Marlin Business Services (MRLN) 8-K Marlin Business Services Corp. Reports Fourth Quarter and Year End 2005 Earnings

Exhibit 99.1

Marlin Business Services Corp. Reports Fourth Quarter
and Year End 2005 Earnings

          MOUNT LAUREL, N.J., Feb. 9 /PRNewswire-FirstCall/ -- Marlin Business Services Corp. (Nasdaq: MRLN) today reported net income of $4.4 million for the fourth quarter ended December 31, 2005, compared with net income of $3.6 million for the same period in 2004.  Diluted net income per share was $0.36 for the fourth quarter of 2005, an increase of 16.1% compared with $0.31 for the same period in 2004.  Annualized returns on average assets and equity in the fourth quarter of 2005 were 2.49% and 15.89%, respectively.

          For the year ended December 31, 2005 net income was $16.2 million compared to $13.5 million for the year ended December 31, 2004.  Diluted net income per share for the year ended December 31, 2005 was $1.36, an increase of 18.3% compared to $1.15 per diluted share reported for the year ended December 31, 2004.  Returns on average assets and equity for the year ended December 31, 2005 were 2.57% and 15.96%, respectively.  Results for 2005 include the effects of Hurricane Katrina which negatively impacted net income in the third quarter of 2005 by approximately $753,000, or approximately $0.06 per diluted share, due to increased reserves for possible credit losses.

          “2005 was another solid year of growth,” said Daniel P. Dyer, Chairman and CEO of Marlin Business Services Corp.  “Strong asset growth and credit quality led the way and is a reflection of our disciplined operating approach and our strategic focus on delivering quality service to our customers.”

          Highlights for the year and quarter ended December 31, 2005 include:

--	Delinquencies greater than 60 days past due declined to 0.61% of  minimum lease payments receivable at December 31, 2005 from 0.72% at  September 30, 2005 and 0.78% at December 31, 2004.
--	At December 31, 2005, the allowance for credit losses was 192.3% of  leases 60 or more days delinquent compared to 169.7% at September 30,  2005.
--	Net charge-offs were a five year low at 1.74% of average net  investment in leases for the year ended December 31, 2005.
--	The Company established its Salt Lake City office to serve as both a  regional lease production office as well as headquarters for Marlin  Business Bank (in organization). The Company filed an application for  an Industrial Bank Charter with the FDIC and the State of Utah  Department of Financial Institutions on October 6, 2005.
Asset Origination
--	Based on initial equipment cost, lease production increased 16.9% to  $318.5 million for the year ended December 31, 2005 compared to $272.3  million for 2004.  Net investment in leases was $572.6 million at  December 31, 2005.
--	Based on initial equipment cost, lease production was $76.5 million  in the fourth quarter of 2005 compared with $79.6 million in the third  quarter of 2005 and $66.8 million in the fourth quarter of 2004.
--	Our end user customer base grew to more than 82,000 at December 31,  2005 compared with 81,000 at September 30, 2005 and 76,000 at December  31, 2004.  The number of active leases in our portfolio was  approximately 103,000 at December 31, 2005.

Credit Quality
--	Net charge-offs were the lowest in five years at 1.74% of average net  investment in leases for the year ended December 31, 2005 compared to  1.99% for the full year ended December 31, 2004.
--	Net charge-offs totaled $2.5 million for the quarter ended December  31, 2005 compared with $2.0 million for the third quarter of 2005. On an annualized basis, net charge-offs were 1.81% of average net  investment in leases during the fourth quarter of 2005 compared to 1.46% for the third quarter of 2005.
--	Fourth quarter 2005 charge-offs included $51,000 of leases from areas  most severely impacted by Hurricane Katrina.  In addition to these  charge-offs, during the fourth quarter Marlin restructured  approximately $1.0 million of net investment in leases for customers  in the storm impacted Gulf States Region by extending payment due  dates until early 2006.
--	As of December 31, 2005, 0.61% of our total lease portfolio was 60 or more days delinquent, compared to 0.72% as of September 30, 2005 and  0.78% as of December 31, 2004.
--	Allowance for credit losses was $7.8 million as of December 31, 2005,  compared to $7.9 million as of September 30, 2005. Allowance for  credit losses as a percentage of net investment in leases was 1.39% at December 31, 2005 compared to 1.44% at September 30, 2005. The  allowance for credit losses was increased during the third quarter to  cover possible losses related to Hurricane Katrina.
--	At December 31, 2005, the allowance for credit losses was 192.3% of  leases 60 or more days delinquent compared to 169.7% at September 30,  2005.
--	In conjunction with this release, static pool loss statistics have  been updated as supplemental information on the investor relations  section of our website at http://www.marlincorp.com.
Net Interest and Fee Margin and Cost of Funds
--	The net interest and fee margin was 12.07% as a percentage of average  net investment in leases for the quarter ended December 31, 2005, an  increase of 8 basis points compared to 11.99% for the quarter ended  September 30, 2005.
--	The average implicit yield on new business was 12.87% for the quarter  ended December 31, 2005 compared to 12.61% for the quarter ended  September 30, 2005.
--	Fee income as a percentage of average net investment in leases was  3.39% for the quarter ended December 31, 2005 compared to 3.15% for  the quarter ended September 30, 2005.
--	The average cost of funds as a percentage of net investment in leases  was 4.28% for the quarter ended December 31, 2005.  This was a 9  basis point increase from the 4.19% for the quarter ended September  30, 2005.  In the fourth quarter of 2005, average borrowings outstanding were a higher percentage of average net investment in leases than in the third quarter and consisted entirely of fixed rate term securitizations.

Operating Expenses
--	Salaries and benefits expense was $4.8 million in the fourth quarter  of 2005 compared to $4.6 million in the third quarter. Salaries and  benefits expense was 3.4% as an annualized percentage of average net  investment in leases for both the fourth and third quarters of 2005. Salaries and benefits included $127,000 of expenses in the fourth quarter of 2005 related to Marlin Business Bank (in organization).
--	Other general and administrative expenses were $3.1 million in the fourth quarter of 2005 compared to $3.0 million in the third quarter. Other general and administrative expenses as an annualized percentage of average net investment in leases were 2.2% for the fourth quarter  of 2005 compared to 2.3% for the third quarter. We incurred  approximately $108,000 primarily in professional fees associated with  a shelf registration statement filed in the fourth quarter of 2005.
Funding and Liquidity
--	Our debt to equity ratio was 4.59:1 at December 31, 2005 compared to  5.42:1 at September 30, 2005.
--	Capital increased an additional $276,000 through the exercise of  employee stock options and the related tax benefits during the fourth  quarter of 2005.
--	We raised $177,000 in additional capital from the sale of 9,761 common shares through the Employee Stock Purchase Plan in the fourth quarter of 2005.
--	The Company had $34.5 million in unrestricted cash balances as of  December 31, 2005.
Other
--	Beginning in 2006 we will adopt Financial Accounting Standard 123R Share-Based Payments as required. This accounting rule requires the recognition of expense related to the fair value of options issued to employees and others. Had this rule been in effect during 2005 net income per diluted share would have been reduced by $0.03. We  anticipate the adoption of this accounting standard in 2006 will lower net income per diluted share by approximately $0.04 to $0.05.

          Conference Call and Webcast

          We will host a conference call on Friday, February 10, 2006 at 9:00 a.m. EST to discuss our fourth quarter and year end 2005 results.  If you wish to participate, please call (800) 903-0258 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, http://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 solutions primarily to small businesses.  The Company’s principal operating subsidiary, Marlin Leasing Corporation, finances over 60 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 http://www.marlincorp.com or call toll free at (888) 479-9111.

          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.

MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except per share amounts)
(unaudited)

	December 31,
	2005			2004
Assets
Cash and cash equivalents	$	34,472		$	16,092
Restricted cash		47,786			37,331
Net investment in direct financing leases		572,581			489,678
Property and equipment, net		3,776			3,555
Fair value of cash flow hedges		3,383			618
Other assets		8,991			7,419
Total assets	$	670,989		$	554,693
Liabilities and Stockholders’ Equity
Revolving and term secured borrowings	$	516,849		$	434,670
Other liabilities:
Sales and property taxes payable		7,702			4,856
Accounts payable and accrued expenses		8,467			6,707
Deferred income tax liability		25,362			18,110
Total liabilities		558,380			464,343
Stockholders’ equity:
Common Stock, $0.01 par value; 75,000 shares authorized; 11,755 and 11,528 shares issued and outstanding, respectively		117			115
Preferred Stock, $0.01 par value; 5,000 shares authorized; none issued and outstanding		—			—
Additional paid-in capital		78,781			75,732
Stock subscription receivable		(25	)		(54	)
Deferred compensation		(1,595	)		(1,380	)
Other comprehensive income		3,520			374
Retained earnings		31,811			15,563
Total stockholders’ equity		112,609			90,350
Total liabilities and stockholders’ equity	$	670,989		$	554,693

MARLIN BUSINESS SERVICES CORP.
AND SUBSIDIARIES
Consolidated Statements of Operations
(dollars in thousands, except share amounts)
 (unaudited)

	Three Months ended December 31,				Year ended December 31,
	2005		2004		2005		2004
Income:
Interest income	$	17,979	$	15,283	$	67,572	$	57,707
Fee income		4,699		3,979		17,957		13,461
Interest and fee income		22,678		19,262		85,529		71,168
Interest expense		5,933		4,532		20,835		16,675
Net interest and fee income		16,745		14,730		64,694		54,493
Provision for credit losses		2,426		2,525		10,886		9,953
Net interest and fee income after provision for credit losses		14,319		12,205		53,808		44,540
Insurance and other income		1,131		1,140		4,682		4,383
Operating income		15,450		13,345		58,490		48,923
Salaries and benefits		4,782		4,245		18,173		14,447
General and administrative		3,062		2,537		11,908		10,063
Financing related costs		382		487		1,554		2,055
Income before income taxes		7,224		6,076		26,855		22,358
Income taxes		2,854		2,468		10,607		8,899
Net income	$	4,370	$	3,608	$	16,248	$	13,459
Basic earnings per share:	$	0.38	$	0.32	$	1.41	$	1.19
Diluted earnings per share:	$	0.36	$	0.31	$	1.36	$	1.15
Shares used in computing basic earnings per share:		11,646,864		11,382,509		11,551,589		11,330,132
Shares used in computing diluted earnings per share:		12,075,882		11,760,701		11,986,088		11,729,703

SUPPLEMENTAL QUARTERLY DATA
(dollars in thousands, except share amounts)
(unaudited)

Quarter Ended:	12/31/04			3/31/05			6/30/05			9/30/05			12/31/05
New Asset Production:
# of Sales Reps		100			99			95			113			103
# of Leases		7,518			8,248			8,798			8,142			7,566
Equipment Volume	$	66,761		$	77,346		$	85,007		$	79,632		$	76,472
Average monthly sources		1,195			1,312			1,361			1,306			1,202
Implicit Yield on New Business		13.71	%		12.84	%		12.70	%		12.61	%		12.87	%
Net interest and fee margin Interest Income Yield		12.91	%		12.82	%		12.76	%		13.03	%		12.96	%
Fee Income Yield		3.36	%		3.63	%		3.57	%		3.15	%		3.39	%
Interest and Fee Income Yield		16.27	%		16.45	%		16.33	%		16.18	%		16.35	%
Cost of Funds		3.83	%		3.67	%		3.73	%		4.19	%		4.28	%
Net interest and Fee Margin		12.44	%		12.78	%		12.60	%		11.99	%		12.07	%
Average Net Investment in Leases	$	473,363		$	490,293		$	513,919		$	536,874		$	554,705
Portfolio Asset Quality:
60+ Days Past Due Delinquencies		0.78	%		0.65	%		0.57	%		0.72	%		0.61	%
60+ Days Past Due Delinquencies	$	4,453		$	3,849		$	3,535		$	4,656		$	4,063
Net Charge-offs	$	2,495		$	2,426		$	2,231		$	1,965		$	2,513
% on Average Net Investment in Leases Annualized		2.11	%		1.98	%		1.74	%		1.46	%		1.81	%
Allowance for Credit Losses	$	6,062		$	6,317		$	6,355		$	7,900		$	7,813
% of 60+ Delinquencies		136.1	%		164.1	%		179.8	%		169.7	%		192.3	%
90+ Day Delinquencies (Non-earning)	$	1,944		$	1,529		$	1,705		$	2,039		$	2,017
Balance Sheet
Assets
Investment in Direct Financing Leases	$	479,767		$	500,766		$	526,934		$	547,868		$	562,039
Initial Direct Costs and Fees		15,973			16,250			16,918			17,902			18,355
Reserve for Credit Losses		(6,062	)		(6,316	)		(6,355	)		(7,900	)		(7,813	)
Net Investment in Leases	$	489,678		$	510,700		$	537,497		$	557,870		$	572,581
Cash and Cash Equivalents		16,092			5,997			6,259			51,656			34,472
Restricted Cash		37,331			46,307			44,370			108,294			47,786
Other Assets		11,592			17,550			13,465			15,113			16,150
Total Assets	$	554,693		$	580,554		$	601,591		$	732,933		$	670,989
Liabilities
Total Debt	$	434,670		$	446,074		$	460,919		$	582,611		$	516,849
Other Liabilities		29,673			37,529			39,369			42,851			41,531
Total Liabilities	$	464,343		$	483,603		$	500,288		$	625,462		$	558,380

SUPPLEMENTAL QUARTERLY DATA - continued
(dollars in thousands, except share amounts)
(unaudited)

Quarter Ended:	12/31/04			3/31/05			6/30/05			9/30/05			12/31/05
Stockholders’ Equity Common Stock	$	115		$	116		$	117		$	117		$	117
Paid-in Capital, net		74,298			74,771			75,853			76,528			77,161
Other Comprehensive Income		374			2,552			1,336			3,386			3,520
Retained Earnings		15,563			19,512			23,997			27,440			31,811
Total Stockholders’ Equity	$	90,350		$	96,951		$	101,303		$	107,471		$	112,609
Total Liabilities and Stockholders’ Equity	$	554,693		$	580,554		$	601,591		$	732,933		$	670,989
Capital and Leverage:
Tangible Equity	$	90,350		$	96,951		$	101,303		$	107,471		$	112,609
Debt to Tangible Equity		4.81			4.60			4.55			5.42			4.59
Expense Ratios:
Salaries and Benefits Expense	$	4,249		$	4,433		$	4,391		$	4,567		$	4,781
Salaries and Benefits Expense annualized % of Avg. Net Invest.		3.59	%		3.62	%		3.42	%		3.40	%		3.45	%
Total personnel end of quarter		273			271			277			308			296
General and Administrative Expense	$	2,532		$	2,826		$	2,971		$	3,049		$	3,062
General and Administrative Expense annualized % of Avg. Net Invest.		2.14	%		2.31	%		2.31	%		2.27	%		2.21	%
Efficiency Ratio		42.73	%		43.10	%		42.31	%		44.13	%		43.87	%
Net Income:
Net Income	$	3,608		$	3,949		$	4,484		$	3,444		$	4,370
Annualized Performance Measures:
Return on Average Assets		2.52	%		2.78	%		3.03	%		2.06	%		2.49	%
Return on Average Stockholders’ Equity		16.42	%		16.87	%		18.09	%		13.20	%		15.89	%
Per Share Data:
Number of Shares - Basic		11,420,247			11,451,551			11,508,519			11,608,450			11,646,864
EPS- Basic	$	0.32		$	0.34		$	0.39		$	0.30		$	0.38
Number of Shares - Diluted		11,798,968			11,842,236			11,912,329			12,048,274			12,075,882
EPS- Diluted	$	0.31		$	0.33		$	0.38		$	0.29		$	0.36

SOURCE  Marlin Business Services Corp.
          -0-                                                  02/09/2006
          /CONTACT:  Bruce E. Sickel, CFO, Marlin Business Services Corp.,
+1-888-479-9111 ext. 4108/
          /Web site:  http://www.marlincorp.com /
          (MRLN)