Marlin Reports Record Q3 Volume, Investment in Loans/Leases

Marlin Business Services reported Q3/16 net income of $4.3 million compared to $4.8 million for the third quarter last year. Included in Marlin’s Q3/16 net income are income tax charges of $0.1 million relating to a true-up of state tax apportionments along with $0.2 million of additional expenses related to the company’s “Marlin 2.0” initiative.

Combined Equipment Finance and Funding Stream origination volume for Q3/16 of $128.3 million was the fourth consecutive quarter of record origination volume for the company. Equipment Finance origination volume of $117.9 million in Q3/16 was up 3.8% compared to $113.6 million in the prior quarter and increased 18.4% from $99.7 million in Q3/15. The company also experienced solid Funding Stream origination volume in Q3/16 totaling $10.3 million, up from $7.9 million sequentially and $2.2 million in the same period a year ago.

Marlin noted its investment in leases and loans ended the quarter at $756.1 million, an all-time record and up 15.1% year-over-year.

“The third quarter was a very productive period for Marlin highlighted by record origination volume and portfolio size, continued strong credit quality and significant progress on key strategic initiatives to drive sustained profitable growth,” commented Jeffrey Hilzinger, Marlin’s president and chief executive officer. “Total origination volume of $128.3 million was an all-time record, up nearly 6% compared to the previous quarter and nearly 26% from a year ago. Our origination growth was broad-based and driven by increased applications in our Equipment Finance business, including solid contributions from our new Franchise and Transportation platforms. In addition, Funding Stream, our working capital loan business, continues to gain traction and comprised $10.3 million, or 8%, of total originations in the quarter, up from $7.9 million, or 6%, of total originations in the prior quarter. Our Investment in leases and loans also reached an all-time record during the quarter, increasing to $756.1 million, up almost 4% compared to the previous quarter and up 15% from a year ago. Further, we achieved the record origination volume while adhering to our strict underwriting standards as evidenced by the portfolio’s credit performance, which remained excellent.”

Hilzinger continued, “In addition to our solid operational performance, during the quarter we kicked-off our ‘Marlin 2.0’ initiative, which is designed to transform the company from primarily a micro-ticket equipment lessor into a broader provider of credit products and services to small businesses. As a result of this strategic re-visioning process, we expect to better scale our origination platforms, evaluate and renew our operating processes and better leverage our structural costs to drive sustainable growth and improved returns. Overall, I am pleased with our early progress with the Marlin 2.0 initiative and look forward to providing updates in future quarters.”

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