0001171843-16-009482.txt : 20160428 0001171843-16-009482.hdr.sgml : 20160428 20160428163017 ACCESSION NUMBER: 0001171843-16-009482 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20160428 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20160428 DATE AS OF CHANGE: 20160428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARLIN BUSINESS SERVICES CORP CENTRAL INDEX KEY: 0001260968 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 383686388 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-50448 FILM NUMBER: 161600520 BUSINESS ADDRESS: STREET 1: 300 FELLOWSHIP ROAD CITY: MT. LAUREL STATE: NJ ZIP: 08054 BUSINESS PHONE: 8884799111 MAIL ADDRESS: STREET 1: 300 FELLOWSHIP ROAD CITY: MT. LAUREL STATE: NJ ZIP: 08054 FORMER COMPANY: FORMER CONFORMED NAME: MARLIN BUSINESS SERVICES INC DATE OF NAME CHANGE: 20030822 8-K 1 f8k_042816.htm FORM 8-K
 

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): April 28, 2016  

Marlin Business Services Corp.
(Exact Name of Registrant as Specified in Charter)

Pennsylvania000-5044838-3686388
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification Number)

 

300 Fellowship Road, Mount Laurel, NJ 08054
(Address of Principal Executive Offices) (Zip Code)

(888) 479-9111
(Registrant's telephone number, including area code)


(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:

 [   ]  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 April 28, 2016, announcing its results of operations for the first quarter ended March 31, 2016.  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 April 28, 2016 in connection with Item 2.02.

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 Marlin Business Services Corp.
(Registrant)
   
   
Date: April 28, 2016 /s/ Edward R. Dietz        
  Edward R. Dietz
  Senior Vice President & General Counsel
  

EXHIBIT INDEX

99.1        Press Release issued by Marlin Business Services Corp. on April 28, 2016 in connection with Item 2.02.

 

 

 

 EX-99.1 2 exh_991.htm PRESS RELEASE EdgarFiling

EXHIBIT 99.1

Marlin Business Services Corp. Reports First Quarter 2016 Earnings and Declares a Cash Dividend of $0.14 Per Share

First Quarter Financial Summary:

  • Total first quarter originations of $108.4 million, up 35% over Q1 2015 
  • Total loan originations of $7.9 million, more than doubling Q4 2015 loan volume
  • Net income of $3.7 million with EPS of $0.29 per share
  • ROE increased 41 basis points from prior year to 9.74%  
  • Total loan and lease yield of 11.69% increased 30 basis points from prior quarter and 84 basis points from prior year
  • Credit quality remained strong with delinquencies at 85 basis points and 52 basis points for the 30+ day and 60+ day delinquencies, respectively
  • Net investment in leases and loans ended the quarter at $702.1 million, up 11.8% over Q1 2015
  • Strong capital position with equity to assets ratio of 19.03%  

Strategic Business Highlights:

  • Second straight quarter of record origination volume with low credit losses
  • Surpassed $800 million in total assets
  • Record origination volume accelerated progress towards goal of generating additional fee income
  • Continued expansion of working capital loan product (Funding Stream), and Franchise and Transportation initiatives
  • Continued to realign operating and sales functions and invest in talent pool to support strategic goals

MOUNT LAUREL, N.J., April 28, 2016 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (NASDAQ:MRLN) today reported first quarter 2016 net income of $3.7 million, or $0.29 per diluted share, compared to $4.1 million, or $0.31 per diluted share, for first quarter 2015.  Return on equity for the quarter was 9.74%, up from 9.33% a year ago.

Edward Siciliano, Interim CEO and Chief Sales Officer, said, “The record origination growth the Company experienced in the first quarter demonstrates that our strategic investments in talent and new channels are beginning to pay off, and we expect this momentum to continue throughout the year.  I want to thank all Marlin employees for their hard work and dedication in the first quarter.”

Combined lease and loan production for the first quarter ended March 31, 2016 of $108.4 million was the second consecutive quarter of record originations for the Company.  Historically, first quarter origination has been the softest of the year; however, 2016 first quarter lease production of $100.5 million was down only slightly from our record fourth quarter of $103.9 million and up 26% compared to the first quarter of 2015.  The company also experienced solid loan production in the first quarter of $7.9 million, up from $3.7 million in the fourth quarter of 2015. The strong performance in all channels was mainly attributable to a more focused marketing strategy, the deployment of a re-energized and optimized salesforce and strategic investments in the expansion of the Company’s origination platform.    

Net interest and fee margin as a percentage of average finance receivables was 11.58% for the first quarter ended March 31, 2016, up 6 basis points from the fourth quarter of 2015 and down 82 basis points from a year ago. The decrease in margin percentage from a year ago was a result of the roll-off of higher yielding assets, a decline in late fees and a slight increase in the Company’s cost of funds. The Company’s cost of funds increased to 100 basis points, compared to 98 basis points for the fourth quarter of 2015 and 85 basis points for the first quarter of 2015.

On an absolute basis, net interest and fee margin increased to $19.7 million for the quarter ended March 31, 2016, compared to $19.3 million for the quarter ended March 31, 2015.

Allowance for credit losses as a percentage of total finance receivables was 1.31% at March 31, 2016, and represented 223% coverage of total 60+ day delinquencies.  The allowance was 16 basis points lower than the March 31, 2015 allowance percentage of 1.47% and the coverage ratio was about the same as the coverage ratio a year ago.

Credit quality remained strong as finance receivables over 30 days delinquent were 0.85% of the Company’s total finance receivables portfolio as of March 31, 2016, down two basis points from March 31, 2015.  Finance receivables over 60 days delinquent were 0.52% of the Company’s total finance receivables portfolio as of March 31, 2016, down five basis points from 0.57% at March 31, 2015.  First quarter net charge-offs were 1.35% of average total finance receivables versus 1.70% a year ago.

The Company’s efficiency ratio for the first quarter was 58.2% compared to 52.4% for the quarter ended March 31, 2015.  The increase was a direct result of Marlin’s investments in new initiatives over the last year and the ratio is expected to improve as those initiatives gain traction.   

The Company’s consolidated equity to assets ratio and risk based capital ratio were 19.03% and 21.74%, respectively.

The Board of Directors of Marlin Business Services Corp. today declared a $0.14 per share quarterly dividend. The dividend is payable May 19, 2016, to shareholders of record on May 9, 2016. Based on the closing stock price on April 26, 2016, the annualized dividend yield on the Company’s common stock is 3.68%.

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.

Conference Call and Webcast
We will host a conference call on Friday, April 29, 2016 at 9:00 a.m. ET to discuss the Company’s first quarter 2016 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.

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)
 
    March 31, December 31,
    2016 2015
         
    (Dollars in thousands, except per-share data)
         
ASSETS        
Cash and due from banks   $ 3,402  $ 4,946 
Interest-earning deposits with banks     61,691    55,183 
Total cash and cash equivalents     65,093    60,129 
Time deposits with banks     8,613    7,368 
Restricted interest-earning deposits with banks     112    216 
Securities available for sale (amortized cost of $6.4 million and $6.6 million at        
March 31, 2016 and December 31, 2015, respectively)     6,276    6,399 
Net investment in leases and loans     702,126    682,432 
Property and equipment, net     3,687    3,872 
Property tax receivables     5,866    47 
Other assets     9,333    12,521 
Total assets   $ 801,106  $ 772,984 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Deposits   $ 612,721  $ 587,940 
Other liabilities:        
Sales and property taxes payable     7,911    2,686 
Accounts payable and accrued expenses     11,709    15,371 
Net deferred income tax liability     16,289    16,849 
Total liabilities     648,630    622,846 
         
Stockholders’ equity:        
Common Stock, $0.01 par value; 75,000,000 shares authorized;        
12,492,310 and 12,410,899 shares issued and outstanding at March 31, 2016        
and December 31, 2015, respectively     125    124 
Preferred Stock, $0.01 par value; 5,000,000 shares authorized; none issued     —    — 
Additional paid-in capital     82,056    81,703 
Stock subscription receivable     (2)   (2)
Accumulated other comprehensive loss     (49)   (129)
Retained earnings     70,346    68,442 
Total stockholders’ equity     152,476    150,138 
Total liabilities and stockholders’ equity   $ 801,106  $ 772,984 


MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
 
    Three Months Ended March 31,
    2016 2015
         
    (Dollars in thousands, except per-share data)
         
Interest income$17,531 $16,487
Fee income 3,834  4,120
 Interest and fee income 21,365  20,607
Interest expense 1,692  1,318
 Net interest and fee income 19,673  19,289
Provision for credit losses 3,075  3,340
 Net interest and fee income after provision for credit losses 16,598  15,949
      
Other income:     
 Insurance income, net 1,622  1,466
 Other income 455  365
 Other income 2,077  1,831
Other expense:     
 Salaries and benefits 8,200  6,967
 General and administrative 4,465  4,093
 Financing related costs 34  108
 Other expense 12,699  11,168
 Income before income taxes 5,976  6,612
Income tax expense 2,325  2,557
 Net income$3,651 $4,055
      
Basic earnings per share$0.29 $0.31
Diluted earnings per share$0.29 $0.31
      
Cash dividends declared and paid per share$0.140 $0.125


 SUPPLEMENTAL QUARTERLY DATA      
 (Dollars in thousands, except share amounts)     
 (Unaudited)     
       
       
 Quarter Ended:3/31/20156/30/20159/30/201512/31/20153/31/2016
       
 Net Income:     
 Net Income$4,055 $4,149 $4,797 $2,965 $3,651 
       
 Annualized Performance Measures:     
 Return on Average Assets 2.17% 2.18% 2.51% 1.56% 1.88%
 Return on Average Stockholders' Equity 9.33% 9.47% 10.95% 7.96% 9.74%
       
       
 EPS Data:     
 Net Income Allocated to Common Stock$3,932 $4,031 $4,661 $2,891 $3,548 
 Number of Shares - Basic 12,487,241  12,450,283  12,406,767  12,118,789  12,120,934 
 Basic Earnings per Share$0.31 $0.32 $0.38 $0.24 $0.29 
       
 Number of Shares - Diluted 12,523,258  12,464,638  12,413,497  12,128,613  12,126,812 
 Diluted Earnings per Share$0.31 $0.32 $0.38 $0.24 $0.29 
       
 Cash Dividends Declared per share$0.125 $0.125 $2.14 $0.14 $0.14 
       
 New Asset Production:     
 Leased Equipment Volume$80,084 $91,981 $98,237 $103,921 $100,492 
 Loan Origination Volume$235 $654 $2,264 $3,695 $7,901 
 New Originations$80,319 $92,635 $100,501 $107,616 $108,393 
       
 Syndication Volume$1,272 $606 $1,394 $317 $0 
 Total Asset Origination$81,591 $93,241 $101,895 $107,933 $108,393 
       
 Implicit Yield on New Lease Originations 10.78% 11.04% 10.48% 10.66% 10.35%
 Implicit Yield on New Loan Originations 35.61% 27.73% 36.00% 31.99% 28.64%
 Total Implicit Yield on New Originations 10.85% 11.16% 11.06% 11.39% 11.69%
       
 # of Sales Reps 125  127  131  136  136 
 # of Leases 5,691  6,366  6,476  6,625  6,316 
 Lease Approval Percentage 63% 64% 66% 62% 62%
 Average Monthly Lease Sources 1,015  1,143  1,106  1,109  1,075 
       
 Net Interest and Fee Margin:     
 Interest Income Leasing$16,405 $16,347 $16,473 $16,582 $16,785 
 Interest Income Loans$17 $62 $139 $332 $641 
       
 Interest Income Yield 10.60% 10.52% 10.41% 10.35% 10.32%
 Fee Income Yield 2.65% 2.38% 2.44% 2.15% 2.26%
 Interest and Fee Income Yield 13.25% 12.90% 12.85% 12.50% 12.58%
 Cost of Funds 0.85% 0.85% 0.89% 0.98% 1.00%
 Net Interest and Fee Margin 12.40% 12.05% 11.96% 11.52% 11.58%
       
 Average Total Finance Receivables$622,120 $627,079 $641,020 $656,942 $679,252 
 Average Net Investment in Leases$620,937 $625,347 $638,358 $652,158 $670,416 
 Average Loans$1,183 $1,732 $2,662 $4,784 $8,836 
       
 End of Period Net Investment in Leases$626,617 $639,065 $655,458 $676,253 $690,843 
 End of Period Loans$1,402 $2,017 $3,795 $6,179 $11,283 
       
 Portfolio Asset Quality:     
       
 Total Finance Receivables     
 30+ Days Past Due Delinquencies 0.87% 0.70% 0.75% 0.73% 0.85%
 30+ Days Past Due Delinquencies$6,208 $5,053 $5,562 $5,618 $6,698 
       
 60+ Days Past Due Delinquencies 0.57% 0.40% 0.43% 0.41% 0.52%
 60+ Days Past Due Delinquencies$4,057 $2,899 $3,186 $3,163 $4,114 
       
 Net Charge-offs - Total Finance Receivables$2,646 $2,880 $1,965 $2,628 $2,297 
 % on Average Total Finance Receivables     
   Annualized 1.70% 1.84% 1.23% 1.60% 1.35%
       
 Net Charge-offs - Leasing$2,646 $2,880 $1,954 $2,628 $2,222 
 % on Average Net Investment in Leases     
   Annualized 1.71% 1.84% 1.22% 1.61% 1.33%
       
 Net Charge-offs - Loans$0 $0 $11 $0 $75 
 % of Average Loans     
   Annualized n/a  n/a  1.65% n/a  3.40%
       
 Allowance for Credit Losses$9,231 $8,567 $8,588 $8,413 $9,191 
 % of Total Finance Receivables 1.47% 1.34% 1.31% 1.24% 1.31%
 % of 60+ Delinquencies 227.53% 295.52% 269.55% 265.98% 223.41%
       
 90+ Day Delinquencies (Non-earning total finance receivables)$1,975 $1,433 $1,684 $1,677 $2,352 
       
 Expense Ratios:     
 Salaries and Benefits Expense$6,967 $7,265 $7,058 $9,884 $8,200 
 Salaries and Benefits Expense     
   Annualized % of Avg. Fin. Recbl. 4.48% 4.63% 4.40% 6.02% 4.83%
       
 Total personnel end of quarter 296  302  307  314  309 
       
 General and Administrative Expense$4,093 $4,330 $4,357 $4,671 $4,465 
 General and Administrative Expense     
   Annualized % of Avg. Fin. Recbl. 2.63% 2.76% 2.72% 2.84% 2.63%
       
 Efficiency Ratio 52.37% 56.19% 53.81% 68.99% 58.23%
       
 Balance Sheet:     
       
 Assets     
 Investment in Leases and Loans$627,167 $639,333 $657,143 $679,737 $699,672 
 Initial Direct Costs and Fees 10,083  10,316  10,697  11,108  11,645 
 Reserve for Credit Losses (9,231) (8,567) (8,588) (8,413) (9,191)
 Net Investment in Leases and Loans$628,019 $641,082 $659,252 $682,432 $702,126 
 Cash and Cash Equivalents 113,129  90,740  105,218  60,129  65,093 
 Restricted Cash 1,545  543  389  216  112 
 Other Assets 26,536  32,607  25,595  30,207  33,775 
 Total Assets$769,229 $764,972 $790,454 $772,984 $801,106 
       
 Liabilities     
 Deposits   557,835    554,190    579,625    587,940    612,721 
 Other Liabilities 36,305  34,292  59,515  34,906  35,909 
 Total Liabilities$594,140 $588,482 $639,140 $622,846 $648,630 
       
 Stockholders' Equity     
 Common Stock$128 $128 $126 $124 $125 
 Paid-in Capital, net 87,832  86,723  84,002  81,701  82,054 
 Other Comprehensive Income (Loss) (35) (75) (27) (129) (49)
 Retained Earnings 87,164  89,714  67,213  68,442  70,346 
 Total Stockholders' Equity$175,089 $176,490 $151,314 $150,138 $152,476 
       
 Total Liabilities and     
 Stockholders' Equity$769,229 $764,972 $790,454 $772,984 $801,106 
       
 Capital and Leverage:     
 Equity$175,089 $176,490 $151,314 $150,138 $152,476 
 Debt to Equity 3.19  3.14  3.83  3.92  4.02 
 Equity to Assets 22.76% 23.07% 19.14% 19.42% 19.03%
       
 Regulatory Capital Ratios:     
 Tier 1 Leverage Capital 23.21% 23.07% 19.72% 19.63% 19.39%
 Common Equity Tier 1 Risk-based Capital 26.00% 25.72% 21.54% 20.86% 20.51%
 Tier 1 Risk-based Capital 26.00% 25.72% 21.54% 20.86% 20.51%
 Total Risk-based Capital 27.25% 26.97% 22.76% 22.02% 21.74%
       
 Notes:     
 Net investment in total finance receivables includes net investment in direct financing leases and loans. 


 

Contact Information:
Investor Relations Dept.
(877) 864-MRLN (6756)
investorrelations@marlincorp.com