Fourth Quarter Summary:
- Net income of $8.4 million, or $0.69 per diluted share, up 31.0% from $6.4 million, or $0.51 per diluted share a year ago and up from $7.4 million, or $0.60 per diluted share last quarter
- Total sourced origination volume of $236.5 million, up 9.3% year-over-year; Direct origination volume of $50.4 million, up 24.9% year-over-year
- Net Investment in Leases and Loans totaled $1.0 billion, relatively flat from a year ago, and total managed assets ended the fourth quarter at $1.3 billion, up 15.7% from a year ago
- Total origination yield of 12.43%, down 95 basis points from the prior quarter and up 7 basis points year-over-year
Full Year 2019 Summary:
- Net income of $27.1 million, or $2.20 per diluted share, up 8.6% from $25.0 million, or $2.00 per diluted share a year ago; Net income on an adjusted basis* of $27.2 million, or $2.20 per share, up from $25.4 million, or $2.04 per diluted share in the prior year
- Total sourced origination volume of $877.9 million, up 18.7% from a year ago; Direct origination volume of $184.6 million, up 29% year-over-year
- Operating efficiency of 54.18% compared to 55.32% in the prior year; operating efficiency on an adjusted basis* of 49.42% compared to 53.16% in the prior year
- ROE of 13.33% compared to 13.27% in the prior year; ROE on an adjusted basis* of 13.36% compared with ROE on an adjusted basis* of 13.52% in the prior year
- In addition to quarterly dividends, returned capital through share repurchases totaling $6.8 million, or 294,686 shares
MOUNT LAUREL, N.J., Jan. 30, 2020 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (NASDAQ: MRLN), a nationwide provider of capital solutions to small businesses (“Marlin” or the “Company”), today reported fourth quarter 2019 net income of $8.4 million, or $0.69 per diluted share, compared with $7.4 million, or $0.60 per diluted share in the prior quarter, and $6.4 million, or $0.51 per share a year ago.
Commenting on the Company’s results, Jeffrey A. Hilzinger, Marlin’s President and CEO, said, “Marlin concluded 2019 with strong performance in the fourth quarter highlighted by record origination volume, disciplined expense management and excellent earnings growth. Total origination volume of $236.5 million increased 9.3% year-over-year, driven by increasing customer demand for both our equipment finance and working capital loan products, as well as solid growth in our direct origination channel. For the full year, total origination volume of $877.9 million grew 18.7% year-over-year, more than double the prior year’s growth rate. We also delivered solid earnings growth despite an increase in provisions for credit losses driven by higher delinquencies and charge-offs. We continue to closely monitor the portfolio and are making appropriate adjustments to ensure optimal risk-adjusted portfolio performance.”
Mr. Hilzinger continued, “While the origination growth we experienced demonstrates the significant demand that exists for our financing products, market conditions during the quarter created both an increasingly competitive pricing environment and a favorable capital markets environment. These market conditions allowed us to offset continued yield compression with exceptionally strong capital markets execution. I also remain extremely pleased with our ability to carefully manage expenses as evidenced by decreases in our adjusted efficiency ratio, which improved on both a sequential quarter and year-over-year basis. As a result, fourth quarter net income expanded to $8.4 million, or $0.69 per diluted share, up 31% from a year ago. For the full year net income of $27.1 million, or $2.20 per diluted share, was up 9% from a year ago. Overall, I believe that the fundamentals of our business remain strong as we enter 2020 and that Marlin is well-positioned for another year of profitable growth.”
Results of Operations
Total sourced origination volume for the fourth quarter of $236.5 million was up 9.3% from a year ago. Direct origination volume of $50.4 million in the fourth quarter was up 24.9% from $40.4 million in the fourth quarter of 2018. Indirect origination volume in the fourth quarter of 2019 was $167.7 million, up 5.1% from $159.5 million in the fourth quarter last year. Assets originated for sale in the fourth quarter of $16.3 million compared with $11.9 million in the fourth quarter last year. Referral volume totaled $2.0 million, down from $4.5 million in the fourth quarter last year.
Net interest and fee margin as a percentage of average finance receivables was 9.44% for the fourth quarter, down 11 basis points from the third quarter of 2019 and down 32 basis points from a year ago. The sequential quarter decrease was driven primarily by a decrease in new origination loan and lease yields. The year-over-year decrease in margin percentage was primarily a result of an increase in interest expense resulting from higher deposit rates and lower fee income, partially offset by an increase of seven basis points in new origination loan and lease yield. The Company’s interest expense as a percent of average total finance receivables was 236 basis points in the fourth quarter of 2019 compared with 250 basis points for the third quarter of 2019 and 220 basis points for the fourth quarter of 2018. The year-over-year increase was due to a higher cost of funds associated with deposits.
On an absolute basis, net interest and fee income was $24.4 million for the fourth quarter of 2019 compared with $23.7 million for the fourth quarter last year.
Non-interest income was $13.5 million for the fourth quarter of 2019, compared with $10.4 million in the prior quarter and $7.1 million in the prior year period. The sequential and year-over-year increase in non-interest income is primarily due to an increase in gains from the sale of assets. Non-interest expense was $16.4 million for the fourth quarter of 2019, compared with $17.0 million in the prior quarter and $16.4 million in the fourth quarter last year.
The Company’s efficiency ratio for the fourth quarter improved to 43.2% from 53.1% in the fourth quarter last year. The Company’s non-GAAP efficiency ratio for the fourth quarter was 40.2% compared with 50.9% in the fourth quarter last year. Marlin’s efficiency ratio has improved primarily due to an increase in non-interest income from capital markets activities coupled with a stable expense base.
Marlin recorded income tax expense of $2.9 million, representing an effective tax rate of 25.5% for the fourth quarter of 2019, compared with an income tax expense of $2.3 million, representing an effective tax rate of 26.0%, for the fourth quarter of 2018.
Portfolio Performance
Allowance for credit losses as a percentage of total finance receivables was 2.15% at December 31, 2019 compared with 1.86% at September 30, 2019 and 1.62% at December 31, 2018.
Finance receivables over 30 days delinquent were 1.41% of the Company’s total finance receivables portfolio as of December 31, 2019, up 13 basis points from September 30, 2019 and up 32 basis points from December 31, 2018. Finance receivables over 60 days delinquent were 0.85% of the Company’s total finance receivables portfolio as of December 31, 2019, up 1 basis point from September 30, 2019 and up 20 basis points from December 31, 2018. Annualized fourth quarter net charge-offs were 3.00% of average total finance receivables versus 1.99% in the third quarter of 2019 and 2.30% a year ago. Included in fourth quarter charge-offs was $0.9 million that was specifically reserved for during the third quarter, thereby eliminating the entire allowance related to the fraudulent activities within a specific dealer’s portfolio.
As of December 31, 2019, the Company’s consolidated equity to assets ratio was 17.80%. This compares to 16.74% and 17.01%, in the prior quarter and year ago quarter, respectively.
Corporate Developments
Marlin’s Board of Directors today declared a $0.14 per share quarterly dividend. The dividend is payable February 20, 2020, to shareholders of record on February 10, 2020. Based on the closing stock price on January 29, 2020, the annualized dividend yield on the Company’s common stock is 2.66%.
Business Outlook
The Company expects earnings per share on an adjusted basis* for the year ending December 31, 2020 to be between $2.17 and $2.27 per share. The Company’s earnings guidance for the full year ending December 31, 2020 reflects the adoption of Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses. ASU 2016 – 13 replaces the currently used incurred loss methodology for estimating credit losses with a forward-looking current expected credit losses (“CECL”) methodology effective on January 1, 2020. We estimate that the adoption of the CECL methodology could unfavorably impact earnings in 2020 by up to $0.25 per share.
The Company’s earnings guidance is based on the following assumptions:
- Total sourced origination volume growth in 2020 of approximately 20% from 2019 levels, with continued disproportionate growth in the working capital loan product.
- Portfolio performance does not deteriorate from year-end 2019 experience and delinquencies and net charge-offs remain at the higher end of our expected range.
- Net interest and fee margin in 2020, as a percentage of average finance receivables, of between 9.25% and 9.75%.
* Non-GAAP Financial Measures: Net income on an adjusted basis, ROE on an adjusted basis and adjusted efficiency ratio are financial measures that are not in accordance with U.S. generally accepted accounting principles (GAAP). See “Regulation G – Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below for a detailed description and reconciliation of such Non-GAAP financial measures to their most directly comparable GAAP financial measures, in accordance with Regulation G.
Conference Call and Webcast
Marlin will host a conference call on Friday, January 31, 2020 at 9:00 a.m. ET to discuss the Company’s fourth quarter and full year 2019 results. The conference call details are as follows:
Fourth Quarter and Full Year 2019 Financial Results Conference Call
| Date: | Friday, January 31, 2020 |
| 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: | 13697822 |
| Webcast: | http://public.viavid.com/index.php?id=137519 |
For those unable to participate during the live broadcast, a replay of the call will also be available from 12:00 p.m. Eastern Time on January 31, 2020 through 11:59 p.m. Eastern Time on February 14, 2020 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13697822.
About Marlin
Marlin 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. Such forward-looking statements represent only the company’s current beliefs regarding future events and are not guarantees of performance or results. All forward-looking statements (including statements regarding expectations of 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,” “could”, “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 under the headings “Forward-Looking Statements” and “Risk Factors” in our periodic reports filed with the United States Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are also available in the “Investors” section of our website. 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. Investors are cautioned not to place undue reliance on such forward-looking statements.
Regulation G – Non-GAAP Financial Measures
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 after-tax income and expenses that are deemed to be unusual in nature or infrequent in occurrence and are not indicative of the underlying performance of the business for the period presented. 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 any discrete adjustments used to present net income on an adjusted basis as well as the impact of pass-through lease expenses that are required to be presented on a gross basis in the income statement and acquisition related expense, 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 defines General and administrative annualized percent of average finance receivables, on an adjusted basis, as the calculation used for the “as reported” ratio, adjusting the numerator for acquisition related general and administrative expenses and pass-through lease expenses that are required to be presented on a gross basis in the income statement, as applicable. The adjusted ratio uses the same denominator as the “as reported” ratio. The Company defines Non-interest expense divided by average total managed assets, on an adjusted basis, as the calculation used for the “as reported” ratio adjusting the number for any discrete adjustments used to present net income on an adjusted basis as well as the impact of pass-through lease expenses that are required to be presented on a gross basis in the income statement and acquisition related expenses, as applicable. The adjusted ratio uses the same denominator as the “as reported” ratio. 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 Bogansky, Senior Vice President & Chief Financial Officer
856-505-4108
Lasse Glassen, Addo Investor Relations
lglassen@addoir.com
424-238-6249
--Tables to Follow--
| MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES | |||||||||
| Consolidated Balance Sheets | |||||||||
| (Unaudited) | |||||||||
| December 31, | December 31, | ||||||||
| 2019 | 2018 | ||||||||
| (Dollars in thousands, except per-share data) | |||||||||
| ASSETS | |||||||||
| Cash and due from banks | $ | 4,701 | $ | 5,088 | |||||
| Interest-earning deposits with banks | 118,395 | 92,068 | |||||||
| Total cash and cash equivalents | 123,096 | 97,156 | |||||||
| Time deposits with banks | 12,927 | 9,659 | |||||||
| Restricted interest-earning deposits (includes $6.9 and $10.0 million at December 31, 2019, and December 31, 2018, respectively, related to consolidated VIEs) | 6,931 | 14,045 | |||||||
| Investment securities (amortized cost of $11.1 million and $11.2 million at December 31, 2019 and December 31, 2018, respectively) | 11,076 | 10,956 | |||||||
| Net investment in leases and loans: | |||||||||
| Leases | 426,608 | 489,299 | |||||||
| Loans | 601,607 | 527,541 | |||||||
| Net investment in leases and loans, excluding allowance for credit losses (includes $76.1 million and $150.2 million at December 31, 2019 and December 31, 2018, respectively, related to consolidated VIEs) | 1,028,215 | 1,016,840 | |||||||
| Allowance for credit losses | (21,695) | (16,100 | ) | ||||||
| Total net investment in leases and loans | 1,006,520 | 1,000,740 | |||||||
| Intangible assets | 7,461 | 7,912 | |||||||
| Goodwill | 6,735 | 7,360 | |||||||
| Operating lease right-of-use assets | 8,863 | — | |||||||
| Property and equipment, net of allowance | 7,888 | 4,317 | |||||||
| Property tax receivables | 5,493 | 5,245 | |||||||
| Other assets | 10,453 | 9,656 | |||||||
| Total assets | $ | 1,207,443 | $ | 1,167,046 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
| Deposits | $ | 839,132 | $ | 755,776 | |||||
| Long-term borrowings related to consolidated VIEs | 76,091 | 150,055 | |||||||
| Operating lease liabilities | 9,730 | — | |||||||
| Other liabilities: | |||||||||
| Sales and property taxes payable | 2,678 | 3,775 | |||||||
| Accounts payable and accrued expenses | 34,028 | 36,369 | |||||||
| Net deferred income tax liability | 30,828 | 22,560 | |||||||
| Total liabilities | 992,487 | 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; 12,113,585 and 12,367,724 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively | 121 | 124 | |||||||
| Additional paid-in capital | 79,665 | 83,496 | |||||||
| Accumulated other comprehensive income (loss) | 58 | (44) | |||||||
| Retained earnings | 135,112 | 114,935 | |||||||
| Total stockholders’ equity | 214,956 | 198,511 | |||||||
| Total liabilities and stockholders’ equity | $ | 1,207,443 | $ | 1,167,046 | |||||
| MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES Consolidated Statements of Operations (Unaudited) | |||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||
| (Dollars in thousands, except per-share data) | |||||||||||||||
| Interest income | $ | 26,747 | $ | 24,946 | $ | 107,420 | $ | 97,025 | |||||||
| Fee income | 3,787 | 4,078 | 15,205 | 15,843 | |||||||||||
| Interest and fee income | 30,534 | 29,024 | 122,625 | 112,868 | |||||||||||
| Interest expense | 6,102 | 5,349 | 25,033 | 17,414 | |||||||||||
| Net interest and fee income | 24,432 | 23,675 | 97,592 | 95,454 | |||||||||||
| Provision for credit losses | 10,255 | 5,761 | 28,036 | 19,522 | |||||||||||
| Net interest and fee income after provision for credit losses | 14,177 | 17,914 | 69,556 | 75,932 | |||||||||||
| Non-interest income: | |||||||||||||||
| Gain on leases and loans sold | 8,810 | 3,505 | 22,210 | 8,363 | |||||||||||
| Insurance premiums written and earned | 2,258 | 2,108 | 8,796 | 8,087 | |||||||||||
| Other income | 2,452 | 1,512 | 13,025 | 4,984 | |||||||||||
| Non-interest income | 13,520 | 7,125 | 44,031 | 21,434 | |||||||||||
| Non-interest expense: | |||||||||||||||
| Salaries and benefits | 9,351 | 9,908 | 44,168 | 39,750 | |||||||||||
| General and administrative | 7,052 | 6,450 | 32,566 | 24,915 | |||||||||||
| Non-interest expense | 16,403 | 16,358 | 76,734 | 64,665 | |||||||||||
| Income before income taxes | 11,294 | 8,681 | 36,853 | 32,701 | |||||||||||
| Income tax expense | 2,880 | 2,259 | 9,737 | 7,721 | |||||||||||
| Net income | $ | 8,414 | $ | 6,422 | $ | 27,116 | $ | 24,980 | |||||||
| Basic earnings per share | $ | 0.69 | $ | 0.52 | $ | 2.21 | $ | 2.01 | |||||||
| Diluted earnings per share | $ | 0.69 | $ | 0.51 | $ | 2.20 | $ | 2.00 | |||||||
| MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||
| (Dollars in thousands, except per-share data) | (Dollars in thousands, except per-share data) | ||||||||||||||
| Net income as reported | $ | 8,414 | $ | 6,422 | $ | 27,116 | $ | 24,980 | |||||||
| Deduct: | |||||||||||||||
| Reversal of charges in connection with executive separation | - | - | 218 | - | |||||||||||
| Charges in connection with executive separation | - | - | (631 | ) | |||||||||||
| Charge in connection with workforce reorganization | - | - | (311 | ) | - | ||||||||||
| Tax effect | - | - | 24 | 162 | |||||||||||
| Total adjustments, net of tax | - | - | (69 | ) | (469 | ) | |||||||||
| Net Income on an adjusted basis | $ | 8,414 | $ | 6,422 | $ | 27,185 | $ | 25,449 | |||||||
| Diluted earnings per share as reported | $ | 0.69 | $ | 0.51 | $ | 2.20 | $ | 2.00 | |||||||
| Diluted earnings per share on an adjusted basis | $ | 0.69 | $ | 0.51 | $ | 2.20 | $ | 2.04 | |||||||
| Return on Average Assets as reported | 2.74 | % | 2.28 | % | 2.18 | % | 2.29 | % | |||||||
| Return on Average Assets on an adjusted basis | 2.74 | % | 2.28 | % | 2.19 | % | 2.33 | % | |||||||
| Return on Average Equity as reported | 16.04 | % | 13.16 | % | 13.33 | % | 13.27 | % | |||||||
| Return on Average Equity on an adjusted basis | 16.04 | % | 13.16 | % | 13.36 | % | 13.52 | % | |||||||
| Efficiency Ratio numerator as reported | $ | 16,403 | $ | 16,358 | $ | 76,734 | $ | 64,665 | |||||||
| Adjustments to Numerator: | |||||||||||||||
| Expense adjustments as seen in Net Income reconciliation above | - | - | (93 | ) | (631 | ) | |||||||||
| Acquisition related expenses | (1,050 | ) | (680 | ) | (3,193 | ) | (1,900 | ) | |||||||
| Pass-through expenses | (374 | ) | - | (6,624 | ) | - | |||||||||
| Efficiency ratio numerator on an adjusted basis | $ | 14,979 | $ | 15,678 | $ | 66,824 | $ | 62,134 | |||||||
| Adjustments to Denominator: | |||||||||||||||
| Efficiency Ratio denominator as reported | $ | 37,952 | $ | 30,800 | $ | 141,623 | $ | 116,888 | |||||||
| Pass-through revenue | (721 | ) | - | (6,401 | ) | - | |||||||||
| Efficiency Ratio denominator on an adjusted basis | $ | 37,231 | $ | 30,800 | $ | 135,222 | $ | 116,888 | |||||||
| Efficiency Ratio as reported | 43.22 | % | 53.11 | % | 54.18 | % | 55.32 | % | |||||||
| Efficiency Ratio on an adjusted basis | 40.23 | % | 50.90 | % | 49.42 | % | 53.16 | % | |||||||
| Non-interest Expense / Average total managed assets numerator, as reported | $ | 16,403 | $ | 16,358 | $ | 76,734 | $ | 64,665 | |||||||
| Adjustments to Numerator: | |||||||||||||||
| Expense adjustments as seen in Net Income reconciliation above | - | - | (93 | ) | (631 | ) | |||||||||
| Acquisition related expenses | (1,050 | ) | (680 | ) | (3,193 | ) | (1,900 | ) | |||||||
| Pass-through expenses | (374 | ) | - | (6,624 | ) | - | |||||||||
| Non-interest Expense / Average total managed assets numerator, on an adjusted basis | $ | 14,979 | $ | 15,678 | $ | 66,824 | $ | 62,134 | |||||||
| Non-interest Expense / Average total managed assets as reported | 4.99 | % | 5.86 | % | 6.14 | % | 6.14 | % | |||||||
| Non-interest Expense / Average total managed assets on an adjusted basis | 4.56 | % | 5.61 | % | 5.35 | % | 5.90 | % | |||||||
| General and administrative expense Annualized % of Average | |||||||||||||||
| Finance Receivables numerator as reported | $ | 7,052 | $ | 6,450 | $ | 32,566 | $ | 24,915 | |||||||
| Adjustments to Numerator: | |||||||||||||||
| Expense adjustments as seen in Net Income reconciliation above | - | - | - | (136 | ) | ||||||||||
| Acquisition related expenses | (480 | ) | (219 | ) | (1,181 | ) | (378 | ) | |||||||
| Pass-through expenses | (374 | ) | - | (6,624 | ) | - | |||||||||
| General and administrative expense Annualized % of Average | |||||||||||||||
| Finance Receivables numerator as adjusted | $ | 6,198 | $ | 6,231 | $ | 24,761 | $ | 24,401 | |||||||
| General and administrative expense Annualized % of Average | |||||||||||||||
| Finance Receivables as reported | 2.73 | % | 2.66 | % | 3.17 | % | 2.64 | % | |||||||
| General and administrative expense Annualized % of Average | |||||||||||||||
| Finance Receivables on an adjusted basis | 2.40 | % | 2.57 | % | 2.41 | % | 2.58 | % | |||||||
| MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES Supplemental Quarterly Data (Dollars in thousands, except share amounts) | |||||||||||||||||||
| Quarter Ended: | 12/31/2018 | 3/31/2019 | 6/30/2019 | 9/30/2019 | 12/31/2019 | ||||||||||||||
| Net Income: | |||||||||||||||||||
| Net Income | $ | 6,422 | $ | 5,141 | $ | 6,115 | $ | 7,446 | $ | 8,414 | |||||||||
| Annualized Performance Measures: | |||||||||||||||||||
| Return on Average Assets | 2.28 | % | 1.69 | % | 1.94 | % | 2.34 | % | 2.74 | % | |||||||||
| Return on Average Stockholders' Equity | 13.16 | % | 10.45 | % | 12.05 | % | 14.58 | % | 16.04 | % | |||||||||
| EPS Data: | |||||||||||||||||||
| Net Income Allocated to Common Stock | $ | 6,322 | $ | 5,069 | $ | 6,041 | $ | 7,357 | $ | 8,313 | |||||||||
| Number of Shares - Basic | 12,202,652 | 12,165,646 | 12,184,996 | 12,054,944 | 11,996,446 | ||||||||||||||
| Basic Earnings per Share | $ | 0.52 | $ | 0.42 | $ | 0.50 | $ | 0.61 | $ | 0.69 | |||||||||
| Number of Shares - Diluted | 12,286,748 | 12,252,116 | 12,266,851 | 12,167,962 | 12,118,193 | ||||||||||||||
| Diluted Earnings per Share | $ | 0.51 | $ | 0.41 | $ | 0.49 | $ | 0.60 | $ | 0.69 | |||||||||
| Cash Dividends Declared per share | $ | 0.14 | $ | 0.14 | $ | 0.14 | $ | 0.14 | $ | 0.14 | |||||||||
| New Asset Production: | |||||||||||||||||||
| Direct Originations | $ | 40,381 | $ | 43,565 | $ | 49,038 | $ | 41,556 | $ | 50,421 | |||||||||
| Indirect Originations | $ | 159,534 | $ | 149,875 | $ | 160,279 | $ | 139,472 | $ | 167,740 | |||||||||
| Total Originations | $ | 199,915 | $ | 193,440 | $ | 209,317 | $ | 181,028 | $ | 218,161 | |||||||||
| Equipment Finance Originations | $ | 180,116 | $ | 169,831 | $ | 181,824 | $ | 154,781 | $ | 186,852 | |||||||||
| Working Capital Loans Originations | $ | 19,799 | $ | 23,609 | $ | 27,493 | $ | 26,247 | $ | 31,309 | |||||||||
| Total Originations | $ | 199,915 | $ | 193,440 | $ | 209,317 | $ | 181,028 | $ | 218,161 | |||||||||
| Assets originated for sale in the period | $ | 11,905 | $ | 11,298 | $ | 18,025 | $ | 18,174 | $ | 16,344 | |||||||||
| Assets referred in the period | $ | 4,451 | $ | 3,617 | $ | 4,140 | $ | 2,408 | $ | 1,961 | |||||||||
| Total Sourced Originations | $ | 216,271 | $ | 208,355 | $ | 231,482 | $ | 201,610 | $ | 236,466 | |||||||||
| Assets sold in the period | $ | 58,138 | $ | 52,867 | $ | 57,640 | $ | 85,425 | $ | 114,483 | |||||||||
| Implicit Yield on Direct Originations | 21.79 | % | 23.09 | % | 23.09 | % | 24.38 | % | 23.20 | % | |||||||||
| Implicit Yield on Indirect Originations | 9.97 | % | 9.76 | % | 9.85 | % | 10.10 | % | 9.19 | % | |||||||||
| Total Implicit Yield on Total Originations | 12.36 | % | 12.76 | % | 12.95 | % | 13.38 | % | 12.43 | % | |||||||||
| Implicit Yield on Equipment Finance Originations | 9.68 | % | 9.59 | % | 9.71 | % | 9.57 | % | 8.91 | % | |||||||||
| Implicit Yield on Working Capital Loans Originations | 36.67 | % | 35.55 | % | 34.34 | % | 35.81 | % | 33.51 | % | |||||||||
| # of Leases / Loans Equipment Finance | 7,873 | 7,467 | 7,648 | 6,836 | 7,279 | ||||||||||||||
| Equipment Finance Approval Percentage | 59 | % | 58 | % | 55 | % | 53 | % | 54 | % | |||||||||
| Average Monthly Equipment Finance Sources | 1,140 | 1,074 | 1,149 | 1,067 | 1,033 | ||||||||||||||
| 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 adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details. | |||||||||||||||||||
| (4) Adjusted non-interest expense adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details. | |||||||||||||||||||
| **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) | |||||||||||||||||||
| Quarter Ended: | 12/31/2018 | 3/31/2019 | 6/30/2019 | 9/30/2019 | 12/31/2019 | ||||||||||||||
| Net Interest and Fee Margin (NIM) | |||||||||||||||||||
| Percent of Average Total Finance Receivables: | |||||||||||||||||||
| Interest Income | 10.28 | % | 10.36 | % | 10.50 | % | 10.57 | % | 10.34 | % | |||||||||
| Fee Income | 1.68 | % | 1.62 | % | 1.36 | % | 1.48 | % | 1.46 | % | |||||||||
| Interest and Fee Income | 11.96 | % | 11.98 | % | 11.86 | % | 12.05 | % | 11.80 | % | |||||||||
| Interest Expense | 2.20 | % | 2.39 | % | 2.48 | % | 2.50 | % | 2.36 | % | |||||||||
| Net Interest and Fee Margin (NIM) | 9.76 | % | 9.59 | % | 9.38 | % | 9.55 | % | 9.44 | % | |||||||||
| Cost of Funds (1) | 2.43 | % | 2.49 | % | 2.60 | % | 2.63 | % | 2.57 | % | |||||||||
| Interest Income Equipment Finance | $ | 21,590 | $ | 21,722 | $ | 22,390 | $ | 22,355 | $ | 21,620 | |||||||||
| Interest Income Working Capital Loans | $ | 2,824 | $ | 3,228 | $ | 3,767 | $ | 4,389 | $ | 4,545 | |||||||||
| Average Total Finance Receivables | $ | 970,785 | $ | 999,432 | $ | 1,031,774 | $ | 1,048,798 | $ | 1,034,464 | |||||||||
| Average Net Investment Equipment Finance | $ | 937,004 | $ | 960,501 | $ | 986,075 | $ | 995,346 | $ | 977,225 | |||||||||
| Average Working Capital Loans | $ | 33,781 | $ | 38,931 | $ | 45,699 | $ | 53,452 | $ | 57,239 | |||||||||
| End of Period Net Investment Equipment Finance | $ | 965,351 | $ | 981,664 | $ | 1,012,463 | $ | 980,799 | $ | 947,477 | |||||||||
| End of Period Working Capital Loans | $ | 35,389 | $ | 41,526 | $ | 49,808 | $ | 53,699 | $ | 59,043 | |||||||||
| Total Owned Net Investment in Leases and Loans (2) | $ | 1,000,740 | $ | 1,023,190 | $ | 1,062,271 | $ | 1,034,498 | $ | 1,006,520 | |||||||||
| Total Assets Serviced for Others | $ | 164,029 | $ | 192,731 | $ | 213,797 | $ | 264,226 | $ | 341,064 | |||||||||
| Total Managed Assets | $ | 1,164,769 | $ | 1,215,921 | $ | 1,276,068 | $ | 1,298,724 | $ | 1,347,584 | |||||||||
| Average Total Managed Assets | $ | 1,117,069 | $ | 1,177,812 | $ | 1,229,588 | $ | 1,278,394 | $ | 1,314,728 | |||||||||
| Portfolio Asset Quality: | |||||||||||||||||||
| Total Finance Receivables | |||||||||||||||||||
| 30+ Days Past Due Delinquencies | 1.09 | % | 1.11 | % | 1.05 | % | 1.28 | % | 1.41 | % | |||||||||
| 30+ Days Past Due Delinquencies | $ | 12,295 | $ | 12,849 | $ | 12,594 | $ | 14,916 | $ | 16,076 | |||||||||
| 60+ Days Past Due Delinquencies | 0.65 | % | 0.66 | % | 0.64 | % | 0.84 | % | 0.85 | % | |||||||||
| 60+ Days Past Due Delinquencies | $ | 7,292 | $ | 7,626 | $ | 7,686 | $ | 9,783 | $ | 9,688 | |||||||||
| Equipment Finance | |||||||||||||||||||
| 30+ Days Past Due Delinquencies | 1.08 | % | 1.13 | % | 1.08 | % | 1.28 | % | 1.41 | % | |||||||||
| 30+ Days Past Due Delinquencies | $ | 11,803 | $ | 12,565 | $ | 12,354 | $ | 14,176 | $ | 15,221 | |||||||||
| 60+ Days Past Due Delinquencies | 0.65 | % | 0.68 | % | 0.67 | % | 0.88 | % | 0.87 | % | |||||||||
| 60+ Days Past Due Delinquencies | $ | 7,100 | $ | 7,626 | $ | 7,686 | $ | 9,756 | $ | 9,417 | |||||||||
| Working Capital Loans | |||||||||||||||||||
| 15+ Days Past Due Delinquencies | 1.44 | % | 1.41 | % | 0.52 | % | 1.89 | % | 1.75 | % | |||||||||
| 15+ Days Past Due Delinquencies | $ | 526 | $ | 605 | $ | 268 | $ | 1,043 | $ | 1,058 | |||||||||
| 30+ Days Past Due Delinquencies | 1.35 | % | 0.66 | % | 0.47 | % | 1.34 | % | 1.42 | % | |||||||||
| 30+ Days Past Due Delinquencies | $ | 492 | $ | 284 | $ | 240 | $ | 740 | $ | 855 | |||||||||
| 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 adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details. | |||||||||||||||||||
| (4) Adjusted non-interest expense adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details. | |||||||||||||||||||
| **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) | |||||||||||||||||||
| Quarter Ended: | 12/31/2018 | 3/31/2019 | 6/30/2019 | 9/30/2019 | 12/31/219 | ||||||||||||||
| Portfolio Asset Quality: | |||||||||||||||||||
| Net Charge-offs - Total Finance Receivables | $ | 5,578 | $ | 4,581 | $ | 4,861 | $ | 5,228 | $ | 7,771 | |||||||||
| % on Average Total Finance Receivables | |||||||||||||||||||
| Annualized | 2.30 | % | 1.83 | % | 1.88 | % | 1.99 | % | 3.00 | % | |||||||||
| Net Charge-offs - Equipment Finance | $ | 5,132 | $ | 3,927 | $ | 4,310 | $ | 5,038 | $ | 6,634 | |||||||||
| % on Average Net Investment in Equipment Finance | |||||||||||||||||||
| Annualized | 2.19 | % | 1.64 | % | 1.75 | % | 2.02 | % | 2.72 | % | |||||||||
| Net Charge-offs - Working Capital Loans | $ | 446 | $ | 654 | $ | 551 | $ | 190 | $ | 1,137 | |||||||||
| % of Average Working Capital Loans | |||||||||||||||||||
| Annualized | 5.28 | % | 6.72 | % | 4.82 | % | 1.42 | % | 7.95 | % | |||||||||
| Total Allowance for Credit Losses | $ | 16,100 | $ | 16,882 | $ | 16,777 | $ | 19,211 | $ | 21,695 | |||||||||
| % of Total Finance Receivables | 1.62 | % | 1.66 | % | 1.59 | % | 1.86 | % | 2.15 | % | |||||||||
| % of 60+ Delinquencies | 220.79 | % | 221.37 | % | 218.28 | % | 196.37 | % | 223.94 | % | |||||||||
| Allowance for Credit Losses - Equipment Finance | $ | 14,633 | $ | 15,198 | $ | 14,837 | $ | 17,115 | $ | 19,796 | |||||||||
| % of Net Investment Equipment Finance | 1.52 | % | 1.56 | % | 1.47 | % | 1.75 | % | 2.09 | % | |||||||||
| % of 60+ Delinquencies | 206.10 | % | 199.28 | % | 193.03 | % | 175.43 | % | 210.21 | % | |||||||||
| Allowance for Credit Losses - Working Capital Loans | $ | 1,467 | $ | 1,684 | $ | 1,940 | $ | 2,096 | $ | 1,899 | |||||||||
| % of Total Working Capital Loans | 4.02 | % | 3.94 | % | 3.79 | % | 3.80 | % | 3.14 | % | |||||||||
| Non-accrual - Equipment Finance | $ | 3,720 | $ | 4,390 | $ | 4,282 | $ | 7,209 | $ | 5,441 | |||||||||
| Non-accrual - Equipment Finance | 0.34 | % | 0.39 | % | 0.37 | % | 0.65 | % | 0.50 | % | |||||||||
| Non-accrual - Working Capital Loans | $ | 492 | $ | 284 | $ | 248 | $ | 740 | $ | 946 | |||||||||
| Non-accrual - Working Capital Loans | 1.35 | % | 0.66 | % | 0.48 | % | 1.34 | % | 1.57 | % | |||||||||
| Non-accrual - Total Finance Receivables | $ | 4,212 | $ | 4,674 | $ | 4,530 | $ | 7,949 | $ | 6,387 | |||||||||
| Non-accrual - Total Finance Receivables | 0.37 | % | 0.40 | % | 0.38 | % | 0.68 | % | 0.56 | % | |||||||||
| Restructured - Total Finance Receivables | $ | 3,636 | $ | 3,363 | $ | 3,122 | $ | 2,533 | $ | 2,906 | |||||||||
| Expense Ratios: | |||||||||||||||||||
| Salaries and Benefits Expense | $ | 9,908 | $ | 11,451 | $ | 12,469 | $ | 10,897 | $ | 9,351 | |||||||||
| Salaries and Benefits Expense | |||||||||||||||||||
| Annualized % of Avg. Fin. Recbl. | 4.08 | % | 4.58 | % | 4.83 | % | 4.16 | % | 3.62 | % | |||||||||
| Total personnel end of quarter | 341 | 352 | 356 | 348 | 348 | ||||||||||||||
| General and Administrative Expense | $ | 6,450 | $ | 13,354 | $ | 6,068 | $ | 6,092 | $ | 7,052 | |||||||||
| General and Administrative Expense | |||||||||||||||||||
| Annualized % of Avg. Fin. Recbl. | 2.66 | % | 5.34 | % | 2.35 | % | 2.32 | % | 2.73 | % | |||||||||
| Adjusted General and Administrative Expense | |||||||||||||||||||
| Annualized % of Avg. Fin. Recbl. (3) | 2.57 | % | 2.75 | % | 2.26 | % | 2.23 | % | 2.40 | % | |||||||||
| 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 adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details. | |||||||||||||||||||
| (4) Adjusted non-interest expense adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details. | |||||||||||||||||||
| **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) | |||||||||||||||||||
| Quarter Ended: | 12/31/2018 | 3/31/3019 | 6/30/2019 | 9/30/2019 | 12/31/2019 | ||||||||||||||
| Expense Ratios: | |||||||||||||||||||
| Non-Interest Expense/Average Total Managed Assets | 5.86 | % | 8.42 | % | 6.03 | % | 5.32 | % | 4.99 | % | |||||||||
| Adjusted Non-Interest Expense/Average Total Managed Assets (4) | 5.61 | % | 6.14 | % | 5.68 | % | 5.10 | % | 4.56 | % | |||||||||
| Efficiency Ratio | 53.11 | % | 67.20 | % | 59.07 | % | 48.02 | % | 43.22 | % | |||||||||
| Adjusted Efficiency Ratio (4) | 50.90 | % | 57.80 | % | 55.78 | % | 46.05 | % | 40.23 | % | |||||||||
| Balance Sheet: | |||||||||||||||||||
| Assets | |||||||||||||||||||
| Investment in Leases and Loans | $ | 996,384 | $ | 1,019,311 | $ | 1,057,726 | $ | 1,032,868 | $ | 1,007,707 | |||||||||
| Initial Direct Costs and Fees | 20,456 | 20,761 | 21,322 | 20,841 | 20,508 | ||||||||||||||
| Reserve for Credit Losses | (16,100 | ) | (16,882 | ) | (16,777 | ) | (19,211 | ) | (21,695 | ) | |||||||||
| Net Investment in Leases and Loans | $ | 1,000,740 | $ | 1,023,190 | $ | 1,062,271 | $ | 1,034,498 | $ | 1,006,520 | |||||||||
| Cash and Cash Equivalents | 97,156 | 140,942 | 139,731 | 132,461 | 123,096 | ||||||||||||||
| Restricted Cash | 14,045 | 13,174 | 8,152 | 7,576 | 6,931 | ||||||||||||||
| Other Assets | 55,105 | 69,409 | 69,829 | 72,881 | 70,896 | ||||||||||||||
| Total Assets | $ | 1,167,046 | $ | 1,246,725 | $ | 1,279,983 | $ | 1,247,416 | $ | 1,207,443 | |||||||||
| Liabilities | |||||||||||||||||||
| Deposits | 755,776 | 840,167 | 888,561 | 869,257 | 839,132 | ||||||||||||||
| Total Debt | 150,055 | 129,171 | 109,637 | 91,739 | 76,091 | ||||||||||||||
| Other Liabilities | 62,704 | 75,737 | 76,231 | 77,633 | 77,264 | ||||||||||||||
| Total Liabilities | $ | 968,535 | $ | 1,045,075 | $ | 1,074,429 | $ | 1,038,629 | $ | 992,487 | |||||||||
| Stockholders' Equity | |||||||||||||||||||
| Common Stock | $ | 124 | $ | 123 | $ | 123 | $ | 122 | $ | 121 | |||||||||
| Paid-in Capital, net | 83,496 | 83,213 | 82,724 | 80,226 | 79,665 | ||||||||||||||
| Other Comprehensive Income (Loss) | (44 | ) | (4 | ) | 48 | 89 | 58 | ||||||||||||
| Retained Earnings | 114,935 | 118,318 | 122,659 | 128,350 | 135,112 | ||||||||||||||
| Total Stockholders' Equity | $ | 198,511 | $ | 201,650 | $ | 205,554 | $ | 208,787 | $ | 214,956 | |||||||||
| Total Liabilities and | |||||||||||||||||||
| Stockholders' Equity | $ | 1,167,046 | $ | 1,246,725 | $ | 1,279,983 | $ | 1,247,416 | $ | 1,207,443 | |||||||||
| Capital and Leverage: | |||||||||||||||||||
| Equity | $ | 198,511 | $ | 201,650 | $ | 205,554 | $ | 208,787 | $ | 214,956 | |||||||||
| Debt to Equity | 4.56 | 4.81 | 4.86 | 4.60 | 4.26 | ||||||||||||||
| Equity to Assets | 17.01 | % | 16.17 | % | 16.06 | % | 16.74 | % | 17.80 | % | |||||||||
| Regulatory Capital Ratios: | |||||||||||||||||||
| Tier 1 Leverage Capital | 16.38 | % | 15.41 | % | 15.24 | % | 15.28 | % | 16.31 | % | |||||||||
| Common Equity Tier 1 Risk-based Capital | 17.50 | % | 17.25 | % | 17.01 | % | 17.72 | % | 18.73 | % | |||||||||
| Tier 1 Risk-based Capital | 17.50 | % | 17.25 | % | 17.01 | % | 17.72 | % | 18.73 | % | |||||||||
| Total Risk-based Capital | 18.76 | % | 18.50 | % | 18.26 | % | 18.98 | % | 19.99 | % | |||||||||
| 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 adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details. | |||||||||||||||||||
| (4) Adjusted non-interest expense adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details. | |||||||||||||||||||
| **Equipment Finance consists of equipment leases and loans; Working Capital Loans consist of small business loans. | |||||||||||||||||||
| MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES Supplemental Annual Data (Dollars in thousands, except share amounts) | |||||||||||
| Year Ended: | 2017 | 2018 | 2019 | ||||||||
| Net Income: | |||||||||||
| Net Income | $ | 25,292 | $ | 24,980 | $ | 27,116 | |||||
| Annualized Performance Measures: | |||||||||||
| Return on Average Assets | 2.59 | % | 2.29 | % | 2.18 | % | |||||
| Return on Average Stockholders' Equity | 15.38 | % | 13.27 | % | 13.33 | % | |||||
| EPS Data: | |||||||||||
| Net Income Allocated to Common Stock | $ | 24,664 | $ | 24,548 | $ | 26,777 | |||||
| Number of Shares - Basic | 12,216,020 | 12,201,465 | 12,099,920 | ||||||||
| Basic Earnings per Share | $ | 2.02 | $ | 2.01 | $ | 2.21 | |||||
| Number of Shares - Diluted | 12,249,623 | 12,273,406 | 12,197,797 | ||||||||
| Diluted Earnings per Share | $ | 2.01 | $ | 2.00 | $ | 2.20 | |||||
| Cash Dividends Declared per share | $ | 0.56 | $ | 0.56 | $ | 0.56 | |||||
| New Asset Production: | |||||||||||
| Direct Originations | $ | 91,182 | $ | 143,057 | $ | 184,580 | |||||
| Indirect Originations | $ | 538,263 | $ | 561,837 | $ | 617,366 | |||||
| Total Originations | $ | 629,445 | $ | 704,894 | $ | 801,946 | |||||
| Equipment Finance Originations | $ | 570,555 | $ | 630,650 | $ | 693,288 | |||||
| Working Capital Loans Originations | $ | 58,890 | $ | 74,244 | $ | 108,658 | |||||
| Total Originations | $ | 629,445 | $ | 704,894 | $ | 801,946 | |||||
| Assets originated for sale in the period | $ | 0 | $ | 17,596 | $ | 63,841 | |||||
| Assets referred in the period | $ | 54,110 | $ | 16,830 | $ | 12,126 | |||||
| Total Sourced Originations | $ | 683,555 | $ | 739,320 | $ | 877,913 | |||||
| Assets sold in the period | $ | 66,744 | $ | 138,995 | $ | 310,415 | |||||
| Implicit Yield on Direct Originations | 21.58 | % | 20.63 | % | 23.41 | % | |||||
| Implicit Yield on Indirect Originations | 10.32 | % | 10.37 | % | 9.71 | % | |||||
| Total Implicit Yield on Total Originations | 11.95 | % | 12.45 | % | 12.86 | % | |||||
| Implicit Yield on Equipment Finance Originations | 9.76 | % | 9.88 | % | 9.43 | % | |||||
| Implicit Yield on Working Capital Loans Originations | 33.19 | % | 34.26 | % | 34.72 | % | |||||
| # of Leases / Loans Equipment Finance | 30,682 | 31,478 | 29,230 | ||||||||
| Equipment Finance Approval Percentage | 56 | % | 57 | % | 55 | % | |||||
| Average Monthly Equipment Finance Sources | 1,198 | 1,186 | 1,081 | ||||||||
| 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 adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details. | |||||||||||
| (4) Adjusted non-interest expense adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details. | |||||||||||
| **Equipment Finance consists of equipment leases and loans; Working Capital Loans consist of small business loans. | |||||||||||
| MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES Supplemental Annual Data (Dollars in thousands, except share amounts) | |||||||||||
| Year Ended: | 2017 | 2018 | 2019 | ||||||||
| Net Interest and Fee Margin (NIM) | |||||||||||
| Percent of Average Total Finance Receivables: | |||||||||||
| Interest Income | 10.33 | % | 10.27 | % | 10.44 | % | |||||
| Fee Income | 1.76 | % | 1.68 | % | 1.48 | % | |||||
| Interest and Fee Income | 12.09 | % | 11.95 | % | 11.92 | % | |||||
| Interest Expense | 1.32 | % | 1.84 | % | 2.43 | % | |||||
| Net Interest and Fee Margin (NIM) | 10.77 | % | 10.11 | % | 9.49 | % | |||||
| Cost of Funds (1) | 1.43 | % | 2.02 | % | 2.58 | % | |||||
| Interest Income Equipment Finance | $ | 78,171 | $ | 84,800 | 88,087 | ||||||
| Interest Income Working Capital Loans | $ | 8,355 | $ | 10,234 | 15,929 | ||||||
| Average Total Finance Receivables | $ | 846,743 | $ | 944,588 | $ | 1,028,617 | |||||
| Average Net Investment Equipment Finance | $ | 821,972 | $ | 913,358 | $ | 979,787 | |||||
| Average Working Capital Loans | $ | 24,771 | $ | 31,230 | $ | 48,830 | |||||
| End of Period Net Investment Equipment Finance | $ | 887,328 | $ | 965,351 | $ | 947,477 | |||||
| End of Period Working Capital Loans | $ | 27,092 | $ | 35,389 | $ | 59,043 | |||||
| Total Owned Net Investment in Leases and Loans (2) | $ | 914,420 | $ | 1,000,740 | $ | 1,006,520 | |||||
| Total Assets Serviced for Others | $ | 74,359 | $ | 164,029 | $ | 341,064 | |||||
| Total Managed Assets | $ | 988,779 | $ | 1,164,769 | $ | 1,347,584 | |||||
| Average Total Managed Assets | $ | 884,851 | $ | 1,053,829 | $ | 1,250,131 | |||||
| Portfolio Asset Quality: | |||||||||||
| Total Finance Receivables | |||||||||||
| 30+ Days Past Due Delinquencies | 1.02 | % | 1.09 | % | 1.41 | % | |||||
| 30+ Days Past Due Delinquencies | $ | 10,565 | $ | 12,295 | $ | 16,076 | |||||
| 60+ Days Past Due Delinquencies | 0.55 | % | 0.65 | % | 0.85 | % | |||||
| 60+ Days Past Due Delinquencies | $ | 5,647 | $ | 7,292 | $ | 9,688 | |||||
| Equipment Finance | |||||||||||
| 30+ Days Past Due Delinquencies | 1.04 | % | 1.08 | % | 1.41 | % | |||||
| 30+ Days Past Due Delinquencies | $ | 10,446 | $ | 11,803 | $ | 15,221 | |||||
| 60+ Days Past Due Delinquencies | 0.56 | % | 0.65 | % | 0.87 | % | |||||
| 60+ Days Past Due Delinquencies | $ | 5,647 | $ | 7,100 | $ | 9,417 | |||||
| Working Capital Loans | |||||||||||
| 15+ Days Past Due Delinquencies | 0.95 | % | 1.44 | % | 1.75 | % | |||||
| 15+ Days Past Due Delinquencies | $ | 264 | $ | 526 | $ | 1,058 | |||||
| 30+ Days Past Due Delinquencies | 0.43 | % | 1.35 | % | 1.42 | % | |||||
| 30+ Days Past Due Delinquencies | $ | 119 | $ | 492 | $ | 855 | |||||
| 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 adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details. | |||||||||||
| (4) Adjusted non-interest expense adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details. | |||||||||||
| **Equipment Finance consists of equipment leases and loans; Working Capital Loans consist of small business loans. | |||||||||||
| MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES Supplemental Annual Data (Dollars in thousands, except share amounts) | |||||||||||
| Year Ended: | 2017 | 2018 | 2019 | ||||||||
| Portfolio Asset Quality: | |||||||||||
| Net Charge-offs - Total Finance Receivables | $ | 14,480 | $ | 18,273 | $ | 22,441 | |||||
| % on Average Total Finance Receivables | |||||||||||
| Annualized | 1.71 | % | 1.93 | % | 2.18 | % | |||||
| Net Charge-offs - Equipment Finance | $ | 13,383 | $ | 16,795 | $ | 19,909 | |||||
| % on Average Net Investment in Equipment Finance | |||||||||||
| Annualized | 1.63 | % | 1.84 | % | 2.03 | % | |||||
| Net Charge-offs - Working Capital Loans | $ | 1,097 | $ | 1,478 | $ | 2,532 | |||||
| % of Average Working Capital Loans | |||||||||||
| Annualized | 4.43 | % | 4.73 | % | 5.19 | % | |||||
| Total Allowance for Credit Losses | $ | 14,851 | $ | 16,100 | $ | 21,695 | |||||
| % of Total Finance Receivables | 1.63 | % | 1.62 | % | 2.15 | % | |||||
| % of 60+ Delinquencies | 262.99 | % | 220.79 | % | 223.94 | % | |||||
| Allowance for Credit Losses - Equipment Finance | $ | 13,815 | $ | 14,633 | $ | 19,796 | |||||
| % of Net Investment Equipment Finance | 1.56 | % | 1.52 | % | 2.09 | % | |||||
| % of 60+ Delinquencies | 244.64 | % | 206.10 | % | 210.21 | % | |||||
| Allowance for Credit Losses - Working Capital Loans | $ | 1,036 | $ | 1,467 | $ | 1,899 | |||||
| % of Total Working Capital Loans | 3.73 | % | 4.02 | % | 3.14 | % | |||||
| Non-accrual - Equipment Finance | $ | 3,065 | $ | 3,720 | $ | 5,441 | |||||
| Non-accrual - Equipment Finance | 0.30 | % | 0.34 | % | 0.50 | % | |||||
| Non-accrual - Working Capital Loans | $ | 118 | $ | 492 | $ | 946 | |||||
| Non-accrual - Working Capital Loans | 0.42 | % | 1.35 | % | 1.57 | % | |||||
| Non-accrual - Total Finance Receivables | $ | 3,183 | $ | 4,212 | $ | 6,387 | |||||
| Non-accrual - Total Finance Receivables | 0.31 | % | 0.37 | % | 0.56 | % | |||||
| Restructured - Total Finance Receivables | $ | 4,489 | $ | 3,636 | $ | 2,906 | |||||
| Expense Ratios: | |||||||||||
| Salaries and Benefits Expense | $ | 37,569 | $ | 39,750 | $ | 44,168 | |||||
| Salaries and Benefits Expense | |||||||||||
| Annualized % of Avg. Fin. Recbl. | 4.44 | % | 4.21 | % | 4.29 | % | |||||
| Total personnel end of quarter | 330 | 341 | 348 | ||||||||
| General and Administrative Expense | $ | 28,272 | $ | 24,915 | $ | 32,566 | |||||
| General and Administrative Expense | |||||||||||
| Annualized % of Avg. Fin. Recbl. | 3.34 | % | 2.64 | % | 3.17 | % | |||||
| Adjusted General and Administrative Expense | |||||||||||
| Annualized % of Avg. Fin. Recbl. (3) | 2.71 | % | 2.58 | % | 2.41 | % | |||||
| 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 adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details. | |||||||||||
| (4) Adjusted non-interest expense adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details. | |||||||||||
| **Equipment Finance consists of equipment leases and loans; Working Capital Loans consist of small business loans. | |||||||||||
| MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES Supplemental Annual Data (Dollars in thousands, except share amounts) | |||||||||||
| Year Ended: | 2017 | 2018 | 2019 | ||||||||
| Expense Ratios: | |||||||||||
| Non-Interest Expense/Average Total Managed Assets | 7.44 | % | 6.14 | % | 6.14 | % | |||||
| Adjusted Non-Interest Expense/Average Total Managed Assets (4) | 6.71 | % | 5.90 | % | 5.35 | % | |||||
| Efficiency Ratio | 61.04 | % | 55.32 | % | 54.18 | % | |||||
| Adjusted Efficiency Ratio (4) | 55.04 | % | 53.16 | % | 49.42 | % | |||||
| Balance Sheet: | |||||||||||
| Assets | |||||||||||
| Investment in Leases and Loans | $ | 911,242 | $ | 996,384 | $ | 1,007,707 | |||||
| Initial Direct Costs and Fees | 18,029 | 20,456 | 20,508 | ||||||||
| Reserve for Credit Losses | (14,851 | ) | (16,100 | ) | (21,695 | ) | |||||
| Net Investment in Leases and Loans | $ | 914,420 | $ | 1,000,740 | $ | 1,006,520 | |||||
| Cash and Cash Equivalents | 67,146 | 97,156 | 123,096 | ||||||||
| Restricted Cash | - | 14,045 | 6,931 | ||||||||
| Other Assets | 58,594 | 55,105 | 70,896 | ||||||||
| Total Assets | $ | 1,040,160 | $ | 1,167,046 | $ | 1,207,443 | |||||
| Liabilities | |||||||||||
| Deposits | 809,315 | 755,776 | 839,132 | ||||||||
| Total Debt | - | 150,055 | 76,091 | ||||||||
| Other Liabilities | 51,196 | 62,704 | 77,264 | ||||||||
| Total Liabilities | $ | 860,511 | $ | 968,535 | $ | 992,487 | |||||
| Stockholders' Equity | |||||||||||
| Common Stock | $ | 124 | $ | 124 | $ | 121 | |||||
| Paid-in Capital, net | 82,586 | 83,496 | 79,665 | ||||||||
| Other Comprehensive Income (Loss) | (96 | ) | (44 | ) | 58 | ||||||
| Retained Earnings | 97,035 | 114,935 | 135,112 | ||||||||
| Total Stockholders' Equity | $ | 179,649 | $ | 198,511 | $ | 214,956 | |||||
| Total Liabilities and | |||||||||||
| Stockholders' Equity | $ | 1,040,160 | $ | 1,167,046 | $ | 1,207,443 | |||||
| Capital and Leverage: | |||||||||||
| Equity | $ | 179,649 | $ | 198,511 | $ | 214,956 | |||||
| Debt to Equity | 4.50 | 4.56 | 4.26 | ||||||||
| Equity to Assets | 17.27 | % | 17.01 | % | 17.80 | % | |||||
| Regulatory Capital Ratios: | |||||||||||
| Tier 1 Leverage Capital | 17.25 | % | 16.38 | % | 16.31 | % | |||||
| Common Equity Tier 1 Risk-based Capital | 18.22 | % | 17.50 | % | 18.73 | % | |||||
| Tier 1 Risk-based Capital | 18.22 | % | 17.50 | % | 18.73 | % | |||||
| Total Risk-based Capital | 19.47 | % | 18.76 | % | 19.99 | % | |||||
| 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 adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details. | |||||||||||
| (4) Adjusted non-interest expense adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details. | |||||||||||
| **Equipment Finance consists of equipment leases and loans; Working Capital Loans consist of small business loans. | |||||||||||
* Non-GAAP Financial Measures: Net income on an adjusted basis, ROE on an adjusted basis and adjusted efficiency ratio are financial measures that are not in accordance with U. S. generally accepted accounting principles (GAAP). See “Regulation G – Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below for a detailed description and reconciliation of such Non-GAAP financial measures to their most directly comparable GAAP financial measures, in accordance with Regulation G.