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Marlin Business Services Corp. Reports Fourth Quarter and Year-End 2014 Earnings and a Cash Dividend of $0.125 Per Share

Fourth Quarter and Full Year Highlights:

  • EPS of $1.49 per share up 19% year over year
  • Dividend of $0.47 per share for the full year
  • Return on average assets of 2.64%, and return on average equity of 11.47% for the full year
  • Strong capital position, equity to assets ratio of 22.94%
  • Efficiency ratio for the full year improved to 50.4%
  • Total average finance receivables of $603 million up 12% year over year
  • 211,391 shares repurchased for the full year under the Company's stock repurchase program

MOUNT LAUREL, N.J., Feb. 4, 2015 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (Nasdaq:MRLN) today reported fourth quarter 2014 net income of $4.9 million, or $0.38 per diluted share, compared to $3.4 million, or $0.26 per diluted share, for fourth quarter 2013.

For the year ended December 31, 2014, net income is $19.4 million, or $1.49 per diluted share, compared to $16.2 million and $1.25 per diluted share for the year ended December 31, 2013.

"We had a solid year of performance," said Daniel P. Dyer, Co-founder and Chief Executive Officer. "Core earnings grew 19% and we delivered strong asset quality results. In 2015, our focus is to continue to grow our highly profitable lease business along with focusing on new value creating opportunities aimed to serve small businesses," said Dyer.

Fourth quarter 2014 lease production is $89.5 million based on initial equipment cost, compared to $82.5 million in the third quarter of 2014 and $90.9 million in fourth quarter of 2013. Full year lease origination volume is $334.8 million.

Net interest and fee margin as a percentage of average finance receivables is 12.48% for the fourth quarter ended December 31, 2014, down 23 basis points from the third quarter of 2014 and down 88 basis points from a year ago. The decrease in margin percentage is a result of the competitively low interest rate environment and a slight increase in cost of funds. The Company's cost of funds increased slightly to 86 basis points, compared to 82 basis points for the third quarter of 2014 and 76 basis points for the fourth quarter of 2013.

On a dollar basis, net interest and fee margin increased 6% to $76.7 million for the year ended December 31, 2014 versus $72.5 million for the year ended December 31, 2013.

The allowance for credit losses as a percentage of total finance receivables is 1.36% at December 31, 2014, and represents 237% of total 60+ day delinquencies.

Finance receivables over 30 days delinquent are 0.85% of the Company's lease portfolio as of December 31, 2014. Finance receivables over 60 days delinquent are 0.51% of the Company's lease portfolio as of December 31, 2014, up slightly 4 basis points from 0.47% at September 30, 2014. Fourth quarter net charge-offs are 1.56% of average total finance receivables versus 1.36% for the third quarter ended September 30, 2014 and 1.30% a year ago.

The Company's efficiency ratio for the fourth quarter is 48.9% compared to an efficiency ratio of 48.1% for the quarter ended September 30, 2014 and 56.9% for the quarter ended December 31, 2013. For the full year the efficiency ratio is 50.4% versus 53.6% at December 31, 2013.

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.

In 2014, the Company purchased 211,391 shares of common stock under its stock repurchase program.

The Board of Directors of Marlin Business Services Corp. today declared a $0.125 per share quarterly dividend. The dividend is payable February 26, 2015, to shareholders of record on February 16, 2015. Based on the closing stock price on February 3, 2015, the annualized dividend yield on the Company's common stock is 3.05%.

Conference Call and Webcast

We will host a conference call on Thursday, February 5, 2015 at 9:00 a.m. ET to discuss the Company's fourth quarter 2014 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)
December 31, December 31,
2014 2013
(Dollars in thousands, except per-share data)
ASSETS
Cash and due from banks $ 2,437 $ 3,534
Interest-earning deposits with banks 108,219 82,119
Total cash and cash equivalents 110,656 85,653
Restricted interest-earning deposits with banks 711 1,273
Securities available for sale (amortized cost of $5.8 million and $5.8 million at December 31, 2014 and December 31, 2013, respectively) 5,722 5,387
Net investment in leases and loans 629,507 597,075
Property and equipment, net 2,846 2,265
Property tax receivables 690 377
Other assets 8,317 10,177
Total assets $758,449 $702,207
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $550,119 $503,038
Other liabilities:
Sales and property taxes payable 2,739 4,035
Accounts payable and accrued expenses 14,406 14,220
Net deferred income tax liability 17,221 17,876
Total liabilities 584,485 539,169
Stockholders' equity:
Common Stock, $0.01 par value; 75,000,000 shares authorized; 12,838,449 and 12,994,758 shares issued and outstanding at December 31, 2014 and December 31, 2013, respectively 128 130
Preferred Stock, $0.01 par value; 5,000,000 shares authorized; none issued
Additional paid-in capital 89,130 91,730
Stock subscription receivable (2) (2)
Accumulated other comprehensive loss (17) (257)
Retained earnings 84,725 71,437
Total stockholders' equity 173,964 168,038
Total liabilities and stockholders' equity $758,449 $702,207
MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended December 31, Twelve Months Ended December 31,
2014 2013 2014 2013
(Dollars in thousands, except per-share data)
Interest income $ 16,582 $ 16,610 $ 66,764 $ 63,685
Fee income 3,904 3,657 14,920 13,390
Interest and fee income 20,486 20,267 81,684 77,075
Interest expense 1,318 1,087 4,965 4,545
Net interest and fee income 19,168 19,180 76,719 72,530
Provision for credit losses 2,554 3,257 9,116 9,617
Net interest and fee income after provision for credit losses 16,614 15,923 67,603 62,913
Other income:
Insurance income 1,467 1,352 5,463 4,924
Loss on derivatives (2)
Other income 438 476 1,614 1,676
Other income 1,905 1,828 7,077 6,598
Other expense:
Salaries and benefits 6,666 8,137 26,628 27,680
General and administrative 3,630 3,807 15,606 14,725
Financing related costs 294 297 1,174 1,106
Other expense 10,590 12,241 43,408 43,511
Income before income taxes 7,929 5,510 31,272 26,000
Income tax expense 3,062 2,084 11,922 9,769
Net income $ 4,867 $ 3,426 $ 19,350 $ 16,231
Basic earnings per share $ 0.38 $ 0.26 $ 1.50 $ 1.26
Diluted earnings per share $ 0.38 $ 0.26 $ 1.49 $ 1.25
Cash dividends declared per share $ 0.125 $ 0.11 $ 0.47 $ 2.42
SUPPLEMENTAL QUARTERLY DATA
(Dollars in thousands, except share amounts)
(Unaudited)
Quarter Ended: 12/31/2013 3/31/2014 6/30/2014 9/30/2014 12/31/2014
Net Income:
Net Income $3,426 $4,643 $4,936 $4,904 $4,867
Annualized Performance Measures:
Return on Average Assets 1.98% 2.58% 2.69% 2.67% 2.64%
Return on Average Stockholders' Equity 8.46% 11.31% 11.88% 11.50% 11.21%
EPS Data:
Net Income Allocated to Common Stock $3,294 $4,485 $4,821 $4,762 $4,731
Number of Shares - Basic 12,493,370 12,546,680 12,582,313 12,487,968 12,466,264
Basic Earnings per Share $0.26 $0.36 $0.38 $0.38 $0.38
Number of Shares - Diluted 12,560,018 12,612,997 12,635,520 12,539,717 12,515,904
Diluted Earnings per Share $0.26 $0.36 $0.38 $0.38 $0.38
Cash Dividends Declared per share $0.11 $0.11 $0.11 $0.125 $0.125
New Asset Production:
# of Sales Reps 124 117 117 116 115
# of Leases 6,265 5,385 6,423 6,130 6,290
Leased Equipment Volume $90,923 $73,995 $88,928 $82,459 $89,453
Approval Percentage 67% 65% 67% 65% 66%
Average Monthly Sources 1,166 1,001 1,197 1,125 1,147
Implicit Yield on New Leases 11.65% 11.27% 11.35% 11.06% 10.89%
Net Interest and Fee Margin:
Interest Income Yield 11.57% 11.35% 11.17% 10.98% 10.80%
Fee Income Yield 2.55% 2.50% 2.30% 2.55% 2.54%
Interest and Fee Income Yield 14.12% 13.85% 13.47% 13.53% 13.34%
Cost of Funds 0.76% 0.80% 0.81% 0.82% 0.86%
Net Interest and Fee Margin 13.36% 13.05% 12.66% 12.71% 12.48%
Average Total Finance Receivables $574,132 $589,922 $599,413 $608,290 $614,068
Average Net Investment in Leases $573,334 $588,729 $598,143 $607,055 $612,910
End of Period Net Investment in Leases $596,121 $599,307 $613,856 $617,518 $628,384
Portfolio Asset Quality:
Total Finance Receivables
30+ Days Past Due Delinquencies 1.08% 0.85% 0.79% 0.81% 0.85%
30+ Days Past Due Delinquencies $7,411 $5,815 $5,491 $5,668 $5,997
60+ Days Past Due Delinquencies 0.47% 0.50% 0.51% 0.47% 0.51%
60+ Days Past Due Delinquencies $3,204 $3,404 $3,544 $3,290 $3,602
Net Charge-offs - Total Finance Receivables $1,865 $2,040 $2,558 $2,060 $2,388
% on Average Total Finance Receivables Annualized 1.30% 1.38% 1.71% 1.36% 1.56%
Allowance for Credit Losses $8,467 $8,159 $7,725 $8,371 $8,537
% of 60+ Delinquencies 264.26% 239.69% 217.97% 254.44% 237.01%
90+ Day Delinquencies (Non-earning total finance receivables) $1,665 $1,686 $1,903 $1,903 $1,742
Expense Ratios:
Salaries and Benefits Expense $8,137 $7,186 $6,463 $6,313 $6,666
Salaries and Benefits Expense
Annualized % of Avg. Fin. Recbl. 5.67% 4.87% 4.31% 4.15% 4.34%
Total personnel end of quarter 285 283 279 279 285
General and Administrative Expense $3,807 $4,189 $3,969 $3,818 $3,630
General and Administrative Expense
Annualized % of Avg. Fin. Recbl. 2.65% 2.84% 2.65% 2.51% 2.36%
Efficiency Ratio 56.85% 54.32% 50.38% 48.07% 48.86%
Balance Sheet:
Assets
Investment in Leases and Loans $595,253 $598,590 $612,722 $616,916 $627,922
Initial Direct Costs and Fees 10,289 10,085 10,135 10,146 10,122
Reserve for Credit Losses (8,467) (8,159) (7,725) (8,371) (8,537)
Net Investment in Leases and Loans $597,075 $600,516 $615,132 $618,691 $629,507
Cash and Cash Equivalents 85,653 118,595 98,612 104,211 110,656
Restricted Cash 1,273 1,190 963 945 711
Other Assets 18,206 20,735 21,538 16,338 17,575
Total Assets $702,207 $741,036 $736,245 $740,185 $758,449
Liabilities
Deposits 503,038 538,209 531,930 534,556 550,119
Total Debt $0 $0 $0 $0 $0
Other Liabilities 36,131 36,676 36,013 35,583 34,366
Total Liabilities $539,169 $574,885 $567,943 $570,139 $584,485
Stockholders' Equity
Common Stock $130 $129 $129 $128 $128
Paid-in Capital, net 91,728 91,567 90,115 88,543 89,128
Other Comprehensive Income (Loss) (257) (191) (106) (84) (17)
Retained Earnings 71,437 74,646 78,164 81,459 84,725
Total Stockholders' Equity $163,038 $166,151 $168,302 $170,046 $173,964
Total Liabilities and Stockholders' Equity $702,207 $741,036 $736,245 $740,185 $758,449
Capital and Leverage:
Equity $163,038 $166,151 $168,302 $170,046 $173,964
Debt to Equity 3.09 3.24 3.16 3.14 3.16
Equity to Assets 23.22% 22.42% 22.86% 22.97% 22.94%
Regulatory Capital Ratios:
Tier 1 Leverage Capital 23.46% 22.94% 22.81% 23.06% 23.43%
Tier 1 Risk-based Capital 25.90% 26.07% 25.83% 26.11% 26.14%
Total Risk-based Capital 27.15% 27.32% 27.01% 27.36% 27.39%
Notes:
Net investment in total finance receivables includes net investment in direct financing leases and loans.

CONTACT: Lynne Wilson 888 479 9111 Ext. 4108 lwilson@marlinleasing.com

Source:Marlin Business Services Corp.