Marlin Reports Net Income of $5.1MM for Q1/2019

Marlin Capital Solutions reported first quarter 2019 net income of $5.1 million, or $0.41 per diluted share, compared with net income of $6.2 million, or $0.50 per share a year ago.

First quarter net income on an adjusted basis was $5.0 million, or $0.40 per diluted share, compared with $6.2 million or $0.50 per diluted share a year ago.

First quarter highlights also included:

  • Net investment in leases and loans totaled $1.0 billion, up 9.9% from a year ago, and total managed assets ended the first quarter at $1.2 billion, up 19.1% from a year ago
  • Total sourced origination volume of $208.4 million, up 27.1% year-over-year; direct origination volume of $43.6 million, up 41.1% year-over-year
  • Total origination yield of 12.76%, up 40 basis points from the prior quarter and up 32 basis points year-over-year
  • Annualized net charge-offs of 1.83%, compared with 2.30% in the prior quarter and 1.68% in the first quarter last year
  • Equity to assets ratio decreased to 16.17%, compared with 17.17% in the first quarter last year

Jeffrey A. Hilzinger, Marlin’s president and CEO, commented, “We enjoyed a solid start to 2019 as strong execution delivered excellent origination volume growth and stable portfolio performance. First quarter total sourced origination volume was $208.4 million, up 27.1% year-over-year, and a record for a first quarter. Growth in the quarter was driven by increased customer demand for both our Equipment Finance and Working Capital Loan products and was strong in both our Direct and Indirect origination channels. We also referred or sold $56.5 million of leases and loans as part of our capital markets initiatives. Because of these origination and capital markets activities, our Net Investment in Leases and Loans is now consistently in excess of $1 billion and up 10% from a year ago. Total managed assets, which includes both our balance sheet portfolio and assets we sell but continue to service for others, grew to more than $1.2 billion, an increase of 19.1% from the first quarter last year. In addition, our focus on maintaining disciplined underwriting standards continues to be a top priority and portfolio performance during the quarter was stable and within expectations.”

Hilzinger concluded, “First quarter net income of $0.41 per diluted share was negatively impacted by $0.04 because of the timing of expense recognition due to the adoption of a new lease accounting standard. We expect the timing impact to normalize over the course of the year and we continue to expect earnings to be more heavily-weighted towards the second half of 2019, as our recent investments in our salesforce continue to generate returns. Importantly, we are affirming our previously issued earnings guidance for the full year.”

Marlin is affirming its previously issued guidance for the full year ending December 31, 2019 as follows:

  • Total sourced origination volume is expected to finish approximately 20% above 2018 levels
  • Portfolio performance is expected to remain in line with the results observed over the last 12 months
  • Net interest and fee margin, as a percentage of average finance receivables, is expected to be between 9.5% and 10.0%
  • ROE is expected to continue to improve in 2019 as the Company continues to improve operating scale
  • Adjusted EPS is expected to be between $2.30 and $2.40 per share

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Terry Mulreany
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