##### 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 September 30, 2009
 Commission file number 000-50448
 MARLIN BUSINESS SERVICES CORP.
  Pennsylvania
    
    38-3686388(State of incorporation)
    
    (I.R.S. Employer Identification Number)
 
 
 þ o
 Yes o No o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-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 September 30, 2009
 TABLE OF CONTENTS
 Page No.Part I  Financial Information
    
    
    2-53Item 1 Condensed Consolidated Financial Statements (Unaudited)
    
    
    2-25Condensed Consolidated Balance Sheets at September 30, 2009 and December 31, 2008 (as restated)
    
    
    2Condensed Consolidated Statements of Operations for the three- and nine-month periods ended
September 30, 2009 and 2008
    
    
    3Condensed Consolidated Statements of Stockholders Equity for the nine-month period ended
September 30, 2009 and the year ended December 31, 2008 (as restated)
    
    
    4Condensed Consolidated Statements of Cash Flows for the nine-month periods ended September 30, 2009 and 2008
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6-25Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    26-53Item 3 Quantitative and Qualitative Disclosure about Market Risk
    
    
    53Item 4 Controls and Procedures
    
    
    53Part II  Other Information
    
    
    54-55Item 1 Legal Proceedings
    
    
    54Item 1A Risk Factors
    
    
    54Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    54Item 3 Defaults upon Senior Securities
    
    
    54Item 4 Submission of Matters to a Vote of Security Holders
    
    
    54-55Item 5 Other Information
    
    
    55Item 6 Exhibits
    
    
    55Signatures
    
    
    56RULE 13a-14(a) CERTIFICATION OF CHIEF EXECUTIVE OFFICERRULE 13a-14(a) CERTIFICATION OF CHIEF FINANCIAL OFFICERRULE 13a-14(b) CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
   - 1 -




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##### Table of Contents



PART I. Financial Information
 
 Item 1. Condensed Consolidated Financial Statements
 MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
 
 Condensed Consolidated Balance Sheets
(Unaudited)
 December 31,2008September 30,
    
    
    (as restated,2009
    
    
    see Note 15)(Dollars in thousands, except per-share data)ASSETSCash and due from banks
    
    $
    2,562
    
    
    $
    1,604Interest-earning deposits with banks
    
    
    47,879
    
    
    
    38,666Total cash and cash equivalents
    
    
    50,441
    
    
    
    40,270Restricted interest-earning deposits with banks
    
    
    64,920
    
    
    
    66,212Net investment in leases and loans
    
    
    499,556
    
    
    
    669,109Property and equipment, net
    
    
    2,635
    
    
    
    2,961Property tax receivables
    
    
    885
    
    
    
    3,120Other assets
    
    
    9,620
    
    
    
    12,759Total assets
    
    $
    628,057
    
    
    $
    794,431LIABILITIES AND STOCKHOLDERS EQUITYShort-term borrowings
    
    $
    87,860
    
    
    $
    101,923Long-term borrowings
    
    
    275,106
    
    
    
    441,385Deposits
    
    
    80,060
    
    
    
    63,385Other liabilities:Fair value of derivatives
    
    
    9,851
    
    
    
    11,528Sales and property taxes payable
    
    
    6,779
    
    
    
    6,540Accounts payable and accrued expenses
    
    
    7,626
    
    
    
    7,926Net deferred income tax liability
    
    
    13,317
    
    
    
    15,119Total liabilities
    
    
    480,599
    
    
    
    647,806Commitments and contingencies (Note 6)Stockholders equity:Common Stock, $0.01 par value; 75,000,000 shares
authorized; 12,616,826 and 12,246,405 shares
issued and outstanding, respectively
    
    
    126
    
    
    
    122Preferred Stock, $0.01 par value; 5,000,000
shares authorized; none issued
    
    
    
    
    
    
    Additional paid-in capital
    
    
    84,242
    
    
    
    83,671Stock subscription receivable
    
    
    (3
    )
    
    
    (5
    )Accumulated other comprehensive income (loss)
    
    
    (152
    )
    
    
    167Retained earnings
    
    
    63,245
    
    
    
    62,670Total stockholders equity
    
    
    147,458
    
    
    
    146,625Total liabilities and stockholders equity
    
    $
    628,057
    
    
    $
    794,431
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##### Table of Contents



MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Operations
(Unaudited)
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands, except per-share data)Interest income
    
    $
    15,591
    
    
    $
    21,062
    
    
    $
    51,944
    
    
    $
    65,884Fee income
    
    
    4,288
    
    
    
    5,534
    
    
    
    13,702
    
    
    
    16,021Interest and fee income
    
    
    19,879
    
    
    
    26,596
    
    
    
    65,646
    
    
    
    81,905Interest expense
    
    
    6,448
    
    
    
    8,790
    
    
    
    21,724
    
    
    
    28,396Net interest and fee income
    
    
    13,431
    
    
    
    17,806
    
    
    
    43,922
    
    
    
    53,509Provision for credit losses
    
    
    5,951
    
    
    
    8,602
    
    
    
    21,493
    
    
    
    22,137Net interest and fee income after provision for
credit losses
    
    
    7,480
    
    
    
    9,204
    
    
    
    22,429
    
    
    
    31,372Other income:Insurance income
    
    
    1,186
    
    
    
    1,609
    
    
    
    4,051
    
    
    
    4,715Gain (loss) on derivatives
    
    
    (1,164
    )
    
    
    (3,280
    )
    
    
    (1,825
    )
    
    
    (3,280
    )Other income
    
    
    409
    
    
    
    424
    
    
    
    1,205
    
    
    
    1,459Other income (loss)
    
    
    431
    
    
    
    (1,247
    )
    
    
    3,431
    
    
    
    2,894Other expense:Salaries and benefits
    
    
    4,051
    
    
    
    5,620
    
    
    
    14,994
    
    
    
    17,835General and administrative
    
    
    3,076
    
    
    
    3,333
    
    
    
    9,761
    
    
    
    11,629Financing related costs
    
    
    51
    
    
    
    370
    
    
    
    361
    
    
    
    967Other expense
    
    
    7,178
    
    
    
    9,323
    
    
    
    25,116
    
    
    
    30,431Income (loss) before income taxes
    
    
    733
    
    
    
    (1,366
    )
    
    
    744
    
    
    
    3,835Income tax expense (benefit)
    
    
    225
    
    
    
    (425
    )
    
    
    169
    
    
    
    1,718Net income (loss)
    
    $
    508
    
    
    $
    (941
    )
    
    $
    575
    
    
    $
    2,117Basic earnings (loss) per share
    
    $
    0.04
    
    
    $
    (0.08
    )
    
    $
    0.05
    
    
    $
    0.17Diluted earnings (loss) per share
    
    $
    0.04
    
    
    $
    (0.08
    )
    
    $
    0.05
    
    
    $
    0.17Weighted average shares used in computing basic
earnings per share
    
    
    12,607,147
    
    
    
    11,843,300
    
    
    
    12,499,578
    
    
    
    12,199,081Weighted average shares used in computing
diluted earnings per share
    
    
    12,649,800
    
    
    
    11,843,300
    
    
    
    12,522,685
    
    
    
    12,258,415
   - 3 -




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##### Table of Contents



MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
 
 Condensed Consolidated Statements Stockholders Equity
(Unaudited)
 AccumulatedAdditional
    
    
    Stock
    
    
    Other
    
    
    
    
    
    
    TotalCommon
    
    
    Stock
    
    
    Paid-In
    
    
    Subscription
    
    
    Comprehensive
    
    
    Retained
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Receivable
    
    
    Income (Loss)
    
    
    Earnings
    
    
    Equity(Dollars in thousands)Balance, December 31, 2007 (as restated,
see Note 15)
    
    
    12,201,304
    
    
    $
    122
    
    
    $
    84,429
    
    
    $
    (7
    )
    
    $
    (3,130
    )
    
    $
    67,900
    
    
    $
    149,314Issuance of common stock
    
    
    36,360
    
    
    
    
    
    
    
    148
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    148Repurchase of common stock
    
    
    (333,759
    )
    
    
    (3
    )
    
    
    (2,380
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,383
    )Exercise of stock options
    
    
    46,616
    
    
    
    
    
    
    
    145
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    145Tax benefit on stock options exercised
    
    
    
    
    
    
    
    
    
    
    102
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    102Stock option compensation recognized
    
    
    
    
    
    
    
    
    
    
    304
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    304Payment of receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    2Restricted stock grant
    
    
    295,884
    
    
    
    3
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restricted stock compensation
recognized
    
    
    
    
    
    
    
    
    
    
    926
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    926Net change related to derivatives, net of
tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,297
    
    
    
    
    
    
    
    3,297Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,230
    )
    
    
    (5,230
    )Balance, December 31, 2008 (as restated,
see Note 15)
    
    
    12,246,405
    
    
    $
    122
    
    
    $
    83,671
    
    
    $
    (5
    )
    
    $
    167
    
    
    $
    62,670
    
    
    $
    146,625Issuance of common stock
    
    
    17,750
    
    
    
    1
    
    
    
    53
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54Repurchase of common stock
    
    
    (102,614
    )
    
    
    (1
    )
    
    
    (399
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (400
    )Exercise of stock options
    
    
    11,327
    
    
    
    
    
    
    
    44
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44Tax benefit on stock options exercised
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Stock option compensation recognized
    
    
    
    
    
    
    
    
    
    
    216
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    216Payment of receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    2Restricted stock grant
    
    
    443,958
    
    
    
    4
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restricted stock compensation
recognized
    
    
    
    
    
    
    
    
    
    
    656
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    656Net change related to derivatives, net
of
tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (319
    )
    
    
    
    
    
    
    (319
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    575
    
    
    
    575Balance, September 30, 2009
    
    
    12,616,826
    
    
    $
    126
    
    
    $
    84,242
    
    
    $
    (3
    )
    
    $
    (152
    )
    
    $
    63,245
    
    
    $
    147,458
   - 4 -




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##### Table of Contents



MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Cash Flows
(Unaudited)
 Nine Months Ended September 30,2009
    
    
    2008(In thousands)Cash flows from operating activities:Net income
    
    $
    575
    
    
    $
    2,117Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    1,844
    
    
    
    2,160Stock-based compensation
    
    
    1,006
    
    
    
    843Excess tax benefits from stock-based payment
arrangements
    
    
    (5
    )
    
    
    (102
    )Amortization of deferred net loss (gain) on cash flow
hedge derivatives
    
    
    113
    
    
    
    (153
    )Change in fair value of derivatives
    
    
    (997
    )
    
    
    2,160Cash flow hedge losses (gains) reclassified from
accumulated other comprehensive income
    
    
    (642
    )
    
    
    1,120Provision for credit losses
    
    
    21,493
    
    
    
    22,137Net deferred income taxes
    
    
    (1,726
    )
    
    
    (1,381
    )Amortization of deferred initial direct costs and fees
    
    
    9,482
    
    
    
    12,630Deferred initial direct costs and fees
    
    
    (2,039
    )
    
    
    (8,055
    )Loss on equipment disposed
    
    
    1,259
    
    
    
    638Effect of changes in other operating items:Other assets
    
    
    4,933
    
    
    
    360Other liabilities
    
    
    (935
    )
    
    
    1,257Net cash provided by operating activities
    
    
    34,361
    
    
    
    35,731Cash flows from investing activities:Purchases of equipment for direct financing lease contracts
and funds used to originate loans
    
    
    (68,904
    )
    
    
    (198,456
    )Principal collections on leases and loans
    
    
    207,923
    
    
    
    232,812Security deposits collected, net of refunds
    
    
    (3,415
    )
    
    
    (1,998
    )Proceeds from the sale of equipment
    
    
    3,754
    
    
    
    4,134Acquisitions of property and equipment
    
    
    (366
    )
    
    
    (639
    )Change in restricted interest-earning deposits with banks
    
    
    1,292
    
    
    
    76,776Net cash provided by investing activities
    
    
    140,284
    
    
    
    112,629Cash flows from financing activities:Issuances of common stock
    
    
    56
    
    
    
    96Repurchases of common stock
    
    
    (400
    )
    
    
    (1,999
    )Exercise of stock options
    
    
    44
    
    
    
    145Excess tax benefits from stock-based payment arrangements
    
    
    5
    
    
    
    102Debt issuance costs
    
    
    (512
    )
    
    
    (46
    )Term securitization repayments
    
    
    (166,279
    )
    
    
    (261,932
    )Secured bank facility advances
    
    
    4,192
    
    
    
    69,104Secured bank facility repayments
    
    
    (24,240
    )
    
    
    (34,276
    )Warehouse advances
    
    
    37,938
    
    
    
    25,911Warehouse repayments
    
    
    (33,153
    )
    
    
    (5,978
    )Other short-term borrowing advances
    
    
    2,200
    
    
    
    Other short-term borrowing repayments
    
    
    (1,000
    )
    
    
    Increase in deposits
    
    
    16,675
    
    
    
    47,172Net cash used in financing activities
    
    
    (164,474
    )
    
    
    (161,701
    )Net increase (decrease) in total cash and cash equivalents
    
    
    10,171
    
    
    
    (13,341
    )Total cash and cash equivalents, beginning of period
    
    
    40,270
    
    
    
    38,708Total cash and cash equivalents, end of period
    
    $
    50,441
    
    
    $
    25,367Supplemental disclosures of cash flow information:Cash paid for interest on deposits and borrowings
    
    $
    20,546
    
    
    $
    27,136Cash paid for income taxes
    
    $
    806
    
    
    $
    2,660
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##### Table of Contents



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




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##### Table of Contents



Insurance income
 Other income.
 Initial direct costs and fees.
 Lease residual values.
 Allowance for credit losses. ,
   - 7 -




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##### Table of Contents



Securitizations.
 Derivatives.
     Common stock and equity.
 Stock-based compensation.
 Income taxes.
  - 8 -




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##### Table of Contents



Earnings per share. Earnings
Per Share Determining Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities
    - 9 -




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NOTE 3  Net Investment in Leases and Loans
  December 31,2008September 30,
    
    
    (As restated,2009
    
    
    see Note 15)(Dollars in thousands)Minimum lease payments receivable
    
    $
    552,398
    
    
    $
    752,802Estimated residual value of equipment
    
    
    46,158
    
    
    
    51,197Unearned lease income, net of initial
direct costs and fees deferred
    
    
    (83,977
    )
    
    
    (119,775
    )Security deposits
    
    
    (8,750
    )
    
    
    (12,165
    )Loans, including unamortized deferred
fees and costs
    
    
    6,020
    
    
    
    12,333Allowance for credit losses
    
    
    (12,293
    )
    
    
    (15,283
    )$
    499,556
    
    
    $
    669,109
    Minimum LeasePayments
    
    
    IncomeReceivable
    
    
    Amortization(Dollars in thousands)Period Ending December 31:2009
    
    $
    71,310
    
    
    $
    14,5422010
    
    
    233,920
    
    
    
    39,4902011
    
    
    146,606
    
    
    
    19,8092012
    
    
    71,651
    
    
    
    7,8412013
    
    
    25,523
    
    
    
    2,101Thereafter
    
    
    3,388
    
    
    
    194$
    552,398
    
    
    $
    83,977
   - 10 -




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##### Table of Contents



NOTE 4  Allowance for Credit Losses
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Allowance for credit losses, beginning of period
    
    $
    13,978
    
    
    $
    12,873
    
    
    $
    15,283
    
    
    $
    10,988Charge-offs
    
    
    (8,605
    )
    
    
    (7,671
    )
    
    
    (26,947
    )
    
    
    (20,918
    )Recoveries
    
    
    969
    
    
    
    535
    
    
    
    2,464
    
    
    
    2,132Net charge-offs
    
    
    (7,636
    )
    
    
    (7,136
    )
    
    
    (24,483
    )
    
    
    (18,786
    )Provision for credit losses
    
    
    5,951
    
    
    
    8,602
    
    
    
    21,493
    
    
    
    22,137Allowance for credit losses, end of period
    
    $
    12,293
    
    
    $
    14,339
    
    
    $
    12,293
    
    
    $
    14,339
 NOTE 5  Other Assets
  September 30,
    
    
    December 31,2009
    
    
    2008(Dollars in thousands)Income taxes receivable
    
    $
    3,053
    
    
    $
    4,136Accrued fees receivable
    
    
    3,463
    
    
    
    3,559Deferred transaction costs
    
    
    1,004
    
    
    
    1,375Prepaid expenses
    
    
    680
    
    
    
    1,990Other
    
    
    1,420
    
    
    
    1,699$
    9,620
    
    
    $
    12,759
 NOTE 6  Commitments and Contingencies
  NOTE 7  Deposits
  ScheduledMaturities(Dollars in thousands)Period Ending
December 31,2009
    
    $
    10,6562010
    
    
    23,4302011
    
    
    19,5632012
    
    
    15,4362013
    
    
    8,824Thereafter
    
    
    2,151$
    80,060
   - 11 -




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##### Table of Contents



NOTE 8  Short-term and Long-term Borrowings
    Principal
    
    
    Interest(1)(Dollars in thousands)Period Ending December 31,2009
    
    $
    60,008
    
    
    $
    7,1382010
    
    
    207,909
    
    
    
    7,9142011
    
    
    68,901
    
    
    
    2,7502012
    
    
    24,139
    
    
    
    4702013
    
    
    1,878
    
    
    
    28Thereafter
    
    
    131
    
    
    
    1$
    362,966
    
    
    $
    18,301
 
 (1)
    
    Includes interest on term note securitizations only. Excludes interest on the $86.7
million balance of the CP conduit warehouse facility and interest on the $1.2 million balance
of federal funds purchased. NOTE 9  Derivative Financial Instruments
       - 12 -




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- 13 -




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##### Table of Contents



For Active Agreements:
 March,
    
    
    January,
    
    
    December,
    
    
    August,
    
    
    August,Inception Date
    
    2008
    
    
    2008
    
    
    2007
    
    
    2007
    
    
    2006
 October,
    
    
    October,
    
    
    October,
    
    
    October,
    
    
    October,Commencement Date
    
    2009
    
    
    2009
    
    
    2009
    
    
    2008
    
    
    2008(Dollars in thousands)Notional amount:September 30, 2009
    
    $
    
    
    
    $
    25,000
    
    
    $
    100,000
    
    
    $
    50,000
    
    
    $
    50,000December 31, 2008
    
    $
    25,000
    
    
    $
    25,000
    
    
    $
    100,000
    
    
    $
    50,000
    
    
    $
    50,000For active agreements:Fair value recorded in other assets (liabilities)September 30, 2009
    
    $
    
    
    
    $
    (1,209
    )
    
    $
    (5,109
    )
    
    $
    (1,678
    )
    
    $
    (1,855
    )December 31, 2008
    
    $
    (653
    )
    
    $
    (922
    )
    
    $
    (3,955
    )
    
    $
    (2,823
    )
    
    $
    (3,175
    )Unrealized gain, net of tax, recorded in equitySeptember 30, 2009
    
    $
    
    
    
    $
    
    
    
    $
    143
    
    
    $
    
    
    
    $
    December 31, 2008
    
    $
    246
    
    
    $
    93
    
    
    $
    190
    
    
    $
    
    
    
    $
    
 For Terminated Agreements:
 August,
    
    
    
    
    
    
    October/March,
    
    
    August,
    
    
    2006/August,
    
    
    June/September,
    
    
    December,Inception Date
    
    2008
    
    
    2006/2007
    
    
    2007
    
    
    2005
    
    
    2004October,
    
    
    October,
    
    
    October,
    
    
    September,
    
    
    August,Commencement Date
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005September/May,
    
    
    October,
    
    
    October,
    
    
    September,
    
    
    August,Termination Date
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(Dollars in thousands)Notional amount
    
    $
    25,000
    
    
    $
    100,000
    
    
    $
    300,000
    
    
    $
    225,000
    
    
    $
    250,000Realized gain (loss) at termination
    
    $
    (775
    )
    
    $
    (3,312
    )
    
    $
    (2,683
    )
    
    $
    3,732
    
    
    $
    3,151Deferred gain (loss), net of tax,
recorded in equity:September 30, 2009
    
    $
    
    
    
    $
    
    
    
    $
    (443
    )
    
    $
    148
    
    
    $
    December 31, 2008
    
    $
    
    
    
    $
    
    
    
    $
    (777
    )
    
    $
    399
    
    
    $
    16Amortization recognized as
increase (decrease) in interest
expense:Nine months ended September 30,
2009
    
    $
    
    
    
    $
    
    
    
    $
    557
    
    
    $
    (418
    )
    
    $
    (26
    )Year ended December 31, 2008
    
    $
    
    
    
    $
    
    
    
    $
    1,136
    
    
    $
    (953
    )
    
    $
    (354
    )Expected amortization during next
12 months as increase (decrease)
in interest expense
    
    $
    
    
    
    $
    
    
    
    $
    450
    
    
    $
    (237
    )
    
    $
    
  - 14 -




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##### Table of Contents



Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Change in fair value of derivative contracts
    
    $
    (1,397
    )
    
    $
    (2,160
    )
    
    $
    (2,467
    )
    
    $
    (2,160
    )Cash flow hedging gains (losses) on forecasted
transactions no longer probable of
occurring(1)
    
    
    233
    
    
    
    (1,120
    )
    
    
    642
    
    
    
    (1,120
    )Gain (loss) on derivatives
    
    $
    (1,164
    )
    
    $
    (3,280
    )
    
    $
    (1,825
    )
    
    $
    (3,280
    )
 
 (1)
    
    Reclassified from accumulated other comprehensive income     ,
 NOTE 10  Fair Value Measurements
    - 15 -




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##### Table of Contents




    
    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
    
    $
    
    
    
    $
    181
    
    
    $
    
    
    
    $
    181LiabilitiesInterest-rate swaps
    
    
    
    
    
    
    9,851
    
    
    
    
    
    
    
    9,851
 Disclosures about the Fair Value of Financial Instruments
    - 16 -




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##### Table of Contents



September 30, 2009
    
    
    December 31, 2008Carrying
    
    
    
    
    
    
    CarryingAmount
    
    
    Fair Value
    
    
    Amount
    
    
    Fair Value(Dollars in thousands)Assets:Cash and cash equivalents
    
    $
    50,441
    
    
    $
    50,441
    
    
    $
    40,270
    
    
    $
    40,270Restricted cash
    
    
    64,920
    
    
    
    64,920
    
    
    
    66,212
    
    
    
    66,212Loans
    
    
    5,454
    
    
    
    5,194
    
    
    
    11,452
    
    
    
    11,201Interest-rate caps purchased
    
    
    181
    
    
    
    181
    
    
    
    53
    
    
    
    53Liabilities:Short-term and long-term
borrowings
    
    
    362,966
    
    
    
    372,621
    
    
    
    543,308
    
    
    
    535,042Deposits
    
    
    80,060
    
    
    
    81,756
    
    
    
    63,385
    
    
    
    64,635Accounts payable and accrued
expenses (1)
    
    
    14,405
    
    
    
    14,405
    
    
    
    14,426
    
    
    
    14,426Interest-rate caps sold
    
    
    
    
    
    
    
    
    
    
    40
    
    
    
    40Interest-rate swaps
    
    
    9,851
    
    
    
    9,851
    
    
    
    11,528
    
    
    
    11,528
 
 (1)
    
    Includes sales and property taxes payable.  (a) Cash and Cash Equivalents
  (b) Restricted Cash
  (c) Loans
  (d) Revolving and Term Secured Borrowings
  (e) Deposits
  (f) Accounts Payable and Accrued Expenses
   - 17 -




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##### Table of Contents



(g) Interest-Rate Swaps and Interest-Rate Caps
 Fair Value Measurements
 NOTE 11 Earnings Per Common Share (EPS)
    Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands, except per-share data)Net income (loss)
    
    $
    508
    
    
    $
    (941
    )
    
    $
    575
    
    
    $
    2,117Weighted average common shares outstanding
    
    
    11,708,401
    
    
    
    11,843,300
    
    
    
    11,686,120
    
    
    
    11,899,731Add: Unvested restricted stock awards
considered participating securities
    
    
    898,746
    
    
    
    
    
    
    
    813,458
    
    
    
    299,350Adjusted weighted average common shares
used in computing basic EPS
    
    
    12,607,147
    
    
    
    11,843,300
    
    
    
    12,499,578
    
    
    
    12,199,081Add: Effect of dilutive stock options
    
    
    42,653
    
    
    
    
    
    
    
    23,107
    
    
    
    59,334Adjusted weighted average common shares
used in computing diluted EPS
    
    
    12,649,800
    
    
    
    11,843,300
    
    
    
    12,522,685
    
    
    
    12,258,415Net earnings (loss) per common share:Basic
    
    $
    0.04
    
    
    $
    (0.08
    )
    
    $
    0.05
    
    
    $
    0.17Diluted
    
    $
    0.04
    
    
    $
    (0.08
    )
    
    $
    0.05
    
    
    $
    0.17
     - 18 -




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##### Table of Contents



NOTE 12  Comprehensive Income (Loss)
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Net income (loss), as reported
    
    $
    508
    
    
    $
    (941
    )
    
    $
    575
    
    
    $
    2,117Other comprehensive income (loss):Change in fair value of derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    593Reclassification of cash flow
hedging losses (gains) on
forecasted transactions no longer
probable of occurring
    
    
    (233
    )
    
    
    1,120
    
    
    
    (642
    )
    
    
    1,120Amortization of net deferred
losses (gains) on cash flow hedge
derivatives
    
    
    47
    
    
    
    (32
    )
    
    
    113
    
    
    
    (153
    )Tax effect
    
    
    74
    
    
    
    (434
    )
    
    
    210
    
    
    
    (612
    )Total other comprehensive income (loss)
    
    
    (112
    )
    
    
    654
    
    
    
    (319
    )
    
    
    948Comprehensive income (loss)
    
    $
    396
    
    
    $
    (287
    )
    
    $
    256
    
    
    $
    3,065
 NOTE 13  Stockholders Equity
 Stockholders Equity
   Regulatory Capital Requirements
     - 19 -




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##### Table of Contents



Minimum Capital
    
    
    Well-Capitalized CapitalActual
    
    
    Requirement
    
    
    RequirementRatio
    
    
    Amount
    
    
    Ratio(1)
    
    
    Amount
    
    
    Ratio
    
    
    Amount(Dollars in thousands)Tier 1 Leverage CapitalMarlin Business Services Corp.
    
    
    22.31
    %
    
    $
    147,611
    
    
    
    4
    %
    
    $
    26,471
    
    
    
    5
    %
    
    $
    33,089Marlin Business Bank
    
    
    15.23
    %
    
    $
    15,209
    
    
    
    5
    %
    
    $
    4,994
    
    
    
    5
    %
    
    $
    4,994Tier 1 Risk-based CapitalMarlin Business Services Corp.
    
    
    27.17
    %
    
    $
    147,611
    
    
    
    4
    %
    
    $
    21,735
    
    
    
    6
    %
    
    $
    32,602Marlin Business Bank
    
    
    15.17
    %
    
    $
    15,209
    
    
    
    6
    %
    
    $
    6,016
    
    
    
    6
    %
    
    $
    6,016Total Risk-based CapitalMarlin Business Services Corp.
    
    
    28.43
    %
    
    $
    154,471
    
    
    
    8
    %
    
    $
    43,469
    
    
    
    10
    %
    
    $
    54,337Marlin Business Bank
    
    
    16.06
    %
    
    $
    16,104
    
    
    
    15
    %
    
    $
    15,040
    
    
    
    10
    %(1)
    
    $
    10,027
 
 (1)
    
    MBB is required to maintain well-capitalized status. In addition, MBB must
maintain a total risk-based capital ratio greater than 15%. Prompt Corrective Action
   - 20 -




---



##### Table of Contents




    
    prohibiting the payment of principal and interest on subordinated debt;
 
    
    prohibiting the holding company from making distributions without prior regulatory
approval;
 
    
    placing limits on asset growth and restrictions on activities;
 
    
    placing additional restrictions on transactions with affiliates;
 
    
    restricting the interest rate the institution may pay on deposits;
 
    
    prohibiting the institution from accepting deposits from correspondent banks; and
 
    
    in the most severe cases, appointing a conservator or receiver for the institution.
   NOTE 14  Stock-Based Compensation
   Stock Options
    - 21 -




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30, 2008
    
    
    September 30, 2008Risk-free interest rate
    
    
    2.99
    %
    
    
    2.45
    %Expected life (years)
    
    
    5
    
    
    
    5Expected volatility
    
    
    35
    %
    
    
    35
    %Expected dividends
    
    
    
    
    
    
    
   WeightedAverageShares
    
    
    Exercise PriceOptionsOutstanding at January 1, 2009
    
    
    885,459
    
    
    $
    12.32Granted
    
    
    
    
    
    
    Exercised
    
    
    (11,327
    )
    
    
    3.87Forfeited
    
    
    (82,751
    )
    
    
    16.51Expired
    
    
    
    
    
    
    Outstanding at September 30, 2009
    
    
    791,381
    
    
    
    12.00
    - 22 -




---



##### Table of Contents



Options Outstanding
    
    
    Options ExercisableWeighted
    
    
    
    
    
    
    Aggregate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AggregateAverage
    
    
    Weighted
    
    
    Intrinsic
    
    
    
    
    
    
    Weighted
    
    
    Weighted
    
    
    IntrinsicRange of
    
    Number
    
    
    Remaining
    
    
    Average
    
    
    Value
    
    
    Number
    
    
    Average Remaining
    
    
    Average
    
    
    ValueExercise Prices
    
    Outstanding
    
    
    Life (Years)
    
    
    Exercise Price
    
    
    (In thousands)
    
    
    Exercisable
    
    
    Life (Years)
    
    
    Exercise Price
    
    
    (In thousands)$3.39
    
    
    94,134
    
    
    
    2.5
    
    
    $
    3.39
    
    
    $
    451
    
    
    
    94,134
    
    
    
    2.5
    
    
    $
    3.39
    
    
    $
    451$4.23  5.01
    
    
    54,441
    
    
    
    0.5
    
    
    
    4.30
    
    
    
    211
    
    
    
    54,441
    
    
    
    0.5
    
    
    
    4.30
    
    
    
    211$7.61  10.18
    
    
    340,962
    
    
    
    4.4
    
    
    
    9.53
    
    
    
    18
    
    
    
    158,061
    
    
    
    3.3
    
    
    
    9.61
    
    
    
    16$14.00  16.02
    
    
    63,484
    
    
    
    4.3
    
    
    
    14.63
    
    
    
    
    
    
    
    56,817
    
    
    
    4.3
    
    
    
    14.57
    
    
    
    $17.52  22.23
    
    
    238,360
    
    
    
    3.8
    
    
    
    20.00
    
    
    
    
    
    
    
    137,813
    
    
    
    3.5
    
    
    
    19.37
    
    
    
    791,381
    
    
    
    3.7
    
    
    
    12.00
    
    
    $
    680
    
    
    
    501,266
    
    
    
    3.0
    
    
    
    11.11
    
    
    $
    678
   Restricted Stock Awards
      - 23 -




---



##### Table of Contents



WeightedAverageGrant-DateShares
    
    
    Fair ValueNon-vested restricted stock at January 1, 2009
    
    
    503,914
    
    
    $
    11.29Granted
    
    
    512,264
    
    
    
    6.05Vested
    
    
    (40,177
    )
    
    
    18.23Forfeited
    
    
    (68,406
    )
    
    
    14.14Non-vested restricted stock at September 30, 2009
    
    
    907,595
    
    
    
    7.81
     NOTE 15  Restatement of Prior Financial Statements
     - 24 -




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##### Table of Contents



As PreviouslyReported
    
    
    Adjustment
    
    
    As Restated(Dollars in thousands)Consolidated Balance SheetNet investment in leases and loans
    
    $
    670,494
    
    
    $
    (1,385
    )
    
    $
    669,109Total assets
    
    
    795,816
    
    
    
    (1,385
    )
    
    
    794,431Net deferred income tax liability
    
    
    15,673
    
    
    
    (554
    )
    
    
    15,119Total liabilities
    
    
    648,360
    
    
    
    (554
    )
    
    
    647,806Retained earnings
    
    
    63,501
    
    
    
    (831
    )
    
    
    62,670Total stockholders equity
    
    
    147,456
    
    
    
    (831
    )
    
    
    146,625Total liabilities and stockholders equity
    
    
    795,816
    
    
    
    (1,385
    )
    
    
    794,431
  As of or For the Year Ended December 31,2007
    
    
    2006
    
    
    2005As
    
    
    
    
    
    
    As
    
    
    
    
    
    
    AsPreviously
    
    
    
    
    
    
    Previously
    
    
    As
    
    
    Previously
    
    
    AsReported
    
    
    As Restated
    
    
    Reported
    
    
    Restated
    
    
    Reported
    
    
    Restated(Dollars in thousands, except per-share data)Consolidated Balance SheetNet investment in leases and loans
    
    $
    765,938
    
    
    $
    764,553
    
    
    $
    693,911
    
    
    $
    693,003
    
    
    $
    572,581
    
    
    $
    572,199Net deferred income tax liability
    
    
    15,682
    
    
    
    15,128
    
    
    
    22,931
    
    
    
    22,568
    
    
    
    25,362
    
    
    
    25,209Retained earnings
    
    
    68,731
    
    
    
    67,900
    
    
    
    50,445
    
    
    
    49,900
    
    
    
    31,811
    
    
    
    31,582Statements of OperationsInterest income
    
    $
    90,231
    
    
    $
    89,754
    
    
    $
    77,644
    
    
    $
    77,118
    
    
    $
    67,572
    
    
    $
    67,190Income before income taxes
    
    
    30,361
    
    
    
    29,884
    
    
    
    31,211
    
    
    
    30,685
    
    
    
    26,855
    
    
    
    26,473Income tax expense
    
    
    12,075
    
    
    
    11,884
    
    
    
    12,577
    
    
    
    12,367
    
    
    
    10,607
    
    
    
    10,454Net income
    
    
    18,286
    
    
    
    18,000
    
    
    
    18,634
    
    
    
    18,318
    
    
    
    16,248
    
    
    
    16,019Basic earnings per share(1)
    
    $
    1.49
    
    
    $
    1.47
    
    
    $
    1.56
    
    
    $
    1.53
    
    
    $
    1.39
    
    
    $
    1.37Diluted earnings per share(1)
    
    $
    1.47
    
    
    $
    1.45
    
    
    $
    1.53
    
    
    $
    1.50
    
    
    $
    1.35
    
    
    $
    1.33
 
 (1)
    
    The amounts for basic and diluted earnings per share as previously reported
reflect the impact of the retrospective adjustment to conform with the provisions of FSP EITF
03-6-1, as incorporated in the Earnings Per Share Topic of the FASB ASC and previously discussed in
Note 2 herein. Therefore, the difference between the amounts as previously reported and as
restated represents the effect of the error correction discussed above. NOTE 16  Subsequent Events
    - 25 -




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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 for the year ended December 31, 2008 filed with the Securities and Exchange
Commission (SEC). This discussion contains certain statements of a forward-looking nature that
involve risks and uncertainties.
 FORWARD-LOOKING STATEMENTS
  
    
    availability, terms and deployment of funding and capital;
    
    general volatility of the securitization and capital markets;
    
    changes in our industry, interest rates or the general economy;
    
    changes in our business strategy;
    
    the degree and nature of our competition;
    
    availability and retention of qualified personnel; and
    
    the factors set forth in the section captioned Risk Factors in our
Form 10-K for the year ended December 31, 2008 filed with the SEC.
  Overview
     - 26 -




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##### Table of Contents



Nine MonthsEndedSeptember 30,
    
    
    As of or For the Year Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Number of sales account executives
    
    
    34
    
    
    
    86
    
    
    
    118
    
    
    
    100
    
    
    
    103
    
    
    
    100Number of originating
sources(1)
    
    
    479
    
    
    
    1,014
    
    
    
    1,246
    
    
    
    1,295
    
    
    
    1,295
    
    
    
    1,244
 
 (1)
    
    Monthly average of origination sources generating lease volume    - 27 -




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##### Table of Contents



Critical Accounting Policies
  Income recognition.
   - 28 -




---



##### Table of Contents



Initial direct costs and fees. .
 Lease residual values.
 Allowance for credit losses.
  Securitizations.
  - 29 -




---



##### Table of Contents



Derivatives.
     Stock-based compensation.
   Income taxes.
  - 30 -




---



##### Table of Contents



RESULTS OF OPERATIONS
 Comparison of the Three-Month Periods Ended September 30, 2009 and 2008
 Net income.
     - 31 -




---



##### Table of Contents



Average balances and net interest margin.
 Three Months Ended September 30,2009
    
    
    2008(Dollars in thousands)Average(1)
    
    
    
    
    
    
    Average
    
    
    Average(1)
    
    
    
    
    
    AverageBalance
    
    
    Interest
    
    
    Yields/Rates(2)
    
    
    Balance
    
    
    Interest
    
    
    Yields/Rates(2)Interest-earning assets:Interest-earning deposits with banks
    
    $
    49,196
    
    
    $
    20
    
    
    
    0.16
    %
    
    $
    27,035
    
    
    $
    171
    
    
    
    2.53
    %Restricted interest-earning deposits
with banks
    
    
    65,569
    
    
    
    44
    
    
    
    0.27
    
    
    
    64,754
    
    
    
    371
    
    
    
    2.29Net investment in leases(3)
    
    
    519,791
    
    
    
    15,317
    
    
    
    11.79
    
    
    
    690,973
    
    
    
    20,035
    
    
    
    11.60Loans receivable(3)
    
    
    7,038
    
    
    
    210
    
    
    
    11.94
    
    
    
    15,534
    
    
    
    485
    
    
    
    12.49Total interest-earning assets
    
    
    641,594
    
    
    
    15,591
    
    
    
    9.72
    
    
    
    798,296
    
    
    
    21,062
    
    
    
    10.55Non-interest-earning assets:Cash and due from banks
    
    
    4,239
    
    
    
    
    
    
    
    
    
    
    
    831Property and equipment, net
    
    
    2,725
    
    
    
    
    
    
    
    
    
    
    
    3,059Property tax receivables
    
    
    1,354
    
    
    
    
    
    
    
    
    
    
    
    909Other assets(4)
    
    
    6,932
    
    
    
    
    
    
    
    
    
    
    
    17,477Total non-interest-earning assets
    
    
    15,250
    
    
    
    
    
    
    
    
    
    
    
    22,276Total assets
    
    $
    656,844
    
    
    
    
    
    
    
    
    
    
    $
    820,572Interest-bearing liabilities:Short-term borrowings(5)
    
    $
    92,292
    
    
    $
    1,275
    
    
    
    5.53
    %
    
    $
    36,758
    
    
    $
    446
    
    
    
    4.85
    %Long-term borrowings(5)
    
    
    301,788
    
    
    
    4,483
    
    
    
    5.94
    
    
    
    548,556
    
    
    
    7,882
    
    
    
    5.75Deposits
    
    
    79,444
    
    
    
    690
    
    
    
    3.47
    
    
    
    43,888
    
    
    
    462
    
    
    
    4.21Total interest-bearing liabilities
    
    
    473,524
    
    
    
    6,448
    
    
    
    5.45
    
    
    
    629,202
    
    
    
    8,790
    
    
    
    5.58Non-interest-bearing liabilities:Fair value of derivatives
    
    
    9,859
    
    
    
    
    
    
    
    
    
    
    
    5,874Sales and property taxes payable
    
    
    7,674
    
    
    
    
    
    
    
    
    
    
    
    10,216Accounts payable and accrued expenses
    
    
    5,621
    
    
    
    
    
    
    
    
    
    
    
    9,656Net deferred income tax liability
    
    
    13,152
    
    
    
    
    
    
    
    
    
    
    
    13,911Total non-interest-bearing
liabilities
    
    
    36,306
    
    
    
    
    
    
    
    
    
    
    
    39,657Total liabilities
    
    
    509,830
    
    
    
    
    
    
    
    
    
    
    
    668,859Stockholders equity
    
    
    147,014
    
    
    
    
    
    
    
    
    
    
    
    151,713Total liabilities and
stockholders equity
    
    $
    656,844
    
    
    
    
    
    
    
    
    
    
    $
    820,572Net interest income
    
    
    
    
    
    $
    9,143
    
    
    
    
    
    
    
    
    
    
    $
    12,272Interest rate spread(6)
    
    
    
    
    
    
    
    
    
    
    4.27
    %
    
    
    
    
    
    
    
    
    
    
    4.97
    %Net interest margin(7)
    
    
    
    
    
    
    
    
    
    
    5.69
    %
    
    
    
    
    
    
    
    
    
    
    6.15
    %Ratio of average interest-earning
assets to average interest-bearing
liabilities
    
    
    
    
    
    
    
    
    
    
    135.49
    %
    
    
    
    
    
    
    
    
    
    
    126.87
    %
 
 (1)
    
    Average balances are calculated using month-end balances, to the extent such
averages are representative of operations.(2)
    
    Annualized.(3)
    
    Average balances of leases and loans include non-accrual leases and loans, and are presented net of unearned income.(4)
    
    Includes operating leases.(5)
    
    Includes effect of transaction costs.(6)
    
    Interest rate spread represents the difference between the average yield on
interest-earning assets and the average rate on interest-bearing liabilities.(7)
    
    Net interest margin represents net interest income as a percentage of average
interest-earning assets.  - 32 -




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##### Table of Contents



The following table presents the components of the changes in net interest income by volume and
rate.
 Three Months Ended September 30, 2009 Compared To Three MonthsEnded September 30, 2008Increase (Decrease) Due To:(Dollars in thousands)Volume(1)
    
    
    Rate(1)
    
    
    TotalInterest income:Interest-earning deposits with banks
    
    $
    79
    
    
    $
    (230
    )
    
    $
    (151
    )Restricted interest-earning deposits with banks
    
    
    5
    
    
    
    (332
    )
    
    
    (327
    )Net investment in leases
    
    
    (5,039
    )
    
    
    321
    
    
    
    (4,718
    )Loans receivable
    
    
    (254
    )
    
    
    (21
    )
    
    
    (275
    )Total interest income
    
    
    (3,902
    )
    
    
    (1,569
    )
    
    
    (5,471
    )Interest expense:Short-term borrowings
    
    
    760
    
    
    
    69
    
    
    
    829Long-term borrowings
    
    
    (3,658
    )
    
    
    259
    
    
    
    (3,399
    )Deposits
    
    
    320
    
    
    
    (92
    )
    
    
    228Total interest expense
    
    
    (2,125
    )
    
    
    (217
    )
    
    
    (2,342
    )Net interest income
    
    
    (2,281
    )
    
    
    (848
    )
    
    
    (3,129
    )
 
 (1)
    
    Changes due to volume and rate are calculated independently for each line item
presented. Changes attributable to changes in volume represent changes in average
balances multiplied by the prior periods average rates. Changes attributable to changes in
rate represent changes in average rates multiplied by the prior years average balances.
Changes attributable to the combined impact of volume and rate have been allocated
proportionately to the change due to volume and the change due to rate. Net interest and fee margin.
 Three Months Ended September 30,2009
    
    
    2008(Dollars in thousands)Interest income
    
    $
    15,591
    
    
    $
    21,062Fee income
    
    
    4,288
    
    
    
    5,534Interest and fee income
    
    
    19,879
    
    
    
    26,596Interest expense
    
    
    6,448
    
    
    
    8,790Net interest and fee income
    
    $
    13,431
    
    
    $
    17,806Average total finance receivables (1)
    
    $
    526,829
    
    
    $
    706,508Percent of average total finance receivables:Interest income
    
    
    11.84
    %
    
    
    11.92
    %Fee income
    
    
    3.25
    %
    
    
    3.14
    %Interest and fee income
    
    
    15.09
    %
    
    
    15.06
    %Interest expense
    
    
    4.89
    %
    
    
    4.98
    %Net interest and fee margin
    
    
    10.20
    %
    
    
    10.08
    %
 
 (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.   - 33 -




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##### Table of Contents



Insurance income.
 Other income.
  - 34 -




---



##### Table of Contents



Gain (loss) on derivatives.
    Salaries and benefits expense.
 General and administrative expense.
 Financing related costs.
 Provision for credit losses.
    - 35 -




---



##### Table of Contents



Provision for income taxes.
 Comparison of the Nine-Month Periods Ended September 30, 2009 and 2008
 Net income.
      - 36 -




---



##### Table of Contents



Average balances and net interest margin.
 Nine Months Ended September 30,2009
    
    
    2008(Dollars in thousands)Average(1)
    
    
    
    
    
    
    Average
    
    
    Average(1)
    
    
    
    
    
    AverageBalance
    
    
    Interest
    
    
    Yields/Rates(2)
    
    
    Balance
    
    
    Interest
    
    
    Yields/Rates(2)Interest-earning assets:Interest-earning deposits with banks
    
    $
    45,736
    
    
    $
    116
    
    
    
    0.34
    %
    
    $
    31,706
    
    
    $
    616
    
    
    
    2.59
    %Restricted interest-earning deposits
with banks
    
    
    67,136
    
    
    
    264
    
    
    
    0.52
    
    
    
    75,681
    
    
    
    1,686
    
    
    
    2.97Net investment in leases(3)
    
    
    577,199
    
    
    
    50,753
    
    
    
    11.72
    
    
    
    711,365
    
    
    
    62,096
    
    
    
    11.64Loans receivable(3)
    
    
    9,136
    
    
    
    811
    
    
    
    11.84
    
    
    
    15,953
    
    
    
    1,486
    
    
    
    12.42Total interest-earning assets
    
    
    699,207
    
    
    
    51,944
    
    
    
    9.91
    
    
    
    834,705
    
    
    
    65,884
    
    
    
    10.52Non-interest-earning assets:Cash and due from banks
    
    
    2,723
    
    
    
    
    
    
    
    
    
    
    
    561Property and equipment, net
    
    
    2,859
    
    
    
    
    
    
    
    
    
    
    
    3,208Property tax receivables
    
    
    3,010
    
    
    
    
    
    
    
    
    
    
    
    3,108Other assets(4)
    
    
    9,891
    
    
    
    
    
    
    
    
    
    
    
    21,159Total non-interest-earning assets
    
    
    18,483
    
    
    
    
    
    
    
    
    
    
    
    28,036Total assets
    
    $
    717,690
    
    
    
    
    
    
    
    
    
    
    $
    862,741Interest-bearing liabilities:Short-term borrowings(5)
    
    $
    102,633
    
    
    $
    3,922
    
    
    
    5.10
    %
    
    $
    22,528
    
    
    $
    851
    
    
    
    5.04
    %Long-term borrowings(5)
    
    
    356,666
    
    
    
    15,766
    
    
    
    5.89
    
    
    
    630,183
    
    
    
    26,923
    
    
    
    5.70Deposits
    
    
    74,000
    
    
    
    2,036
    
    
    
    3.67
    
    
    
    19,891
    
    
    
    622
    
    
    
    4.17Total interest-bearing liabilities
    
    
    533,299
    
    
    
    21,724
    
    
    
    5.43
    
    
    
    672,602
    
    
    
    28,396
    
    
    
    5.63Non-interest-bearing liabilities:Fair value of derivatives
    
    
    10,546
    
    
    
    
    
    
    
    
    
    
    
    6,857Sales and property taxes payable
    
    
    7,636
    
    
    
    
    
    
    
    
    
    
    
    9,478Accounts payable and accrued expenses
    
    
    4,826
    
    
    
    
    
    
    
    
    
    
    
    8,573Net deferred income tax liability
    
    
    14,387
    
    
    
    
    
    
    
    
    
    
    
    14,880Total non-interest-bearing
liabilities
    
    
    37,395
    
    
    
    
    
    
    
    
    
    
    
    39,788Total liabilities
    
    
    570,694
    
    
    
    
    
    
    
    
    
    
    
    712,390Stockholders equity
    
    
    146,996
    
    
    
    
    
    
    
    
    
    
    
    150,351Total liabilities and
stockholders equity
    
    $
    717,690
    
    
    
    
    
    
    
    
    
    
    $
    862,741Net interest income
    
    
    
    
    
    $
    30,220
    
    
    
    
    
    
    
    
    
    
    $
    37,488Interest rate spread(6)
    
    
    
    
    
    
    
    
    
    
    4.48
    %
    
    
    
    
    
    
    
    
    
    
    4.89
    %Net interest margin(7)
    
    
    
    
    
    
    
    
    
    
    5.76
    %
    
    
    
    
    
    
    
    
    
    
    5.99
    %Ratio of average interest-earning
assets to average interest-bearing
liabilities
    
    
    
    
    
    
    
    
    
    
    131.11
    %
    
    
    
    
    
    
    
    
    
    
    124.10
    %
 
 (1)
    
    Average balances are calculated using month-end balances, to the extent such
averages are representative of operations.(2)
    
    Annualized.(3)
    
    Average balances of leases and loans include non-accrual leases and loans, and are presented net of unearned income.(4)
    
    Includes operating leases.(5)
    
    Includes effect of transaction costs.(6)
    
    Interest rate spread represents the difference between the average yield on
interest-earning assets and the average rate on interest-bearing liabilities.(7)
    
    Net interest margin represents net interest income as a percentage of average
interest-earning assets.  - 37 -




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##### Table of Contents



Nine Months Ended September 30, 2009 Compared To Nine MonthsEnded September 30, 2008Increase (Decrease) Due To:(Dollars in thousands)Volume(1)
    
    
    Rate(1)
    
    
    TotalInterest income:Interest-earning deposits with banks
    
    $
    192
    
    
    $
    (692
    )
    
    $
    (500
    )Restricted interest-earning deposits with banks
    
    
    (171
    )
    
    
    (1,251
    )
    
    
    (1,422
    )Net investment in leases
    
    
    (11,794
    )
    
    
    451
    
    
    
    (11,343
    )Loans receivable
    
    
    (607
    )
    
    
    (68
    )
    
    
    (675
    )Total interest income
    
    
    (10,234
    )
    
    
    (3,706
    )
    
    
    (13,940
    )Interest expense:Short-term borrowings
    
    
    3,061
    
    
    
    10
    
    
    
    3,071Long-term borrowings
    
    
    (12,060
    )
    
    
    903
    
    
    
    (11,157
    )Deposits
    
    
    1,498
    
    
    
    (84
    )
    
    
    1,414Total interest expense
    
    
    (5,705
    )
    
    
    (967
    )
    
    
    (6,672
    )Net interest income
    
    
    (5,900
    )
    
    
    (1,368
    )
    
    
    (7,268
    )
 
 (1)
    
    Changes due to volume and rate are calculated independently for each line item
presented. Changes attributable to changes in volume represent changes in average
balances multiplied by the prior periods average rates. Changes attributable to changes in
rate represent changes in average rates multiplied by the prior years average balances.
Changes attributable to the combined impact of volume and rate have been allocated
proportionately to the change due to volume and the change due to rate. Net interest and fee margin.
 Nine Months Ended September 30,2009
    
    
    2008(Dollars in thousands)Interest income
    
    $
    51,944
    
    
    $
    65,884Fee income
    
    
    13,702
    
    
    
    16,021Interest and fee income
    
    
    65,646
    
    
    
    81,905Interest expense
    
    
    21,724
    
    
    
    28,396Net interest and fee income
    
    $
    43,922
    
    
    $
    53,509Average total finance receivables (1)
    
    $
    586,336
    
    
    $
    727,317Percent of average total finance receivables:Interest income
    
    
    11.81
    %
    
    
    12.08
    %Fee income
    
    
    3.12
    %
    
    
    2.94
    %Interest and fee income
    
    
    14.93
    %
    
    
    15.02
    %Interest expense
    
    
    4.94
    %
    
    
    5.21
    %Net interest and fee margin
    
    
    9.99
    %
    
    
    9.81
    %
 
 (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.   - 38 -




---



##### Table of Contents



Insurance income.
 Other income.
  - 39 -




---



##### Table of Contents



Gain (loss) on derivatives.
    Salaries and benefits expense.
    General and administrative expense.
  - 40 -




---



##### Table of Contents



Financing related costs.
 Provision for credit losses.
   Provision for income taxes.
  - 41 -




---



##### Table of Contents



FINANCE RECEIVABLES AND ASSET QUALITY
   Three Months Ended
    
    
    Nine Months Ended
    
    
    Year EndedSeptember 30,
    
    
    September 30,
    
    
    December 31,2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2008(Dollars in thousands)Allowance for credit losses, beginning of period
    
    $
    13,978
    
    
    $
    12,873
    
    
    $
    15,283
    
    
    $
    10,988
    
    
    $
    10,988Charge-offs
    
    
    (8,605
    )
    
    
    (7,671
    )
    
    
    (26,947
    )
    
    
    (20,918
    )
    
    
    (30,231
    )Recoveries
    
    
    969
    
    
    
    535
    
    
    
    2,464
    
    
    
    2,132
    
    
    
    3,032Net charge-offs
    
    
    (7,636
    )
    
    
    (7,136
    )
    
    
    (24,483
    )
    
    
    (18,786
    )
    
    
    (27,199
    )Provision for credit losses
    
    
    5,951
    
    
    
    8,602
    
    
    
    21,493
    
    
    
    22,137
    
    
    
    31,494Allowance for credit losses, end of period(1)
    
    $
    12,293
    
    
    $
    14,339
    
    
    $
    12,293
    
    
    $
    14,339
    
    
    $
    15,283Annualized net charge-offs to average total finance
receivables (2)
    
    
    5.80
    %
    
    
    4.04
    %
    
    
    5.57
    %
    
    
    3.44
    %
    
    
    3.80
    %Allowance for credit losses to total finance receivables, end of
period (2)
    
    
    2.46
    %
    
    
    2.07
    %
    
    
    2.46
    %
    
    
    2.07
    %
    
    
    2.30
    %Average total finance receivables (2)
    
    $
    526,829
    
    
    $
    706,508
    
    
    $
    586,336
    
    
    $
    727,317
    
    
    $
    715,649Total finance receivables, end of period (2)
    
    $
    499,802
    
    
    $
    693,627
    
    
    $
    499,802
    
    
    $
    693,627
    
    
    $
    664,902Delinquencies greater than 60 days past due
    
    $
    9,431
    
    
    $
    11,320
    
    
    $
    9,431
    
    
    $
    11,320
    
    
    $
    12,203Delinquencies greater than 60 days past due (3)
    
    
    1.69
    %
    
    
    1.41
    %
    
    
    1.69
    %
    
    
    1.41
    %
    
    
    1.59
    %Allowance for credit losses to delinquent accounts greater than 60
days past due (3)
    
    
    130.35
    %
    
    
    126.67
    %
    
    
    130.35
    %
    
    
    126.67
    %
    
    
    125.24
    %Non-accrual leases and loans, end of period
    
    $
    5,209
    
    
    $
    5,370
    
    
    $
    5,209
    
    
    $
    5,370
    
    
    $
    6,380Renegotiated leases and loans, end of period
    
    $
    5,383
    
    
    $
    8,133
    
    
    $
    5,383
    
    
    $
    8,133
    
    
    $
    8,256Accruing leases and loans past due 90 days or more
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Interest income included on non-accrual leases and loans(4)
    
    $
    58
    
    
    $
    83
    
    
    $
    365
    
    
    $
    392
    
    
    $
    711Interest income excluded on non-accrual leases and loans(5)
    
    $
    240
    
    
    $
    133
    
    
    $
    607
    
    
    $
    361
    
    
    $
    525
 
 (1)
    
    The allowance for credit losses allocated to loans at September 30, 2009, September
30, 2008 and December 31, 2008, was $566,000, $814,000 and $881,000, respectively.(2)
    
    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. Total finance receivables at December 31, 2008 have been restated as described
in Note 15 to the Consolidated Financial Statements.(3)
    
    Calculated as a percent of minimum lease payments receivable for leases and as a
percent of principal outstanding for loans and factoring receivables.(4)
    
    Represents interest which was recognized during the period on non-accrual loans and
leases, prior to non-accrual status.(5)
    
    Represents interest which would have been recorded on non-accrual loans and leases
had they performed in accordance with their contractual terms during the period.   - 42 -




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www.marlincorp.com
  RESIDUAL PERFORMANCE
    - 43 -




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LIQUIDITY AND CAPITAL RESOURCES
   
    
    borrowings under a revolving or short-term bank facility;
    
    financing of leases and loans in CP conduit warehouse facilities;
    
    financing of leases through term note securitizations; and
    
    FDIC-insured certificates of deposit issued by our wholly-owned subsidiary, Marlin Business
Bank (MBB).
        - 44 -




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Total Cash and Cash Equivalents.
   - 45 -




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##### Table of Contents



Borrowings.
 For the Nine Months Ended September 30, 2009
    
    
    As of September 30, 2009MaximumMaximum
    
    
    Month End
    
    
    Average
    
    
    Weighted
    
    
    
    
    
    
    WeightedFacility
    
    
    Amount
    
    
    Amount
    
    
    Average
    
    
    Amount
    
    
    Average
    
    
    UnusedAmount
    
    
    Outstanding
    
    
    Outstanding
    
    
    Coupon
    
    
    Outstanding
    
    
    Coupon
    
    
    Capacity(1)(Dollars in thousands)Revolving or short-term bank
facility(2)
    
    $
    
    
    
    $
    16,839
    
    
    $
    5,894
    
    
    
    2.92
    %
    
    $
    
    
    
    
    
    %
    
    $
    Federal funds purchased
    
    
    1,200
    
    
    
    1,200
    
    
    
    4
    
    
    
    0.65
    %
    
    
    1,200
    
    
    
    0.65
    %
    
    
    1,200CP conduit warehouse
facility(3)
    
    
    
    
    
    
    111,380
    
    
    
    96,735
    
    
    
    4.92
    %
    
    
    86,660
    
    
    
    4.74
    %
    
    
    Term note securitizations(4)
    
    
    
    
    
    
    419,167
    
    
    
    356,666
    
    
    
    5.65
    %
    
    
    275,106
    
    
    
    5.71
    %
    
    
    $
    1,200
    
    
    
    
    
    
    $
    459,299
    
    
    
    5.46
    %
    
    $
    362,966
    
    
    
    5.46
    %
    
    $
    1,200
 
 (1)
    
    Does not include MBBs access to the Federal Reserve Discount Window, which is based
on the amount of assets MBB chooses to pledge. Based on assets pledged at September 30, 2009,
MBB had $8.0 million in unused, secured borrowing capacity at the Federal Reserve Discount
Window.(2)
    
    Paid off and not renewed at June 29, 2009. Therefore, there was no unused capacity
at September 30, 2009.(3)
    
    Converted from a revolving facility to an amortizing facility in March, 2009.(4)
    
    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/Short-term Bank Facility
  Federal Funds Line of Credit with Correspondent Bank
  Federal Reserve Discount Window (Federal Reserve Advances)
  CP Conduit Warehouse Facility
   - 46 -




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##### Table of Contents



Term Note Securitizations
  Financial Covenants
  Actual(1)

    
    RequirementTangible net worth minimum
    
    $132.6 million
    
    
    $90.6 millionDebt-to-equity ratio maximum
    
    
    3.2 to 1
    
    
    
    10.0 to 1Four-quarter rolling average
interest coverage ratio minimum
    
    
    1.73 to 1
    
    
    
    1.25 to 1
 
 (1)
    
    Calculations are based on specific contractual definitions and subsidiaries per the
applicable debt agreements, which may differ from ratios or amounts presented elsewhere in
this document.     - 47 -




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##### Table of Contents



Items Subsequent to September 30, 2009
  Bank Capital and Regulatory Oversight
    Capital Adequacy
 i.e.
   - 48 -




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##### Table of Contents



Information on Stock Repurchases
  Contractual Obligations (excluding Deposits)
  Contractual Obligations as of September 30, 2009Operating
    
    
    Leased
    
    
    CapitalBorrowings
    
    
    Interest(1)
    
    
    Leases
    
    
    Facilities
    
    
    Leases
    
    
    Total(Dollars in thousands)Period Ending December 31,2009
    
    $
    60,008
    
    
    $
    7,138
    
    
    $
    3
    
    
    $
    420
    
    
    $
    9
    
    
    $
    67,5782010
    
    
    207,909
    
    
    
    7,914
    
    
    
    11
    
    
    
    1,575
    
    
    
    35
    
    
    
    217,4442011
    
    
    68,901
    
    
    
    2,750
    
    
    
    8
    
    
    
    1,431
    
    
    
    35
    
    
    
    73,1252012
    
    
    24,139
    
    
    
    470
    
    
    
    4
    
    
    
    1,461
    
    
    
    18
    
    
    
    26,0922013
    
    
    1,878
    
    
    
    28
    
    
    
    4
    
    
    
    623
    
    
    
    
    
    
    
    2,533Thereafter
    
    
    131
    
    
    
    1
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    136Total
    
    $
    362,966
    
    
    $
    18,301
    
    
    $
    34
    
    
    $
    5,510
    
    
    $
    97
    
    
    $
    386,908
 
 (1)
    
    Includes interest on term note securitizations only. Excludes interest on $86.7
million of CP conduit warehouse facility and interest on $1.2 million of federal funds
purchased. MARKET INTEREST RATE RISK AND SENSITIVITY
    - 49 -




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.
         - 50 -




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Change in fair value of derivatives contracts
    
    $
    (1,397
    )
    
    $
    (2,160
    )
    
    
    (2,467
    )
    
    $
    (2,160
    )Cash flow hedging gains (losses) on forecasted
transactions no longer probable of
occurring(1)
    
    
    233
    
    
    
    (1,120
    )
    
    
    642
    
    
    
    (1,120
    )Gain (loss) on derivatives
    
    $
    (1,164
    )
    
    $
    (3,280
    )
    
    $
    (1,825
    )
    
    $
    (3,280
    )
 
 (1)
    
    Reclassified from accumulated other comprehensive income      Scheduled Maturities by Calendar YearTotal2013 &
    
    
    Carrying2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    Thereafter
    
    
    Amount(Dollars in thousands)Debt:Fixed-rate debt
    
    $
    45,832
    
    
    $
    134,225
    
    
    $
    68,901
    
    
    $
    24,139
    
    
    $
    2,009
    
    
    $
    275,106Average fixed rate
    
    
    5.60
    %
    
    
    5.76
    %
    
    
    6.02
    %
    
    
    6.39
    %
    
    
    7.03
    %
    
    
    5.86
    %Variable-rate debt
    
    $
    14,176
    
    
    $
    73,684
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    87,860Average variable rate
    
    
    4.63
    %
    
    
    5.00
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.94
    %
   - 51 -




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##### Table of Contents



RECENTLY ISSUED ACCOUNTING STANDARDS
  Fair Value Measurements and
Disclosures (Topic 820)Measuring Liabilities at Fair Value.
 Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating
Securities ,
  Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly .
 Interim Disclosures
about Fair Value of Financial Instruments .
  - 52 -




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##### Table of Contents



Subsequent Events, .
  Accounting for Transfers of Financial Assets Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities,
 Amendments to FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities,
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
 Disclosure Controls and Procedures
   Changes in Internal Control over Financial Reporting
   - 53 -




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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
    
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  Name
    
    For
    
    WithheldDaniel P. Dyer
    
    10,829,035 shares
    
    51,516 sharesJohn J. Calamari
    
    10,820,100 shares
    
    60,451 sharesLawrence J. DeAngelo
    
    10,673,437 shares
    
    207,114 sharesEdward Grzedzinski
    
    10,672,811 shares
    
    207,740 sharesKevin J. McGinty
    
    10,829,035 shares
    
    51,516 sharesMatthew J. Sullivan
    
    10,666,392 shares
    
    214,159 sharesJames W. Wert
    
    10,829,035 shares
    
    51,516 shares
  - 54 -




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##### Table of Contents



For
    
    Against
    
    Abstain
    
    Broker Non-Vote9,617,276 shares
    
    527,708 shares
    
    35,755 shares
    
    699,812 shares
  For
    
    Against
    
    Abstain
    
    Broker Non-Vote6,272,861 shares
    
    3,898,873 shares
    
    9,005 shares
    
    699,812 shares
  For
    
    Against
    
    Abstain
    
    Broker Non-Vote6,294,053 shares
    
    3,850,601 shares
    
    36,085 shares
    
    699,812 shares
 
 Item 5. Other Information
  
 Item 6. Exhibits
 ExhibitNumber
    
    Description3.1
    

    Amended and Restated Articles of Incorporation (1)3.2
    

    Bylaws (2)10.1
    

    Loan and Security Agreement, dated as of October 9, 2009, by and among Marlin Receivables
Corp., Marlin Leasing Corp., Marlin Business Services Corp. and Wells Fargo Foothill, LLC(3)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)
 
 (1)
    
    Previously filed with the SEC as an exhibit to the Companys Annual Report on Form
10-K for the fiscal year ended December 31, 2007 filed on March 5, 2008, and incorporated by
reference herein.(2)
    
    Previously filed with the SEC as an exhibit to the Companys Amendment No. 1 to
Registration Statement on Form S-1 (File No. 333-108530), filed on October 14, 2003 and
incorporated by reference herein.(3)
    
    Previously filed with the SEC as an exhibit to the Companys Form 8-K dated October
9, 2009, and incorporated by reference herein.  - 55 -




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##### Table of Contents



SIGNATURES
  MARLIN BUSINESS SERVICES CORP.(Registrant)By:
    
    /s/ Daniel P. Dyer

Daniel P. Dyer
    
    
    
    Chief Executive Officer(Chief
Executive Officer)By:
    
    /s/ Lynne C. WilsonLynne C. Wilson
    
    
    
    Chief Financial Officer & Senior Vice President
(Principal Financial Officer)
   - 56 -




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##### Table of Contents



EXHIBIT INDEX
 Exhibit 
Number
    
    Description31.1
    

    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)