Marlin Business Services Corp reported fourth quarter 2012 net income of $3.6 million. Net income for the full year 2012 was $11.7 million.
"There were many positive developments for our business in 2012," says Daniel P. Dyer, Marlin's co-founder and Chief Executive Officer. "We delivered strong asset and profit growth and favorable credit quality performance, with a focus on delivering value-added credit products and services to our customers," says Mr. Dyer.
Fourth quarter 2012 lease production was $87.8 million based on initial equipment cost, up from $81.6 million for the third quarter of 2012 and 28% higher than the fourth quarter of 2011. Full year 2012 lease origination volume was $322.2 million, a 41% increase year-over-year.
Net interest and fee margin increased in the fourth quarter of 2012 to 13.54%, from 13.51% in the third quarter of 2012, and has increased 50 basis points from the fourth quarter a year ago. For the full year, net interest and fee margin is 13.42%, an improvement of 83 basis points over 2011.
The Company's cost of funds improved 9 basis points from the third quarter of 2012 and 128 basis points from the fourth quarter of 2011. The improvement resulted from the Company's continuing shift in funding mix to lower-cost insured deposits issued by the Company's subsidiary, Marlin Business Bank. On a total year basis, cost of funds was 1.59%, compared to 3.19% for 2011.
The increase to the provision for credit losses this quarter is a result of higher charge-offs and portfolio growth. The allowance for credit losses as a percentage of total finance receivables stands at 1.30% as of December 31, 2012, compared to 1.20% as of September 30, 2012. The allowance for credit losses as of December 31, 2012 represents 265% of total 60+ day delinquencies compared to 258% as of September 30, 2012.
Leases over 30 days delinquent were 0.92% of Marlin's lease portfolio as of December 31, 2012, 5 basis points higher than the third quarter of 2012 and 10 basis points lower than a year ago. Leases over 60 days delinquent were 0.42% of Marlin's lease portfolio as of December 31, 2012, up 2 basis points from 0.40% at September 30, 2012 and 4 basis points higher than a year ago.
Fourth quarter net charge-offs were 1.26% of average total finance receivables, up from 0.89% for the third quarter and 13 basis points lower than the fourth quarter of 2011. The increase over the prior quarter reflects the impact of portfolio growth and seasoning, and the timing of defaults.
Read the full Marlin Business Services Corp earnings press release.