* Strong capital position; equity to assets ratio of 18.5%
 * Pricing on new originations up 73 basis points year over year
 * Issuance of $63.4 million of insured deposits through Marlin
   Business Bank
 * Marlin Business Bank conversion to a state-chartered, Fed member
   commercial bank
 * Stable asset quality; delinquencies and charge-offs in line with
   expectations
 * Strengthening of loss reserves to $15.3 million

MOUNT LAUREL, N.J., March 9, 2009 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (Nasdaq:MRLN) today reported a fourth quarter 2008 net loss of $7.3 million or $0.62 per diluted share and net income on an adjusted basis of $371,000, or $0.03 per diluted share (excluding the losses on interest rate hedges of $7.7 million). For the twelve months ended December 31, 2008, the net loss was $5.2 million or $0.44 per diluted share and net income on an adjusted basis was $4.5 million, or $0.37 per diluted share (excluding the losses on interest rate hedges of $9.7 million).

Net Income on an Adjusted Basis is defined as net income excluding the loss on derivatives and hedging activities net of tax. The Company believes that Net Income on an Adjusted Basis is a useful performance metric for management, investors and lenders, because it facilitates evaluation of the Company without the effects of certain adjustments in accordance with GAAP that may not necessarily be indicative of current operating performance.

"2008 was a challenging year for the economy and I am pleased to report that despite these challenges the company delivered profitable net income on an adjusted basis," says Daniel P. Dyer, Marlin's Chairman and CEO. "We believe our strong operating model is a key factor behind this success. During this challenging period, we continue to focus and execute on the basic fundamentals of disciplined credit underwriting, productivity and maximizing profits while continuing to provide customers with exceptional service," says Dyer.

For the fourth quarter of 2008, the average net investment in leases was $667.2 million, compared to $691.0 million for the third quarter of 2008 and $733.5 million for the fourth quarter of 2007.

Fourth quarter 2008 lease production was $58.1 million, based on initial equipment cost, compared to $59.0 million for the third quarter of 2008 and $87.7 million for the fourth quarter of 2007. Approval rates on lease originations were 47% for the fourth quarter of 2008, versus 49% for the third quarter of 2008 and 56% for fourth quarter a year ago. Direct sales volume in the fourth quarter decreased 17% year over year, while indirect sales volume decreased by 64%. The lower lease production and approval rates in the fourth quarter reflect our decision to adopt more restrictive credit standards during a weakened credit environment and deliberate actions to reduce exposure in our indirect channel.

The average implicit yield on new lease production was 13.76% in the quarter, down slightly from the third quarter of 2008 and up 78 basis points from the fourth quarter of 2007. Yields on new originations in 2008 are the highest yields since 2004.

The net interest and fee margin for the quarter ended December 31, 2008 was 10.21%, down 5 basis points from the third quarter of 2008 and up 4 basis points from 10.17% for the quarter ended December 31, 2007.

Fee income at 3.32% for the quarter ended December 31, 2008 was flat from third quarter 2008 and an improvement of 36 basis points from 2.96% for the quarter ended December 31, 2007.

Interest expense as a percentage of average total finance receivables was flat at 4.99% in the fourth quarter of 2008 versus 4.98% in the third quarter of 2008.

Leases over 30 days delinquent were 3.72% as of December 31, 2008, an increase compared to 3.52% as of September 30, 2008. On a dollar basis, leases in the 30+ delinquency category totaled $28.1 million at December 31, 2008, up from $27.7 million at September 30, 2008 and an improvement from $29.1 million at December 31, 2007. Leases over 60 days delinquent were 1.53% as of December 31, 2008, an increase from 1.36% as of September 30, 2008 and 0.95% at December 31, 2007. On a dollar basis, leases over 60 days delinquent totaled $11.6 million at December 31, 2008, an increase compared to $10.7 million at September 30, 2008 and an increase compared to $8.2 million at December 31, 2007.

Net lease charge-offs in the fourth quarter were $7.9 million, or 4.71% of average net investment in leases on an annualized basis, compared to $6.7 million or 3.85% of average net investment in leases on an annualized basis during third quarter 2008.

The provision for credit losses was $9.4 million for the quarter ended December 31, 2008, up from $8.6 million for the third quarter 2008. The provision increase is primarily due to higher net charge-offs driven by a weakening credit environment.

The Company strengthened its allowance for credit losses to $15.3 million as of December 31, 2008, raising the allowance as a percentage of total finance receivables to 2.30% from 2.07% at September 30, 2008 and 1.47% as of December 31, 2007.

Salaries and benefits were $5.1 million for the fourth quarter ended December 31, 2008, down from $5.6 million for the third quarter 2008. The decrease is primarily due to a reduction in management incentive compensation for 2008.

General and administrative expenses were $3.6 million for the fourth quarter ended December 31, 2008, compared to $3.3 million for the third quarter 2008. The increase over the third quarter is primarily related to costs associated with increased investment spending in collections.

Effective July 1, 2008, the Company discontinued the use of hedge accounting for its derivative financial instruments used to hedge against interest rate risk under its securitization program. By discontinuing the use of hedge accounting, subsequent changes to the fair value of derivative instruments are recognized immediately in earnings rather than comprehensive income.

A $12.8 million loss was incurred on derivatives for the quarter due to losses caused by the precipitous decline in interest rates and the mark-to-market decrease in the value of forward "pay fixed" swaps. $10.6 million of the total loss recognized in the quarter was unrealized.

During the fourth quarter the Company repurchased 102,900 shares under the stock repurchase program announced in November 2007.

The Company opened its Utah Industrial Bank, Marlin Business Bank ("MBB"), on March 12, 2008 and the Bank has funded $79.3 million of leases and loans through its initial capitalization of $12 million and its issuance of $63.4 million in FDIC insured deposits at an average borrowing rate of 4.00%. Quarterly average deposit outstandings were $52.9 million at a weighted average interest rate of 4.14%.

On December 31, 2008, Marlin Business Bank received approval from the Federal Reserve Bank of San Francisco to convert from an industrial bank to a state-chartered commercial bank. The approval allows MBB to grow in size subject to the condition of additional invested capital. On January 13, 2009, MBB converted from an industrial bank to a commercial bank and became a member of the Federal Reserve System and Marlin Business Services Corp. became a bank holding company. On January 20, 2009, Marlin Business Bank submitted a modification request to the FDIC related to an outstanding Order that restricts the growth of the bank during its first three years of operations. At this time, we are awaiting a response from the FDIC on the modification request. Until we receive approval for this modification, we do not expect to have clear visibility on our overall funding options.

Our decision to adopt tighter underwriting standards, along with the general decline in the economy and related business activities, has led to lower overall anticipated lease originations. The lower expected originations, coupled with lack of clear visibility on our overall funding options, has resulted in our decision to proactively lower expenses in the first quarter of 2009, including reducing our workforce by 17% and closing our two smallest satellite offices (Chicago and Utah). A total of approximately 49 employees company-wide were affected as a result of the staff reductions. We expect to incur pretax severance costs in the three months ended March 31, 2009 of approximately $500,000 related to the staff reductions. The total annualized pretax salary cost savings that are expected to result from these reductions are estimated to be approximately $2.3 million. Although we believe that these estimates are appropriate and reasonable based on available information, actual results could differ from these estimates.

In conjunction with this release, static pool loss statistics have been updated as supplemental information on the investor relations section of our website at www.marlincorp.com.

Conference Call and Webcast -

We will host a conference call on Tuesday, March 10, 2009 at 9:00 a.m. ET to discuss our fourth quarter and fiscal year 2008 results.