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Marlin Reports Fourth Quarter and Full Year 2019 Earnings and Declares a Cash Dividend of $0.14 Per Share

Fourth Quarter Summary:

  • Net income of $8.4 million, or $0.69 per diluted share, up 31.0% from $6.4 million, or $0.51 per diluted share a year ago and up from $7.4 million, or $0.60 per diluted share last quarter
  • Total sourced origination volume of $236.5 million, up 9.3% year-over-year; Direct origination volume of $50.4 million, up 24.9% year-over-year
  • Net Investment in Leases and Loans totaled $1.0 billion, relatively flat from a year ago, and total managed assets ended the fourth quarter at $1.3 billion, up 15.7% from a year ago
  • Total origination yield of 12.43%, down 95 basis points from the prior quarter and up 7 basis points year-over-year

Full Year 2019 Summary:

  • Net income of $27.1 million, or $2.20 per diluted share, up 8.6% from $25.0 million, or $2.00 per diluted share a year ago; Net income on an adjusted basis* of $27.2 million, or $2.20 per share, up from $25.4 million, or $2.04 per diluted share in the prior year
  • Total sourced origination volume of $877.9 million, up 18.7% from a year ago; Direct origination volume of $184.6 million, up 29% year-over-year
  • Operating efficiency of 54.18% compared to 55.32% in the prior year; operating efficiency on an adjusted basis* of 49.42% compared to 53.16% in the prior year
  • ROE of 13.33% compared to 13.27% in the prior year; ROE on an adjusted basis* of 13.36% compared with ROE on an adjusted basis* of 13.52% in the prior year
  • In addition to quarterly dividends, returned capital through share repurchases totaling $6.8 million, or 294,686 shares

MOUNT LAUREL, N.J., Jan. 30, 2020 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (MRLN), a nationwide provider of capital solutions to small businesses (“Marlin” or the “Company”), today reported fourth quarter 2019 net income of $8.4 million, or $0.69 per diluted share, compared with $7.4 million, or $0.60 per diluted share in the prior quarter, and $6.4 million, or $0.51 per share a year ago.

Commenting on the Company’s results, Jeffrey A. Hilzinger, Marlin’s President and CEO, said, “Marlin concluded 2019 with strong performance in the fourth quarter highlighted by record origination volume, disciplined expense management and excellent earnings growth. Total origination volume of $236.5 million increased 9.3% year-over-year, driven by increasing customer demand for both our equipment finance and working capital loan products, as well as solid growth in our direct origination channel.  For the full year, total origination volume of $877.9 million grew 18.7% year-over-year, more than double the prior year’s growth rate.  We also delivered solid earnings growth despite an increase in provisions for credit losses driven by higher delinquencies and charge-offs.  We continue to closely monitor the portfolio and are making appropriate adjustments to ensure optimal risk-adjusted portfolio performance.”

Mr. Hilzinger continued, “While the origination growth we experienced demonstrates the significant demand that exists for our financing products, market conditions during the quarter created both an increasingly competitive pricing environment and a favorable capital markets environment. These market conditions allowed us to offset continued yield compression with exceptionally strong capital markets execution. I also remain extremely pleased with our ability to carefully manage expenses as evidenced by decreases in our adjusted efficiency ratio, which improved on both a sequential quarter and year-over-year basis. As a result, fourth quarter net income expanded to $8.4 million, or $0.69 per diluted share, up 31% from a year ago.  For the full year net income of $27.1 million, or $2.20 per diluted share, was up 9% from a year ago. Overall, I believe that the fundamentals of our business remain strong as we enter 2020 and that Marlin is well-positioned for another year of profitable growth.”

Results of Operations
Total sourced origination volume for the fourth quarter of $236.5 million was up 9.3% from a year ago. Direct origination volume of $50.4 million in the fourth quarter was up 24.9% from $40.4 million in the fourth quarter of 2018. Indirect origination volume in the fourth quarter of 2019 was $167.7 million, up 5.1% from $159.5 million in the fourth quarter last year. Assets originated for sale in the fourth quarter of $16.3 million compared with $11.9 million in the fourth quarter last year. Referral volume totaled $2.0 million, down from $4.5 million in the fourth quarter last year.

Net interest and fee margin as a percentage of average finance receivables was 9.44% for the fourth quarter, down 11 basis points from the third quarter of 2019 and down 32 basis points from a year ago. The sequential quarter decrease was driven primarily by a decrease in new origination loan and lease yields. The year-over-year decrease in margin percentage was primarily a result of an increase in interest expense resulting from higher deposit rates and lower fee income, partially offset by an increase of seven basis points in new origination loan and lease yield. The Company’s interest expense as a percent of average total finance receivables was 236 basis points in the fourth quarter of 2019 compared with 250 basis points for the third quarter of 2019 and 220 basis points for the fourth quarter of 2018.  The year-over-year increase was due to a higher cost of funds associated with deposits.

On an absolute basis, net interest and fee income was $24.4 million for the fourth quarter of 2019 compared with $23.7 million for the fourth quarter last year.

Non-interest income was $13.5 million for the fourth quarter of 2019, compared with $10.4 million in the prior quarter and $7.1 million in the prior year period. The sequential and year-over-year increase in non-interest income is primarily due to an increase in gains from the sale of assets. Non-interest expense was $16.4 million for the fourth quarter of 2019, compared with $17.0 million in the prior quarter and $16.4 million in the fourth quarter last year.

The Company’s efficiency ratio for the fourth quarter improved to 43.2% from 53.1% in the fourth quarter last year. The Company’s non-GAAP efficiency ratio for the fourth quarter was 40.2% compared with 50.9% in the fourth quarter last year. Marlin’s efficiency ratio has improved primarily due to an increase in non-interest income from capital markets activities coupled with a stable expense base.

Marlin recorded income tax expense of $2.9 million, representing an effective tax rate of 25.5% for the fourth quarter of 2019, compared with an income tax expense of $2.3 million, representing an effective tax rate of 26.0%, for the fourth quarter of 2018.

Portfolio Performance
Allowance for credit losses as a percentage of total finance receivables was 2.15% at December 31, 2019 compared with 1.86% at September 30, 2019 and 1.62% at December 31, 2018.

Finance receivables over 30 days delinquent were 1.41% of the Company’s total finance receivables portfolio as of December 31, 2019, up 13 basis points from September 30, 2019 and up 32 basis points from December 31, 2018. Finance receivables over 60 days delinquent were 0.85% of the Company’s total finance receivables portfolio as of December 31, 2019, up 1 basis point from September 30, 2019 and up 20 basis points from December 31, 2018. Annualized fourth quarter net charge-offs were 3.00% of average total finance receivables versus 1.99% in the third quarter of 2019 and 2.30% a year ago. Included in fourth quarter charge-offs was $0.9 million that was specifically reserved for during the third quarter, thereby eliminating the entire allowance related to the fraudulent activities within a specific dealer’s portfolio.

As of December 31, 2019, the Company’s consolidated equity to assets ratio was 17.80%. This compares to 16.74% and 17.01%, in the prior quarter and year ago quarter, respectively.

Corporate Developments
Marlin’s Board of Directors today declared a $0.14 per share quarterly dividend. The dividend is payable February 20, 2020, to shareholders of record on February 10, 2020. Based on the closing stock price on January 29, 2020, the annualized dividend yield on the Company’s common stock is 2.66%.

Business Outlook
The Company expects earnings per share on an adjusted basis* for the year ending December 31, 2020 to be between $2.17 and $2.27 per share.  The Company’s earnings guidance for the full year ending December 31, 2020 reflects the adoption of Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses.  ASU 2016 – 13 replaces the currently used incurred loss methodology for estimating credit losses with a forward-looking current expected credit losses (“CECL”) methodology effective on January 1, 2020.  We estimate that the adoption of the CECL methodology could unfavorably impact earnings in 2020 by up to $0.25 per share.

The Company’s earnings guidance is based on the following assumptions:

  • Total sourced origination volume growth in 2020 of approximately 20% from 2019 levels, with continued disproportionate growth in the working capital loan product.
  • Portfolio performance does not deteriorate from year-end 2019 experience and delinquencies and net charge-offs remain at the higher end of our expected range.
  • Net interest and fee margin in 2020, as a percentage of average finance receivables, of between 9.25% and 9.75%.

* Non-GAAP Financial Measures: Net income on an adjusted basis, ROE on an adjusted basis and adjusted efficiency ratio are financial measures that are not in accordance with U.S. generally accepted accounting principles (GAAP).  See “Regulation G – Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below for a detailed description and reconciliation of such Non-GAAP financial measures to their most directly comparable GAAP financial measures, in accordance with Regulation G.

Conference Call and Webcast
Marlin will host a conference call on Friday, January 31, 2020 at 9:00 a.m. ET to discuss the Company’s fourth quarter and full year 2019 results. The conference call details are as follows:

Fourth Quarter and Full Year 2019 Financial Results Conference Call

Date: Friday, January 31, 2020
Time: 9:00 a.m. Eastern Time / 6:00 a.m. Pacific Time
Dial-in: 1-877-407-0792 (Domestic)
1-201-689-8263 (International)
Conference ID: 13697822
Webcast: http://public.viavid.com/index.php?id=137519

For those unable to participate during the live broadcast, a replay of the call will also be available from 12:00 p.m. Eastern Time on January 31, 2020 through 11:59 p.m. Eastern Time on February 14, 2020 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13697822.

About Marlin
Marlin is a nationwide provider of capital solutions to small businesses with a mission of helping small businesses fulfill their American dream. Our products and services are offered directly to small businesses and through financing programs with independent equipment dealers and other intermediaries. For more information about Marlin, visit marlincapitalsolutions.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. Such forward-looking statements represent only the company’s current beliefs regarding future events and are not guarantees of performance or results.  All forward-looking statements (including statements regarding expectations of 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,” “could”, “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 under the headings “Forward-Looking Statements” and “Risk Factors” in our periodic reports filed with the United States Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are also available in the “Investors” section of our website. 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.  Investors are cautioned not to place undue reliance on such forward-looking statements.

Regulation G – Non-GAAP Financial Measures
The Company uses certain financial measures which are not calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company defines net income on an adjusted basis as net income excluding after-tax income and expenses that are deemed to be unusual in nature or infrequent in occurrence and are not indicative of the underlying performance of the business for the period presented.  The Company defines diluted earnings per share on an adjusted basis, return on average assets on an adjusted basis and return on average equity on an adjusted basis as the calculation used for the “as reported” number substituting net income as reported with net income on an adjusted basis while using the same denominator in the “as reported” number, where appropriate. The Company defines efficiency ratio on an adjusted basis as the calculation used for the “as reported” ratio adjusting the numerator for any discrete adjustments used to present net income on an adjusted basis as well as the impact of pass-through lease expenses that are required to be presented on a gross basis in the income statement and acquisition related expense, as applicable.  The Company adjusts the denominator in the “as reported” ratio for pass-through lease revenue that is required to be presented on a gross basis in the income statement, as applicable. The Company defines General and administrative annualized percent of average finance receivables, on an adjusted basis, as the calculation used for the “as reported” ratio, adjusting the numerator for acquisition related general and administrative expenses and pass-through lease expenses that are required to be presented on a gross basis in the income statement, as applicable.  The adjusted ratio uses the same denominator as the “as reported” ratio.  The Company defines Non-interest expense divided by average total managed assets, on an adjusted basis, as the calculation used for the “as reported” ratio adjusting the number for any discrete adjustments used to present net income on an adjusted basis as well as the impact of pass-through lease expenses that are required to be presented on a gross basis in the income statement and acquisition related expenses, as applicable.  The adjusted ratio uses the same denominator as the “as reported” ratio.  The Company believes that these non-GAAP measures are useful performance metrics for management, investors and lenders, because it provides a means to evaluate period-to-period comparisons of the Company's financial performance without the effects of certain adjustments in accordance with GAAP that may not necessarily be indicative of current operating performance. 

Non-GAAP financial measures should not be considered as an alternative to GAAP financial measures. They may not be indicative of the historical operating results of the Company nor are they intended to be predictive of potential future results. Investors should not consider non-GAAP financial measures in isolation or as a substitute for performance measures calculated in accordance with GAAP.

Investor Contacts:
Mike Bogansky, Senior Vice President & Chief Financial Officer
856-505-4108

Lasse Glassen, Addo Investor Relations
lglassen@addoir.com
424-238-6249

--Tables to Follow--

                   
MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
                   
          December 31,     December 31,  
          2019     2018  
                   
        (Dollars in thousands, except per-share data)  
                   
ASSETS            
Cash and due from banks $ 4,701   $ 5,088  
Interest-earning deposits with banks   118,395     92,068  
Total cash and cash equivalents   123,096     97,156  
Time deposits with banks   12,927     9,659  
Restricted interest-earning deposits (includes $6.9 and $10.0 million at December 31, 2019, and  December 31, 2018, respectively, related to consolidated VIEs)   6,931     14,045  
Investment securities (amortized cost of $11.1 million and $11.2 million at December 31, 2019 and December 31, 2018, respectively)   11,076     10,956  
Net investment in leases and loans:            
Leases   426,608     489,299  
Loans   601,607     527,541  
Net investment in leases and loans, excluding allowance for credit losses (includes $76.1 million and $150.2 million at December 31, 2019 and December 31, 2018, respectively, related to consolidated VIEs)   1,028,215     1,016,840  
Allowance for credit losses   (21,695)     (16,100 )
Total net investment in leases and loans   1,006,520     1,000,740  
Intangible assets   7,461     7,912  
Goodwill   6,735     7,360  
Operating lease right-of-use assets   8,863      
Property and equipment, net of allowance   7,888     4,317  
Property tax receivables   5,493     5,245  
Other assets   10,453     9,656  
Total assets $ 1,207,443   $ 1,167,046  
             
LIABILITIES AND STOCKHOLDERS’ EQUITY            
Deposits $ 839,132   $ 755,776  
Long-term borrowings related to consolidated VIEs   76,091     150,055  
Operating lease liabilities   9,730      
Other liabilities:            
Sales and property taxes payable   2,678     3,775  
Accounts payable and accrued expenses   34,028     36,369  
Net deferred income tax liability   30,828     22,560  
Total liabilities   992,487     968,535  
             
             
Stockholders’ equity:            
Preferred Stock, $0.01 par value; 5,000,000 shares authorized; none issued        
Common Stock, $0.01 par value; 75,000,000 shares authorized; 12,113,585 and 12,367,724 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively   121     124  
Additional paid-in capital   79,665     83,496  
Accumulated other comprehensive income (loss)   58     (44)  
Retained earnings   135,112     114,935  
Total stockholders’ equity   214,956     198,511  
Total liabilities and stockholders’ equity $ 1,207,443   $ 1,167,046  
                   

 


                               
MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
                       
        Three Months Ended December 31,     Twelve Months Ended December 31,
        2019   2018     2019   2018
                               
        (Dollars in thousands, except per-share data)
                               
Interest income $ 26,747   $ 24,946     $ 107,420   $ 97,025
Fee income   3,787     4,078       15,205     15,843
Interest and fee income   30,534     29,024       122,625     112,868
Interest expense   6,102     5,349       25,033     17,414
Net interest and fee income   24,432     23,675       97,592     95,454
Provision for credit losses   10,255     5,761       28,036     19,522
Net interest and fee income after provision for credit losses   14,177     17,914       69,556     75,932
                         
Non-interest income:                        
Gain on leases and loans sold   8,810     3,505       22,210     8,363
Insurance premiums written and earned   2,258     2,108       8,796     8,087
Other income   2,452     1,512       13,025     4,984
Non-interest income   13,520     7,125       44,031     21,434
Non-interest expense:                        
Salaries and benefits   9,351     9,908       44,168     39,750
General and administrative   7,052     6,450       32,566     24,915
Non-interest expense   16,403     16,358       76,734     64,665
Income before income taxes   11,294     8,681       36,853     32,701
Income tax expense   2,880     2,259       9,737     7,721
Net income $ 8,414   $ 6,422     $ 27,116   $ 24,980
                         
Basic earnings per share $ 0.69   $ 0.52     $ 2.21   $ 2.01
Diluted earnings per share $ 0.69   $ 0.51     $ 2.20   $ 2.00
                               

 


                       
MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Measures

                       
  Three Months Ended December 31,   Twelve Months Ended December 31,
    2019       2018       2019       2018  
       
  (Dollars in thousands, except per-share data)   (Dollars in thousands, except per-share data)
                       
Net income as reported $ 8,414     $ 6,422     $ 27,116     $ 24,980  
Deduct:                      
Reversal of charges in connection with executive separation   -       -       218       -  
Charges in connection with executive separation   -       -             (631 )
Charge in connection with workforce reorganization   -       -       (311 )     -  
Tax effect   -       -       24       162  
Total adjustments, net of tax   -       -       (69 )     (469 )
Net Income on an adjusted basis $ 8,414     $ 6,422     $ 27,185     $ 25,449  
                       
Diluted earnings per share as reported 0.69     0.51     2.20     2.00  
Diluted earnings per share on an adjusted basis 0.69     0.51     2.20     2.04  
Return on Average Assets as reported   2.74 %     2.28 %     2.18 %     2.29 %
Return on Average Assets on an adjusted basis   2.74 %     2.28 %     2.19 %     2.33 %
Return on Average Equity as reported   16.04 %     13.16 %     13.33 %     13.27 %
Return on Average Equity on an adjusted basis   16.04 %     13.16 %     13.36 %     13.52 %
                       
Efficiency Ratio numerator as reported $ 16,403     $ 16,358     $ 76,734     $ 64,665  
Adjustments to Numerator:                      
Expense adjustments as seen in Net Income reconciliation above   -       -       (93 )     (631 )
Acquisition related expenses   (1,050 )     (680 )     (3,193 )     (1,900 )
Pass-through expenses   (374 )     -       (6,624 )     -  
Efficiency ratio numerator on an adjusted basis $ 14,979     $ 15,678     $ 66,824     $ 62,134  
Adjustments to Denominator:                      
Efficiency Ratio denominator as reported $ 37,952     $ 30,800     $ 141,623     $ 116,888  
Pass-through revenue   (721 )     -       (6,401 )     -  
Efficiency Ratio denominator on an adjusted basis $ 37,231     $ 30,800     $ 135,222     $ 116,888  
                       
Efficiency Ratio as reported   43.22 %     53.11 %     54.18 %     55.32 %
Efficiency Ratio on an adjusted basis   40.23 %     50.90 %     49.42 %     53.16 %
                       
Non-interest Expense / Average total managed assets numerator, as reported $ 16,403     $ 16,358     $ 76,734     $ 64,665  
Adjustments to Numerator:                      
Expense adjustments as seen in Net Income reconciliation above   -       -       (93 )     (631 )
Acquisition related expenses   (1,050 )     (680 )     (3,193 )     (1,900 )
Pass-through expenses   (374 )     -       (6,624 )     -  
Non-interest Expense / Average total managed assets numerator, on an adjusted basis $ 14,979     $ 15,678     $ 66,824     $ 62,134  
                       
Non-interest Expense / Average total managed assets as reported   4.99 %     5.86 %     6.14 %     6.14 %
Non-interest Expense / Average total managed assets on an adjusted basis   4.56 %     5.61 %     5.35 %     5.90 %
                       
General and administrative expense Annualized % of Average                      
Finance Receivables numerator as reported $ 7,052     $ 6,450     $ 32,566     $ 24,915  
Adjustments to Numerator:                      
Expense adjustments as seen in Net Income reconciliation above   -       -       -       (136 )
Acquisition related expenses   (480 )     (219 )     (1,181 )     (378 )
Pass-through expenses   (374 )     -       (6,624 )     -  
General and administrative expense Annualized % of Average                      
Finance Receivables numerator as adjusted $ 6,198     $ 6,231     $ 24,761     $ 24,401  
                       
General and administrative expense Annualized % of Average                      
Finance Receivables as reported   2.73 %     2.66 %     3.17 %     2.64 %
General and administrative expense Annualized % of Average                      
Finance Receivables on an adjusted basis   2.40 %     2.57 %     2.41 %     2.58 %
                       

 

...
           
MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES
Supplemental Quarterly Data
(Dollars in thousands, except share amounts)
                                       
Quarter Ended: 12/31/2018
  3/31/2019
  6/30/2019
  9/30/2019
  12/31/2019
           
Net Income:          
Net Income $ 6,422     $ 5,141     $ 6,115     $ 7,446     $ 8,414  
           
Annualized Performance Measures:          
Return on Average Assets   2.28 %     1.69 %     1.94 %     2.34 %     2.74 %
Return on Average Stockholders' Equity   13.16 %     10.45 %     12.05 %     14.58 %     16.04 %
           
           
EPS Data:          
Net Income Allocated to Common Stock $ 6,322     $ 5,069     $ 6,041     $ 7,357     $ 8,313  
Number of Shares - Basic   12,202,652       12,165,646       12,184,996       12,054,944       11,996,446  
Basic Earnings per Share $ 0.52     $ 0.42     $ 0.50     $ 0.61     $ 0.69  
           
Number of Shares - Diluted   12,286,748       12,252,116       12,266,851       12,167,962       12,118,193  
Diluted Earnings per Share $ 0.51     $ 0.41     $ 0.49     $ 0.60     $ 0.69  
           
Cash Dividends Declared per share $ 0.14     $ 0.14     $ 0.14     $ 0.14     $ 0.14  
           
New Asset Production:          
Direct Originations $ 40,381     $ 43,565     $ 49,038     $ 41,556     $ 50,421  
Indirect Originations $ 159,534     $ 149,875     $ 160,279     $ 139,472     $ 167,740  
Total Originations $ 199,915     $ 193,440     $ 209,317     $ 181,028     $ 218,161  
           
Equipment Finance Originations $ 180,116     $ 169,831     $ 181,824     $ 154,781     $ 186,852  
Working Capital Loans Originations $ 19,799     $ 23,609     $ 27,493     $ 26,247     $ 31,309  
Total Originations $ 199,915     $ 193,440     $ 209,317     $ 181,028     $ 218,161  
           
Assets originated for sale in the period $ 11,905     $ 11,298     $ 18,025     $ 18,174     $ 16,344  
Assets referred in the period $ 4,451     $ 3,617     $ 4,140     $ 2,408     $ 1,961  
Total Sourced Originations $ 216,271     $ 208,355     $ 231,482     $ 201,610     $ 236,466  
Assets sold in the period $ 58,138     $ 52,867     $ 57,640     $ 85,425     $ 114,483  
           
Implicit Yield on Direct Originations   21.79 %     23.09 %     23.09 %     24.38 %     23.20 %
Implicit Yield on Indirect Originations   9.97 %     9.76 %     9.85 %     10.10 %     9.19 %
Total Implicit Yield on Total Originations   12.36 %     12.76 %     12.95 %     13.38 %     12.43 %
           
Implicit Yield on Equipment Finance Originations   9.68 %     9.59 %     9.71 %     9.57 %     8.91 %
Implicit Yield on Working Capital Loans Originations   36.67 %     35.55 %     34.34 %     35.81 %     33.51 %
           
# of Leases / Loans Equipment Finance   7,873       7,467       7,648       6,836       7,279  
Equipment Finance Approval Percentage   59 %     58 %     55 %     53 %     54 %
Average Monthly Equipment Finance Sources   1,140       1,074       1,149       1,067       1,033  
           
Notes and Footnotes:
(1) COF is defined as interest expense for the period divided by average interest bearing liabilities, annualized.
(2) Net investment in total finance receivables includes net investment in Equipment Finance leases and loans and Working Capital Loans.
(3) Adjusted general and administrative expense adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details.
(4) Adjusted non-interest expense adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details.
**Equipment Finance consists of equipment leases and loans; Working Capital Loans consist of small business loans.
 
 
MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES
Supplemental Quarterly Data
(Dollars in thousands, except share amounts)
                                       
Quarter Ended: 12/31/2018   3/31/2019
  6/30/2019   9/30/2019   12/31/2019
                                       
Net Interest and Fee Margin (NIM)                                      
Percent of Average Total Finance Receivables:                                      
Interest Income   10.28 %     10.36 %     10.50 %     10.57 %     10.34 %
Fee Income   1.68 %     1.62 %     1.36 %     1.48 %     1.46 %
Interest and Fee Income   11.96 %     11.98 %     11.86 %     12.05 %     11.80 %
Interest Expense   2.20 %     2.39 %     2.48 %     2.50 %     2.36 %
Net Interest and Fee Margin (NIM)   9.76 %     9.59 %     9.38 %     9.55 %     9.44 %
           
Cost of Funds (1)   2.43 %     2.49 %     2.60 %     2.63 %     2.57 %
           
Interest Income Equipment Finance $ 21,590     $ 21,722     $ 22,390     $ 22,355     $ 21,620  
Interest Income Working Capital Loans $ 2,824     $ 3,228     $ 3,767     $ 4,389     $ 4,545  
           
Average Total Finance Receivables $ 970,785     $ 999,432     $ 1,031,774     $ 1,048,798     $ 1,034,464  
Average Net Investment Equipment Finance $ 937,004     $ 960,501     $ 986,075     $ 995,346     $ 977,225  
Average Working Capital Loans $ 33,781     $ 38,931     $ 45,699     $ 53,452     $ 57,239  
           
End of Period Net Investment Equipment Finance $ 965,351     $ 981,664     $ 1,012,463     $ 980,799     $ 947,477  
End of Period Working Capital Loans $ 35,389     $ 41,526     $ 49,808     $ 53,699     $ 59,043  
Total Owned Net Investment in Leases and Loans (2) $ 1,000,740     $ 1,023,190     $ 1,062,271     $ 1,034,498     $ 1,006,520  
           
Total Assets Serviced for Others $ 164,029     $ 192,731     $ 213,797     $ 264,226     $ 341,064  
           
Total Managed Assets $ 1,164,769     $ 1,215,921     $ 1,276,068     $ 1,298,724     $ 1,347,584  
           
Average Total Managed Assets $ 1,117,069     $ 1,177,812     $ 1,229,588     $ 1,278,394     $ 1,314,728  
           
Portfolio Asset Quality:          
           
Total Finance Receivables          
30+ Days Past Due Delinquencies   1.09 %     1.11 %     1.05 %     1.28 %     1.41 %
30+ Days Past Due Delinquencies $ 12,295     $ 12,849     $ 12,594     $ 14,916     $ 16,076  
           
60+ Days Past Due Delinquencies   0.65 %     0.66 %     0.64 %     0.84 %     0.85 %
60+ Days Past Due Delinquencies $ 7,292     $ 7,626     $ 7,686     $ 9,783     $ 9,688  
           
Equipment Finance          
30+ Days Past Due Delinquencies   1.08 %     1.13 %     1.08 %     1.28 %     1.41 %
30+ Days Past Due Delinquencies $ 11,803     $ 12,565     $ 12,354     $ 14,176     $ 15,221  
           
60+ Days Past Due Delinquencies   0.65 %     0.68 %     0.67 %     0.88 %     0.87 %
60+ Days Past Due Delinquencies $ 7,100     $ 7,626     $ 7,686     $ 9,756     $ 9,417  
           
Working Capital Loans          
15+ Days Past Due Delinquencies   1.44 %     1.41 %     0.52 %     1.89 %     1.75 %
15+ Days Past Due Delinquencies $ 526     $ 605     $ 268     $ 1,043     $ 1,058  
           
30+ Days Past Due Delinquencies   1.35 %     0.66 %     0.47 %     1.34 %     1.42 %
30+ Days Past Due Delinquencies $ 492     $ 284     $ 240     $ 740     $ 855  
 
Notes and Footnotes:
(1) COF is defined as interest expense for the period divided by average interest bearing liabilities, annualized.
(2) Net investment in total finance receivables includes net investment in Equipment Finance leases and loans and Working Capital Loans.
(3) Adjusted general and administrative expense adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details.
(4) Adjusted non-interest expense adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures. See schedule for details.
**Equipment Finance consists of equipment leases and loans; Working Capital Loans consist of small business loans.
 
 
MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES
Supplemental Quarterly Data
(Dollars in thousands, except share amounts)
                   
Quarter Ended: 12/31/2018
  3/31/2019   6/30/2019   9/30/2019   12/31/219
           
Portfolio Asset Quality:          
Net Charge-offs - Total Finance Receivables $ 5,578     $ 4,581     $ 4,861     $ 5,228     $ 7,771  
% on Average Total Finance Receivables          
Annualized   2.30 %     1.83 %     1.88 %     1.99 %     3.00 %
           
Net Charge-offs - Equipment Finance $ 5,132     $ 3,927     $ 4,310     $ 5,038     $ 6,634  
% on Average Net Investment in Equipment Finance          
Annualized   2.19 %     1.64 %