##### 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 March 31, 2011
 Commission file number 000-50448
 MARLIN BUSINESS SERVICES CORP.
  Pennsylvania
    
    38-3686388(State of incorporation)
    
    (I.R.S. Employer Identification Number)
 
 
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 Yes o No þ




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##### 



MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES
 Quarterly Report on Form 10-Q
for the Quarter Ended March 31, 2011
 TABLE OF CONTENTS
 Page No.Part I  Financial Information
    
    
    2Item 1 Condensed Consolidated Financial Statements (Unaudited)
    
    
    2Condensed Consolidated Balance Sheets at March 31, 2011 and December 31, 2010
    
    
    2Condensed Consolidated Statements of Operations for the three-month periods ended
March 31, 2011 and 2010
    
    
    3Condensed Consolidated Statements of Stockholders Equity for the three-month period ended
March 31, 2011 and the year ended December 31, 2010
    
    
    4Condensed Consolidated Statements of Cash Flows for the three-month periods ended
March 31, 2011 and 2010
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    25Item 3 Quantitative and Qualitative Disclosure about Market Risk
    
    
    45Item 4 Controls and Procedures
    
    
    45Part II  Other Information
    
    
    46Item 1 Legal Proceedings
    
    
    46Item 1A Risk Factors
    
    
    46Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    47Item 3 Defaults upon Senior Securities
    
    
    47Item 4 [Removed and Reserved]
    
    
    47Item 5 Other Information
    
    
    47Item 6 Exhibits
    
    
    48Signatures
    
    
    49CertificationsRULE 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)
 March 31,
    
    
    December 31,2011
    
    
    2010(Dollars in thousands, except per-share data)ASSETSCash and due from banks
    
    $
    982
    
    
    $
    2,557Interest-earning deposits with banks
    
    
    39,082
    
    
    
    34,469Total cash and cash equivalents
    
    
    40,064
    
    
    
    37,026Restricted interest-earning deposits with banks (includes $46.3 million and $44.7 million
at March 31, 2011 and December 31, 2010, respectively, related to consolidated variable
interest entities (VIEs))
    
    
    51,212
    
    
    
    47,107Securities available for sale (amortized cost of $1.7 million and $1.5 million at
March 31, 2011 and December 31, 2010, respectively)
    
    
    1,682
    
    
    
    1,534Net investment in leases and loans (includes $130.9 million and $154.1 million at March 31, 2011
and December 31, 2010, respectively, related to consolidated VIEs)
    
    
    348,019
    
    
    
    351,569Property and equipment, net
    
    
    2,261
    
    
    
    2,180Property tax receivables
    
    
    4,074
    
    
    
    197Other assets
    
    
    26,955
    
    
    
    28,449Total assets
    
    $
    474,267
    
    
    $
    468,062LIABILITIES AND STOCKHOLDERS EQUITYLong-term borrowings (includes $106.9 million and $128.2 million at March 31, 2011
and December 31, 2010, respectively, related to consolidated VIEs)
    
    
    178,323
    
    
    
    178,650Deposits
    
    
    95,731
    
    
    
    92,919Other liabilities:Sales and property taxes payable
    
    
    5,268
    
    
    
    1,978Accounts payable and accrued expenses
    
    
    8,128
    
    
    
    8,019Net deferred income tax liability
    
    
    25,449
    
    
    
    26,493Total liabilities
    
    
    312,899
    
    
    
    308,059Commitments and contingencies (Note 6)Stockholders equity:Common Stock, $0.01 par value; 75,000,000 shares authorized;
13,021,761 and 12,864,665 shares issued and outstanding at March 31, 2011
and December 31, 2010, respectively
    
    
    130
    
    
    
    129Additional paid-in capital
    
    
    87,565
    
    
    
    86,987Stock subscription receivable
    
    
    (2
    )
    
    
    (2
    )Accumulated other comprehensive loss
    
    
    (100
    )
    
    
    (132
    )Retained earnings
    
    
    73,775
    
    
    
    73,021Total stockholders equity
    
    
    161,368
    
    
    
    160,003Total liabilities and stockholders equity
    
    $
    474,267
    
    
    $
    468,062
   -2-




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MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Operations
(Unaudited)
 Three Months Ended March 31,2011
    
    
    2010(Dollars in thousands, except per-share data)Interest income
    
    $
    10,900
    
    
    $
    12,829Fee income
    
    
    3,132
    
    
    
    3,816Interest and fee income
    
    
    14,032
    
    
    
    16,645Interest expense
    
    
    3,292
    
    
    
    4,658Net interest and fee income
    
    
    10,740
    
    
    
    11,987Provision for credit losses
    
    
    1,179
    
    
    
    3,123Net interest and fee income after provision for credit losses
    
    
    9,561
    
    
    
    8,864Other income:Insurance income
    
    
    977
    
    
    
    1,158Loss on derivatives
    
    
    (5
    )
    
    
    (94
    )Other income
    
    
    282
    
    
    
    288Other income
    
    
    1,254
    
    
    
    1,352Other expense:Salaries and benefits
    
    
    5,937
    
    
    
    5,124General and administrative
    
    
    3,471
    
    
    
    3,046Financing related costs
    
    
    189
    
    
    
    147Other expense
    
    
    9,597
    
    
    
    8,317Income before income taxes
    
    
    1,218
    
    
    
    1,899Income tax expense
    
    
    464
    
    
    
    662Net income
    
    $
    754
    
    
    $
    1,237Basic earnings per share
    
    $
    0.06
    
    
    $
    0.10Diluted earnings per share
    
    $
    0.06
    
    
    $
    0.10Weighted average shares used in computing basic earnings per share
    
    
    12,927,477
    
    
    
    12,778,463Weighted average shares used in computing diluted earnings per share
    
    
    13,005,882
    
    
    
    12,833,643
   -3-




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##### Table of Contents



MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Stockholders Equity
(Unaudited)
 AccumulatedCommon
    
    
    Additional
    
    
    Stock
    
    
    Other
    
    
    
    
    
    
    TotalCommon
    
    
    Stock
    
    
    Paid-In
    
    
    Subscription
    
    
    Comprehensive
    
    
    Retained
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Receivable
    
    
    Income (Loss)
    
    
    Earnings
    
    
    Equity(Dollars in thousands)Balance, December 31, 2009
    
    
    12,778,935
    
    
    $
    128
    
    
    $
    84,674
    
    
    $
    (3
    )
    
    $
    (267
    )
    
    $
    67,353
    
    
    $
    151,885Issuance of common stock
    
    
    21,398
    
    
    
    
    
    
    
    172
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    172Repurchase of common stock
    
    
    (80,925
    )
    
    
    (1
    )
    
    
    (771
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (772
    )Exercise of stock options
    
    
    35,864
    
    
    
    1
    
    
    
    161
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    162Tax benefit on stock options exercised
    
    
    
    
    
    
    
    
    
    
    72
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    72Stock option compensation recognized
    
    
    
    
    
    
    
    
    
    
    194
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    194Payment of receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    1Restricted stock grant
    
    
    109,393
    
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restricted stock compensation
recognized
    
    
    
    
    
    
    
    
    
    
    2,486
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,486Net change related to derivatives, net of
tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    138
    
    
    
    
    
    
    
    138Net change in unrealized gain/loss on
securities available for sale, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,668
    
    
    
    5,668Balance, December 31, 2010
    
    
    12,864,665
    
    
    $
    129
    
    
    $
    86,987
    
    
    $
    (2
    )
    
    $
    (132
    )
    
    $
    73,021
    
    
    $
    160,003Repurchase of common stock
    
    
    (72,789
    )
    
    
    (1
    )
    
    
    (815
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (816
    )Stock option compensation recognized
    
    
    
    
    
    
    
    
    
    
    24
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24Restricted stock grant
    
    
    229,885
    
    
    
    2
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restricted stock compensation
recognized
    
    
    
    
    
    
    
    
    
    
    1,371
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,371Net change related to derivatives, net of
tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35
    
    
    
    
    
    
    
    35Net change in unrealized gain/loss on
securities available for sale, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    754
    
    
    
    754Balance, March 31, 2011
    
    
    13,021,761
    
    
    $
    130
    
    
    $
    87,565
    
    
    $
    (2
    )
    
    $
    (100
    )
    
    $
    73,775
    
    
    $
    161,368
   -4-




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MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Cash Flows
(Unaudited)
 Three Months Ended March 31,2011
    
    
    2010(Dollars in thousands)Cash flows from operating activities:Net income
    
    $
    754
    
    
    $
    1,237Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    641
    
    
    
    706Stock-based compensation
    
    
    1,119
    
    
    
    1,333Excess tax benefits from stock-based payment arrangements
    
    
    
    
    
    
    (56
    )Amortization of deferred net loss on cash flow hedge derivatives
    
    
    58
    
    
    
    42Change in fair value of derivatives
    
    
    5
    
    
    
    (1,121
    )Provision for credit losses
    
    
    1,179
    
    
    
    3,123Net deferred income taxes
    
    
    (790
    )
    
    
    (1,848
    )Amortization of deferred initial direct costs and fees
    
    
    1,334
    
    
    
    2,057Deferred initial direct costs and fees
    
    
    (1,189
    )
    
    
    (670
    )Loss on equipment disposed
    
    
    756
    
    
    
    596Effect of changes in other operating items:Other assets
    
    
    (2,776
    )
    
    
    551Other liabilities
    
    
    3,394
    
    
    
    3,240Net cash provided by operating activities
    
    
    4,485
    
    
    
    9,190Cash flows from investing activities:Purchases of equipment for direct financing lease contracts and funds used to originate loans
    
    
    (47,034
    )
    
    
    (23,656
    )Principal collections on leases and loans
    
    
    47,845
    
    
    
    58,691Security deposits collected, net of refunds
    
    
    (555
    )
    
    
    (823
    )Proceeds from the sale of equipment
    
    
    1,214
    
    
    
    1,087Acquisitions of property and equipment
    
    
    (315
    )
    
    
    (128
    )Change in restricted interest-earning deposits with banks
    
    
    (4,105
    )
    
    
    (2,121
    )Purchases of securities available for sale
    
    
    (152
    )
    
    
    Net cash provided by (used in) investing activities
    
    
    (3,102
    )
    
    
    33,050Cash flows from financing activities:Issuances of common stock
    
    
    
    
    
    
    1Repurchases of common stock
    
    
    (816
    )
    
    
    (485
    )Exercise of stock options
    
    
    
    
    
    
    113Excess tax benefits from stock-based payment arrangements
    
    
    
    
    
    
    56Debt issuance costs
    
    
    (14
    )
    
    
    (943
    )Term securitization advances
    
    
    
    
    
    
    68,169Term securitization repayments
    
    
    (21,282
    )
    
    
    (45,768
    )Warehouse and bank facility advances
    
    
    28,730
    
    
    
    4,425Warehouse and bank facility repayments
    
    
    (7,775
    )
    
    
    (65,378
    )Increase in deposits
    
    
    2,812
    
    
    
    4,847Net cash provided by (used in) financing activities
    
    
    1,655
    
    
    
    (34,963
    )Net increase in total cash and cash equivalents
    
    
    3,038
    
    
    
    7,277Total cash and cash equivalents, beginning of period
    
    
    37,026
    
    
    
    37,057Total cash and cash equivalents, end of period
    
    $
    40,064
    
    
    $
    44,334Supplemental disclosures of cash flow information:Cash paid for interest on deposits and borrowings
    
    $
    2,745
    
    
    $
    4,246Cash paid for income taxes, net of refunds received
    
    $
    184
    
    
    $
    (3,051
    )
   -5-




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




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Insurance income
 Other income.
 Securities available for sale.
 Initial direct costs and fees.
 Net Investment in Leases and Loans.
      -7-




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Allowance for credit losses. ,
     Securitizations.
 Common stock and equity.
 Stock-based compensation.
   -8-




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##### Table of Contents



Income taxes.
     Earnings per share.
   -9-




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NOTE 3  Net Investment in Leases and Loans
  March 31,
    
    
    December 31,2011
    
    
    2010(Dollars in thousands)Minimum lease payments receivable
    
    $
    387,132
    
    
    $
    389,247Estimated residual value of equipment
    
    
    36,070
    
    
    
    37,320Unearned lease income, net of initial direct costs and fees deferred
    
    
    (64,617
    )
    
    
    (63,355
    )Security deposits
    
    
    (4,470
    )
    
    
    (5,026
    )Loans, including unamortized deferred fees and costs
    
    
    791
    
    
    
    1,101Allowance for credit losses
    
    
    (6,887
    )
    
    
    (7,718
    )$
    348,019
    
    
    $
    351,569
    Minimum LeasePayments
    
    
    IncomeReceivable
    
    
    Amortization(Dollars in thousands)Period Ending December 31,2011
    
    $
    138,788
    
    
    $
    27,2662012
    
    
    125,754
    
    
    
    21,4432013
    
    
    70,869
    
    
    
    10,3832014
    
    
    33,522
    
    
    
    4,2862015
    
    
    16,644
    
    
    
    1,195Thereafter
    
    
    1,555
    
    
    
    44$
    387,132
    
    
    $
    64,617
   -10-




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NOTE 4  Allowance for Credit Losses
   Three Months EndedMarch 31,2011
    
    
    2010(Dollars in thousands)Allowance for credit losses, beginning of period
    
    $
    7,718
    
    
    $
    12,193Charge-offs
    
    
    (2,628
    )
    
    
    (5,926
    )Recoveries
    
    
    618
    
    
    
    863Net charge-offs
    
    
    (2,010
    )
    
    
    (5,063
    )Provision for credit losses
    
    
    1,179
    
    
    
    3,123Allowance for credit losses, end of period(1)
    
    $
    6,887
    
    
    $
    10,253Annualized net charge-offs to average total finance receivables (2)
    
    
    2.30
    %
    
    
    4.70
    %Allowance for credit losses to total finance receivables, end of period (2)
    
    
    1.98
    %
    
    
    2.50
    %Average total finance receivables (2)
    
    $
    349,203
    
    
    $
    431,176Total finance receivables, end of period (2)
    
    $
    348,290
    
    
    $
    409,637Delinquencies greater than 60 days past due
    
    $
    2,914
    
    
    $
    6,288Delinquencies greater than 60 days past due (3)
    
    
    0.75
    %
    
    
    1.39
    %Allowance for credit losses to delinquent accounts greater than 60 days past due (3)
    
    
    236.34
    %
    
    
    163.06
    %Non-accrual leases and loans, end of period
    
    $
    1,407
    
    
    $
    3,399Renegotiated leases and loans, end of period
    
    $
    1,861
    
    
    $
    3,790
 
 (1)
    
    The allowance for credit losses allocated to loans at March 31, 2011, March 31, 2010
and December 31, 2010, was $0.1 million, $0.3 million and $0.1 million, respectively.(2)
    
    Total finance receivables include net investment in direct financing leases and
loans. For purposes of asset quality and allowance calculations, the effects of (i) the
allowance for credit losses and (ii) initial direct costs and fees deferred are excluded.(3)
    
    Calculated as a percent of minimum lease payments receivable for leases and as a
percent of principal outstanding for loans.   -11-




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NOTE 5  Other Assets
  March 31,
    
    
    December 31,2011
    
    
    2010(Dollars in thousands)Accrued fees receivable
    
    $
    2,005
    
    
    $
    2,250Deferred transaction costs
    
    
    2,091
    
    
    
    2,420Prepaid expenses
    
    
    1,660
    
    
    
    1,674Income taxes receivable
    
    
    19,609
    
    
    
    20,711Other
    
    
    1,590
    
    
    
    1,394$
    26,955
    
    
    $
    28,449
 NOTE 6  Commitments and Contingencies
   -12-




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NOTE 7  Short-term and Long-term Borrowings
   Principal
    
    
    Interest(1)(Dollars in thousands)Period Ending December 31,2011
    
    $
    58,648
    
    
    $
    5,8382012
    
    
    107,347
    
    
    
    4,2752013
    
    
    9,325
    
    
    
    3482014
    
    
    1,800
    
    
    
    1282015
    
    
    1,086
    
    
    
    43Thereafter
    
    
    117
    
    
    
    1Total
    
    $
    178,323
    
    
    $
    10,633
 
 (1)
    
    Interest on variable-rate long-term loan facilities is assumed at the March 31,
2011 rate for the remaining term.  -13-




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NOTE 8  Deposits
  ScheduledMaturities(Dollars inthousands)Period Ending December 31,2011
    
    $
    22,7542012
    
    
    32,8812013
    
    
    23,5372014
    
    
    9,3022015
    
    
    7,257Total
    
    $
    95,731
   -14-




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NOTE 9  Fair Value Measurements and Disclosures about the Fair Value of Financial Instruments
    
    
    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, which 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.
   March 31, 2011
    
    
    December 31, 2010Fair Value Measurements Using
    
    
    Fair Value Measurements UsingLevel 1
    
    
    Level 2
    
    
    Level 1
    
    
    Level 2(Dollars in thousands)AssetsSecurities available for sale
    
    $
    1,682
    
    
    $
    
    
    
    $
    1,534
    
    
    $
    Interest-rate caps purchased
    
    
    
    
    
    
    48
    
    
    
    
    
    
    
    14
  Disclosures about the Fair Value of Financial Instruments
   -15-




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March 31, 2011
    
    
    December 31, 2010Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairAmount
    
    
    Value
    
    
    Amount
    
    
    Value(Dollars in thousands)AssetsCash and cash equivalents
    
    $
    40,064
    
    
    $
    40,064
    
    
    $
    37,026
    
    
    $
    37,026Restricted interest-earning deposits with banks
    
    
    51,212
    
    
    
    51,212
    
    
    
    47,107
    
    
    
    47,107Securities available for sale
    
    
    1,682
    
    
    
    1,682
    
    
    
    1,534
    
    
    
    1,534Loans
    
    
    764
    
    
    
    762
    
    
    
    1,040
    
    
    
    1,025Interest-rate caps purchased
    
    
    48
    
    
    
    48
    
    
    
    14
    
    
    
    14LiabilitiesLong-term borrowings
    
    
    178,323
    
    
    
    180,009
    
    
    
    178,650
    
    
    
    183,088Deposits
    
    
    95,731
    
    
    
    96,991
    
    
    
    92,919
    
    
    
    94,602Accounts
payable and accrued expenses (1)
    
    
    13,396
    
    
    
    13,396
    
    
    
    9,997
    
    
    
    9,997
 
 (1)
    
    Includes sales and property taxes payable.  (a) Cash and Cash Equivalents
  (b) Restricted Interest-Earning Deposits with Banks
  (c) Securities Available for Sale
  (d) Loans
   -16-




---



##### Table of Contents



(e) Long-Term Borrowings
  (f) Deposits
  (g) Accounts Payable and Accrued Expenses
  (h) Interest-Rate Caps
   -17-




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##### Table of Contents



NOTE 10  Earnings Per Common Share
    Three Months Ended March 31,2011
    
    
    2010(Dollars in thousands, exceptper-share data)Net income
    
    $
    754
    
    
    $
    1,237Weighted average common shares outstanding
    
    
    11,934,525
    
    
    
    11,807,733Add: Unvested restricted stock awards considered participating securities
    
    
    992,952
    
    
    
    970,730Adjusted weighted average common shares used in computing basic EPS
    
    
    12,927,477
    
    
    
    12,778,463Add: Effect of dilutive stock options
    
    
    78,405
    
    
    
    55,180Adjusted weighted average common shares used in computing diluted EPS
    
    
    13,005,882
    
    
    
    12,833,643Net earnings per common share:Basic
    
    $
    0.06
    
    
    $
    0.10Diluted
    
    $
    0.06
    
    
    $
    0.10
   -18-




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NOTE 11  Comprehensive Income
  Three Months Ended March 31,2011
    
    
    2010(Dollars in thousands)Net income
    
    $
    754
    
    
    $
    1,237Other comprehensive income:Change in fair value of securities available for sale
    
    
    (4
    )
    
    
    Amortization of net deferred losses on cash flow hedge derivatives
    
    
    58
    
    
    
    42Tax effect
    
    
    (22
    )
    
    
    (17
    )Total other comprehensive income
    
    
    32
    
    
    
    25Comprehensive income
    
    $
    786
    
    
    $
    1,262
 NOTE 12  Stockholders Equity
 Stockholders Equity
    Regulatory Capital Requirements
    -19-




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-20-




---



##### 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.
    
    
    34.30
    %
    
    $
    161,468
    
    
    
    4
    %
    
    $
    18,830
    
    
    
    5
    %
    
    $
    23,537Marlin Business Bank
    
    
    36.59
    %
    
    $
    46,467
    
    
    
    5
    %
    
    $
    6,349
    
    
    
    5
    %
    
    $
    6,349Tier 1 Risk-based CapitalMarlin Business Services Corp.
    
    
    39.88
    %
    
    $
    161,468
    
    
    
    4
    %
    
    $
    16,195
    
    
    
    6
    %
    
    $
    24,293Marlin Business Bank
    
    
    35.18
    %
    
    $
    46,467
    
    
    
    6
    %
    
    $
    7,924
    
    
    
    6
    %
    
    $
    7,924Total Risk-based CapitalMarlin Business Services Corp.
    
    
    41.14
    %
    
    $
    166,552
    
    
    
    8
    %
    
    $
    32,391
    
    
    
    10
    %
    
    $
    40,488Marlin Business Bank
    
    
    36.35
    %
    
    $
    48,008
    
    
    
    15
    %
    
    $
    19,811
    
    
    
    10
    % (1)
    
    $
    13,207
 
 (1)
    
    MBB is required to maintain well-capitalized status. In addition, MBB must
maintain a total risk-based capital ratio greater than 15% pursuant to the FDIC Order. Prompt Corrective Action
   
    
    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.
  -21-




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Dividends
 NOTE 13  Stock-Based Compensation
   Stock Options
        -22-




---



##### Table of Contents



Options Outstanding
    
    
    Options ExercisableWeighted
    
    
    Weighted
    
    
    Aggregate
    
    
    
    
    
    
    Weighted
    
    
    Weighted
    
    
    AggregateAverage
    
    
    Average
    
    
    Intrinsic
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    IntrinsicRange of
    
    Number
    
    
    Remaining
    
    
    Exercise
    
    
    Value
    
    
    Number
    
    
    Remaining
    
    
    Exercise
    
    
    ValueExercise Prices
    
    Outstanding
    
    
    Life (Years)
    
    
    Price
    
    
    (In thousands)
    
    
    Exercisable
    
    
    Life (Years)
    
    
    Price
    
    
    (In thousands)$3.39
    
    
    85,925
    
    
    
    1.0
    
    
    $
    3.39
    
    
    $
    769
    
    
    
    85,925
    
    
    
    1.0
    
    
    $
    3.39
    
    
    $
    769$7.17  10.18
    
    
    354,528
    
    
    
    3.0
    
    
    
    9.43
    
    
    
    1,032
    
    
    
    214,778
    
    
    
    2.5
    
    
    
    9.40
    
    
    
    630$12.08  12.41
    
    
    145,612
    
    
    
    6.1
    
    
    
    12.40
    
    
    
    1
    
    
    
    
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a$14.00  16.01
    
    
    39,984
    
    
    
    2.8
    
    
    
    14.33
    
    
    
    
    
    
    
    37,253
    
    
    
    2.7
    
    
    
    14.33
    
    
    
    $19.78  21.50
    
    
    22,104
    
    
    
    2.2
    
    
    
    20.80
    
    
    
    
    
    
    
    22,104
    
    
    
    2.1
    
    
    
    20.80
    
    
    
    648,153
    
    
    
    3.4
    
    
    
    9.99
    
    
    $
    1,802
    
    
    
    360,060
    
    
    
    2.1
    
    
    
    9.18
    
    
    $
    1,399
   Restricted Stock Awards
      -23-




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##### Table of Contents



WeightedAverageGrant-DateNon-vested restricted stock
    
    Shares
    
    
    Fair ValueOutstanding at December 31, 2010
    
    
    954,029
    
    
    $
    7.90Granted
    
    
    231,535
    
    
    
    11.03Vested
    
    
    (173,818
    )
    
    
    7.16Forfeited
    
    
    (1,650
    )
    
    
    9.58Outstanding at March 31, 2011
    
    
    1,010,096
    
    
    
    8.74
      -24-




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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, 2010 filed with the 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;
 
    
    changes in our industry, interest rates, the regulatory environment or the general
economy resulting in changes to our business strategy;
 
    
    the degree and nature of our competition;
 
    
    availability and retention of qualified personnel;
 
    
    general volatility of the securitization and capital markets; and
 
    
    the factors set forth in the section captioned Risk Factors in Item 1 of our Form 10-K
for the year ended December 31, 2010 filed with the SEC.
  Overview
      -25-




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##### Table of Contents



Three MonthsEndedMarch 31,
    
    
    As of or For the Year Ended December 31,2011
    
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006Number of sales account executives
    
    
    94
    
    
    
    87
    
    
    
    38
    
    
    
    86
    
    
    
    118
    
    
    
    100Number of originating sources(1)
    
    
    740
    
    
    
    604
    
    
    
    465
    
    
    
    1,014
    
    
    
    1,246
    
    
    
    1,295
 
 (1)
    
    Monthly average of origination sources generating lease volume       -26-




---



##### Table of Contents



Critical Accounting Policies
  Income recognition.
     -27-




---



##### Table of Contents



Initial direct costs and fees. .
 Lease residual values.
     Allowance for credit losses.
    -28-




---



##### Table of Contents



Securitizations.
 Stock-based compensation.
   Income taxes.
  -29-




---



##### Table of Contents



RESULTS OF OPERATIONS
 Comparison of the Three-Month Periods Ended March 31, 2011 and March 31, 2010
 Net income.
      -30-




---



##### Table of Contents



Average balances and net interest margin.
 Three Months Ended March 31,2011
    
    
    2010(Dollars in thousands)Average
    
    
    
    
    
    
    
    
    
    
    AverageAverage
    
    
    
    
    
    
    Yields/
    
    
    Average
    
    
    
    
    
    
    Yields/Balance(1)
    
    
    Interest
    
    
    Rates(2)
    
    
    Balance(1)
    
    
    Interest
    
    
    Rates(2)Interest-earning assets:Interest-earning deposits with banks
    
    $
    35,269
    
    
    $
    12
    
    
    
    0.13
    %
    
    $
    35,278
    
    
    $
    4
    
    
    
    0.04
    %Restricted interest-earning deposits with banks
    
    
    48,410
    
    
    
    11
    
    
    
    0.09
    
    
    
    63,047
    
    
    
    12
    
    
    
    0.08Securities available for sale
    
    
    1,610
    
    
    
    13
    
    
    
    3.27
    
    
    
    
    
    
    
    
    
    
    
    Net investment in leases(3)
    
    
    348,276
    
    
    
    10,848
    
    
    
    12.46
    
    
    
    427,416
    
    
    
    12,696
    
    
    
    11.88Loans receivable(3)
    
    
    927
    
    
    
    16
    
    
    
    7.07
    
    
    
    3,759
    
    
    
    117
    
    
    
    12.45Total interest-earning assets
    
    
    434,492
    
    
    
    10,900
    
    
    
    10.04
    
    
    
    529,500
    
    
    
    12,829
    
    
    
    9.69Non-interest-earning assets:Cash and due from banks
    
    
    2,586
    
    
    
    
    
    
    
    
    
    
    
    1,836Property and equipment, net
    
    
    2,134
    
    
    
    
    
    
    
    
    
    
    
    2,363Property tax receivables
    
    
    761
    
    
    
    
    
    
    
    
    
    
    
    1,481Other assets(4)
    
    
    27,326
    
    
    
    
    
    
    
    
    
    
    
    6,615Total non-interest-earning assets
    
    
    32,807
    
    
    
    
    
    
    
    
    
    
    
    12,295Total assets
    
    $
    467,299
    
    
    
    
    
    
    
    
    
    
    $
    541,795Interest-bearing liabilities:Short-term borrowings(5)
    
    $
    
    
    
    $
    
    
    
    
    
    %
    
    $
    28,854
    
    
    $
    325
    
    
    
    4.51
    %Long-term borrowings(5)
    
    
    176,074
    
    
    
    2,710
    
    
    
    6.16
    
    
    
    255,611
    
    
    
    3,705
    
    
    
    5.80Deposits
    
    
    93,352
    
    
    
    582
    
    
    
    2.49
    
    
    
    81,363
    
    
    
    628
    
    
    
    3.09Total interest-bearing liabilities
    
    
    269,426
    
    
    
    3,292
    
    
    
    4.89
    
    
    
    365,828
    
    
    
    4,658
    
    
    
    5.09Non-interest-bearing liabilities:Fair value of derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,796Sales and property taxes payable
    
    
    2,045
    
    
    
    
    
    
    
    
    
    
    
    3,769Accounts payable and accrued expenses
    
    
    8,606
    
    
    
    
    
    
    
    
    
    
    
    5,120Net deferred income tax liability
    
    
    26,534
    
    
    
    
    
    
    
    
    
    
    
    15,950Total non-interest-bearing liabilities
    
    
    37,185
    
    
    
    
    
    
    
    
    
    
    
    26,635Total liabilities
    
    
    306,611
    
    
    
    
    
    
    
    
    
    
    
    392,463Stockholders equity
    
    
    160,688
    
    
    
    
    
    
    
    
    
    
    
    149,332Total liabilities and stockholders equity
    
    $
    467,299
    
    
    
    
    
    
    
    
    
    
    $
    541,795Net interest income
    
    
    
    
    
    $
    7,608
    
    
    
    
    
    
    
    
    
    
    $
    8,171Interest rate spread(6)
    
    
    
    
    
    
    
    
    
    
    5.15
    %
    
    
    
    
    
    
    
    
    
    
    4.60
    %Net interest margin(7)
    
    
    
    
    
    
    
    
    
    
    7.00
    %
    
    
    
    
    
    
    
    
    
    
    6.17
    %Ratio of average interest-earning assets to
average interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    161.27
    %
    
    
    
    
    
    
    
    
    
    
    144.74
    %
 
 (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. The average balances of leases and loans do not include the
effects of (i) the allowance for credit losses and (ii) initial direct costs and fees
deferred.(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.  -31-




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Three Months Ended March 31, 2011 Compared ToThree Months Ended March 31, 2010Increase (Decrease) Due To:Volume(1)
    
    
    Rate(1)
    
    
    Total(Dollars in thousands)Interest income:Interest-earning deposits with banks
    
    $
    
    
    
    $
    8
    
    
    $
    8Restricted interest-earning deposits with banks
    
    
    (3
    )
    
    
    2
    
    
    
    (1
    )Securities available for sale
    
    
    13
    
    
    
    
    
    
    
    13Net investment in leases
    
    
    (2,441
    )
    
    
    593
    
    
    
    (1,848
    )Loans receivable
    
    
    (64
    )
    
    
    (37
    )
    
    
    (101
    )Total interest income
    
    
    (2,370
    )
    
    
    441
    
    
    
    (1,929
    )Interest expense:Short-term borrowings
    
    
    (163
    )
    
    
    (162
    )
    
    
    (325
    )Long-term borrowings
    
    
    (1,212
    )
    
    
    217
    
    
    
    (995
    )Deposits
    
    
    85
    
    
    
    (131
    )
    
    
    (46
    )Total interest expense
    
    
    (1,184
    )
    
    
    (182
    )
    
    
    (1,366
    )Net interest income
    
    
    (1,579
    )
    
    
    1,016
    
    
    
    (563
    )
 
 (1)
    
    Changes due to volume and rate are calculated independently for each line item
presented rather than presenting vertical subtotals for the individual volume and rate
columns.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.  -32-




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##### Table of Contents



Net interest and fee margin.
 Three Months Ended March 31,2011
    
    
    2010(Dollars in thousands)Interest income
    
    $
    10,900
    
    
    $
    12,829Fee income
    
    
    3,132
    
    
    
    3,816Interest and fee income
    
    
    14,032
    
    
    
    16,645Interest expense
    
    
    3,292
    
    
    
    4,658Net interest and fee income
    
    
    10,740
    
    
    
    11,987Average total finance receivables(1)
    
    $
    349,203
    
    
    $
    431,176Percent of average total finance receivables:Interest income
    
    
    12.48
    %
    
    
    11.90
    %Fee income
    
    
    3.59
    
    
    
    3.54Interest and fee income
    
    
    16.07
    
    
    
    15.44Interest expense
    
    
    3.77
    
    
    
    4.32Net interest and fee margin
    
    
    12.30
    %
    
    
    11.12
    %
 
 (1)
    
    Total finance receivables include net investment in direct financing leases and
loans. For the calculations above, the effects of (i) the allowance for credit losses and
(ii) initial direct costs and fees deferred are excluded.     -33-




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##### Table of Contents



Insurance income.
 Other income.
 Salaries and benefits expense.
  General and administrative expense.
 Financing related costs.
  -34-




---



##### Table of Contents



Provision for credit losses.
  Provision for income taxes.
 FINANCE RECEIVABLES AND ASSET QUALITY
   -35-




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##### Table of Contents



Three Months Ended
    
    
    Year EndedMarch 31,
    
    
    December 31,2011
    
    
    2010
    
    
    2010(Dollars in thousands)Allowance for credit losses, beginning of period
    
    $
    7,718
    
    
    $
    12,193
    
    
    $
    12,193Charge-offs
    
    
    (2,628
    )
    
    
    (5,926
    )
    
    
    (17,095
    )Recoveries
    
    
    618
    
    
    
    863
    
    
    
    3,182Net charge-offs
    
    
    (2,010
    )
    
    
    (5,063
    )
    
    
    (13,913
    )Provision for credit losses
    
    
    1,179
    
    
    
    3,123
    
    
    
    9,438Allowance for credit losses, end of period(1)
    
    $
    6,887
    
    
    $
    10,253
    
    
    $
    7,718Annualized net charge-offs to average total finance receivables (2)
    
    
    2.30
    %
    
    
    4.70
    %
    
    
    3.58
    %Allowance for credit losses to total finance receivables, end of period (2)
    
    
    1.98
    %
    
    
    2.50
    %
    
    
    2.19
    %Average total finance receivables (2)
    
    $
    349,203
    
    
    $
    431,176
    
    
    $
    389,001Total finance receivables, end of period (2)
    
    $
    348,290
    
    
    $
    409,637
    
    
    $
    352,527Delinquencies greater than 60 days past due
    
    $
    2,914
    
    
    $
    6,288
    
    
    $
    3,504Delinquencies greater than 60 days past due (3)
    
    
    0.75
    %
    
    
    1.39
    %
    
    
    0.90
    %Allowance for credit losses to delinquent accounts greater than 60 days past due
    
    
    236.34
    %
    
    
    163.06
    %
    
    
    220.26
    %Non-accrual leases and loans, end of period
    
    $
    1,407
    
    
    $
    3,399
    
    
    $
    1,996Renegotiated leases and loans, end of period
    
    $
    1,861
    
    
    $
    3,790
    
    
    $
    2,221Accruing leases and loans past due 90 days or more
    
    $
    
    
    
    $
    
    
    
    $
    Interest income included on non-accrual leases and loans(4)
    
    $
    15
    
    
    $
    42
    
    
    $
    214Interest income excluded on non-accrual leases and loans(5)
    
    $
    18
    
    
    $
    40
    
    
    $
    46
 
 (1)
    
    The allowance for credit losses allocated to loans at March 31, 2011, March 31, 2010
and December 31, 2010, was $0.1 million, $0.3 million and $0.1 million, respectively.(2)
    
    Total finance receivables include net investment in direct financing leases and
loans. For purposes of asset quality and allowance calculations, the effects of (i) the
allowance for credit losses and (ii) initial direct costs and fees deferred are excluded.(3)
    
    Calculated as a percent of total minimum lease payments receivable for leases and as
a percent of principal outstanding for loans.(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.  -36-




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www.marlincorp.com
   RESIDUAL PERFORMANCE
     -37-




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LIQUIDITY AND CAPITAL RESOURCES
   
    
    borrowings under revolving, short-term or long-term bank facilities;
    
    financing of leases and loans in various warehouse facilities (all of which have since been
repaid in full);
    
    financing of leases through term note securitizations; and
    
    FDIC-insured certificates of deposit issued by our wholly-owned subsidiary, MBB.
         -38-




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Total Cash and Cash Equivalents.
 Restricted Interest-earning Deposits with Banks
  -39-




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Borrowings.
 For the Three Months Ended March 31, 2011
    
    
    As of March 31, 2011MaximumMaximum
    
    
    Month End
    
    
    Average
    
    
    Weighted
    
    
    
    
    
    
    WeightedFacility
    
    
    Amount
    
    
    Amount
    
    
    Average
    
    
    Amount
    
    
    Average
    
    
    UnusedAmount
    
    
    Outstanding
    
    
    Outstanding
    
    
    Coupon
    
    
    Outstanding
    
    
    Coupon
    
    
    Capacity(1)(Doillars in thousands)Federal funds purchased
    
    $
    1,600
    
    
    $
    
    
    
    $
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    %
    
    $
    1,600Term note securitizations(2)
    
    
    
    
    
    
    121,318
    
    
    
    116,931
    
    
    
    5.35
    %
    
    
    106,902
    
    
    
    5.29
    %
    
    
    Long-term loan facilities
    
    
    125,000
    
    
    
    71,421
    
    
    
    59,143
    
    
    
    5.43
    %
    
    
    71,421
    
    
    
    5.28
    %
    
    
    53,579$
    126,600
    
    
    
    
    
    
    $
    176,074
    
    
    
    5.38
    %
    
    $
    178,323
    
    
    
    5.29
    %
    
    $
    55,179
 
 (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 March 31, 2011, MBB
had $8.5 million in unused, secured borrowing capacity at the Federal Reserve Discount Window.
Additional liquidity that may be provided by the issuance of insured deposits is also excluded
from this table.(2)
    
    Our term note securitizations are one-time fundings that pay down over time without
any ability for us to draw down additional amounts. Federal Funds Line of Credit with Correspondent Bank
  Federal Reserve Discount Window
  CP Conduit Warehouse Facility
  Term Note Securitizations
    -40-




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Long-term Loan Facilities
   Financial Covenants
    -41-




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Actual(1)
    
    
    RequirementTangible net worth minimum
    
    $161.1 million
    
    

    $141.5 millionDebt-to-equity ratio maximum
    
    
    1.61 to 1
    
    
    
    10.0 to 1Maximum servicer senior leverage ratio
    
    
    1.56 to 1
    
    
    
    4.0 to 1Four-quarter rolling average interest coverage ratio minimum
    
    
    2.2 to 1
    
    
    
    1.50 to 1Maximum portfolio delinquency ratio
    
    
    0.75
    %
    
    
    3.50
    %Maximum gross charge-off ratio
    
    
    3.66
    %
    
    
    7.00
    %
 
 (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.  Bank Capital and Regulatory Oversight
    Capital Adequacy
  -42-




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i.e.
    Information on Stock Repurchases
   -43-




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Contractual Obligations (excluding Deposits)
  Contractual Obligations as of March 31, 2011Operating
    
    
    Leased
    
    
    CapitalPeriod Ending December 31,
    
    Borrowings
    
    
    Interest(1)
    
    
    Leases
    
    
    Facilities
    
    
    Leases
    
    
    Total(Dollars in thousands)2011
    
    $
    58,648
    
    
    $
    5,838
    
    
    $
    5
    
    
    $
    1,197
    
    
    $
    91
    
    
    $
    65,7792012
    
    
    107,347
    
    
    
    4,275
    
    
    
    4
    
    
    
    1,621
    
    
    
    103
    
    
    
    113,3502013
    
    
    9,325
    
    
    
    348
    
    
    
    4
    
    
    
    789
    
    
    
    86
    
    
    
    10,5522014
    
    
    1,800
    
    
    
    128
    
    
    
    4
    
    
    
    141
    
    
    
    21
    
    
    
    2,0942015
    
    
    1,086
    
    
    
    43
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,129Thereafter
    
    
    117
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    118Total
    
    $
    178,323
    
    
    $
    10,633
    
    
    $
    17
    
    
    $
    3,748
    
    
    $
    301
    
    
    $
    193,022
 
 (1)
    
    Interest on the variable-rate long-term loan facilities is assumed at the March 31,
2011 rate for the remaining term.  MARKET INTEREST RATE RISK AND SENSITIVITY
    -44-




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Scheduled Maturities by Calendar YearTotal2015 &
    
    
    Carrying2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    Thereafter
    
    
    Amount(Dollars in thousands)Debt:Fixed-rate debt
    
    $
    58,648
    
    
    $
    35,926
    
    
    $
    9,325
    
    
    $
    1,800
    
    
    $
    1,203
    
    
    $
    106,902Average fixed rate
    
    
    5.39
    %
    
    
    5.14
    %
    
    
    4.07
    %
    
    
    5.99
    %
    
    
    6.27
    %
    
    
    5.21
    %Variable-rate debt
    
    $
    
    
    
    $
    71,421
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    71,421Average
variable rate
    
    
    
    
    
    
    5.28
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5.28
    %
    
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4.
    
    Controls and Procedures
 Disclosure Controls and Procedures
    -45-




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Changes in Internal Control over Financial Reporting
  
 PART II. Other Information
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
   -46-




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Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
 Information on Stock Repurchases
   MaximumTotal Number of
    
    
    Approximate DollarShares Purchased as
    
    
    Value of SharesNumber of
    
    
    Average Price
    
    
    Part of a Publicly
    
    
    that May Yet beShares
    
    
    Paid Per
    
    
    Announced Plan or
    
    
    Purchased Under theTime
Period
    
    Purchased
    
    
    Share(1)
    
    
    Program
    
    
    Plans or ProgramsJanuary 1, 2011 to
January 31, 2011
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    10,440,013February 1, 2011 to
February 28, 2011
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    10,440,013March 1, 2011 to
March 31, 2011
    
    
    15,594
    
    
    $
    11.34
    
    
    
    15,594
    
    
    $
    10,263,193Total for the quarter ended
March 31, 2011
    
    
    15,594
    
    
    $
    11.34
    
    
    
    15,594
    
    
    $
    10,263,193
 
 (1)
    
    Average price paid per share includes commissions and is rounded to the nearest two
decimal places.  
 Item 3.
    
    Defaults Upon Senior Securities
  
 Item 4.
    
    [Removed and Reserved.]
 
 Item 5.
    
    Other Information
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Item 6.
    
    Exhibits
 ExhibitNumber

    
    Description3.1
    
    
    Amended and Restated Articles of Incorporation (1)3.2
    
    
    Bylaws (2)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.  -48-




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SIGNATURES
  MARLIN BUSINESS SERVICES CORP.
(Registrant)By:
    /s/ Daniel P. DyerDaniel P. DyerChief Executive Officer
(Chief Executive Officer)By:
    /s/ Lynne C. WilsonLynne C. WilsonChief Financial Officer & Senior Vice President
(Principal Financial Officer)   -49-