EXHIBIT 99.1
Marlin Business Services Corp. Reports Fourth Quarter and Full-Year 2010 Results
Fourth Quarter and Full-Year Highlights:
- Net income of $5.7 million for the full-year 2010, a 447% increase over 2009
- New equipment lease originations growth of 51% year-over-year
- Strong capital position, equity to assets leverage ratio of 34.2%
- Total risk-based capital of 40.84%
MOUNT LAUREL, N.J., March 8, 2011 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (Nasdaq:MRLN) today reported fourth quarter 2010 net income of $1.4 million, or $0.11 per diluted share. Net income for the full-year 2010 was $5.7 million, or $0.44 per diluted share.
"We're very excited with the momentum build of our business," says Daniel P. Dyer, Marlin's CEO. "This quarter we posted another solid gain in new lease asset origination and customer account growth. Asset quality remains very strong as demonstrated by the favorable charge-off and delinquency trends throughout 2010. Looking ahead to 2011, we are well positioned to serve the growing credit needs of small and mid-sized businesses led by a financially strong, well-capitalized balance sheet and the overall strength of our funding platform led by Marlin Business Bank. As an industry leader, our service oriented approach to serving customers will pave the way to continued profitable growth in the future," says Dyer.
Fourth quarter 2010 lease production was $42.9 million, based on initial equipment cost, up 19.8% from $35.8 million for the third quarter of 2010. For the full-year 2010, lease equipment volume reached $134.0 million versus $88.9 million for the full-year 2009, representing an increase of 51%. Approval rates on lease originations were 54% for the fourth quarter of 2010 and 50% for the full-year 2010. The average implicit yield on new lease production was 13.98% in the fourth quarter of 2010. Net interest and fee margin was 12.10% for the fourth quarter of 2010 compared to 12.26% in the third quarter of 2010 and 10.28% a year ago.
Credit trends continue to improve and have returned to historic levels. Highlights for the fourth quarter of 2010 included:
- Leases over 30 days delinquent were 1.97% of Marlin's lease portfolio, which is 38 basis points lower than the third quarter of 2010 and the lowest since the third quarter of 2006. On a dollar basis, 30+ day delinquencies have decreased 18% from the third quarter of 2010.
- Leases over 60 days delinquent were 0.89% of Marlin's lease portfolio, which is 14 basis points lower than the third quarter of 2010 and the lowest since the second quarter of 2007. On a dollar basis, 60+ day delinquencies have decreased 16% from the third quarter of 2010.
- Non-performing assets of $2.0 million were 17% lower than the third quarter of 2010.
- Net lease charge-offs of $2.3 million were 16% lower than the third quarter of 2010 levels.
- Static pool credit losses and delinquency performance continue to be better than expectations for leases in the 2009 and 2010 vintages.
- Reflecting improving credit trends, the allowance for credit losses as a percentage of total finance receivables stands at 2.19% as of December 31, 2010, compared to 2.31% as of September 30, 2010, and represents 220.3% of total 60+ day delinquencies.
At December 31, 2010, the Company had $78.1 million of available funding through its borrowing facilities with various national banks and certificates of deposits at Marlin Business Bank, the Company's wholly-owned bank subsidiary.
In conjunction with this release, the Company's 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 Company has restated its consolidated financial statements as of December 31, 2009 from amounts previously reported by increasing its deferred income tax assets and increasing retained earnings by $3.6 million to correct income tax overpayments and over-recognition of income tax expense accumulated during previous years. In addition, 2010 income tax expense was favorably impacted by $0.5 million.
In connection with ongoing discussions with the Federal Reserve Bank relating to the Company's allowance for credit losses (the "Allowance"), Marlin Business Bank received a written determination from the Federal Reserve Bank of San Francisco and the Utah Department of Financial Institutions on October 27, 2010 (the "MBB Report"), and the Company received a written determination from the Federal Reserve Bank of Philadelphia on December 22, 2010 (the "MBSC Report"). While we have not received any additional information from the Federal Reserve Bank of San Francisco or the Federal Reserve Bank of Philadelphia in connection with our implementation of the recommendations contained in the MBB Report and the MBSC Report, we believe that we have properly implemented the recommendations. If the Company receives additional information in connection with our implementation of the recommendations and if, as a result of its review of such additional information, management determines that such additional information requires adjustments or changes to the methodology used to determine the Allowance, such adjustments or changes could have an impact on the size of the Allowance.
Conference Call and Webcast
We will host a conference call on Wednesday, March 9, 2011 at 9:00 a.m. ET to discuss the Company's fourth quarter and full-year 2010 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, and 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 equipment leasing solutions primarily to small and mid-sized 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, 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, |
| | 2010 | 2009 (1) |
| | (Dollars in thousands, except per-share
data) |
| | | |
| ASSETS | | |
| Cash and due from banks | $2,557 | $1,372 |
| Interest-earning deposits with banks | 34,469 | 35,685 |
| Total cash and cash equivalents | 37,026 | 37,057 |
Restricted interest-earning deposits with banks (includes $44.7 million
and $57.1 million, respectively, related to consolidated variable interest
entities ("VIEs")) | 47,107 | 63,400 |
| Securities available for sale (amortized cost of $1.5 million) | 1,534 | — |
Net investment in leases and loans (includes $154.1 million and
$238.0 million, respectively, related to consolidated VIEs) | 351,569 | 448,610 |
| Property and equipment, net | 2,180 | 2,431 |
| Property tax receivables | 197 | 1,135 |
| Other assets | 28,449 | 13,170 |
| Total assets | $468,062 | $565,803 |
| | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | |
| Short-term borrowings | $— | $62,541 |
Long-term borrowings (includes $128.2 million and $226.7 million,
respectively, related to consolidated VIEs) | 178,650 | 244,445 |
| Deposits | 92,919 | 80,288 |
| Other liabilities: | | |
| Fair value of derivatives | — | 2,408 |
| Sales and property taxes payable | 1,978 | 4,197 |
| Accounts payable and accrued expenses | 8,019 | 7,649 |
| Net deferred income tax liability | 26,493 | 12,390 |
| Total liabilities | 308,059 | 413,918 |
| | | |
| Commitments and contingencies | | |
| | | |
| Stockholders' equity: | | |
Common Stock, $0.01 par value; 75,000,000 shares authorized;
12,864,665 and 12,778,935 shares issued and outstanding at
December 31, 2010 and 2009 respectively | 129 | 128 |
Preferred Stock, $0.01 par value; 5,000,000 shares authorized;
none issued | — | — |
| Additional paid-in capital | 86,987 | 84,674 |
| Stock subscription receivable | (2) | (3) |
| Accumulated other comprehensive loss | (132) | (267) |
| Retained earnings | 73,021 | 67,353 |
| Total stockholders' equity | 160,003 | 151,885 |
| Total liabilities and stockholders' equity | $468,062 | $565,803 |
| | | |
(1) Net deferred income tax liability has been decreased and retained earnings has been increased by
$3.6 million from amounts previously reported to reflect the correction of an error in previously filed
financial statements. |
| |
| MARLIN BUSINESS SERVICES CORP. |
| AND SUBSIDIARIES |
| Condensed Consolidated Statements of Operations |
| (Unaudited) |
| | | | | |
| | Three Months Ended December 31, | Year Ended December 31, |
| | 2010 | 2009 | 2010 | 2009 |
| | (Dollars in thousands, except per-share data) |
| | | | | |
| Interest income | $11,052 | $14,095 | $47,296 | $66,039 |
| Fee income | 3,157 | 3,703 | 14,041 | 17,405 |
| Interest and fee income | 14,209 | 17,798 | 61,337 | 83,444 |
| Interest expense | 3,410 | 5,614 | 15,613 | 27,338 |
| Net interest and fee income | 10,799 | 12,184 | 45,724 | 56,106 |
| Provision for credit losses | 1,738 | 5,697 | 9,438 | 27,189 |
| Net interest and fee income after provision for credit losses | 9,061 | 6,487 | 36,286 | 28,917 |
| | | | | |
| Other income: | | | | |
| Insurance income | 976 | 1,279 | 4,106 | 5,330 |
| Gain (loss) on derivatives | 12 | (135) | (116) | (1,959) |
| Other income | 347 | 322 | 1,295 | 1,525 |
| Other income | 1,335 | 1,466 | 5,285 | 4,896 |
| Other expense: | | | | |
| Salaries and benefits | 5,307 | 4,078 | 19,966 | 19,071 |
| General and administrative | 3,487 | 3,092 | 12,762 | 12,854 |
| Financing related costs | 247 | 143 | 680 | 505 |
| Other expense | 9,041 | 7,313 | 33,408 | 32,430 |
| Income before income taxes | 1,355 | 640 | 8,163 | 1,383 |
| Income tax expense (benefit) | (91) | 179 | 2,495 | 347 |
| Net income | $1,446 | $461 | $5,668 | $1,036 |
| | | | | |
| Basic earnings per share | $0.11 | $0.04 | $0.44 | $0.08 |
| Diluted earnings per share | $0.11 | $0.04 | $0.44 | $0.08 |
| | | | | |
Weighted average shares used in computing basic earnings
per share | 12,866,214 | 12,681,773 | 12,836,340 | 12,549,167 |
Weighted average shares used in computing diluted earnings
per share | 12,942,524 | 12,724,998 | 12,902,151 | 12,579,806 |
| |
| MARLIN BUSINESS SERVICES CORP. |
| AND SUBSIDIARIES |
| Net Income on an Adjusted Basis Reconciliation to GAAP Results |
| (Unaudited) |
| | | | | |
| | Three Months Ended December 31, | Year Ended December 31, |
| | 2010 | 2009 | 2010 | 2009 |
| | (Dollars in thousands) |
| | | | | |
| Net income as reported | $1,446 | $461 | $5,668 | $1,036 |
| | | | | |
| Deduct: | | | | |
| Gain (loss) on derivatives | 12 | (135) | (116) | (1,959) |
| Tax effect | (5) | 53 | 46 | 774 |
| Gain (loss) on derivatives, net of tax | 7 | (82) | (70) | (1,185) |
| Net Income on an Adjusted Basis | $1,439 | $543 | $5,738 | $2,221 |
| | | | | |
Net Income on an Adjusted Basis is defined as net income excluding the gain (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. |
| | | | | | |
| SUPPLEMENTAL QUARTERLY DATA | | | | | |
| (Dollars in thousands, except share amounts) | | | | | |
| (Unaudited) | | | | | |
| | | | | | |
| Quarter Ended: | 12/31/2009 | 3/31/2010 | 6/30/2010 | 9/30/2010 | 12/31/2010 |
| | | | | | |
| New Asset Production: | | | | | |
| # of Sales Reps | 38 | 53 | 69 | 84 | 87 |
| # of Leases | 2,205 | 2,476 | 3,009 | 3,253 | 3,669 |
| Leased Equipment Volume | $20,031 | $23,636 | $31,729 | $35,759 | $42,906 |
| | | | | | |
| Approval Percentage | 44% | 46% | 49% | 49% | 54% |
| | | | | | |
| Average Monthly Sources | 421 | 484 | 581 | 625 | 725 |
| | | | | | |
| Implicit Yield on New Leases | 15.32% | 15.32% | 14.56% | 14.40% | 13.98% |
| | | | | | |
| Net Interest and Fee Margin: | | | | | |
| Interest Income Yield | 11.89% | 11.90% | 12.12% | 12.28% | 12.38% |
| Fee Income Yield | 3.12% | 3.54% | 3.54% | 3.84% | 3.54% |
| Interest and Fee Income Yield | 15.01% | 15.44% | 15.66% | 16.12% | 15.92% |
| Cost of Funds | 4.73% | 4.32% | 4.00% | 3.86% | 3.82% |
| Net Interest and Fee Margin | 10.28% | 11.12% | 11.66% | 12.26% | 12.10% |
| | | | | | |
| Average Total Finance Receivables | $474,326 | $431,176 | $395,906 | $371,833 | $357,089 |
| Average Net Investment in Leases | $469,040 | $427,416 | $393,248 | $369,973 | $355,863 |
| | | | | | |
| End of Period Net Investment in Leases | $444,583 | $405,424 | $378,559 | $359,859 | $350,528 |
| End of Period Loans | $4,027 | $2,781 | $2,101 | $1,284 | $1,041 |
| | | | | | |
| Portfolio Asset Quality: | | | | | |
| | | | | | |
| Leasing | | | | | |
| 30+ Days Past Due Delinquencies | 3.38% | 3.00% | 2.64% | 2.35% | 1.97% |
| 30+ Days Past Due Delinquencies | $16,790 | $13,470 | $11,031 | $9,359 | $7,665 |
| | | | | | |
| 60+ Days Past Due Delinquencies | 1.63% | 1.37% | 1.20% | 1.03% | 0.89% |
| 60+ Days Past Due Delinquencies | $8,101 | $6,135 | $5,015 | $4,099 | $3,460 |
| | | | | | |
| Total Finance Receivables | | | | | |
| 30+ Days Past Due Delinquencies | 3.46% | 3.06% | 2.70% | 2.38% | 1.98% |
| 30+ Days Past Due Delinquencies | $17,297 | $13,829 | $11,358 | $9,537 | $7,726 |
| | | | | | |
| 60+ Days Past Due Delinquencies | 1.67% | 1.39% | 1.24% | 1.05% | 0.90% |
| 60+ Days Past Due Delinquencies | $8,334 | $6,288 | $5,202 | $4,213 | $3,504 |
| | | | | | |
| | | | | | |
| Net Charge-offs - Leasing | $5,469 | $4,843 | $3,489 | $2,778 | $2,324 |
| % on Average Net Investment in Leases Annualized | 4.66% | 4.53% | 3.55% | 3.00% | 2.61% |
| | | | | | |
| Net Charge-offs - Total Finance Receivables | $5,796 | $5,063 | $3,596 | $2,879 | $2,375 |
| % on Average Total Finance Receivables Annualized | 4.89% | 4.70% | 3.63% | 3.10% | 2.66% |
| �� | | | | | |
| Allowance for Credit Losses | $12,193 | $10,253 | $9,151 | $8,355 | $7,718 |
| % of 60+ Day Delinquencies | 146.30% | 163.06% | 175.91% | 198.31% | 220.26% |
| | | | | | |
90+ Day Delinquencies (Non-earning total finance
receivables) | $4,557 | $3,399 | $2,819 | $2,398 | $1,996 |
| Balance Sheet: | | | | | |
| Assets | | | | | |
| Investment in Leases and Loans | $450,595 | $409,637 | $381,978 | $362,328 | $352,527 |
| Initial Direct Costs and Fees | 10,208 | 8,821 | 7,833 | 7,170 | 6,760 |
| Reserve for Credit Losses | (12,193) | (10,253) | (9,151) | (8,355) | (7,718) |
| Net Investment in Leases and Loans | $448,610 | $408,205 | $380,660 | $361,143 | $351,569 |
| Cash and Cash Equivalents | 37,057 | 44,334 | 35,178 | 44,100 | 37,026 |
| Restricted Cash | 63,400 | 65,521 | 66,546 | 47,384 | 47,107 |
| Other Assets | 16,736 | 16,461 | 12,611 | 13,678 | 32,360 |
| Total Assets | $565,803 | $534,521 | $494,995 | $466,305 | $468,062 |
| | | | | | |
| Liabilities | | | | | |
| Total Debt | $306,986 | $268,434 | $218,987 | $191,858 | $178,650 |
| Deposits | 80,288 | 85,135 | 96,852 | 95,358 | 92,919 |
| Other Liabilities | 26,644 | 26,787 | 22,887 | 20,932 | 36,490 |
| Total Liabilities | $413,918 | $380,356 | $338,726 | $308,148 | $308,059 |
| | | | | | |
| Stockholders' Equity | | | | | |
| Common Stock | $128 | $128 | $129 | $129 | $129 |
| Paid-in Capital, net | 84,671 | 85,689 | 86,204 | 86,606 | 86,985 |
| Other Comprehensive Income | (267) | (242) | (205) | (153) | (132) |
| Retained Earnings | 67,353 | 68,590 | 70,141 | 71,575 | 73,021 |
| Total Stockholders' Equity | $151,885 | $154,165 | $156,269 | $158,157 | $160,003 |
| Total Liabilities and Stockholders' Equity | $565,803 | $534,521 | $494,995 | $466,305 | $468,062 |
| | | | | | |
| Capital and Leverage: | | | | | |
| Equity | $151,885 | $154,165 | $156,269 | $158,157 | $160,003 |
| Debt to Equity | 2.55 | 2.29 | 2.02 | 1.82 | 1.70 |
| Equity to Assets | 26.84% | 28.84% | 31.57% | 33.92% | 34.18% |
| | | | | | |
| Regulatory Capital Ratios: | | | | | |
| Tier 1 Leverage Capital | 24.89% | 28.36% | 30.13% | 32.67% | 35.87% |
| Tier 1 Risk-based Capital | 30.19% | 34.15% | 37.48% | 39.90% | 39.58% |
| Total Risk-based Capital | 31.45% | 35.42% | 38.74% | 41.16% | 40.84% |
| | | | | | |
| Expense Ratios: | | | | | |
| Salaries and Benefits Expense | $4,078 | $5,124 | $4,588 | $4,947 | $5,307 |
Salaries and Benefits Expense
Annualized % of Avg. Fin. Recbl. | 3.44% | 4.75% | 4.64% | 5.32% | 5.94% |
| | | | | | |
| Total personnel end of quarter | 181 | 196 | 211 | 229 | 234 |
| | | | | | |
| General and Administrative Expense | $3,092 | $3,046 | $3,073 | $3,156 | $3,487 |
General and Administrative Expense
Annualized % of Avg. Fin. Recbl. | 2.61% | 2.83% | 3.10% | 3.40% | 3.91% |
| | | | | | |
| Efficiency Ratio | 52.01% | 60.82% | 59.70% | 63.62% | 72.55% |
| | | | | | |
| Net Income: | | | | | |
| Net Income | $461 | $1,237 | $1,551 | $1,434 | $1,446 |
| | | | | | |
| Annualized Performance Measures: | | | | | |
| Return on Average Assets | 0.31% | 0.90% | 1.20% | 1.19% | 1.28% |
| Return on Average Stockholders' Equity | 1.25% | 3.31% | 4.09% | 3.73% | 3.72% |
| | | | | | |
| Per Share Data: | | | | | |
| Number of Shares - Basic | 12,681,773 | 12,778,463 | 12,832,792 | 12,872,123 | 12,866,214 |
| Basic Earnings per Share | $0.04 | $0.10 | $0.12 | $0.11 | $0.11 |
| | | | | | |
| Number of Shares - Diluted | 12,724,998 | 12,833,643 | 12,904,163 | 12,933,439 | 12,942,524 |
| Diluted Earnings per Share | $0.04 | $0.10 | $0.12 | $0.11 | $0.11 |
| | | | | | |
| Net investment in total finance receivables includes net investment in direct financing leases and loans. | | | | | |
CONTACT: Marlin Business Services Corp.
Lynne Wilson
888 479 9111 Ext. 4108