×

Marlin Business Services Corp. Announces Hiring of W. Taylor Kamp as Chief Financial Officer, Successful Launch of New Working Capital Loan Offer Tailored to Small Businesses Nationwide, FundingStream.com, Reports Second Quarter 2015 Earnings and Increases

Second Quarter Highlights:

  • Net income of $4.1 million, EPS of $0.32
  • Net income on an adjusted basis of $4.4 million; EPS on an adjusted basis of $0.34
  • Increased quarterly dividend to $0.14 per share from $0.125 per share
  • Net interest and fee margin of 12.05% for the quarter
  • Strong capital position, equity to assets ratio of 23.07%
  • Total average finance receivables of $627 million, up 5% year-over-year
  • Lease and loan production of $93.2 million, up 14% from the quarter ended March 31, 2015
  • 98,394 shares repurchased at an average price of $18.96 per share in the second quarter of 2015 under the Company's stock repurchase program
  • Hired W. Taylor Kamp as Senior Vice President and Chief Financial Officer

MOUNT LAUREL, N.J., Aug. 4, 2015 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (NASDAQ:MRLN) today announced the hiring of W. Taylor Kamp as Senior Vice President and Chief Financial Officer. Mr. Kamp brings more than 25 years of experience to Marlin, including extensive financial and corporate development experience. Mr. Kamp will report directly to Daniel P. Dyer, Co-founder and Chief Executive Officer of Marlin. Mr. Kamp was most recently Managing Director and Head of Corporate Development and Mergers & Acquisitions for CIT Group, Inc. where he managed world-wide activities related to the purchase and sale of businesses and portfolios. From 2000 until 2010, Mr. Kamp served in various managing director and senior corporate development roles within CIT. From 1987 until 2000, Mr. Kamp was with Citigroup Inc. where he served in various senior finance positions, including Chief Financial Officer of Citigroup's international commercial operations (1999 to 2000), consumer real estate services (1997 to 1999) and commercial operations and transport finance (1993 to 1996).

"Taylor is extremely well qualified to serve as our CFO," said Daniel P. Dyer, Co-founder and Chief Executive Officer. "His deep financial and corporate development experience will be a strong complement to our executive team and will be invaluable as we continue to drive our strategic and financial goals," said Dyer.

"I am very excited to join the Marlin executive team and to join a company with such strong growth prospects," said Kamp. "Marlin has a long track record of success in the lending and leasing space and is a respected market leader and innovator in serving their clients and partners."

The Company also today reported second quarter 2015 net income of $4.1 million, or $0.32 per diluted share, compared to $4.9 million and $0.38 per diluted share for second quarter 2014. During the second quarter 2015, the Company recorded one-time charges related to the resignation of its Chief Financial Officer of $0.2 million, net of tax. Second quarter 2015 net income adjusted for one-time charges is $4.4 million, or $0.34 per diluted share.

"We're delighted with the strong new asset growth this quarter," said Daniel P. Dyer, Co-founder and Chief Executive Officer.

"Business development opportunities remain robust and as a result we plan on adding more sales resources. We anticipate the sales force to grow 20% year-over-year and volume growth to accelerate in the second half of 2015," said Ed Siciliano, Executive Vice President and Chief Sales Officer.

"FundingStream.com, our new small business working capital loan portal, is operational and generating considerable customer interest. Going forward, we're excited about the growth prospects and market opportunity for loans and how it syncs with the needs of our small business customer base," said Dyer.

Second quarter 2015 lease and loan production is $93.2 million, up 14% compared to $81.6 million in the first quarter of 2015 and up 5% compared to $88.9 million in second quarter of 2014. Yields on new lease and loan originations were 11.16%, up 31 basis points compared to 10.85% for the first quarter of 2015 and 11.35% for the second quarter of 2014.

Net interest and fee margin as a percentage of average finance receivables is 12.05% for the second quarter 2015, 35 basis points lower from 12.40% in the first quarter of 2015 and 61 basis points lower 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, unchanged from first quarter of 2015 and up 4 basis points from the second quarter of 2014.

The allowance for credit losses as a percentage of total finance receivables is 1.34% at June 30, 2015, and represents 296% of total 60+ day delinquencies.

30+ day delinquencies were 0.70% of total finance receivables as of June 30, 2015, 17 basis points lower than the first quarter of 2015 and 9 basis points lower than the second quarter of 2014. 60+ day delinquencies were 0.40% of total finance receivables as of June 30, 2015, down 17 basis points from 0.57% at March 30, 2015 and down 11 basis points from June 30, 2014. Second quarter net charge-offs were 1.84% of average total finance receivables versus 1.70% for the first quarter ended March 30, 2015 and 1.71% a year ago.

Total salaries, benefits and general and administrative costs ("SG&A") was $11.6 million for the second quarter 2015, up from $11.1 million from the first quarter 2015 and $10.4 million from the second quarter 2014. Included in the second quarter 2015 SG&A expense is $0.3 million of severance expense associated with the resignation of Marlin's Chief Financial Officer and $0.3 million of expense related to investments in the Company's Capital Loan and Franchise Lending initiatives.

The Company's efficiency ratio was 56% for the quarter ended June 30, 2015 compared to 50% a year ago. The Company's efficiency ratio adjusted for severance costs and Capital Loan and Franchise Lending initiatives was 53% for the quarter ended June 30, 2015.

The Company's consolidated equity to assets ratio is 23.07%. Our risk based capital ratio 26.97%.

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 second quarter of 2015, under its stock repurchase program, the Company purchased 98,394 shares of common stock at an average price paid per share of $18.96.

The Board of Directors of Marlin Business Services Corp. today declared a $0.14 per share quarterly dividend. The dividend is payable August 24, 2015, to shareholders of record on August 14, 2015. Based on the closing stock price on August 3, 2015, the annualized dividend yield on the Company's common stock is 3.60%.

Conference Call and Webcast

We will host a conference call on Wednesday, August 5, 2015 at 9:00 a.m. ET to discuss the Company's second 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)
June 30, December 31,
2015 2014
(Dollars in thousands, except per-share data)
ASSETS
Cash and due from banks $5,246 $2,437
Interest-earning deposits with banks 85,494 108,219
Total cash and cash equivalents 90,740 110,656
Time deposits with banks 7,368
Restricted interest-earning deposits with banks 543 711
Securities available for sale (amortized cost of $6.4 million and $5.8 million at June 30, 2015 and December 31, 2014, respectively) 6,258 5,722
Net investment in leases and loans 641,082 629,507
Property and equipment, net 3,993 2,846
Property tax receivables 5,977 690
Other assets 9,011 8,317
Total assets $764,972 $758,449
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $554,190 $550,119
Other liabilities:
Sales and property taxes payable 6,335 2,739
Accounts payable and accrued expenses 12,066 14,406
Net deferred income tax liability 15,891 17,221
Total liabilities 588,482 584,485
Stockholders' equity:
Common Stock, $0.01 par value; 75,000,000 shares authorized; 12,785,066 and 12,838,449 shares issued and outstanding at June 30, 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 86,725 89,130
Stock subscription receivable (2) (2)
Accumulated other comprehensive loss (75) (17)
Retained earnings 89,714 84,725
Total stockholders' equity 176,490 173,964
Total liabilities and stockholders' equity $764,972 $758,449
MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 2014
(Dollars in thousands, except per-share data)
Interest income $16,488 $16,740 $32,975 $33,477
Fee income 3,727 3,450 7,847 7,135
Interest and fee income 20,215 20,190 40,822 40,612
Interest expense 1,336 1,216 2,654 2,397
Net interest and fee income 18,879 18,974 38,168 38,215
Provision for credit losses 2,216 2,124 5,556 3,856
Net interest and fee income after provision for credit losses 16,663 16,850 32,612 34,359
Other income:
Insurance income 1,358 1,338 2,824 2,655
Other income 399 394 764 776
Other income 1,757 1,732 3,588 3,431
Other expense:
Salaries and benefits 7,265 6,463 14,232 13,649
General and administrative 4,330 3,969 8,423 8,158
Financing related costs 42 293 150 583
Other expense 11,637 10,725 22,805 22,390
Income before income taxes 6,783 7,857 13,395 15,400
Income tax expense 2,634 2,921 5,191 5,821
Net income $4,149 $4,936 $8,204 $9,579
Basic earnings per share $0.32 $0.38 $0.64 $0.74
Diluted earnings per share $0.32 $0.38 $0.64 $0.74
Cash dividends declared and paid per share $0.125 $0.11 $0.25 $0.22
MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
Net Income on an Adjusted Basis Reconciliation to GAAP Results
Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 2014
(Dollars in thousands) (Dollars in thousands)
(Unaudited) (Unaudited)
Net income as reported $4,149 $4,936 $8,204 $9,579
Deduct:
One time charge (381) (381)
Tax effect 149 149
One time charge, net of tax (232) (232)
Net Income on an Adjusted Basis $4,381 $4,936 $8,436 $9,579
Diluted earnings per share as reported $0.32 $0.38 $0.64 $0.74
Diluted earnings per share on an adjusted basis $0.34 $0.38 $0.66 $0.74
Return on Average Assets as reported 2.18% 2.69% 2.17% 2.63%
Return on Average Assets on an adjusted basis 2.30% 2.69% 2.23% 2.63%
Return on Average Equity as reported 9.47% 11.88% 9.40% 11.59%
Return on Average Equity on an adjusted basis 10.00% 11.88% 9.67% 11.59%
Efficiency Ratio as reported 56.2% 50.4% 54.3% 52.4%
Efficiency Ratio on an adjusted basis 54.3% 50.4% 53.3% 52.4%
Net Income on an Adjusted Basis is defined as net income excluding one-time charges related to the resignation of the Chief Financial Officer.
SUPPLEMENTAL QUARTERLY DATA
(Dollars in thousands, except share amounts)
(Unaudited)
Quarter Ended: 6/30/2014 9/30/2014 12/31/2014 3/31/2015 6/30/2015
Net Income:
Net Income $4,936 $4,904 $4,867 $4,055 $4,149
Annualized Performance Measures:
Return on Average Assets 2.69% 2.67% 2.64% 2.17% 2.18%
Return on Average Stockholders' Equity 11.88% 11.50% 11.21% 9.33% 9.47%
EPS Data:
Net Income Allocated to Common Stock $4,821 $4,762 $4,731 $3,932 $4,031
Number of Shares - Basic 12,582,313 12,487,968 12,466,264 12,487,241 12,450,283
Basic Earnings per Share $0.38 $0.38 $0.38 $0.31 $0.32
Number of Shares - Diluted 12,635,520 12,539,717 12,515,904 12,523,258 12,464,638
Diluted Earnings per Share $0.38 $0.38 $0.38 $0.31 $0.32
Cash Dividends Declared per share $0.11 $0.125 $0.125 $0.125 $0.125
New Asset Production:
Leased Equipment Volume $88,928 $82,459 $89,362 $80,084 $92,103
Capital Loan Origination Volume $0 $0 $0 $235 $532
New Originations $88,928 $82,459 $89,362 $80,319 $92,635
Syndication Volume $0 $0 $91 $1,272 $606
Total Asset Origination $88,928 $82,459 $89,453 $81,591 $93,241
Implicit Yield on New Originations 11.35% 11.06% 10.89% 10.85% 11.16%
# of Sales Reps 117 116 115 125 127
# of Leases 6,423 6,130 6,290 5,691 6,366
Lease Approval Percentage 67% 65% 66% 63% 64%
Average Monthly Lease Sources 1,197 1,125 1,147 1,015 1,143
Net Interest and Fee Margin:
Interest Income Yield 11.17% 10.98% 10.80% 10.60% 10.52%
Fee Income Yield 2.30% 2.55% 2.54% 2.65% 2.38%
Interest and Fee Income Yield 13.47% 13.53% 13.34% 13.25% 12.90%
Cost of Funds 0.81% 0.82% 0.86% 0.85% 0.85%
Net Interest and Fee Margin 12.66% 12.71% 12.48% 12.40% 12.05%
Average Total Finance Receivables $599,413 $608,290 $614,068 $622,120 $627,079
Average Net Investment in Leases $598,143 $607,055 $612,910 $620,937 $625,347
End of Period Net Investment in Leases $613,856 $617,518 $628,384 $626,617 $639,065
Portfolio Asset Quality:
Total Finance Receivables
30+ Days Past Due Delinquencies 0.79% 0.81% 0.85% 0.87% 0.70%
30+ Days Past Due Delinquencies $5,491 $5,668 $5,997 $6,208 $5,053
60+ Days Past Due Delinquencies 0.51% 0.47% 0.51% 0.57% 0.40%
60+ Days Past Due Delinquencies $3,544 $3,290 $3,602 $4,057 $2,899
Net Charge-offs - Total Finance Receivables $2,558 $2,060 $2,388 $2,646 $2,880
% on Average Total Finance Receivables Annualized 1.71% 1.36% 1.56% 1.70% 1.84%
Allowance for Credit Losses $7,725 $8,371 $8,537 $9,231 $8,567
% of 60+ Delinquencies 217.97% 254.44% 237.01% 227.53% 295.52%
90+ Day Delinquencies (Non-earning total finance
receivables)
$1,903 $1,903 $1,742 $1,975 $1,433
Expense Ratios:
Salaries and Benefits Expense $6,463 $6,313 $6,666 $6,967 $7,265
Salaries and Benefits Expense Annualized % of Avg. Fin. Recbl. 4.31% 4.15% 4.34% 4.48% 4.63%
Total personnel end of quarter 279 279 285 296 302
General and Administrative Expense $3,969 $3,818 $3,630 $4,093 $4,330
General and Administrative Expense Annualized % of Avg. Fin. Recbl. 2.65% 2.51% 2.36% 2.63% 2.76%
Efficiency Ratio 50.38% 48.07% 48.86% 52.37% 56.19%
Balance Sheet:
Assets
Investment in Leases and Loans $612,722 $616,916 $627,922 $627,167 $639,333
Initial Direct Costs and Fees 10,135 10,146 10,122 10,083 10,316
Reserve for Credit Losses (7,725) (8,371) (8,537) (9,231) (8,567)
Net Investment in Leases and Loans $615,132 $618,691 $629,507 $628,019 $641,082
Cash and Cash Equivalents 98,612 104,211 110,656 113,129 90,740
Restricted Cash 963 945 711 1,545 543
Other Assets 21,538 16,338 17,575 26,536 32,607
Total Assets $736,245 $740,185 $758,449 $769,229 $764,972
Liabilities
Deposits 531,930 534,556 550,119 557,835 554,190
Other Liabilities 36,013 35,583 34,366 36,305 34,292
Total Liabilities $567,943 $570,139 $584,485 $594,140 $588,482
Stockholders' Equity
Common Stock $129 $128 $128 $128 $128
Paid-in Capital, net 90,115 88,543 89,128 87,832 86,723
Other Comprehensive Income (Loss) (106) (84) (17) (35) (75)
Retained Earnings 78,164 81,459 84,725 87,164 89,714
Total Stockholders' Equity $168,302 $170,046 $173,964 $175,089 $176,490
Total Liabilities and
Stockholders' Equity $736,245 $740,185 $758,449 $769,229 $764,972
Capital and Leverage:
Equity $168,302 $170,046 $173,964 $175,089 $176,490
Debt to Equity 3.16 3.14 3.16 3.19 3.14
Equity to Assets 22.86% 22.97% 22.94% 22.76% 23.07%
Regulatory Capital Ratios:
Tier 1 Leverage Capital 22.81% 23.06% 23.43% 23.21% 23.07%
Common Equity Tier 1 Risk-based Capital 26.00% 25.72%
Tier 1 Risk-based Capital 25.83% 26.11% 26.14% 26.00% 25.72%
Total Risk-based Capital 27.01% 27.36% 27.39% 27.25% 26.97%
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: Daniel P. Dyer Co-founder & Chief Executive Officer Marlin Business Services Corp. Phone: 1-888-479-9111 Email: ddyer@marlinleasing.com

Source:Marlin Business Services Corp.