MRLN - Earnings call transcript Q4 2019 | Marlin Business Services Corp

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Operator

Greetings and welcome to the Marlin Fourth Quarter and Full Year 2019 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. pleasure Relations. your my with Lasse now Investor ADDO is to host, introduce Glassen, It you. Thank

may You begin.

Lasse Glassen

quarter Good us Business fourth today and for conference morning thank Marlin Service you Corp’s for joining results call. XXXX

Lou Bogansky, is today Officer. Chief President Executive President call the President Maslowe, and and Jeff Vice Mike On Senior Officer; Vice and Hilzinger, Chief Officer; Senior Risk Financial and Chief

reliance on to reports beliefs are to under States forward-looking, only the projected the those today, Private results company's made are future current but which Before in forward-looking remind performance differ the or periodic of today such may including United on factors me statements of available also of Form most Reform Investors Exchange risk regarding recent not reports or Report place performance Form factors implied and call guarantees Litigation results. statements or statements. of quarterly heading a Actual the some variety let described not Such Marlin's Security statements including Commission section were in to undue beginning due company's limited under not of the the forward-looking with the in and will from and Act filed and be the such website. XX-K that you materially made cautioned events the statements forward-looking are Securities forward-looking Investors XX-Q Annual on XXXX. and factors represent

over to release financial a it’s measures a comparable to and financial reconciliation Marlin’s respective, CEO, With measures Hilzinger. adjusted efficiency per and measures call to and Jeff? these call Marlin operating earnings other of now that, including as measures. their non-GAAP Jeff may turn directly for to refer the adjusted pleasure Please well President as such this discuss most my GAAP earnings of non-GAAP financial During various description ratio. share our

Jeffrey A. Hilzinger

solutions joining past from you the of nationwide overview Chief transformed XXXX year. ticket Maslowe, financial Lou a Risk results on provider details quarter us a an to Officer comment into businesses. highlights our Good Officer with on with fourth for of our as with and portfolio everyone along outlook discuss Mike and Lasse. for results. that capital this on morning and lessor I’ll quarter, will financial you from micro to additional execution Thank Marlin strategy key has will successfully small business thank our an the equipment our the our Chief Financial upcoming as well continued update begin follow Bogansky, guidance our of performance

Marlin volume, concluded strong excellent year-over-year origination well record as by solid quarter volume direct in of origination earnings XXXX Total disciplined by our for customer capital demand in products finance equipment expense increasing growth channel. increased both performance with highlighted working and growth. driven origination fourth the XXX.X our million management, and loan X.X% a as

the prior full million more of rate. origination grew the year-over-year, year double than XXX.X XX.X% year's For volume total growth

continued finance capital market products, significant product this growth these demonstrates pricing created for market end competitive enabled an equipment financing both fourth offset that a markets our increasingly we the and origination the conditions capital during conditions exists experienced to While our experienced To execution. environment. compression strong favorable the with us markets demand quarter we in the environment yield exceptionally

of on sold a assets originations net generated conditions that favorable XXX.X capital X.X we quarter a gain the during sale strong an our pretax million. and volume markets Given immediate million fourth

per $X.XX the diluted our XX% line significant increase non-interest billion, year. fourth fourth with in quarter year-over-year last growing to bottom expense year. carefully as assets ability for our performance just quarter the earnings evidenced from quarter over total with year X manage share our these leases and per last As compared year-over-year share the was Intervening and strong earnings stood increased a result the net to of efficiency in to performance. improvement at credit by portfolio at proactively diluted experience Notwithstanding ratio. end fourth this more during closely and our an quarter capital the monitor $X.XX our markets and to expanded manage loans adjusted managed we income activities losses and origination operating of continued to XX.X% delinquencies Marlin's higher X.X did portfolio investment the and and billion quarter than credit at net the by

remains ago of XX the of For earnings issued from income was guidance. Overall ahead net business strong I most share look remains and a our I very believe positioned per believe the year growth. our for to of the increased year as and X.X% of another by end recently at we million $X.XX full that year diluted million of XXXX well fundamentals XX.X profitable continue Marlin to high

on our company's cost by processing be and consistent and and managing proactively reduce driving cost operating on company's which key on appetite. transformation our profile scale our focused to like expanding origination initiatives fourth, our second, operational and the through portfolio leveraging market; risk by would strategically leveraging move update an costs; base better fixed and improve fixed and growth unit with I business the risk growth; efficiency are better first, to improvements target third, now capital returns equity to improving to

would since we like share I with each call. have you made our of last areas to these progress in the

providing expanding market solutions our addressable terms multiple grow. help in to and First, on we products small businesses financing developing focused remain of

continuing by but go our end-user equipment directly vendor with of to partners, part strategy not also customers. our broadened As also this we through our only to originate have market

strong working to we expanded the of pleased product. to grow, are particularly million. with XX% Fourth While business performance equipment working by our loan consistently capital our volume capital origination finance continues loan XX.X year-over-year quarter

year XX% working the over of volume XXX.X the increased For origination million year. loan full prior capital nearly

business market part directly customers. our its solutions end-user strategy customers leveraging customers key our relationships has provide efforts small including approximately is company to the with over financing our end-user relationships to We pleased time. to The remain XXX,XXX built solicitable also go our with our with of

identifies customers by strategy set with meet needs. Our a multiple offering additional direct financing products that of financing these their broader opportunities existing

fourth last million XX%. the XXX.X the originations direct to of and increase wrapped an million up year. of resulted in XX.X solid XX% This year which nearly for quarter volume origination prior fourth increased year-over-year in of with the from XX.X was quarter over year business up During million a volume a our direct increase

to against where origination in focuses bulk only more to reserves allowing also along interest in while the on loss provided as to not assets. costs and not way asset the we we the of fixed pricing quarter. margin see through a compete followed favorable with capital capital others our Marlin's fourth we In sold credit continue the make as addition, markets on we basis last headway markets through requirements our growth very to effectively the but we simultaneously generated productively, by capital assets the monetize meet whole leveraging and does indication releasing sales quarter, guidance second Thanks and to which our return Overall, the an opportunity us strong net key held the capital use priority, on risk to on the a conditions growth. transferring

terms efficient our sources, to and way risk, and returns, in particular further to diversify as industries, geographies, classes. Asset an sales as portfolio provide also asset funding well composition optimize our credit of exposure to helped

intermediate to direct importantly, and of from us the retaining while meet and our our opportunity of customers retain sales business. or to our most needs also asset take full support Finally, to the perspective, total customer in a by our maximum servicing origination us and advantage assets strategic to relationships allow continue allowing to of advantage financing

immediate origination sale assets demand our net XX.X approximately and growing year, with market by past million favorable combined allowed generated investor XXX.X us pre-tax this gain on that million. in to volume of During conditions, sell strong an

as I customers approximately ongoing total, assets, relationship strategy. to these XXX previously, and market continue nearly allows capital we us of our million maintain are which of for with support Importantly, In assets we in servicing an now all partners. these in to service mentioned our direct

make the last fourth for XX.X% period XX.X% operating revenue quarter and GAAP through year year full for fixed XXXX XX.X% XX.X% in improved quarter our to through for automation. we improving the operating and efficiencies strides area for better company's and focus, the in the was Turning year XXXX efficiency versus company's same XX.X% fourth to and year by Moreover improvements versus basis, continue versus costs for the period in in On the XX.X% a the to and company's process in third improved to growth for full versus efficiency XX.X% portfolio last ongoing XXXX. XX.X% of leveraging ratio same the ratio the adjusted XXXX.

operate leverage through Looking growth look renewal to initiatives. various efficiently continue portfolio and we and ahead ways process beyond, costs will and to to through automation fixed more revenue our XXXX and our for

finally, that on managing remain appetite. with company's is the risk we such profile, it And proactively focused our risk commensurate

to a been underwriting experience has in delinquencies also losses we underperforming also the provide broader and the earlier, have higher color portfolio the these remarks. the on adjustments that in As noted which are will and we delinquency collections quarter, making credit upward did address his trend I response the response, experiencing. pressure more of added areas Lou in resources is on are and activities experiencing. to industry industry we In

we wrapped XXXX quarter. up summary, In fourth strong a with

the and goals strategic good During throughout our on quarter objectives. near-term both financial and we made longer-term the progress year,

I now discuss to of the we Maslow, exist many for As our detail. growth performance another marketplace and in profitable I'd and the Lou in to that unlock XXXX Risk to over opportunities believe shareholders. Chief we well-positioned look more that, portfolio Officer ahead, are Lou. With the for we year turn that to to our pursue call of anticipate in Marlin our strongly value the like

Lou Maslowe

morning Jeff you, Thank and good everyone.

both managed portfolio. to considered of want note of due I for provide managed well metrics the more for and sales as portfolio indicative the the are quality book will trends aggregate on that in asset metrics Before XXX portfolio million the I discussing the credit statistics quarter, as XXXX. The I performance to portfolio portfolio begin

days from points from managed XX portfolio the basis XXXX. basis XXXX. prior the prior X.XX%, quarter basis quarter points portfolio managed X days The receivables fourth the receivables year-over-year. of XX the points from down the points XX key the quarter over on fourth quarter over XX from basis XX points Equipment and were quarter delinquent the quarter X.XX%, metrics, were and finance finance quarter XX up points book fourth points from up XX from XX asset were delinquent prior XXXX. basis prior XX basis of down X quality days equipment over at X.XX%, Looking were and receivables X.XX%, The and up over basis the basis of from up X points days up

For points and which increased December day the PayNet November since XX XX benchmark delinquency XX small purposes, X since latest XXXX. basis basis business available to the August, index, was points

net charge specific XX receivables Aggregate finance fraudulent quarter basis prior fourth On total with XXX,XXX eliminating X% managed off quarter increased entire reserved to Included activities net X.XX%, offs allowance third prior and the X.XX% finance in on by net increased as thereby portfolio. Equipment during points the a in was charge fourth fourth were in finance the related to basis receivables specifically XX basis X.XX%. an of basis annualized X.X% offs average was that the equipment basis a XXXX. points points quarter quarter XX within the and the in compared from in of up portfolio finance year-over-year charge to the quarter-over-quarter QX quarter, dealers offs quarter. charge

observed have analysis the Due headwinds of businesses points in performed basis PayNet second increasing into index from delinquency portfolio XXXX. of business performance. the well For continued November lenders, default XXXX. believe and drivers weakening X a data, fourth as third with been benchmark other December discussions August our we XX Based very points small quarter that disproportionately impacted half by small the basis the X.XX%, deep the on was and offs benchmark to the in purposes as and charge economic we from up experience quarters,

in a borrowers that lower increase Based and borrowers there we've underwriting from second larger was portfolio. adjustments during offs quality. analysis the credit our XXXX much delinquency made Our quality for our charge lower the half of on analysis of revealed in credit

plus the to the delinquency capital to basis fourth Transitioning by from X.XX% to quarter points X.XX% in loan day quarter discuss day points net Working the on in quarter XX increased plus X.XX%, third XX charge working loans, offs from basis capital X quarter average X.XX% fourth to an annualized now increased fourth and capital the of quarter decreased while in loans of XXXX. prior X.XX%. XX working basis delinquency

on extraordinarily and product noted as offs from the remain QX net charge in we've call quarter, last volatile the noted this losses the were As in earnings past, low quarter-to-quarter.

results in earnings target product. the highly given QX of high yield While results the the X%, remain our accretive exceeded the of to

to results continue and performance. underwriting closely as needed will monitor to ensure portfolio satisfactory We adjustments make

of on quarter. results. expected additional for or The credit credit the the X, quarter. basis will CECL was fourth in in finance beginning commonly in losses migration remarks, losses referred allowance projected finance from to impact credit attributable to provide mainly delinquency details adopt prior allowance new average CECL is points an equipment current Marlin off for receivables, of quarter the XXXX percentage The allowance Mike methodology in our will rate his losses estimated fourth XX and January up the including XXXX. X.XX% as the increase charge higher

terms default the five of of Outlook, portfolio small our a from statistics. the while of the leading that slightly PayNet's PD the Index the macro the National outlook, quarter PayNet's the which readings perspective, we of year current all December of a index forecast performance lower across top forecast. stability over the points small history. monitor than four U.S. forecasting of monitor From points we XX on businesses prior credit commercial loan based in indicators, declining latest economic in fault than Business basis number in utilizing the prior XX% forecasts and as sentiment XX Small business including Independent business In a Optimism next rate which relative small Federation remains October data higher is only rate months basis with XX months is for absolute

market noted stabilize. portfolio we performance data Given I expect to the

turn months the see Bogansky, our call Mike more changes to they monitor fourth detailed financial have that a for our over to the performance. With I'll Mike? the the will underwriting six desired over closely effect. to we have We made that past that, of discussion CFO, quarter

Michael R. Bogansky

fourth good you, with for share Thank per diluted income million per X.X Lou share million or the was quarter quarter diluted morning and X.X compared or last $X.XX net $X.XX everyone. Fourth year.

yields quarter yield XXX down on pricing from on total to from working lower was capital Yield our the basis XXXX. of seven For interest the to for was quarter, down of lower direct XX.XX%, the Fourth rate yielding as indirect was lower originations quarter and originations from on competitive the down originations yield prior quarter, originations third basis due up quarter quarter the mix X.XX%, prior environment, loan. points well the quarter XX and the points pressure XX the on points points from due XX.X%, and programs. primarily basis fourth basis as

by driven and points fee the in deposit by lower offset margin, decrease interest decrease a down expense Sequential offset partially increase yield. result from basis primarily new and interest X.XX%, net loan The NIM, seven points points expense. and lower partially prior percentage basis quarter, resulting interest the lease margin the rates lower lease fee a decrease and of primarily basis from in increase by loan yield, in an origination an quarter new origination quarter down was in XX XXXX. was of income, and higher of For or was from XX fourth quarter income year-over-year

receivables finance a we returns. will alternatives caused markets previous due experience pricing expense at X.XX%, X.X% increased quarter decreased with optimize the expect the to have least to evaluate We to fourth costs. that pricing execution interest conditions to quarter this of XXXX. increasingly for pressures X.X% continue market to percent and of leading Interest deposit current average Company's favorable quarter. as of higher continue XXXX our first a environment through average the as compared percent persist an for capital risk to primarily finance competitive The also expense we adjusted and from of will competitive receivables

company's and Non-interest million year in non-interest increase with is for quarter-over-quarter prior in The prior of XXXX, due sold fourth XXX.X to current realized an quarter gains the from fourth on the quarter we compared of increasing in the activities. assets X.X strong driven the execution income market markets during capital gains sale primarily XX.X assets of was the million of XXXX quarter the XX.X period. We year-over-year million income by million conditions. and and the

compression Jeff us to we in As of some was noted, and yield it programs of yielding this experienced. the result a growth enabled strong origination have lower that offset

Moving to million We respectively. to flat quarter increase despite XX.X achieve quarter year-over-year prior year. declining XX% fourth expense origination relatively the were volume million base X% the million, a a XX XX.X to expenses, compared expenses quarter in increase a last quarter and with and in fourth in non-interest able were sequential

approximately an fourth $XX.XX XXXX, quarter per Marlin During common average shares the we of of XX,XXX of for repurchased stock share. price

As million August of that December have stock XXst, of announced we remaining was authorization available XXXX. the program repurchase of X in under approximately

previously continue have use capital time. we share communicated, we at this we that evaluate alternatives repurchases appropriate routinely capital an of are believe and As allocation to

Additionally, declared of February XXXX $X.XX XX, our Board quarterly XXXX. as of of February payable Directors XX, share shareholders dividend on of to per record regular a

the December Based XXXX. accounting XXXX-XX update replaces adopt on effective accounting CECL. X, we As size standards composition to as of current earnings loss expected ASU XX, referred portfolio and call, credit more our for commonly forward-looking January the noted losses model on will credit model XXXX-XX current with loss XXXX. last incurred a as

equity through deferred million. income and million total million credit allowance equity adjustment to approximately be by X approximately XXXX-XX of adopting approximately effective X net transition This losses taxes increase we'll on XXXX. X, by for January recognized for stockholders' $XX of We expect will our ASU reduce

in the we adoption credit XXXX as in negatively in the that ending environment in volumes change for as CECL origination a December increase XX, year end losses is of larger of $X.XX provision variety prepayment in well the credit vintage loss full and earnings XXXX, dependent is to highly the timing value. for but expectations our residual by on up forecast due of to losses share for but originations, of syndication our periods conditions, adoption the and to the ongoing the growth, ASU impact of of economic lifetime portfolio estimate with XXXX. the credit term EPS of expected activity, portfolio impact a on be Based could it's factors to calculation, income The in from allowance XXXX-XX not speeds. The leases for with performance, the of including volume expected addition of limited the per recognition

Now, are accounting December our guidance initiating year adoption XXXX. the we CECL reflects for for XXXX, outlook turning ending XX, business our full model, to which the of earnings

We earnings expect to $X.XX. per between adjusted $X.XX share be and

the As negatively accounting reflects I this the CECL impact impact per of which before, said share earnings adoption by up to model, from per the $X.XX could share.

call percentage growth That based remain of of charge concludes disproportionate remarks prepared Our performance capital expected does finance receivables open Operator. assumptions, the with up and the and and the XXXX X.XX%. margin loan as not from working origination XX% a for earnings Net Portfolio at with interest guidance our is experience continued of offs range. fee and let's the questions. net that, X.XX% between our approximately total higher average end product. year-end XXXX of delinquencies in our growth volume on levels following sourced and deteriorate from

Operator

Instructions]. [Operator you. Thank

first comes Securities. JMP line the question of question. proceed your Christopher with York from Our with Please

Christopher York

guys my questions. good for thanks Hey, taking morning and

Lou Maslowe

Chris. Good morning

Christopher York

the mean do formal performance not elaborate deteriorate? or could you specifically credit on Lou So, to is you specifically by what expected guidance, Mike,

Lou Maslowe

performance over higher you you think want we was will I the we, jump last half. the start Mike if saw I that first particularly if than the quarters know Well, in, two to and

particularly So in XXXX. was as expect look view at than I would the high, I is my performance, QX which higher for

or XXX a to economy being about So, our XXX we've basis talked so. points range in from good

economy now business right the small end think how them. weaker a I at impacting it's good were and the of

is little when that you I from kind from bit predict of indication. view of a higher calculation the XXX, maybe that think with associated probably So this that actual range consideration perspective, which my even than take looking at. of we're point that a the end But that's ballpark around math the higher I into

Christopher York

for that repeat me, what just Okay, that referencing? XXX, is

Lou Maslowe

end a range economy. is of because equipment that about So the for in we've is XXX finance, that talked the good upper

higher we're So, to be I think for range that end talked about in that finance. equipment going we

Christopher York

it and should XXXX? then allowance ended does Okay, loan flat so which to the we at expect maybe so, on year be deteriorate, for an X.XX% throughout losses allowance the not

Lou Maslowe

to CECL, so it moving I one that that's will Mike. Now to pass

Michael R. Bogansky

but of is Yes, thought as credit allowance the We so the Chris expect initial going the Lou percentage. to that's throughout this we of things up bump million, XXXX. environment an to is provision mentioned, impact function $XX a CECL being guided Mike. really that we the not All deteriorating, thought would

Christopher York

total back expect then on X.XX% not to offs we Okay, reverting finance should be to delinquency, delivered the ended deteriorate, does XXX on it the at receivables year then which flat? net so finance equipment charge

Lou Maslowe

stable, me my referring you to earlier, Yes, charge so in Yes, good was impact. it's that Chris. clarify for charge we that to the I Ultimately, pretty XXX range our offs economy. talked financial the XXX so added was about in off. let comments

Christopher York

then staying Okay, was couple to how okay, you in OPEX helpful. not expenses we it expenses XX% provide that formal to XXXX historically of projected in efficiency guidance on volatile on of ratio should been an Alright, as years, represent chose have XXXX? line about and the but that's think last your over

Michael R. Bogansky

provided we've impact collectible leasing in adjusted tax the efficiency ratio the the on to that had standard of expenses. gross up on XXXX our so due property Yes, the

into ratio that XXXX. over we expect expanded course trending from XXXX or a improvement the be efficiency look similar you bit we ratio of think to out rate. kind I how of a in course over But and expense little and little expense of So obviously the fourth lower do tends efficiency be volatile ratio quarter expenses to our tend the an if would similar an

Christopher York

press just exactly to mentions, digging on down? I on quarter did bit you fourth release quarter comment fourth discipline OPEXs so then could and your the little what the expense in mean, manage a you having maybe Okay, take

Lou Maslowe

Well, and now. the earlier result we base making they the took expense that discipline fourth is the are really manifested expense the in their of through the quarter that in a actions year, way

did of So back were at been announce it's actions actions throughout quarter the of end initiated to second a the on a certain third we quarters flow. of But half they're and the just in the starting the focused second, expenses lot those continuous year. of XXXX, and

Christopher York

Okay, in and the impact then how platform much are your then online today? in you investing

Lou Maslowe

continuing I continuing offering. years to We're of in they're a mean, to make initiated application continuing make we reinstalled pace, at measured I investments a digital we're our to we're digital couple to offering. Salesforce.com ago or make platform. enhancements enhancements would to say that our and but more

that would So through, to expect through continue pace that statements those financial to the we coming throughout continue and you we at refine the would come see our XXXX investments offering. I investment in investment the say as same -- line digital

Christopher York

what's we and Okay, the of efficiency mean, I we in maybe I so how getting causing XXXX. understand or lack XX% should investors potentially ratio should of efficiency how were thought I then think

could initially that potentially that operational But potentially some thinking you achievements be was expected? delaying investing what I of tech. in Now the is efficiency

Jeffrey A. Hilzinger

this Chris years so is operating think, Yeah, I a XXXX. XX% efficiency ago we ratio to guided three in Jeff,

the that in the being reason in of think up the it's I for XXs I done digital. is because when to that all know, end investment You and we're said and high making we're going think

allow loan finance only products think and thought. that digital less that NIM our than is, better have because complex over offsetting digital that to can be that be way somewhere we to as our up NIM and but a in end going expanded platform, difference us in going at investing intending on digital more accretive offered ultimately to a to to will ultimately between they're digital thought equipment that They I a one being sits efficiency was what's to But introducing. will is product of some are where investment able capital we additional a between result working that digital ratio what happen product. the operating in will offer the we time we're an be, products operationally our

Christopher York

sense. Okay, it makes more

consequently on year-over-year remains your capital Okay, increased assets and target. equity it above XX% to

actions managed? than do expect repurchases be optimally been more consider active to capital what to be you you more you've historically or other So in share

Jeffrey A. Hilzinger

-- XXXX we shares and lot in authorization So we of did have under latest repurchase $X authorization. a were million of we our remaining

view especially as the prepared as would remarks, of said safe effective I continue and So time view share do this we price. at our an repurchases in use capital we to that, given stack

Christopher York

Okay, and is capital to the there anything XX%? to actions close that consider you get else on that

Jeffrey A. Hilzinger

to capital of them assets could but to ROE, we balance accretive figure syndicating the way sheet to risk trying know, excess it's isn't how profile in the You for balance the the business the in size of that to here that I proper on out instead hold more Chris a capital think the get goal the isn't sheet. use be to

company this was which capital, the FDIC, bank. year, the with And look if capital requires faces hold got to the much the than at we've securitization less companies at that is issue much, required it XX% the limitation that big XX%. us the based last was economic structural did capital agreement and you So, capital issue we the that

to is we're try to the capital a approximate But, be. but from that a here one significant the we get limitation make the until is to agreement, for which relief objective not that it's goal economic level to the the capital think going actual what business progress be we very, get should to able to not I control. down and So that's on more strategic the company very capital important

Christopher York

no higher with OPEX all changed line expectations, bit more now debt, noticed to has an been to your I supposed unidentified a XXXX capital. existed help, with been one's that long-term doubt, my little on of your was questions is XX% combining hitting be while. return line together, the target. top to Sure, yep which at XX%, more a the Kind target on average for equity, in essentially has and

this that be So how to about expectation for investors should hit? for timing think achievement

Jeffrey A. Hilzinger

competitive from we equipment more that's on needs begin we are, these higher and of it's, progress the of digitizing going the that ultimately, than is think good litigant capital thought combination a result being so relief us amount three the But have We to our in is think You were platform we offer business I to the of make change capital the we're business platform able I we about will in with structure to and finance and that the the going market platform. in be ultimately the to we to calmer strategy. guidance products and basic where the offer I And when the products, in in removing think increasing that years provided it the the digitizing know, think of a a really to to margin more business be that provided years. the much over guidance that, platform capital continue way you margin business was two get we we can we next But to really ago. perspective environment we common need with. digitizing think to three a to digital know, the to that the we're the

Christopher York

the your hop queue. question and ask Got and I'll last in I time. back hog to don't one want all then it,

this your is execution should else question on years, you higher price improve initiatives throughout stock the most take control look toughest, have stocks lead important but Marlin few essentially further investors to last a flat, why execution I the a over multiple back, X.X. nice been and any job what is done a to performance? with to So in But If here. stock is it expect

Jeffrey A. Hilzinger

You limit know I that And, are have repurchasing price working to the in answer question. is place a a crisp reduced changing environment. that. we the don't removing -- dramatically. shares, capital we agreement. good remove expenses to We are got markets We've to mitigate We're capital

year. next very to And from control last do we to I we think perspective aggressively. we're going the that we're year managing did continue levers So, so and so our

stock view it's conversation business. being in management Board. it the of with we huge team a both obviously intrinsic value the and price, below the And significantly the of to topic as As the

thinking time. So we're that the about working it's to all and improve something

Christopher York

Got you've sensing some maybe essentially I'm easy it, modeling Jeff. confidence investors be will for reassured. the been an Thanks yeah. it's that X.X, not candor, question. losing that know I

So that's it the for me. I'll hop queue. back in

Operator

Instructions]. [Operator

proceed next your Our question with question. Securities. a York is with Please from follow-up Christopher JMP

Christopher York

You me. can't get rid of

the Just up two questions just on specifically quarter. follow

second some of what that qualitative the credit throw So, that led of some in in on the characteristics year? your delinquencies of to borrowers the pickup the half are lower comments

Lou Maslowe

delinquency and Yeah, so so QX I'm offs. this portfolio it's in so of even our showed particular QX not all that clear transportation. was it's charge first there more that three time just weakness that of were parts in But,

to retail as we based our we multiple then space. it broad its through refer lastly, business, retail from partners Our broker and but solicit business our industries that dealer

market that freight to we higher So, still rates, deterioration talked quarter see suffering costs. freight volume, our is guidelines. We've underwriting continued lower we'd transportation as insurance last lower to from changes made

we've even -- transportation tightened So the further made sector. we've

limited business group portfolios have much which vehicle is operators. commercial large our We've are whose anyhow. eliminated We other to partners transportation vocational of and to well, performing completely basically two

up tightened and was had we've I really point. well still, fees the charge there. this sufficiently offs But So at on think transportation we weak QX increased

terms offs credit of quality we business half really our as between our I analysis the business, a our of charge saw marked better a we deep higher of broker lower and of the in that difference in would portfolio, half. and the terms the did into retail movement In delinquency say

some done guarantees. the of might guarantors, approved guarantees, requiring their made we've grade were scores have what those without in been personal pretty terms their terms the credit is that now credits the in So terms past in in revolving of lower of personal personal credit of scores, We've changes both the those and significant quality increased transactions, we've also requirements availability.

and take those we've identify to changes. steps needed implemented us the So analysis help revealed the to we

Christopher York

that's equipment then Thanks what's bit average for to talk your mix me your me of Maybe the little know the I'm you to could new help more standpoint? the it, in finance and what okay, experiencing if bit comments so Got equipment ascertain competitive there understand talked competitive pressures, the little trying of weighted more decline about look qualitatively equipment way a finance in obviously the Maybe a just a that pressures, a I could still, that's comments at kind prepared in on going a from competition bit helpful. competitive indicator you little just pressures. color. you're about of finance, for an on Jeff, qualitatively

Jeffrey A. Hilzinger

Sure.

we of a little and could I couple as continues talk evolve equipment on So as to about that make a bit financing then working capital market comments well. could

with kind quarter So, and and cycle, regardless competition think competitive cycle in saw and what fourth most the credit. of you're definitely I of But we late -- first -- quarter always usually increased we pricing in and it's quarter, with occur the late then the competitive in. third broader it's felt price environment changes the is that fourth competitive

to equipment yet serve is better question so no like there that market. exercise. marginal finance to find particularly margin continue the grow to compression way to enter But We a as there's I think trying trying that down is the their us as discipline haven't it seen move the feels piece banks they credit and industry to deposit it's occurring. there's And platforms continuing credit continue space costs low customers that's it's and to with that are

where And pricing in fourth we the I fourth -- an decision on impact we current definitely third to we most. an price the in the think the it felt those that having platforms on market the made and in the conscious had quarter. That's experienced the quarter beat impact

basis just because that capability, because ultimately bank's believe balance capital assets we anyway. compete we're -- that can it's have we So the to sheet intermediating we on markets a the

cost be able needs, to funds it relative so service it independent and us competitive, competitors. to our us allows And their our allows remain to able retain of of be of to customers, control to our to

the not good solution. it's perfect it's a but So solution,

Christopher York

capital on got pricing just comments a any working then comments on of pressure? maybe qualitative or confluence agreed. And competitors, potential Yeah competitive and you've what you're so seeing there,

Jeffrey A. Hilzinger

Yeah.

And I the product capital case structural banks and has unlike we're market that lot have impact both it -- these what maturing the -- a equipment down we that, lot two last three of that the discovering it able is a and is there's and in of a move competitors bit We the as volume. over a impact in or just more really that finance customers also better increase the little outcome the the think last working to I seeing market with the they've think product, well. be think The becoming the it's is potentially cycles and I years. see market It yet, or accumulated are as and have see where to price our economic there's is they market, data product they're there they is while used reduce really really don't so mainstream. to anymore. driven a resort, be cycle data

repayments. you've got got going extending, monthly so daily repayments, And you've from tenders weekly got you've it, and

of fintech credit a stratification going or quality You've that more the There's up. providing the sizes in way got that deal product lenders specific market. are all and

to really certainly both it's having there's more consumed to able bad settle good thing. tailwinds becoming dog more necessarily mainstream and occurs going over the being I way. we're in from that working So it place tries -- think, product into market to it just good to competition a be And, with the forth. as use because take that environment in the of a to that being in because time in they having capital rise tailwinds a mainstream, and think everybody the I that as advantage I want so and think that and more product And is or all to place is evolve come be it's compete fights it don't a there it, but is and viewed the

Christopher York

for that on the great perspective Interesting, as well. especially its and market the industry all context. Thanks and

I for me. think it that's

taking So being list exhaustive thank for of and patient you by questions. my

Jeffrey A. Hilzinger

Our pleasure, Chris. Thank you.

Operator

end over Mr. have we question-and-answer you, closing remarks. like for call Hilzinger our session. reached turn to Thank to of back I'd the the any

Jeffrey A. Hilzinger

to speaking call. Thank you and for again forward in day. you have on and our again the report quarter results support look We April. hope you first of for late great a when with today's joining rest Thanks I we your us XXXX

Operator

This a day. Thank have you concludes may at today's your this Thank wonderful lines disconnect teleconference, you. time. for your you participation and

Marlin Business Services (MRLN) 31 Jan 202019 Q4 Earnings call transcript