Marlin Business Services Corp. reported second quarter 2012 net income of $3.0 million. For the six month period ended June 30, 2012, net income was $4.6 million.
"We're delighted with the solid profit momentum and strong operating fundamentals of our business," says Daniel P. Dyer, Marlin's co-founder and Chief Executive Officer.
"The continued expansion of our base of customers, combined with the ongoing growth and development of the sales force, are key drivers of our sales momentum," says Ed Siciliano, Marlin’s Chief Sales Officer.
"Asset quality remains strong with lower delinquencies and charge-offs reported for the quarter," says George Pelose, Marlin’s Chief Operating Officer.
Second quarter 2012 lease production was $80.4 million based on initial equipment cost, up 11% from $72.4 million for the first quarter of 2012 and 49% higher than the second quarter of 2011.
The average number of monthly originating sources reached 1,128, up 11% from 1,016 for the first quarter of 2012 and an increase of 37% from the second quarter a year ago.
Net interest and fee margin declined slightly in the second quarter of 2012, to 13.22% from 13.35% in the first quarter of 2012, and has increased 101 basis points from the second quarter a year ago.
Driving the attractive margin is the Company’s cost of funds, which improved 46 basis points from the first quarter of 2012 and 177 basis points from the second quarter of 2011. The improvement resulted from the Company’s continuing shift in funding mix to lower-cost insured deposits issued by the Company’s subsidiary, Marlin Business Bank.
The allowance for credit losses as a percentage of total finance receivables stands at 1.18% as of June 30, 2012, compared to 1.28% as of March 31, 2012. The allowance for credit losses as of June 30, 2012 represents 375% of total 60+ day delinquencies.
Leases over 30 days delinquent were 0.70% of Marlin’s lease portfolio as of June 30, 2012, 24 basis points lower than the first quarter of 2012 and 61 basis points lower than a year ago. Leases over 60 days delinquent were 0.27% of Marlin’s lease portfolio as of June 30, 2012, down 14 basis points from 0.41% at March 31, 2012 and 29 basis points lower than a year ago.
Second quarter net lease charge-offs were 1.04% of average net investment, representing an improvement of 19 basis points from the first quarter of 2012 and an improvement of 82 basis points from the second quarter of 2011.
Second quarter total operating expenses were $9.1 million, down $1.3 million, or 13%, from the first quarter of 2012. The decrease in operating expenses is due primarily to the absence of Marlin Business Services Corp. seasonal expenses recorded in the first quarter related to withholding taxes and restricted stock.
The Company maintains strong capital ratios with a consolidated equity to assets ratio of 31.64%. Our risk based capital ratio is 35.85%, which is well above regulatory requirements.
Read the full Marlin Business Services Corp. press release.