UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 29, 2012
Marlin Business Services Corp.
(Exact name of registrant as specified in its charter)
Pennsylvania |
000-50448 |
38-3686388 |
||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
300 Fellowship Road, Mount Laurel, NJ |
08054 |
|||
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (888) 479-9111
________________________________________________________________________________
(Former name or former address, if changed since last report)
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): | ||
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Item 2.02. Results of Operations and Financial Condition.
The Registrant issued a press release on October 29, 2012, announcing its results of operations for the third quarter ended September 30, 2012. A copy of the press release is being furnished as Exhibit 99.1 to this report.
The information in this Current Report, including the Exhibit hereto, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document filed with the Securities and Exchange Commission.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press Release issued by Marlin Business Services Corp. on October 29, 2012.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Marlin Business Services Corp. |
||
| Date: October 29, 2012 |
/s/ DANIEL P. DYER Daniel P. Dyer Chief Executive Officer |
INDEX TO EXHIBITS
99.1 Press Release issued by Marlin Business Services Corp. on October 29, 2012.
EXHIBIT 99.1
Third Quarter Highlights:
MOUNT LAUREL, N.J., Oct. 29, 2012 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (Nasdaq:MRLN) today reported third quarter 2012 net income of $3.4 million, or $0.27 per diluted share. For the nine-month period ended September 30, 2012, net income was $8.1 million, or $0.63 per diluted share.
"The business is well-positioned to grow and address the credit needs of small businesses," says Daniel P. Dyer, Marlin's co-founder and Chief Executive Officer. "Reflecting our favorable earnings, we have declared a quarterly cash dividend of $0.08 per share," says Mr. Dyer.
Third quarter 2012 lease production was $81.6 million based on initial equipment cost, up from $80.4 million for the second quarter of 2012 and 37% higher than the third quarter of 2011.
Net interest and fee margin increased in the third quarter of 2012, to 13.51% from 13.22% in the second quarter of 2012, and has increased 74 basis points from the third quarter a year ago.
The Company's cost of funds improved 39 basis points from the second quarter of 2012 and 168 basis points from the third 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 1.20% as of September 30, 2012, compared to 1.18% as of June 30, 2012. The allowance for credit losses as of September 30, 2012 represents 258% of total 60+ day delinquencies.
Leases over 30 days delinquent were 0.87% of Marlin's lease portfolio as of September 30, 2012, 17 basis points higher than the second quarter of 2012 and 31 basis points lower than a year ago. Leases over 60 days delinquent were 0.40% of Marlin's lease portfolio as of September 30, 2012, up 13 basis points from 0.27% at June 30, 2012 and 7 basis points lower than a year ago.
Third quarter net lease charge-offs were 0.89% of average total finance receivables, representing an improvement of 15 basis points from the second quarter of 2012 and an improvement of 84 basis points from the third quarter of 2011.
Third quarter total operating expenses were $9.6 million, up $0.3 million, or 3%, from the second quarter of 2012. The increase in operating expenses is due primarily to variable costs associated with the increase in volume.
The Company maintains strong capital ratios with a consolidated equity to assets ratio of 29.62%. Our risk based capital ratio is 34.40%, which is well above regulatory requirements.
In conjunction with this release, static pool loss statistics and a vintage delinquency analysis have been updated as supplemental information on the Investor Relations section of the Company's website at www.marlincorp.com.
The Board of Directors of Marlin Business Services Corp. declared an $0.08 per share quarterly dividend. The dividend is payable November 26, 2012, to shareholders of record on November 12, 2012. Based on the closing stock price on October 26, 2012, the annualized dividend yield on the Company's common stock is 1.51%.
Conference Call and Webcast
Due to weather conditions on the East Coast, we have rescheduled our conference call to Wednesday, October 31, 2012 at 3:00 p.m. ET to discuss the Company's third quarter 2012 results. If you wish to participate, please call 877-312-5414 approximately 10 minutes in advance of the call time. The conference ID will be: "Marlin." The call will also be webcast on the Investor Relations page of the Company's website, www.marlincorp.com. An audio replay will also be available on the Investor Relations section of Marlin's website for approximately 45 days.
About Marlin Business Services Corp.
Marlin Business Services Corp. is a nationwide provider of innovative equipment financing solutions for small and mid-size businesses. Since its inception in 1997, Marlin has financed a wide array of commercial equipment and software for a quarter of a million business customers. Marlin's mission is to offer convenient and cost-effective financing products while providing the highest level of customer service. Marlin is publicly traded (Nasdaq:MRLN) and owns and operates a federally regulated commercial bank, Marlin Business Bank. For more information, visit www.marlincorp.com or call toll free at (888) 479-9111.
The Marlin Business Services Corp. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4087
Forward-Looking Statements
This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements (including statements regarding future financial and operating results) involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words "anticipate," "believe," "expect," "estimate," "plan," "may," "intend" and similar expressions are generally intended to identify forward-looking statements. Economic, business, funding, market, competitive, legal and/or regulatory factors, among others, affecting our business are examples of factors that could cause actual results to differ materially from those described in the forward-looking statements. More detailed information about these factors is contained in our filings with the Securities and Exchange Commission, including the sections captioned "Risk Factors" and "Business" in the Company's Form 10-K filed with the Securities and Exchange Commission. We are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.
| MARLIN BUSINESS SERVICES CORP. | ||
| AND SUBSIDIARIES | ||
| Condensed Consolidated Balance Sheets | ||
| (Unaudited) | ||
| September 30, | December 31, | |
| 2012 | 2011 | |
| (Dollars in thousands, except per-share data) | ||
| ASSETS | ||
| Cash and due from banks | $ 897 | $ 1,035 |
| Interest-earning deposits with banks | 69,128 | 41,250 |
| Total cash and cash equivalents | 70,025 | 42,285 |
| Restricted interest-earning deposits with banks (includes $6.3 million and $24.3 million at September 30, 2012 and December 31, 2011, respectively, related to consolidated variable interest entities ("VIEs")) | 10,747 | 28,637 |
| Securities available for sale (amortized cost of $3.2 million and $1.7 million at September 30, 2012 and December 31, 2011, respectively) | 3,346 | 1,780 |
| Net investment in leases and loans (includes $13.9 million and $60.0 million at September 30, 2012 and December 31, 2011, respectively, related to consolidated VIEs) | 472,059 | 387,840 |
| Property and equipment, net | 2,062 | 2,052 |
| Property tax receivables | 43 | 265 |
| Other assets | 20,755 | 23,110 |
| Total assets | $ 579,037 | $ 485,969 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Deposits | $ 341,993 | $ 198,579 |
| Long-term borrowings (includes $5.8 million and $45.1 million at September 30, 2012 and December 31, 2011, respectively, related to consolidated VIEs) | 33,083 | 92,004 |
| Other liabilities: | ||
| Sales and property taxes payable | 4,537 | 2,169 |
| Accounts payable and accrued expenses | 10,764 | 8,791 |
| Net deferred income tax liability | 17,161 | 20,325 |
| Total liabilities | 407,538 | 321,868 |
| Stockholders' equity: | ||
| Common Stock, $0.01 par value; 75,000,000 shares authorized; 12,740,504 and 12,760,266 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively | 127 | 128 |
| Preferred Stock, $0.01 par value; 5,000,000 shares authorized; none issued | — | — |
| Additional paid-in capital | 87,361 | 85,544 |
| Stock subscription receivable | (2) | (2) |
| Accumulated other comprehensive income | 66 | 1 |
| Retained earnings | 83,947 | 78,430 |
| Total stockholders' equity | 171,499 | 164,101 |
| Total liabilities and stockholders' equity | $ 579,037 | $ 485,969 |
| MARLIN BUSINESS SERVICES CORP. | ||||
| AND SUBSIDIARIES | ||||
| Condensed Consolidated Statements of Operations | ||||
| (Unaudited) | ||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
| 2012 | 2011 | 2012 | 2011 | |
| (Dollars in thousands, except per-share data) | ||||
| Interest income | $ 13,688 | $ 11,073 | $ 38,571 | $ 32,836 |
| Fee income | 2,966 | 3,105 | 8,854 | 9,163 |
| Interest and fee income | 16,654 | 14,178 | 47,425 | 41,999 |
| Interest expense | 1,496 | 2,706 | 5,417 | 9,061 |
| Net interest and fee income | 15,158 | 11,472 | 42,008 | 32,938 |
| Provision for credit losses | 1,414 | 837 | 3,546 | 2,940 |
| Net interest and fee income after provision for credit losses | 13,744 | 10,635 | 38,462 | 29,998 |
| Other income: | ||||
| Insurance income | 1,029 | 761 | 3,059 | 2,690 |
| Gain (loss) on derivatives | 1 | (8) | (1) | (52) |
| Other income | 452 | 574 | 1,119 | 1,290 |
| Other income | 1,482 | 1,327 | 4,177 | 3,928 |
| Other expense: | ||||
| Salaries and benefits | 5,988 | 5,559 | 18,683 | 16,880 |
| General and administrative | 3,390 | 3,226 | 10,174 | 9,842 |
| Financing related costs | 250 | 177 | 637 | 523 |
| Other expense | 9,628 | 8,962 | 29,494 | 27,245 |
| Income before income taxes | 5,598 | 3,000 | 13,145 | 6,681 |
| Income tax expense | 2,183 | 1,169 | 5,093 | 2,566 |
| Net income | $ 3,415 | $ 1,831 | $ 8,052 | $ 4,115 |
| Basic earnings per share | $ 0.27 | $ 0.14 | $ 0.63 | $ 0.32 |
| Diluted earnings per share | $ 0.27 | $ 0.14 | $ 0.63 | $ 0.32 |
| Cash dividends declared per share | $ 0.08 | $ — | $ 0.20 | $ — |
| SUPPLEMENTAL QUARTERLY DATA | |||||
| (Dollars in thousands, except share amounts) | |||||
| (Unaudited) | |||||
| Quarter Ended: | 9/30/2011 | 12/31/2011 | 3/31/2012 | 6/30/2012 | 9/30/2012 |
| Net Income: | |||||
| Net Income | $1,831 | $2,060 | $1,649 | $2,988 | $3,415 |
| Annualized Performance Measures: | |||||
| Return on Average Assets | 1.56% | 1.71% | 1.34% | 2.29% | 2.50% |
| Return on Average Stockholders' Equity | 4.53% | 5.04% | 4.02% | 7.17% | 8.08% |
| EPS Data: | |||||
| Net Income Allocated to Common Stock | $1,699 | $1,916 | $1,576 | $2,861 | $3,270 |
| Number of Shares - Basic | 11,880,834 | 11,900,351 | 12,106,865 | 12,172,628 | 12,186,832 |
| Basic Earnings per Share | $0.14 | $0.16 | $0.13 | $0.24 | $0.27 |
| Number of Shares - Diluted | 11,946,231 | 11,949,505 | 12,173,522 | 12,240,154 | 12,280,123 |
| Diluted Earnings per Share | $0.14 | $0.16 | $0.13 | $0.23 | $0.27 |
| Cash Dividends Declared per share | $0.00 | $0.06 | $0.06 | $0.06 | $0.08 |
| New Asset Production: | |||||
| # of Sales Reps | 95 | 93 | 99 | 106 | 112 |
| # of Leases | 4,580 | 5,016 | 5,658 | 6,172 | 6,227 |
| Leased Equipment Volume | $59,674 | $68,427 | $72,362 | $80,442 | $81,623 |
| Approval Percentage | 60% | 64% | 66% | 68% | 67% |
| Average Monthly Sources | 831 | 911 | 1,016 | 1,128 | 1,117 |
| Implicit Yield on New Leases | 12.55% | 12.57% | 12.71% | 13.19% | 12.97% |
| Net Interest and Fee Margin: | |||||
| Interest Income Yield | 12.32% | 12.25% | 12.34% | 12.28% | 12.20% |
| Fee Income Yield | 3.46% | 3.31% | 3.19% | 2.66% | 2.64% |
| Interest and Fee Income Yield | 15.78% | 15.56% | 15.53% | 14.94% | 14.84% |
| Cost of Funds | 3.01% | 2.52% | 2.18% | 1.72% | 1.33% |
| Net Interest and Fee Margin | 12.77% | 13.04% | 13.35% | 13.22% | 13.51% |
| Average Total Finance Receivables | $359,451 | $373,260 | $390,608 | $417,794 | $448,691 |
| Average Net Investment in Leases | $358,753 | $372,676 | $390,150 | $417,342 | $448,211 |
| End of Period Net Investment in Leases | $366,293 | $387,377 | $412,099 | $442,781 | $471,545 |
| Portfolio Asset Quality: | |||||
| Total Finance Receivables | |||||
| 30+ Days Past Due Delinquencies | 1.18% | 1.02% | 0.93% | 0.70% | 0.87% |
| 30+ Days Past Due Delinquencies | $4,844 | $4,452 | $4,362 | $3,560 | $4,713 |
| 60+ Days Past Due Delinquencies | 0.47% | 0.38% | 0.41% | 0.27% | 0.40% |
| 60+ Days Past Due Delinquencies | $1,934 | $1,663 | $1,911 | $1,385 | $2,173 |
| Net Charge-offs - Total Finance Receivables | $1,553 | $1,300 | $1,199 | $1,090 | $1,003 |
| % on Average Total Finance Receivables Annualized | 1.73% | 1.39% | 1.23% | 1.04% | 0.89% |
| Allowance for Credit Losses | $5,459 | $5,353 | $5,256 | $5,197 | $5,608 |
| % of 60+ Delinquencies | 282.26% | 321.89% | 275.04% | 375.23% | 258.08% |
| 90+ Day Delinquencies (Non-earning total finance receivables) | $1,151 | $829 | $842 | $686 | $989 |
| Expense Ratios: | |||||
| Salaries and Benefits Expense | $5,559 | $5,659 | $7,062 | $5,633 | $5,988 |
| Salaries and Benefits Expense | |||||
| Annualized % of Avg. Fin. Recbl. | 6.19% | 6.06% | 7.23% | 5.39% | 5.34% |
| Total personnel end of quarter | 247 | 242 | 246 | 258 | 258 |
| General and Administrative Expense | $3,226 | $3,202 | $3,294 | $3,489 | $3,390 |
| General and Administrative Expense | |||||
| Annualized % of Avg. Fin. Recbl. | 3.59% | 3.43% | 3.37% | 3.34% | 3.02% |
| Efficiency Ratio | 68.60% | 63.78% | 72.17% | 60.03% | 56.36% |
| Balance Sheet: | |||||
| Assets | |||||
| Investment in Leases and Loans | $365,610 | $385,984 | $409,960 | $439,933 | $468,722 |
| Initial Direct Costs and Fees | 6,849 | 7,209 | 7,849 | 8,495 | 8,945 |
| Reserve for Credit Losses | (5,459) | (5,353) | (5,256) | (5,197) | (5,608) |
| Net Investment in Leases and Loans | $367,000 | $387,840 | $412,553 | $443,231 | $472,059 |
| Cash and Cash Equivalents | 48,345 | 42,285 | 39,600 | 49,007 | 70,025 |
| Restricted Cash | 29,419 | 28,637 | 28,487 | 13,175 | 10,747 |
| Other Assets | 28,618 | 27,207 | 32,031 | 27,108 | 26,206 |
| Total Assets | $473,382 | $485,969 | $512,671 | $532,521 | $579,037 |
| Liabilities | |||||
| Deposits | 157,398 | 198,579 | 238,760 | 283,782 | 341,993 |
| Total Debt | $115,089 | $92,004 | $73,692 | $48,046 | $33,083 |
| Other Liabilities | 38,488 | 31,285 | 34,378 | 32,228 | 32,462 |
| Total Liabilities | $310,975 | $321,868 | $346,830 | $364,056 | $407,538 |
| Stockholders' Equity | |||||
| Common Stock | $128 | $128 | $127 | $127 | $127 |
| Paid-in Capital, net | 85,157 | 85,542 | 86,394 | 86,740 | 87,359 |
| Other Comprehensive Income (Loss) | (14) | 1 | 1 | 51 | 66 |
| Retained Earnings | 77,136 | 78,430 | 79,319 | 81,547 | 83,947 |
| Total Stockholders' Equity | $162,407 | $164,101 | $165,841 | $168,465 | $171,499 |
| Total Liabilities and | |||||
| Stockholders' Equity | $473,382 | $485,969 | $512,671 | $532,521 | $579,037 |
| Capital and Leverage: | |||||
| Equity | $162,407 | $164,101 | $165,841 | $168,465 | $171,499 |
| Debt to Equity | 1.68 | 1.77 | 1.88 | 1.97 | 2.19 |
| Equity to Assets | 34.31% | 33.77% | 32.36% | 31.64% | 29.62% |
| Regulatory Capital Ratios: | |||||
| Tier 1 Leverage Capital | 34.46% | 33.74% | 33.36% | 32.04% | 31.22% |
| Tier 1 Risk-based Capital | 39.23% | 37.94% | 36.06% | 34.77% | 33.30% |
| Total Risk-based Capital | 40.48% | 39.19% | 37.20% | 35.85% | 34.40% |
| Notes: | |||||
| Net investment in total finance receivables includes net investment in direct financing leases and loans. | |||||
| Average balances from January 1, 2012 forward were calculated using average daily balances. Average balances before January 1, 2012 were generally calculated using beginning and ending balances for each month to approximate average daily balances. The average balance of total finance receivables for the three-month period ended September 30, 2012 was decreased by approximately $6.0 million, from $454.7 million to $448.7 million, as a result of this calculation change. | |||||
CONTACT: www.marlincorp.com
(888) 479-9111