Marlin Business Services Corp. reported fourth quarter 2015 net income of $3.0 million compared to $4.9 million for fourth quarter 2014. Before one-time costs relating to the retirement of the CEO, fourth quarter 2015 net income was $4.9 million.
For the year ended December 31, 2015, net income was $16.0 million compared to $19.4 million for the year ended December 31, 2014. Before one-time costs relating to the retirement of the CEO and the resignation of the CFO, 2015 net income was $18.3 million.
“We are excited to be gaining traction on our growth plans,” said Ed Siciliano, Chief Sales Officer and Interim CEO. “2015 was a year of investment and, although impactful to short term earnings, that investment is starting to pay off as we see new originations accelerating. We are also pleased with the performance of and growing customer demand for our Funding Stream loan product,” said Siciliano.
Total lease and loan production for the fourth quarter of $107.6 million was the highest quarter in the history of the company and was 7.1% above the previous quarter. Fourth quarter 2015 lease production was $103.9 million compared to $98.2 million in the third quarter of 2015 and $89.4 million in fourth quarter of 2014. Full year lease and loan production was $381.1 million. Full year lease production was $374.2 million, up 11.8% year over year.
Net interest and fee margin as a percentage of average finance receivables was 11.52% for the fourth quarter ended December 31, 2015, down 44 basis points from the third quarter of 2015 and down 96 basis points from a year ago. The decrease in margin percentage was a result of the downward repricing of assets, decline in fee income, change in mix, and slight increase in cost of funds. The Company’s cost of funds increased to 98 basis points, compared to 89 basis points for the third quarter of 2015 and 86 basis points for the fourth quarter of 2014. The increase in cost of funds was due both to increasing leverage and increasing rates.
On a dollar basis, net interest and fee margin declined 1% to $76.3 million for the year ended December 31, 2015 versus $76.7 million for the year ended December 31, 2014.
The allowance for credit losses as a percentage of total finance receivables was 1.24% at December 31, 2015, and represents 266% of total 60+ day delinquencies.
Finance receivables over 30 days delinquent were 0.73% of the Company’s total finance receivables portfolio as of December 31, 2015. Finance receivables over 60 days delinquent were 0.41% of the Company’s total finance receivables portfolio as of December 31, 2015, down 2 basis points from 0.43% at September 30, 2015. Fourth quarter net charge-offs were 1.60% of average total finance receivables versus 1.23% for the third quarter ended September 30, 2015 and 1.56% a year ago.
The Company’s efficiency ratio for the fourth quarter was 69.0% compared to an efficiency ratio of 53.8% for the quarter ended September 30, 2015 and 48.9% for the quarter ended December 31, 2014. For the full year the efficiency ratio is 57.8% versus 50.4% at December 31, 2014. Efficiency ratios have increased in recent periods as we invest in new products offerings.
Read the full Marlin Business Services Earnings Release.