Marlin Business Services Corp. reported first quarter 2012 net income of $1.6 million.

“Results for the quarter demonstrate the solid performance track of our business,” says Daniel P. Dyer, Marlin’s co-founder and Chief Executive Officer. “Our value-added service proposition to customers has proven to be a key part of our winning strategy, driving the delivery of sustainable asset growth at attractive risk adjusted margins. Looking ahead, we see plenty of opportunities for profitable growth by serving the equipment financing needs of customers and small businesses across the country,” says Dyer.

First quarter 2012 lease production was $72.4 million based on initial equipment cost, up 6% from $68.4 million for the fourth quarter of 2011 and 54% higher than the first quarter of 2011.

The average number of monthly originating sources reached 1,016, up 12% from 911 for the fourth quarter of 2011 and an increase of 37% from the first quarter a year ago.

Net interest and fee margin increased 31 basis points in the first quarter of 2012, to 13.35% from 13.04% in the fourth quarter of 2011, and has increased 105 basis points from the first quarter a year ago.
Driving the margin improvement is the Company’s cost of funds, which improved 34 basis points from the fourth quarter of 2011 and 159 basis points from the first quarter of 2011. The improvement resulted from the Company’s shift in funding mix from term funding to lower-cost insured deposits issued by the Company’s subsidiary, Marlin Business Bank.

Reflecting positive credit trends, the allowance for credit losses as a percentage of total finance receivables stands at 1.28% as of March 31, 2012, compared to 1.39% as of December 31, 2011. The allowance for credit losses as of March 31, 2012 represents 275% of total 60+ day delinquencies.

Leases over 30 days delinquent were 0.94% of Marlin’s lease portfolio as of March 31, 2012, which is 8 basis points lower than the fourth quarter of 2011 and 73 basis points lower than a year ago. Leases over 60 days delinquent were 0.41% of Marlin’s lease portfolio as of March 31, 2012, up slightly from 0.38% at December 31, 2011 but 34 basis points lower than a year ago.

First quarter net lease charge-offs were 1.23% of average net investment, representing an improvement of 17 basis points from the fourth quarter of 2011 and an improvement of 107 basis points from the first quarter of 2011.
First quarter total operating expenses were $10.4 million, up $1.5 million, or 17%, from the fourth quarter of December 31, 2011. The increase in operating expenses is due primarily to the first quarter seasonal impact of withholding taxes, accruals and restricted stock.

The Company maintains strong capital ratios with a consolidated equity to assets ratio of 32.4%.

To read the full press release and earnings report, click here.