 22.97% | 22.94% |
| Regulatory Capital Ratios: | |||||
| Tier 1 Leverage Capital | 23.46% | 22.94% | 22.81% | 23.06% | 23.43% |
| Tier 1 Risk-based Capital | 25.90% | 26.07% | 25.83% | 26.11% | 26.14% |
| Total Risk-based Capital | 27.15% | 27.32% | 27.01% | 27.36% | 27.39% |
| Notes: | |||||
| Net investment in total finance receivables includes net investment in direct financing leases and loans. | |||||