updated 11/9/2010 4:45:35 AM ET 2010-11-09T09:45:35

Third Quarter Highlights:

  • Net Income of $1.4 million, an increase of 182% over the third quarter of 2009
  • Increased sales force by 15 full-time equivalents to 84
  • 12.9% increase in origination funding from the second quarter of 2010
  • 30+ day lease delinquencies improved 29 basis points from the second quarter of 2010 and improved 120 basis points from third quarter of 2009
  • Non-performing assets improved 15% from the second quarter of 2010 and 54% from third quarter of 2009
  • Available committed funding of $105 million
  • Strong capital position, equity to assets ratio of 33.1%
  • Total risk-based capital of 40.24%

MOUNT LAUREL, N.J., Nov. 8, 2010 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (Nasdaq:MRLN) today reported third quarter 2010 net income of $1.4 million, or $0.11 per diluted share, and net income on an adjusted basis of $1.4 million, or $0.11 per share.

"Despite the lingering effects of a weak economy, we're pleased with the solid results for the quarter," says Daniel P. Dyer, Marlin's CEO. "We continue to make steady progress on the sales side, with solid new lease originations growth and continued investment in the sales force. Portfolio credit quality is in very good shape and the underlying credit and profit fundamentals of the business are solidly intact to support profitable growth in the future. Looking ahead, our attention is squarely focused on disciplined growth and capitalizing on the exciting opportunity to serve the growing demand for our services by customers across the U.S."   

Third quarter 2010 lease production was $35.8 million, based on initial equipment cost, up 12.9% from $31.7 million for the second quarter of 2010. Approval rates on lease originations were 49% for the third quarter of 2010. The average implicit yield on new lease production was 14.40% in the third quarter of 2010. Net interest and fee margin was 12.26% for the third quarter of 2010 compared to 11.66% in the second quarter of 2010 and 10.20% a year ago.

The Company increased its sales force 22% in third quarter 2010 to 84 full-time equivalents.

Credit trends continued to improve and have returned to historic levels. Highlights for the third quarter of 2010 included:

  • Leases over 30 days delinquent were 2.35% of Marlin's lease portfolio, which is 29 basis points lower than the second quarter of 2010 and the lowest since third quarter of 2006.  On a dollar basis, 30+ day delinquencies have decreased 15% from the second quarter of 2010.
  • Leases over 60 days delinquent were 1.03% of Marlin's lease portfolio, which is 17 basis points lower than the second quarter of 2010 and the lowest since the fourth quarter of 2007. On a dollar basis 60+ day delinquencies have decreased 18% from the second quarter of 2010.
  • Non-performing assets of $2.4 million were 15% lower than the second quarter of 2010.
  • Net lease charge-offs of $2.8 million were 20% lower than the second quarter of 2010 levels.  
  • Static pool credit losses and delinquency performance continue to be at or better than expectations for 2008, 2009 and 2010 vintages.
  • Reflecting improving credit trends, the allowance for credit losses as a percentage of total finance receivables stands at 2.31% as of September 30, 2010 compared to 2.40% as of June 30, 2010 and 2.71% as of December 31, 2009.

In conjunction with this release, static pool loss statistics and vintage delinquency analysis have been updated as supplemental information on the Investor Relations section of the Company's website at www.marlincorp.com .

At September 30, 2010, the Company had outstanding $110.6 million of leases and loans funded through its banking subsidiary, Marlin Business Bank, and had $95.4 million in FDIC-insured deposits outstanding at an average borrowing rate of 2.69% with a weighted average term to maturity of 2.9 years. Average deposits outstanding for the third quarter of 2010 were $96.3 million at a weighted average interest rate of 2.70%.

On September 24, 2010, Marlin Leasing Receivables XIII LLC, an affiliate of the Company, closed on a $50 million three-year committed funding facility with Key Equipment Finance Inc. The facility will be used by the Company to fund its growth, increasing its ability to extend flexible equipment financing options to small- and medium-sized businesses nationwide.

At September 30, 2010, the Company had $105 million of available funding through its bank facilities and Marlin Business Bank.

In our form 10Q filed on August 6, 2010, we disclosed that we were in discussions with the Federal Reserve Bank in connection with the Federal Reserve Bank's interpretation of the Interagency Policy Statement on the Allowance for Loan and Lease Losses (SR 06-17) dated December 13, 2006 (the "ALLL Policy Statement") and the appropriate application of the ALLL Policy Statement to management's estimates used in determining the Company's allowance for credit losses (the "Allowance").  On October 27, 2010, Marlin Business Bank received a written determination from the Federal Reserve Bank of San Francisco and the Utah Department of Financial Institutions (the "MBB Report"). We do not believe that any of the recommendations in the MBB Report require a material adjustment by the Company.

While the Company has not received a written determination from the Federal Reserve Bank of Philadelphia in connection with the ALLL Policy Statement and Allowance discussion, if the Company receives such a written determination and if, as a result of the Company's review of such written determination, management determines that it should revise its estimates or methodology used to compute the Allowance, such changes could have a material impact on the size of the Allowance.

Conference Call and Webcast

We will host a conference call on Tuesday, November 9, 2010 at 9:00 a.m. ET to discuss the Company's third quarter 2010 results. If you wish to participate, please call 877-312-5414 approximately 10 minutes in advance of the call time. The conference ID will be: "Marlin." The call will also be webcast on the Investor Relations page of the Company's website, www.marlincorp.com . An audio replay will also be available on the Investor Relations section of Marlin's website for approximately 100 days.

About Marlin Business Services Corp.

Marlin Business Services Corp. is a nationwide provider of equipment leasing to small businesses. The Company's principal operating subsidiary, Marlin Leasing Corporation, finances over 100 equipment categories in a segment of the market generally referred to as "small-ticket" leasing (i.e., leasing transactions less than $250,000). The Company was founded in 1997 and completed its initial public offering of common stock on November 12, 2003. For more information, visit www.marlincorp.com or call toll free at (888) 479-9111.

The Marlin Business Services Corp. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4087

Forward-Looking Statements

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 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 SEC, 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.

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Operations

Net Income on an Adjusted Basis Reconciliation to GAAP Results


Net Income on an Adjusted Basis is defined as net income excluding the gain (loss) on derivatives, net of tax. The Company believes that Net Income on an Adjusted Basis is a useful performance metric for management, investors and lenders, because it excludes the volatility resulting from derivatives activities subsequent to discontinuing hedge accounting in mid-2008.

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