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Marlin Business Services Corp. 2015 Year-End 10-K - What Was Not In Their Press Release

Marlin Business Services Corp. 2015 Year-end 10-K

On October 20, 2015, the Company announced the retirement of Daniel P. Dyer from his role as Chief Executive Officer and director of Marlin Business Services Corp., effective October 20, 2015. This change did not have a material adverse effect on our financing arrangement with Wells Fargo Capital Finance because Mr. Dyer's duties have been assumed by someone with similar skills and experience.
page 81

Salaries and benefits expense increased $4.6 million, or 17.3%, to $31.2 million for the year ended December 31, 2015 from $26.6 million for the year ended December 31, 2014. The increase was primarily due to salary and benefit expense associated with the separation agreements related to the departure of the Company's Chief Financial Officer and Chief Executive Officer and an increase in total personnel. Pre-tax, one-time expenses recognized in 2015 for the Chief Financial Officer and Chief Executive Officer departures totaled $3.8 million. Salaries and benefits expense, as a percentage of average total finance receivables, was 4.90% for the year ended December 31, 2015 compared with 4.42% for the year ended December 31, 2015, compared to 2.59% for the year ended December 31, 2014.
page 43

Total Stockholder's Equity
(in thousands) Ended December 31,
2015: $150,138
2014 $173,964
page 63

Net Income
2015 $15,966
2014 $19,350
2013 $16, 231
page 64

Net charge-offs were $10.1 million for the year ended December 31, 2015, compared to $9.0 million for the year ended December 31, 2014.
page 43

At December 31, 2015, we had approximately 82,000 active leases in our portfolio, representing aggregate minimum lease payments receivable of $761.7 million. With respect to our portfolio at December 31, 2015:
• the average original lease transaction was approximately $14,000, with an average remaining balance of approximately $9,000;
• the average original lease term was approximately 47 months;
• our active leases were spread among approximately 68,000 different end user customers, with the largest single end user customer accounting for only 0.07% of the aggregate minimum lease payments receivable;
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page 8

Residual Performance
Our leases offer our end user customers the option to own the equipment at lease expiration. As of December 31, 2015, approximately 68% of our leases were one dollar purchase option leases, 31% were fair market value leases and 1% were fixed purchase option leases, the latter of which typically contain an end-of-term purchase option equal to 10% of the original equipment cost. As of December 31, 2015, there were $27.4 million of residual assets retained on our Consolidated Balance Sheet, of which $22.7 million, or 83.1%, were related to copiers. As of December 31, 2014, there were $27.4 million of residual assets retained on our Consolidated Balance Sheet, of which $22.0 million, or 80.2%, were related to copiers.
page 51

Credit analysts are located in our New Jersey corporate office and at MBBs office in Salt Lake City, Utah. At December 31, 2015 we had a total of 22 credit analysts, each with an average of approximately 12 years of experience.
page 9

We also lease office space in Portsmouth, New Hampshire; Highlands Ranch, Colorado; Aurora, Colorado; and Denver, Colorado on a month to-month basis.
page 26

New Income, Year Ended December 31:
(in thousands)

2015: $15,966
2014 $19,350
2013 $16,231
2012 $11,697
2011 $6,175
page 30

For the year ended December 31, 2015 compared to the year ended December 31, 2014, net interest and fee income decreased $0.4 million, or 0.5%, primarily due $0.7 million increase in interest expense and a $0.1 million decrease to interest income, partially offset by a $0.3 million increase in fee income. The provision for credit losses increased $0.9 million, or 9.9%, to $10.0 million for the year ended December 31, 2015 from $9.1 million for the year ended December 31, 2014, primarily due to increased net charge-offs and by the impact of portfolio growth. Other expenses increased $5.4 million, or 12.4%, for the year ended December 31, 2015, compared to the year ended December 31, 2014.
page 38

Fee income increased $0.4 million, or 2.7%, to $15.3 million for the year ended December 31, 2015 from $14.9 million for the year ended December 31, 2014. Fee income included approximately $3.8 million of net residual income for the year ended December 31, 2015 and $3.1 million for the year ended December 31, 2014. The increase in net residual income was primarily due to lower net losses on residual values disposed at end of term partially offset by lower renewal income as fewer leases reached the end of their original contract term during 2015 as compared to 2014 as a result of the lower originations during the 2009 to 2011 timeframe. Fee income also included approximately $9.1 million in late fee income for the year ended December 31, 2015, which decreased 5.2%, compared to $9.6 million for the year ended December 31, 2014.
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Insurance income.
Insurance income increased $0.4 million to $5.9 million for the year ended December 31, 2015 from $5.5 million for the year ended December 31, 2014, primarily due to higher number of contracts participating in our insurance program in 2015 as compared to 2014 and an increase in the average ticket size. This was partially offset by higher losses experienced in 2015.
page 42

On October 20, 2015, the Company announced the retirement of Daniel P. Dyer from his role as Chief Executive Officer and director of Marlin Business Services Corp., effective October 20, 2015. This change did not have a material adverse effect on our financing arrangement with Wells Fargo Capital Finance because Mr. Dyer's duties have been assumed by someone with similar skills and experience.
page 81

Complete 2015 Year-end Marlin Business Services 10-K (110 pages)
http://www.leasingnews.org/PDF/MarlinYearEnd2015.pdf

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.