Marlin Business Services reported fourth quarter 2016 net income of $4.8 million compared to $3.0 million for the fourth quarter last year. Return on equity for the quarter was 12.06%, up from 7.96% a year ago.

For the year ended December 31, 2016, net income was $17.3 million compared to $16.0 million for the year ended December 31, 2015.

Selected Highlights from the report:
 
Fourth Quarter Summary:

• Total fourth quarter origination volume of $146.1 million, a record for a single quarter, an increase of 13.9% compared to the prior quarter and an increase of 35.4% year-over-year
• Total Funding Stream loan origination volume of $11.3 million, up 9.4% from the prior quarter and 3.1 times higher than a year ago
• Net income of $4.8 million with diluted EPS of $0.38 per share, up from net income of $3.0 million with diluted EPS of $0.24 in the prior year period
• Return on equity increased to 12.06%, 96 basis points higher than the prior quarter
• Total new origination loan and lease yield of 11.50% decreased 19 basis points from the prior quarter and was up 13 basis points year-over-year
• Credit quality remained stable with 30+ and 60+ day delinquencies at 80 basis points and 46 basis points, respectively and annualized net charge-offs during the fourth quarter of 1.40%.
• Strong capital position with equity to assets ratio of 18.19%
• Subsequent to quarter end, completed the acquisition of Horizon Keystone Financial
• Subsequent to quarter end, appointed Louis E. Maslowe as Senior Vice President and Chief Credit Officer

Full Year 2016 Summary:

• Full year total origination volume of $504.3 million, up 31.1% from a year ago
• Full year total Funding Stream loan origination volume of $35.8 million, 5.4 times higher than the prior year period
• Investment in Leases and Loans (before deferred costs and loss allowance) of $793.3 million, an all-time record and up 16.7% year-over-year
• Full year net income of $17.3 million with diluted EPS of $1.38, up from net income of $16.0 million with diluted EPS of $1.25 in the prior year period

“We concluded 2016 with an outstanding fourth quarter driven by robust origination volume and stable credit quality that helped deliver solid earnings growth,” commented Jeffrey A. Hilzinger, Marlin’s President and Chief Executive Officer. “Total origination volume of $146.1 million was a record for a single quarter, an increase of nearly 14% compared to the previous quarter and up more than 35% from the fourth quarter last year. While strong customer demand in our Equipment Finance business continued to drive overall growth, we also benefited from our strategy to transform Marlin from primarily a micro-ticket equipment lessor into a broader provider of credit products and services to small businesses. Funding Stream, our working capital loan business, also performed well and contributed $11.3 million, or 8%, of total originations in the quarter, and our Franchise Finance business, which caters to the unique financing needs of franchisees, comprised $5.1 million, or 4%, of total fourth quarter originations. As a result, our Investment in Leases and Loans grew to a record $793.3 million, up almost 5% compared to the previous quarter and up 17% from a year ago, with continued stable credit performance. Fourth quarter net income also increased on both a sequential quarter and year-over-year basis to $4.8 million, or $0.38 per diluted share. Overall, 2016 was a very productive and transformative year for Marlin, and we look forward to building on our success in 2017.”

Mr. Hilzinger concluded, “Consistent with our ‘Marlin 2.0’ initiative and as part of our effort to identify additional growth engines, subsequent to year-end we completed the acquisition of Horizon Keystone Financial, an originator of equipment finance solutions for small businesses with a focus on the office furniture, heating/ventilation/ air conditioning/refrigeration (HVAC/R) and automotive markets. Horizon is a strong complement to our existing equipment finance business and provides Marlin with the opportunity to enter new and attractive equipment markets while further leveraging our existing infrastructure and resources.”

To read the full earnings release, click here.