Second Quarter Highlights:
- Net income of $3.0 million, up 95% year-over-year
- New lease originations of $80.4 million, up 49% year-over-year
- Risk adjusted net interest and fee margin of 12.24%, an increase of 108 basis points year-over-year
- Insured deposit growth of 19% quarter-over-quarter, up 128% year-over-year
- Strong capital position, equity to assets ratio of 31.64%
- Total risk-based capital of 35.85%
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Efficiency ratio of 60%, compared to 70% a year ago
MOUNT LAUREL, N.J., Aug. 2, 2012 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (Nasdaq:MRLN) today reported second quarter 2012 net income of $3.0 million, or $0.23 per diluted share. For the six-month period ended June 30, 2012, net income was $4.6 million, or $0.36 per diluted share.
"We're delighted with the solid profit momentum and strong operating fundamentals of our business," says Daniel P. Dyer, Marlin's co-founder and Chief Executive Officer.
"The continued expansion of our base of customers, combined with the ongoing growth and development of the sales force, are key drivers of our sales momentum," says Ed Siciliano, Marlin's Chief Sales Officer.
"Asset quality remains strong with lower delinquencies and charge-offs reported for the quarter," says George Pelose, Marlin's Chief Operating Officer.
"Reflecting our favorable outlook for the business, we have increased the quarterly cash dividend to $ 0.08 per share," says Mr. Dyer.
Second quarter 2012 lease production was $80.4 million based on initial equipment cost, up 11% from $72.4 million for the first quarter of 2012 and 49% higher than the second quarter of 2011.
The average number of monthly originating sources reached 1,128, up 11% from 1,016 for the first quarter of 2012 and an increase of 37% from the second quarter a year ago.
Net interest and fee margin declined slightly in the second quarter of 2012, to 13.22% from 13.35% in the first quarter of 2012, and has increased 101 basis points from the second quarter a year ago.
Driving the attractive margin is the Company's cost of funds, which improved 46 basis points from the first quarter of 2012 and 177 basis points from the second quarter of 2011. The improvement resulted from the Company's continuing shift in funding mix to lower-cost insured deposits issued by the Company's subsidiary, Marlin Business Bank.
The allowance for credit losses as a percentage of total finance receivables stands at 1.18% as of June 30, 2012, compared to 1.28% as of March 31, 2012. The allowance for credit losses as of June 30, 2012 represents 375% of total 60+ day delinquencies.
Leases over 30 days delinquent were 0.70% of Marlin's lease portfolio as of June 30, 2012, 24 basis points lower than the first quarter of 2012 and 61 basis points lower than a year ago. Leases over 60 days delinquent were 0.27% of Marlin's lease portfolio as of June 30, 2012, down 14 basis points from 0.41% at March 31, 2012 and 29 basis points lower than a year ago.
Second quarter net lease charge-offs were 1.04% of average net investment, representing an improvement of 19 basis points from the first quarter of 2012 and an improvement of 82 basis points from the second quarter of 2011.
Second quarter total operating expenses were $9.1 million, down $1.3 million, or 13%, from the first quarter of 2012. The decrease in operating expenses is due primarily to the absence of seasonal expenses recorded in the first quarter related to withholding taxes and restricted stock.
The Company maintains strong capital ratios with a consolidated equity to assets ratio of 31.64%. Our risk based capital ratio is 35.85%, which is well above regulatory requirements.
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 $0.08 per share quarterly dividend, an increase of 33% over the prior quarter. The dividend is payable August 23, 2012, to shareholders of record on August 13, 2012. Based on the closing stock price on August 01, 2012, the annualized dividend yield on the Company's common stock is 2.07%.
Conference Call and Webcast
We will host a conference call on Friday, August 3, 2012 at 9:00 a.m. ET to discuss the Company's second quarter 2012 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.
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) | ||
| June 30, | December 31, | |
| 2012 | 2011 | |
| (Dollars in thousands, except per-share data) | ||
| ASSETS | ||
| Cash and due from banks | $86 | $1,035 |
| Interest-earning deposits with banks | 48,921 | 41,250 |
| Total cash and cash equivalents | 49,007 | 42,285 |
| Restricted interest-earning deposits with banks (includes $7.5 million and $24.3 million at June 30, 2012 and December 31, 2011, respectively, related to consolidated variable interest entities ("VIEs")) | 13,175 | 28,637 |
| Securities available for sale (amortized cost of $3.3 million and $1.7 million at June 30, 2012 and December 31, 2011, respectively) | 3,347 | 1,780 |
| Net investment in leases and loans (includes $17.9 million and $60.0 million at June 30, 2012 and December 31, 2011, respectively, related to consolidated VIEs) | 443,231 | 387,840 |
| Property and equipment, net | 2,186 | 2,052 |
| Property tax receivables | 337 | 265 |
| Other assets | 21,238 | 23,110 |
| Total assets | $532,521 | $485,969 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Deposits | $283,782 | $198,579 |
| Long-term borrowings (includes $9.5 million and $45.1 million at June 30, 2012 and December 31, 2011, respectively, related to consolidated VIEs) | 48,046 | 92,004 |
| Other liabilities: | ||
| Sales and property taxes payable | 5,185 | 2,169 |
| Accounts payable and accrued expenses | 8,794 | 8,791 |
| Net deferred income tax liability | 18,249 | 20,325 |
| Total liabilities | 364,056 | 321,868 |
| Stockholders' equity: | ||
| Common Stock, $0.01 par value; 75,000,000 shares authorized; 12,738,877 and 12,760,266 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively | 127 | 128 |
| Preferred Stock, $0.01 par value; 5,000,000 shares authorized; none issued | — | — |
| Additional paid-in capital | 86,742 | 85,544 |
| Stock subscription receivable | (2) | (2) |
| Accumulated other comprehensive loss | 51 | 1 |
| Retained earnings | 81,547 | 78,430 |
| Total stockholders' equity | 168,465 | 164,101 |
| Total liabilities and stockholders' equity | $532,521 | $485,969 |
|
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| MARLIN BUSINESS SERVICES CORP. | ||||
| AND SUBSIDIARIES | ||||
| Condensed Consolidated Statements of Operations | ||||
| (Unaudited) | ||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2012 | 2011 | 2012 | 2011 | |
| (Dollars in thousands, except per-share data) | ||||
| Interest income | $12,831 | $10,863 | $24,883 | $21,763 |
| Fee income | 2,774 | 2,926 | 5,889 | 6,058 |
| Interest and fee income | 15,605 | 13,789 | 30,772 | 27,821 |
| Interest expense | 1,792 | 3,063 | 3,922 | 6,355 |
| Net interest and fee income | 13,813 | 10,726 | 26,850 | 21,466 |
| Provision for credit losses | 1,031 | 924 | 2,133 | 2,103 |
| Net interest and fee income after provision for credit losses | 12,782 | 9,802 | 24,717 | 19,363 |
| Other income: | ||||
| Insurance income | 1,021 | 951 | 2,030 | 1,928 |
| Gain (loss) on derivatives | 2 | (38) | (3) | (43) |
| Other income | 363 | 434 | 667 | 716 |
| Other income | 1,386 | 1,347 | 2,694 | 2,601 |
| Other expense: | ||||
| Salaries and benefits | 5,633 | 5,384 | 12,695 | 11,321 |
| General and administrative | 3,489 | 3,145 | 6,783 | 6,616 |
| Financing related costs | 186 | 157 | 387 | 346 |
| Other expense | 9,308 | 8,686 | 19,865 | 18,283 |
| Income before income taxes | 4,860 | 2,463 | 7,546 | 3,681 |
| Income tax expense | 1,872 | 933 | 2,909 | 1,397 |
| Net income | $2,988 | $1,530 | $4,637 | $2,284 |
| Basic earnings per share | $0.24 | $0.12 | $0.37 | $0.18 |
| Diluted earnings per share | $0.23 | $0.12 | $0.36 | $0.18 |
| Cash dividends declared per share | $0.06 | $— | $0.12 | $— |
| SUPPLEMENTAL QUARTERLY DATA | |||||
| (Dollars in thousands, except share amounts) | |||||
| (Unaudited) | |||||
| Quarter Ended: | 6/30/2011 | 9/30/2011 | 12/31/2011 | 3/31/2012 | 6/30/2012 |
| Net Income: | |||||
| Net Income | $1,530 | $1,831 | $2,060 | $1,649 | $2,988 |
| Annualized Performance Measures: | |||||
| Return on Average Assets | 1.31% | 1.56% | 1.71% | 1.34% | 2.29% |
| Return on Average Stockholders' Equity | 3.78% | 4.53% | 5.04% | 4.02% | 7.17% |
| EPS Data: | |||||
| Net Income Allocated to Common Stock | $1,411 | $1,699 | $1,916 | $1,576 | $2,861 |
| Number of Shares - Basic | 11,979,787 | 11,880,834 | 11,900,351 | 12,106,865 | 12,172,628 |
| Basic Earnings per Share | $0.12 | $0.14 | $0.16 | $0.13 | $0.24 |
| Number of Shares - Diluted | 12,055,312 | 11,946,231 | 11,949,505 | 12,173,522 | 12,240,154 |
| Diluted Earnings per Share | $0.12 | $0.14 | $0.16 | $0.13 | $0.23 |
| Cash Dividends Declared per share | $0.00 | $0.00 | $0.06 | $0.06 | $0.06 |
| New Asset Production: | |||||
| # of Sales Reps | 97 | 95 | 93 | 99 | 106 |
| # of Leases | 4,522 | 4,580 | 5,016 | 5,658 | 6,172 |
| Leased Equipment Volume | $53,889 | $59,674 | $68,427 | $72,362 | $80,442 |
| Approval Percentage | 60% | 60% | 64% | 66% | 68% |
| Average Monthly Sources | 826 | 831 | 911 | 1,016 | 1,128 |
| Implicit Yield on New Leases | 13.04% | 12.55% | 12.57% | 12.71% | 13.19% |
| Net Interest and Fee Margin: | |||||
| Interest Income Yield | 12.37% | 12.32% | 12.25% | 12.34% | 12.28% |
| Fee Income Yield | 3.33% | 3.46% | 3.31% | 3.19% | 2.66% |
| Interest and Fee Income Yield | 15.70% | 15.78% | 15.56% | 15.53% | 14.94% |
| Cost of Funds | 3.49% | 3.01% | 2.52% | 2.18% | 1.72% |
| Net Interest and Fee Margin | 12.21% | 12.77% | 13.04% | 13.35% | 13.22% |
| Average Total Finance Receivables | $351,389 | $359,451 | $373,260 | $390,608 | $417,794 |
| Average Net Investment in Leases | $350,662 | $358,753 | $372,676 | $390,150 | $417,342 |
| End of Period Net Investment in Leases | $353,839 | $366,293 | $387,377 | $412,099 | $442,781 |
| Portfolio Asset Quality: | |||||
| Total Finance Receivables | |||||
| 30+ Days Past Due Delinquencies | 1.31% | 1.18% | 1.02% | 0.93% | 0.70% |
| 30+ Days Past Due Delinquencies | $5,190 | $4,844 | $4,452 | $4,362 | $3,560 |
| 60+ Days Past Due Delinquencies | 0.56% | 0.47% | 0.38% | 0.41% | 0.27% |
| 60+ Days Past Due Delinquencies | $2,221 | $1,934 | $1,663 | $1,911 | $1,385 |
| Net Charge-offs - Total Finance Receivables | $1,636 | $1,553 | $1,300 | $1,199 | $1,090 |
| % on Average Total Finance Receivables Annualized | 1.86% | 1.73% | 1.39% | 1.23% | 1.04% |
| Allowance for Credit Losses | $6,175 | $5,459 | $5,353 | $5,256 | $5,197 |
| % of 60+ Delinquencies | 278.03% | 282.26% | 321.89% | 275.04% | 375.23% |
| 90+ Day Delinquencies (Non-earning total finance receivables) | $1,197 | $1,151 | $829 | $842 | $686 |
| Expense Ratios: | |||||
| Salaries and Benefits Expense | $5,384 | $5,559 | $5,659 | $7,062 | $5,633 |
| Salaries and Benefits Expense Annualized % of Avg. Fin. Recbl. | 6.13% | 6.19% | 6.06% | 7.23% | 5.39% |
| Total personnel end of quarter | 251 | 247 | 242 | 246 | 258 |
| General and Administrative Expense | $3,145 | $3,226 | $3,202 | $3,294 | $3,489 |
| General and Administrative Expense Annualized % of Avg. Fin. Recbl. | 3.58% | 3.59% | 3.43% | 3.37% | 3.34% |
| Efficiency Ratio | 70.42% | 68.60% | 63.78% | 72.17% | 60.03% |
| Balance Sheet: | |||||
| Assets | |||||
| Investment in Leases and Loans | $354,014 | $365,610 | $385,984 | $409,960 | $439,933 |
| Initial Direct Costs and Fees | 6,686 | 6,849 | 7,209 | 7,849 | 8,495 |
| Reserve for Credit Losses | (6,175) | (5,459) | (5,353) | (5,256) | (5,197) |
| Net Investment in Leases and Loans | $354,525 | $367,000 | $387,840 | $412,553 | $443,231 |
| Cash and Cash Equivalents | 51,904 | 48,345 | 42,285 | 39,600 | 49,007 |
| Restricted Cash | 30,910 | 29,419 | 28,637 | 28,487 | 13,175 |
| Other Assets | 29,909 | 28,618 | 27,207 | 32,031 | 27,108 |
| Total Assets | $467,248 | $473,382 | $485,969 | $512,671 | $532,521 |
| Liabilities | |||||
| Deposits | 124,522 | 157,398 | 198,579 | 238,760 | 283,782 |
| Total Debt | $143,794 | $115,089 | $92,004 | $73,692 | $48,046 |
| Other Liabilities | 37,361 | 38,488 | 31,285 | 34,378 | 32,228 |
| Total Liabilities | $305,677 | $310,975 | $321,868 | $346,830 | $364,056 |
| Stockholders' Equity | |||||
| Common Stock | $129 | $128 | $128 | $127 | $127 |
| Paid-in Capital, net | 86,197 | 85,157 | 85,542 | 86,394 | 86,740 |
| Other Comprehensive Income (Loss) | (60) | (14) | 1 | 1 | 51 |
| Retained Earnings | 75,305 | 77,136 | 78,430 | 79,319 | 81,547 |
| Total Stockholders' Equity | $161,571 | $162,407 | $164,101 | $165,841 | $168,465 |
| Total Liabilities and | |||||
| Stockholders' Equity | $467,248 | $473,382 | $485,969 | $512,671 | $532,521 |
| Capital and Leverage: | |||||
| Equity | $161,571 | $162,407 | $164,101 | $165,841 | $168,465 |
| Debt to Equity | 1.66 | 1.68 | 1.77 | 1.88 | 1.97 |
| Equity to Assets | 34.58% | 34.31% | 33.77% | 32.36% | 31.64% |
| Regulatory Capital Ratios: | |||||
| Tier 1 Leverage Capital | 34.35% | 34.46% | 33.74% | 33.36% | 32.04% |
| Tier 1 Risk-based Capital | 40.10% | 39.23% | 37.94% | 36.06% | 34.77% |
| Total Risk-based Capital | 41.35% | 40.48% | 39.19% | 37.20% | 35.85% |
| Notes: | |||||
| Net investment in total finance receivables includes net investment in direct financing leases and loans. | |||||
| Average balances from January 1, 2012 forward were calculated using average daily balances. Average balances before January 1, 2012 were generally calculated using beginning and ending balances for each month to approximate average daily balances. The average balance of total finance receivables for the three-month period ended June 30, 2012 was decreased by approximately $5.8 million, from $423.6 million to $417.8 million, as a result of this calculation change. | |||||