Fourth Quarter and Full Year Highlights:
- Closed new $75 million three-year committed secured loan facility
- Closed $80.7 million AAA TALF-eligible securitization on February 12, 2009
- Marlin Business Bank reaches $80.3 million in deposits
- 30+ lease delinquencies improved 17 basis points in the fourth quarter of 2009 and decreased 34 basis points from fourth quarter of 2008
- Yield on new lease production was 140 basis points higher year over year
- Strong capital position, equity to assets leverage ratio of 26.20%
- Total risk-based capital of 31.45%
- Net income of $461,000 for the fourth quarter, $1.0 million for the full year 2009
- Net income on an adjusted basis of $543,000 for the fourth quarter and $2.2 million for the full year 2009
MOUNT LAUREL, N.J., Feb. 16, 2010 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (Nasdaq:MRLN) today reported fourth quarter 2009 net income of $461,000, or $0.04 per diluted share, and net income on an adjusted basis of $543,000 or $0.04 per share.
Net income for the full-year 2009 was $1.0 million or $0.08 per diluted share, and net income on an adjusted basis was $2.2 million or $0.18 per diluted share.
"Looking back on the economic turmoil and capital market crisis that unfolded in 2009, I am pleased with the management team's success navigating the challenges that confronted the business," says Daniel P. Dyer, Marlin's CEO. "In 2009, we successfully executed on our risk strategy to strengthen the credit fundamentals of the business leading to improving charge-off and delinquency trends through 2009. On the funding side, we added new capacity to complement the funding provided through our bank depository, Marlin Business Bank," added Dyer. "Entering 2010, we're very excited about the future and the attractive opportunities to grow the business and serve the borrowing needs of customers."
Credit trends continued to steadily improve in 2009. Highlights for the fourth quarter and full year are:
- Leases over 30 days delinquent are 17 basis points lower than third quarter 2009 and the lowest since third quarter 2008. On a dollar basis 30+ delinquencies have decreased 40% from the fourth quarter of 2008.
- Leases over 60 days delinquent are 2 basis points lower than third quarter 2009 and the lowest since fourth quarter 2008. On a dollar basis 60+ delinquencies have decreased 30% from the fourth quarter of 2008.
- Non-performing assets of $4.6 million are 29% lower than year-end 2008.
- Net charge-offs of $5.8 million were 24% lower than third quarter 2009 levels.
- Static pool credit losses and delinquency performance remain solid for 2008 and 2009 vintages.
- The provision for credit losses was $5.7 million for the quarter ended December 31, 2009, down from $6.0 million for the third quarter of 2009, and $9.4 million for the fourth quarter of 2008, due to improvements in the delinquency migration rates of the lease portfolio.
- The allowance as a percentage of total finance receivables stands at 2.71% as of December 31, 2009 compared to 2.30% as of December 31, 2008.
On October 9, 2009, the Company closed on a $75,000,000 three-year committed funding facility with the Lender Finance division of Wells Fargo Foothill. The facility will be used to fund new lease originations.
In addition, on February 12, 2010, Marlin completed a $80.7 million TALF eligible term securitization, its tenth securitization and fifth rated AAA.
At December 31, 2009, the Company has outstanding $95.4 million of leases and loans funded through its banking subsidiary, Marlin Business Bank, and has $80.3 million in FDIC-insured deposits outstanding at an average borrowing rate of 3.16% with a weighted average term to maturity of 2.7 years. Fourth quarter 2009 average deposit outstandings were $82 million at a weighted average interest rate of 3.35%.
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 our website at www.marlincorp.com.
Conference Call and Webcast
We will host a conference call on Wednesday, February 17, 2010 at 9:00 a.m. ET to discuss our fourth quarter 2009 results. If you wish to participate, please call 888-264-8952 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 Marlin Business Services Corp. website, www.marlincorp.com. An audio replay will also be available on the Investor Relations section of Marlin's website for approximately 100 days.
About Marlin Business Services Corp.
Marlin Business Services Corp. is a nationwide provider of equipment leasing and working capital solutions primarily to small businesses. The Company's principal operating subsidiary, Marlin Leasing Corporation, finances over 100 equipment categories in a segment of the market generally referred to as "small-ticket" leasing (i.e. leasing transactions less than $250,000). The Company was founded in 1997 and completed its initial public offering of common stock on November 12, 2003. 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 and Section 21E of the Securities Exchange Act of 1934. 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 SEC, 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 | ||
| Consolidated Balance Sheets | ||
| December 31, | ||
| 2009 | 2008 | |
| (Dollars in thousands, except per-share data) | ||
| (Unaudited) | ||
| ASSETS | ||
| Cash and due from banks | $1,372 | $1,604 |
| Interest-earning deposits with banks | 35,685 | 38,666 |
| Total cash and cash equivalents | 7,057 | 40,270 |
| Restricted interest-earning deposits with banks | 63,400 | 66,212 |
| Net investment in leases and loans | 448,610 | 669,109 |
| Property and equipment, net | 2,431 | 2,961 |
| Property tax receivables | 1,135 | 3,120 |
| Other assets | 13,170 | 12,759 |
| Total assets | $565,803 | $794,431 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Short-term borrowings | $62,541 | $101,923 |
| Long-term borrowings | 244,445 | 441,385 |
| Deposits | 80,288 | 63,385 |
| Other liabilities: | ||
| Fair value of derivatives | 2,408 | 11,528 |
| Sales and property taxes payable | 4,197 | 6,540 |
| Accounts payable and accrued expenses | 7,649 | 7,926 |
| Net deferred income tax liability | 16,037 | 15,119 |
| Total liabilities | 417,565 | 647,806 |
| Commitments and contingencies | ||
| Stockholders' equity: | ||
|
Common Stock, $0.01 par value; 75,000,000 shares authorized; 12,778,935 and 12,246,405 shares issued and outstanding at December 31, 2009 and 2008, respectively |
128 | 122 |
|
Preferred Stock, $0.01 par value; 5,000,000 shares authorized; none issued |
— | — |
| Additional paid-in capital | 84,674 | 83,671 |
| Stock subscription receivable | (3) | (5) |
| Accumulated other comprehensive income (loss) | (267) | 167 |
| Retained earnings | 63,706 | 62,670 |
| Total stockholders' equity | 148,238 | 146,625 |
| Total liabilities and stockholders' equity | $565,803 | $794,431 |
| MARLIN BUSINESS SERVICES CORP. | ||||
| AND SUBSIDIARIES | ||||
| Consolidated Statements of Operations | ||||
| (Unaudited) | ||||
| Three Months Ended December 31, | Year Ended December 31, | |||
| 2009 | 2008 | 2009 | 2008 | |
| (Dollars in thousands, except per-share data) | ||||
| Interest income | $14,095 | $20,214 | $66,039 | $86,099 |
| Fee income | 3,703 | 5,333 | 17,405 | 21,354 |
| Interest and fee income | 17,798 | 25,547 | 83,444 | 107,453 |
| Interest expense | 5,614 | 8,484 | 27,338 | 36,880 |
| Net interest and fee income | 12,184 | 17,063 | 56,106 | 70,573 |
| Provision for credit losses | 5,697 | 9,356 | 27,189 | 31,494 |
|
Net interest and fee income after provision for credit losses |
6,487 | 7,707 | 28,917 | 39,079 |
| Other income: | ||||
| Insurance income | 1,279 | 1,537 | 5,330 | 6,252 |
| Loss on derivatives | (135) | (12,759) | (1,959) | (16,039) |
| Other income | 322 | 433 | 1,525 | 1,892 |
| Other income (loss) | 1,466 | (10,789) | 4,896 | (7,895) |
| Other expense: | ||||
| Salaries and benefits | 4,078 | 5,082 | 19,071 | 22,916 |
| General and administrative | 3,092 | 3,611 | 12,854 | 15,241 |
| Financing related costs | 143 | 451 | 505 | 1,418 |
| Other expense | 7,313 | 9,144 | 32,430 | 39,575 |
| Income (loss) before income taxes | 640 | (12,226) | 1,383 | (8,391) |
| Income tax expense (benefit) | 179 | (4,878) | 347 | (3,161) |
| Net income (loss) | $461 | $(7,348) | $1,036 | $(5,230) |
| Basic earnings (loss) per share | $0.04 | $(0.62) | $0.08 | $(0.44) |
| Diluted earnings (loss) per share | $0.04 | $(0.62) | $0.08 | $(0.44) |
|
Weighted average shares used in computing basic earnings (loss) per share |
12,681,773 | 11,799,939 | 12,549,167 | 11,874,647 |
|
Weighted average shares used in computing diluted earnings (loss) per share |
12,724,998 | 11,799,939 | 12,579,806 | 11,874,647 |
| MARLIN BUSINESS SERVICES CORP. | ||||
| AND SUBSIDIARIES | ||||
| Net Income on an Adjusted Basis Reconciliation to GAAP Results | ||||
| Three Months Ended December 31, | Year Ended December 31, | |||
| 2009 | 2008 | 2009 | 2008 | |
| (Dollars in thousands) | (Dollars in thousands) | |||
| (Unaudited) | (Unaudited) | |||
| Net income (loss) as reported | $461 | $(7,348) | $1,036 | $(5,230) |
| Deduct: | ||||
| Loss on derivatives | (135) | (12,759) | (1,959) | (16,039) |
| Tax effect | 53 | 5,040 | 774 | 6,335 |
| Loss on derivatives, net of tax | (82) | (7,719) | (1,185) | (9,704) |
| Net Income on an Adjusted Basis | $543 | $371 | $2,221 | $4,474 |
| Net Income on an Adjusted Basis is defined as net income excluding the loss on derivatives, net of tax. The Company believes that Net Income on an Adjusted Basis is a useful performance metric for management, investors and lenders, because it excludes the volatility resulting from derivatives activities subsequent to discontinuing hedge accounting in mid-2008. | ||||
| MARLIN BUSINESS SERVICES CORP. | |||||
| AND SUBSIDIARIES | |||||
| SUPPLEMENTAL QUARTERLY DATA | |||||
| (Dollars in thousands, except share amounts) | |||||
| (Unaudited) | |||||
| Quarter Ended: | 12/31/2008 | 3/31/2009 | 6/30/2009 | 9/30/2009 | 12/31/2009 |
| New Asset Production: | |||||
| # of Sales Reps | 86 | 58 | 33 | 34 | 38 |
| # of Leases | 5,558 | 3,811 | 1,831 | 1,916 | 2,205 |
| Leased Equipment Volume | $58,098 | $36,280 | $15,811 | $16,813 | $20,031 |
| Approval Percentage | 47% | 41% | 36% | 38% | 44% |
| Average Monthly Sources | 936 | 692 | 374 | 371 | 421 |
| Implicit Yield on New Leases | 13.76% | 14.40% | 15.83% | 15.62% | 15.32% |
| Net Interest and Fee Margin: | |||||
| Interest Income Yield | 11.88% | 11.82% | 11.78% | 11.84% | 11.89% |
| Fee Income Yield | 3.13% | 3.12% | 2.99% | 3.25% | 3.12% |
| Interest and Fee Income Yield | 15.01% | 14.94% | 14.77% | 15.09% | 15.01% |
| Cost of Funds | 4.99% | 4.86% | 5.08% | 4.89% | 4.73% |
| Net Interest and Fee Margin | 10.02% | 10.08% | 9.69% | 10.20% | 10.28% |
| Average Total Finance Receivables | $680,645 | $645,570 | $586,608 | $526,829 | $474,326 |
| Average Net Investment in Leases | $667,232 | $634,314 | $577,493 | $519,791 | $469,040 |
| End of Period Net Investment in Leases | $657,657 | $611,774 | $547,892 | $494,102 | $444,583 |
| End of Period Loans | $11,452 | $9,160 | $7,190 | $5,454 | $4,027 |
| Portfolio Asset Quality: | |||||
| Total Finance Receivables | |||||
| 30+ Days Past Due Delinquencies | 3.81% | 4.94% | 4.53% | 3.62% | 3.46% |
| 30+ Days Past Due Delinquencies | $29,216 | $34,910 | $28,493 | $20,215 | $17,297 |
| 60+ Days Past Due Delinquencies | 1.59% | 2.38% | 2.32% | 1.69% | 1.67% |
| 60+ Days Past Due Delinquencies | $12,203 | $16,824 | $14,579 | $9,431 | $8,334 |
| Leasing | |||||
| 30+ Days Past Due Delinquencies | 3.72% | 4.87% | 4.41% | 3.55% | 3.38% |
| 30+ Days Past Due Delinquencies | $28,113 | $33,895 | $27,399 | $19,583 | $16,790 |
| 60+ Days Past Due Delinquencies | 1.53% | 2.34% | 2.26% | 1.65% | 1.63% |
| 60+ Days Past Due Delinquencies | $11,559 | $16,281 | $14,055 | $9,103 | $8,101 |
| Loans | |||||
| 30+ Days Past Due Delinquencies | 8.91% | 10.04% | 13.55% | 10.47% | 11.43% |
| 30+ Days Past Due Delinquencies | $1,103 | $1,015 | $1,094 | $632 | $507 |
| 60+ Days Past Due Delinquencies | 5.20% | 5.37% | 6.49% | 5.43% | 5.25% |
| 60+ Days Past Due Delinquencies | $644 | $543 | $524 | $328 | $233 |
| Net Charge-offs - Leasing | $7,862 | $7,973 | $7,593 | $7,039 | $5,469 |
| % on Average Net Investment in | |||||
| Leases Annualized | 4.71% | 5.03% | 5.26% | 5.42% | 4.66% |
| Net Charge-offs - Other Finance Receivables | $550 | $749 | $531 | $597 | $327 |
| % on Average Other Finance Receivables | |||||
| Annualized | 16.40% | 26.62% | 23.30% | 33.93% | 25.17% |
| Allowance for Credit Losses | $15,283 | $15,309 | $13,978 | $12,293 | $12,193 |
| % of 60+ Delinquencies | 125.24% | 91.00% | 95.88% | 130.35% | 146.30% |
| 90+ Day Delinquencies (Non-earning total finance receivables) | $6,380 | $8,263 | $7,650 | $5,209 | $4,557 |
| Balance Sheet: | |||||
| Assets | |||||
| Investment in Leases and Loans | $664,902 | $619,129 | $554,712 | $499,802 | $450,595 |
| Initial Direct Costs and Fees | 19,490 | 17,114 | 14,348 | 12,047 | 10,208 |
| Reserve for Credit Losses | (15,283) | (15,309) | (13,978) | (12,293) | (12,193) |
| Net Investment in Leases and Loans | $669,109 | $620,934 | $555,082 | $499,556 | $448,610 |
| Cash and Cash Equivalents | 40,270 | 50,466 | 53,529 | 50,441 | 37,057 |
| Restricted Cash | 66,212 | 71,382 | 67,751 | 64,920 | 63,400 |
| Other Assets | 18,840 | 20,857 | 14,284 | 13,140 | 16,736 |
| Total Assets | $794,431 | $763,639 | $690,646 | $628,057 | $565,803 |
| Liabilities | |||||
| Total Debt | $543,308 | $499,852 | $426,203 | $362,966 | $306,986 |
| Deposits | $63,385 | $74,853 | $77,305 | $80,060 | $80,288 |
| Other Liabilities | 41,113 | 43,278 | 40,477 | 37,573 | 30,291 |
| Total Liabilities | $647,806 | $617,983 | $543,985 | $480,599 | $417,565 |
| Stockholders' Equity | |||||
| Common Stock | $122 | $126 | $126 | $126 | $128 |
| Paid-in Capital, net | 83,666 | 83,561 | 83,838 | 84,239 | 84,671 |
| Other Comprehensive Income | 167 | 178 | (40) | (152) | (267) |
| Retained Earnings | 62,670 | 61,791 | 62,737 | 63,245 | 63,706 |
| Total Stockholders' Equity | $146,625 | $145,656 | $146,661 | $147,458 | $148,238 |
| Total Liabilities and | |||||
| Stockholders' Equity | $794,431 | $763,639 | $690,646 | $628,057 | $565,803 |
| Capital and Leverage: | |||||
| Tangible Equity | $146,625 | $145,656 | $146,661 | $147,458 | $148,238 |
| Debt to Tangible Equity | 4.14 | 3.95 | 3.43 | 3.00 | 2.61 |
| Equity to Assets | 18.46% | 19.07% | 21.24% | 23.48% | 26.20% |
| Regulatory Capital Ratios: | |||||
| Tier 1 Leverage Capital | n/a | 19.19% | 20.12% | 22.31% | 24.89% |
| Tier 1 Risk-based Capital | n/a | 21.48% | 24.36% | 27.16% | 30.19% |
| Total Risk-based Capital | n/a | 22.74% | 25.63% | 28.43% | 31.45% |
| Expense Ratios: | |||||
| Salaries and Benefits Expense | $5,082 | $5,885 | $5,057 | $4,051 | $4,078 |
| Salaries and Benefits Expense | |||||
| Annualized % of Avg. Fin. Recbl. | 2.99% | 3.65% | 3.45% | 3.08% | 3.44% |
| Total personnel end of quarter | 284 | 230 | 169 | 175 | 181 |
| General and Administrative Expense | $3,611 | $3,399 | $3,287 | $3,076 | $3,092 |
| General and Administrative Expense | |||||
| Annualized % of Avg. Fin. Recbl. | 2.12% | 2.11% | 2.24% | 2.34% | 2.61% |
| Efficiency Ratio | 45.67% | 50.94% | 52.39% | 47.43% | 52.01% |
| Net Income: | |||||
| Net Income (Loss) | ($7,348) | ($879) | $946 | $508 | $461 |
| Annualized Performance Measures: | |||||
| Return on Average Assets | -3.71% | -0.45% | 0.52% | 0.31% | 0.31% |
| Return on Average Stockholders' Equity | -19.64% | -2.39% | 2.58% | 1.38% | 1.25% |
| Per Share Data: | |||||
| Number of Shares - Basic | 11,799,939 | 11,677,264 | 12,593,514 | 12,607,147 | 12,681,773 |
| Basic Earnings (Loss) per Share | ($0.62) | ($0.08) | $0.08 | $0.04 | $0.04 |
| Number of Shares - Diluted | 11,799,939 | 11,677,264 | 12,603,305 | 12,649,800 | 12,724,998 |
| Diluted Earnings (Loss) per Share | ($0.62) | ($0.08) | $0.08 | $0.04 | $0.04 |
|
Net investment in total finance receivables includes net investment in direct financing leases and loans. |
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