Marlin Reports $5.9MM Q2/20 Loss, Volume Down 71% Y/Y

Marlin Business Services reported a Q2/20 net loss of $5.9 million, compared with net loss of $11.8 million in Q1/20 and net income of $6.1 million a year ago.

Total Q2/20 sourced origination volume of $67.2 million was down 71.0% year over year. Average total finance receivables were $979.3 million, down 5% year over year.

Total allowance for credit losses was $63.6 million in Q2/20; allowance as a percentage of receivables was 5.97% for equipment finance and 18.92% for working capital.

Marlin reported annualized Q2/20 net charge-offs of 3.47%, compared with 3.11% in Q1/20 and 1.88% in Q2/19.

Marlin assisted its customers by restructuring more than 5,000 contracts totaling $133.8 million, or 13.7%, of net investment through payment deferrals.

“We, along with the entire financial services industry, continue to operate in a challenging and uncertain environment arising from the unprecedented impact of the COVID-19 health crisis on our business,” Jeffrey A. Hilzinger, president and CEO of Marlin, said. “Our $5.9 million net loss during the quarter was driven by a significant increase in the allowance for loan losses, as our provision for credit losses was $18.8 million. Despite the loss for the quarter, our capital and liquidity positions remain very strong which enabled us to provide payment deferral contract modifications for a select group of customers. We also maintained our second quarter dividend and took steps to significantly reduce costs and re-align our organizational structure to take advantage of emerging opportunities that we believe will accelerate as the current economic uncertainty dissipates.”

“As we manage the business through this challenging environment, we remain focused on our core fundamentals: protecting our employees and our portfolio, helping our customers, maintaining strong liquidity, reducing costs and proactively preparing for the future. I am extremely proud of our employees’ dedication to both our business and our customers during these challenging times. We are thankful for the support of our shareholders, and we look forward to continuing to serve our customers and communities during this time of need and emerging from this crisis in an even stronger competitive position.”

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