Fourth Quarter and Full Year Highlights:
- Net income of $3.6 million for the fourth quarter of 2012, and $11.7 million for the full year, up 89% year-over-year
- New lease originations of $87.8 million for the fourth quarter of 2012, and $322.2 million for the full year, up 41% year-over-year
- Risk adjusted net interest and fee margin of 11.55% for the quarter
- $378 million of insured deposits, up 90% year-over-year
- Average cost of deposits of 1.00% for the fourth quarter
- Strong capital position, equity to assets ratio of 29.01%
- Total risk-based capital ratio of 33.04%
- Efficiency ratio improved to 60% for the full year, compared to 70% for 2011
MOUNT LAUREL, N.J., Jan. 30, 2013 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (Nasdaq:MRLN) today reported fourth quarter 2012 net income of $3.6 million, or $0.28 per diluted share. Net income for the full year 2012 was $11.7 million, or $0.91 per diluted share.
"There were many positive developments for our business in 2012," says Daniel P. Dyer, Marlin's co-founder and Chief Executive Officer. "We delivered strong asset and profit growth and favorable credit quality performance, with a focus on delivering value-added credit products and services to our customers," says Mr. Dyer.
Fourth quarter 2012 lease production was $87.8 million based on initial equipment cost, up from $81.6 million for the third quarter of 2012 and 28% higher than the fourth quarter of 2011. Full year 2012 lease origination volume was $322.2 million, a 41% increase year-over-year.
Net interest and fee margin increased in the fourth quarter of 2012 to 13.54%, from 13.51% in the third quarter of 2012, and has increased 50 basis points from the fourth quarter a year ago. For the full year, net interest and fee margin is 13.42%, an improvement of 83 basis points over 2011.
The Company's cost of funds improved 9 basis points from the third quarter of 2012 and 128 basis points from the fourth 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. On a total year basis, cost of funds was 1.59%, compared to 3.19% for 2011.
The increase to the provision for credit losses this quarter is a result of higher charge-offs and portfolio growth. The allowance for credit losses as a percentage of total finance receivables stands at 1.30% as of December 31, 2012, compared to 1.20% as of September 30, 2012. The allowance for credit losses as of December 31, 2012 represents 265% of total 60+ day delinquencies compared to 258% as of September 30, 2012.
Leases over 30 days delinquent were 0.92% of Marlin's lease portfolio as of December 31, 2012, 5 basis points higher than the third quarter of 2012 and 10 basis points lower than a year ago. Leases over 60 days delinquent were 0.42% of Marlin's lease portfolio as of December 31, 2012, up 2 basis points from 0.40% at September 30, 2012 and 4 basis points higher than a year ago.
Fourth quarter net charge-offs were 1.26% of average total finance receivables, up from 0.89% for the third quarter and 13 basis points lower than the fourth quarter of 2011. The increase over the prior quarter reflects the impact of portfolio growth and seasoning, and the timing of defaults.
Fourth quarter total operating expenses were $9.8 million, up $0.2 million, or 2%, from the third quarter of 2012. The increase in operating expenses is primarily due to variable costs associated with the increase in volume.
The Company maintains strong capital ratios with a consolidated equity to assets ratio of 29.01%. Our risk based capital ratio is 33.04%, which is well above regulatory requirements.
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.
The Board of Directors of Marlin Business Services Corp. declared a $0.10 per share quarterly dividend, a $0.02 increase over the previous quarterly dividend. The dividend is payable February 22, 2013, to shareholders of record on February 11, 2013. Based on the closing stock price on January 29, 2013, the annualized dividend yield on the Company's common stock is 1.87%.
Conference Call and Webcast
We will host a conference call on Thursday, January 31, 2013 at 9:00 a.m. ET to discuss the Company's fourth quarter and full-year 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) | ||
| December 31, | ||
| 2012 | 2011 | |
| (Dollars in thousands, except per-share data) | ||
| ASSETS | ||
| Cash and due from banks | $ 2,472 | $ 1,035 |
| Interest-earning deposits with banks | 62,498 | 41,250 |
| Total cash and cash equivalents | 64,970 | 42,285 |
| Restricted interest-earning deposits with banks (includes $0.0 million and $24.3 million at December 31, 2012 and December 31, 2011, respectively, related to consolidated variable interest entities ("VIEs")) | 3,520 | 28,637 |
| Securities available for sale (amortized cost of $4.8 million and $1.7 million at December 31, 2012 and December 31, 2011, respectively) | 4,845 | 1,780 |
| Net investment in leases and loans (includes $0.0 million and $60.0 million at December 31, 2012 and December 31, 2011, respectively, related to consolidated VIEs) | 503,017 | 387,840 |
| Property and equipment, net | 1,970 | 2,052 |
| Property tax receivables | 397 | 265 |
| Other assets | 23,629 | 23,110 |
| Total assets | $ 602,348 | $ 485,969 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Deposits | $ 378,188 | $ 198,579 |
| Long-term borrowings (includes $0.0 million and $45.1 million at December 31, 2012 and December 31, 2011, respectively, related to consolidated VIEs) | 15,514 | 92,004 |
| Other liabilities: | ||
| Sales and property taxes payable | 4,505 | 2,169 |
| Accounts payable and accrued expenses | 12,062 | 8,791 |
| Net deferred income tax liability | 17,329 | 20,325 |
| Total liabilities | 427,598 | 321,868 |
| Stockholders' equity: | ||
| Common Stock, $0.01 par value; 75,000,000 shares authorized; 12,774,829 and 12,760,266 shares issued and outstanding at December 31, 2012 and December 31, 2011, respectively | 128 | 128 |
| Preferred Stock, $0.01 par value; 5,000,000 shares authorized; none issued | — | — |
| Additional paid-in capital | 87,994 | 85,544 |
| Stock subscription receivable | (2) | (2) |
| Accumulated other comprehensive income | 55 | 1 |
| Retained earnings | 86,575 | 78,430 |
| Total stockholders' equity | 174,750 | 164,101 |
| Total liabilities and stockholders' equity | $ 602,348 | $ 485,969 |
| MARLIN BUSINESS SERVICES CORP. | ||||
| AND SUBSIDIARIES | ||||
| Condensed Consolidated Statements of Operations | ||||
| (Unaudited) | ||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||
| 2012 | 2011 | 2012 | 2011 | |
| (Dollars in thousands, except per-share data) | ||||
| Interest income | $ 14,404 | $ 11,433 | $ 52,975 | $ 44,269 |
| Fee income | 3,122 | 3,091 | 11,976 | 12,254 |
| Interest and fee income | 17,526 | 14,524 | 64,951 | 56,523 |
| Interest expense | 1,465 | 2,355 | 6,882 | 11,416 |
| Net interest and fee income | 16,061 | 12,169 | 58,069 | 45,107 |
| Provision for credit losses | 2,373 | 1,194 | 5,920 | 4,134 |
| Net interest and fee income after provision for credit losses | 13,688 | 10,975 | 52,149 | 40,973 |
| Other income: | ||||
| Insurance income | 1,042 | 1,070 | 4,101 | 3,759 |
| Loss on derivatives | (5) | (2) | (6) | (53) |
| Other income | 750 | 655 | 1,869 | 1,945 |
| Other income | 1,787 | 1,723 | 5,964 | 5,651 |
| Other expense: | ||||
| Salaries and benefits | 6,179 | 5,659 | 24,862 | 22,539 |
| General and administrative | 3,374 | 3,202 | 13,547 | 13,044 |
| Financing related costs | 213 | 196 | 850 | 719 |
| Other expense | 9,766 | 9,057 | 39,259 | 36,302 |
| Income before income taxes | 5,709 | 3,641 | 18,854 | 10,322 |
| Income tax expense | 2,064 | 1,581 | 7,157 | 4,147 |
| Net income | $ 3,645 | $ 2,060 | $ 11,697 | $ 6,175 |
| Basic earnings per share | $ 0.29 | $ 0.16 | $ 0.92 | $ 0.48 |
| Diluted earnings per share | $ 0.28 | $ 0.16 | $ 0.91 | $ 0.48 |
| Cash dividends declared per share | $ 0.08 | $ 0.06 | $ 0.28 | $ 0.06 |
| SUPPLEMENTAL QUARTERLY DATA | |||||
| (Dollars in thousands, except share amounts) | |||||
| (Unaudited) | |||||
| Quarter Ended: | 12/31/2011 | 3/31/2012 | 6/30/2012 | 9/30/2012 | 12/31/2012 |
| Net Income: | |||||
| Net Income | $2,060 | $1,649 | $2,988 | $3,415 | $3,645 |
| Annualized Performance Measures: | |||||
| Return on Average Assets | 1.71% | 1.34% | 2.29% | 2.50% | 2.48% |
| Return on Average Stockholders' Equity | 5.04% | 4.02% | 7.17% | 8.08% | 8.44% |
| EPS Data: | |||||
| Net Income Allocated to Common Stock | $1,916 | $1,576 | $2,861 | $3,270 | $3,497 |
| Number of Shares - Basic | 11,900,351 | 12,106,865 | 12,172,628 | 12,186,832 | 12,238,081 |
| Basic Earnings per Share | $0.16 | $0.13 | $0.24 | $0.27 | $0.29 |
| Number of Shares - Diluted | 11,949,505 | 12,173,522 | 12,240,154 | 12,280,123 | 12,331,766 |
| Diluted Earnings per Share | $0.16 | $0.13 | $0.23 | $0.27 | $0.28 |
| Cash Dividends Declared per share | $0.06 | $0.06 | $0.06 | $0.08 | $0.08 |
| New Asset Production: | |||||
| # of Sales Reps | 93 | 99 | 106 | 112 | 114 |
| # of Leases | 5,016 | 5,658 | 6,172 | 6,227 | 6,500 |
| Leased Equipment Volume | $68,427 | $72,362 | $80,442 | $81,623 | $87,771 |
| Approval Percentage | 64% | 66% | 68% | 67% | 67% |
| Average Monthly Sources | 911 | 1,016 | 1,128 | 1,117 | 1,207 |
| Implicit Yield on New Leases | 12.57% | 12.71% | 13.19% | 12.97% | 12.56% |
| Net Interest and Fee Margin: | |||||
| Interest Income Yield | 12.25% | 12.34% | 12.28% | 12.20% | 12.15% |
| Fee Income Yield | 3.31% | 3.19% | 2.66% | 2.64% | 2.63% |
| Interest and Fee Income Yield | 15.56% | 15.53% | 14.94% | 14.84% | 14.78% |
| Cost of Funds | 2.52% | 2.18% | 1.72% | 1.33% | 1.24% |
| Net Interest and Fee Margin | 13.04% | 13.35% | 13.22% | 13.51% | 13.54% |
| Average Total Finance Receivables | $373,260 | $390,608 | $417,794 | $448,691 | $474,225 |
| Average Net Investment in Leases | $372,676 | $390,150 | $417,342 | $448,211 | $473,699 |
| End of Period Net Investment in Leases | $387,377 | $412,099 | $442,781 | $471,545 | $502,496 |
| Portfolio Asset Quality: | |||||
| Total Finance Receivables | |||||
| 30+ Days Past Due Delinquencies | 1.02% | 0.93% | 0.70% | 0.87% | 0.92% |
| 30+ Days Past Due Delinquencies | $4,452 | $4,362 | $3,560 | $4,713 | $5,296 |
| 60+ Days Past Due Delinquencies | 0.38% | 0.41% | 0.27% | 0.40% | 0.42% |
| 60+ Days Past Due Delinquencies | $1,663 | $1,911 | $1,385 | $2,173 | $2,444 |
| Net Charge-offs - Total Finance Receivables | $1,300 | $1,199 | $1,090 | $1,003 | $1,493 |
| % on Average Total Finance Receivables Annualized | 1.39% | 1.23% | 1.04% | 0.89% | 1.26% |
| Allowance for Credit Losses | $5,353 | $5,256 | $5,197 | $5,608 | $6,488 |
| % of 60+ Delinquencies | 321.89% | 275.04% | 375.23% | 258.08% | 265.47% |
| 90+ Day Delinquencies (Non-earning total finance receivables) | $829 | $842 | $686 | $989 | $1,395 |
| Expense Ratios: | |||||
| Salaries and Benefits Expense | $5,659 | $7,062 | $5,633 | $5,988 | $6,179 |
| Salaries and Benefits Expense Annualized % of Avg. Fin. Recbl. | 6.06% | 7.23% | 5.39% | 5.34% | 5.21% |
| Total personnel end of quarter | 242 | 246 | 258 | 258 | 265 |
| General and Administrative Expense | $3,202 | $3,294 | $3,489 | $3,390 | $3,374 |
| General and Administrative Expense Annualized % of Avg. Fin. Recbl. | 3.43% | 3.37% | 3.34% | 3.02% | 2.85% |
| Efficiency Ratio | 63.78% | 72.17% | 60.03% | 56.36% | 53.51% |
| Balance Sheet: | |||||
| Assets | |||||
| Investment in Leases and Loans | $385,984 | $409,960 | $439,933 | $468,722 | $500,203 |
| Initial Direct Costs and Fees | 7,209 | 7,849 | 8,495 | 8,945 | 9,302 |
| Reserve for Credit Losses | (5,353) | (5,256) | (5,197) | (5,608) | (6,488) |
| Net Investment in Leases and Loans | $387,840 | $412,553 | $443,231 | $472,059 | $503,017 |
| Cash and Cash Equivalents | 42,285 | 39,600 | 49,007 | 70,025 | 64,970 |
| Restricted Cash | 28,637 | 28,487 | 13,175 | 10,747 | 3,520 |
| Other Assets | 27,207 | 32,031 | 27,108 | 26,206 | 30,841 |
| Total Assets | $485,969 | $512,671 | $532,521 | $579,037 | $602,348 |
| Liabilities | |||||
| Deposits | 198,579 | 238,760 | 283,782 | 341,993 | 378,188 |
| Total Debt | $92,004 | $73,692 | $48,046 | $33,083 | $15,514 |
| Other Liabilities | 31,285 | 34,378 | 32,228 | 32,462 | 33,896 |
| Total Liabilities | $321,868 | $346,830 | $364,056 | $407,538 | $427,598 |
| Stockholders' Equity | |||||
| Common Stock | $128 | $127 | $127 | $127 | $128 |
| Paid-in Capital, net | 85,542 | 86,394 | 86,740 | 87,359 | 87,992 |
| Other Comprehensive Income (Loss) | 1 | 1 | 51 | 66 | 55 |
| Retained Earnings | 78,430 | 79,319 | 81,547 | 83,947 | 86,575 |
| Total Stockholders' Equity | $164,101 | $165,841 | $168,465 | $171,499 | $174,750 |
| Total Liabilities and Stockholders' Equity | $485,969 | $512,671 | $532,521 | $579,037 | $602,348 |
| Capital and Leverage: | |||||
| Equity | $164,101 | $165,841 | $168,465 | $171,499 | $174,750 |
| Debt to Equity | 1.77 | 1.88 | 1.97 | 2.19 | 2.25 |
| Equity to Assets | 33.77% | 32.36% | 31.64% | 29.62% | 29.01% |
| Regulatory Capital Ratios: | |||||
| Tier 1 Leverage Capital | 33.74% | 33.36% | 32.04% | 31.22% | 29.43% |
| Tier 1 Risk-based Capital | 37.94% | 36.06% | 34.77% | 33.30% | 31.85% |
| Total Risk-based Capital | 39.19% | 37.20% | 35.85% | 34.40% | 33.04% |
| 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 December 31, 2012 was decreased by approximately $7.7 million, from $481.9 million to $474.2 million, as a result of this calculation change. | |||||