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Marlin Reports Net Income Up 27% Y/Y in Q1 2014

May 01, 2014, 07:00 AM
Filed Under: Corporate Earnings

Marlin Business Services Corp. reported first quarter 2014 net income of $4.6 million compared to $3.7 million for first quarter 2013.

"Overall results were favorable with a strong earnings quarter," said Daniel P. Dyer, Co-Founder and Chief Executive Officer. "During the early part of the quarter, the severe winter weather affecting most of the country did have a temporary impact on our business with many of our customers unable to conduct business as usual. This led to reduced sales activity as many businesses were unable to overcome the harsh conditions."

First Quarter Highlights:

  • Net income of $4.6 million, up 27% year-over-year
  • Return on average assets of 2.58% and return on average equity of 11.31% for the first quarter
  • Risk adjusted net interest and fee margin of 11.87% for the quarter
  • $538.2 million of insured deposits, up 28% year-over-year
  • Strong capital position, equity to assets ratio of 22.42%

Net interest and fee margin of 13.05% is down 31 basis points from the fourth quarter of 2013 and is down 45 basis points from the first quarter of 2013. The decrease is due to downward pressure on origination yields due to the increasingly competitive low interest rate environment, as well as channel origination mix.

The Company's cost of funds increased slightly to 80 basis points, compared to 76 basis points for the fourth quarter of 2013, and improved 20 basis points from the first quarter of 2013. The improvement resulted from the Company's use of lower-cost insured deposits issued by the Company's subsidiary, Marlin Business Bank, its primary funding source.

The allowance for credit losses as a percentage of total finance receivables is 1.36% at March 31, 2014, and represents 240% of total 60+ day delinquencies.

Finance receivables over 30 days delinquent were 0.85% of the Company's lease portfolio as of March 31, 2014, 23 basis points lower than the fourth quarter of 2013 and 14 basis points lower than first quarter 2013. Finance receivables over 60 days delinquent were 0.50% of the Company's lease portfolio as of March 31, 2014, up slightly, from 0.47% at December 31, 2013. First quarter net charge-offs were 1.38% of average total finance receivables versus 1.30% for the fourth quarter ended December 31, 2013 and 1.25% a year ago.

The Company's efficiency ratio was 54% for the quarter ended March 31, 2014 compared to 55% a year ago.

The Company's consolidated equity to assets ratio is 22.42%. Our risk based capital ratio is 27.32%, which is well above regulatory requirements.

To read the full earnings press release, click here.

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