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Marlin Reports $349.5MM in Lease Originations for 2013, Net Income Rises

February 06, 2014, 06:50 AM
Filed Under: Corporate Earnings

Marlin Business Services Corp. reported fourth quarter 2013 net income of $3.4 million, compared to $3.6 million, for fourth quarter 2012.

Net income on an adjusted basis (excluding the impact from adjustments related to a one-time charge due to the departure of Marlin's Chief Operating Officer) is $4.7 million.

For the year ended December 31, 2013, net income is $16.2 million, compared to $11.7 million for the year ended December 31, 2012. Net income on an adjusted basis is $17.5 million.

"In 2013, we delivered strong asset growth and profit performance and increased returns on capital" said Daniel P. Dyer, Co-founder and Chief Executive Officer. "Our financial strength provides the capacity to grow our business and the flexibility to return capital to our shareholders. Looking ahead, Marlin is well positioned to serve the financing needs of the small and mid-size business market, and we remain focused on our unique value proposition and steadfast commitment to our customers' success."

Fourth quarter 2013 lease production is $90.9 million based on initial equipment cost, compared to $86.1 million in the third quarter of 2013 and $87.8 million in fourth quarter of 2012. Full year lease origination volume is $349.5 million, an 8% increase year-over-year.

Net interest and fee margin of 13.36% is down slightly, 8 basis points from the third quarter of 2013, and is down 18 basis points from the fourth quarter of 2012. The Company's cost of funds remained stable at 76 basis points compared to 75 basis points for the third quarter of 2013 and improved 48 basis points from the fourth quarter of 2012. The improvement resulted from the Company's use of lower-cost insured deposits issued by the Company's subsidiary, Marlin Business Bank, as its primary funding source. For the full year, net interest and fee margin remained the same at 13.42% as compared to the prior year.

The allowance for credit losses as a percentage of total finance receivables is 1.42% at December 31, 2013, and represents 264% of total 60+ day delinquencies.

Finance receivables over 30 days delinquent are 1.08% of the Company's lease portfolio as of December 31, 2013, 25 basis points higher than at the end of the third quarter of 2013. The increase in 30+ delinquencies is a result of timing and seasonality. Finance receivables over 60 days delinquent are 0.47% of the Company's lease portfolio as of December 31, 2013, up slightly, 2 basis points from 0.45% at September 30, 2013. Fourth quarter net charge-offs are 1.30% of average total finance receivables versus 1.55% for the third quarter ended September 30, 2013 and 1.26% a year ago.

To read the full earnings release, click here.

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