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Marlin Reports Second Quarter 2019 Earnings and Declares a Cash Dividend of $0.14 Per Share

Second Quarter Summary:

  • Net income of $6.1 million, or $0.49 per diluted share up from $5.1 million, or $0.41 per diluted share last quarter, but down from $6.5 million, or $0.52 per diluted share a year ago
  • Net Investment in Leases and Loans totaled $1.1 billion, up 10.3% from a year ago, and total managed assets ended the second quarter at $1.3 billion, up 20.2% from a year ago
  • Total sourced origination volume of $231.5 million, up 28.9% year-over-year; Direct origination volume of $49.0 million, up 34.9% year-over-year
  • Total origination yield of 12.95%, up 19 basis points from the prior quarter and up 71 basis points year-over-year      
  • Annualized net charge-offs of 1.88%, compared with 1.83% in the prior quarter and 1.84% in the second quarter last year
  • Equity to assets ratio decreased to 16.06%, compared with 17.03% in the second quarter last year

MOUNT LAUREL, N.J., Aug. 01, 2019 (GLOBE NEWSWIRE) -- Marlin (MRLN), a nationwide provider of capital solutions to small businesses (“Marlin” or the “Company”), today reported second quarter 2019 net income of $6.1 million, or $0.49 per diluted share, compared with $5.1 million, or $0.41 per diluted share in the prior quarter, and $6.5 million, or $0.52 per share a year ago. Second quarter 2019 net income on an adjusted basis was $6.3 million, or $0.51 per diluted share, compared with $6.5 million or $0.52 per diluted share a year ago.

Commenting on the Company’s results, Jeffrey A. Hilzinger, Marlin’s President and CEO, said, “Marlin delivered a productive second quarter highlighted by strong growth in origination volume, stable portfolio performance and improving profitability. Second quarter total sourced origination volume of $231.5 million increased 29% year-over-year, a record for a single quarter. Growth was strong in both our Equipment Finance and Working Capital Loan products and we continued to benefit from strong growth in both our Direct and Indirect origination channels. At quarter end, our Net Investment in Leases and Loans reached nearly $1.1 billion, up 10% from a year ago.  Our portfolio of total managed assets, which includes assets we service for others, expanded to nearly $1.3 billion, an increase of 20% from the second quarter last year. Importantly, the credit quality of our portfolio remained stable and within expectations.”

Mr. Hilzinger continued, “Second quarter net income was $0.49 per diluted share, inclusive of severance expenses associated with a staff reorganization that we initiated during the quarter that lowered earnings by approximately $0.02 per diluted share. We continue to expect earnings to grow substantially during the second half of 2019 as the recent investments we’ve made in our salesforce continue to generate returns and, importantly, we are reaffirming our earnings guidance for the full year.”

Results of Operations
Total sourced origination volume for the second quarter of $231.5 million was up 28.9% from a year ago. Direct origination volume of $49.0 million in the second quarter was up 34.9% from $36.3 million in the second quarter of 2018. Indirect origination volume in the second quarter of 2019 was $160.3 million, up 18.0% from $135.9 million in the second quarter last year. Assets originated for sale in the second quarter of $18.0 million compared with $1.8 in the second quarter last year. Referral volume totaled $4.1 million, down from $5.6 million in the second quarter last year.

Net interest and fee margin as a percentage of average finance receivables was 9.38% for the second quarter, down 21 basis points from the first quarter of 2019 and down 93 basis points from a year ago. The year-over-year decrease in margin percentage was primarily a result of an increase in interest expense resulting from higher deposit rates as well as the higher cost of funds associated with the securitization that was executed in the second half of 2018, partially offset by an increase of 71 basis points in new origination loan and lease yield. The Company’s interest expense as a percent of average total finance receivables increased to 248 basis points in the second quarter of 2019 compared with 239 basis points for the first quarter of 2019 and 159 basis points for the second quarter of 2018.  The sequential quarter increase was primarily due to an increase in deposits costs, while the year-over-year increase was due to a higher cost of funds associated with both deposits and long-term borrowings from the securitization.

On an absolute basis, net interest and fee income was $24.2 million for the second quarter of 2019 compared with $24.1 million for the second quarter last year.

Non-interest income was $7.2 million for the second quarter of 2019, compared with $12.9 million in the prior quarter and $4.6 million in the prior year period. The decrease compared with the prior quarter is primarily due to the Company’s January 1, 2019 adoption of ASC 842 – Lease Accounting, which increased non-interest income by $5.6 million for the first quarter of 2019, as certain lessor costs, including property taxes that are paid by the lessee to the lessor are required to be presented gross in the consolidated statement of operations.  The year-over-year increase in non-interest income is primarily due to an increase in gains-on-sale and an increase in insurance-related income. Non-interest expense was $18.5 million for the second quarter of 2019, compared with $24.8 million in the prior quarter and $16.0 million in the second quarter last year. The decrease in non-interest expense compared with the prior quarter was primarily due to the aforementioned adoption of ASC 842, which increased non-interest expense by $6.2 million in the first quarter of 2019 due to the change in presentation of property taxes paid by the lessee to the lessor gross in the consolidated statement of operations. The year-over-year increase in non-interest expense is primarily due to higher employee related expenses and an increase in commissions tied to originations.  

The Company’s efficiency ratio for the second quarter was 59.1% compared with 55.6% in the second quarter last year. The Company’s non-GAAP efficiency ratio for the second quarter was 55.8% compared with 54.3% in the second quarter last year.   Marlin expects its efficiency ratio to improve during the remainder of 2019 as the Company continues to generate improving returns from recent investments in its salesforce, leverages its fixed costs through continued portfolio growth and generates continued operating efficiencies through its various process improvement and cost containment activities.

Marlin recorded an income tax expense of $2.0 million, representing an effective tax rate of 24.4% for the second quarter of 2019, compared with an income tax expense of $2.1 million, representing an effective tax rate of 24.1%, for the second quarter of 2018.

Portfolio Performance
Allowance for credit losses as a percentage of total finance receivables was 1.59% at June 30, 2019 compared with 1.66% at March 31, 2019 and 1.62% at June 30, 2018.

Finance receivables over 30 days delinquent were 1.05% of the Company’s total finance receivables portfolio as of June 30, 2019, down 6 basis points from March 31, 2019 and up 9 basis points from June 30, 2018. Finance receivables over 60 days delinquent were 0.64% of the Company’s total finance receivables portfolio as of June 30, 2019, down 2 basis points from March 31, 2019 and up 9 basis points from June 30, 2018. Annualized second quarter net charge-offs were 1.88% of average total finance receivables versus 1.83% in the first quarter of 2019 and 1.84% a year ago.

As of June 30, 2019, the Company’s consolidated equity to assets ratio was 16.06%. This compares to 16.17% and 17.03%, in the prior quarter and year ago quarter, respectively.

Corporate Developments
During the second quarter, the Company invested approximately $1.7 million to repurchase 72,824 shares at an average price of $23.44.  As of June 30, 2019, there remained approximately $3.3 million available under the $10 million stock repurchase program authorized by the Board of Directors in 2017.  Subsequent to the end of the quarter, the Company’s Board of Directors authorized a new stock repurchase program of up to an additional $10 million of its outstanding common stock upon completion of the 2017 authorization. The repurchase may be made on the open market, in block trades, through privately negotiated transactions or plans, pursuant to instructions or contracts established under Rule 10b5-1 under the Securities Exchange Act of 1934, or otherwise in accordance with applicable laws, rules and regulations. No time limit has been set for the completion of the program. The stock repurchase program does not obligate the Company to acquire any particular amount of common stock, and it may be suspended at any time at the Company's discretion. The stock repurchase will be funded using the Company's working capital. Any shares purchased under this program will be returned to the status of authorized but unissued shares of common stock.

Subsequent to quarter end, the Company announced the resignation of Senior Vice President, General Counsel and Chief Compliance Officer, Edward Dietz. Mr. Dietz will remain with Marlin through the end of 2019 to assist in the transition of the Company’s legal and compliance functions.  Commenting on Mr. Dietz’s resignation, Jeff Hilzinger said, “On behalf of the Board and everybody at Marlin, we thank Ed for his contributions and many years of service to the organization.  We wish him all the best in his future endeavors.”

Marlin’s Board of Directors today declared a $0.14 per share quarterly dividend. The dividend is payable August 22, 2019, to shareholders of record on August 12, 2019. Based on the closing stock price on July 31, 2019, the annualized dividend yield on the Company’s common stock is 2.41%.

Business Outlook
The Company is reaffirming its previously issued guidance for the full year ending December 31, 2019 as follows:

  • Total Sourced Origination volume is expected to finish approximately 20% above 2018 levels
  • Total asset sales are expected to be $250 to $280 million as we continue to integrate the acquisition of Fleet Financing Resources and execute loan and lease syndications.  We expect to achieve an immediate gain on sale margin of 6.0% to 7.0%.
  • Portfolio performance is expected to remain in line with the results observed over the last 12 months
  • Net interest and fee margin, as a percentage of average finance receivables, is expected to be between 9.5% and 10.0%
  • ROE is expected to continue to improve in 2019 as the Company continues to improve operating scale
  • Adjusted EPS is expected to be between $2.30 and $2.40 per share

Conference Call and Webcast
Marlin will host a conference call on Friday, August 2, 2019 at 9:00 a.m. ET to discuss the Company’s second quarter 2019 results. The conference call details are as follows:

Second Quarter 2019 Financial Results Conference Call

Date: Friday, August 2, 2019
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: 13691886
Webcast: http://public.viavid.com/index.php?id=135004

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 August 2, 2019 through 11:59 p.m. Eastern Time on August 16, 2019 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13691886.

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. 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.

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, 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 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

            June 30,     December 31,
            2019       2018  
                   
          (Dollars in thousands, except per-share data)
                   
  ASSETS          
  Cash and due from banks $ 5,170     $ 5,088  
  Interest-earning deposits with banks   134,561       92,068  
  Total cash and cash equivalents   139,731       97,156  
  Time deposits with banks   12,679       9,659  
  Restricted interest-earning deposits (includes $8.1 and $10.0 million at June 30, 2019, and   8,152       14,045  
  December 31, 2018, respectively, related to consolidated VIEs)          
  Investment securities (amortized cost of $10.7 million and $11.2 million at   10,633       10,956  
  June 30, 2019 and December 31, 2018, respectively)          
  Net investment in leases and loans:          
  Leases   478,068       489,299  
  Loans   600,980       527,541  
  Net investment in leases and loans, excluding allowance for credit losses   1,079,048       1,016,840  
  (includes $109.8 million and $150.2 million at June 30, 2019 and December 31, 2018,          
  respectively, related to consolidatedVIEs)          
  Allowance for credit losses   (16,777 )     (16,100 )
  Total net investment in leases and loans   1,062,271       1,000,740  
  Intangible assets   7,920       7,912  
  Goodwill   6,735       7,360  
  Operating lease right-of-use assets   8,626        
  Property and equipment, net   4,014       4,317  
  Property tax receivables   8,070       5,245  
  Other assets   11,152       9,656  
  Total assets $ 1,279,983     $ 1,167,046  
             
  LIABILITIES AND STOCKHOLDERS’ EQUITY          
  Deposits $ 888,561     $ 755,776  
  Long-term borrowings related to consolidated VIEs   109,637       150,055  
  Operating lease liabilities   9,074        
  Other liabilities:          
  Sales and property taxes payable   7,827       3,775  
  Accounts payable and accrued expenses   32,597       36,369  
  Net deferred income tax liability   26,733       22,560  
  Total liabilities   1,074,429       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;          
  12,285,564 and 12,367,724 shares issued and outstanding at June 30, 2019 and   123       124  
  December 31, 2018, respectively          
  Additional paid-in capital   82,726       83,498  
  Stock subscription receivable   (2 )     (2 )
  Accumulated other comprehensive loss   48       (44 )
  Retained earnings   122,659       114,935  
  Total stockholders’ equity   205,554       198,511  
  Total liabilities and stockholders’ equity $ 1,279,983     $ 1,167,046  
                 

MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES
Consolidated Statements of Operations

          Three Months Ended June 30,     Six Months Ended June 30,
          2019   2018     2019   2018
                                 
          (Dollars in thousands, except per-share data)
                                 
  Interest income $ 27,082   $ 23,964     $ 52,965   $ 47,243
  Fee income   3,507     3,876       7,549     7,835
  Interest and fee income   30,589     27,840       60,514     55,078
  Interest expense   6,408     3,711       12,370     7,110
  Net interest and fee income   24,181     24,129       48,144     47,968
  Provision for credit losses   4,756     4,256       10,119     8,868
  Net interest and fee income after provision for credit losses   19,425     19,873       38,025     39,100
                           
  Non-interest income:                        
  Insurance premiums written and earned   2,176     1,993       4,308     3,932
  Other income   5,025     2,634       15,841     5,929
  Non-interest income   7,201     4,627       20,149     9,861
  Non-interest expense:                        
  Salaries and benefits   12,469     9,527       23,920     19,550
  General and administrative   6,068     6,449       19,422     13,020
  Non-interest expense   18,537     15,976       43,342     32,570
  Income before income taxes   8,089     8,524       14,832     16,391
  Income tax expense   1,974     2,057       3,576     3,739
  Net income $ 6,115   $ 6,467     $ 11,256   $ 12,652
                           
  Basic earnings per share $ 0.50   $ 0.52     $ 0.91   $ 1.02
  Diluted earnings per share $ 0.49   $ 0.52     $ 0.91   $ 1.01
                                 

                               

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

    Three Months Ended June 30,   Six Months Ended June 30,
      2019       2018       2019       2018  
         
    (Dollars in thousands, except per-share data)   (Dollars in thousands, except per-share data)
                         
  Net income as reported $6,115     $6,467     $11,256     $12,652  
  Deduct:                      
                                 
  Reversal of charges in connection with executive separation   -       -       218       -  
  Charge in connection with workforce reorganization   (311)             (311)        
  Tax effect   79       -       24       -  
  Total adjustments, net of tax   (232)       -       (69)       -  
  Net Income on an adjusted basis $6,347     $6,467     $11,325     $12,652  
                         
  Diluted earnings per share as reported $0.49     $0.52     $0.91     $1.01  
  Diluted earnings per share on an adjusted basis $0.51     $0.52     $0.91     $1.01  
  Return on Average Assets as reported   1.94%       2.41%       1.82%       2.39%  
  Return on Average Assets on an adjusted basis   2.02%       2.41%       1.84%       2.39%  
  Return on Average Equity as reported   12.05%       13.93%       11.26%       13.81%  
  Return on Average Equity on an adjusted basis   12.51%       13.93%       11.33%       13.81%  
                         
  Efficiency Ratio numerator as reported $18,537     $15,976     $43,343     $32,570  
  Adjustments to Numerator:                      
  Expense adjustments as seen in Net Income reconciliation above   (311)       -       (93)       -  
  Acquisition related expenses   (757)       (359)       (1,472)       (725)  
  pass-through expenses   (10)       -       (6,242)       -  
  Efficiency ratio numerator on an adjusted basis $17,459     $15,617     $35,536     $31,845  
  Adjustments to Denominator:                      
  Efficiency Ratio denominator as reported $31,381     $28,756     $68,292     $57,829  
  pass-through revenue   (79)       -       (5,722)       -  
  Efficiency Ratio denominator on an adjusted basis $31,302     $28,756     $62,570     $57,829  
                         
  Efficiency Ratio as reported   59.07%       55.56%       63.47%       56.32%  
  Efficiency Ratio on an adjusted basis   55.78%       54.31%       56.79%       55.07%  
                         

MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES
Supplemental Quarterly Data
(Dollars in thousands, except share amounts)

  Quarter Ended: 6/30/2018 9/30/2018 12/31/2018 3/31/2019 6/30/2019
             
  Net Income:          
  Net Income $6,467   $5,906   $6,422   $5,141   $6,115  
             
  Annualized Performance Measures:          
  Return on Average Assets   2.41%     2.04%     2.28%     1.69%     1.94%  
  Return on Average Stockholders' Equity   13.93%     12.36%     13.16%     10.45%     12.05%  
             
             
  EPS Data:          
  Net Income Allocated to Common Stock $6,352   $5,808   $6,322   $5,069   $6,041  
  Number of Shares - Basic   12,199,089     12,214,913     12,202,652     12,165,646     12,184,996  
  Basic Earnings per Share $0.52   $0.48   $0.52   $0.42   $0.50  
             
  Number of Shares - Diluted   12,269,989     12,296,726     12,286,748     12,252,116     12,266,851  
  Diluted Earnings per Share $0.52   $0.47   $0.51   $0.41   $0.49  
             
  Cash Dividends Declared per share $0.14   $0.14   $0.14   $0.14   $0.14  
             
  New Asset Production:          
  Direct Originations $36,338   $35,469   $40,381   $43,565   $49,038  
  Indirect Originations $135,865   $137,605   $159,534   $149,875   $160,279  
  Total Originations $172,203   $173,074   $199,915   $193,440   $209,317  
             
  Equipment Finance Originations $155,385   $153,503   $180,116   $169,831   $181,824  
  Working Capital Loans Originations $16,818   $19,571   $19,799   $23,609   $27,493  
  Total Originations $172,203   $173,074   $199,915   $193,440   $209,317  
             
  Assets originated for sale in the period $1,801   $3,890   $11,905   $11,298   $18,025  
  Assets referred in the period $5,638   $2,540   $4,451   $3,617   $4,140  
  Total Sourced Originations $179,642   $179,504   $216,271   $208,355   $231,482  
  Assets sold in the period $16,890   $40,986   $58,138   $52,867   $57,640  
             
  Implicit Yield on Direct Originations   18.59%     22.39%     21.79%     23.09%     23.09%  
  Implicit Yield on Indirect Originations   10.54%     10.29%     9.97%     9.76%     9.85%  
  Total Implicit Yield on Total Originations   12.24%     12.77%     12.36%     12.76%     12.95%  
             
  Implicit Yield on Equipment Finance Originations   9.94%     9.96%     9.68%     9.59%     9.71%  
  Implicit Yield on Working Capital Loans Originations   33.52%     34.85%     36.67%     35.55%     34.34%  
             
  # of Leases / Loans Equipment Finance   8,238     7,603     7,873     7,467     7,648  
  Equipment Finance Approval Percentage   56%     57%     59%     58%     55%  
  Average Monthly Equipment Finance Sources   1,240     1,174     1,140     1,074     1,149  

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: 6/30/2018 9/30/2018 12/31/2018 3/31/2019 6/30/2019
             
  Net Interest and Fee Margin (NIM)          
  Percent of Average Total Finance Receivables:          
  Interest Income   10.24%     10.37%     10.28%     10.36%     10.50%  
  Fee Income   1.66%     1.64%     1.68%     1.62%     1.36%  
  Interest and Fee Income   11.90%     12.01%     11.96%     11.98%     11.86%  
  Interest Expense   1.59%     2.07%     2.20%     2.39%     2.48%  
  Net Interest and Fee Margin (NIM)   10.31%     9.94%     9.76%     9.59%     9.38%  
             
  Cost of Funds (1)   1.76%     2.15%     2.43%     2.49%     2.60%  
             
  Interest Income Equipment Finance $21,082   $21,489   $21,590   $21,722   $22,390  
  Interest Income Working Capital Loans $2,463   $2,626   $2,824   $3,228   $3,767  
             
  Average Total Finance Receivables $936,007   $957,755   $970,785   $999,432   $1,031,774  
  Average Net Investment Equipment Finance $905,583   $925,900   $937,004   $960,501   $986,075  
  Average Working Capital Loans $30,424   $31,855   $33,781   $38,931   $45,699  
             
  End of Period Net Investment Equipment Finance $933,261   $937,897   $965,351   $981,664   $1,012,463  
  End of Period Working Capital Loans $29,848   $32,528   $35,389   $41,526   $49,808  
  Total Owned Net Investment in Leases and Loans (2) $963,109   $970,425   $1,000,740   $1,023,190   $1,062,271  
             
  Total Assets Serviced for Others $98,442   $128,539   $164,029   $192,731   $213,797  
             
  Total Managed Assets $1,061,551   $1,098,964   $1,164,769   $1,215,921   $1,276,068  
             
  Average Total Managed Assets $1,030,579   $1,071,246   $1,117,069   $1,177,812   $1,229,588  
             
  Portfolio Asset Quality:          
             
  Total Finance Receivables          
  30+ Days Past Due Delinquencies   0.96%     1.02%     1.09%     1.11%     1.05%  
  30+ Days Past Due Delinquencies $10,438   $11,270   $12,295   $12,849   $12,594  
             
  60+ Days Past Due Delinquencies   0.55%     0.57%     0.65%     0.66%     0.64%  
  60+ Days Past Due Delinquencies $6,007   $6,244   $7,292   $7,626   $7,686  
             
  Equipment Finance          
  30+ Days Past Due Delinquencies   0.97%     1.02%     1.08%     1.13%     1.08%  
  30+ Days Past Due Delinquencies $10,286   $10,913   $11,803   $12,565   $12,354  
             
  60+ Days Past Due Delinquencies   0.56%     0.57%     0.65%     0.68%     0.67%  
  60+ Days Past Due Delinquencies $5,952   $6,137   $7,100   $7,626   $7,686  
             
  Working Capital Loans          
  15+ Days Past Due Delinquencies   0.59%     1.17%     1.44%     1.41%     0.52%  
  15+ Days Past Due Delinquencies $183   $394   $526   $605   $268  
             
  30+ Days Past Due Delinquencies   0.49%     1.06%     1.35%     0.66%     0.47%  
  30+ Days Past Due Delinquencies $152   $357   $492   $284   $240  

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: 6/30/2018   9/30/2018   12/31/2018   3/31/2019   6/30/2019  
                       
  Net Charge-offs - Total Finance Receivables $4,306   $4,546   $5,578   $4,581   $4,861  
  % on Average Total Finance Receivables          
  Annualized   1.84%     1.90%     2.30%     1.83%     1.88%  
             
  Net Charge-offs - Equipment Finance $3,851   $4,194   $5,132   $3,927   $4,310  
  % on Average Net Investment in Equipment Finance          
  Annualized   1.70%     1.81%     2.19%     1.64%     1.75%  
             
  Net Charge-offs - Working Capital Loans $456   $352   $446   $654   $551  
  % of Average Working Capital Loans          
  Annualized   6.00%     4.42%     5.28%     6.72%     4.82%  
             
             
  Total Allowance for Credit Losses $15,570   $15,917   $16,100   $16,882   $16,777  
  % of Total Finance Receivables   1.62%     1.65%     1.62%     1.66%     1.59%  
  % of 60+ Delinquencies   259.19%     254.92%     220.79%     221.37%     218.28%  
             
  Allowance for Credit Losses - Equipment Finance $14,236   $14,498   $14,633   $15,198   $14,837  
  % of Net Investment Equipment Finance   1.53%     1.55%     1.52%     1.56%     1.47%  
  % of 60+ Delinquencies   239.18%     236.24%     206.10%     199.28%     193.03%  
             
  Allowance for Credit Losses - Working Capital Loans $1,334   $1,419   $1,467   $1,684   $1,940  
  % of Total Working Capital Loans   4.32%     4.22%     4.02%     3.94%     3.79%  
             
             
  Non-accrual - Equipment Finance $3,211   $3,392   $3,720   $4,390   $4,282  
  Non-accrual - Equipment Finance   0.30%     0.32%     0.34%     0.39%     0.37%  
             
  Non-accrual - Working Capital Loans $147   $217   $492   $284   $248  
  Non-accrual - Working Capital Loans   0.48%     0.65%     1.35%     0.66%     0.48%  
             
  Non-accrual - Total Finance Receivables $3,358   $3,609   $4,212   $4,674   $4,530  
  Non-accrual - Total Finance Receivables   0.31%     0.33%     0.37%     0.40%     0.38%  
             
  Restructured - Total Finance Receivables $3,747   $3,456   $3,636   $3,363   $3,122  
             
  Expense Ratios:          
  Salaries and Benefits Expense $9,527   $10,292   $9,908   $11,451   $12,469  
  Salaries and Benefits Expense          
  Annualized % of Avg. Fin. Recbl.   4.07%     4.30%     4.08%     4.58%     4.83%  
             
  Total personnel end of quarter   320     339     341     352     356  
             
  General and Administrative Expense $6,449   $5,445   $6,450   $13,354   $6,068  
  General and Administrative Expense          
  Annualized % of Avg. Fin. Recbl.   2.76%     2.27%     2.66%     5.34%     2.35%  
  Adjusted General and Administrative Expense          
  Annualized % of Avg. Fin. Recbl. (3)   2.73%     2.25%     2.57%     2.75%     2.26%  

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:   6/30/2018     9/30/2018     12/31/2018     3/31/2019     6/30/2019  
  Non-Interest Expense/Average Total Managed Assets   6.20%     5.88%     5.86%     8.42%     6.03%  
  Adjusted Non-Interest Expense/Average Total Managed Assets (4)   6.06%     5.46%     5.61%     6.14%     5.68%  
             
  Efficiency Ratio   55.56%     55.69%     53.11%     67.20%     59.07%  
  Adjusted Efficiency Ratio (4)   54.31%     51.70%     50.90%     57.80%     55.78%  
             
  Balance Sheet:          
             
  Assets          
  Investment in Leases and Loans $959,452   $966,659   $996,384   $1,019,311   $1,057,726  
  Initial Direct Costs and Fees   19,227     19,683     20,456     20,761     21,322  
  Reserve for Credit Losses   (15,570)     (15,917)     (16,100)     (16,882)     (16,777)  
  Net Investment in Leases and Loans $963,109   $970,425   $1,000,740   $1,023,190   $1,062,271  
  Cash and Cash Equivalents   99,227     88,448     97,156     140,942     139,731  
  Restricted Cash     -        10,049       14,045       13,174       8,152  
  Other Assets   50,975     57,811     55,105     69,409     69,829  
  Total Assets $1,113,311   $1,126,733   $1,167,046   $1,246,725   $1,279,983  
             
  Liabilities          
  Deposits     863,568       700,107       755,776       840,167       888,561  
  Total Debt     -        174,519       150,055       129,171       109,637  
  Other Liabilities   60,101     58,564     62,704     75,737     76,231  
  Total Liabilities $923,669   $933,190   $968,535   $1,045,075   $1,074,429  
             
  Stockholders' Equity          
  Common Stock $124   $124   $124   $123   $123  
  Paid-in Capital, net   83,472     83,315     83,496     83,213     82,724  
  Other Comprehensive Income (Loss)   (73)     (149)     (44)     (4)     48  
  Retained Earnings   106,119     110,253     114,935     118,318     122,659  
  Total Stockholders' Equity $189,642   $193,543   $198,511   $201,650   $205,554  
             
  Total Liabilities and          
  Stockholders' Equity $1,113,311   $1,126,733   $1,167,046   $1,246,725   $1,279,983  
             
  Capital and Leverage:          
  Equity $189,642   $193,543   $198,511   $201,650   $205,554  
  Debt to Equity   4.55     4.52     4.56     4.81     4.86  
  Equity to Assets   17.03%     17.18%     17.01%     16.17%     16.06%  
             
  Regulatory Capital Ratios:          
  Tier 1 Leverage Capital   17.04%     15.57%     16.38%     15.41%     15.24%  
  Common Equity Tier 1 Risk-based Capital   18.07%     17.46%     17.50%     17.25%     17.01%  
  Tier 1 Risk-based Capital   18.07%     17.46%     17.50%     17.25%     17.01%  
  Total Risk-based Capital   19.33%     18.72%     18.76%     18.50%     18.26%  
             

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.