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| 8-K - FORM 8-K FILING DOCUMENT - MARLIN BUSINESS SERVICES CORP | document.htm |
EXHIBIT 99.1
Marlin Business Services Corp. Reports Second Quarter 2011 Results
Second Quarter 2011 Highlights:
- Net income of $1.5 million for the quarter
- 15% sequential growth in new lease originations; 70% year-over-year
- Lease portfolio growth of 1.9% for the quarter
- 12% sequential growth in dealer sources; 42% year-over-year
- Net interest and fee margin of 12.21%
- Risk adjusted net interest and fee margin of 10.35%
- Insured deposit growth of 30% quarter over quarter
- Strong capital position, consolidated equity to assets ratio of 34.58%
MOUNT LAUREL, N.J., Aug. 2, 2011 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (Nasdaq:MRLN) today reported second quarter 2011 net income of $1.5 million, or $0.12 per diluted share. For the sixth-month period ended June 30, 2011, net income was $2.3 million, or $0.18 per diluted share.
"We're pleased with the momentum in all aspects of our business," says Daniel P. Dyer, Marlin's CEO. "Our intense focus on delivering high quality and consistent service to customers is an important component of our sales growth strategy. Supporting asset growth this quarter, dealer and lease account activity were up significantly over first quarter levels. Credit quality is in terrific shape with strong delinquency and charge-off performance across all segments of the portfolio. Borrowing costs continue to steadily decline benefiting from our low cost bank deposit strategy to fund lease originations and portfolio growth," says Dyer.
Second quarter 2011 lease production was $53.9 million, based on initial equipment cost, up 15% from $47.0 million for the first quarter of 2011 and 70% higher than the second quarter of 2010. Average monthly originating sources reached 826 for the second quarter of 2011, up 12% from the first quarter of 2011 and a 42% increase over the second quarter of 2010. The sales force grew to 97 full-time equivalents from 94 in the first quarter of 2011 and 69 in the second quarter of 2010, a 41% increase over the prior year.
Net interest and fee margin at 12.21% was relatively flat for the second quarter of 2011, compared to 12.30% in the first quarter of 2011, and has increased 55 basis points from the second quarter a year ago. Cost of funds improved 28 basis points from the first quarter of 2011 and 51 basis points from the second quarter of 2010. The improvement resulted from the Company's shift in funding mix from term funding to lower cost insured deposits at the Company's subsidiary, Marlin Business Bank.
Credit quality continues to improve. Highlights for the second quarter of 2011 include:
- Leases over 30 days delinquent were 1.31% of Marlin's lease portfolio, which is 36 basis points lower than the first quarter of 2011 and 133 basis points lower than the second quarter of 2010.
- Leases over 60 days delinquent were 0.56% of Marlin's lease portfolio, which is 19 basis points lower than the first quarter of 2011 and the lowest since the second quarter of 2006.
- Net leasing charge-offs were 1.86% of average net investment, which is 44 basis points lower than the first quarter of 2011 and 169 basis points lower than the second quarter of 2010.
As of June 30, 2011, the allowance for credit losses as a percentage of total finance receivables was 1.74%, which represented 278% of total 60+ day delinquencies, compared to an allowance for credit losses of 1.98% as of March 31, 2011, which represented 236% of total 60+ day delinquencies.
The Company maintains strong capital ratios with a consolidated equity to assets ratio of 34.58% and ample liquidity to support growth through our insured depository, Marlin Business Bank. The Company also had $58 million in unused commitments through its revolver facilities.
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.
Conference Call and Webcast
We will host a conference call on Wednesday August 3, 2011 at 9:00 a.m. ET to discuss the Company's second quarter 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 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 | ||
| June 30, | December 31, | |
| 2011 | 2010 | |
| (Dollars in thousands, except per-share data) | ||
| (Unaudited) | ||
| ASSETS | ||
| Cash and due from banks | $558 | $2,557 |
| Interest-earning deposits with banks | 51,346 | 34,469 |
| Total cash and cash equivalents | 51,904 | 37,026 |
| Restricted interest-earning deposits with banks (includes $24.2 million and $44.7 million at June 30, 2011 and December 31, 2010, respectively, related to consolidated variable interest entities ("VIEs")) | 30,910 | 47,107 |
| Securities available for sale (amortized cost of $1.7 million and $1.5 million at June 30, 2011 and December 31, 2010, respectively) | 1,715 | 1,534 |
| Net investment in leases and loans (includes $94.8 million and $154.1 million at June 30, 2011 and December 31, 2010, respectively, related to consolidated VIEs) | 354,525 | 351,569 |
| Property and equipment, net | 2,149 | 2,180 |
| Property tax receivables | 298 | 197 |
| Other assets | 25,747 | 28,449 |
| Total assets | $467,248 | $468,062 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Long-term borrowings (includes $76.5 million and $128.2 million at June 30, 2011 and December 31, 2010, respectively, related to consolidated VIEs) | 143,794 | 178,650 |
| Deposits | 124,522 | 92,919 |
| Other liabilities: | ||
| Sales and property taxes payable | 4,717 | 1,978 |
| Accounts payable and accrued expenses | 7,841 | 8,019 |
| Net deferred income tax liability | 24,803 | 26,493 |
| Total liabilities | 305,677 | 308,059 |
| Stockholders' equity: | ||
| Common Stock, $0.01 par value; 75,000,000 shares authorized; 12,886,841 and 12,864,665 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively | 129 | 129 |
| Preferred Stock, $0.01 par value; 5,000,000 shares authorized; none issued | -- | -- |
| Additional paid-in capital | 86,199 | 86,987 |
| Stock subscription receivable | (2) | (2) |
| Accumulated other comprehensive loss | (60) | (132) |
| Retained earnings | 75,305 | 73,021 |
| Total stockholders' equity | 161,571 | 160,003 |
| Total liabilities and stockholders' equity | $467,248 | $468,062 |
| MARLIN BUSINESS SERVICES CORP. | ||||
| AND SUBSIDIARIES | ||||
| Condensed Consolidated Statements of Operations | ||||
| (Unaudited) | ||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| (Dollars in thousands, except per-share data) | ||||
| Interest income | $10,863 | $11,994 | $21,763 | $24,823 |
| Fee income | 2,926 | 3,501 | 6,058 | 7,317 |
| Interest and fee income | 13,789 | 15,495 | 27,821 | 32,140 |
| Interest expense | 3,063 | 3,955 | 6,355 | 8,614 |
| Net interest and fee income | 10,726 | 11,540 | 21,466 | 23,526 |
| Provision for credit losses | 924 | 2,494 | 2,103 | 5,617 |
| Net interest and fee income after provision for credit losses | 9,802 | 9,046 | 19,363 | 17,909 |
| Other income: | ||||
| Insurance income | 951 | 987 | 1,928 | 2,144 |
| Loss on derivatives | (38) | (25) | (43) | (119) |
| Other income | 434 | 306 | 716 | 596 |
| Other income | 1,347 | 1,268 | 2,601 | 2,621 |
| Other expense: | ||||
| Salaries and benefits | 5,384 | 4,588 | 11,321 | 9,713 |
| General and administrative | 3,145 | 3,073 | 6,616 | 6,118 |
| Financing related costs | 157 | 155 | 346 | 302 |
| Other expense | 8,686 | 7,816 | 18,283 | 16,133 |
| Income before income taxes | 2,463 | 2,498 | 3,681 | 4,397 |
| Income tax expense | 933 | 947 | 1,397 | 1,609 |
| Net income | $1,530 | $1,551 | $2,284 | $2,788 |
| Basic earnings per share | $0.12 | $0.12 | $0.18 | $0.22 |
| Diluted earnings per share | $0.12 | $0.12 | $0.18 | $0.22 |
| Weighted average shares used in computing basic earnings per share | 12,989,681 | 12,832,792 | 12,957,552 | 12,802,579 |
| Weighted average shares used in computing diluted earnings per share | 13,065,206 | 12,904,163 | 13,033,875 | 12,865,857 |
| SUPPLEMENTAL QUARTERLY DATA | ||||||||||
| (Dollars in thousands, except share amounts) | ||||||||||
| (Unaudited) | ||||||||||
| Quarter Ended: | 6/30/2010 | 9/30/2010 | 12/31/2010 | 3/31/2011 | 6/30/2011 | |||||
| New Asset Production: | ||||||||||
| # of Sales Reps | 69 | 84 | 87 | 94 | 97 | |||||
| # of Leases | 3,009 | 3,253 | 3,669 | 3,984 | 4,522 | |||||
| Leased Equipment Volume | $31,729 | $35,759 | $42,906 | $47,024 | $53,889 | |||||
| Approval Percentage | 49% | 49% | 54% | 56% | 60% | |||||
| Average Monthly Sources | 581 | 625 | 725 | 740 | 826 | |||||
| Implicit Yield on New Leases | 14.56% | 14.40% | 13.98% | 13.39% | 13.04% | |||||
| Net Interest and Fee Margin: | ||||||||||
| Interest Income Yield | 12.12% | 12.28% | 12.38% | 12.48% | 12.37% | |||||
| Fee Income Yield | 3.54% | 3.84% | 3.54% | 3.59% | 3.33% | |||||
| Interest and Fee Income Yield | 15.66% | 16.12% | 15.92% | 16.07% | 15.70% | |||||
| Cost of Funds | 4.00% | 3.86% | 3.82% | 3.77% | 3.49% | |||||
| Net Interest and Fee Margin | 11.66% | 12.26% | 12.10% | 12.30% | 12.21% | |||||
| Average Total Finance Receivables | $395,906 | $371,833 | $357,089 | $349,203 | $351,389 | |||||
| Average Net Investment in Leases | $393,248 | $369,973 | $355,863 | $348,276 | $350,662 | |||||
| End of Period Net Investment in Leases | $378,559 | $359,859 | $350,528 | $347,254 | $353,839 | |||||
| End of Period Loans | $2,101 | $1,284 | $1,041 | $765 | $686 | |||||
| Portfolio Asset Quality: | ||||||||||
| Leasing | ||||||||||
| 30+ Days Past Due Delinquencies | 2.64% | 2.35% | 1.97% | 1.67% | 1.31% | |||||
| 30+ Days Past Due Delinquencies | $11,031 | $9,359 | $7,665 | $6,475 | $5,188 | |||||
| 60+ Days Past Due Delinquencies | 1.20% | 1.03% | 0.89% | 0.75% | 0.56% | |||||
| 60+ Days Past Due Delinquencies | $5,015 | $4,099 | $3,460 | $2,891 | $2,220 | |||||
| Total Finance Receivables | ||||||||||
| 30+ Days Past Due Delinquencies | 2.70% | 2.38% | 1.98% | 1.68% | 1.31% | |||||
| 30+ Days Past Due Delinquencies | $11,358 | $9,537 | $7,726 | $6,514 | $5,190 | |||||
| 60+ Days Past Due Delinquencies | 1.24% | 1.05% | 0.90% | 0.75% | 0.56% | |||||
| 60+ Days Past Due Delinquencies | $5,202 | $4,213 | $3,504 | $2,914 | $2,221 | |||||
| Net Charge-offs - Leasing | $3,489 | $2,778 | $2,324 | $2,002 | $1,631 | |||||
| % on Average Net Investment in Leases Annualized | 3.55% | 3.00% | 2.61% | 2.30% | 1.86% | |||||
| Net Charge-offs - Total Finance Receivables | $3,596 | $2,879 | $2,375 | $2,010 | $1,636 | |||||
| % on Average Total Finance Receivables Annualized | 3.63% | 3.10% | 2.66% | 2.30% | 1.86% | |||||
| Allowance for Credit Losses | $9,151 | $8,355 | $7,718 | $6,887 | $6,175 | |||||
| % of 60+ Delinquencies | 175.91% | 198.31% | 220.26% | 236.34% | 278.03% | |||||
| 90+ Day Delinquencies (Non-earning total finance receivables) | $2,819 | $2,398 | $1,996 | $1,407 | $1,197 | |||||
| Balance Sheet: | ||||||||||
| Assets | ||||||||||
| Investment in Leases and Loans | $381,978 | $362,328 | $352,527 | $348,290 | $354,014 | |||||
| Initial Direct Costs and Fees | 7,833 | 7,170 | 6,760 | 6,616 | 6,686 | |||||
| Reserve for Credit Losses | (9,151) | (8,355) | (7,718) | (6,887) | (6,175) | |||||
| Net Investment in Leases and Loans | $380,660 | $361,143 | $351,569 | $348,019 | $354,525 | |||||
| Cash and Cash Equivalents | 35,178 | 44,100 | 37,026 | 40,064 | 51,904 | |||||
| Restricted Cash | 66,546 | 47,384 | 47,107 | 51,212 | 30,910 | |||||
| Other Assets | 12,611 | 13,678 | 32,360 | 34,972 | 29,909 | |||||
| Total Assets | $494,995 | $466,305 | $468,062 | $474,267 | $467,248 | |||||
| Liabilities | ||||||||||
| Total Debt | $218,987 | $191,858 | $178,650 | $178,323 | $143,794 | |||||
| Deposits | 96,852 | 95,358 | 92,919 | 95,731 | 124,522 | |||||
| Other Liabilities | 22,887 | 20,932 | 36,490 | 38,845 | 37,361 | |||||
| Total Liabilities | $338,726 | $308,148 | $308,059 | $312,899 | $305,677 | |||||
| Stockholders' Equity | ||||||||||
| Common Stock | $129 | $129 | $129 | $130 | $129 | |||||
| Paid-in Capital, net | 86,204 | 86,606 | 86,985 | 87,563 | 86,197 | |||||
| Other Comprehensive Income | (205) | (153) | (132) | (100) | (60) | |||||
| Retained Earnings | 70,141 | 71,575 | 73,021 | 73,775 | 75,305 | |||||
| Total Stockholders' Equity | $156,269 | $158,157 | $160,003 | $161,368 | $161,571 | |||||
| Total Liabilities and Stockholders' Equity | $494,995 | $466,305 | $468,062 | $474,267 | $467,248 | |||||
| Capital and Leverage: | ||||||||||
| Equity | $156,269 | $158,157 | $160,003 | $161,368 | $161,571 | |||||
| Debt to Equity | 2.02 | 1.82 | 1.70 | 1.70 | 1.66 | |||||
| Equity to Assets | 31.57% | 33.92% | 34.18% | 34.02% | 34.58% | |||||
| Regulatory Capital Ratios: | ||||||||||
| Tier 1 Leverage Capital | 30.13% | 32.67% | 34.87% | 34.30% | 34.35% | |||||
| Tier 1 Risk-based Capital | 37.48% | 39.90% | 39.58% | 39.88% | 40.10% | |||||
| Total Risk-based Capital | 38.74% | 41.16% | 40.84% | 41.14% | 41.35% | |||||
| Expense Ratios: | ||||||||||
| Salaries and Benefits Expense | $4,588 | $4,947 | $5,307 | $5,937 | $5,384 | |||||
| Salaries and Benefits Expense Annualized % of Avg. Fin. Recbl. | 4.64% | 5.32% | 5.94% | 6.80% | 6.13% | |||||
| Total personnel end of quarter | 211 | 229 | 234 | 243 | 251 | |||||
| General and Administrative Expense | $3,073 | $3,156 | $3,487 | $3,471 | $3,145 | |||||
| General and Administrative Expense Annualized % of Avg. Fin. Recbl. | 3.10% | 3.40% | 3.91% | 3.98% | 3.58% | |||||
| Efficiency Ratio | 59.70% | 63.62% | 72.55% | 78.41% | 70.42% | |||||
| Net Income: | ||||||||||
| Net Income | $1,551 | $1,434 | $1,446 | $754 | $1,530 | |||||
| Annualized Performance Measures: | ||||||||||
| Return on Average Assets | 1.20% | 1.19% | 1.28% | 0.65% | 1.31% | |||||
| Return on Average Stockholders' Equity | 4.09% | 3.73% | 3.72% | 1.88% | 3.78% | |||||
| Per Share Data: | ||||||||||
| Number of Shares - Basic | 12,832,792 | 12,872,123 | 12,866,214 | 12,927,477 | 12,989,681 | |||||
| Basic Earnings per Share | $0.12 | $0.11 | $0.11 | $0.06 | $0.12 | |||||
| Number of Shares - Diluted | 12,904,163 | 12,933,439 | 12,942,524 | 13,005,882 | 13,065,206 | |||||
| Diluted Earnings per Share | $0.12 | $0.11 | $0.11 | $0.06 | $0.12 | |||||
| Net investment in total finance receivables includes net investment in direct financing leases and loans. | ||||||||||
CONTACT: Marlin Business Services Corp.
Lynne C. Wilson, CFO
+1-888-479-9111 x4108