MOUNT LAUREL, N.J., May 8, 2008 (PRIME NEWSWIRE) -- Marlin Business Services Corp. (Nasdaq:MRLN) today reported first quarter 2008 net income of $1.4 million or $0.11 per diluted share.

"We continue to navigate through this challenging period for the economy and capital markets. Managing through this credit cycle is a priority and I am pleased to report progress with overall delinquencies," says Daniel P. Dyer, Marlin's Chairman and CEO. "I am also pleased to announce our new bank became operational this quarter."

For the first quarter of 2008, the average net investment in leases was $730.0 million, compared to $733.5 million for the fourth quarter of 2007 and $687.4 million for the first quarter of 2007. First quarter 2008 lease production was $70.6 million, based on initial equipment cost, compared to $87.7 million for the fourth quarter of 2007 and $102.7 million for the first quarter of 2007. Our decision to adopt more restrictive credit standards combined with greater pricing discipline led to the lower new origination levels in the quarter.

Reflecting the effect of our pricing discipline, the average implicit yield on new lease production was 13.29% in the quarter, an increase of 31 basis points from the fourth quarter of 2007 and up 49 basis points from the first quarter of 2007.

Included in average total finance receivables is $15.0 million of the Company's Business Capital Loan product, an increase of $3.8 million compared to fourth quarter of 2007 and $12.4 million compared to first quarter 2007.

The net interest and fee margin for the quarter ended March 31, 2008 was 9.82%, down 35 basis points from 10.17% in the fourth quarter of 2007. The decline is due primarily from interest on free cash flow which has been impacted by the recent drop in the federal funds rate. Fee income improved slightly to 3.00% for the quarter ended March 31, 2008 from 2.96% in the fourth quarter of 2007. Cost of funds declined 18 basis points to 5.50% in the first quarter of 2008 versus 5.68% in the fourth quarter of 2007. The decline in cost of funds is due to a reduction in average debt outstanding as a percentage of average finance receivables resulting from the take-down of prefunding proceeds generated by the 2007-1 term securitization used to fund first quarter 2008 originations.

Leases over 30 days delinquent were 3.05% as of March 31, 2008, a 32 basis points improvement compared to 3.37% as of December 31, 2007. Leases over 60 days delinquent were 1.09% as of March 31, 2008 and 14 basis points higher compared to 0.95% as of December 31, 2007.

Net lease charge-offs in the first quarter were $5.3 million, or 2.90% of average net investment in leases on an annualized basis compared to $4.7 million or 2.55% of average net investment in leases on an annualized basis as of fourth quarter 2007.

Credit quality continues to be affected by weakness in the performance of leases in California and Florida and industries related to the housing sector.

The Company increased its allowance for credit losses to $12.1 million as of March 31, 2008, raising the allowance as a percentage of total finance receivables to 1.63 percent from 1.47 percent at December 31, 2007.

Total operating expenses for the first quarter were $10.5 million, up $1.3 million compared to the fourth quarter of 2007. The increase is primarily related to investments in sales staff and marketing programs, seasonal timing of employment related taxes, additional professional fees, an increase in property taxes on leased equipment and lower cost deferrals resulting from lower origination volumes.

During the fourth quarter the Company repurchased 98,400 shares under the stock repurchase program announced in November.

The Company opened its Utah Industrial Bank, Marlin Business Bank, on March 12, 2008. The Bank has funded $18.5 million of leases through its initial capitalization of $12 million and its issuance of $10 million in certificates of deposit at a weighted deposit rate of 4.17%. Additional information can be found on www.fdic.gov.

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.

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