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Marlin: Q4 Total Sourced Origination Volume Up 9.3% Y/Y, Direct Origination Volume Up 24.9%

January 31, 2020, 07:28 AM
Filed Under: Corporate Earnings

Marlin Business Services Corp. reported fourth-quarter 2019 net income of $8.4 million, compared with $6.4 million, a year ago.

The company also reported highlights of the quarter including:

  • Total sourced origination volume of $236.5 million, up 9.3 percent year-over-year; direct origination volume of $50.4 million, up 24.9 percent year-over-year
  • Net investment in leases and loans totaled $1.0 billion, relatively flat from a year ago, and total managed assets ended the fourth quarter at $1.3 billion, up 15.7 percent from a year ago
  • Total origination yield of 12.43 percent, down 95 basis points from the prior quarter and up 7 basis points year-over-year.

Commenting on the company’s results, Jeffrey A. Hilzinger, Marlin’s President and CEO, said, “Marlin concluded 2019 with strong performance in the fourth quarter highlighted by record origination volume, disciplined expense management and excellent earnings growth. Total origination volume of $236.5 million increased 9.3 percent year-over-year, driven by increasing customer demand for both our equipment finance and working capital loan products, as well as solid growth in our direct origination channel.  For the full year, total origination volume of $877.9 million grew 18.7 percent year-over-year, more than double the prior year’s growth rate.  We also delivered solid earnings growth despite an increase in provisions for credit losses driven by higher delinquencies and charge-offs.  We continue to closely monitor the portfolio and are making appropriate adjustments to ensure optimal risk-adjusted portfolio performance.”

Hilzinger continued, “While the origination growth we experienced demonstrates the significant demand that exists for our financing products, market conditions during the quarter created both an increasingly competitive pricing environment and a favorable capital markets environment. These market conditions allowed us to offset continued yield compression with exceptionally strong capital markets execution. I also remain extremely pleased with our ability to carefully manage expenses as evidenced by decreases in our adjusted efficiency ratio, which improved on both a sequential quarter and year-over-year basis. As a result, fourth quarter net income expanded to $8.4 million, or $0.69 per diluted share, up 31 percent from a year ago.  For the full year net income of $27.1 million, or $2.20 per diluted share, was up 9 percent from a year ago. Overall, I believe that the fundamentals of our business remain strong as we enter 2020 and that Marlin is well-positioned for another year of profitable growth.”

Full Year 2019 Summary

  • Net income of $27.1 million up 8.6 percent from $25.0 million a year ago; net income on an adjusted basis of $27.2 million up from $25.4 million in the prior year
  • Total sourced origination volume of $877.9 million, up 18.7 percent from a year ago; Direct origination volume of $184.6 million, up 29 percent year-over-year
  • Operating efficiency of 54.18 percent compared to 55.32 percent in the prior year; operating efficiency on an adjusted basis of 49.42 percent compared to 53.16 percent in the prior year
  • ROE of 13.33 percent compared to 13.27 percent in the prior year; ROE on an adjusted basis of 13.36 percent compared with ROE on an adjusted basis of 13.52 percent in the prior year.

See the full release for additional information.

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