updated 11/6/2007 6:22:36 PM ET 2007-11-06T23:22:36

MOUNT LAUREL, N.J., Nov. 6, 2007 (PRIME NEWSWIRE) -- Marlin Business Services Corp. (Nasdaq:MRLN) today reported net income of $5.0 million for the third quarter ended September 30, 2007, a 6.4% increase over $4.7 million for the same period in 2006. Diluted earnings per share was $0.41 compared with $0.39 for the same period in 2006.

For the nine months ended September 30, 2007, net income was $15.2 million and diluted earnings per share was $1.24, both up from $14.8 million and $1.22 per share, respectively, for the same period in 2006. Included in net income and diluted earnings per share for the nine-month period ended September 30, 2006 was an after-tax reduction of Hurricane Katrina related reserves of $545,000 or $0.045 per diluted share. Excluding this after-tax reduction, for the nine-month period ended September 30, 2006 net income was $14.2 million and diluted earnings per share was $1.17.

Daniel P. Dyer, Chairman and Chief Executive Officer of Marlin Business Services Corp., said, "Marlin's strong performance this quarter demonstrates the strength and resilience of our business model as we were able to quickly adjust to industry challenges. We made progress along all of our key operating metrics, including portfolio growth, margins, and funding, while also investing in our infrastructure to support our growth objectives. Our value proposition -- quick turnaround, simplified documentation and competitive terms -- is increasingly meeting the business financing needs of the small business market and creating value for shareholders."

Average net investment in leases and loans of $733.2 million for the quarter ended September 30, 2007 was up 17.4% compared to the third quarter of 2006. Third quarter 2007 lease production was $86.2 million, based on initial equipment cost. Lease production in the quarter reflects efforts to maintain credit quality and pricing discipline as well as temporary disruptions to end user demand, and deliberate reductions in our exposure to select industries. The Company also grew its new Business Capital Loan portfolio during the quarter.

Yields and margins both showed the effects of recently implemented improvement programs. For the quarter, the average implicit yield on new lease production rose to 13.06%, a sequential increase of 2 basis points from the previous quarter and a 33 basis point increase from a year ago. The ability to achieve price increases on new business contributed to a sequential flattening in the portfolio interest income yield, which was 12.34% of total average finance receivables for the third quarter. For the third quarter, the net interest and fee margin expanded 3 basis points to 10.66% of total average finance receivables compared to the second quarter of 2007, reflecting improvements in fee income offset by a higher cost of funds.

For the third quarter, the average cost of funds as a percentage of average total finance receivables was 4.78%, up 18 basis points from the second quarter of 2007 primarily due to the impact of rising short-term interest rates on the Company's variable rate borrowing facilities. During the quarter the Company both renewed and expanded its warehouse financing facilities to an aggregate $340 million. In addition, on October 24, Marlin completed a $440 million term securitization, its ninth securitization and fourth rated AAA. Consequently, the Company now has secured the funding capacity to support its growth plans.

Credit quality remained strong. For the third quarter, charge-offs were $3.4 million, or 1.85% of average total finance receivables on an annualized basis, a ratio that is essentially in line with both the preceding quarter and with the third quarter of 2006. Leases over 60 days delinquent rose 23 basis points on a sequential basis, primarily due to higher delinquencies in select industries and fewer processing days in September. As of September 30, 2007, the Company's allowance for credit losses was $9.4 million, or 1.27% of total finance receivables.

For the quarter, the Company's efficiency ratio was 41.06%. Total operating expenses for the quarter increased to $8.9 million, primarily as a result of costs associated with growth investments in sales hires and marketing initiatives.

Effective November, 2007, the Company is discontinuing the origination of new factoring agreements, and plans to withdraw from the factoring business that was in the pilot phase. At September 30, 2007, factoring-related financings totaled approximately $540,000, consisting of $95,000 of factoring receivables and a $445,000 term loan resulting from the refinance of a real estate related factoring receivable.

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 Wednesday, November 7, 2007 at 9:00 a.m. ET to discuss our third quarter 2007 results. If you wish to participate, please call 888-819-8038 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.

Marlin Business Services Corp. is a nationwide provider of equipment leasing and working capital solutions primarily to small businesses. The Company's principal operating subsidiary, Marlin Leasing Corporation, finances over 70 equipment categories in a segment of the market generally referred to as "small-ticket" leasing (i.e. leasing transactions less than $250,000). The Company was founded in 1997 and completed its initial public offering of common stock on November 12, 2003. In addition to its executive offices in Mount Laurel, NJ, Marlin has regional offices in or near Atlanta, Chicago, Denver, Philadelphia and Salt Lake City. For more information, visit www.marlincorp.com or call toll free at (888) 479-9111.

The Marlin Business Services Corp. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=4087

Forward-Looking Statements

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All forward-looking statements (including statements regarding future financial and operating results) involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words "anticipate," "believe," "expect," "estimate," "plan," "may," "intend," and similar expressions are generally intended to identify forward-looking statements. Economic, business, funding, market, competitive, legal and/or regulatory factors, among others, affecting our business are examples of factors that could cause actual results to differ materially from those described in the forward-looking statements. More detailed information about these factors is contained in our filings with the SEC, including the sections captioned "Risk Factors" and "Business" in the Company's Form 10-K filed with the Securities and Exchange Commission. We are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.

PrimeNewswire, Inc. 2007


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