Marlin Business Services reported Q2/14 net income of $4.9 million was up 10% compared to $4.5 million for second quarter 2013.

Origination volume was $88.9 million in Q2/14, up 20% compared to $74.0 million in Q1/14 and down 3% from $91.4 million in Q2/13. Marlin said the yield on new originations for the quarter was 11.35%, up from 11.27% sequentially, but down from 12.34% in Q2/13.

Marlin noted that average new asset production sources in Q2/14 of 1,197 was up from 1,001 in Q1/14 and down from 1,247 in Q2/13.

Net interest and fee margin of 12.66% is down 39 basis points from the first quarter of 2014 and is down 70 basis points from the second quarter of 2013. The reduction from first quarter 2014 was driven by fee income and interest income. Fee income as a percentage of average total finance receivables is 2.30% for the quarter ended June 2014 compared to 2.50% in the first quarter of 2014 and 2.38% a year ago and is due to lower late fee billings.

Interest income as a percentage of average finance receivables is 11.17% for the second quarter ended June 2014 compared to 11.35% in the first quarter of 2014 and 11.86% a year ago. The decrease in interest income is primarily due to the competitive low interest rate environment and its impact on origination yields in 2014.

The company’s cost of funds remained stable at 81 basis points, compared to 80 basis points for the first quarter of 2014, and improved 7 basis points from the second quarter of 2013. The improvement resulted from the company’s use of lower-cost insured deposits issued by the company’s subsidiary, Marlin Business Bank, its primary funding source. Marlin said its $532 million of insured deposits was up 15% year-over-year.

“New asset originations were up 20% this quarter,” said Daniel P. Dyer, co-founder and chief executive officer. “Our focus and attentiveness to delivering value to our customers, along with our disciplined operating approach, remain core elements to our profitable growth strategy. Favorable operating results and our confident outlook for the future led to the announced dividend increase to $0.125 per share this quarter,” said Dyer.

To view the full Marlin Business Services news release, click here.