First Quarter Highlights:
- Net income of $4.1 million, EPS of $0.31 per share
- Dividend of $0.125 per share
- Risk adjusted net interest and fee margin of 10.25% for the quarter
- Strong capital position, equity to assets ratio of 22.76%
- Total average finance receivables of $622 million, up 5% year-over-year
- 112,129 shares repurchased in the first quarter of 2015 under the Company's stock repurchase program
- Launched Funding Stream capital loan product
MOUNT LAUREL, N.J., April 30, 2015 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (Nasdaq:MRLN) today reported first quarter 2015 net income of $4.1 million, or $0.31 per diluted share, compared to $4.6 million and $0.36 per diluted share for first quarter 2014.
"Origination activity for the quarter is higher year over year on stronger dealer demand," said Daniel P. Dyer, Co-founder and Chief Executive Officer. "The growth of our sales force this quarter is part of an active campaign to invest resources in the core business and our new initiatives. We are also excited about our recently announced small business working capital loan product and its long term growth potential," said Dyer.
First quarter 2015 lease and loan production is $81.6 million, compared to $89.5 million in the fourth quarter of 2014 and $74.0 million in first quarter of 2014.
Net interest and fee margin as a percentage of average finance receivables is 12.40% for the first quarter ended March 31, 2015, down slightly from 12.48% in the fourth quarter of 2014 and down 65 basis points from a year ago. The year-over-year 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 was 85 basis points, compared to 86 basis points for the fourth quarter of 2014 and 80 basis points for the first quarter of 2014.
The allowance for credit losses as a percentage of total finance receivables is 1.47% at March 31, 2015, and represents 228% of total 60+ day delinquencies.
30+ day delinquencies were 0.87% of total finance receivables as of March 31, 2015, 2 basis points higher than the fourth quarter of 2014 and the first quarter of 2014. 60+ day delinquencies were 0.57% of total finance receivables as of March 31, 2015, up slightly, from 0.51% at December 31, 2014. First quarter net charge-offs were 1.70% of average total finance receivables versus 1.56% for the fourth quarter ended December 31, 2014 and 1.38% a year ago.
The Company's efficiency ratio was 52% for the quarter ended March 31, 2015 compared to 54% a year ago.
The Company's consolidated equity to assets ratio is 22.76%. Our risk based capital ratio is 27.25%.
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.marlinfinance.com.
In the first quarter of 2015, the Company purchased 112,129 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 May 21, 2015, to shareholders of record on May 11, 2015. Based on the closing stock price on April 29, 2015, the annualized dividend yield on the Company's common stock is 2.49%.
On March 16, 2015, the Company announced the launch of Funding Stream, a new, flexible loan program of Marlin Business Bank, our wholly owned, federally regulated commercial bank. Funding Stream is tailored to the small business market to provide customers a convenient, hassle-free alternative to traditional lenders and access to up to $100,000 of capital to help grow their businesses.
Conference Call and Webcast
We will host a conference call on Friday, May 1, 2015 at 9:00 a.m. ET to discuss the Company's first quarter 2015 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.marlinfinance.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 commercial lending solutions for small and mid-size businesses. Through its wholly-owned operating subsidiary, Marlin Business Bank, Marlin provides innovative commercial financing programs. Our equipment financing and loan products are offered directly to businesses, and through third party vendor programs, which includes manufacturers, distributors, independent dealers and brokers. Since its inception in 1997, Marlin has extended credit to over a quarter of a million business customers. Our mission is to offer convenient financing products while providing the highest level of personalized customer service. Marlin is publicly traded (Nasdaq:MRLN). For more information about Marlin, 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, | |
| 2015 | 2014 | |
| (Dollars in thousands, except per-share data) | ||
| ASSETS | ||
| Cash and due from banks | $ 4,534 | $ 2,437 |
| Interest-earning deposits with banks | 108,595 | 108,219 |
| Total cash and cash equivalents | 113,129 | 110,656 |
| Time deposits with banks | 3,135 | — |
| Restricted interest-earning deposits with banks | 1,545 | 711 |
| Securities available for sale (amortized cost of $5.6 million and $5.8 million at March 31, 2015 and December 31, 2014, respectively) | 5,554 | 5,722 |
| Net investment in leases and loans | 628,019 | 629,507 |
| Property and equipment, net | 3,516 | 2,846 |
| Property tax receivables | 6,212 | 690 |
| Other assets | 8,119 | 8,317 |
| Total assets | $ 769,229 | $ 758,449 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Deposits | $ 557,835 | $ 550,119 |
| Other liabilities: | ||
| Sales and property taxes payable | 7,052 | 2,739 |
| Accounts payable and accrued expenses | 12,359 | 14,406 |
| Net deferred income tax liability | 16,894 | 17,221 |
| Total liabilities | 594,140 | 584,485 |
| Stockholders' equity: | ||
| Common Stock, $0.01 par value; 75,000,000 shares authorized; 12,847,888 and 12,838,449 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 128 | 128 |
| Preferred Stock, $0.01 par value; 5,000,000 shares authorized; none issued | — | — |
| Additional paid-in capital | 87,834 | 89,130 |
| Stock subscription receivable | (2) | (2) |
| Accumulated other comprehensive loss | (35) | (17) |
| Retained earnings | 87,164 | 84,725 |
| Total stockholders' equity | 175,089 | 173,964 |
| Total liabilities and stockholders' equity | $ 769,229 | $ 758,449 |
| MARLIN BUSINESS SERVICES CORP. | |||
| AND SUBSIDIARIES | |||
| Condensed Consolidated Statements of Operations | |||
| (Unaudited) | |||
| Three Months Ended March 31, | |||
| 2015 | 2014 | ||
| (Dollars in thousands, except per-share data) | |||
| Interest income | $ 16,487 | $ 16,737 | |
| Fee income | 4,120 | 3,685 | |
| Interest and fee income | 20,607 | 20,422 | |
| Interest expense | 1,318 | 1,181 | |
| Net interest and fee income | 19,289 | 19,241 | |
| Provision for credit losses | 3,340 | 1,732 | |
| Net interest and fee income after provision for credit losses | 15,949 | 17,509 | |
| Other income: | |||
| Insurance income, net | 1,466 | 1,317 | |
| Other income | 365 | 382 | |
| Other income | 1,831 | 1,699 | |
| Other expense: | |||
| Salaries and benefits | 6,967 | 7,186 | |
| General and administrative | 4,093 | 4,189 | |
| Financing related costs | 108 | 290 | |
| Other expense | 11,168 | 11,665 | |
| Income before income taxes | 6,612 | 7,543 | |
| Income tax expense | 2,557 | 2,900 | |
| Net income | $ 4,055 | $ 4,643 | |
| Basic earnings per share | $ 0.31 | $ 0.36 | |
| Diluted earnings per share | $ 0.31 | $ 0.36 | |
| Cash dividends declared and paid per share | $ 0.125 | $ 0.11 | |
| SUPPLEMENTAL QUARTERLY DATA | ||||||||||
| (Dollars in thousands, except share amounts) | ||||||||||
| (Unaudited) | ||||||||||
| Quarter Ended: | 3/31/2014 | 6/30/2014 | 9/30/2014 | 12/31/2014 | 3/31/2015 | |||||
| Net Income: | ||||||||||
| Net Income | $4,643 | $4,936 | $4,904 | $4,867 | $4,055 | |||||
| Annualized Performance Measures: | ||||||||||
| Return on Average Assets | 2.58% | 2.69% | 2.67% | 2.64% | 2.17% | |||||
| Return on Average Stockholders' Equity | 11.31% | 11.88% | 11.50% | 11.21% | 9.33% | |||||
| EPS Data: | ||||||||||
| Net Income Allocated to Common Stock | $4,485 | $4,821 | $4,762 | $4,731 | $3,932 | |||||
| Number of Shares - Basic | 12,546,680 | 12,582,313 | 12,487,968 | 12,466,264 | 12,487,241 | |||||
| Basic Earnings per Share | $0.36 | $0.38 | $0.38 | $0.38 | $0.31 | |||||
| Number of Shares - Diluted | 12,612,997 | 12,635,520 | 12,539,717 | 12,515,904 | 12,523,258 | |||||
| Diluted Earnings per Share | $0.36 | $0.38 | $0.38 | $0.38 | $0.31 | |||||
| Cash Dividends Declared per share | $0.11 | $0.11 | $0.125 | $0.125 | $0.125 | |||||
| New Asset Production: | ||||||||||
| Leased Equipment Volume | $73,995 | $88,928 | $82,459 | $89,362 | $80,084 | |||||
| Capital Loan Origination Volume | $0 | $0 | $0 | $0 | $235 | |||||
| Subtotal | $73,995 | $88,928 | $82,459 | $89,362 | $80,319 | |||||
| Syndication Volume | $0 | $0 | $0 | $91 | $1,272 | |||||
| Total Asset Origination | $73,995 | $88,928 | $82,459 | $89,453 | $81,591 | |||||
| Implicit Yield on New Originations | 11.27% | 11.35% | 11.06% | 10.89% | 10.79% | |||||
| # of Sales Reps | 117 | 117 | 116 | 115 | 125 | |||||
| # of Leases | 5,385 | 6,423 | 6,130 | 6,290 | 5,691 | |||||
| Lease Approval Percentage | 65% | 67% | 65% | 66% | 63% | |||||
| Average Monthly Lease Sources | 1,001 | 1,197 | 1,125 | 1,147 | 1,015 | |||||
| Net Interest and Fee Margin: | ||||||||||
| Interest Income Yield | 11.35% | 11.17% | 10.98% | 10.80% | 10.60% | |||||
| Fee Income Yield | 2.50% | 2.30% | 2.55% | 2.54% | 2.65% | |||||
| Interest and Fee Income Yield | 13.85% | 13.47% | 13.53% | 13.34% | 13.25% | |||||
| Cost of Funds | 0.80% | 0.81% | 0.82% | 0.86% | 0.85% | |||||
| Net Interest and Fee Margin | 13.05% | 12.66% | 12.71% | 12.48% | 12.40% | |||||
| Average Total Finance Receivables | $589,922 | $599,413 | $608,290 | $614,068 | $622,120 | |||||
| Average Net Investment in Leases | $588,729 | $598,143 | $607,055 | $612,910 | $620,937 | |||||
| End of Period Net Investment in Leases | $599,307 | $613,856 | $617,518 | $628,384 | $626,617 | |||||
| Portfolio Asset Quality: | ||||||||||
| Total Finance Receivables | ||||||||||
| 30+ Days Past Due Delinquencies | 0.85% | 0.79% | 0.81% | 0.85% | 0.87% | |||||
| 30+ Days Past Due Delinquencies | $5,815 | $5,491 | $5,668 | $5,997 | $6,208 | |||||
| 60+ Days Past Due Delinquencies | 0.50% | 0.51% | 0.47% | 0.51% | 0.57% | |||||
| 60+ Days Past Due Delinquencies | $3,404 | $3,544 | $3,290 | $3,602 | $4,057 | |||||
| Net Charge-offs - Total Finance Receivables | $2,040 | $2,558 | $2,060 | $2,388 | $2,646 | |||||
| % on Average Total Finance Receivables Annualized | 1.38% | 1.71% | 1.36% | 1.56% | 1.70% | |||||
| Allowance for Credit Losses | $8,159 | $7,725 | $8,371 | $8,537 | $9,231 | |||||
| % of 60+ Delinquencies | 239.69% | 217.97% | 254.44% | 237.01% | 227.53% | |||||
|
90+ Day Delinquencies (Non-earning total finance receivables) |
$1,686 | $1,903 | $1,903 | $1,742 | $1,975 | |||||
| Expense Ratios: | ||||||||||
| Salaries and Benefits Expense | $7,186 | $6,463 | $6,313 | $6,666 | $6,967 | |||||
| Salaries and Benefits Expense | ||||||||||
| Annualized % of Avg. Fin. Recbl. | 4.87% | 4.31% | 4.15% | 4.34% | 4.48% | |||||
| Total personnel end of quarter | 283 | 279 | 279 | 285 | 296 | |||||
| General and Administrative Expense | $4,189 | $3,969 | $3,818 | $3,630 | $4,093 | |||||
| General and Administrative Expense | ||||||||||
| Annualized % of Avg. Fin. Recbl. | 2.84% | 2.65% | 2.51% | 2.36% | 2.63% | |||||
| Efficiency Ratio | 54.32% | 50.38% | 48.07% | 48.86% | 52.37% | |||||
| Balance Sheet: | ||||||||||
| Assets | ||||||||||
| Investment in Leases and Loans | $598,590 | $612,722 | $616,916 | $627,922 | $627,167 | |||||
| Initial Direct Costs and Fees | 10,085 | 10,135 | 10,146 | 10,122 | 10,083 | |||||
| Reserve for Credit Losses | (8,159) | (7,725) | (8,371) | (8,537) | (9,231) | |||||
| Net Investment in Leases and Loans | $600,516 | $615,132 | $618,691 | $629,507 | $628,019 | |||||
| Cash and Cash Equivalents | 118,595 | 98,612 | 104,211 | 110,656 | 113,129 | |||||
| Restricted Cash | 1,190 | 963 | 945 | 711 | 1,545 | |||||
| Other Assets | 20,735 | 21,538 | 16,338 | 17,575 | 26,536 | |||||
| Total Assets | $741,036 | $736,245 | $740,185 | $758,449 | $769,229 | |||||
| Liabilities | ||||||||||
| Deposits | 538,209 | 531,930 | 534,556 | 550,119 | 557,835 | |||||
| Other Liabilities | 36,676 | 36,013 | 35,583 | 34,366 | 36,305 | |||||
| Total Liabilities | $574,885 | $567,943 | $570,139 | $584,485 | $594,140 | |||||
| Stockholders' Equity | ||||||||||
| Common Stock | $129 | $129 | $128 | $128 | $128 | |||||
| Paid-in Capital, net | 91,567 | 90,115 | 88,543 | 89,128 | 87,832 | |||||
| Other Comprehensive Income (Loss) | (191) | (106) | (84) | (17) | (35) | |||||
| Retained Earnings | 74,646 | 78,164 | 81,459 | 84,725 | 87,164 | |||||
| Total Stockholders' Equity | $166,151 | $168,302 | $170,046 | $173,964 | $175,089 | |||||
| Total Liabilities and | ||||||||||
| Stockholders' Equity | $741,036 | $736,245 | $740,185 | $758,449 | $769,229 | |||||
| Capital and Leverage: | ||||||||||
| Equity | $166,151 | $168,302 | $170,046 | $173,964 | $175,089 | |||||
| Debt to Equity | 3.24 | 3.16 | 3.14 | 3.16 | 3.19 | |||||
| Equity to Assets | 22.42% | 22.86% | 22.97% | 22.94% | 22.76% | |||||
| Regulatory Capital Ratios: | ||||||||||
| Tier 1 Leverage Capital | 22.94% | 22.81% | 23.06% | 23.43% | 23.21% | |||||
| Common Equity Tier 1 Risk-based Capital | 26.00% | |||||||||
| Tier 1 Risk-based Capital | 26.07% | 25.83% | 26.11% | 26.14% | 26.00% | |||||
| Total Risk-based Capital | 27.32% | 27.01% | 27.36% | 27.39% | 27.25% | |||||
| Notes: | ||||||||||
| Net investment in total finance receivables includes net investment in direct financing leases and loans. | ||||||||||
| Common Equity Tier 1 Risk-based Capital became effective on January 1, 2015. | ||||||||||