MRLN - Marlin Reports First Quarter 2021 Results and Declares a Cash Dividend of $0.14 Per Share
First Quarter Summary:
- Net income of $6.9 million, or $0.57 per diluted share, up from a net loss of $11.8 million, or $1.00 per diluted share a year ago and down from net income of $15.3 million, or $1.28 per diluted share last quarter
- Ended the quarter with total stockholders’ equity of $201.7 million and a consolidated equity-to-assets ratio of 20.73%
- Total 30+ day delinquencies were 1.16%, down from 1.79% in the prior year and 1.63% in the fourth quarter; annualized net charge-offs of 1.67%, compared with 2.57% in the fourth quarter and 3.11% in the first quarter last year
- Total sourced origination volume of $83.8 million, down 0.3% from the prior quarter, and down 46.8% year-over-year. Average total finance receivables were $833.5 million, down 17.4% year-over-year
- Loss provision net benefit of $2.9 million with ending allowance for credit losses of $38.9 million; allowance as a percentage of receivables was 4.64% for equipment finance and 5.51% for working capital, down from prior quarter percentages of 5.07% for equipment finance and 6.02% for working capital;
MOUNT LAUREL, N.J., April 29, 2021 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (NASDAQ: MRLN) , a nationwide provider of capital solutions to small businesses (“Marlin” or the “Company”), today reported first quarter 2021 net income of $6.9 million, or $0.57 per diluted share, compared with net income of $15.3 million, or $1.28 per diluted share in the prior quarter, and a net loss of $11.8 million, or $1.00 per diluted share a year ago.
Commenting on the Company’s results, Jeffrey A. Hilzinger, Marlin’s President and CEO, said, “Marlin’s first quarter results are highlighted by solid credit quality, improving origination volume trends and strong earnings. Our portfolio performed better than expected during the first quarter with delinquency and net charge-off metrics in-line with, or below, pre-pandemic levels. This, coupled with an improving macro-economic outlook resulted in a net release in loss reserves established last year in response to the pandemic. At the bottom line, net income of $6.9 million, or $0.57 per diluted share, expanded significantly from a year ago.”
Results of Operations
Total sourced origination volume for the first quarter of $83.8 million was down 46.8% from a year ago. Direct origination volume of $7.4 million in the first quarter was down 80.3% from $37.8 million in the first quarter of 2020. Indirect origination volume in the first quarter of 2021 was $76.2 million, down 33.0% from $113.8 million in the first quarter last year. Net Investment in Leases and Loans was $797.4 million, down 17.8% from first quarter last year, while total managed assets stood at approximately $1.0 billion, down 23.2% from the first quarter last year.
Net interest and fee margin as a percentage of average finance receivables was 8.39% for the first quarter, up 3 basis points from the fourth quarter of 2020 and down 95 basis points from a year ago. The sequential quarter increase was driven primarily by a decrease in interest expense resulting from lower deposit rates, partially offset by a decrease in new origination loan and lease yields, interest income, and lower fee income. The year-over-year decrease in margin percentage was primarily related to the decrease in new origination loan and lease yields and interest income. The Company’s interest expense as a percent of average total finance receivables was 157 basis points in the first quarter of 2021 compared with 187 basis points for the prior quarter and 225 basis points for the first quarter of 2020, resulting from lower rates and a shift in mix, as higher rate long-term debt pays down.
On an absolute basis, net interest and fee income was $17.5 million for the first quarter of 2021 compared with $23.6 million in the first quarter last year.
Marlin recorded a $2.9 million provision for credit losses net benefit in the first quarter of 2021, compared to $12.7 million provision net benefit in the fourth quarter of 2020, and $25.2 million provision net expense in the first quarter of 2020. The provision release in the first quarter of 2021 reflects better than expected portfolio performance, continued positive performance trends, and an improved macroeconomic outlook.
Non-interest income was $8.6 million for the first quarter of 2021, compared with $4.1 million in the prior quarter and $12.2 million in the prior year period. The sequential quarter increase is primarily due to property tax revenue that is seasonally high in the first quarter. The year-over-year decrease in non-interest income is primarily due to a $2.3 million decrease in gains from the sale of assets. Non-interest expense was $19.6 million for the first quarter of 2021, compared with $14.8 million in the prior quarter and $29.9 million in the first quarter of 2020. The sequential quarter increase was primarily due to higher general and administrative expenses related to property tax expense that is seasonally high in the first quarter. The year-over-year decrease was primarily due to a $6.7 million write-off of goodwill impairment in the prior year period.
Marlin recorded a $2.5 million tax expense in the first quarter, representing an effective tax rate of 26.9%. In the fourth quarter of 2020, the Company recorded a $4.8 million tax expense representing an effective tax rate of 23.9%, and in the first quarter of 2020, the Company recorded $7.4 million of tax benefit.
Portfolio Performance
Allowance for credit losses as a percentage of total finance receivables was 4.65% at March 31, 2021 compared with 5.09% at December 31, 2020.
For the three months ended March 31, 2021, the Company recorded a $2.9 million provision for credit losses net benefit, compared with $25.2 million provision net expense recognized in the first quarter of 2020 and a $12.7 million provision net benefit recorded for the fourth quarter of 2020. The provision release in the first quarter of 2021 was primarily due to positive changes in the outlook of macroeconomic assumptions to which the reserve is correlated as well as positive trends in portfolio performance.
As of March 31, 2021, the Company had $93.8 million total receivables that were modified, or 11.2% of total net investment, or $90.8 million (11.1%) Equipment Finance and $3.0 million (16.4%) of Working Capital. Total modified receivables for Equipment Finance and Working Capital declined 12.9% and 56.6%, respectively from corresponding amounts as of December 31 st .
Equipment Finance receivables over 30 days delinquent were 116 basis points as of March 31, 2021, down 43 basis points from December 31, 2020, and down 66 basis points from March 31, 2020. Working Capital receivables over 15 days delinquent were 147 basis points as of March 31, 2021, down 353 basis points from December 31, 2020, and down 108 basis points from March 31, 2020. Annualized first quarter total net charge-offs were 1.67% of average total finance receivables versus 2.57% in the fourth quarter of 2020 and 3.11% a year ago.
Corporate Developments
On April 29, 2021, Marlin’s Board of Directors declared a $0.14 per share quarterly dividend. The dividend is payable on May 20, 2021, to shareholders of record on May 10, 2021. Based on the closing stock price on April 28, 2021, the annualized dividend yield on the Company’s common stock is 2.50%.
*Non-GAAP Financial Measures: Net income (loss) 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.
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 (including but not limited to the impact of the COVID-19 pandemic), 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 pre-tax 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, acquisition related expense, and Rep and Warranty liability adjustments, 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 any General and administrative discrete pre-tax adjustments used to present net income on an adjusted basis, acquisition related general and administrative expenses, Rep and Warranty liability adjustments, 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 non-interest expense discrete pre-tax 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, acquisition related expenses, and Rep and Warranty liability adjustments, 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
Marlin Business Services Corp. and Subsidiaries
Consolidated Balance Sheets (Unaudited)
(Dollars in thousands, except share amounts)
| March 31, |
| December 31, |
| 2021 |
| 2020 |
| ASSETS |
| Cash and due from banks |
| $ |
| 5,244 |
| $ |
| 5,473 |
| Interest-earning deposits with banks |
| 105,378 |
| 130,218 |
| Total cash and cash equivalents |
| 110,622 |
| 135,691 |
| Time deposits with banks |
| 4,482 |
| 5,967 |
| Restricted interest-earning deposits related to consolidated VIEs |
| 4,358 |
| 4,719 |
| Investment securities (amortized cost of $12.6 million and $11.5 million at March 31, 2021 and December 31, 2020, respectively) |
| 12,373 |
| 11,624 |
| Net investment in leases and loans: |
| Leases |
| 319,092 |
| 337,159 |
| Loans |
| 517,249 |
| 532,125 |
| Net investment in leases and loans, excluding allowance for credit losses (includes $23.2 million and $30.4 million at March 31, 2021 and December 31, 2020, respectively, related to consolidated VIEs) |
| 836,341 |
| 869,284 |
| Allowance for credit losses |
| (38,912 |
| ) |
| (44,228 |
| ) |
| Total net investment in leases and loans |
| 797,429 |
| 825,056 |
| Intangible assets |
| 5,510 |
| 5,678 |
| Operating lease right-of-use assets |
| 7,648 |
| 7,623 |
| Property and equipment, net |
| 8,603 |
| 8,574 |
| Property tax receivables, net of allowance |
| 12,063 |
| 6,854 |
| Other assets |
| 9,776 |
| 10,212 |
| Total assets |
| $ |
| 972,864 |
| $ |
| 1,021,998 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
| Deposits |
| $ |
| 678,331 |
| $ |
| 729,614 |
| Long-term borrowings related to consolidated VIEs |
| 23,670 |
| 30,665 |
| Operating lease liabilities |
| 8,517 |
| 8,700 |
| Other liabilities: |
| Sales and property taxes payable |
| 10,916 |
| 6,316 |
| Accounts payable and accrued expenses |
| 26,086 |
| 27,734 |
| Net deferred income tax liability |
| 23,642 |
| 22,604 |
| Total liabilities |
| 771,162 |
| 825,633 |
| 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; 12,009,323 and 11,974,530 |
| shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively |
| 120 |
| 120 |
| Additional paid-in capital |
| 76,682 |
| 76,323 |
| Accumulated other comprehensive income (loss) |
| (115 |
| ) |
| 69 |
| Retained earnings |
| 125,015 |
| 119,853 |
| Total stockholders’ equity |
| 201,702 |
| 196,365 |
| Total liabilities and stockholders’ equity |
| $ |
| 972,864 |
| $ |
| 1,021,998 |
Marlin Business Services Corp. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except share amounts)
| Three Months Ended March 31, |
| 2021 |
| 2020 |
| Interest income |
| $ |
| 18,288 |
| $ |
| 26,465 |
| Fee income |
| 2,455 |
| 2,766 |
| Interest and fee income |
| 20,743 |
| 29,231 |
| Interest expense |
| 3,263 |
| 5,680 |
| Net interest and fee income |
| 17,480 |
| 23,551 |
| Provision for credit losses |
| (2,936 |
| ) |
| 25,150 |
| Net interest and fee income (loss) after provision for credit losses |
| 20,416 |
| (1,599 |
| ) |
| Non-interest income: |
| Gain on leases and loans sold |
| - |
| 2,282 |
| Insurance premiums written and earned |
| 1,998 |
| 2,282 |
| Other income |
| 6,574 |
| 7,639 |
| Non-interest income |
| 8,572 |
| 12,203 |
| Non-interest expense: |
| Salaries and benefits |
| 8,373 |
| 9,519 |
| General and administrative |
| 11,246 |
| 13,605 |
| Goodwill impairment |
| - |
| 6,735 |
| Non-interest expense |
| 19,619 |
| 29,859 |
| Income (loss) before income taxes |
| 9,369 |
| (19,255 |
| ) |
| Income tax expense (benefit) |
| 2,518 |
| (7,434 |
| ) |
| Net income (loss) |
| $ |
| 6,851 |
| $ |
| (11,821 |
| ) |
| Basic earnings (loss) per share |
| $ |
| 0.57 |
| $ |
| (1.00 |
| ) |
| Diluted earnings (loss) per share |
| $ |
| 0.57 |
| $ |
| (1.00 |
| ) |
Marlin Business Services Corp. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
(Dollars in thousands, except share amounts)
| Three Months Ended March 31, |
| 2021 |
| 2020 |
| Net income (loss) as reported |
| $ |
| 6,851 |
| $ |
| (11,821 |
| ) |
| Deduct: |
| Goodwill impairment |
| - |
| (6,735 |
| ) |
| Tax effect |
| - |
| 1,614 |
| Total adjustments, net of tax |
| - |
| (5,121 |
| ) |
| Net tax benefit resulting from the CARES Act of 2020 |
| - |
| 3,256 |
| Net income (loss) on an adjusted basis |
| $ |
| 6,851 |
| $ |
| (9,956 |
| ) |
| Diluted earnings (loss) per share as reported |
| $ |
| 0.57 |
| ($ |
| 1.00 |
| ) |
| Diluted earnings (loss) per share on an adjusted basis |
| $ |
| 0.57 |
| ($ |
| 0.84 |
| ) |
| Return on Average Assets as reported |
| 2.78 |
| % |
| -3.98 |
| % |
| Return on Average Assets on an adjusted basis |
| 2.78 |
| % |
| -3.35 |
| % |
| Return on Average Equity as reported |
| 13.89 |
| % |
| -22.75 |
| % |
| Return on Average Equity on an adjusted basis |
| 13.89 |
| % |
| -19.16 |
| % |
| Efficiency Ratio numerator as reported |
| $ |
| 19,619 |
| $ |
| 29,859 |
| Adjustments to Numerator: |
| Expense adjustments as seen in Net Income reconciliation above |
| - |
| (6,735 |
| ) |
| Acquisition related expenses |
| (160 |
| ) |
| (378 |
| ) |
| Recourse & Rep & Warranty liability adjustment |
| (199 |
| ) |
| (807 |
| ) |
| Pass-through expenses |
| (5,570 |
| ) |
| (6,002 |
| ) |
| Efficiency ratio numerator on an adjusted basis |
| $ |
| 13,690 |
| $ |
| 15,937 |
| Efficiency Ratio denominator as reported |
| $ |
| 26,052 |
| $ |
| 35,754 |
| Adjustments to Denominator: |
| Pass-through revenue |
| (5,020 |
| ) |
| (5,504 |
| ) |
| Efficiency Ratio denominator on an adjusted basis |
| $ |
| 21,032 |
| $ |
| 30,250 |
| Efficiency Ratio as reported |
| 75.31 |
| % |
| 83.51 |
| % |
| Efficiency Ratio on an adjusted basis |
| 65.09 |
| % |
| 52.68 |
| % |
Marlin Business Services Corp. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
(Dollars in thousands, except share amounts)
| Three Months Ended March 31, |
| 2021 |
| 2020 |
| Non-interest Expense / Average total managed assets numerator, as reported |
| $ |
| 19,619 |
| $ |
| 29,859 |
| Adjustments to Numerator: |
| Expense adjustments as seen in Net Income reconciliation above |
| - |
| (6,735 |
| ) |
| Acquisition related expenses |
| (160 |
| ) |
| (378 |
| ) |
| Recourse & Rep & Warranty liability adjustment |
| (199 |
| ) |
| (807 |
| ) |
| Pass-through expenses |
| (5,570 |
| ) |
| (6,002 |
| ) |
| Non-interest Expense / Average total managed assets numerator, on an adjusted basis |
| $ |
| 13,690 |
| $ |
| 15,937 |
| Non-interest Expense / Average total managed assets as reported |
| 7.49 |
| % |
| 8.89 |
| % |
| Non-interest Expense / Average total managed assets on an adjusted basis |
| 5.23 |
| % |
| 4.74 |
| % |
| General and administrative expense Annualized % of Average |
| Finance Receivables numerator as reported |
| $ |
| 11,246 |
| $ |
| 13,605 |
| Adjustments to Numerator: |
| Expense adjustments as seen in Net Income reconciliation above |
| - |
| - |
| Acquisition related expenses |
| (168 |
| ) |
| (200 |
| ) |
| Rep & Warranty liability adjustment |
| (199 |
| ) |
| (807 |
| ) |
| Pass-through expenses |
| (5,570 |
| ) |
| (6,002 |
| ) |
| General and administrative expense Annualized % of Average |
| Finance Receivables numerator as adjusted |
| $ |
| 5,309 |
| $ |
| 6,596 |
| General and administrative expense Annualized % of Average |
| Finance Receivables as reported |
| 5.40 |
| % |
| 5.39 |
| % |
| General and administrative expense Annualized % of Average |
| Finance Receivables on an adjusted basis |
| 2.55 |
| % |
| 2.62 |
| % |
Marlin Business Services Corp. and Subsidiaries
Supplemental Quarterly Data
(Dollars in thousands, except share amounts)
| Quarter Ended: |
| 3/31/2020 |
| 6/30/2020 |
| 9/30/2020 |
| 12/31/2020 |
| 3/31/2021 |
| Net Income (Loss) |
| Net Income |
| ($11,821 |
| ) |
| ($5,882 |
| ) |
| $2,743 |
| $15,302 |
| $6,851 |
| Annualized Performance Measures: |
| Return on Average Assets |
| -3.98 |
| % |
| -1.88 |
| % |
| 0.98 |
| % |
| 5.74 |
| % |
| 2.77 |
| % |
| Return on Average Stockholders' Equity |
| -22.75 |
| % |
| -12.41 |
| % |
| 6.00 |
| % |
| 33.59 |
| % |
| 13.89 |
| % |
| EPS Data: |
| Net Income (Loss) Allocated to Common Stock |
| ($11,821 |
| ) |
| ($5,882 |
| ) |
| $2,707 |
| $15,112 |
| $6,766 |
| Basic Earnings (loss) per Share |
| ($1.00 |
| ) |
| ($0.50 |
| ) |
| $0.23 |
| $1.28 |
| $0.57 |
| Diluted Earnings (loss) per Share |
| ($1.00 |
| ) |
| ($0.50 |
| ) |
| $0.23 |
| $1.28 |
| $0.57 |
| Number of Shares - Basic |
| 11,876,147 |
| 11,760,479 |
| 11,791,141 |
| 11,825,693 |
| 11,834,415 |
| Number of Shares - Diluted |
| 11,876,147 |
| 11,760,479 |
| 11,832,413 |
| 11,841,134 |
| 11,869,218 |
| Cash Dividends Declared per share |
| $0.14 |
| $0.14 |
| $0.14 |
| $0.14 |
| $0.14 |
| New Asset Production: |
| Direct Originations |
| $37,821 |
| $6,617 |
| $8,381 |
| $8,658 |
| $7,437 |
| Indirect Originations |
| $113,760 |
| $58,802 |
| $58,736 |
| $74,353 |
| $76,245 |
| Total Originations (6) |
| $151,581 |
| $65,419 |
| $67,117 |
| $83,011 |
| $83,682 |
| Equipment Finance Originations |
| $127,681 |
| $64,572 |
| $65,764 |
| $75,873 |
| $75,272 |
| Working Capital Loans Originations |
| $23,900 |
| $847 |
| $1,353 |
| $7,138 |
| $8,410 |
| Total Originations (6) |
| $151,581 |
| $65,419 |
| $67,117 |
| $83,011 |
| $83,682 |
| Assets originated for sale in the period |
| $3,301 |
| $1,135 |
| $62 |
| $0 |
| $0 |
| Assets referred in the period |
| $2,509 |
| $664 |
| $1,297 |
| $1,046 |
| $84 |
| Total Sourced Originations (6) |
| $157,391 |
| $67,218 |
| $68,476 |
| $84,057 |
| $83,766 |
| Implicit Yield on Originations: |
| Total (6) |
| 12.45 |
| % |
| 9.16 |
| % |
| 9.34 |
| % |
| 9.63 |
| % |
| 9.46 |
| % |
| Direct |
| 21.69 |
| % |
| 13.80 |
| % |
| 15.76 |
| % |
| 19.85 |
| % |
| 21.22 |
| % |
| Indirect |
| 9.39 |
| % |
| 8.64 |
| % |
| 8.42 |
| % |
| 8.38 |
| % |
| 8.32 |
| % |
| Equipment Finance |
| 8.95 |
| % |
| 8.80 |
| % |
| 8.77 |
| % |
| 7.97 |
| % |
| 7.63 |
| % |
| Working Capital |
| 31.16 |
| % |
| 36.75 |
| % |
| 36.62 |
| % |
| 26.72 |
| % |
| 25.85 |
| % |
| Paycheck Protection Program Loans Originated |
| $0 |
| $4,178 |
| $202 |
| $0 |
| $0 |
| Implicit Yield on Paycheck Protection Loans Originated |
| n/a |
| 4.56 |
| % |
| 2.76 |
| % |
| n/a |
| n/a |
| Assets sold in the period |
| $22,929 |
| $1,127 |
| $4,286 |
| $0 |
| $0 |
_________________
(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 adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures.
(4) Adjusted non-interest expense adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures.
(5) Effective January 1, 2020, in connection with the adoption of ASU 2016-13 "CECL", residual income is no longer recorded as a component of fee income and instead is presented within the allowance for loan loss
(6) Excludes Paycheck Protection Program Loans Originated
(7) Non-Accrual as of March 31, 2021 includes restructured contracts totaling $12.1 million for Equipment Finance and $0.3 million for Working Capital.
Marlin Business Services Corp. and Subsidiaries
Supplemental Quarterly Data
(Dollars in thousands, except share amounts)
| Quarter Ended: |
| 3/31/2020 |
| 6/30/2020 |
| 9/30/2020 |
| 12/31/2020 |
| 3/31/2021 |
| Impact Yield on Organizations: |
| # of Leases / Loans Equipment Finance |
| 5,863 |
| 3,178 |
| 3,410 |
| 3,552 |
| 3,687 |
| Equipment Finance Approval Percentage |
| 46 |
| % |
| 37 |
| % |
| 40 |
| % |
| 44 |
| % |
| 44 |
| % |
| Average Monthly Equipment Finance Sources |
| 932 |
| 518 |
| 547 |
| 566 |
| 555 |
| Net Interest and Fee Margin (NIM) |
| Percent of Average Total Finance Receivables: |
| Interest Income |
| 10.49 |
| % |
| 9.90 |
| % |
| 9.69 |
| % |
| 9.06 |
| % |
| 8.78 |
| % |
| Fee Income (5) |
| 1.10 |
| % |
| 1.00 |
| % |
| 1.21 |
| % |
| 1.17 |
| % |
| 1.18 |
| % |
| Interest and Fee Income |
| 11.59 |
| % |
| 10.90 |
| % |
| 10.90 |
| % |
| 10.23 |
| % |
| 9.96 |
| % |
| Interest Expense |
| 2.25 |
| % |
| 2.22 |
| % |
| 2.03 |
| % |
| 1.87 |
| % |
| 1.57 |
| % |
| Net Interest and Fee Margin (NIM) |
| 9.34 |
| % |
| 8.68 |
| % |
| 8.87 |
| % |
| 8.36 |
| % |
| 8.39 |
| % |
| Cost of Funds (1) |
| 2.50 |
| % |
| 2.17 |
| % |
| 2.13 |
| % |
| 1.97 |
| % |
| 1.79 |
| % |
| Interest Income Equipment Finance |
| $21,076 |
| $19,985 |
| $19,719 |
| $18,068 |
| $16,901 |
| Interest Income Working Capital Loans |
| $4,932 |
| $4,095 |
| $2,526 |
| $1,515 |
| $1,303 |
| Average Total Finance Receivables |
| $1,008,823 |
| $979,313 |
| $924,635 |
| $869,625 |
| $833,474 |
| Average Net Investment Equipment Finance |
| $947,696 |
| $928,210 |
| $886,990 |
| $845,487 |
| $813,263 |
| Average Working Capital Loans |
| $61,127 |
| $51,103 |
| $33,696 |
| $23,019 |
| $19,062 |
| End of Period Net Investment in leases and loans, net of allowance |
| Equipment Finance |
| $918,264 |
| $876,919 |
| $823,712 |
| $806,229 |
| $780,089 |
| Working Capital Loans |
| $51,812 |
| $34,116 |
| $23,016 |
| $18,827 |
| $17,340 |
| Total Owned Leases and Loans (2) |
| $970,076 |
| $911,035 |
| $846,728 |
| $825,056 |
| $797,429 |
| Assets Serviced for Others |
| $328,252 |
| $296,401 |
| $261,144 |
| $229,530 |
| $199,080 |
| Total Managed Assets |
| $1,298,328 |
| $1,207,436 |
| $1,107,872 |
| $1,054,586 |
| $996,509 |
| Average Total Managed Assets |
| $1,343,862 |
| $1,292,052 |
| $1,203,502 |
| $1,114,929 |
| $1,047,854 |
| Restructured Receivables: |
| Payment Deferral Modification Program |
| Equipment Finance |
| $12,530 |
| $115,941 |
| $117,672 |
| $104,287 |
| $90,843 |
| Working Capital |
| $6,987 |
| $17,876 |
| $12,210 |
| $6,922 |
| $3,004 |
| Total - $ |
| $19,517 |
| $133,817 |
| $129,882 |
| $111,209 |
| $93,847 |
| Total - as a % of Ending Finance Receivables |
| 2.00 |
| % |
| 13.70 |
| % |
| 14.30 |
| % |
| 12.80 |
| % |
| 11.22 |
| % |
| Total - # of Active Modified Contracts |
| 520 |
| 5,017 |
| 5,237 |
| 4,809 |
| 4,356 |
| Other Restructured Contracts |
| $3,096 |
| $1,751 |
| $1,035 |
| $922 |
| $822 |
_________________
(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 adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures.
(4) Adjusted non-interest expense adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures.
(5) Effective January 1, 2020, in connection with the adoption of ASU 2016-13 "CECL", residual income is no longer recorded as a component of fee income and instead is presented within the allowance for loan loss
(6) Excludes Paycheck Protection Program Loans Originated
(7) Non-Accrual as of March 31, 2021 includes restructured contracts totaling $12.1 million for Equipment Finance and $0.3 million for Working Capital.
Marlin Business Services Corp. and Subsidiaries
Supplemental Quarterly Data
(Dollars in thousands, except share amounts)
?
| Quarter Ended: |
| Q1 2020 |
| Q2 2020 |
| Q3 2020 |
| Q4 2020 |
| Q1 2021 |
| Portfolio Asset Quality: |
| Allowance |
| Total |
| $52,060 |
| $63,644 |
| $61,325 |
| $44,228 |
| $38,912 |
| % of Total Finance Receivables |
| 5.09 |
| % |
| 6.53 |
| % |
| 6.75 |
| % |
| 5.09 |
| % |
| 4.65 |
| % |
| Equipment Finance |
| $44,860 |
| $55,682 |
| $57,869 |
| $43,022 |
| $37,902 |
| % of Net Investment Equipment Finance |
| 4.66 |
| % |
| 5.97 |
| % |
| 6.57 |
| % |
| 5.07 |
| % |
| 4.64 |
| % |
| Working Capital Loans |
| $7,200 |
| $7,962 |
| $3,456 |
| $1,206 |
| $1,010 |
| % of Total Working Capital Loans |
| 12.20 |
| % |
| 18.92 |
| % |
| 13.06 |
| % |
| 6.02 |
| % |
| 5.51 |
| % |
| Net Charge-offs |
| Total |
| $7,846 |
| $8,494 |
| $10,488 |
| $5,588 |
| $3,475 |
| % on Avg. Finance Receivables, Annualized |
| 3.11 |
| % |
| 3.47 |
| % |
| 4.54 |
| % |
| 2.57 |
| % |
| 1.67 |
| % |
| Equipment Finance |
| $6,603 |
| $7,872 |
| $9,956 |
| $5,203 |
| $3,070 |
| % on Avg. Equipment Finance, Annualized |
| 2.79 |
| % |
| 3.39 |
| % |
| 4.49 |
| % |
| 2.46 |
| % |
| 1.51 |
| % |
| Working Capital Loans |
| $1,243 |
| $622 |
| $532 |
| $385 |
| $405 |
| % of Avg. Working Capital Loans, Annualized |
| 8.13 |
| % |
| 4.87 |
| % |
| 6.32 |
| % |
| 6.69 |
| % |
| 8.50 |
| % |
| Delinquency |
| Total Finance Receivables: |
| 30+ Days Past Due |
| 1.79 |
| % |
| 3.83 |
| % |
| 2.15 |
| % |
| 1.63 |
| % |
| 1.16 |
| % |
| 60+ Days Past Due |
| 1.00 |
| % |
| 2.46 |
| % |
| 1.42 |
| % |
| 0.77 |
| % |
| 0.62 |
| % |
| Equipment Finance: |
| 30+ Days Past Due |
| 1.82 |
| % |
| 3.90 |
| % |
| 2.13 |
| % |
| 1.59 |
| % |
| 1.16 |
| % |
| 60+ Days Past Due |
| 1.05 |
| % |
| 2.52 |
| % |
| 1.42 |
| % |
| 0.78 |
| % |
| 0.63 |
| % |
| Working Capital Loans: |
| 15+ Days Past Due |
| 2.55 |
| % |
| 4.38 |
| % |
| 3.93 |
| % |
| 5.00 |
| % |
| 1.47 |
| % |
| 30+ Days Past Due |
| 1.14 |
| % |
| 2.68 |
| % |
| 2.94 |
| % |
| 3.69 |
| % |
| 1.05 |
| % |
| Total Finance Receivables: |
| 30+ Days Past Due |
| $18,249 |
| $37,347 |
| $19,527 |
| $14,209 |
| $9,704 |
| 60+ Days Past Due |
| $10,220 |
| $24,015 |
| $12,925 |
| $6,717 |
| $5,203 |
| Equipment Finance: |
| 30+ Days Past Due |
| $17,576 |
| $36,217 |
| $18,750 |
| $13,468 |
| $9,511 |
| 60+ Days Past Due |
| $10,156 |
| $23,353 |
| $12,546 |
| $6,582 |
| $5,109 |
| Working Capital Loans: |
| 15+ Days Past Due |
| $1,504 |
| $1,843 |
| $1,041 |
| $1,001 |
| $269 |
| 30+ Days Past Due |
| $673 |
| $1,130 |
| $777 |
| $741 |
| $193 |
_________________
(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 adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures.
(4) Adjusted non-interest expense adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures.
(5) Effective January 1, 2020, in connection with the adoption of ASU 2016-13 "CECL", residual income is no longer recorded as a component of fee income and instead is presented within the allowance for loan loss
(6) Excludes Paycheck Protection Program Loans Originated
(7) Non-Accrual as of March 31, 2021 includes restructured contracts totaling $12.1 million for Equipment Finance and $0.3 million for Working Capital.
Marlin Business Services Corp. and Subsidiaries
Supplemental Quarterly Data
(Dollars in thousands, except share amounts)
| Quarter Ended: |
| Q1 2020 |
| Q2 2020 |
| Q3 2020 |
| Q4 2020 |
| Q1 2021 |
| Portfolio Asset Quality: |
| Non-Accrual |
| Total |
| 0.66 |
| % |
| 1.13 |
| % |
| 0.92 |
| % |
| 1.64 |
| % |
| 1.68 |
| % |
| Equipment Finance |
| 0.62 |
| % |
| 1.06 |
| % |
| 0.82 |
| % |
| 1.57 |
| % |
| 1.67 |
| % |
| Working Capital Loans |
| 1.28 |
| % |
| 2.83 |
| % |
| 4.32 |
| % |
| 4.65 |
| % |
| 1.87 |
| % |
| Total (7) |
| $6,705 |
| $11,031 |
| $8,375 |
| $14,289 |
| $14,013 |
| Equipment Finance |
| $5,950 |
| $9,842 |
| $7,231 |
| $13,357 |
| $13,669 |
| Working Capital Loans |
| $755 |
| $1,189 |
| $1,144 |
| $932 |
| $344 |
| Expense Ratios: |
| Salaries and Benefits Expense |
| $9,519 |
| $7,668 |
| $8,515 |
| $8,081 |
| $8,373 |
| As a % of Avg. Fin. Receivables (annualized) |
| 3.77 |
| % |
| 3.13 |
| % |
| 3.68 |
| % |
| 3.72 |
| % |
| 4.02 |
| % |
| Total personnel end of quarter |
| 339 |
| 240 |
| 247 |
| 254 |
| 262 |
| General and Administrative Expense |
| $13,605 |
| $5,847 |
| $4,717 |
| $6,745 |
| $11,246 |
| As a % of Avg. Fin. Receivables (annualized) |
| 5.39 |
| % |
| 2.39 |
| % |
| 2.04 |
| % |
| 3.10 |
| % |
| 5.40 |
| % |
| Adjusted General and Administrative Expense |
| As a % of Avg. Fin. Receivables (3) |
| 2.62 |
| % |
| 2.21 |
| % |
| 2.40 |
| % |
| 2.81 |
| % |
| 2.55 |
| % |
| Non-Interest Expense/Average Total Managed Assets |
| 8.89 |
| % |
| 4.18 |
| % |
| 4.74 |
| % |
| 5.32 |
| % |
| 7.49 |
| % |
| Adjusted Non-Interest Expense/Average Total Managed Assets (4) |
| 4.74 |
| % |
| 3.75 |
| % |
| 4.36 |
| % |
| 5.05 |
| % |
| 5.23 |
| % |
| Efficiency Ratio |
| 83.51 |
| % |
| 53.92 |
| % |
| 57.64 |
| % |
| 66.51 |
| % |
| 75.31 |
| % |
| Adjusted Efficiency Ratio (4) |
| 52.68 |
| % |
| 47.58 |
| % |
| 53.38 |
| % |
| 63.93 |
| % |
| 65.09 |
| % |
_________________
(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 adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures.
(4) Adjusted non-interest expense adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures.
(5) Effective January 1, 2020, in connection with the adoption of ASU 2016-13 "CECL", residual income is no longer recorded as a component of fee income and instead is presented within the allowance for loan loss
(6) Excludes Paycheck Protection Program Loans Originated
(7) Non-Accrual as of March 31, 2021 includes restructured contracts totaling $12.1 million for Equipment Finance and $0.3 million for Working Capital.
Marlin Business Services Corp. and Subsidiaries
Supplemental Quarterly Data
(Dollars in thousands, except share amounts)
| Quarter Ended: |
| 3/31/2020 |
| 6/30/2020 |
| 9/30/2020 |
| 12/31/2020 |
| 3/31/2021 |
| Balance Sheet: |
| Assets |
| Investment in Leases and Loans |
| $1,002,611 |
| $956,981 |
| $891,940 |
| $854,701 |
| $822,706 |
| Initial Direct Costs and Fees |
| 19,525 |
| 17,698 |
| 16,113 |
| 14,583 |
| 13,635 |
| Reserve for Credit Losses |
| (52,060 |
| ) |
| (63,644 |
| ) |
| (61,325 |
| ) |
| (44,228 |
| ) |
| (38,912 |
| ) |
| Net Investment in Leases and Loans |
| $970,076 |
| $911,035 |
| $846,728 |
| $825,056 |
| $797,429 |
| Cash and Cash Equivalents |
| 211,070 |
| 211,706 |
| 195,132 |
| 135,691 |
| 110,622 |
| Restricted Cash |
| 6,474 |
| 6,072 |
| 5,771 |
| 4,719 |
| 4,358 |
| Other Assets |
| 75,917 |
| 67,402 |
| 58,320 |
| 56,532 |
| 60,455 |
| Total Assets |
| $1,263,537 |
| $1,196,215 |
| $1,105,951 |
| $1,021,998 |
| $972,864 |
| Liabilities |
| Deposits |
| 941,996 |
| 902,191 |
| 823,707 |
| 729,614 |
| 678,331 |
| Total Debt |
| 62,193 |
| 50,890 |
| 39,833 |
| 30,665 |
| 23,670 |
| Other Liabilities |
| 70,858 |
| 62,130 |
| 60,061 |
| 65,353 |
| 69,161 |
| Total Liabilities |
| $1,075,047 |
| $1,015,211 |
| 923,601 |
| 825,632 |
| 771,162 |
| Stockholders' Equity |
| Common Stock |
| $119 |
| $119 |
| $120 |
| $120 |
| $120 |
| Paid-in Capital, net |
| 75,647 |
| 75,606 |
| 75,893 |
| 76,323 |
| 76,682 |
| Other Comprehensive Income (Loss) |
| 20 |
| 86 |
| 93 |
| 69 |
| (115 |
| ) |
| Retained Earnings |
| 112,704 |
| 105,193 |
| 106,244 |
| 119,854 |
| 125,015 |
| Total Stockholders' Equity |
| $188,490 |
| $181,004 |
| $182,350 |
| $196,366 |
| $201,702 |
| Total Liabilities and |
| Stockholders' Equity |
| $1,263,537 |
| $1,196,215 |
| $1,105,951 |
| $1,021,998 |
| $972,864 |
| Capital and Leverage: |
| Equity |
| $188,490 |
| $181,004 |
| $182,350 |
| $196,366 |
| $201,702 |
| Debt to Equity |
| 5.33 |
| 5.27 |
| 4.74 |
| 3.87 |
| 3.48 |
| Equity to Assets |
| 14.92 |
| % |
| 15.13 |
| % |
| 16.49 |
| % |
| 19.21 |
| % |
| 20.73 |
| % |
| Regulatory Capital Ratios: |
| Tier 1 Leverage Capital |
| 16.18 |
| % |
| 15.05 |
| % |
| 16.92 |
| % |
| 18.78 |
| % |
| 20.68 |
| % |
| Common Equity Tier 1 Risk-based Capital |
| 18.64 |
| % |
| 19.33 |
| % |
| 21.17 |
| % |
| 22.74 |
| % |
| 23.79 |
| % |
| Tier 1 Risk-based Capital |
| 18.64 |
| % |
| 19.33 |
| % |
| 21.17 |
| % |
| 22.74 |
| % |
| 23.79 |
| % |
| Total Risk-based Capital |
| 19.94 |
| % |
| 20.65 |
| % |
| 22.49 |
| % |
| 24.04 |
| % |
| 25.08 |
| % |
_________________
(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 adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures.
(4) Adjusted non-interest expense adjusts certain items, as defined in the reconciliation of GAAP to Non-GAAP financial measures.
(5) Effective January 1, 2020, in connection with the adoption of ASU 2016-13 "CECL", residual income is no longer recorded as a component of fee income and instead is presented within the allowance for loan loss
(6) Excludes Paycheck Protection Program Loans Originated
(7) Non-Accrual as of March 31, 2021 includes restructured contracts totaling $12.1 million for Equipment Finance and $0.3 million for Working Capital.