EXHIBIT 99.1
Marlin Reports Third Quarter 2019 Earnings and Declares a Cash Dividend of $0.14 Per Share
Third Quarter Summary:
- Net income of $7.4 million, or $0.60 per diluted share, up 26.1% from $5.9 million, or $0.47 per diluted share a year ago and up from $6.1 million, or $0.49 per diluted share last quarter
- Total sourced origination volume of $201.6 million, up 12.3% year-over-year; Direct origination volume of $41.6 million, up 17.2% year-over-year; Year-to-date through the end of the third quarter, total sourced originations of $641.4 million are up 22.6% from the same period last year
- Net Investment in Leases and Loans totaled $1.0 billion, up 6.6% from a year ago, and total managed assets ended the third quarter at $1.3 billion, up 18.2% from a year ago
- Total origination yield of 13.38%, up 43 basis points from the prior quarter and up 61 basis points year-over-year
- Annualized net charge-offs of 1.99%, compared with 1.88% in the prior quarter and 1.90% in the third quarter last year
- Net interest and fee margin as a percentage of average finance receivables of 9.55%, up 17 basis points from the prior quarter and down 39 basis points year-over-year
MOUNT LAUREL, N.J., Oct. 31, 2019 (GLOBE NEWSWIRE) -- Marlin (NASDAQ: MRLN), a nationwide provider of capital solutions to small businesses (“Marlin” or the “Company”), today reported third quarter 2019 net income of $7.4 million, or $0.60 per diluted share, compared with $6.1 million, or $0.49 per diluted share in the prior quarter, and $5.9 million, or $0.47 per share a year ago. Third quarter 2019 net income on an adjusted basis was $7.4 million, or $0.60 per diluted share, compared with $6.4 million or $0.51 per diluted share a year ago.
Commenting on the Company’s results, Jeffrey A. Hilzinger, Marlin’s President and CEO, said, “We delivered strong growth in earnings and double-digit growth in total sourced origination volume on a year-over-year basis. While there was only a modest increase in net charge-offs during the quarter, earnings growth was tempered by an increase in our allowance for credit losses due to an increase in delinquencies and a $936 thousand specific provision related to fraudulent activities within a specific equipment dealer’s portfolio.”
Mr. Hilzinger continued, “While lease and loan application volume was up by more than 20%, growth in origination volume was below expectations in both the Equipment Finance and Working Capital Loan products as our approval and booking rates declined during the quarter. However, our capital markets execution was better than anticipated because we took advantage of favorable capital markets conditions and sold more loans and leases than expected given that our origination mix was skewed towards lower-yielding origination flows. As a result of these origination and capital markets activities, our Net Investment in Leases and Loans stood at $1.035 billion at quarter-end, up 6.6% from a year ago.”
Mr. Hilzinger concluded, “Overall credit quality remains acceptable and we are proactively managing the credit performance of the portfolio while continuing to grow prudently. Importantly, we are also realizing the expected cost savings from the reorganization we implemented last quarter and still expect strong earnings growth this year and we expect that momentum to continue next year. Overall, the fundamentals of our business remain very strong and we continued to make good progress on both our near-term profitability and longer-term strategic objectives during the quarter.”
Results of Operations
Total sourced origination volume for the third quarter of $201.6 million was up 12.3% from a year ago. Direct origination volume of $41.6 million in the third quarter was up 17.2% from $35.5 million in the third quarter of 2018. Indirect origination volume in the third quarter of 2019 was $139.5 million, up 1.4% from $137.6 million in the third quarter last year. Assets originated for sale in the third quarter of $18.2 million compared with $3.9 in the third quarter last year. Referral volume totaled $2.4 million, down from $2.5 million in the third quarter last year.
Net interest and fee margin as a percentage of average finance receivables was 9.55% for the third quarter, up 17 basis points from the second quarter of 2019 and down 39 basis points from a year ago. The sequential quarter increase was driven primarily by higher fee income and an increase 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 as well as the higher cost of funds associated with the securitization that was executed in July of 2018 and lower fee income, partially offset by an increase of 61 basis points in new origination loan and lease yield. The Company’s interest expense as a percent of average total finance receivables increased nominally to 250 basis points in the third quarter of 2019 compared with 248 basis points for the second quarter of 2019 and 207 basis points for the third quarter of 2018. The year-over-year increase was due to a higher cost of funds associated with deposits partially offset by a decline in the impact from long-term borrowings from the securitization.
On an absolute basis, net interest and fee income was $25.0 million for the third quarter of 2019 compared with $23.8 million for the third quarter last year.
Non-interest income was $10.4 million for the third quarter of 2019, compared with $7.2 million in the prior quarter and $4.4 million in the prior year period. The year-over-year increase in non-interest income is primarily due to an increase in gains-on-sale. Non-interest expense was $17.0 million for the third quarter of 2019, compared with $18.5 million in the prior quarter and $15.7 million in the third quarter last year. The decrease in non-interest expense compared with the prior quarter was primarily due to a decrease in Salaries and Benefits as a result of lower commissions tied to originations, a reduction of corporate bonus accrual, and a reduction in salary on lower headcount. The year-over-year increase in non-interest expense is primarily due to higher General and Administrative expenses and to a lesser extent an increase in Salaries and Benefits.
The Company’s efficiency ratio for the third quarter was 48.0% compared with 55.7% in the third quarter last year. The Company’s non-GAAP efficiency ratio for the third quarter was 46.1% compared with 51.7% in the third quarter last year. Marlin’s efficiency ratio has improved primarily due to an increase in Non-interest income. The efficiency ratio has also benefitted from returns as a result of recent investments in the salesforce, the leveraging of fixed costs through continued portfolio growth and operating efficiencies through various process improvement and cost containment activities.
Marlin recorded an income tax expense of $3.3 million, representing an effective tax rate of 30.6% for the third quarter of 2019, compared with an income tax expense of $1.7 million, representing an effective tax rate of 22.6%, for the third quarter of 2018. The higher effective tax rate in the third quarter of 2019 is associated with changes in state statutory rates and related revaluation of deferred tax as well as the establishment of a valuation allowance against certain net operating loss carryforwards that are not expected to be utilized.
Portfolio Performance
Allowance for credit losses as a percentage of total finance receivables was 1.86% at September 30, 2019 compared with 1.59% at June 30, 2019 and 1.65% at September 30, 2018.
Finance receivables over 30 days delinquent were 1.28% of the Company’s total finance receivables portfolio as of September 30, 2019, up 23 basis points from June 30, 2019 and up 26 basis points from September 30, 2018. Finance receivables over 60 days delinquent were 0.84% of the Company’s total finance receivables portfolio as of September 30, 2019, up 20 basis points from June 30, 2019 and up 27 basis points from September 30, 2018. Annualized third quarter net charge-offs were 1.99% of average total finance receivables versus 1.88% in the second quarter of 2019 and 1.90% a year ago.
As of September 30, 2019, the Company’s consolidated equity to assets ratio was 16.74%. This compares to 16.06% and 17.18%, 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 November 21, 2019, to shareholders of record on November 11, 2019. Based on the closing stock price on October 30, 2019, the annualized dividend yield on the Company’s common stock is 2.30%.
During the quarter, the Company reached agreement with Ryan Melcher to become the Company’s Deputy General Counsel effective November 1, 2019 and to become the Company’s General Counsel and Corporate Secretary effective January 1, 2020. Prior to joining Marlin, Mr. Melcher was Deputy General Counsel and Corporate Secretary of PHH Corporation.
Business Outlook
The Company’s guidance for the full year ending December 31, 2019 as follows:
- Total Sourced Origination volume is expected to finish approximately 20% above 2018 levels
- Total asset sales are now expected to be between $295 million and $305 million as we continue to integrate the acquisition of Fleet Financing Resources and execute loan and lease syndications. Marlin expects to achieve an immediate gain on sale margin of 6.0% to 7.0%.
- Delinquencies and net charge-offs are expected to remain at the higher end of our expected range.
- Net interest and fee margin, as a percentage of average finance receivables, is expected to be between 9.5% and 10.0%
- ROE is expected to continue to improve in 2019 as the Company continues to improve operating scale
- Adjusted EPS is now expected to be between $2.15 and $2.20 per share
Conference Call and Webcast
Marlin will host a conference call on Friday, November 1, 2019 at 9:00 a.m. ET to discuss the Company’s third quarter 2019 results. The conference call details are as follows:
Third Quarter 2019 Financial Results Conference Call
| Date: | Friday, November 1, 2019 |
| 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: | 13695077 |
| Webcast: | http://public.viavid.com/index.php?id=136316 |
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 November 1, 2019 through 11:59 p.m. Eastern Time on November 15, 2019 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13695077.
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. 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.
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, 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 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
MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
| | | | | | |
| | | September 30, | | | December 31, |
| | | 2019 | | | 2018 |
| | | | | | |
| | (Dollars in thousands, except per-share data) |
| | | | | | |
| ASSETS | | | | | |
| Cash and due from banks | $ | 5,929 | | $ | 5,088 |
| Interest-earning deposits with banks | | 126,532 | | | 92,068 |
| Total cash and cash equivalents | | 132,461 | | | 97,156 |
| Time deposits with banks | | 14,919 | | | 9,659 |
| Restricted interest-earning deposits (includes $7.6 and $10.0 million at September 30, 2019, and | | 7,576 | | | 14,045 |
| December 31, 2018, respectively, related to consolidated VIEs) | | | | | | |
| Investment securities (amortized cost of $10.2 million and $11.2 million at | | 10,222 | | | 10,956 |
| September 30, 2019 and December 31, 2018, respectively) | | | | | |
| Net investment in leases and loans: | | | | | |
| Leases | | 456,528 | | | 489,299 |
| Loans | | 597,181 | | | 527,541 |
| Net investment in leases and loans, excluding allowance for credit losses | | 1,053,709 | | | 1,016,840 |
| (includes $91.9 million and $150.2 million at September 30, 2019 and December 31, 2018, | | | | | |
| respectively, related to consolidated VIEs) | | | | | |
| Allowance for credit losses | | (19,211) | | | (16,100) |
| Total net investment in leases and loans | | 1,034,498 | | | 1,000,740 |
| Intangible assets | | 7,690 | | | 7,912 |
| Goodwill | | 6,735 | | | 7,360 |
| Operating lease right-of-use assets | | 9,071 | | | — |
| Property and equipment, net of allowance | | 6,266 | | | 4,317 |
| Property tax receivables | | 5,889 | | | 5,245 |
| Other assets | | 12,089 | | | 9,656 |
| Total assets | $ | 1,247,416 | | $ | 1,167,046 |
| | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
| Deposits | $ | 869,257 | | $ | 755,776 |
| Long-term borrowings related to consolidated VIEs | | 91,739 | | | 150,055 |
| Operating lease liabilities | | 9,745 | | | — |
| Other liabilities: | | | | | |
| Sales and property taxes payable | | 6,104 | | | 3,775 |
| Accounts payable and accrued expenses | | 32,295 | | | 36,369 |
| Net deferred income tax liability | | 29,489 | | | 22,560 |
| Total liabilities | | 1,038,629 | | | 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; | | | | | |
| 12,154,661 and 12,367,724 shares issued and outstanding at September 30, 2019 and | | 122 | | | 124 |
| December 31, 2018, respectively | | | | | |
| Additional paid-in capital | | 80,228 | | | 83,498 |
| Stock subscription receivable | | (2) | | | (2) |
| Accumulated other comprehensive income (loss) | | 89 | | | (44) |
| Retained earnings | | 128,350 | | | 114,935 |
| Total stockholders’ equity | | 208,787 | | | 198,511 |
| Total liabilities and stockholders’ equity | $ | 1,247,416 | | $ | 1,167,046 |
| | | | | | |
| | | | | | |
MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
| | Three Months Ended September 30, | | | Nine Months Ended September 30, |
| | 2019 | | 2018 | | | 2019 | | 2018 |
| | | | | | | | | | | | | |
| | (Dollars in thousands, except per-share data) |
| | | | | | | | | | | | | |
| Interest income | $ | 27,708 | | $ | 24,836 | | | $ | 80,673 | | $ | 72,079 |
| Fee income | | 3,869 | | | 3,930 | | | | 11,418 | | | 11,765 |
| Interest and fee income | | 31,577 | | | 28,766 | | | | 92,091 | | | 83,844 |
| Interest expense | | 6,561 | | | 4,955 | | | | 18,931 | | | 12,065 |
| Net interest and fee income | | 25,016 | | | 23,811 | | | | 73,160 | | | 71,779 |
| Provision for credit losses | | 7,662 | | | 4,893 | | | | 17,781 | | | 13,761 |
| Net interest and fee income after provision for credit losses | | 17,354 | | | 18,918 | | | | 55,379 | | | 58,018 |
| | | | | | | | | | | | | |
| Non-interest income: | | | | | | | | | | | | |
| Insurance premiums written and earned | | 2,230 | | | 2,047 | | | | 6,538 | | | 5,979 |
| Other income | | 8,132 | | | 2,401 | | | | 23,973 | | | 8,330 |
| Non-interest income | | 10,362 | | | 4,448 | | | | 30,511 | | | 14,309 |
| Non-interest expense: | | | | | | | | | | | | |
| Salaries and benefits | | 10,897 | | | 10,292 | | | | 34,817 | | | 29,842 |
| General and administrative | | 6,092 | | | 5,445 | | | | 25,514 | | | 18,465 |
| Non-interest expense | | 16,989 | | | 15,737 | | | | 60,331 | | | 48,307 |
| Income before income taxes | | 10,727 | | | 7,629 | | | | 25,559 | | | 24,020 |
| Income tax expense | | 3,281 | | | 1,723 | | | | 6,857 | | | 5,462 |
| Net income | $ | 7,446 | | $ | 5,906 | | | $ | 18,702 | | $ | 18,558 |
| | | | | | | | | | | | | |
| Basic earnings per share | $ | 0.61 | | $ | 0.48 | | | $ | 1.52 | | $ | 1.49 |
| Diluted earnings per share | $ | 0.60 | | $ | 0.47 | | | $ | 1.51 | | $ | 1.49 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Measures
| | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | | 2019 | | | | 2018 | | | | 2019 | | | | 2018 | |
| | (Dollars in thousands, except per-share data) | | (Dollars in thousands, except per-share data) |
| | | | | | | | |
| Net income as reported | | 7,446 | | | | 5,906 | | | | 18,702 | | | | 18,558 | |
| Deduct: | | | | | | | |
| Reversal of charges in connection with executive separation | | - | | | | - | | | | 218 | | | | - | |
| Charges in connection with executive separation | | - | | | | (631 | ) | | | | | (631 | ) |
| Charge in connection with workforce reorganization | | - | | | | - | | | | (311 | ) | | | - | |
| Tax effect | | - | | | | 162 | | | | 24 | | | | 162 | |
| Total adjustments, net of tax | | - 0 | | | | (469 | ) | | | (69 | ) | | | (469 | ) |
| Net Income on an adjusted basis | $ | 7,446 | | | $ | 6,375 | | | $ | 18,771 | | | $ | 19,027 | |
| | | | | | | | |
| Diluted earnings per share as reported | $ | 0.60 | | | $ | 0.47 | | | $ | 1.51 | | | $ | 1.49 | |
| Diluted earnings per share on an adjusted basis | $ | 0.60 | | | $ | 0.51 | | | $ | 1.52 | | | $ | 1.52 | |
| Return on Average Assets as reported | | 2.34 | % | | | 2.04 | % | | | 2.00 | % | | | 2.27 | % |
| Return on Average Assets on an adjusted basis | | 2.34 | % | | | 2.20 | % | | | 2.01 | % | | | 2.32 | % |
| Return on Average Equity as reported | | 14.58 | % | | | 12.36 | % | | | 12.38 | % | | | 13.31 | % |
| Return on Average Equity on an adjusted basis | | 14.58 | % | | | 13.35 | % | | | 12.43 | % | | | 13.65 | % |
| | | | | | | | |
| Efficiency Ratio numerator as reported | | 16,989 | | | | 15,737 | | | | 60,331 | | | | 48,307 | |
| Adjustements to Numerator: | | | | | | | |
| Expense adjustments as seen in Net Income reconcilaition above | | - | | | | (631 | ) | | | (93 | ) | | | (631 | ) |
| Acquisition related expenses | | (670 | ) | | | (495 | ) | | | (2,142 | ) | | | (1,219 | ) |
| pass-through expenses | | (9 | ) | | | - | | | | (6,251 | ) | | | - | |
| Efficiency ratio numerator on an adjusted basis | $ | 16,310 | | | $ | 14,611 | | | $ | 51,845 | | | $ | 46,457 | |
| Adjustments to Denominator: | | | | | | | |
| Efficiency Ratio denominator as reported | | 35,378 | | | | 28,259 | | | | 103,671 | | | | 86,088 | |
| pass-through revenue | | 42 | | | | - | | | | (5,680 | ) | | | - | |
| Efficiency Ratio denominator on an adjusted basis | $ | 35,420 | | | $ | 28,259 | | | $ | 97,991 | | | $ | 86,088 | |
| | | | | | | | |
| Efficiency Ratio as reported | | 48.02 | % | | | 55.69 | % | | | 58.19 | % | | | 56.11 | % |
| Efficiency Ratio on an adjusted basis | | 46.05 | % | | | 51.70 | % | | | 52.91 | % | | | 53.96 | % |
| | | | | | | | |
| | | | | | | | |
MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES
Supplemental Quarterly Data
(Dollars in thousands, except share amounts)
| | | | | | | |
| Quarter Ended: | 9/30/18 | 12/31/18 | 3/31/19 | 6/30/19 | 9/30/19 | |
| | | | | | | |
| Net Income: | | | | | | |
| Net Income | $5,906 | | $6,422 | | $5,141 | | $6,115 | | $7,446 | | |
| | | | | | | |
| Annualized Performance Measures: | | | | | | |
| Return on Average Assets | | 2.04 | % | | 2.28 | % | | 1.69 | % | | 1.94 | % | | 2.34 | % | |
| Return on Average Stockholders' Equity | | 12.36 | % | | 13.16 | % | | 10.45 | % | | 12.05 | % | | 14.58 | % | |
| | | | | | | |
| | | | | | | |
| EPS Data: | | | | | | |
| Net Income Allocated to Common Stock | $5,808 | | $6,322 | | $5,069 | | $6,041 | | $7,357 | | |
| Number of Shares - Basic | | 12,214,913 | | | 12,202,652 | | | 12,165,646 | | | 12,184,996 | | | 12,054,944 | | |
| Basic Earnings per Share | $0.48 | | $0.52 | | $0.42 | | $0.50 | | $0.61 | | |
| | | | | | | |
| Number of Shares - Diluted | | 12,296,726 | | | 12,286,748 | | | 12,252,116 | | | 12,266,851 | | | 12,167,962 | | |
| Diluted Earnings per Share | $0.47 | | $0.51 | | $0.41 | | $0.49 | | $0.60 | | |
| | | | | | | |
| Cash Dividends Declared per share | $0.14 | | $0.14 | | $0.14 | | $0.14 | | $0.14 | | |
| | | | | | | |
| New Asset Production: | | | | | | |
| Direct Originations | $35,469 | | $40,381 | | $43,565 | | $49,038 | | $41,556 | | |
| Indirect Originations | $137,605 | | $159,534 | | $149,875 | | $160,279 | | $139,472 | | |
| Total Originations | $173,074 | | $199,915 | | $193,440 | | $209,317 | | $181,028 | | |
| | | | | | | |
| Equipment Finance Originations | $153,503 | | $180,116 | | $169,831 | | $181,824 | | $154,781 | | |
| Working Capital Loans Originations | $19,571 | | $19,799 | | $23,609 | | $27,493 | | $26,247 | | |
| Total Originations | $173,074 | | $199,915 | | $193,440 | | $209,317 | | $181,028 | | |
| | | | | | | |
| Assets originated for sale in the period | $3,890 | | $11,905 | | $11,298 | | $18,025 | | $18,174 | | |
| Assets referred in the period | $2,540 | | $4,451 | | $3,617 | | $4,140 | | $2,408 | | |
| Total Sourced Originations | $179,504 | | $216,271 | | $208,355 | | $231,482 | | $201,610 | | |
| Assets sold in the period | $40,986 | | $58,138 | | $52,867 | | $57,640 | | $85,425 | | |
| | | | | | | |
| Implicit Yield on Direct Originations | | 22.39 | % | | 21.79 | % | | 23.09 | % | | 23.09 | % | | 24.38 | % | |
| Implicit Yield on Indirect Originations | | 10.29 | % | | 9.97 | % | | 9.76 | % | | 9.85 | % | | 10.10 | % | |
| Total Implicit Yield on Total Originations | | 12.77 | % | | 12.36 | % | | 12.76 | % | | 12.95 | % | | 13.38 | % | |
| | | | | | | |
| Implicit Yield on Equipment Finance Originations | | 9.96 | % | | 9.68 | % | | 9.59 | % | | 9.71 | % | | 9.57 | % | |
| Implicit Yield on Working Capital Loans Originations | | 34.85 | % | | 36.67 | % | | 35.55 | % | | 34.34 | % | | 35.81 | % | |
| | | | | | | |
| # of Leases / Loans Equipment Finance | | 7,603 | | | 7,873 | | | 7,467 | | | 7,648 | | | 6,836 | | |
| Equipment Finance Approval Percentage | | 57 | % | | 59 | % | | 58 | % | | 55 | % | | 53 | % | |
| Average Monthly Equipment Finance Sources | | 1,174 | | | 1,140 | | | 1,074 | | | 1,149 | | | 1,067 | | |
| | | | | | | |
| | | | | | | |
| Notes and Footnotes: | | | | | | |
| (1) COF is defined as interest expense for the period divided by average interest bearling 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 Quarterly Data |
| (Dollars in thousands, except share amounts) |
| | | | | | | |
| | | | | | | |
| Quarter Ended: | 9/30/18 | 12/31/18 | 3/31/19 | 6/30/19 | 9/30/19 | |
| | | | | | | |
| Net Interest and Fee Margin (NIM) | | | | | | |
| Percent of Average Total Finance Receivables: | | | | | | |
| Interest Income | | 10.37 | % | | 10.28 | % | | 10.36 | % | | 10.50 | % | | 10.57 | % | |
| Fee Income | | 1.64 | % | | 1.68 | % | | 1.62 | % | | 1.36 | % | | 1.48 | % | |
| Interest and Fee Income | | 12.01 | % | | 11.96 | % | | 11.98 | % | | 11.86 | % | | 12.05 | % | |
| Interest Expense | | 2.07 | % | | 2.20 | % | | 2.39 | % | | 2.48 | % | | 2.50 | % | |
| Net Interest and Fee Margin (NIM) | | 9.94 | % | | 9.76 | % | | 9.59 | % | | 9.38 | % | | 9.55 | % | |
| | | | | | | |
| Cost of Funds (1) | | 2.15 | % | | 2.43 | % | | 2.49 | % | | 2.60 | % | | 2.63 | % | |
| | | | | | | |
| Interest Income Equipment Finance | $21,489 | | $21,590 | | $21,722 | | $22,390 | | $22,355 | | |
| Interest Income Working Capital Loans | $2,626 | | $2,824 | | $3,228 | | $3,767 | | $4,389 | | |
| | | | | | | |
| Average Total Finance Receivables | $957,755 | | $970,785 | | $999,432 | | $1,031,774 | | $1,048,798 | | |
| Average Net Investment Equipment Finance | $925,900 | | $937,004 | | $960,501 | | $986,075 | | $995,346 | | |
| Average Working Capital Loans | $31,855 | | $33,781 | | $38,931 | | $45,699 | | $53,452 | | |
| | | | | | | |
| End of Period Net Investment Equipment Finance | $937,897 | | $965,351 | | $981,664 | | $1,012,463 | | $980,799 | | |
| End of Period Working Capital Loans | $32,528 | | $35,389 | | $41,526 | | $49,808 | | $53,699 | | |
| Total Owned Net Investment in Leases and Loans (2) | $970,425 | | $1,000,740 | | $1,023,190 | | $1,062,271 | | $1,034,498 | | |
| | | | | | | |
| Total Assets Serviced for Others | $128,539 | | $164,029 | | $192,731 | | $213,797 | | $264,226 | | |
| | | | | | | |
| Total Managed Assets | $1,098,964 | | $1,164,769 | | $1,215,921 | | $1,276,068 | | $1,298,724 | | |
| | | | | | | |
| Average Total Managed Assets | $1,071,246 | | $1,117,069 | | $1,177,812 | | $1,229,588 | | $1,278,394 | | |
| | | | | | | |
| Portfolio Asset Quality: | | | | | | |
| | | | | | | |
| Total Finance Receivables | | | | | | |
| 30+ Days Past Due Delinquencies | | 1.02 | % | | 1.09 | % | | 1.11 | % | | 1.05 | % | | 1.28 | % | |
| 30+ Days Past Due Delinquencies | $11,270 | | $12,295 | | $12,849 | | $12,594 | | $14,916 | | |
| | | | | | | |
| 60+ Days Past Due Delinquencies | | 0.57 | % | | 0.65 | % | | 0.66 | % | | 0.64 | % | | 0.84 | % | |
| 60+ Days Past Due Delinquencies | $6,244 | | $7,292 | | $7,626 | | $7,686 | | $9,783 | | |
| | | | | | | |
| Equipment Finance | | | | | | |
| 30+ Days Past Due Delinquencies | | 1.02 | % | | 1.08 | % | | 1.13 | % | | 1.08 | % | | 1.28 | % | |
| 30+ Days Past Due Delinquencies | $10,913 | | $11,803 | | $12,565 | | $12,354 | | $14,176 | | |
| | | | | | | |
| 60+ Days Past Due Delinquencies | | 0.57 | % | | 0.65 | % | | 0.68 | % | | 0.67 | % | | 0.88 | % | |
| 60+ Days Past Due Delinquencies | $6,137 | | $7,100 | | $7,626 | | $7,686 | | $9,756 | | |
| | | | | | | |
| Working Capital Loans | | | | | | |
| 15+ Days Past Due Delinquencies | | 1.17 | % | | 1.44 | % | | 1.41 | % | | 0.52 | % | | 1.89 | % | |
| 15+ Days Past Due Delinquencies | $394 | | $526 | | $605 | | $268 | | $1,043 | | |
| | | | | | | |
| 30+ Days Past Due Delinquencies | | 1.06 | % | | 1.35 | % | | 0.66 | % | | 0.47 | % | | 1.34 | % | |
| 30+ Days Past Due Delinquencies | $357 | | $492 | | $284 | | $240 | | $740 | | |
| | | | | | | |
| | | | | | | |
| Notes and Footnotes: | | | | | | |
| (1) COF is defined as interest expense for the period divided by average interest bearling 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 Quarterly Data |
| (Dollars in thousands, except share amounts) |
| |
| | | | | | | |
| Quarter Ended: | 9/30/18 | 12/31/18 | 3/31/19 | 6/30/19 | 9/30/19 | |
| | | | | | | |
| Portfolio Asset Quality: | | | | | | |
| Net Charge-offs - Total Finance Receivables | $4,546 | | $5,578 | | $4,581 | | $4,861 | | $5,228 | | |
| % on Average Total Finance Receivables | | | | | | |
| Annualized | | 1.90 | % | | 2.30 | % | | 1.83 | % | | 1.88 | % | | 1.99 | % | |
| | | | | | | |
| Net Charge-offs - Equipment Finance | $4,194 | | $5,132 | | $3,927 | | $4,310 | | $5,038 | | |
| % on Average Net Investment in Equipment Finance | | | | | | |
| Annualized | | 1.81 | % | | 2.19 | % | | 1.64 | % | | 1.75 | % | | 2.02 | % | |
| | | | | | | |
| Net Charge-offs - Working Capital Loans | $352 | | $446 | | $654 | | $551 | | $190 | | |
| % of Average Working Capital Loans | | | | | | |
| Annualized | | 4.42 | % | | 5.28 | % | | 6.72 | % | | 4.82 | % | | 1.42 | % | |
| | | | | | | |
| | | | | | | |
| Total Allowance for Credit Losses | $15,917 | | $16,100 | | $16,882 | | $16,777 | | $19,211 | | |
| % of Total Finance Receivables | | 1.65 | % | | 1.62 | % | | 1.66 | % | | 1.59 | % | | 1.86 | % | |
| % of 60+ Delinquencies | | 254.92 | % | | 220.79 | % | | 221.37 | % | | 218.28 | % | | 196.37 | % | |
| | | | | | | |
| Allowance for Credit Losses - Equipment Finance | $14,498 | | $14,633 | | $15,198 | | $14,837 | | $17,115 | | |
| % of Net Investment Equipment Finance | | 1.55 | % | | 1.52 | % | | 1.56 | % | | 1.47 | % | | 1.75 | % | |
| % of 60+ Delinquencies | | 236.24 | % | | 206.10 | % | | 199.28 | % | | 193.03 | % | | 175.43 | % | |
| | | | | | | |
| Allowance for Credit Losses - Working Capital Loans | $1,419 | | $1,467 | | $1,684 | | $1,940 | | $2,096 | | |
| % of Total Working Capital Loans | | 4.22 | % | | 4.02 | % | | 3.94 | % | | 3.79 | % | | 3.80 | % | |
| | | | | | | |
| | | | | | | |
| Non-accrual - Equipment Finance | $3,392 | | $3,720 | | $4,390 | | $4,282 | | $7,209 | | |
| Non-accrual - Equipment Finance | | 0.32 | % | | 0.34 | % | | 0.39 | % | | 0.37 | % | | 0.65 | % | |
| | | | | | | |
| Non-accrual - Working Capital Loans | $217 | | $492 | | $284 | | $248 | | $740 | | |
| Non-accrual - Working Capital Loans | | 0.65 | % | | 1.35 | % | | 0.66 | % | | 0.48 | % | | 1.34 | % | |
| | | | | | | |
| Non-accrual - Total Finance Receivables | $3,609 | | $4,212 | | $4,674 | | $4,530 | | $7,949 | | |
| Non-accrual - Total Finance Receivables | | 0.33 | % | | 0.37 | % | | 0.40 | % | | 0.38 | % | | 0.68 | % | |
| | | | | | | |
| Restructured - Total Finance Receivables | $3,456 | | $3,636 | | $3,363 | | $3,122 | | $2,533 | | |
| | | | | | | |
| Expense Ratios: | | | | | | |
| Salaries and Benefits Expense | $10,292 | | $9,908 | | $11,451 | | $12,469 | | $10,897 | | |
| Salaries and Benefits Expense | | | | | | |
| Annualized % of Avg. Fin. Recbl. | | 4.30 | % | | 4.08 | % | | 4.58 | % | | 4.83 | % | | 4.16 | % | |
| | | | | | | |
| Total personnel end of quarter | | 339 | | | 341 | | | 352 | | | 356 | | | 348 | | |
| | | | | | | |
| General and Administrative Expense | $5,445 | | $6,450 | | $13,354 | | $6,068 | | $6,092 | | |
| General and Administrative Expense | | | | | | |
| Annualized % of Avg. Fin. Recbl. | | 2.27 | % | | 2.66 | % | | 5.34 | % | | 2.35 | % | | 2.32 | % | |
| Adjusted General and Administrative Expense | | | | | | |
| Annualized % of Avg. Fin. Recbl. (3) | | 2.25 | % | | 2.57 | % | | 2.75 | % | | 2.26 | % | | 2.23 | % | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Notes and Footnotes: | | | | | | | | | | | | | | | | |
| (1) COF is defined as interest expense for the period divided by average interest bearling 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 Quarterly Data |
| (Dollars in thousands, except share amounts) |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Quarter Ended: | | 9/30/18 | | | 12/31/18 | | 3/31/19 | | 6/30/19 | | 9/30/19 | |
| | | | | | | | | | | | | | | | | |
| Expense Ratios: | | | | | | |
| Non-Interest Expense/Average Total Managed Assets | | 5.88 | % | | 5.86 | % | | 8.42 | % | | 6.03 | % | | 5.32 | % | |
| Adjusted Non-Interest Expense/Average Total Managed Assets (4) | | 5.46 | % | | 5.61 | % | | 6.14 | % | | 5.68 | % | | 5.10 | % | |
| | | | | | | |
| Efficiency Ratio | | 55.69 | % | | 53.11 | % | | 67.20 | % | | 59.07 | % | | 48.02 | % | |
| Adjusted Efficiency Ratio (4) | | 51.70 | % | | 50.90 | % | | 57.80 | % | | 55.78 | % | | 46.05 | % | |
| | | | | | | |
| Balance Sheet: | | | | | | |
| | | | | | | |
| Assets | | | | | | |
| Investment in Leases and Loans | $966,659 | | $996,384 | | $1,019,311 | | $1,057,726 | | $1,032,868 | | |
| Initial Direct Costs and Fees | | 19,683 | | | 20,456 | | | 20,761 | | | 21,322 | | | 20,841 | | |
| Reserve for Credit Losses | | (15,917 | ) | | (16,100 | ) | | (16,882 | ) | | (16,777 | ) | | (19,211 | ) | |
| Net Investment in Leases and Loans | $970,425 | | $1,000,740 | | $1,023,190 | | $1,062,271 | | $1,034,498 | | |
| Cash and Cash Equivalents | | 88,448 | | | 97,156 | | | 140,942 | | | 139,731 | | | 132,461 | | |
| Restricted Cash | | 10,049 | | | 14,045 | | | 13,174 | | | 8,152 | | | 7,576 | | |
| Other Assets | | 57,811 | | | 55,105 | | | 69,409 | | | 69,829 | | | 72,881 | | |
| Total Assets | $1,126,733 | | $1,167,046 | | $1,246,725 | | $1,279,983 | | $1,247,416 | | |
| | | | | | | |
| Liabilities | | | | | | |
| Deposits | | 700,107 | | | 755,776 | | | 840,167 | | | 888,561 | | | 869,257 | | |
| Total Debt | | 174,519 | | | 150,055 | | | 129,171 | | | 109,637 | | | 91,739 | | |
| Other Liabilities | | 58,564 | | | 62,704 | | | 75,737 | | | 76,231 | | | 77,633 | | |
| Total Liabilities | $933,190 | | $968,535 | | $1,045,075 | | $1,074,429 | | $1,038,629 | | |
| | | | | | | |
| Stockholders' Equity | | | | | | |
| Common Stock | $124 | | $124 | | $123 | | $123 | | $122 | | |
| Paid-in Capital, net | | 83,315 | | | 83,496 | | | 83,213 | | | 82,724 | | | 80,226 | | |
| Other Comprehensive Income (Loss) | | (149 | ) | | (44 | ) | | (4 | ) | | 48 | | | 89 | | |
| Retained Earnings | | 110,253 | | | 114,935 | | | 118,318 | | | 122,659 | | | 128,350 | | |
| Total Stockholders' Equity | $193,543 | | $198,511 | | $201,650 | | $205,554 | | $208,787 | | |
| | | | | | | |
| Total Liabilities and | | | | | | |
| Stockholders' Equity | $1,126,733 | | $1,167,046 | | $1,246,725 | | $1,279,983 | | $1,247,416 | | |
| | | | | | | |
| Capital and Leverage: | | | | | | |
| Equity | $193,543 | | $198,511 | | $201,650 | | $205,554 | | $208,787 | | |
| Debt to Equity | | 4.52 | | | 4.56 | | | 4.81 | | | 4.86 | | | 4.60 | | |
| Equity to Assets | | 17.18 | % | | 17.01 | % | | 16.17 | % | | 16.06 | % | | 16.74 | % | |
| | | | | | | |
| Regulatory Capital Ratios: | | | | | | |
| Tier 1 Leverage Capital | | 15.57 | % | | 16.38 | % | | 15.41 | % | | 15.24 | % | | 15.28 | % | |
| Common Equity Tier 1 Risk-based Capital | | 17.46 | % | | 17.50 | % | | 17.25 | % | | 17.01 | % | | 17.72 | % | |
| Tier 1 Risk-based Capital | | 17.46 | % | | 17.50 | % | | 17.25 | % | | 17.01 | % | | 17.72 | % | |
| Total Risk-based Capital | | 18.72 | % | | 18.76 | % | | 18.50 | % | | 18.26 | % | | 18.98 | % | |
| | | | | | | |
| Notes and Footnotes: | | | | | | |
| (1) COF is defined as interest expense for the period divided by average interest bearling 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. |
| | | | | | | |
