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Marlin to Record One-time Estimated Net Tax Benefit of Approximately $10MM

January 08, 2018, 07:15 AM
Filed Under: Industry News

Marlin Business Services announced that as a result of the Tax Cuts and Jobs Act of 2017 enacted December 22, 2017, it will be required to revalue its deferred tax assets and deferred tax liabilities to account for the future impact of lower corporate tax rates on these deferred amounts.

Based on preliminary analysis of the reduction in the federal tax rate from 35% to 21%, Marlin expects to record a one-time net tax benefit of approximately $10 million primarily related to the revaluation of these deferred tax items.  This decrease to income tax expense will be reflected in Marlin’s operating results for the fourth quarter of 2017, including a corresponding increase to the Company’s capital base. Marlin has not completed its process to determine the actual net tax benefits related to the impacted items, and the ultimate amount of the actual net tax benefit will be based upon a number of factors, including final net deferred tax liabilities as of December 31, 2017, the completion of Marlin’s consolidated financial statements as of and for the year ending December 31, 2017 and the completion of Marlin’s 2017 tax returns.

For 2018 and beyond, Marlin’s effective tax rate will be comprised of the new, lower federal tax rate plus a blended state tax rate. In 2018, the Company expects a net reduction of 13 to 14 percentage points in its effective tax rate as a result of the new tax law.

Estimates presented in this press release are preliminary and subject to change. These preliminary estimates of the impact of the Tax Cuts and Jobs Act of 2017 on Marlin should not be viewed as a substitute for full financial statements prepared in accordance with U.S. generally accepted accounting principles, and are not necessarily indicative of the results to be achieved for any future periods. The estimates have been prepared by management and Marlin’s independent auditors have not completed their audit or review of such information.

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