Marlin Business Services Corp.
Annual Report 2013

Plain-text annual report

CORPORATE OFFICES 300 Fellowship Road Mt. Laurel, NJ 08054 P (888)479-9111 F (888)479-1100 1500 John F. Kennedy Blvd. Suite 330 Philadelphia, PA 19102 P (888)479-9111 F (800)303-9545 WESTERN OFFICE 16115 SW 1st Street Unit 204 Sherwood, OR 97140 P (503)610-1850 F (888)395-6756 SOUTHEASTERN OFFICE 6470 East Johns Crossing Suite 490 Johns Creek, GA 30097 P (888)479-9111 F (800)535-8576 MARLIN BUSINESS BANK 2795 E. Cottonwood Pkwy. Suite 120 Salt Lake City, UT 84121 P (888)479-9111 F (877)870-6756 www.marlincorp.com M A R L I N B U S I N E S S S E R V I C E S C O R P . ® 2 0 1 3 A N N U A L R E P O R T ANNUAL REPORT BUSINESS SERVICES CORP. LEADING LENDER TO SMALL BUSINESSES SINCE 1997 2013 ANNUAL REPORT MARLIN BUSINESS SERVICES CORP. ® CONSOLIDATED FINANCIAL SUMMARY YEAR ($ in Thousands) 2009 2010 2011 2012 2013 Revenues $90,299 $66,738 $62,227 $70,921 $83,675 Net Income (Loss) $1,036 $5,668 $6,175 $11,697 $16,231 Net Income – Adjusted(1) $2,221 $5,738 $6,207 $11,701 $16,232 Net Investment in Leases and Loans $448,610 $351,569 $387,840 $503,017 $597,075 Total Assets Deposits(2) $565,803 $468,062 $485,969 $602,348 $702,207 $80,288 $92,919 $198,579 $378,188 $503,038 Total Stockholders’ Equity $151,885 $160,003 $164,101 $174,250 $163,038 Total Originations (Leases and Loans) $88,935 $134,030 $229,014 $322,198 $349,461 Total Number of New Leases and Loans Originated 9,763 12,407 18,102 24,557 25,712 Net Interest and Fee Margin 10.05% 11.75% 12.59% 13.42% 13.42% Net Charge-Offs(3) 5.42% 3.58% 1.81% 1.11% 1.41% REGULATORY CAPITAL RATIOS: Tier 1 Leverage Capital 24.89% 34.87% 33.74% 29.35% 23.46% Tier 1 Risk-based Capital 30.19% 39.58% 37.94% 31.76% 25.90% Total Risk-based Capital 31.45% 40.84% 39.19% 32.95% 27.15% (1) Net Income - Adjusted represents net income excluding the loss on derivatives and hedging activities, net of tax, and is provided to evaluate the Company’s core business performance without such activities. The Company believes that Net Income - Adjusted 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. (2) FDIC insured deposits. (3) As a percentage of average total finance receivables. MISSION STATEMENT Marlin Business Services Corp.™ is a company of dedicated employees committed to the delivery of quality credit products to small businesses with exceptional customer service and convenience...one customer at a time. S E N I O R C O R P O R A T E O F F I C E R S B O A R D O F D I R E C T O R S DANIEL P. DYER Co-Founder Chief Executive Officer EDWARD J. SICILIANO Executive Vice President Chief Sales Officer LYNNE C. WILSON Senior Vice President Chief Financial Officer EDWARD R. DIETZ, JR. Senior Vice President of Administration and General Counsel KEVIN J. MCGINTY Chairman JOHN J. CALAMARI LAWRENCE J. DEANGELO DANIEL P. DYER MATTHEW J. SULLIVAN J. CHRISTOPHER TEETS JAMES W. WERT 2013 ANNUAL REPORT MARLIN BUSINESS SERVICES CORP. ® TO OUR SHAREHOLDERS: 2013 2013 capped a year of solid growth and financial performance. Our portfolio of managed assets grew 19% and we successfully added to the account base of customers with whom we have a relationship. For the year, 39% profit growth was achieved by originating high quality assets along with adhering to a disciplined operating formula and effectively managing credit risk. New asset growth and account development were driven by effectively penetrating our core market segments and by delivering value-added financing solutions and quality service to our customers. For the year, we reported net income of $16.2 million and $1.25 per diluted share, an increase from the $.91 per diluted share earned for 2012. The company’s financial performance and strong capital position allowed us to return capital to shareholders through cash dividends. 2013’s dividends per share of $2.42 included a one-time special dividend of $2.00. Returns on assets was 2.45% and returns on equity capital increased to 9.3%. Future Outlook As we look ahead, the company is well positioned to capitalize on the opportunity to grow our small business lending franchise. Our operating platform, starting with our sales origination platform and servicing standards, positions us to continue to grow and gain market share. Our vast repository of customer information and capabilities to mine such data is another valuable resource to capitalize on. Our core value proposition of assisting small and mid-size businesses access credit in a convenient, hassle-free manner to finance their capital equipment purchases, combined with the delivery of customized, value-added products and services to our manufacturer, distributor and equipment dealer channel partners, is a winning strategy to generating attractive, risk adjusted returns and increase value for shareholders. Going forward, we will look to continue to execute on our growth strategy by following a disciplined operating approach and growing our market footprint within both our core markets and adjacent new equipment and industry segments where we see opportunities to exploit our core capabilities and competitive strengths. Marlin Business Bank® will continue to be an instrumental part of our success by providing access to inexpensive funding and a trusted financing source for the small business community we serve. Of course, our success will continue to be led through the efforts and dedication of all our employees who work tirelessly to deliver on our mission of serving customers. I would also like to thank Kevin J. McGinty for his 16 years of dedicated service on Marlin’s Board of Directors. On behalf of all our employees, I wish to thank you for your continued support. Daniel P. Dyer Co-Founder & Chief Executive Officer 2013 ANNUAL REPORT MARLIN BUSINESS SERVICES CORP. ® CONSOLIDATED FINANCIAL SUMMARY YEAR ($ in Thousands) 2009 2010 2011 2012 2013 Revenues $90,299 $66,738 $62,227 $70,921 $83,675 Net Income (Loss) $1,036 $5,668 $6,175 $11,697 $16,231 Net Income – Adjusted(1) $2,221 $5,738 $6,207 $11,701 $16,232 Net Investment in Leases and Loans $448,610 $351,569 $387,840 $503,017 $597,075 Total Assets Deposits(2) $565,803 $468,062 $485,969 $602,348 $702,207 $80,288 $92,919 $198,579 $378,188 $503,038 Total Stockholders’ Equity $151,885 $160,003 $164,101 $174,250 $163,038 Total Originations (Leases and Loans) $88,935 $134,030 $229,014 $322,198 $349,461 Total Number of New Leases and Loans Originated 9,763 12,407 18,102 24,557 25,712 Net Interest and Fee Margin 10.05% 11.75% 12.59% 13.42% 13.42% Net Charge-Offs(3) 5.42% 3.58% 1.81% 1.11% 1.41% REGULATORY CAPITAL RATIOS: Tier 1 Leverage Capital 24.89% 34.87% 33.74% 29.35% 23.46% Tier 1 Risk-based Capital 30.19% 39.58% 37.94% 31.76% 25.90% Total Risk-based Capital 31.45% 40.84% 39.19% 32.95% 27.15% (1) Net Income - Adjusted represents net income excluding the loss on derivatives and hedging activities, net of tax, and is provided to evaluate the Company’s core business performance without such activities. The Company believes that Net Income - Adjusted 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. (2) FDIC insured deposits. (3) As a percentage of average total finance receivables. MISSION STATEMENT Marlin Business Services Corp.™ is a company of dedicated employees committed to the delivery of quality credit products to small businesses with exceptional customer service and convenience...one customer at a time. S E N I O R C O R P O R A T E O F F I C E R S B O A R D O F D I R E C T O R S DANIEL P. DYER Co-Founder Chief Executive Officer EDWARD J. SICILIANO Executive Vice President Chief Sales Officer LYNNE C. WILSON Senior Vice President Chief Financial Officer EDWARD R. DIETZ, JR. Senior Vice President of Administration and General Counsel KEVIN J. MCGINTY Chairman JOHN J. CALAMARI LAWRENCE J. DEANGELO DANIEL P. DYER MATTHEW J. SULLIVAN J. CHRISTOPHER TEETS JAMES W. WERT CORPORATE OFFICES 300 Fellowship Road Mt. Laurel, NJ 08054 P (888)479-9111 F (888)479-1100 1500 John F. Kennedy Blvd. Suite 330 Philadelphia, PA 19102 P (888)479-9111 F (800)303-9545 WESTERN OFFICE 16115 SW 1st Street Unit 204 Sherwood, OR 97140 P (503)610-1850 F (888)395-6756 SOUTHEASTERN OFFICE 6470 East Johns Crossing Suite 490 Johns Creek, GA 30097 P (888)479-9111 F (800)535-8576 MARLIN BUSINESS BANK 2795 E. Cottonwood Pkwy. Suite 120 Salt Lake City, UT 84121 P (888)479-9111 F (877)870-6756 www.marlincorp.com M A R L I N B U S I N E S S S E R V I C E S C O R P . ® 2 0 1 3 A N N U A L R E P O R T ANNUAL REPORT BUSINESS SERVICES CORP. LEADING LENDER TO SMALL BUSINESSES SINCE 1997 

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