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Marlin Business Services Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 3, 2012 04:26PM

Marlin Business Services Corp. (MRLN) filed Quarterly Report for the period ended 2012-06-30. Marlin Business Services Corp. has a market cap of $200.5 million; its shares were traded at around $15.79 with a P/E ratio of 28.7 and P/S ratio of 3.2. The dividend yield of Marlin Business Services Corp. stocks is 1.5%.



Highlight of Business Operations:

For the three-month period ended June 30, 2012 compared to the three-month period ended June 30, 2011, net interest and fee income increased $3.1 million, or 29.0%, primarily due to the impact of the 18.9% million increase in average total finance receivables, combined with a lower cost of funds on liabilities. The provision for credit losses increased $0.1 million, or 11.1%, to $1.0 million for the three-month period ended June 30, 2012 from $0.9 million for the same period in 2011, primarily due to portfolio growth, partially offset by lower charge-offs and improved delinquencies. Other expenses increased $0.6 million, or 6.9%, for the three-month period ended June 30, 2012 compared to the three-month period ended June 30, 2011, primarily due to increased volume and increased sales compensation expense.

Interest income, net of amortized initial direct costs and fees, increased $1.9 million, or 17.4%, to $12.8 million for the three-month period ended June 30, 2012 from $10.9 million for the three-month period ended June 30, 2011. The increase in interest income was principally due to the 18.9% increase in average total finance receivables, which increased $66.4 million to $417.8 million at June 30, 2012 from $351.4 million at June 30, 2011, partially offset by a decrease in average yield of 9 basis points. The increase in average total finance receivables is primarily due to the continued seasoning and development of our sales account executives, combined with adjusting our credit underwriting guidelines in response to economic conditions. The average yield on the portfolio decreased, primarily due to lower yields on the new leases compared to the yields on the leases repaying. The weighted average implicit interest rate on new finance receivables originated increased 15 basis points to 13.19% for the three-month period ended June 30, 2012, compared to 13.04% for the three-month period ended June 30, 2011.

Salaries and benefits expense. Salaries and benefits expense increased $0.2 million, or 3.7%, to $5.6 million for the three month period ended June 30, 2012 from $5.4 million for the same period in 2011. The increase was primarily due to increased sales compensation. Salaries and benefits expense, as a percentage of average total finance receivables, was 5.39% for the three-month period ended June 30, 2012 compared with 6.13% for the same period in 2011.

Interest income, net of amortized initial direct costs and fees, increased $3.1 million, or 14.2%, to $24.9 million for the six-month period ended June 30, 2012 from $21.8 million for the six-month period ended June 30, 2011. The increase in interest income was principally due to a 15.4% increase in average total finance receivables, which increased $53.9 million to $404.2 million at June 30, 2012 from $350.3 million at June 30, 2011, partially offset by a decrease in average yield of 12 basis points. The increase in average total finance receivables is primarily due to the continued seasoning and development of our sales account executives, combined with adjusting our credit underwriting guidelines in response to economic conditions. The average yield on the portfolio decreased, primarily due to lower yields on the new leases compared to the yields on the leases repaying. The weighted average implicit interest rate on new finance receivables originated decreased 24 basis points to 12.96% for the six-month period ended June 30, 2012, compared to 13.20% for the six-month period ended June 30, 2011, primarily due to a change in mix of new origination types toward larger program opportunities.

Salaries and benefits expense. Salaries and benefits expense increased $1.4 million, or 12.4%, to $12.7 million for the six months ended June 30, 2012 from $11.3 million for the same period in 2011. The increase was primarily due to increased sales compensation and additional compensation related to the achievement of certain performance criteria determined annually. Salaries and benefits expense, as a percentage of average total finance receivables, was 6.28% for the six-month period ended June 30, 2012 compared with 6.46% for the same period in 2011. Total personnel increased to 258 at June 30, 2012 from 251 at June 30, 2011, primarily due to increased sales staffing levels, which were 106 sales account executives at June 30, 2012, compared to 97 sales account executives at June 30, 2011.

Read the The complete Report



Stocks Discussed: MRLN,
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