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Marlin Business Services Corp. Reports First Quarter 2015 Earnings and a Cash Dividend of $0.125 Per Share

First Quarter Highlights:

  • Net income of $4.1 million, EPS of $0.31 per share
  • Dividend of $0.125 per share
  • Risk adjusted net interest and fee margin of 10.25% for the quarter
  • Strong capital position, equity to assets ratio of 22.76%
  • Total average finance receivables of $622 million, up 5% year-over-year
  • 112,129 shares repurchased in the first quarter of 2015 under the Company's stock repurchase program
  • Launched Funding Stream capital loan product

MOUNT LAUREL, N.J., April 30, 2015 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (Nasdaq:MRLN) today reported first quarter 2015 net income of $4.1 million, or $0.31 per diluted share, compared to $4.6 million and $0.36 per diluted share for first quarter 2014.

"Origination activity for the quarter is higher year over year on stronger dealer demand," said Daniel P. Dyer, Co-founder and Chief Executive Officer. "The growth of our sales force this quarter is part of an active campaign to invest resources in the core business and our new initiatives. We are also excited about our recently announced small business working capital loan product and its long term growth potential," said Dyer.

First quarter 2015 lease and loan production is $81.6 million, compared to $89.5 million in the fourth quarter of 2014 and $74.0 million in first quarter of 2014.

Net interest and fee margin as a percentage of average finance receivables is 12.40% for the first quarter ended March 31, 2015, down slightly from 12.48% in the fourth quarter of 2014 and down 65 basis points from a year ago. The year-over-year 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 was 85 basis points, compared to 86 basis points for the fourth quarter of 2014 and 80 basis points for the first quarter of 2014.

The allowance for credit losses as a percentage of total finance receivables is 1.47% at March 31, 2015, and represents 228% of total 60+ day delinquencies.

30+ day delinquencies were 0.87% of total finance receivables as of March 31, 2015, 2 basis points higher than the fourth quarter of 2014 and the first quarter of 2014. 60+ day delinquencies were 0.57% of total finance receivables as of March 31, 2015, up slightly, from 0.51% at December 31, 2014. First quarter net charge-offs were 1.70% of average total finance receivables versus 1.56% for the fourth quarter ended December 31, 2014 and 1.38% a year ago.

The Company's efficiency ratio was 52% for the quarter ended March 31, 2015 compared to 54% a year ago.

The Company's consolidated equity to assets ratio is 22.76%. Our risk based capital ratio is 27.25%.

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.marlinfinance.com.

In the first quarter of 2015, the Company purchased 112,129 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 May 21, 2015, to shareholders of record on May 11, 2015. Based on the closing stock price on April 29, 2015, the annualized dividend yield on the Company's common stock is 2.49%.

On March 16, 2015, the Company announced the launch of Funding Stream, a new, flexible loan program of Marlin Business Bank, our wholly owned, federally regulated commercial bank. Funding Stream is tailored to the small business market to provide customers a convenient, hassle-free alternative to traditional lenders and access to up to $100,000 of capital to help grow their businesses.

Conference Call and Webcast

We will host a conference call on Friday, May 1, 2015 at 9:00 a.m. ET to discuss the Company's first quarter 2015 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.marlinfinance.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 commercial lending solutions for small and mid-size businesses. Through its wholly-owned operating subsidiary, Marlin Business Bank, Marlin provides innovative commercial financing programs. Our equipment financing and loan products are offered directly to businesses, and through third party vendor programs, which includes manufacturers, distributors, independent dealers and brokers. Since its inception in 1997, Marlin has extended credit to over a quarter of a million business customers. Our mission is to offer convenient financing products while providing the highest level of personalized customer service. Marlin is publicly traded (Nasdaq:MRLN). For more information about Marlin, 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,
2015 2014
(Dollars in thousands, except per-share data)
ASSETS
Cash and due from banks $ 4,534 $ 2,437
Interest-earning deposits with banks 108,595 108,219
Total cash and cash equivalents 113,129 110,656
Time deposits with banks 3,135
Restricted interest-earning deposits with banks 1,545 711
Securities available for sale (amortized cost of $5.6 million and $5.8 million at March 31, 2015 and December 31, 2014, respectively) 5,554 5,722
Net investment in leases and loans 628,019 629,507
Property and equipment, net 3,516 2,846
Property tax receivables 6,212 690
Other assets 8,119 8,317
Total assets $ 769,229 $ 758,449
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 557,835 $ 550,119
Other liabilities:
Sales and property taxes payable 7,052 2,739
Accounts payable and accrued expenses 12,359 14,406
Net deferred income tax liability 16,894 17,221
Total liabilities 594,140 584,485
Stockholders' equity:
Common Stock, $0.01 par value; 75,000,000 shares authorized; 12,847,888 and 12,838,449 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively 128 128
Preferred Stock, $0.01 par value; 5,000,000 shares authorized; none issued
Additional paid-in capital 87,834 89,130
Stock subscription receivable (2) (2)
Accumulated other comprehensive loss (35) (17)
Retained earnings 87,164 84,725
Total stockholders' equity 175,089 173,964
Total liabilities and stockholders' equity $ 769,229 $ 758,449
MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended March 31,
2015 2014
(Dollars in thousands, except per-share data)
Interest income $ 16,487 $ 16,737
Fee income 4,120 3,685
Interest and fee income 20,607 20,422
Interest expense 1,318 1,181
Net interest and fee income 19,289 19,241
Provision for credit losses 3,340 1,732
Net interest and fee income after provision for credit losses 15,949 17,509
Other income:
Insurance income, net 1,466 1,317
Other income 365 382
Other income 1,831 1,699
Other expense:
Salaries and benefits 6,967 7,186
General and administrative 4,093 4,189
Financing related costs 108 290
Other expense 11,168 11,665
Income before income taxes 6,612 7,543
Income tax expense 2,557 2,900
Net income $ 4,055 $ 4,643
Basic earnings per share $ 0.31 $ 0.36
Diluted earnings per share $ 0.31 $ 0.36
Cash dividends declared and paid per share $ 0.125 $ 0.11
SUPPLEMENTAL QUARTERLY DATA
(Dollars in thousands, except share amounts)
(Unaudited)
Quarter Ended: 3/31/2014 6/30/2014 9/30/2014 12/31/2014 3/31/2015
Net Income:
Net Income $4,643 $4,936 $4,904 $4,867 $4,055
Annualized Performance Measures:
Return on Average Assets 2.58% 2.69% 2.67% 2.64% 2.17%
Return on Average Stockholders' Equity 11.31% 11.88% 11.50% 11.21% 9.33%
EPS Data:
Net Income Allocated to Common Stock $4,485 $4,821 $4,762 $4,731 $3,932
Number of Shares - Basic 12,546,680 12,582,313 12,487,968 12,466,264 12,487,241
Basic Earnings per Share $0.36 $0.38 $0.38 $0.38 $0.31
Number of Shares - Diluted 12,612,997 12,635,520 12,539,717 12,515,904 12,523,258
Diluted Earnings per Share $0.36 $0.38 $0.38 $0.38 $0.31
Cash Dividends Declared per share $0.11 $0.11 $0.125 $0.125 $0.125
New Asset Production:
Leased Equipment Volume $73,995 $88,928 $82,459 $89,362 $80,084
Capital Loan Origination Volume $0 $0 $0 $0 $235
Subtotal $73,995 $88,928 $82,459 $89,362 $80,319
Syndication Volume $0 $0 $0 $91 $1,272
Total Asset Origination $73,995 $88,928 $82,459 $89,453 $81,591
Implicit Yield on New Originations 11.27% 11.35% 11.06% 10.89% 10.79%
# of Sales Reps 117 117 116 115 125
# of Leases 5,385 6,423 6,130 6,290 5,691
Lease Approval Percentage 65% 67% 65% 66% 63%
Average Monthly Lease Sources 1,001 1,197 1,125 1,147 1,015
Net Interest and Fee Margin:
Interest Income Yield 11.35% 11.17% 10.98% 10.80% 10.60%
Fee Income Yield 2.50% 2.30% 2.55% 2.54% 2.65%
Interest and Fee Income Yield 13.85% 13.47% 13.53% 13.34% 13.25%
Cost of Funds 0.80% 0.81% 0.82% 0.86% 0.85%
Net Interest and Fee Margin 13.05% 12.66% 12.71% 12.48% 12.40%
Average Total Finance Receivables $589,922 $599,413 $608,290 $614,068 $622,120
Average Net Investment in Leases $588,729 $598,143 $607,055 $612,910 $620,937
End of Period Net Investment in Leases $599,307 $613,856 $617,518 $628,384 $626,617
Portfolio Asset Quality:
Total Finance Receivables
30+ Days Past Due Delinquencies 0.85% 0.79% 0.81% 0.85% 0.87%
30+ Days Past Due Delinquencies $5,815 $5,491 $5,668 $5,997 $6,208
60+ Days Past Due Delinquencies 0.50% 0.51% 0.47% 0.51% 0.57%
60+ Days Past Due Delinquencies $3,404 $3,544 $3,290 $3,602 $4,057
Net Charge-offs - Total Finance Receivables $2,040 $2,558 $2,060 $2,388 $2,646
% on Average Total Finance Receivables Annualized 1.38% 1.71% 1.36% 1.56% 1.70%
Allowance for Credit Losses $8,159 $7,725 $8,371 $8,537 $9,231
% of 60+ Delinquencies 239.69% 217.97% 254.44% 237.01% 227.53%
90+ Day Delinquencies (Non-earning total finance
receivables)
$1,686 $1,903 $1,903 $1,742 $1,975
Expense Ratios:
Salaries and Benefits Expense $7,186 $6,463 $6,313 $6,666 $6,967
Salaries and Benefits Expense
Annualized % of Avg. Fin. Recbl. 4.87% 4.31% 4.15% 4.34% 4.48%
Total personnel end of quarter 283 279 279 285 296
General and Administrative Expense $4,189 $3,969 $3,818 $3,630 $4,093
General and Administrative Expense
Annualized % of Avg. Fin. Recbl. 2.84% 2.65% 2.51% 2.36% 2.63%
Efficiency Ratio 54.32% 50.38% 48.07% 48.86% 52.37%
Balance Sheet:
Assets
Investment in Leases and Loans $598,590 $612,722 $616,916 $627,922 $627,167
Initial Direct Costs and Fees 10,085 10,135 10,146 10,122 10,083
Reserve for Credit Losses (8,159) (7,725) (8,371) (8,537) (9,231)
Net Investment in Leases and Loans $600,516 $615,132 $618,691 $629,507 $628,019
Cash and Cash Equivalents 118,595 98,612 104,211 110,656 113,129
Restricted Cash 1,190 963 945 711 1,545
Other Assets 20,735 21,538 16,338 17,575 26,536
Total Assets $741,036 $736,245 $740,185 $758,449 $769,229
Liabilities
Deposits 538,209 531,930 534,556 550,119 557,835
Other Liabilities 36,676 36,013 35,583 34,366 36,305
Total Liabilities $574,885 $567,943 $570,139 $584,485 $594,140
Stockholders' Equity
Common Stock $129 $129 $128 $128 $128
Paid-in Capital, net 91,567 90,115 88,543 89,128 87,832
Other Comprehensive Income (Loss) (191) (106) (84) (17) (35)
Retained Earnings 74,646 78,164 81,459 84,725 87,164
Total Stockholders' Equity $166,151 $168,302 $170,046 $173,964 $175,089
Total Liabilities and
Stockholders' Equity $741,036 $736,245 $740,185 $758,449 $769,229
Capital and Leverage:
Equity $166,151 $168,302 $170,046 $173,964 $175,089
Debt to Equity 3.24 3.16 3.14 3.16 3.19
Equity to Assets 22.42% 22.86% 22.97% 22.94% 22.76%
Regulatory Capital Ratios:
Tier 1 Leverage Capital 22.94% 22.81% 23.06% 23.43% 23.21%
Common Equity Tier 1 Risk-based Capital 26.00%
Tier 1 Risk-based Capital 26.07% 25.83% 26.11% 26.14% 26.00%
Total Risk-based Capital 27.32% 27.01% 27.36% 27.39% 27.25%
Notes:
Net investment in total finance receivables includes net investment in direct financing leases and loans.
Common Equity Tier 1 Risk-based Capital became effective on January 1, 2015.

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

Source:Marlin Business Services Corp.