##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended June 30, 2008
 Commission file number 000-50448
 MARLIN BUSINESS SERVICES CORP.
  Pennsylvania
(State of incorporation)
    
    38-3686388
(I.R.S. Employer Identification Number)
 
 
 þ o
  Large accelerated filer oAccelerated filer þNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ




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##### 



MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES
 Quarterly Report on Form 10-Q
for the Quarter Ended June 30, 2008
 TABLE OF CONTENTS
 Page No.Part I  Financial Information
    
    
    2-37Item 1
    
    Financial Statements
    
    
    2-17Consolidated Balance Sheets at June 30, 2008 (unaudited) and December 31, 2007
    
    
    2Consolidated Statements of Operations for the three and six months ended June 30, 2008 and 2007 (unaudited)
    
    
    3Consolidated Statements of Stockholders Equity at June 30, 2008 (unaudited) and December 31, 2007
    
    
    4Consolidated Statements of Cash Flows for the six months ended June 30, 2008 and 2007 (unaudited)
    
    
    5Notes to Consolidated Financial Statements (unaudited)
    
    
    6-17Item 2
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    18-37Item 3
    
    Quantitative and Qualitative Disclosure about Market Risk
    
    
    37Item 4
    
    Controls and Procedures
    
    
    37Part II  Other Information
    
    
    38-39Item 1
    
    Legal Proceedings
    
    
    38Item 1A
    
    Risk Factors
    
    
    38Item 2
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    38Item 3
    
    Defaults upon Senior Securities
    
    
    38Item 4
    
    Submission of Matters to a Vote of Security Holders
    
    
    39Item 5
    
    Other Information
    
    
    39Item 6
    
    Exhibits
    
    
    39Signatures
    
    
    40CertificationsCERTIFICATION OF CHIEF EXECUTIVE OFFICERCERTIFICATION OF CHIEF FINANCIAL OFFICERCERTIFICATIONS
  1




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##### Table of Contents



PART I. Financial Information
 
 Item 1. Financial Statements
 
 MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
Consolidated Balance Sheets
 June 30,
    
    
    December 31,2008
    
    
    2007(Dollars in thousands, except per-share data)(Unaudited)ASSETSCash and cash equivalents
    
    $
    36,798
    
    
    $
    34,347Restricted cash
    
    
    65,136
    
    
    
    141,070Net investment in leases and loans
    
    
    731,427
    
    
    
    765,938Property and equipment, net
    
    
    3,173
    
    
    
    3,266Property tax receivables
    
    
    1,532
    
    
    
    539Fair value of cash flow hedge derivatives
    
    
    880
    
    
    
    4Other assets
    
    
    16,631
    
    
    
    14,490Total assets
    
    $
    855,577
    
    
    $
    959,654LIABILITIES AND STOCKHOLDERS EQUITYRevolving and term secured borrowings
    
    $
    618,330
    
    
    $
    773,085Deposits
    
    
    43,618
    
    
    
    Other liabilities:Fair value of cash flow hedge derivatives
    
    
    5,041
    
    
    
    4,760Sales and property taxes payable
    
    
    11,611
    
    
    
    5,756Accounts payable and accrued expenses
    
    
    10,069
    
    
    
    10,226Deferred income tax liability
    
    
    14,513
    
    
    
    15,682Total liabilities
    
    
    703,182
    
    
    
    809,509Commitments and contingenciesStockholders equity:Common Stock, $0.01 par value; 75,000,000 shares
authorized; 12,193,777 and 12,201,304 shares
issued and outstanding, respectively
    
    
    122
    
    
    
    122Preferred Stock, $0.01 par value; 5,000,000
shares authorized; none issued
    
    
    
    
    
    
    Additional paid-in capital
    
    
    83,324
    
    
    
    84,429Stock subscription receivable
    
    
    (5
    )
    
    
    (7
    )Accumulated other comprehensive loss
    
    
    (2,836
    )
    
    
    (3,130
    )Retained earnings
    
    
    71,790
    
    
    
    68,731Total stockholders equity
    
    
    152,395
    
    
    
    150,145Total liabilities and stockholders equity
    
    $
    855,577
    
    
    $
    959,654
  2




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##### Table of Contents



MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
Consolidated Statements of Operations
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(Dollars in thousands, except per-share data)(Unaudited)Income:Interest income
    
    $
    21,870
    
    
    $
    22,151
    
    
    $
    44,823
    
    
    $
    43,588Fee income
    
    
    5,565
    
    
    
    5,186
    
    
    
    11,159
    
    
    
    10,801Interest and fee income
    
    
    27,435
    
    
    
    27,337
    
    
    
    55,982
    
    
    
    54,389Interest expense
    
    
    9,359
    
    
    
    8,256
    
    
    
    19,606
    
    
    
    15,967Net interest and fee income
    
    
    18,076
    
    
    
    19,081
    
    
    
    36,376
    
    
    
    38,422Provision for credit losses
    
    
    6,530
    
    
    
    3,468
    
    
    
    13,536
    
    
    
    6,860Net interest and fee income after provision for
credit losses
    
    
    11,546
    
    
    
    15,613
    
    
    
    22,840
    
    
    
    31,562Insurance and other income
    
    
    1,708
    
    
    
    1,553
    
    
    
    3,469
    
    
    
    3,228Net interest and other revenue after
provision for credit losses
    
    
    13,254
    
    
    
    17,166
    
    
    
    26,309
    
    
    
    34,790Non-interest expenseSalaries and benefits
    
    
    6,344
    
    
    
    5,113
    
    
    
    12,215
    
    
    
    10,830General and administrative
    
    
    3,994
    
    
    
    3,281
    
    
    
    8,296
    
    
    
    6,633Financing related costs
    
    
    231
    
    
    
    213
    
    
    
    597
    
    
    
    459Non-interest expense
    
    
    10,569
    
    
    
    8,607
    
    
    
    21,108
    
    
    
    17,922Income before income taxes
    
    
    2,685
    
    
    
    8,559
    
    
    
    5,201
    
    
    
    16,868Income taxes
    
    
    985
    
    
    
    3,381
    
    
    
    2,142
    
    
    
    6,663Net income
    
    $
    1,700
    
    
    $
    5,178
    
    
    $
    3,059
    
    
    $
    10,205Basic earnings per share
    
    $
    0.14
    
    
    $
    0.43
    
    
    $
    0.25
    
    
    $
    0.85Diluted earnings per share
    
    $
    0.14
    
    
    $
    0.42
    
    
    $
    0.25
    
    
    $
    0.83Weighted average shares used in computing basic
earnings per share
    
    
    11,987,220
    
    
    
    12,106,482
    
    
    
    12,008,544
    
    
    
    12,030,155Weighted average shares used in computing
diluted earnings per share
    
    
    12,061,843
    
    
    
    12,341,182
    
    
    
    12,107,198
    
    
    
    12,297,097
  3




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##### Table of Contents



MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
Consolidated Statements of Stockholders Equity
 AccumulatedAdditional
    
    
    Stock
    
    
    Other
    
    
    
    
    
    
    TotalCommon
    
    
    Stock
    
    
    Paid-In
    
    
    Subscription
    
    
    Comprehensive
    
    
    Retained
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Receivable
    
    
    Income (Loss)
    
    
    Earnings
    
    
    Equity(Dollars in thousands)(Unaudited)Balance, December 31, 2006
    
    
    12,030,259
    
    
    $
    120
    
    
    $
    81,850
    
    
    $
    (18
    )
    
    $
    1,892
    
    
    $
    50,445
    
    
    $
    134,289Issuance of common stock
    
    
    17,994
    
    
    
    
    
    
    
    290
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    290Repurchase of common stock
    
    
    (122,000
    )
    
    
    (1
    )
    
    
    (1,613
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,614
    )Exercise of stock options
    
    
    217,417
    
    
    
    2
    
    
    
    1,742
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,744Tax benefit on stock options
exercised
    
    
    
    
    
    
    
    
    
    
    1,220
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,220Stock option compensation
recognized, net of tax
    
    
    
    
    
    
    
    
    
    
    413
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    413Payment of receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    11Restricted stock grant
    
    
    57,634
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Restricted stock compensation
recognized
    
    
    
    
    
    
    
    
    
    
    527
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    527Net unrealized losses on cash
flow
hedge derivatives, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,022
    )
    
    
    
    
    
    
    (5,022
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,286
    
    
    
    18,286Balance, December 31, 2007
    
    
    12,201,304
    
    
    $
    122
    
    
    $
    84,429
    
    
    $
    (7
    )
    
    $
    (3,130
    )
    
    $
    68,731
    
    
    $
    150,145Issuance of common stock
    
    
    14,238
    
    
    
    
    
    
    
    93
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93Repurchase of common stock
    
    
    (168,402
    )
    
    
    (1
    )
    
    
    (1,495
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,496
    )Exercise of stock options
    
    
    27,391
    
    
    
    
    
    
    
    80
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80Tax benefit on stock options
exercised
    
    
    
    
    
    
    
    
    
    
    75
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75Stock option compensation
recognized, net of tax
    
    
    
    
    
    
    
    
    
    
    71
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71Payment of receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    2Restricted stock grant
    
    
    119,246
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Restricted stock compensation
recognized
    
    
    
    
    
    
    
    
    
    
    71
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71Net unrealized losses on cash
flow
hedge derivatives, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    294
    
    
    
    
    
    
    
    294Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,059
    
    
    
    3,059Balance, June 30, 2008
    
    
    12,193,777
    
    
    $
    122
    
    
    $
    83,324
    
    
    $
    (5
    )
    
    $
    (2,836
    )
    
    $
    71,790
    
    
    $
    152,395
  4




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##### Table of Contents



MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
 Six Months Ended June 30,2008
    
    
    2007(In thousands)(Unaudited)Cash flows from operating activities:Net income
    
    $
    3,059
    
    
    $
    10,205Adjustments to reconcile net income to net cash provided by operating
activities:Depreciation and amortization
    
    
    1,492
    
    
    
    1,467Stock-based compensation
    
    
    449
    
    
    
    632Excess tax benefits from stock-based payment arrangements
    
    
    (75
    )
    
    
    (1,118
    )Amortization of deferred net gain on cash flow hedge derivatives
    
    
    (121
    )
    
    
    (1,290
    )Provision for credit losses
    
    
    13,536
    
    
    
    6,860Deferred taxes
    
    
    (1,655
    )
    
    
    (1,858
    )Amortization of deferred initial direct costs and fees
    
    
    8,568
    
    
    
    7,752Deferred initial direct costs and fees
    
    
    (5,702
    )
    
    
    (10,140
    )Loss on equipment disposed
    
    
    394
    
    
    
    182Effect of changes in other operating items:Other assets
    
    
    (3,884
    )
    
    
    (4,162
    )Other liabilities
    
    
    5,729
    
    
    
    1,373Net cash provided by operating activities
    
    
    21,790
    
    
    
    9,903Cash flows from investing activities:Purchases of equipment for direct financing lease contracts and funds
used to originate loans
    
    
    (139,416
    )
    
    
    (206,933
    )Principal collections on leases and loans
    
    
    155,567
    
    
    
    146,524Security deposits collected, net of returns
    
    
    (1,177
    )
    
    
    (1,002
    )Proceeds from the sale of equipment
    
    
    2,741
    
    
    
    2,529Acquisitions of property and equipment
    
    
    (561
    )
    
    
    (538
    )Change in restricted cash
    
    
    75,935
    
    
    
    (6,956
    )Net cash provided by (used by) investing activities
    
    
    93,089
    
    
    
    (66,376
    )Cash flows from financing activities:Issuances of common stock
    
    
    96
    
    
    
    160Repurchases of common stock
    
    
    (1,496
    )
    
    
    Exercise of stock options
    
    
    80
    
    
    
    1,183Excess tax benefits from stock-based payment arrangements
    
    
    75
    
    
    
    1,118Debt issuance costs
    
    
    (46
    )
    
    
    (40
    )Term securitization repayments
    
    
    (190,455
    )
    
    
    (141,715
    )Secured bank facility advances
    
    
    39,265
    
    
    
    102,233Secured bank facility repayments
    
    
    (3,565
    )
    
    
    (94,044
    )Warehouse advances
    
    
    
    
    
    
    176,690Warehouse repayments
    
    
    
    
    
    
    (7,715
    )Net increase in deposits
    
    
    43,618
    
    
    
    Net cash provided by (used by) financing activities
    
    
    (112,428
    )
    
    
    37,870Net increase (decrease) in cash and cash equivalents
    
    
    2,451
    
    
    
    (18,603
    )Cash and cash equivalents, beginning of period
    
    
    34,347
    
    
    
    26,663Cash and cash equivalents, end of period
    
    $
    36,798
    
    
    $
    8,060Supplemental disclosures of cash flow information:Cash paid for interest
    
    $
    19,046
    
    
    $
    16,234Cash paid for income taxes
    
    
    2,445
    
    
    
    9,535
  5




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##### Table of Contents



MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  Organization
 Description
   NOTE 2  Basis of Financial Statement Presentation and Critical Accounting Policies
  Use of estimates.
 Income recognition.
 Fee income.
   6




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Insurance and other income
 Initial direct costs and fees. Accounting for Nonrefundable Fees and Costs Associated with Originating or
Acquiring Loans and Initial Direct Costs of Leases.
 Lease residual values.
 Allowance for credit losses.
  Securitizations. Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities a replacement of Financial Accounting Standards Board (FASB) Statement No. 125
 Derivatives. Accounting for Derivative Instruments and Hedging
Activities
 7




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##### Table of Contents



Fair Value Measurements
 Common stock and equity.
 Stock-based compensation. Share-Based Payments,
 Income taxes. Accounting for Income Taxes.
  Accounting for
Uncertainty in Income Taxes,
  8




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NOTE 3  Net Investment in Leases and Loans
  June 30,
    
    
    December 31,2008
    
    
    2007(Dollars in thousands)Minimum lease payments receivable
    
    $
    819,781
    
    
    $
    865,156Estimated residual value of equipment
    
    
    51,178
    
    
    
    50,798Unearned lease income, net of initial direct
costs and fees deferred
    
    
    (129,214
    )
    
    
    (137,909
    )Security deposits
    
    
    (13,966
    )
    
    
    (15,144
    )Loans, net of unamortized deferred fees and costs
    
    
    16,521
    
    
    
    14,025Allowance for credit losses
    
    
    (12,873
    )
    
    
    (10,988
    )$
    731,427
    
    
    $
    765,938
   Minimum LeasePayments
    
    
    IncomeReceivable
    
    
    Amortization(Dollars in thousands)Period Ending December 31:2008
    
    $
    180,427
    
    
    $
    37,8462009
    
    
    289,061
    
    
    
    50,7892010
    
    
    193,741
    
    
    
    26,4932011
    
    
    107,807
    
    
    
    11,0122012
    
    
    43,480
    
    
    
    2,913Thereafter
    
    
    5,265
    
    
    
    161$
    819,781
    
    
    $
    129,214
 NOTE 4  Allowance for Credit Losses
   Three Months Ended June 30,
    
    
    Six Months Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(Dollars in thousands)Balance, beginning of period
    
    $
    12,074
    
    
    $
    8,568
    
    
    $
    10,988
    
    
    $
    8,201Current provisions
    
    
    6,530
    
    
    
    3,468
    
    
    
    13,536
    
    
    
    6,860Charge-offs, net
    
    
    (5,731
    )
    
    
    (3,207
    )
    
    
    (11,651
    )
    
    
    (6,232
    )Balance, end of period
    
    $
    12,873
    
    
    $
    8,829
    
    
    $
    12,873
    
    
    $
    8,829
 9




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NOTE 5  Other Assets
  June 30,
    
    
    December 31,2008
    
    
    2007(Dollars in thousands)Derivative collateral
    
    $
    8,183
    
    
    $
    4,361Accrued fees receivable
    
    
    3,348
    
    
    
    3,361Deferred transaction costs
    
    
    1,925
    
    
    
    2,739Prepaid expenses
    
    
    1,150
    
    
    
    1,268Other
    
    
    2,025
    
    
    
    2,761$
    16,631
    
    
    $
    14,490
 NOTE 6  Contingencies
  NOTE 7  Deposits
  ScheduledMaturities(Dollars in thousands)Period Ending December 31,2008
    
    $
    2009
    
    
    17,9602010
    
    
    10,0282011
    
    
    7,5562012
    
    
    3,648Thereafter
    
    
    4,426$
    43,618
  NOTE 8  Revolving and Term Secured Borrowings
  Principal
    
    
    Interest(1)(Dollars in thousands)Period Ending December 31,2008
    
    $
    171,735
    
    
    $
    15,1742009
    
    
    218,967
    
    
    
    19,9602010
    
    
    135,878
    
    
    
    9,6162011
    
    
    68,278
    
    
    
    3,5462012
    
    
    22,686
    
    
    
    694Thereafter
    
    
    786
    
    
    
    16$
    618,330
    
    
    $
    49,006
 
 (1)
    
    Includes interest on term note securitizations only. Excludes interest on $35.7
million of revolving bank facility and commercial paper (CP) conduit warehouse facility. 10




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NOTE 9  Derivative Financial Instruments
 Accounting for Derivative Instruments and Hedging Activities
     For Active Agreements:January,
    
    December,
    
    August,
    
    August,Inception Date
    
    March, 2008
    
    2008
    
    2007
    
    2007
    
    2006
    
    July, 2004October,
    
    October,
    
    October,
    
    October,
    
    October,Commencement Date
    
    2009
    
    2009
    
    2009
    
    2008
    
    2008
    
    July, 2004(Dollars in thousands)Notional amount:June 30, 2008
    
    $
    25,000
    
    
    $
    25,000
    
    
    $
    100,000
    
    
    $
    100,000
    
    
    $
    100,000
    
    
    $
    December 31, 2007
    
    $
    
    
    
    $
    
    
    
    $
    100,000
    
    
    $
    100,000
    
    
    $
    100,000
    
    
    $
    3,066For active agreements:Fair value recorded in other assets (liabilities)June 30, 2008
    
    $
    409
    
    
    $
    155
    
    
    $
    316
    
    
    $
    (2,165
    )
    
    $
    (2,876
    )
    
    $
    December 31, 2007
    
    $
    
    
    
    $
    
    
    
    $
    (46
    )
    
    $
    (2,010
    )
    
    $
    (2,704
    )
    
    $
    4Unrealized gain (loss), net of tax, recorded in
equityJune 30, 2008
    
    $
    246
    
    
    $
    93
    
    
    $
    190
    
    
    $
    (1,303
    )
    
    $
    (1,730
    )
    
    $
    December 31, 2007
    
    $
    
    
    
    $
    
    
    
    $
    (28
    )
    
    $
    (1,213
    )
    
    $
    (1,632
    )
    
    $
    2
 11




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##### Table of Contents



For Terminated Agreements:Inception Date
    
    August 2006/August
    
    June/September,
    
    October/December,2007
    
    2005
    
    2004Commencement Date
    
    October, 2007
    
    September, 2006
    
    August, 2005Termination Date
    
    October, 2007
    
    September, 2006
    
    August, 2005(Dollars in thousands)Notional amount
    
    $
    300,000
    
    
    $
    225,000
    
    
    $
    250,000Realized gain (loss) at termination
    
    $
    (2,683
    )
    
    $
    3,732
    
    
    $
    3,151Deferred gain (loss), net of tax,
recorded in equityJune 30, 2008
    
    $
    (1,082
    )
    
    $
    649
    
    
    $
    101December 31, 2007
    
    $
    (1,462
    )
    
    $
    974
    
    
    $
    229Amortization recognized as increase
(decrease) in interest expenseSix months ended June 30, 2008
    
    $
    630
    
    
    $
    (537
    )
    
    $
    (214
    )Year ended December 31, 2007
    
    $
    255
    
    
    $
    (1,543
    )
    
    $
    (749
    )Expected amortization during next
12 months as increase (decrease) in
interest expense
    
    $
    900
    
    
    $
    (718
    )
    
    $
    (263
    )
   Hedge Accounting Subsequent to June 30, 2008
    NOTE 10  Fair Value Measurements
 Fair Value Measurements
 12




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##### Table of Contents



Accounting for Leases
   
    
    Level 1  Inputs to the valuation are unadjusted quoted prices in active markets for
identical assets or liabilities.
    
    Level 2  Inputs to the valuation may include quoted prices for similar assets and
liabilities in active or inactive markets, and inputs other than quoted prices, such as
interest rates and yield curves, that are observable for the asset or liability for
substantially the full term of the financial instrument.
    
    Level 3  Inputs to the valuation are unobservable and significant to the fair value
measurement. Level 3 inputs shall be used to measure fair value only to the extent that
observable inputs are not available.
   Fair Value Measurements Using
    
    Assets/LiabilitiesLevel 1
    
    Level 2
    
    Level 3
    
    at Fair Value(Dollars in thousands)AssetsInterest-rate caps purchased
    
    $
    
    
    
    $
    334
    
    
    $
    
    
    
    $
    334Interest-rate swaps
    
    
    
    
    
    
    880
    
    
    
    
    
    
    
    880LiabilitiesInterest-rate caps sold
    
    
    
    
    
    
    334
    
    
    
    
    
    
    
    334Interest-rate swaps
    
    
    
    
    
    
    5,041
    
    
    
    
    
    
    
    5,041
 NOTE 11  Comprehensive Income
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(Dollars in thousands)Net income, as reported
    
    $
    1,700
    
    
    $
    5,178
    
    
    $
    3,059
    
    
    $
    10,205Other comprehensive income:Changes in fair values of cash flow hedge derivatives
    
    
    5,946
    
    
    
    2,301
    
    
    
    595
    
    
    
    1,388Amortization of net deferred gain on cash flow hedge
derivatives
    
    
    (51
    )
    
    
    (607
    )
    
    
    (121
    )
    
    
    (1,290
    )Tax effect
    
    
    (2,329
    )
    
    
    (666
    )
    
    
    (180
    )
    
    
    (35
    )Total other comprehensive income
    
    
    3,566
    
    
    
    1,028
    
    
    
    294
    
    
    
    63Comprehensive income
    
    $
    5,266
    
    
    $
    6,206
    
    
    $
    3,353
    
    
    $
    10,268
 13




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##### Table of Contents



NOTE 12  Stockholders Equity and Earnings Per Share
 Stockholders Equity
   Regulatory Capital Requirements
   Prompt Corrective Action.
  Dividends.
 14




---



##### Table of Contents



Earnings Per Common Share (EPS)
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(Dollars in thousands, except per-share data)Net income
    
    $
    1,700
    
    
    $
    5,178
    
    
    $
    3,059
    
    
    $
    10,205Weighted average common shares
outstanding used in computing basic EPS
    
    
    11,987,220
    
    
    
    12,106,482
    
    
    
    12,008,544
    
    
    
    12,030,155Effect of dilutive securities:Stock options and restricted stock
    
    
    74,623
    
    
    
    234,700
    
    
    
    98,654
    
    
    
    266,942Adjusted weighted average common shares
used in computing diluted EPS
    
    
    12,061,843
    
    
    
    12,341,182
    
    
    
    12,107,198
    
    
    
    12,297,097Net earnings per common share:Basic
    
    $
    0.14
    
    
    $
    0.43
    
    
    $
    0.25
    
    
    $
    0.85Diluted
    
    $
    0.14
    
    
    $
    0.42
    
    
    $
    0.25
    
    
    $
    0.83
   NOTE 13  Stock-Based Compensation
  Stock Options
     15




---



##### Table of Contents



Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2008
    
    2007
    
    2008
    
    2007Risk-free interest rate
    
    
    2.94
    %
    
    
    4.86
    %
    
    
    2.43
    %
    
    
    4.51
    %Expected life (years)
    
    
    4
    
    
    
    4
    
    
    
    5
    
    
    
    5Expected volatility
    
    
    35
    %
    
    
    35
    %
    
    
    35
    %
    
    
    35
    %Expected dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   WeightedAverageOptions
    
    Shares
    
    
    Exercise PriceOutstanding at January 1, 2008
    
    
    727,184
    
    
    $
    13.20Granted
    
    
    264,123
    
    
    
    9.30Exercised
    
    
    (27,391
    )
    
    
    2.94Forfeited
    
    
    (21,366
    )
    
    
    18.12Expired
    
    
    
    
    
    
    Outstanding at June 30, 2008
    
    
    942,550
    
    
    
    12.29
    Options Outstanding
    
    
    Options ExercisableWeighted
    
    
    
    
    
    
    Aggregate
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    AggregateAverage
    
    
    Weighted
    
    
    Intrinsic
    
    
    
    
    
    
    Average
    
    
    Weighted
    
    
    IntrinsicRange of
    
    Number
    
    
    Remaining
    
    
    Average
    
    
    Value
    
    
    Number
    
    
    Remaining
    
    
    Average
    
    
    ValueExercise Prices
    
    Outstanding
    
    
    Life (Years)
    
    
    Exercise Price
    
    
    (In thousands)
    
    
    Exercisable
    
    
    Life (Years)
    
    
    Exercise Price
    
    
    (In thousands)$3.39
    
    
    121,520
    
    
    
    3.8
    
    
    $
    3.39
    
    
    $
    430
    
    
    
    121,520
    
    
    
    3.8
    
    
    $
    3.39
    
    
    $
    430$4.23  5.01
    
    
    58,641
    
    
    
    1.8
    
    
    
    4.34
    
    
    
    152
    
    
    
    58,641
    
    
    
    1.8
    
    
    
    4.34
    
    
    
    152$7.61  10.18
    
    
    366,072
    
    
    
    5.7
    
    
    
    9.54
    
    
    
    
    
    
    
    106,645
    
    
    
    3.4
    
    
    
    10.18
    
    
    
    $14.00  16.02
    
    
    94,401
    
    
    
    5.6
    
    
    
    14.76
    
    
    
    
    
    
    
    77,325
    
    
    
    5.5
    
    
    
    14.58
    
    
    
    $17.52  22.23
    
    
    301,916
    
    
    
    5.0
    
    
    
    19.99
    
    
    
    
    
    
    
    144,995
    
    
    
    4.7
    
    
    
    19.42
    
    
    
    942,550
    
    
    
    5.0
    
    
    
    12.29
    
    
    $
    582
    
    
    
    509,126
    
    
    
    4.0
    
    
    
    11.19
    
    
    $
    582
  16




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##### Table of Contents



Restricted Stock Awards
      WeightedAverageGrant-DateShares
    
    
    Fair ValueNon-vested restricted stock at January 1, 2008
    
    
    218,248
    
    
    $
    20.17Granted
    
    
    129,873
    
    
    
    7.87Vested
    
    
    (11,465
    )
    
    
    19.68Forfeited
    
    
    (10,721
    )
    
    
    20.50Non-vested restricted stock at June 30, 2008
    
    
    325,935
    
    
    
    15.28
     17




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##### Table of Contents



Item 2. Managements Discussion And Analysis Of Financial Condition And Results Of Operations
 The following discussion and analysis of our financial condition and results of operations should
be read in conjunction with our consolidated financial statements and the related notes thereto in
our Form 10-K filed with the Securities and Exchange Commission This discussion contains certain
statements of a forward-looking nature that involve risks and uncertainties.
 FORWARD-LOOKING STATEMENTS
  
    
    availability, terms and deployment of capital;
    
    general volatility of capital markets, in particular, the market for securitized assets;
    
    changes in our industry, interest rates or the general economy resulting in changes to our business strategy;
    
    the nature of our competition;
    
    availability of qualified personnel; and
    
    the factors set forth in the section captioned Risk Factors in our Form 10-K filed with the Securities and Exchange
Commission.
  Overview
      18




---



##### Table of Contents



Six MonthsEndedJune 30,
    
    As of or For the Year Ended December 31,2008
    
    2007
    
    2006
    
    2005
    
    2004
    
    2003Number of sales account executives
    
    
    92
    
    
    
    118
    
    
    
    100
    
    
    
    103
    
    
    
    100
    
    
    
    84Number of originating
sources(1)
    
    
    1,069
    
    
    
    1,246
    
    
    
    1,295
    
    
    
    1,295
    
    
    
    1,244
    
    
    
    1,147
 
 (1)
    
    Monthly average of origination sources generating lease volume    Accounting for Derivative
Instruments and Hedging Activities
 19




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##### Table of Contents



Critical Accounting Policies
  Income recognition.
      Initial direct costs and fees. Accounting for Nonrefundable Fees
and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases.
 Lease residual values.
 20




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##### Table of Contents



Allowance for credit losses.
  Securitizations. Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities a
replacement of Financial Accounting Standards Board Statement No. 125
 Derivatives. Accounting for Derivative Instruments and Hedging
Activities
 Stock-based compensation. Share-Based Payments,
 Income taxes.
 Accounting for
Uncertainty in Income Taxes,
 21




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##### Table of Contents



RESULTS OF OPERATIONS
 Comparison of the Three Months Ended June 30, 2008 and 2007
 Net income.
   Three Months Ended June 30,2008
    
    
    2007(Dollars in thousands)Interest income
    
    $
    21,870
    
    
    $
    22,151Fee income
    
    
    5,565
    
    
    
    5,186Interest and fee income
    
    
    27,435
    
    
    
    27,337Interest expense
    
    
    9,359
    
    
    
    8,256Net interest and fee income
    
    $
    18,076
    
    
    $
    19,081Average total finance receivables (1)
    
    $
    730,267
    
    
    $
    717,893Percent of average total finance receivables:Interest income
    
    
    11.98
    %
    
    
    12.34
    %Fee income
    
    
    3.05
    
    
    
    2.89Interest and fee income
    
    
    15.03
    
    
    
    15.23Interest expense
    
    
    5.13
    
    
    
    4.60Net interest and fee margin
    
    
    9.90
    %
    
    
    10.63
    %
 
 (1)
    
    Total finance receivables includes net investment in direct financing leases, loans
and factoring receivables. For the calculations above, the effects of (1) the allowance for
credit losses and (2) initial direct costs and fees deferred are excluded. Net interest and fee margin.
  22




---



##### Table of Contents



Insurance and other income.
 Salaries and benefits expense.
  General and administrative expense.
 23




---



##### Table of Contents



Financing related costs.
 Provision for credit losses.
 Provision for income taxes.
 Comparison of the Six Months Ended June 30, 2008 and 2007
 Net income.
   Six Months Ended June 30,2008
    
    
    2007(Dollars in thousands)Interest income
    
    $
    44,823
    
    
    $
    43,588Fee income
    
    
    11,159
    
    
    
    10,801Interest and fee income
    
    
    55,982
    
    
    
    54,389Interest expense
    
    
    19,606
    
    
    
    15,967Net interest and fee income
    
    $
    36,376
    
    
    $
    38,422Average total finance receivables (1)
    
    $
    737,721
    
    
    $
    704,573Percent of average total finance receivables:Interest income
    
    
    12.15
    %
    
    
    12.37
    %Fee income
    
    
    3.03
    
    
    
    3.07Interest and fee income
    
    
    15.18
    
    
    
    15.44Interest expense
    
    
    5.32
    
    
    
    4.53Net interest and fee margin
    
    
    9.86
    %
    
    
    10.91
    %
 
 (1)
    
    Total finance receivables includes net investment in direct financing leases, loans and
factoring receivables. For the calculations above, the effects of (1) the allowance for
credit losses and (2) initial direct costs and fees deferred are excluded. 24




---



##### Table of Contents



Net interest and fee margin.
      Insurance and other income.
 Salaries and benefits expense.
  25




---



##### Table of Contents



General and administrative expense.
 Financing related costs.
 Provision for credit losses.
 Provision for income taxes.
 26




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##### Table of Contents



FINANCE RECEIVABLES AND ASSET QUALITY
   Year EndedThree Months Ended June 30,
    
    
    Six Months Ended June 30,
    
    
    December 31,2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2007(Dollars in thousands)Allowance for credit losses, beginning of period
    
    $
    12,074
    
    
    $
    8,568
    
    
    $
    10,988
    
    
    $
    8,201
    
    
    $
    8,201Provision for credit losses
    
    
    6,530
    
    
    
    3,468
    
    
    
    13,536
    
    
    
    6,860
    
    
    
    17,221Charge-offs, net
    
    
    (5,731
    )
    
    
    (3,207
    )
    
    
    (11,651
    )
    
    
    (6,232
    )
    
    
    (14,434
    )Allowance for credit losses, end of period
    
    $
    12,873
    
    
    $
    8,829
    
    
    $
    12,873
    
    
    $
    8,829
    
    
    $
    10,988Annualized
net charge-offs to average total finance receivables (1)
    
    
    3.14
    %
    
    
    1.79
    %
    
    
    3.16
    %
    
    
    1.77
    %
    
    
    2.00
    %Allowance
for credit losses to total finance receivables, end of period (1)
    
    
    1.79
    %
    
    
    1.21
    %
    
    
    1.79
    %
    
    
    1.21
    %
    
    
    1.47
    %Average total finance receivables (1)
    
    $
    730,267
    
    
    $
    717,893
    
    
    $
    737,721
    
    
    $
    704,573
    
    
    $
    721,900Total finance receivables, end of period (1)
    
    $
    719,783
    
    
    $
    730,507
    
    
    $
    719,783
    
    
    $
    730,507
    
    
    $
    749,571Delinquencies greater than 60 days past due
    
    $
    9,687
    
    
    $
    5,824
    
    
    $
    9,687
    
    
    $
    5,824
    
    
    $
    8,377Delinquencies greater than 60 days past due (2)
    
    
    1.16
    %
    
    
    0.68
    %
    
    
    1.16
    %
    
    
    0.68
    %
    
    
    0.95
    %Allowance for credit losses to delinquent accounts
greater than 60 days past due (2)
    
    
    132.89
    %
    
    
    151.60
    %
    
    
    132.89
    %
    
    
    151.60
    %
    
    
    131.17
    %Non-accrual leases and loans
    
    $
    4,704
    
    
    $
    2,449
    
    
    $
    4,704
    
    
    $
    2,449
    
    
    $
    3,695Renegotiated leases and loans
    
    $
    8,143
    
    
    $
    4,347
    
    
    $
    8,143
    
    
    $
    4,347
    
    
    $
    6,987
 
 (1)
    
    Total finance receivables include net investment in direct financing leases, loans
and factoring receivables. For purposes of asset quality and allowance calculations the
effects of (1) the allowance for credit losses and (2) initial direct costs and fees deferred
are excluded.(2)
    
    Calculated as a percent of minimum lease payments receivable for leases and as a
percent of principal outstanding for loans and factoring receivables.    27




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##### Table of Contents



RESIDUAL PERFORMANCE
   LIQUIDITY AND CAPITAL RESOURCES
   
    
    borrowings under a revolving bank facility;
    
    financing of leases and loans in CP conduit warehouse facilities;
    
    financing of leases through term note securitizations; and
    
    equity and debt securities with third-party investors.
 28




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##### Table of Contents



Cash and Cash Equivalents.
  Borrowings.
 For the Six Months Ended June 30, 2008
    
    
    As of June 30, 2008MaximumMaximum
    
    
    Month End
    
    
    Average
    
    
    Weighted
    
    
    
    
    
    
    WeightedFacility
    
    
    Amount
    
    
    Amount
    
    
    Average
    
    
    Amount
    
    
    Average
    
    
    UnusedAmount
    
    
    Outstanding
    
    
    Outstanding
    
    
    Coupon
    
    
    Outstanding
    
    
    Coupon
    
    
    Capacity(Dollars in thousands)Revolving bank facility(1)
    
    $
    40,000
    
    
    $
    35,700
    
    
    $
    15,413
    
    
    
    4.37
    %
    
    $
    35,700
    
    
    
    4.03
    %
    
    $
    4,300CP conduit warehouse
facilities(1)
    
    
    175,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    175,000Term note securitizations(2)
    
    
    
    
    
    
    744,167
    
    
    
    669,315
    
    
    
    5.45
    %
    
    
    582,630
    
    
    
    5.63
    %
    
    
    $
    215,000
    
    
    
    
    
    
    $
    684,728
    
    
    
    5.43
    %
    
    $
    618,330
    
    
    
    5.54
    %
    
    $
    179,300
 
 (1)
    
    Subject to lease or loan eligibility and borrowing base formula.(2)
    
    Our term note securitizations are one-time fundings that pay down over time without
any ability for us to draw down additional amounts. Revolving Bank Facility
  29




---



##### Table of Contents



CP Conduit Warehouse Facilities
     Term Note Securitizations
    30




---



##### Table of Contents



Financial Covenants
  Actual(1)
    
    RequirementTangible net worth minimum
    
    $140.2 million
    
    $89.7 millionDebt-to-equity ratio maximum
    
    
    4.60 to 1
    
    
    
    10 to 1Four-quarter rolling average
interest coverage ratio minimum
    
    
    2.84 to 1
    
    
    
    1.50 to 1Three-month rolling average lease
portfolio charge-off ratio maximum
    
    
    2.63
    %
    
    
    3.00
    %
 
 (1)
    
    Calculations are based on specific contractual definitions and subsidiaries per the
applicable debt agreements, which may differ from ratios presented elsewhere in this document.    Marlin Business Bank (Bank)
    31




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##### Table of Contents



Bank Capital and Regulatory Oversight
  Capital Requirements.
 Prompt Corrective Action.
  Dividends.
 Transfers of Funds and Transactions with Affiliates.
 32




---



##### Table of Contents



Restrictions on Ownership
 Information on Stock Repurchases
   Maximum ApproximateTotal Number of
    
    Dollar Value ofShares Purchased as
    
    Shares that May YetPart of a Publicly
    
    be Purchased UnderNumber of Shares
    
    Average Price
    
    Announced Plan or
    
    the Plans orTime Period
    
    Purchased
    
    Paid Per Share(1)
    
    Program
    
    ProgramsApril 1, 2008 to
April 30, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    12,402,596May 1, 2008 to May
30, 2008
    
    
    22,000
    
    
    $
    7.04
    
    
    
    22,000
    
    
    
    12,247,637June 1, 2008 to
June 30, 2008
    
    
    46,000
    
    
    
    7.49
    
    
    
    46,000
    
    
    
    11,902,895Total for the
quarter ended June
30, 2008
    
    
    68,000
    
    
    $
    7.35
    
    
    
    68,000
    
    
    
    11,902,895
 
 (1)
    
    Average price paid per share includes commissions and is rounded to the nearest two
decimal places.  Contractual Obligations
  Contractual Obligations as of June 30, 2008Operating
    
    
    Leased
    
    
    CapitalBorrowings
    
    
    Interest(1)
    
    
    Leases
    
    
    Facilities
    
    
    Leases
    
    
    Total(Dollars in thousands)2008
    
    $
    171,735
    
    
    $
    15,174
    
    
    $
    5
    
    
    $
    910
    
    
    $
    5
    
    
    $
    187,8292009
    
    
    218,967
    
    
    
    19,960
    
    
    
    10
    
    
    
    1,816
    
    
    
    11
    
    
    
    240,7642010
    
    
    135,878
    
    
    
    9,616
    
    
    
    5
    
    
    
    1,662
    
    
    
    3
    
    
    
    147,1642011
    
    
    68,278
    
    
    
    3,546
    
    
    
    1
    
    
    
    1,521
    
    
    
    
    
    
    
    73,3462012
    
    
    22,686
    
    
    
    694
    
    
    
    
    
    
    
    1,551
    
    
    
    
    
    
    
    24,931Thereafter
    
    
    786
    
    
    
    16
    
    
    
    
    
    
    
    667
    
    
    
    
    
    
    
    1,469Total
    
    $
    618,330
    
    
    $
    49,006
    
    
    $
    21
    
    
    $
    8,127
    
    
    $
    19
    
    
    $
    675,503
 
 (1)
    
    Includes interest on term note securitizations only. Excludes interest on $35.7
million of revolving bank facility and CP conduit warehouse facility. 33




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##### Table of Contents



MARKET INTEREST RATE RISK AND SENSITIVITY
       34




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##### Table of Contents



For Active Agreements:
 January,
    
    December,
    
    August,
    
    August,Inception Date
    
    March, 2008
    
    2008
    
    2007
    
    2007
    
    2006
    
    July, 2004October,
    
    October,
    
    October,
    
    October,
    
    October,Commencement Date
    
    2009
    
    2009
    
    2009
    
    2008
    
    2008
    
    July, 2004(Dollars in thousands)Notional amount:June 30, 2008
    
    $
    25,000
    
    
    $
    25,000
    
    
    $
    100,000
    
    
    $
    100,000
    
    
    $
    100,000
    
    
    $
    December 31, 2007
    
    $
    
    
    
    $
    
    
    
    $
    100,000
    
    
    $
    100,000
    
    
    $
    100,000
    
    
    $
    3,066For active agreements:Fair value recorded in other
assets (liabilities)June 30, 2008
    
    $
    409
    
    
    $
    155
    
    
    $
    316
    
    
    $
    (2,165
    )
    
    $
    (2,876
    )
    
    $
    December 31, 2007
    
    $
    
    
    
    $
    
    
    
    $
    (46
    )
    
    $
    (2,010
    )
    
    $
    (2,704
    )
    
    $
    4Unrealized gain (loss),
net of tax, recorded in equityJune 30, 2008
    
    $
    246
    
    
    $
    93
    
    
    $
    190
    
    
    $
    (1,303
    )
    
    $
    (1,730
    )
    
    $
    December 31, 2007
    
    $
    
    
    
    $
    
    
    
    $
    (28
    )
    
    $
    (1,213
    )
    
    $
    (1,632
    )
    
    $
    2
 For Terminated Agreements:
 August 2006/August
    
    June/September,
    
    October/December,Inception Date
    
    2007
    
    2005
    
    2004Commencement Date
    
    October, 2007
    
    September, 2006
    
    August, 2005Termination Date
    
    October, 2007
    
    September, 2006
    
    August, 2005(Dollars in thousands)Notional amount
    
    $
    300,000
    
    
    $
    225,000
    
    
    $
    250,000Realized gain (loss) at termination
    
    $
    (2,683
    )
    
    $
    3,732
    
    
    $
    3,151Deferred gain (loss), net of tax,
recorded in equityJune 30, 2008
    
    $
    (1,082
    )
    
    $
    649
    
    
    $
    101December 31, 2007
    
    $
    (1,462
    )
    
    $
    974
    
    
    $
    229Amortization recognized as increase
(decrease) in interest expenseSix months ended June 30, 2008
    
    $
    630
    
    
    $
    (537
    )
    
    $
    (214
    )Year ended December 31, 2007
    
    $
    255
    
    
    $
    (1,543
    )
    
    $
    (749
    )Expected amortization during next
12 months as increase (decrease) in
interest expense
    
    $
    900
    
    
    $
    (718
    )
    
    $
    (263
    )
   35




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##### Table of Contents



Scheduled Maturities by Calendar YearTotal2012 &
    
    Carrying2008
    
    2009
    
    2010
    
    2011
    
    Thereafter
    
    Amount(Dollars in thousands)Debt:Fixed-rate debt
    
    $
    136,035
    
    
    $
    218,967
    
    
    $
    135,878
    
    
    $
    68,278
    
    
    $
    23,472
    
    
    $
    582,630Average fixed rate
    
    
    5.56
    %
    
    
    5.74
    %
    
    
    5.98
    %
    
    
    6.36
    %
    
    
    7.05
    %
    
    
    5.88
    %Variable-rate debt
    
    $
    35,700
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    35,700Average variable rate
    
    
    4.03
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.03
    %
    Items Subsequent to June 30, 2008
    RECENTLY ISSUED ACCOUNTING STANDARDS
 Fair Value Measurements
 36




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##### Table of Contents



Accounting for
Leases
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an Amendment of FASB Statement No. 115
 Determining Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities,
 
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4.
    
    Controls and Procedures
      37




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##### Table of Contents



PART II. Other Information
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Information on Stock Repurchases
   Maximum ApproximateTotal Number of
    
    Dollar Value ofShares Purchased as
    
    Shares that May YetNumber of
    
    
    
    
    
    Part of a Publicly
    
    be Purchased UnderShares
    
    Average Price
    
    Announced Plan or
    
    the Plans orTime Period
    
    Purchased
    
    Paid Per Share(1)
    
    Program
    
    ProgramsApril 1, 2008 to
April 30, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    12,402,596May 1, 2008 to May
30, 2008
    
    
    22,000
    
    
    $
    7.04
    
    
    
    22,000
    
    
    
    12,247,637June 1, 2008 to
June 30, 2008
    
    
    46,000
    
    
    
    7.49
    
    
    
    46,000
    
    
    
    11,902,895Total for the
quarter ended June
30, 2008
    
    
    68,000
    
    
    $
    7.35
    
    
    
    68,000
    
    
    
    11,902,895
 
 (2)
    
    Average price paid per share includes commissions and is rounded to the nearest two
decimal places.  
 Item 3. Defaults Upon Senior Securities
  38




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##### Table of Contents



Item 4. Submission of Matters To A Vote Of Security Holders
  Name
    
    For
    
    WithheldDaniel P. Dyer
    
    11,138,731 shares
    
    72,612 sharesJohn J. Calamari
    
    10,951,503 shares
    
    259,840 sharesLawrence J. DeAngelo
    
    11,131,191 shares
    
    80,152 sharesEdward Grzedzinski
    
    7,885,580 shares
    
    3,325,763 sharesKevin J. McGinty
    
    10,948,173 shares
    
    263,170 sharesMatthew J. Sullivan
    
    11,135,891 shares
    
    75,452 sharesJames W. Wert
    
    10,956,573 shares
    
    254,770 shares
  For
    
    Against
    
    Abstain
    
    Broker Non-Vote7,103,769 shares
    
    3,277,474 shares
    
    2,397 shares
    
    827,703 shares
 
 Item 5. Other Information
  
 Item 6. Exhibits
 ExhibitNumber
    
    Description10.1
    
    Marlin Business Services Corp. 2003 Equity Compensation Plan, as Amended (filed as Exhibit
99.1 to the Companys Registration Statement on Form S-8 filed with the Securities and
Exchange Commission on June 2, 2008, and incorporated by reference herein.)31.1
    
    Certification of the Chief Executive Officer of Marlin Business Services Corp. required by
Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended. (Filed herewith)31.2
    
    Certification of the Chief Financial Officer of Marlin Business Services Corp. required by
Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended. (Filed herewith)32.1
    
    Certification of the Chief Executive Officer and Chief Financial Officer of Marlin Business
Services Corp. required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as
amended. (This exhibit shall not be deemed filed for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that
section. Further, this exhibit shall not be deemed to be incorporated by reference into any
filing under the Securities Exchange Act of 1933, as amended, or the Securities Exchange Act
of 1934, as amended.) (Furnished herewith)
 39




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##### Table of Contents



SIGNATURES
  MARLIN BUSINESS SERVICES CORP.
(Registrant)By:
    /s/ Daniel P. Dyer
    
    Chief Executive OfficerDaniel P. Dyer
    (Chief Executive Officer)By:
    /s/ Lynne C. Wilson
    
    Chief Financial Officer & Senior Vice PresidentLynne C. Wilson
    (Principal Financial Officer)  40