Marlin Business Services Corp.
Annual Report 2014

Plain-text annual report

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 4 A N N U A L R E P O R T 2014 ANNUAL REPORT LEADING LENDER TO SMALL BUSINESSES SINCE 1997 2014 ANNUAL REPORT MARLIN BUSINESS SERVICES CORP. ® CONSOLIDATED FINANCIAL SUMMARY YEAR ($ in Thousands) Revenues Net Income 2010 2011 2012 2013 2014 $66,738 $62,227 $70,921 $83,675 $88,761 $5,668 $6,175 $11,697 $16,231 $19,350 Net Income – Adjusted(1) $5,738 $6,207 $11,701 $16,232 $19,350 Net Investment in Leases and Loans $351,569 $387,840 $503,017 $597,075 $629,507 Total Assets Deposits(2) $468,062 $485,969 $602,348 $702.207 $758.449 $92,919 $198,579 $378,188 $503,038 $550,119 Total Stockholders’ Equity $160,003 $164,101 $174,250 $163,038 $173,964 Total Originations (Leases and Loans) $134,030 $229,014 $322,198 $349,461 $334,835 Total Number of New Leases and Loans Originated 12,407 18,102 24,557 25,712 24,228 Net Interest and Fee Margin 11.75% 12.59% 13.42% 13.42% 12.72% Net Charge-Offs(3) 3.58% 1.81% 1.11% 1.41% 1.50% REGULATORY CAPITAL RATIOS:OS: Tier 1 Leverage Capital 34.87% 33.74% 29.35% 23.46% 23.43% Tier 1 Risk-based Capital 39.58% 37.94% 31.76% 25.90% 26.14% Total Risk-based Capital 40.84% 39.19% 32.95% 27.15% 27.39% (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. ABOUT MARLIN Marlin Business Services Corp.® is a nationwide provider of commercial lending solutions for small and mid-size businesses. Our equipment financing and loan products are offered directly to businesses, and through third party vendor programs, which includes manufacturers, distributors, independent dealers and brokers. Since its inception in 1997, Marlin has extended credit to over a quarter of a million business customers. Our mission is to offer convenient financing products while providing the highest level of personalized customer service. Marlin Business Services Corp. Total Return Performance Marlin Business Services Corp. Russell 2000 SNL Specialty Lender 400 350 300 250 200 150 100 l e u a V x e d n I 50 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 Index Marlin Business Services Corp. Russell 2000 SNL Specialty Lender Period Ending 12/31/09 100.00 100.00 100.00 12/31/10 159.52 126.86 122.97 12/31/11 160.93 121.56 128.98 12/31/12 258.54 141.43 168.14 12/31/13 356.97 196.34 253.17 12/31/14 297.69 205.95 253.72 Source : SNL Financial LC, Charlottesville, VA © 2015 www.snl.com 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 LAWRENCE J. DEANGELO Chairman JOHN J. CALAMARI DANIEL P. DYER SCOTT HEIMES MATTHEW J. SULLIVAN J. CHRISTOPHER TEETS JAMES W. WERT 2014 ANNUAL REPORT MARLIN BUSINESS SERVICES CORP. ® TO OUR SHAREHOLDERS: 2014 2014 capped a year of solid financial performance. For the year, the company delivered 19% year-over-year profit growth by originating high quality earning assets while continuing to adhere to our disciplined operating approach and effective credit risk management philosophy. Market conditions and the unparalleled level of excess liquidity continued in 2014, influencing the competitive environment and its impact on asset growth and yield. For the year, we reported net income of $19.4 million and $1.49 per diluted share, an increase from the $1.25 per diluted share earned in 2013. Our strong financial performance provided the flexibility to return excess capital to shareholders through cash dividends. In 2014, in connection with our efforts to prudently manage capital, the company’s dividend program delivered regular dividends per share of $0.47 versus 2013’s $0.42 regular dividend per share and a $2.00 one-time special dividend per share. For the year, return on equity grew to 11.5%, compared to 9.3% for 2013. Future Outlook The company is well-positioned for long-term success by expanding our core lending franchise. Going forward, our market focus is to continue to grow our highly profitable small-ticket lease business. Additionally, our unique operational capabilities and sizable customer base provide us an attractive opportunity to expand our products and service offerings tailored to the small business market. Funding Stream, our recently launched short-term working capital loan offer, seeks to capitalize on Marlin’s strengths by providing customers responsive access to credit while adhering to a disciplined operating approach. Our bank depository, Marlin Business Bank, will continue to be an instrumental component to our future by providing the business access to stable, attractively priced deposit funding and by providing a trusted financing source to the small business community we serve. Our core value proposition remains centered on Marlin’s tradition of serving customers in a personalized, convenient and flexible fashion with a differentiated level of service. In combination with offering an expanded selection of credit products to customers, our aspiration is for Marlin to emerge as a premium provider to small businesses when it comes to them choosing a lending partner to help them grow and succeed. Of course, our own 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. On behalf of all our employees, I wish to thank you for your continued support. Daniel P. Dyer Co-Founder & Chief Executive Officer 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 4 A N N U A L R E P O R T www.MARLINCORP.com 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 

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