* Strong capital position, equity to assets leverage ratio of 19.1%   * Total risk-based capital of 22.86%   * Pricing on new originations improved 111 basis points    year-over-year   * Completed modification of warehouse facilities   * Converted to a Bank Holding Company 

MOUNT LAUREL, N.J., May 7, 2009 (GLOBE NEWSWIRE) -- Marlin Business Services Corp. (Nasdaq:MRLN) today reported a first quarter 2009 GAAP net loss of $879,000 or $0.08 per diluted share and net loss on an adjusted basis of $88,000 or $0.01 per share. Included in net income is an after-tax severance charge of $300,000 related to a previously announced workforce reduction. Excluding this charge, net loss for the first quarter ended March 31, 2009 is $579,000 and net income on an adjusted basis is $212,000.

"This past quarter was extremely difficult for the economy and the capital markets and I am quite pleased with the steps we have taken to manage through this challenging period and position ourselves for the future," said Daniel P. Dyer, Marlin's CEO. "These results demonstrate clearly the resiliency and strength of our business model during even the most difficult of times. Our capital position remains very strong and is a significant source of financial strength to Marlin Business Bank and our lenders. On the funding side we continue our efforts working with the FDIC toward a final decision on our order modification request to grow Marlin Business Bank," said Dyer.

For the first quarter of 2009, the average net investment in leases was $634.3 million, compared to $667.2 million for the fourth quarter of 2008 and $730.0 million for the first quarter of 2008.

Reflecting management's deliberate actions to maintain conservative underwriting standards, first quarter 2009 lease production was $36.3 million, based on initial equipment cost, compared to $58.1 million for the fourth quarter of 2008 and $70.6 million for the first quarter of 2008. Approval rates on lease originations were 41% for the first quarter of 2009, versus 47% for the fourth quarter of 2008 and 50% for the first quarter a year ago. Direct sales volume decreased 37% year-over-year, while indirect sales volume decreased by 87%. The lower lease production and approval rates in the first quarter reflect our decision to adopt more restrictive credit standards during a weakened economic environment in order to closely manage growth.

The average implicit yield on new lease production continues to improve and was 14.40% in the quarter, up 64 basis points from the fourth quarter of 2008 and up 111 basis points from the first quarter of 2008.

The net interest and fee margin for the quarter ended March 31, 2009 was 10.08%, up 6 basis points from the fourth quarter of 2008 and up 45 basis points from 9.63% for the quarter ended March 31, 2008.

Fee income at 3.12% for the quarter ended March 31, 2009 was flat from fourth quarter 2008 and up 31 basis points from 2.81% as of the quarter ended March 31, 2008. Certain fee income categories have been reclassed to "Other Income" to conform to the Securities and Exchange Commission's Regulation S-X, Article 9, applicable to bank holding companies. The impact of this reclassification on fee income was a reduction of 20 basis points for the quarter ended March 31, 2009, 19 basis points for the fourth quarter 2008 and 19 basis points for the first quarter of 2008.

Interest expense as a percentage of average total finance receivables was 4.86% in the first quarter of 2009 versus 4.99% in the fourth quarter of 2008. The decrease was primarily due a shift in mix from long-term borrowings to less expensive short-term borrowings and deposits.

Leases over 30 days delinquent were 4.87% as of March 31, 2009, an increase compared to 3.72% at December 31, 2008. On a dollar basis, leases in the 30+ delinquency category totaled $33.9 million at March 31, 2009, up from $28.1 million at December 31, 2008 and $25.8 million at March 31, 2008. Leases over 60 days delinquent were 2.34% as of March 31, 2009, an increase from 1.53% as of December 31, 2008 and 1.09% at March 31, 2008. On a dollar basis, leases over 60 days delinquent totaled $16.3 million at March 31, 2009, an increase compared to $11.6 million at December 31, 2008 and $9.2 million at March 31, 2008.

Net lease charge-offs in the first quarter were $8.0 million, or 5.03% of average net investment in leases on an annualized basis, compared to $7.9 million or 4.71% of average net investment in leases on an annualized basis during fourth quarter 2008.

The provision for credit losses was $8.7 million for the quarter ended March 31, 2009, down from $9.4 million for the fourth quarter of 2008. The provision reflects management's estimate of future charge-offs inherent in the portfolio. The allowance as a percentage of total finance receivables increased to 2.47% at March 31, 2009 versus 2.30% at December 31, 2008 and 1.63% at March 31, 2008.

A $1.3 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. $188,000 of the total loss recognized in the quarter was unrealized.

Salaries and benefits were $5.9 million for the first quarter ended March 31, 2009, up from $5.1 million for the fourth quarter of 2008. The increase is primarily due to seasonal withholding taxes and $500,000 of severance costs related to a previously announced reduction in work force occurring in the first quarter of 2009. The total annualized pretax savings that are expected to result from the reductions are estimated to be approximately $2.3 million.

The current limitation on asset growth at Marlin Business Bank has led to lower lease originations and an overall decline in our portfolio size, which has required us to further proactively lower expenses in the second quarter of 2009, including reducing our workforce and closing our satellite office in Denver. A total of approximately 53 employees company-wide were affected as a result of this recent staff reduction. We expect to incur pretax severance costs in the quarter ended June 30, 2009 of approximately $700,000 related to this staff reduction. The total annualized pretax salary cost savings that are expected to result from this reduction are estimated to be approximately $2.8 million. Although we believe that these estimates are appropriate and reasonable based on available information, actual results could differ from these estimates.

General and administrative expenses were $3.4 million for the first quarter ended March 31, 2009, compared to $3.6 million for the fourth quarter 2008. The decrease from the fourth quarter is primarily related to reductions in discretionary spending.

During the first quarter the Company repurchased 88,894 shares under the stock repurchase program announced in November 2007.

On January 13, 2009, the Company officially converted its Utah Industrial Bank to a state-chartered commercial bank and became a member of the Federal Reserve System. At that time Marlin Business Services Corp. became a bank holding company. Through March 31, 2009, the Bank has funded $93.7 million of leases and loans through its initial capitalization of $12 million and its issuance of $78.1 million in FDIC insured deposits at an average borrowing rate of 4.06%. First quarter 2009 average deposit outstandings were $67.2 million at a weighted average interest rate of 3.86%.

Marlin Business Bank is currently seeking a modification to its existing FDIC order issued when it became an industrial bank. If the FDIC approves the modification request, then Marlin Business Services Corp. intends to inject additional capital into Marlin Business Bank and begin executing against the business plan approved by the FRB.

In conjunction with this release, static pool loss statistics and vintage delinquency analysis 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 Friday, May 8, 2009 at 9:00 a.m. ET to discuss our first quarter 2009 results. If you wish to participate, please call 877-856-1969 approximately 10 minutes in advance of the call time. The conference ID will be: "Marlin." The call will also be Webcast on the Investor Relations page of the Marlin Business Services Corp. website, www.marlincorp.com. An audio replay will also be available on the Investor Relations section of Marlin's website for approximately 90 days.

About Marlin Business Services Corp.