10-Q

UNITED STATES SECURITIES AND EXCHANGE

COMMISSION

WASHINGTON, D.C. 20549

FORM

10-Q

☑

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF

1934

For the Quarterly Period Ended

September 30, 2021

or

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF

1934

For the transition period from__________ to__________

Commission file number

000-50448

MARLIN BUSINESS SERVICES CORP.

(Exact name of registrant as specified in its charter) 

Pennsylvania

38-3686388

 (State of incorporation) (I.R.S. Employer Identification Number)

300 Fellowship Road

,

Mount Laurel

,

NJ

08054

(Address of principal executive offices) (Zip code) 

(

888

)

479-9111

(Registrant’s telephone number, including area code) 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $.01 per share

MRLN

NASDAQ

 Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),

and (2) has been subject to such filing requirements for the past 90 days.

Yes

☑

No

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted

pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that

registrant was required to submit such files.) 

Yes

☑

No

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller

reporting company or an emerging growth company. See the definitions of "large accelerated filer,” “accelerated filer", “smaller

reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☑

 Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for

complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of

the Exchange Act

.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

Yes

☐

No

☒

At October 22, 2021,

12,026,394

 shares of Registrant’s common stock, $.01 par value, were outstanding.

MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES

Quarterly Report on Form 10-Q

for the Quarter Ended September 30, 2021

TABLE OF CONTENTS

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-3-

PART I. Financial Information

Item 1. Consolidated Financial Statements

MARLIN BUSINESS SERVICES CORP.

AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

September 30,

December 31,

2021

2020

(Dollars in thousands, except per-

share data)

ASSETS

Cash and due from banks

$

4,914

$

5,473

Interest-earning deposits with banks 

217,346

130,218

 Total cash and cash equivalents

222,260

135,691

Time deposits with banks

996

5,967

Restricted interest-earning deposits related to consolidated VIEs

3,202

4,719

Investment securities (amortized cost of $11.5 million at December 31, 2020)

—

11,624

Net investment in leases and loans:

 Leases

295,514

337,159

 Loans

525,239

532,125

Net investment in leases and loans, excluding allowance for credit losses (includes $

12.1

 million and

$

30.4

 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated

VIEs)

820,753

869,284

Allowance for credit losses

(27,521)

(44,228)

 Total net investment in leases and loans

793,232

825,056

Intangible assets

5,175

5,678

Operating lease right-of-use assets

7,268

7,623

Property and equipment, net

9,359

8,574

Property tax receivables, net of allowance

9,260

6,854

Other assets

16,560

10,212

 Total assets

$

1,067,312

$

1,021,998

LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits

$

783,203

$

729,614

Long-term borrowings related to consolidated VIEs

11,676

30,665

Operating lease liabilities

8,134

8,700

Other liabilities:

 Sales and property taxes payable

6,203

6,316

 Accounts payable and accrued expenses

19,086

27,734

 Net deferred income tax liability

23,728

22,604

 Total liabilities

852,030

825,633

Commitments and contingencies

Stockholders’ equity:

Preferred Stock, $

0.01

 par value;

5,000,000

 shares authorized; none issued

—

—

Common Stock, $

0.01

 par value;

75,000,000

 shares authorized;

12,026,429

 and

11,974,530

 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

120

120

 Additional paid-in capital

77,903

76,323

 Accumulated other comprehensive income

—

69

 Retained earnings

137,259

119,853

 Total stockholders’ equity

215,282

196,365

 Total liabilities and stockholders’ equity

$

1,067,312

$

1,021,998

The accompanying notes are an integral part of the unaudited consolidated financial statements.

-4-

MARLIN BUSINESS SERVICES CORP.

AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(Dollars in thousands, except per-share data)

Interest income

$

17,656

$

22,398

$

53,622

$

73,111

Fee income

2,027

2,803

6,795

8,019

Interest and fee income

19,683

25,201

60,417

81,130

Interest expense

2,594

4,694

8,676

15,802

Net interest and fee income

17,089

20,507

51,741

65,328

Provision for credit losses

(1,183)

7,204

(14,010)

51,160

Net interest and fee income after provision for credit losses

18,272

13,303

65,751

14,168

Non-interest income:

 Gain on leases and loans sold

—

87

—

2,426

 Insurance premiums written and earned

1,906

2,082

5,847

6,612

 Other income 

1,700

2,044

9,828

11,172

 Non-interest income 

3,606

4,213

15,675

20,210

Non-interest expense:

 Salaries and benefits

8,162

8,515

24,996

25,702

 General and administrative

6,200

4,717

25,823

24,169

 Goodwill impairment

—

—

—

6,735

 Intangible assets impairment

—

1,016

—

1,016

 Non-interest expense

14,362

14,248

50,819

57,622

 Income (loss) before income taxes

7,516

3,268

30,607

(23,244)

Income tax expense (benefit)

2,035

525

8,019

(8,284)

 Net income (loss)

$

5,481

$

2,743

$

22,588

$

(14,960)

Basic earnings (loss) per share

$

0.46

$

0.23

$

1.88

$

(1.27)

Diluted earnings (loss) per share

$

0.45

$

0.23

$

1.86

$

(1.27)

The accompanying notes are an integral part of the unaudited consolidated financial statements.

-5-

MARLIN BUSINESS SERVICES CORP.

AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(Dollars in thousands)

Net income (loss)

$

5,481

$

2,743

$

22,588

$

(14,960)

Other comprehensive income:

(Decrease) increase in fair value of debt securities available

for sale

(247)

10

(116)

47

 Tax effect

82

(3)

47

(12)

Total other comprehensive (loss) income

(165)

7

(69)

35

 Comprehensive income (loss)

$

5,316

$

2,750

$

22,519

$

(14,925)

The accompanying notes are an integral part of the unaudited consolidated financial statements.

-6-

MARLIN BUSINESS SERVICES CORP.

AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity

(Unaudited)

Accumulated

Common

Additional

Other

Total

Common

Stock

Paid-In

Comprehensive

Retained

Stockholders’

Shares

Amount 

Capital 

Income (Loss)

Earnings 

Equity 

(Dollars in thousands)

Balance, December 31, 2020

11,974,530

$

120

$

76,323

$

69

$

119,853

$

196,365

 Repurchase of common stock

(16,038)

—

(224)

—

—

(224)

 Stock issued in connection with restricted

 stock and RSUs, net of forfeitures

50,831

—

—

—

—

—

 Stock-based compensation recognized

—

—

583

—

—

583

 Net change in unrealized gain/loss on 

 securities available for sale, net of tax

—

—

—

(184)

—

(184)

 Net income

—

—

—

—

6,851

6,851

Cash dividends paid ($

0.14

 per share)

—

—

—

—

(1,689)

(1,689)

Balance, March 31, 2021

12,009,323

120

76,682

(115)

125,015

201,702

 Repurchase of common stock

(124)

—

(3)

—

—

(3)

 Stock issued in connection with restricted

 stock and RSUs, net of forfeitures

17,274

—

—

—

—

—

 Stock-based compensation recognized

—

—

600

—

—

600

 Net change in unrealized gain/loss on 

 securities available for sale, net of tax

—

—

—

280

—

280

 Net income

—

—

—

—

10,256

10,256

Cash dividends paid ($

0.14

 per share)

—

—

—

—

(1,756)

(1,756)

Balance, June 30, 2021

12,026,473

$

120

$

77,279

$

165

$

133,515

$

211,079

 Repurchase of common stock

6

—

(1)

—

—

(1)

 Stock issued in connection with restricted

 stock and RSUs, net of forfeitures

(50)

—

—

—

—

—

 Stock-based compensation recognized

—

—

625

—

—

625

 Net change in unrealized gain/loss on 

 securities available for sale, net of tax

—

—

—

(165)

—

(165)

 Net income

—

—

—

—

5,481

5,481

Cash dividends paid ($

0.14

 per share)

—

—

—

—

(1,737)

(1,737)

Balance, September 30, 2021

12,026,429

$

120

$

77,903

$

—

$

137,259

$

215,282

The accompanying notes are an integral part of the unaudited consolidated financial statements.

-7-

MARLIN BUSINESS SERVICES CORP.

AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity

(Unaudited)

Accumulated

Common

Additional

Other

Total

Common

Stock

Paid-In

Comprehensive

Retained

Stockholders’

Shares

Amount 

Capital 

Income (Loss)

Earnings 

Equity 

(Dollars in thousands)

Balance, December 31, 2019

12,113,585

$

121

$

79,665

$

58

$

135,112

$

214,956

 Repurchase of common stock

(285,593)

(3)

(4,535)

—

—

(4,538)

 Stock issued in connection with restricted

 stock and RSUs, net of forfeitures

56,481

1

(1)

—

—

—

 Stock-based compensation recognized

—

—

518

—

—

518

 Net change in unrealized gain/loss on 

 securities available for sale, net of tax

—

—

—

(38)

—

(38)

 Net loss

—

—

—

—

(11,821)

(11,821)

 Impact of adoption of new accounting

 standards

(1)

—

—

—

—

(8,877)

(8,877)

Cash dividends paid ($

0.14

 per share)

—

—

—

—

(1,710)

(1,710)

Balance, March 31, 2020

11,884,473

119

75,647

20

112,704

188,490

 Issuance of common stock

14,891

—

120

—

—

120

 Repurchase of common stock

(1,897)

—

(12)

—

—

(12)

 Stock issued in connection with restricted

 stock and RSUs, net of forfeitures

44,780

—

—

—

—

—

 Stock-based compensation recognized

—

—

(149)

—

—

(149)

 Net change in unrealized gain/loss on 

 securities available for sale, net of tax

—

—

—

66

—

66

 Net loss

—

—

—

—

(5,882)

(5,882)

Cash dividends paid ($

0.14

 per share)

—

—

—

—

(1,629)

(1,629)

Balance, June 30, 2020

11,942,247

$

119

$

75,606

$

86

$

105,193

$

181,004

 Repurchase of common stock

(18,446)

—

(149)

—

—

(149)

 Stock issued in connection with restricted

 stock and RSUs, net of forfeitures

50,850

1

(1)

—

—

—

 Stock-based compensation recognized

—

—

437

—

—

437

 Net change in unrealized gain/loss on 

 securities available for sale, net of tax

—

—

—

7

—

7

 Net income

—

—

—

—

2,743

2,743

Cash dividends paid ($

0.14

 per share)

—

—

—

—

(1,692)

(1,692)

Balance, September 30, 2020

11,974,651

$

120

$

75,893

$

93

$

106,244

$

182,350

(1) Represents the impact of Accounting Standards Update ("ASU") 2016-13 and related ASUs collectively referred to as "CECL".

The accompanying notes are an integral part of the unaudited consolidated financial statements.

-8-

MARLIN BUSINESS SERVICES CORP.

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

Nine Months Ended September 30,

2021

2020

(Dollars in thousands)

Cash flows from operating activities:

Net income (loss)

$

22,588

$

(14,960)

 Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 Depreciation and amortization

2,848

2,996

 Stock-based compensation

1,808

806

 Impairment of goodwill and intangible assets

—

7,751

 Change in fair value of equity securities

(20)

(89)

 Provision for credit losses

(14,010)

51,160

 Change in net deferred income tax liability

1,107

(7,777)

 Amortization of deferred initial direct costs and fees

7,770

9,244

 Loss on equipment disposed

—

116

 Gain on leases sold

—

(2,426)

 Leases originated for sale

—

(4,882)

 Proceeds from sale of leases originated for sale

—

5,123

 Noncash lease expense

683

1,365

 Adjustment to value of contingent consideration

—

(1,435)

 Effect of changes in other operating items:

 Other assets

(9,153)

(1,642)

 Other liabilities

(10,183)

(311)

 Net cash provided by operating activities

3,438

45,039

Cash flows from investing activities:

 Net change in time deposits with banks

4,971

4,471

 Purchases of equipment for lease contracts and funds used to originate loans

(289,391)

(298,244)

 Principal collections on leases and loans

325,824

356,133

 Proceeds from sale of leases originated for investment

—

25,663

 Security deposits collected, net of refunds

18

(176)

 Proceeds from the sale of equipment

2,148

1,567

 Acquisitions of property and equipment

(2,616)

(2,266)

 Principal payments received on securities available for sale

11,567

432

 Net cash provided by investing activities 

52,521

87,580

Cash flows from financing activities:

 Net change in deposits

53,589

(15,425)

 Term securitization repayments

(19,080)

(36,538)

 Business combinations earn-out consideration payments

(3)

(180)

 Issuances of common stock 

—

120

 Repurchases of common stock

(228)

(4,699)

 Dividends paid

(5,185)

(5,021)

 Net cash provided (used in) by financing activities

29,093

(61,743)

Net (decrease) increase in total cash, cash equivalents and restricted cash

85,052

70,876

Total cash, cash equivalents and restricted cash, beginning of period 

140,410

130,027

Total cash, cash equivalents and restricted cash, end of period

$

225,462

$

200,903

The accompanying notes are an integral part of the unaudited consolidated financial statements.

-9-

MARLIN BUSINESS SERVICES CORP.

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

Nine Months Ended September 30,

2021

2020

(Dollars in thousands)

Supplemental disclosures of cash flow information:

 Cash paid for interest on deposits and borrowings

$

8,491

$

17,308

 Net cash (received) paid for income taxes

22,591

(5,005)

 Leases and loans transferred into held for sale from investment

—

23,460

Supplemental disclosures of non cash investing activities:

 Purchase of equipment for lease contracts and loans originated

$

3,191

$

2,253

Reconciliation of Cash, cash equivalents and restricted cash to 

the Consolidated Balance Sheets:

Cash and cash equivalents

$

222,260

$

195,132

Restricted interest-earning deposits

3,202

5,771

Cash, cash equivalents and restricted cash at end of period

$

225,462

$

200,903

-10-

MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – The Company

We are a nationwide provider of credit products and services to small businesses and were incorporated in the Commonwealth of

Pennsylvania

 in

2003

. In 2008, we opened Marlin Business Bank (“MBB”), a commercial bank chartered by the State of

Utah

 and a

member of the Federal Reserve System, which serves as the Company’s primary funding source through its issuance of Federal

Deposit Insurance Corporation (“FDIC”)-insured deposits. In 2009, Marlin Business Services Corp. became a bank holding company

subject to the Bank Holding Company Act and in 2010, the Federal Reserve Bank of Philadelphia confirmed the effectiveness of

Marlin Business Services Corp.’s election to become a financial holding company (while remaining a bank holding company)

pursuant to Sections 4(k) and (l) of the Bank Holding Company Act and section 225.82 of the Federal Reserve Board’s Regulation

Y.

Such election permits Marlin Business Services Corp. to engage in activities that are financial in nature or incidental to a financial

activity, including the maintenance and expansion of our reinsurance activities conducted through our wholly-owned subsidiary,

AssuranceOne, Ltd. (“AssuranceOne”).

On April 18, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the

Company, Madeira Holdings, LLC and Madeira Merger Subsidiary, Inc. (“HPS Merger Sub”) pursuant to which all outstanding

shares of the Company’s common stock will, subject to the terms and conditions of the Merger Agreement, be cancelled and

converted into the merger consideration specified in the Merger Agreement in an all cash transaction pursuant to a merger of the

Company with and into HPS Merger Sub, with the Company surviving (the “Merger”). On August 4, 2021, our shareholders

approved the adoption of the Merger Agreement. The Merger remains subject to, in addition to various other customary closing

conditions, governmental and regulatory approvals and completion of MBB’s surrender of its banking licenses and authority and

termination of its FDIC insured deposits (a process we refer to as “De-banking”).

References to the “Company,” “Marlin,” “Registrant,” “we,” “us” and “our” herein refer to Marlin Business Services Corp. and its

wholly-owned subsidiaries, unless the context otherwise requires.

NOTE 2 – Summary of Significant Accounting Policies

Basis of financial statement presentation.

 The unaudited consolidated financial statements include the accounts of the Company and

its wholly-owned subsidiaries. Marlin Leasing Corporation (“MLC”) and MBB are managed together as a single business segment and

are aggregated for financial reporting purposes as they exhibit similar economic characteristics, share the same leasing and loan

portfolio and have a single consolidated product offering platform. All intercompany accounts and transactions have been eliminated

in consolidation.

The accompanying unaudited consolidated financial statements present the Company’s financial position at September 30, 2021 and

the results of operations for the three- and nine -month periods ended September 30, 2021 and 2020, and cash flows for the nine-

month periods ended September 30, 2021 and 2020. In management’s opinion, the unaudited consolidated financial statements

contain all adjustments, which include normal and recurring adjustments, necessary for a fair presentation of the financial position and

results of operations for the interim periods presented. These unaudited consolidated financial statements should be read in

conjunction with the consolidated financial statements and note disclosures included in the Company’s Form 10-K for the year ended

December 31, 2020, filed with the Securities and Exchange Commission (“SEC”) on March 5, 2021. The consolidated results and

statements of cash flows for these interim financial statements are not necessarily indicative of the results of operations or cash flows

for the respective full years or any other period.

Use of Estimates.

 These unaudited consolidated financial statements require management to make estimates and assumptions that

affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial

statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used when accounting for

income recognition, the residual values of leased equipment, the allowance for credit losses, deferred initial direct costs and fees, late

fee receivables, the fair value of financial instruments, estimated losses from insurance program, and income taxes. Actual results

could differ from those estimates.

Income taxes.

-11-

Our statutory tax rate, which is a combination of federal and state income taxes, was

25.1

% and

25.4

% for the three months ended

September 30, 2021 and September 30, 2020, respectively.

For the nine months ended September 30, 2021, our effective tax rate was

26.2

%. For the nine months ended September 30, 2020, our

effective tax rate was

35.6

%, driven by a $

3.2

 million discrete benefit, resulting from certain provisions in the Coronavirus Aid,

Relief, and Economic Security Act (“CARES Act”) that allow for a remeasurement of our federal net operating losses.

For the three and nine-month periods ended September 30, 2021, our effective tax rates were

27.1

% and

26.2

%, respectively. 

The Company’s IRS federal audit for tax years ending December 31, 2013 to 2018 resulting from Joint Committee Review as part of

an IRS refund claim closed in the second quarter of 2021 with no adjustments. The Company remains subject to examination for the

2017 tax year to the present as of September 30, 2021 under regular statute of limitations.

Significant Accounting Policies. 

There have been no significant changes to our Significant Accounting Policies as described in our

Annual Report on Form 10-K for the year ended December 31, 2020.

Recently Adopted Accounting Standards

. 

Credit Losses.

 In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and related

ASUs collectively referred to as “CECL”.

The Company adopted the guidance in these ASUs, effective January 1, 2020, applying changes resulting from the application of the

new standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in

which the guidance was effective (i.e., modified retrospective approach). See our Annual Report on Form 10-K for the year ended

December 31, 2020 for a detailed discussion of our adoption of this guidance.

Income Taxes

. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for

Income Taxes, which removes certain exceptions to the general principles of ASC 740 in order to reduce the cost and complexity of

its application. The amendments also clarify and amend existing guidance to improve consistent application. The ASU is effective for

fiscal years beginning after December 15, 2020, including interim periods within those annual periods. We adopted ASU 2019-12 on

January 1, 2021, and the adoption did not have a material impact on our consolidated financial position or results of operations.

-12-

NOTE 3 – Non-Interest Income

The following table summarizes non-interest income for the periods presented:

Three Months Ended

Nine Months Ended 

September 30,

September 30,

(Dollars in thousands)

2021

2020

2021

2020

Insurance premiums written and earned

$

1,906

$

2,082

$

5,847

$

6,612

Gain on sale of leases and loans

—

87

—

2,426

Other income: 

Property tax income

149

123

5,190

5,247

Servicing income

270

462

963

1,517

Net (loss) gain recognized during the period on investment securities

(3)

—

(59)

89

Non-interest income - other than from contracts with customers

2,322

2,754

11,941

15,891

Other income:

Insurance policy fees

749

819

2,268

2,610

Property tax administrative fees on leases

213

243

622

713

ACH payment fees

62

35

184

143

Referral fees

26

15

57

123

Other

234

347

603

730

Non-interest income from contracts with customers

1,284

1,459

3,734

4,319

Total non-interest income

$

3,606

$

4,213

$

15,675

$

20,210

-13-

NOTE 4 - Investment Securities 

In accordance with the Merger Agreement and De-banking process discussed in Note 1, the Company sold all its investment securities

in the third quarter of 2021 and recognized an immaterial gain on the sale of those securities:

The Company had the following investment securities as of the dates presented:

September 30,

December 31,

(Dollars in thousands)

2021

2020

Equity Securities

Mutual fund

$

—

$

3,760

Debt Securities, Available for Sale:

Asset-backed securities ("ABS")

—

3,719

Municipal securities

—

4,145

 Total investment securities

$

—

$

11,624

The following schedule summarizes changes in fair value of equity securities and the portion of unrealized gains and losses for each

period presented:

Three Months Ended September 30,

Nine Months Ended September 30,

(Dollars in thousands)

2021

2020

2021

2020

Net gains (losses) recognized during the period on equity securities 

$

75

$

—

$

20

$

89

Less: Net gains (losses) recognized during the period

 on equity securities sold during the period

75

—

20

—

Unrealized gains recognized during the reporting period

 on equity securities still held at the reporting date

$

—

$

—

$

—

$

89

-14-

Available for Sale

There are no available for sale investments as of September 30, 2021 due to the liquidation of all the Company’s available for sale

investments in the third quarter of 2021 resulting in immaterial gains in the three and nine month periods ending September 30, 2021.

The following schedules are a summary of available for sale investments as of December 31, 2020, and the aggregate amount of

unrealized losses on available for sale securities in the Company’s investment securities classified according to the amount of time

those securities have been in a continuous loss position as of December 31, 2020

:

Gross 

Gross

Amortized

Unrealized 

Unrealized

Estimated

Cost

Gains

Losses

Fair Value

(Dollars in thousands)

ABS

$

3,666

$

53

$

—

$

3,719

Municipal securities

4,082

64

(1)

4,145

 Total Debt Securities, Available for Sale

$

7,748

$

117

$

(1)

$

7,864

Less than 12 months

12 months or longer

Total

Gross 

Gross

Gross

Unrealized 

Fair

Unrealized

Fair

Unrealized

Fair

Losses

Value

Losses

Value

Losses

Value

(Dollars in thousands)

Municipal securities

$

(1)

$

141

$

—

$

—

$

(1)

$

141

Total available for sale investment

securities

$

(1)

$

141

$

—

$

—

$

(1)

$

141

-15-

NOTE 5 – Net Investment in Leases and Loans 

Net investment in leases and loans consists of the following:

September 30, 2021

December 31, 2020

(Dollars in thousands)

Minimum lease payments receivable

$

308,479

$

354,298

Estimated residual value of equipment

24,999

26,983

Unearned lease income, net of initial direct costs and fees deferred

(37,560)

(43,737)

Security deposits

(404)

(385)

Total leases

295,514

337,159

Commercial loans, net of origination costs and fees deferred

Working Capital Loans

31,178

20,034

CRA

(1)

1,019

1,091

Equipment loans

(2)

414,392

449,149

CVG

78,650

61,851

Total commercial loans

525,239

532,125

Net investment in leases and loans, excluding allowance

820,753

869,284

Allowance for credit losses

(27,521)

(44,228)

Total net investment in leases and loans

$

793,232

$

825,056

________________________ 

(1)

CRA loans are comprised of loans originated under a line of credit to satisfy its obligations under the Community Reinvestment Act of 1977

(“CRA”).

(2)

Equipment loans are comprised of Equipment Finance Agreements, Installment Purchase Agreements and other loans.

In response to COVID-19, starting in mid-March 2020, the Company instituted a payment deferral contract modification program in

order to assist our small-business customers. See Note 6, “Allowance for Credit Losses” for discussion of that program.

At September 30, 2021, $

12.8

 million in net investment in leases were pledged as collateral for the Company’s outstanding asset-

backed securitization balance and $

55.9

 million in net investment in leases were pledged as collateral for the secured borrowing

capacity at the Federal Reserve Discount Window. 

The amount of deferred initial direct costs and origination costs net of fees deferred were $

13.6

 million and $

14.6

 million as of

September 30, 2021 and December 31, 2020, respectively. Initial direct costs are netted in unearned income and are amortized to

income using the effective interest method. Origination costs are netted in commercial loans and are amortized to income using the

effective interest method. At September 30, 2021 and December 31, 2020, $

20.8

 million and $

21.9

 million, respectively, of the

estimated residual value of equipment retained on our Consolidated Balance Sheets was related to copiers.

-16-

Maturities of lease receivables under lease contracts and the amortization of unearned lease income, including initial direct costs and

fees deferred, were as follows as of September 30, 2021:

Minimum Lease

Payments

Net Income

Receivable

(1)

Amortization

(2)

(Dollars in thousands)

Period Ending December 31,

Remainder of 2021

$

33,951

$

7,902

2022

120,586

16,069

2023

80,663

8,510

2024

45,306

3,668

2025

20,550

1,221

Thereafter

7,423

190

$

308,479

$

37,560

________________________ 

(1)

Represents the undiscounted cash flows of the lease payments receivable.

(2)

Represents the difference between the undiscounted cash flows and the discounted cash flows.

-17-

The lease income recognized was as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(Dollars in thousands)

Interest Income

$

6,070

$

8,357

$

19,073

$

25,977

As of September 30, 2021 and December 31, 2020, the Company maintained total finance receivables which were on a non-accrual

basis with net investment of $

10.1

 million and $

14.3

 million, respectively. See Note 6 “Allowance for Credit Losses” for additional

discussion of loan modifications due to COVID-19.

Portfolio Sales

The Company has historically originated certain lease and loans for sale to third parties, based on their underwriting criteria and

specifications. In addition, the Company may periodically enter into agreements to sell certain leases and loans that were originated

for investment to third parties. 

For agreements that qualify as a sale where the Company has continuing involvement through servicing, the Company recognizes a

servicing liability at its initial fair value, and then amortizes the liability over the expected servicing period based on the effective yield

method, within Other income in the Consolidated Statements of Operations. The Company’s sale agreements typically do not contain

a stated servicing fee, so the initial value recognized as a servicing liability is a reduction of the proceeds received and is based on an

estimate of the fair value attributable to that obligation. The Company’s servicing liability was $

0.7

 million and $

1.3

 million as of

September 30, 2021, and December 31, 2020, respectively, and is recognized within Accounts payable and accrued expenses in the

Consolidated Balance Sheets. As of September 30, 2021 and December 31, 2020, the portfolio of leases and loans serviced for others

was $

146

 million and $

230

 million, respectively. 

In addition, the Company may have continuing involvement in contracts sold through any recourse obligations that may include

customary representations and warranties or specific recourse provisions. 

The following table summarizes information related to portfolio sales for the periods presented:

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(Dollars in thousands)

Sales of leases and loans 

$

—

$

4,286

$

—

$

28,342

Gain on sale of leases and loans

—

87

—

2,426

-18-

NOTE 6 – Allowance for Credit Losses

Effective January 1, 2020, we

 adopted

ASU 2016-13 and related ASUs collectively referred to as CECL

,

 which replaced the probable,

incurred loss model with a measurement of expected credit losses for the contractual term of the Company’s current portfolio of loans

and leases. See our Annual Report on Form 10-K for the year ended December 31, 2020 for a detailed discussion of our adoption of

this guidance

.

The following tables summarize activity in the allowance for credit losses

:

Three Months Ended September 30, 2021

(Dollars in thousands)

Equipment

Finance

Working

Capital

Loans

CVG

CRA

Total

Allowance for credit losses, beginning of period

$

19,718

$

1,003

$

8,036

$

—

$

28,757

 Charge-offs

(2,407)

(262)

(27)

—

(2,696)

 Recoveries

1,273

158

85

—

1,516

Net charge-offs

(1,134)

(104)

58

—

(1,180)

Realized cashflows from Residual Income

1,127

—

—

—

1,127

 Provision for credit losses

(1,334)

300

(149)

—

(1,183)

Allowance for credit losses, end of period

$

18,377

$

1,199

$

7,945

$

—

$

27,521

Net investment in leases and loans, before allowance

$

717,697

$

31,178

$

70,859

$

1,019

$

820,753

Three Months Ended September 30, 2020

(Dollars in thousands)

Equipment

Finance

Working

Capital

Loans

CVG

CRA &

PPP

Total

Allowance for credit losses, beginning of period

$

48,550

$

7,962

$

7,132

$

—

$

63,644

 Charge-offs

(10,509)

(633)

(524)

—

(11,666)

 Recoveries

983

101

94

—

1,178

 Net charge-offs

(9,526)

(532)

(430)

—

(10,488)

Realized cashflows from Residual Income

965

—

—

—

965

 Provision for credit losses

7,226

(3,974)

3,952

—

7,204

Allowance for credit losses, end of period

$

47,215

$

3,456

$

10,654

$

—

$

61,325

Net investment in leases and loans, before allowance

$

803,689

$

26,472

$

76,778

$

1,114

$

908,053

-19-

Nine Months Ended September 30, 2021

(Dollars in thousands)

Equipment

Finance

Working

Capital

Loans

CVG

CRA

Total

Allowance for credit losses, beginning of period

$

33,184

$

1,206

$

9,838

$

—

$

44,228

 Charge-offs

(8,556)

(813)

(1,176)

—

(10,545)

 Recoveries

3,933

432

308

—

4,673

Net charge-offs

(4,623)

(381)

(868)

—

(5,872)

Realized cashflows from Residual Income

3,175

—

—

—

3,175

 Provision for credit losses

(13,359)

374

(1,025)

—

(14,010)

Allowance for credit losses, end of period

$

18,377

$

1,199

$

7,945

$

—

$

27,521

Net investment in leases and loans, before allowance

$

717,697

$

31,178

$

70,859

$

1,019

$

820,753

Nine Months Ended September 30, 2020

(Dollars in thousands)

Equipment

Finance

Working

Capital

Loans

CVG

CRA &

PPP

Total

Allowance for credit losses, December 31, 2019

$

18,334

$

1,899

$

1,462

$

—

$

21,695

Adoption of ASU 2016-13 (CECL)

(1)

9,264

(3)

2,647

—

11,908

Allowance for credit losses, beginning of period

$

27,598

$

1,896

$

4,109

$

—

$

33,603

 Charge-offs

(24,723)

(2,598)

(2,157)

—

(29,478)

 Recoveries

2,237

156

257

—

2,650

 Net charge-offs

(22,486)

(2,442)

(1,900)

—

(26,828)

Realized cashflows from Residual Income

3,390

—

—

—

3,390

 Provision for credit losses

38,713

4,002

8,445

—

51,160

Allowance for credit losses, end of period

$

47,215

$

3,456

$

10,654

$

—

$

61,325

Net investment in leases and loans, before allowance

$

803,689

$

26,472

$

76,778

$

1,114

$

908,053

__________________

(1)

 The Company adopted ASU 2016-13,

Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on

Financial Instruments

, which changed our accounting policy and estimated allowance, effective January 1, 2020. See further

discussion in Note 2, “Summary of Significant Accounting Policies”, and below.

-20-

Estimate of Current Expected Credit Losses (CECL)

The Company uses a vintage loss model as the approach to estimate and measure its expected credit losses for all portfolio segments

and for all pools, primarily because the timing of the losses realized has been consistent across historical vintages, such that the

company is able to develop a predictable and reliable loss curve for each separate portfolio segment. The vintage model assigns loans

to vintages by origination date, measures our historical average actual loss and recovery experience within that vintage, develops a

loss curve based on the averages of all vintages, and predicts (or forecasts) the remaining expected net losses of the current portfolio

by applying the expected net loss rates to the remaining life of each open vintage.

Additional detail specific to the measurement of each portfolio segment as of September 30, 2021, is summarized below. 

Equipment Finance:

Equipment Finance consists of Equipment Finance Agreements, Installment Purchase Agreements and other leases and loans. 

The risk characteristics referenced to develop pools of Equipment Finance leases and loans are based on internally developed

credit score ratings, which is a measurement that combines many risk characteristics, including loan size, external credit

scores, existence of a guarantee, and various characteristics of the borrower’s business. In addition, the Company separately

measured a pool of true leases so that any future cashflows from residuals could be used to partially offset the allowance for

that pool. 

The Company’s measurement of Equipment Finance pools is based on its own historical loss experience. The Company

analyzed the correlation of its own loss data from 2004 to 2019 against various economic variables in order to determine an

approach for reasonable and supportable forecast. The Company then selected certain economic variables to reference for its

forecast about the future, specifically the unemployment rate and growth in business bankruptcy. The Company’s

methodology reverts from the forecast data to its own loss data adjusted for the long-term average of the referenced economic

variables, on a straight-line basis.

At each reporting date, the Company considers current conditions, including changes in portfolio composition or the business

environment, when determining the appropriate measurement of current expected credit losses for the remaining life of its

portfolio. As of the January 1, 2020 adoption date, the Company utilized a 12-month forecast period and 12-month straight-

line reversion period, based on its initial assessment of the appropriate timing. 

However, starting with the March 31, 2020 measurement, the Company adjusted its model to reference a 6-month forecast

period and 12-month straight line reversion period. The change in the length of the reasonable and supportable forecast was

based on observed market volatility in March 2020. During the first quarter of 2021, the Company reverted to the pre-

COVID 12-month forecast period and 12-month straight line reversion period and continued using this forecast in the second

and third quarters of 2021 as uncertainty in the macroeconomic environment has lessened and the Company’s portfolio has

stabilized with low net charge-offs and delinquencies. The continued positive economic forecast resulted in provision

benefits for Equipment Finance of $

1.3

 million and $

13.4

 million for the three and nine-months ended September 30, 2021,

respectively, as compared to provisions of $

7.2

 million and $

38.7

 million for the same periods in 2020 during the height of

the COVID-19 pandemic. 

Working Capital:

The risk characteristics referenced to develop pools of Working Capital loans is based on origination channel, separately

considering an estimation of loss for direct-sourced loans versus loans that were sourced from a broker. The Company’s

historical relationship with its direct-sourced customers typically results in a lower level of credit risk than loans sourced

from brokers where the Company has no prior credit relationship with the customer. 

The Company’s measurement of Working Capital pools is based on its own historical loss experience. The Company’s

Working Capital loans typically range from 6 – 12 months of duration. For this portfolio segment, due to the short contract

duration, the Company did not define a standard methodology to adjust its loss estimate based on a forecast of economic

conditions. However, the Company will continually assess through a qualitative adjustment whether there are changes in

conditions and the environment that will impact the performance of these loans that should be considered for qualitative

adjustment.

-21-

At each reporting date, the Company considers current conditions, including changes in portfolio composition or the business

environment, when determining the appropriate measurement of current expected credit losses for the remaining life of its

portfolio. As of the January 1, 2020 adoption date, there was no qualitative adjustment to the Working Capital portfolio. 

However, starting with its March 31, 2020 measurement, driven by the elevated risk of credit loss driven by market

conditions due to COVID-19, the Company developed alternate scenarios for credit loss based on an analysis of the

characteristics of its portfolio, considering different timing and magnitudes of potential exposures. 

During the third quarter, the Company updated its expectation for credit losses for the Working Capital segment based on the

favorable actual portfolio performance during the quarter and a revised forecast based on its current assessment of risks in the

portfolio. Based on that analysis, the Company recognized a provision of $

0.3

 million for the three months ended September

30, 2021, bringing the total provision associated with Working Capital to $

0.4

 million for the nine months ended September

30, 2021.

Commercial Vehicle Group (CVG):

Transportation-related equipment leases and loans are analyzed as a single pool, as the Company did not consider any risk

characteristics to be significant enough to warrant disaggregating this population. 

The Company’s measurement of CVG is based on a combination of its own historical loss experience and industry loss data

from an external source. The Company has limited history of this product, and therefore the Company determined it was

appropriate to develop an estimate based on a combination of internal and industry data. Due to the Company’s limited

history of performance of this segment, and the limited size of the portfolio, the Company did not develop a standard

methodology to adjust its loss estimate based on a forecast of economic conditions. However, the Company will continually

assess through a qualitative adjustment whether there are changes in conditions and the environment that will impact the

performance of these loans that should be considered for qualitative adjustment.

At each reporting date, the Company considers current conditions, including changes in portfolio composition or the business

environment, when determining the appropriate measurement for the remaining life of the current portfolio. As of the

January 1, 2020 adoption date, there were no qualitative adjustment to the CVG portfolio. However, starting with the March

31, 2020 measurement, driven by the elevated risk of credit loss driven by market conditions due to COVID-19, the

Company developed alternate scenarios for expected credit loss for this segment, considering different timing and

magnitudes of potential exposures. 

Beginning in the first quarter of 2021, the Company updated its expectation for credit losses for the CVG segment, including

separately assessing the elevated risks of a population of motor coach industry contracts that are facing prolonged impacts

from COVID-19. While the segment continues to evidence negative impacts from COVID-19 as seen in the segment’s

delinquency and modification balances, it is also experiencing positive indicators such as paydown of balance. These factors,

including no further significant reduction in collateral values resulted in the qualitative reserve remaining unchanged from the

prior quarter at $

4.7

 million of total CVG qualitative adjustments for COVID-19 related risks.

Community Reinvestment Act (CRA) Loans:

CRA loans are comprised of loans originated under a line of credit to satisfy the Company’s obligations under the CRA. The

Company does not measure an allowance specific to this population because the exposure to credit loss is nominal.

For the three and nine-months ended September 30, 2021, the Company recognized provision benefits of $

1.2

 million, and $

14.0

million, respectively, driven primarily by improving economic forecasts and portfolio performance.

Our reserve as of September 30, 2021, and the qualitative and economic adjustments discussed above, were calculated referencing our

historical loss experience, including loss experience through the 2008 economic cycle, and our adjustments to that experience based

on our judgements about the extent of the impact of the COVID-19 pandemic. Those judgements include certain expectations for the

extent and timing of impacts from COVID-19 on unemployment rates and business bankruptcies and are based on our current

expectations of the performance of our portfolio in the current environment. We may recognize credit losses in excess of our reserve

or revise our estimate of credit losses in the future, and such amounts may be significant, based on (i) the actual performance of our

portfolio, including the performance of the modified portfolio, (ii) any further changes in the economic environment, or (iii) other

developments or unforeseen circumstances that impact our portfolio.

-22-

Loan Modification Program:

In response to COVID-19, starting in mid-March 2020, the Company instituted a Loan modification payment deferral program in

order to assist its customers that requested relief and were current under their existing agreement. The payment deferral program

allows for up to 6 months of fully deferred or reduced payments. As of September 30, 2021, the Company’s Loan modification

program has been terminated, with future modifications considered and granted on a case-by-case basis.

As of September 30, 2021, the Company had

3,460

 active modified leases and loans totaling $

69.5

 million of which all except $

0.5

million were out of the deferral period. Out of the deferral period means the contract has returned to its regular payment schedule. For

loans in deferral period, the deferral may either be full, with zero payment owed during the deferral period, or partial, with reduced

payments during deferral that are primarily

25

%-

50

% of schedule, or the deferral period payment may be a nominal amount.

Total resolved modifications include

311

 contracts charged off where a $

7.0

 million credit loss was realized, and

1,848

 contracts that

paid in full.

TDRs are restructurings of leases and loans in which, due to the borrower's financial difficulties, a lender grants a concession that it

would not otherwise consider for borrowers of similar credit quality. In accordance with the interagency guidance as updated in April

2020, that the FASB concurred with, loans modified under the Company’s payment deferral program are not considered TDRs. As of

September 30, 2021, the Company had $

10.3

 million of active contracts designated as TDRs.

Credit Quality

At origination, the Company utilizes an internally developed credit score ratings as part of its underwriting assessment and pricing

decisions for new contracts. The internal credit score is a measurement that combines many risk characteristics, including loan size,

external credit scores, existence of a guarantee, and various characteristics of the borrower’s business. The internal credit score is

used to create pools of loans for analysis in the Company’s Equipment Finance portfolio segment, as discussed further above. We

believe this segmentation allows our loss modeling to properly reflect changes in portfolio mix driven by sales activity and

adjustments to underwriting standards. However, this score is not updated after origination date for analyzing the Company’s

provision.

On an ongoing basis, to monitor the credit quality of its portfolio, the Company primarily reviews the current delinquency of the

portfolio and delinquency migration to monitor risk and default trends . We believe that delinquency is the best factor to use to monitor

the credit quality of our portfolio on an ongoing basis because it reflects the current condition of the portfolio and is a good predictor

of near-term charge-offs and can help with identifying trends and emerging risks to the portfolio. 

The following tables provide information about delinquent leases and loans in the Company’s portfolio based on the contract’s status

as-of the dates presented. In particular, contracts that are part of the Loan Modification Program discussed above are presented in the

below delinquency table and the non-accrual information for September 30, 2021 based on their status with respect to the modified

terms.

-23-

Portfolio by Origination Year as of September 30, 2021

Total

2021

2020

2019

2018

2017

Prior

Receivables

(Dollars in thousands)

Equipment Finance

30-59

$

612

$

688

$

1,149

$

435

$

230

$

31

$

3,145

60-89

179

146

584

277

78

28

1,292

90+

91

266

323

197

90

31

998

Total Past Due

882

1,100

2,056

909

398

90

5,435

Current

203,688

196,444

192,259

83,310

32,507

4,054

712,262

Total

204,570

197,544

194,315

84,219

32,905

4,144

717,697

Working Capital

30-59

224

26

—

—

—

—

250

60-89

51

—

43

—

—

—

94

90+

—

24

—

—

—

—

24

Total Past Due

275

50

43

—

—

—

368

Current

28,626

1,901

283

—

—

—

30,810

Total

28,901

1,951

326

—

—

—

31,178

CVG

30-59

—

—

—

7

2

41

50

60-89

51

157

91

14

—

—

313

90+

—

—

74

55

—

—

129

Total Past Due

51

157

165

76

2

41

492

Current

21,695

13,879

23,270

8,735

2,393

395

70,367

Total

21,746

14,036

23,435

8,811

2,395

436

70,859

CRA

Total Past Due

—

—

—

—

—

—

—

Current

1,019

—

—

—

—

—

1,019

Total

1,019

—

—

—

—

—

1,019

Net investment in leases

and loans, before allowance

$

256,236

$

213,531

$

218,076

$

93,030

$

35,300

$

4,580

$

820,753

-24-

Portfolio by Origination Year as of December 31, 2020

Total

2020

2019

2018

2017

2016

Prior

Receivables

(Dollars in thousands)

Equipment Finance

30-59

$

1,162

$

1,526

$

1,349

$

690

$

292

$

14

$

5,033

60-89

367

1,111

463

532

130

6

2,609

90+

503

1,370

804

377

199

16

3,269

Total Past Due

2,032

4,007

2,616

1,599

621

36

10,911

Current

265,036

276,140

138,142

65,722

18,805

1,615

765,460

Total

267,068

280,147

140,758

67,321

19,426

1,651

776,371

Working Capital

30-59

125

481

—

—

—

—

606

60-89

—

135

—

—

—

—

135

90+

—

—

—

—

—

—

—

Total Past Due

125

616

—

—

—

—

741

Current

12,741

6,528

24

—

—

—

19,293

Total

12,866

7,144

24

—

—

—

20,034

CVG

30-59

591

1,039

173

29

21

—

1,853

60-89

—

69

33

—

68

—

170

90+

—

340

179

5

11

—

535

Total Past Due

591

1,448

385

34

100

—

2,558

Current

17,065

30,805

13,733

5,938

1,659

30

69,230

Total

17,656

32,253

14,118

5,972

1,759

30

71,788

CRA

Total Past Due

—

—

—

—

—

—

—

Current

1,091

—

—

—

—

—

1,091

Total

1,091

—

—

—

—

—

1,091

Net investment in leases

and loans, before allowance

$

298,681

$

319,544

$

154,900

$

73,293

$

21,185

$

1,681

$

869,284

Net investments in Equipment Finance and CVG leases and loans are generally charged-off when they are contractually past due for

120 days or more. Income recognition is discontinued when a default on monthly payment exists for a period of 90 days or more.

Income recognition resumes when a lease or loan becomes less than 90 days delinquent. At September 30, 2021 and December 31,

2020, there were

no

 finance receivables past due 90 days or more and still accruing. 

-25-

Working Capital Loans are generally placed in non-accrual status when they are 30 days past due and generally charged-off at 60 days

past due. Both Equipment Finance and Working Capital loans are considered for non-accrual status if and when they are modified and

classified as a troubled debt restructuring. The loan is removed from non-accrual status once sufficient payments are made to bring the

loan current and reviewed by management. At September 30, 2021 and December 31, 2020, there were

no

 Working Capital Loans

past due 30 days or more and still accruing.

The following tables provide information about non-accrual leases and loans:

September 30,

December 31,

(Dollars in thousands)

2021

2020

Equipment Finance

$

2,485

$

5,543

Working Capital Loans

139

932

CVG

7,495

7,814

Total Non-Accrual

$

10,119

$

14,289

NOTE 7 - Goodwill and Intangible Assets

Goodwill

In the first quarter of 2020, driven by negative events that impacted the Company related to the COVID-19 economic shutdown, the

Company concluded that the implied fair value of its $

6.7

 million goodwill balance was less than the carrying amount and recognized

impairment equal to the $

6.7

 million balance in the March 31, 2020 Consolidated Statements of Operations.

Intangible assets

The following table presents details of the Company’s intangible assets as of September 30, 2021:

Gross Carrying

Accumulated

Net

(Dollars in thousands)

Useful Life

Amount

Amortization

Value

Vendor relationships

11

years

$

7,290

$

2,134

$

5,156

Corporate trade name

7

years

60

41

19

 Total

$

7,350

$

2,175

$

5,175

The Company’s intangible assets consist of definite-lived assets in connection with the January 2017 acquisition of Horizon Keystone

Financial, and definite-lived intangible assets in connection with the September 2018 acquisition of Fleet Financing Resources. The

Company has

no

 indefinite-lived intangible assets. 

There was

no

 impairment of these assets in the nine-months ended September 30, 2021 or 2020. Amortization related to the

Company’s definite lived intangible assets was $

0.5

 million and $

0.6

 million for the nine-month periods ended September 30, 2021

and September 30, 2020, respectively.

-26-

The Company expects the amortization expense for the next five years will be as follows:

Amortization

(Dollars in thousands)

Expense

Remainder of 2021

$

168

2022

671

2023

671

2024

663

2025

663

NOTE 8 – Other Assets

Other assets are comprised of the following:

September 30,

December 31,

2021

2020

(Dollars in thousands)

Accrued fees receivable

$

2,289

$

2,928

Prepaid expenses

2,404

2,790

Income taxes receivable 

8,214

—

Federal Reserve Bank Stock

1,711

1,711

Other 

1,942

2,783

$

16,560

$

10,212

NOTE 9 – Deposits

MBB serves as the Company’s primary funding source. MBB issues fixed-rate FDIC-insured certificates of deposit raised nationally

through various brokered deposit relationships and fixed-rate FDIC-insured deposits received from direct sources. MBB offers FDIC-

insured money market deposit accounts (the “MMDA Product”) through participation in a partner bank’s insured savings account

product. This brokered deposit product has a variable rate, no maturity date and is offered to the clients of the partner bank and

recorded as a single deposit account at MBB. As of September 30, 2021, money market deposit accounts totaled $

55.0

 million.

As of September 30, 2021, the scheduled maturities of certificates of deposits are as follows:

Scheduled

Dollars in thousands

Maturities

Period Ending December 31,

Remainder of 2021

$

391,752

2022

204,023

2023

91,829

2024

33,321

2025

9,054

Total

$

729,979

Certificates of deposits issued by MBB are time deposits and are generally issued in denominations of $

250,000

 or less. The MMDA

Product is also issued to customers in amounts less than $

250,000

. The FDIC insures deposits up to $

250,000

 per depositor. The

weighted average all-in interest rate of deposits at September 30, 2021 was

1.07

%.

See Note 14 –

Subsequent Events

 for a discussion of an agreement entered into by MBB in October 2021 to transfer its portfolio of

brokered certificates of deposit held through The Depository Trust Company.

-27-

NOTE 10 – Debt and Financing Arrangements

Long-term Borrowings

Borrowings with an original maturity date of one year or more are classified as long-term borrowings. The Company’s term note

securitizations are classified as long-term borrowings.

The balance of long-term borrowings consisted of the following:

September 30,

December 31,

2021

2020

(Dollars in thousands)

Term securitization 2018-1

$

11,719

$

30,800

Unamortized debt issuance costs

(43)

(135)

$

11,676

$

30,665

Long-term Borrowings

On July 27, 2018, the Company completed a $

201.7

 million asset-backed term securitization. Each tranche of the term note

securitization has a fixed term, fixed interest rate and fixed principal amount. At September 30, 2021, outstanding term securitizations

amounted to $

11.7

 million and are collateralized by $

12.8

 million of minimum lease and loan payments receivable and $

3.2

 million of

restricted interest-earning deposits. The Company’s term note securitizations are classified as long-term borrowings.

The term note securitization is summarized below:

Outstanding Balance as of

Notes

Final

Original 

September 30,

December 31,

Originally 

Maturity 

Coupon 

2021

2020

Issued

Date

Rate

(Dollars in thousands)

2018 — 1

 Class A-1 

$

—

$

—

$

77,400

July, 2019

2.55

%

 Class A-2 

—

—

55,700

October, 2020

3.05

 Class A-3 

—

—

36,910

April, 2023

3.36

 Class B

—

9,560

10,400

May, 2023

3.54

 Class C

1,869

11,390

11,390

June, 2023

3.70

 Class D

5,470

5,470

5,470

July, 2023

3.99

 Class E

4,380

4,380

4,380

May, 2025

5.02

Total Term Note Securitizations

$

11,719

$

30,800

$

201,650

3.05

%

(1)(2)

__________________

(1)

Represents the original weighted average initial coupon rate for all tranches of the securitization. In addition to this coupon

interest, term note securitizations have other transaction costs which are amortized over the life of the borrowings as additional

interest expense.

 (2)

The weighted average coupon rate of the 2018-1 term note securitization will approximate 4.33% over the remaining term of the

borrowing.

-28-

Based on current expected cashflows of leases underlying our term note securitization, principal and interest payments are estimated

as of September 30, 2021 as follows:

Principal

Interest

(Dollars in thousands)

Period Ending December 31,

Remainder of 2021

$

3,137

$

121

2022

8,582

$

159

$

11,719

$

280

Federal Funds Line of Credit with Correspondent Bank

MBB has established a federal funds line of credit with a correspondent bank. This line allows for both selling and purchasing of

federal funds. The amount that can be drawn against the line is limited to $

25.0

 million. As of September 30, 2021, and December 31,

2020, there were

no

 balances outstanding on this line of credit.

Federal Reserve Discount Window

In addition, MBB has received approval to borrow from the Federal Reserve Discount Window based on the amount of assets MBB

chooses to pledge. MBB had $

50.2

 million in unused, secured borrowing capacity at the Federal Reserve Discount Window, based on

$

55.9

 million of net investment in leases pledged at September 30, 2021.

-29-

NOTE 11 – Fair Value Measurements and Disclosures about the Fair Value of Financial Instruments

Fair Value Measurements

Fair value is defined in GAAP as the price that would be received to sell an asset or the price that would be paid to transfer a liability

on the measurement date. GAAP focuses on the exit price in the principal or most advantageous market for the asset or liability in an

orderly transaction between market participants. A three-level valuation hierarchy is required for disclosure of fair value

measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The fair value

hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the

lowest priority to unobservable inputs (Level 3). The level in the fair value hierarchy within which the fair value measurement in its

entirety falls is determined based on the lowest level input that is significant to the measurement in its entirety.

In accordance with the Merger Agreement and De-banking process discussed in Note 1, the Company sold all its investment securities

in the third quarter of 2021.

The Company’s balances measured at fair value on a recurring basis include the following as of September 30, 2021 and December

31, 2020:

September 30, 2021

December 31, 2020

Fair Value Measurements Using

Fair Value Measurements Using

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

(Dollars in thousands)

Assets

ABS

$

—

$

—

$

—

$

—

$

3,719

$

—

Municipal securities

—

—

—

—

4,145

—

Mutual fund

—

—

—

3,760

—

—

At this time, the Company has not elected to report any assets and liabilities using the fair value option. There have been

no

 transfers

between Level 1 and Level 2 of the fair value hierarchy for any of the periods presented.

Non-Recurring Measurements

Non-recurring fair value measurements include assets and liabilities that are periodically remeasured or assessed for impairment using

Fair value measurements. Non-recurring measurements include the Company’s evaluation of goodwill and residual assets for

impairment, and the Company’s remeasurement of contingent consideration and assessment of the carrying amount of its servicing

liability. 

For the nine months ended September 30, 2021, there were no significant amounts recognized in the Consolidated Statements of

Operations in connection with non-recurring fair value measurements.

For the nine months ended September 30, 2020, the Company recognized $

6.7

 million for the impairment of goodwill as discussed

further in Note 7 -

Goodwill and Intangible Assets

.

Fair Value of Other Financial Instruments 

The following summarizes the carrying amount and estimated fair value of the Company’s other financial instruments, including those

not measured at fair value on a recurring basis:

-30-

September 30, 2021

December 31, 2020

Carrying

Fair

Carrying

Fair

Amount

Value

Amount

Value

(Dollars in thousands)

Financial Assets

Cash and cash equivalents

$

222,260

$

222,260

$

135,691

$

135,691

Time deposits with banks

996

1,000

5,967

6,003

Restricted interest-earning deposits with banks

3,202

3,202

4,719

4,719

Loans, net of allowance

504,335

513,431

500,768

507,362

Federal Reserve Bank Stock

1,711

1,711

1,711

1,711

Financial Liabilities

 Deposits

$

783,203

$

790,175

$

729,614

$

742,882

 Long-term borrowings

11,676

11,961

30,665

31,114

There have been no significant changes in the methods and assumptions used in estimating the fair values of financial instruments, as

outlined in our consolidated financial statements and note disclosures in the Company’s Form 10-K for the year ended December 31,

2020.

-31-

NOTE 12 – Earnings Per Share 

The Company’s restricted stock awards are paid non-forfeitable common stock dividends and thus meet the criteria of participating

securities. Accordingly, earnings per share (“EPS”) has been calculated using the two-class method, under which earnings are

allocated to both common stock and participating securities. 

Basic EPS has been computed by dividing net income or loss allocated to common stock by the weighted average common shares

used in computing basic EPS. For the computation of basic EPS, all shares of restricted stock have been deducted from the weighted

average shares outstanding. 

Diluted EPS has been computed by dividing net income or loss allocated to common stock by the weighted average number of

common shares used in computing basic EPS, further adjusted by including the dilutive impact of the exercise or conversion of

common stock equivalents, such as stock options, into shares of comm on stock as if those securities were exercised or converted.

The following table provides net income and shares used in computing basic and diluted EPS:

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(Dollars in thousands, except per-share data)

Basic EPS

Net income (loss)

$

5,481

$

2,743

$

22,588

$

(14,960)

Less: net income allocated to participating securities

(69)

(36)

(281)

—

Net income (loss) allocated to common stock

$

5,412

$

2,707

$

22,307

$

(14,960)

Weighted average common shares outstanding 

12,026,443

11,946,549

12,007,963

11,951,375

Less: Unvested restricted stock awards considered participating

securities

(150,339)

(155,408)

(149,462)

(142,186)

Adjusted weighted average common shares used in computing

basic EPS

11,876,104

11,791,141

11,858,501

11,809,189

Basic EPS

$

0.46

$

0.23

$

1.88

$

(1.27)

Diluted EPS

Net income (loss) allocated to common stock

$

5,412

$

2,707

$

22,307

$

(14,960)

Adjusted weighted average common shares used in computing

basic EPS

11,876,104

11,791,141

11,858,501

11,809,189

Add: Effect of dilutive stock-based compensation awards

186,146

41,272

113,767

—

Adjusted weighted average common shares used in computing

diluted EPS

12,062,250

11,832,413

11,972,268

11,809,189

Diluted EPS

$

0.45

$

0.23

$

1.86

$

(1.27)

For the three-month periods ended September 30, 2021 and September 30, 2020, weighted average outstanding stock-based

compensation awards in the amount of

112,216

 and

230,428

, respectively, were considered antidilutive and therefore were not

considered in the computation of potential common shares for purposes of diluted EPS. 

For the nine-month periods ended September 30, 2021 and September 30, 2020, weighted average outstanding stock-based

compensation awards in the amount of

132,619

 and

286,349

, respectively, were considered antidilutive and therefore were not

considered in the computation of potential common shares for purposes of diluted EPS.

-32-

NOTE 13 – Stockholders’ Equity 

Share Repurchases

During the three month and nine-month periods ended September 30, 2021, the Company did

no

t purchase any shares of its common

stock under the stock repurchase plan approved by the Company’s Board of Directors on August 1, 2019 (the “2019 Repurchase

Plan”). 

During the three-month period ended September 30, 2020, the Company did

no

t purchase any shares of its common stock under the

2019 Repurchase Plan. During the nine-month period ended September 30, 2020, the Company purchased

264,470

 shares of its

common stock under the 2019 Repurchase Plan at an average cost of $

16.09

 per share.

At September 30, 2021, the Company had $

4.7

 million of remaining authorizations under the 2019 Repurchase Plan. Pursuant to the

Merger Agreement, the Company may not repurchase shares of common stock (pursuant to the 2019 Repurchase Plan or otherwise)

without the prior written consent of Madeira Holdings, LLC.

In addition to the repurchases described above, participants in the Company’s 2014 Equity Compensation Plan (approved by the

Company’s shareholders on June 3, 2014) (the “2014 Plan”) and the Company’s 2019 Equity Compensation Plan (approved by the

Company’s shareholders on May 30, 2019) (as amended by the First Amendment approved by the Company’s shareholders on June 2,

2021, the “2019 Plan”) may have shares withheld to cover income taxes. During the three-month periods ended September 30, 2021

and September 30, 2020, there were

36

 shares and

18,446

 shares repurchased to cover income tax withholding under the 2014 Plan

and the 2019 Plan at an average cost of $

22.44

 per share and $

8.06

 per share, respectively. During the nine-month periods ended

September 30, 2021 and September 30, 2020, there were

16,198

 and

41,466

 shares repurchased to cover income tax withholding in

connection with shares granted under the 2014 Plan and the 2019 Plan at average per-share costs of $

14.07

 and $

10.70

, respectively.

Regulatory Capital Requirements

Through its issuance of FDIC-insured deposits, MBB serves as the Company’s primary funding source. Over time, MBB may offer

other products and services to the Company’s customer base. MBB operates as a Utah state-chartered, Federal Reserve member

commercial bank, insured by the FDIC. As a state-chartered Federal Reserve member bank, MBB is supervised by both the Federal

Reserve Bank of San Francisco and the Utah Department of Financial Institutions.

The Company and MBB are subject to capital adequacy regulations issued jointly by the federal bank regulatory agencies. These risk-

based capital and leverage guidelines make regulatory capital requirements more sensitive to differences in risk profiles among

banking organizations and consider off -balance sheet exposures in determining capital adequacy. The federal bank regulatory agencies

and/or the U.S. Congress may determine to increase capital requirements in the future due to the current economic environment.

Under the capital adequacy regulation, at least half of a banking organization’s total capital is required to be "Tier 1 Capital" as

defined in the regulations, comprised of common equity, retained earnings and a limited amount of non-cumulative perpetual

preferred stock. The remaining capital, "Tier 2 Capital," as defined in the regulations, may consist of other preferred stock, a limited

amount of term subordinated debt or a limited amount of the reserve for possible credit losses. The regulations establish minimum

leverage ratios for banking organizations, which are calculated by dividing Tier 1 Capital by total average assets. Recognizing that the

risk-based capital standards principally address credit risk rather than interest rate, liquidity, operational or other risks, many banking

organizations are expected to maintain capital in excess of the minimum standards. 

The Company and MBB operate under the Basel III capital adequacy standards. These standards require a minimum for Tier 1

leverage ratio of

4

%, minimum Tier 1 risk-based ratio of

6

%, and a total risk-based capital ratio of

8

%. The Basel III capital adequacy

standards established a new common equity Tier 1 risk-based capital ratio with a required

4.5

% minimum (

6.5

% to be considered

well-capitalized). The Company is required to have a level of regulatory capital in excess of the regulatory minimum and to have a

capital buffer above

2.5

%. If a banking organization does not maintain capital above the minimum plus the capital conservation buffer

it may be subject to restrictions on dividends, share buybacks, and certain discretionary payments such as bonus payments. 

CMLA Agreement. 

On March 25, 2020, MBB received notice from the FDIC that it had approved MBB’s request to rescind certain

nonstandard conditions in the FDIC’s order granting federal deposit insurance issued on March 20, 2007. Furthermore, effective

March 26, 2020, the FDIC, the Company and certain of the Company’s subsidiaries terminated the Capital Maintenance and Liquidity

-33-

Agreement (the “CMLA Agreement”) and the Parent Company Agreement, each entered into by and among the Company, certain of

its subsidiaries and the FDIC in conjunction with the opening of MBB. As a result of these actions, MBB is no longer required

pursuant to the CMLA Agreement to maintain a total risk-based capital ratio above

15

%. Rather, MBB must continue to maintain a

total risk-based capital ratio above

8

% to be considered adequately capitalized and above

10

% to be considered well-capitalized as

defined by banking regulations, while the Company must continue to maintain a total risk-based capital ratio as discussed in the

immediately preceding paragraph. The additional capital released by the termination of the CMLA Agreement is held at MBB and is

subject to the restrictions outlined in Title 12 part 208 of the Code of Federal Regulations (12 CFR 208.5), which places limitations on

bank dividends, including restricting dividends for any year to the earnings from the current and prior two calendar years less the

amount of cumulative dividends paid over that period. Any dividends declared above that amount and any return of permanent capital

would require prior approval of the Federal Reserve Board of Governors. As of September 30, 2021, MBB has the capacity under 12

CFR 208.5 to pay dividends to the Company without explicit approval from the Federal Reserve Board of Governors.

MBB’s Tier 1 Capital balance at September 30, 2021 was $

165.9

 million, which met all capital requirements to which MBB is subject

and qualified MBB for “well-capitalized” status. At September 30, 2021, the Company also exceeded its regulatory capital

requirements and was considered “well-capitalized” as defined by federal banking regulations and as required by the FDIC

Agreement. 

CECL Capital Transition. 

The Company adopted CECL, or a new measurement methodology for the allowance estimate, on January

1, 2020, as discussed further in Note 2—Summary of Significant Accounting Policies. Rules governing the Company’s regulatory

capital requirements give entities the option of delaying for two years the estimated impact of CECL on regulatory capital, followed

by a three-year transition period to phase out the aggregate amount of capital benefit, or a five-year transition in total. The Company

has elected to avail itself of the five-year transition. For measurements of regulatory capital in 2020 and 2021, under the two year

delay the Company shall prepare: (i) a measurement of its estimated allowance for credit losses under CECL, as reported in its balance

sheets; and (ii) a measurement of its estimated allowance under the historical incurred loss methodology, as prescribed by the

regulatory calculation. Any amount of provisions under CECL that is in excess of the incurred estimate will be an adjustment the

Company’s capital during the two-year delay. The three-year transition, starting in 2022, will phase in that adjustment straight -line,

such that

25

% of the transitional amounts will be included in the first year, and an additional

25

% over each of the next two years,

such that we will have phased in

75

% of the adjustment during year three. At the beginning of year 6 (2025) the Company will have

completely reflected the effects of CECL in its regulatory capital.

-34-

The following table sets forth the Tier 1 leverage ratio, common equity Tier 1 risk-based capital ratio, Tier 1 risk-based capital ratio

and total risk-based capital ratio for Marlin Business Services Corp. and MBB at September 30, 2021.

Minimum Capital

Well-Capitalized Capital

Actual

Requirement

Requirement

Ratio

Amount

Ratio

Amount

Ratio

Amount

(Dollars in thousands)

Tier 1 Leverage Capital

 Marlin Business Services Corp.

21.71%

$

217,465

4.00%

$

40,076

5.00%

$

50,095

 Marlin Business Bank

17.84%

$

165,937

4.00%

$

37,210

5.00%

$

46,513

Common Equity Tier 1 Risk-Based Capital

 Marlin Business Services Corp.

25.33%

$

217,465

4.50%

$

38,640

6.50%

$

55,813

 Marlin Business Bank

20.67%

$

165,937

4.50%

$

36,131

6.50%

$

52,189

Tier 1 Risk-based Capital

 Marlin Business Services Corp.

25.33%

$

217,465

6.00%

$

51,519

8.00%

$

68,693

 Marlin Business Bank

20.67%

$

165,937

6.00%

$

48,174

8.00%

$

64,232

Total Risk-based Capital

 Marlin Business Services Corp.

26.60%

$

228,405

8.00%

$

68,693

10.00%

$

85,866

 Marlin Business Bank

21.94%

$

176,181

8.00%

$

64,232

10.00%

$

80,290

Prompt Corrective Action

. The Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) requires the federal

regulators to take prompt corrective action against any undercapitalized institution. Five capital categories have been established

under federal banking regulations: well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and

critically undercapitalized. Well-capitalized institutions significantly exceed the required minimum level for each relevant capital

measure. Adequately capitalized institutions include depository institutions that meet but do not significantly exceed the required

minimum level for each relevant capital measure. Undercapitalized institutions consist of those that fail to meet the required minimum

level for one or more relevant capital measures. Significantly undercapitalized characterizes depository institutions with capital levels

significantly below the minimum requirements for any relevant capital measure. Critically undercapitalized refers to depository

institutions with minimal capital and at serious risk for government seizure.

Under certain circumstances, a well-capitalized, adequately capitalized or undercapitalized institution may be treated as if the

institution were in the next lower capital category. A depository institution is generally prohibited from making capital distributions,

including paying dividends, or paying management fees to a holding company if the institution would thereafter be undercapitalized. 

Institutions that are adequately capitalized but not well-capitalized cannot accept, renew or roll over brokered deposits except with a

waiver from the FDIC and are subject to restrictions on the interest rates that can be paid on such deposits. Undercapitalized

institutions may not accept, renew or roll over brokered deposits.

The federal bank regulatory agencies are permitted or, in certain cases, required to take certain actions with respect to institutions

falling within one of the three undercapitalized categories. Depending on the level of an institution’s capital, the agency’s corrective

powers include, among other things: 

• prohibiting the payment of principal and interest on subordinated debt ;

• prohibiting the holding company from making distributions without prior regulatory approval;

• placing limits on asset growth and restrictions on activities;

• placing additional restrictions on transactions with affiliates;

• restricting the interest rate the institution may pay on deposits;

-35-

• prohibiting the institution from accepting deposits from correspondent banks; and

• in the most severe cases, appointing a conservator or receiver for the institution.

A banking institution that is undercapitalized is required to submit a capital restoration plan, and such a plan will not be accepted

unless, among other things, the banking institution’s holding company guarantees the plan up to a certain specified amount. Any such

guarantee from a depository institution’s holding company is entitled to a priority of payment in bankruptcy. 

MBB’s total risk-based capital ratio of

21.94

% at September 30, 2021 exceeded the threshold for “well capitalized” status under the

applicable laws and regulations.

Dividends

. The Federal Reserve Board has issued policy statements requiring insured banks and bank holding companies to have an

established assessment process for maintaining capital commensurate with their overall risk profile. Such assessment process may

affect the ability of the organizations to pay dividends. Although generally organizations may pay dividends only out of current

operating earnings, dividends may be paid if the distribution is prudent relative to the organization’s financial position and risk profile,

after consideration of current and prospective economic conditions. As mentioned above, MBB’s ability to pay dividends to the

Company is subject to various regulatory requirements, including Title 12 part 208 of the Code of Federal Regulations (12 CFR

208.5), which places limitations on bank dividends. Furthermore, as a bank holding company, the Company’s ability to pay dividends

to its shareholders is also subject to various regulatory requirements, including Supervisory Letter SR 09-4,

Applying Supervisory

Guidance and Regulations on the Payment of Dividends, Stock Redemptions and Stock Repurchases at Bank Holding Companies.

Pursuant to the Merger Agreement, the Company may not, without the prior written consent of Madeira Holdings, LLC, declare or pay

any dividends, other than the Company’s regular quarterly cash dividends in an amount not to exceed $

0.14

 per quarter.

NOTE 14 – Subsequent Events 

Quarterly Dividend

The Company declared a dividend of $

0.14

 per share on October 28, 2021. The quarterly dividend, which is expected to result in a

dividend payment of approximately $

1.7

 million, is scheduled to be paid on

November 18, 2021

 to shareholders of record on the close

of business on

November 8, 2021

. It represents the Company’s

forty-first

 consecutive quarterly cash dividend. The payment of future

dividends will be subject to satisfaction of regulatory requirements appli cable to bank holding companies and approval by the

Company’s Board of Directors. In addition, pursuant to the Merger Agreement, the Company may not, without the prior written

consent of Madeira Holdings, LLC, declare or pay any future dividends other than the Company’s regular quarterly cash dividend in

an amount not to exceed $

0.14

 per quarter. 

Deposit Assignment & Assumption Agreement. 

On October 8, 2021, MBB entered into an agreement to transfer its portfolio of brokered certificates of deposit held through The

Depository Trust Company with an outstanding principal amount of approximately $

204.8

 million to a Federal Deposit Insurance

Corporation (“FDIC”)-insured depository institution. In exchange for the acquiror’s assumption of those deposits, MBB has agreed to

pay the acquiror at the time of transfer, in addition to the outstanding principal amount of the deposits, all accrued but unpaid interest

on the deposits as of the transfer date plus a sum of $

750,000

. The agreement contemplates that the transfer, which is subject to

(among other customary closing conditions) the approval of the Utah Department of Financial Institutions and of the FDIC pursuant to

Section 18(c) of the Federal Deposit Insurance Act, expected to occur in late December 2021 or early January 2022.

-36-

Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our

Consolidated Financial Statements and the related notes thereto in our Form 10-K for the year ended December 31, 2020 filed with

the SEC.

This discussion contains certain statements of a forward-looking nature that involve risks and uncertainties.

F

ORWARD

-L

OOKING

S

TATEMENTS

Certain statements in this document may include the words or phrases “can be,” “expects,” “plans,” “may,” “may affect,” “may

depend,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “if” and similar words and phrases that constitute “forward-

looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “1933 Act”), and Section 21E

of the Securities Exchange Act of 1934, as amended (the “1934 Act”). Investors are cautioned not to place undue reliance on these

forward-looking statements. Forward-looking statements are subject to various known and unknown risks and uncertainties and the

Company cautions that any forward-looking information provided by or on its behalf is not a guarantee of future performance.

Statements regarding the following subjects are forward-looking by their nature: (a) our expectations related to the proposed Merger,

including the timing thereof and the costs to be incurred in connection with the De-banking; (b) our business strategy; (c) our

projected operating results; (d) our ability to obtain external deposits or financing; (e) our understanding of our competition; and (f)

industry and market trends. The Company’s actual results could differ materially from those anticipated by such forward-looking

statements due to a number of factors, some of which are beyond the Company’s control, including, without limitation:

◾

our ability to complete our proposed merger with HPS Merger Sub, including to complete the De-banking within the timeline

required under the merger agreement, if at all;

◾

availability, terms and deployment of funding and capital; 

◾

changes in our industry, interest rates, the regulatory environment or the general economy resulting in changes to our

business strategy;

◾

the degree and nature of our competition;

◾

availability and retention of qualified personnel;

◾

general volatility of the capital markets;

◾

the effects of the COVID-19 pandemic; and

◾

the factors set forth in the section captioned “Risk Factors” in Item 1 of our Form 10-K for the year ended December 31,

2020 and in Part II—Item 1A of this Form 10-Q.

Forward-looking statements apply only as of the date made and the Company is not required to update forward-looking statements for

subsequent or unanticipated events or circumstances.

For any forward-looking statements contained in any document, we claim the

protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. As

used herein, the terms “Company,” “Marlin,” “Registrant,” “we,” “us” or “our” refer to Marlin Business Services Corp. and its

subsidiaries. 

O

VERVIEW

Founded in 1997, we are a nationwide provider of credit products and services to small and mid-sized businesses. The products and

services we provide to our customers include loans and leases for the acquisition of commercial equipment (including Commercial

Vehicle Group (“CVG”) assets) and working capital loans. In May 2000, we established AssuranceOne, Ltd., a Bermuda-based,

wholly-owned captive insurance subsidiary (“Assurance One”), which enables us to reinsure the property insurance coverage for the

equipment financed by Marlin Leasing Corporation (“MLC”) and Marlin Business Bank (“MBB”) for our small business customers.

In 2008, we opened MBB, a commercial bank chartered by the State of Utah and a member of the Federal Reserve System. MBB

serves as the Company’s primary funding source through its issuance of Federal Deposit Insurance Corporation (“FDIC”)-insured

deposits. In January 2017, we completed the acquisition of Horizon Keystone Financial, an equipment leasing company which

identifies and sources lease and loan contracts for investor partners for a fee, and in September 2018, we completed the acquisition of

Fleet Financing Resources, a company specializing in the leasing and financing of both new and used commercial vehicles, with an

emphasis on livery equipment and other types of commercial vehicles used by small businesses.

We access our end user customers primarily through origination sources consisting of independent commercial equipment dealers,

various national account programs, through direct solicitation of our end user customers and through relationships with select lease

and loan brokers. We use both a telephonic direct sales model and, for strategic larger accounts, outside sales executives to market to

-37-

our origination sources and end user customers. Through these origination sources, we are able to cost-effectively access end user

customers while also helping our origination sources obtain financing for their customers.

We fund our business primarily through the issuance of fixed and variable-rate FDIC-insured deposits and money market demand

accounts raised nationally by MBB, sales of pools of leases or loans, as well as, from time to time, fixed-rate asset backed

securitization transactions. 

E

XECUTIVE

S

UMMARY

Proposed Acquisition by a Subsidiary of Funds Managed by HPS Investment Partners, LLC.

On April 18, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the

Company, Madeira Holdings, LLC and HPS Merger Sub pursuant to which all outstanding shares of the Company’s common stock

will, subject to the terms and conditions of the Merger Agreement, be cancelled and converted into the merger consideration specified

in the Merger Agreement in an all cash transaction pursuant to a merger of the Company with and into HPS Merger Sub, with the

Company surviving (the “Merger”). On August 4, 2021, our shareholders approved the adoption of the Merger Agreement. The

Merger remains subject to, in addition to various other customary closing conditions, governmental and regulatory approvals and

completion of the De-banking.

We continue to operate the business and are focused on taking necessary actions to ensure we meet all closing conditions, including

completion of the De-banking.

See “Part I—Item 1A. Risk Factors—Risks Related to Our Strategies—"We may fail to consummate the proposed Merger Agreement,

and uncertainties related to the consummation of the transaction may have a material adverse effect on our business, financial position,

results of operations and cash flows, and negatively impact the price of our Common stock." in this Form 10-Q.

Business Update

In 2020, we faced unprecedented operating challenges and macro-economic uncertainty from the COVID-19 pandemic. Our initial

focus from the beginning of the COVID-19 crisis in the first quarter of 2020 was working with existing customers to protect the value

of our portfolio and limiting the erosion of shareholder capital.

Early in response to the onset of the pandemic, we temporarily tightened underwriting standards for areas of elevated risk and we

continue to update such risk assessments based on current conditions. As we have seen economic conditions improve and continued

excellent portfolio performance, our underwriting criteria and standards have been updated accordingly.

Most of our employees continue to work remotely but we have not experienced any significant interruption to our operations. We

began to return some of our employees back to the workplace in May 2021 based upon business needs and employee interest. We

currently intend to implement a hybrid approach to our return to the office beginning in early 2022; however, we will continually re-

evaluate our return to office approach as we monitor the trends in COVID-19 cases across the country.

Our third quarter results of net income of $5.5 million, or $0.45 earnings per share, were primarily driven by a $1.2 million provision

for credit losses benefit due to continued positive portfolio performance coupled with expense management benefits. Our total

originations in the third quarter 2021 were $98.6 million, which were 16% above total origination in the same quarter as last year, but

2% below the prior quarter. Additionally, total originations in the quarter were 46% below the pre-pandemic levels of 2019. 

Economic factors, including but not limited to employment conditions and global supply chain disruptions, have affected our

origination volumes; however, we are proactively increasing staffing in our sales organization in order to increase sales activities and

origination momentum.

Portfolio Trends and Performance

During the three months ended September 30, 2021, we generated 3,836 new Equipment Finance leases and loans with equipment

costs of $81.6 million, compared to 3,410 new Equipment Finance leases and loans with equipment costs of $65.8 million generated

for the three months ended September 30, 2020. Working Capital loan originations were $17.0 million during the three-month period

ended September 30, 2021, compared to $1.4 million for the three-month period ended September 30, 2020.

Overall, our average net investment in total finance receivables for the three-month period ended September 30, 2021 decreased

13.1% to $803.8 million, compared to $924.6 million for the three-month period ended September 30, 2020, which has caused a

corresponding reduction in interest and fee income.

-38-

Equipment Finance receivables delinquent over 30 days were 0.76% at September 30, 2021, down 137 basis points from 2.13% at

September 30, 2020 and down 83 basis points from 1.59% at December 31, 2020. Working Capital receivables over 15 days

delinquent were 1.49% at September 30, 2021, down 244 basis points from 3.93% at September 30, 2020 and down 351 basis point

from 5.00% at December 31, 2020. Annualized total net charge-offs for the third quarter of 2021 were 0.59% of average total finance

receivables as compared to 4.54% for the same period in 2020.

For the three-months ended September 30, 2021 we recognized a provision benefit of $1.2 million as compared to a provision net

expense of $7.2 million for the same period in 2020. The provision benefit in the third quarter of 2021 was primarily due to positive

changes in the outlook of macroeconomic assumptions to which the reserve is correlated as well as positive trends in portfolio

performance. Allowance for credit losses as a percentage of total finance receivables was 3.35% at September 30, 2021 compared with

6.75% at September 30, 2020.

-39-

F

INANCE

R

ECEIVABLES AND

A

SSET

Q

UALITY

The following table summarizes certain portfolio statistics for the periods presented:

September 30,

June 30,

December 31,

September 30,

2021

2021

2020

2020

(Dollars in thousands)

Finance receivables:

End of period

$

820,753

$

829,111

$

869,284

$

908,053

Average for the quarter

(1)

803,783

815,761

945,599

924,635

Origination Volume - three months

98,605

100,864

83,011

67,117

Origination Volume - nine months, through September 30

282,772

184,630

—

284,117

Assets Sold - three months

—

—

—

4,286

Assets Sold - nine months, through September 30

—

—

—

28,342

Leases and Loans Modified:

Payment deferral program

(2)

End of period

$

69,456

$

80,554

111,209

129,882

As a % of end of period receivables

(1)

8.5%

9.7%

12.8%

14.3%

Allowance for credit losses :

End of period

$

27,521

$

28,757

$

44,228

$

61,325

As a % of end of period receivables

(1)

3.35%

3.47%

5.09%

6.75%

Annualized net charge-offs 

 to average total finance receivables (quarter)

(1)

0.59%

0.60%

3.43%

4.54%

Delinquencies, end of period:

(3)

Equipment Finance and CVG:

Greater than 60 days past due, $

$

2,848

$

3,899

$

6,717

$

12,551

Greater than 60 days past due, %

0.35%

0.37%

0.77%

1.43%

Working Capital: 

Greater than 30 days past due, $

$

368

$

56

$

741

$

777

Greater than 30 days past due, %

1.18%

0.23%

3.69%

2.94%

__________________

(1)

For purposes of asset quality and allowance calculations, the effects of (i) the allowance for credit losses and (ii) initial direct costs and fees

deferred are excluded.

(2)

Contracts that are part of our Payment-deferral modification program, that allows for either full or partial payment deferral, will appear in our

Delinquency and Non-Accrual measures based on their performance against their modified terms. 

(3)

Calculated as a percentage of net investment in leases and loans. 

-40-

R

ESULTS OF

O

PERATIONS

Comparison of the Three-Month Periods Ended September 30, 2021 and September 30, 2020 

Net income.

Net income of $5.5 million was reported for the three-month period ended September 30, 2021, resulting in diluted EPS per share of

$0.45, compared to net income of $2.7 million and diluted loss per share of $0.23 for the three-month period ended September 30,

2020. This $2.8 million increase in Net income was primarily driven by:

-

$8.4 million decrease in Provision for credit losses, driven primarily by an improvement in economic conditions during the

past 12 months

;

-

$3.4 million decrease in net interest and fee income driven primarily by a decline in the size of our finance receivable

portfolio;

-

$2.1 million decrease in interest expense due to a decline in the deposit balance and rates, as well as continuing reduction of

long-term debt;

-

$1.5 million increase in general and administrative, primarily driven by a prior year $1.4 million reduction to the fair value of

the contingent consideration earn out liability related to our 2018 acquisition of the FFR business. 

Average balances and net interest margin.

The following table summarizes the Company’s average balances, interest income,

interest expense and average yields and rates on major categories of interest-earning assets and interest-bearing liabilities for the three-

month periods ended September 30, 2021 and September 30, 2020 .

-41-

Three Months Ended September 30,

2021

2020

(Dollars in thousands)

Average

Average

Average

Yields/

Average

Yields/

Balance

(1)

Interest

Rates

(2)

Balance

(1)

Interest

Rates

(2)

Interest-earning assets:

Interest-earning deposits with banks

$

142,540

$

28

0.08

%

$

165,257

$

30

0.07

%

Time Deposits

2,466

7

1.07

10,069

42

1.67

Restricted interest-earning deposits with banks

3,888

—

—

6,487

—

0.01

Securities available for sale

6,325

15

0.98

10,755

50

1.86

Net investment in leases

(3)

753,506

15,282

8.11

851,683

19,010

8.93

Loans receivable

(3)

50,277

2,324

18.49

72,952

3,266

17.91

 Total interest-earning assets

959,002

17,657

7.36

1,117,203

22,398

8.02

Non-interest-earning assets:

Cash and due from banks

5,686

5,515

Allowance for loan and lease losses

(29,621)

(61,470)

Intangible assets

5,285

6,982

Operating lease right-of-use assets

7,393

8,070

Property and equipment, net

9,252

8,580

Property tax receivables

9,395

8,949

Other assets

(4)

28,428

28,390

 Total non-interest-earning assets

35,818

5,016

 Total assets

$

994,820

$

1,122,219

Interest-bearing liabilities:

Certificate of Deposits

(5)

$

666,637

$

2,374

1.42

%

784,056

$

4,149

2.12

%

Money Market Deposits

(5)

53,611

40

0.30

51,563

38

0.29

Long-term borrowings

(5)

14,589

180

4.93

45,594

507

4.45

 Total interest-bearing liabilities

734,837

2,594

1.41

881,213

4,694

2.13

Non-interest-bearing liabilities:

Sales and property taxes payable

6,603

6,340

Operating lease liabilities

8,260

9,015

Accounts payable and accrued expenses

8,172

20,893

Net deferred income tax liability

25,181

21,865

 Total non-interest-bearing liabilities

48,216

58,113

 Total liabilities

783,053

939,326

Stockholders’ equity

211,768

182,893

 Total liabilities and stockholders’ equity

$

994,820

$

1,122,219

Net interest income

$

15,063

$

17,704

Interest rate spread

(6)

5.95

%

5.89

%

Net interest margin

(7)

6.28

%

6.34

%

Ratio of average interest-earning assets to

 average interest-bearing liabilities

130.51

%

126.78

%

__________________

(1)

Average balances were calculated using average daily balances. 

(2)

Annualized.

-42-

(3)

Average balances of leases and loans include non-accrual leases and loans, and are presented net of unearned income. The average balances of

leases and loans do not include the effects of (i) the allowance for credit losses and (ii) initial direct costs and fees deferred.

(4)

Includes operating leases.

(5) 

Includes effect of transaction costs. Amortization of transaction costs is on a straight-line basis, resulting in an increased average rate whenever

average portfolio balances are at reduced levels.

(6)

Interest rate spread represents the difference between the average yield on interest-earning assets and the average rate on interest-bearing liabilities.

(7)

Net interest margin represents net interest income as an annualized percentage of average interest-earning assets.

Changes due to volume and rate.

The following table presents the components of the changes in net interest income by volume and

rate.

Three Months Ended September 30, 2021 Compared To

Three Months Ended September 30, 2020

Increase (Decrease) Due To: 

Volume

(1)

Rate

(1)

Total

(Dollars in thousands)

Interest income:

Interest-earning deposits with banks

$

(4)

$

2

$

(2)

Time Deposits

(24)

(11)

(35)

Securities available for sale

(16)

(19)

(35)

Net investment in leases

(2,080)

(1,648)

(3,728)

Loans receivable

(1,045)

103

(942)

 Total interest income

(3,007)

(1,734)

(4,741)

Interest expense:

Certificate of Deposits

(558)

(1,217)

(1,775)

Money Market Deposits

1

1

2

Long-term borrowings

(377)

50

(327)

 Total interest expense

(693)

(1,407)

(2,100)

Net interest income

(2,486)

(155)

(2,642)

__________________

(1)

Changes due to volume and rate are calculated independently for each line item presented rather than presenting vertical subtotals for the

individual volume and rate columns.

Changes attributable to changes in volume represent changes in average balances multiplied by the

prior period’s average rates. Changes attributable to changes in rate represent changes in average rates multiplied by the prior year’s

average balances. Changes attributable to the combined impact of volume and rate have been allocated proportionately to the change due to

volume and the change due to rate.

-43-

Net interest and fee margin.

The following table summarizes the Company’s net interest and fee income as an annualized percentage

of average total finance receivables for the three-month periods ended September 30, 2021 and September 30, 2020.

Three Months Ended September 30,

2021

2020

(Dollars in thousands)

Interest income 

$

17,656

$

22,398

Fee income 

2,027

2,803

 Interest and fee income 

19,683

25,201

Interest expense 

2,594

4,694

 Net interest and fee income 

$

17,089

$

20,507

Average total finance receivables

(1)

$

803,783

$

924,635

Annualized percent of average total finance receivables:

Interest income 

8.79

%

9.69

%

Fee income 

1.01

1.21

 Interest and fee income 

9.80

10.90

Interest expense 

1.29

2.03

 Net interest and fee margin 

8.51

%

8.87

%

__________________

(1)

Total finance receivables include net investment in leases and loans. For the calculations above, the effects of (i) the allowance for credit losses

and (ii) initial direct costs and fees deferred are excluded. 

Net interest and fee income decreased $3.4 million, or 16.6%, to $17.1 million for the three months ended September 30, 2021 from

$20.5 million for the three months ended September 30, 2020. The annualized net interest and fee margin decreased 36 basis points to

8.51% in the three-month period ended September 30, 2021 from 8.87% for the corresponding period in 2020. 

Interest income, net of amortized initial direct costs and fees, was $17.7 million and $22.4 million for the three-month periods ended

September 30, 2021 and September 30, 2020, respectively. Average total finance receivables decreased $120.8 million, or 13.1%, to

$803.8 million at September 30, 2021 from $924.6 million at September 30, 2020. The decrease in average total finance receivables

was primarily due to lower origination volume along with the customary loan repayments and charge-offs. The average yield on the

portfolio decreased 90 basis points to 8.79% from 9.69% in the same quarter one year ago. Higher yielding working capital portfolio

made up a smaller percentage of the total portfolio during the third quarter of 2021 compared to the same period one year ago. The

weighted average implicit interest rate on new finance receivables originated increased 150 basis points to 10.83% for the three-month

period ended September 30, 2021 compared to 9.33% for the three-month period ended September 30, 2020. That increase was

primarily driven by a shift in the mix of originations as higher-yield Working Capital originations comprised $17.0 million of our

originations for the three months ended September 30, 2021, compared to $1.4 million in 2020. As the economy continues to recover

from the impacts of the COVID-19 pandemic the company is looking to grow originations. During the third quarter of 2021, the

company originated $98.6 million of total originations compared to $67.1 million in the same period one year ago. Additionally,

equipment finance approval percentage in the third quarter of 2021 was 50% which was up 10 basis points compared to the third

quarter of 2020.

Fee income was $2.0 million and $2.8 million for the three-month periods ended September 30, 2021 and September 30, 2020,

respectively, and included approximately $1.2 million and $1.7 million in late fee income for the three-month periods ended

September 30, 2021 and September 30, 2020, respectively. Late fees remained the largest component of fee income at 0.60% as an

annualized percentage of average total finance receivables for the three-month period ended September 30, 2021, compared to 0.74%

for the three-month period ended September 30, 2020. Fee income also included approximately $0.8 million and $1.1 million of early

buyout income for the three-month periods ended September 30, 2021 and September 30, 2020, respectively. Early buyout income is

driven by customer behavior, in which increased levels of this activity and related income have been recorded during the course of the

pandemic. 

-44-

Interest expense decreased $2.1 million to $2.6 million for the three-month period ended September 30, 2021 from $4.7 million for the

corresponding period in 2020, primarily due to a decrease of $1.8 million on lower deposit balances and rates. Additionally, there was

a decrease of $0.3 million due to the continuing reduction of long-term debt. Interest expense, as an annualized percentage of average

total finance receivables, decreased 74 basis points to 1.29% for the three -month period ended September 30, 2021, from 2.03% for

the corresponding period in 2020. The average balance of deposits was $720.2 million and $835.6 million for the three-month periods

ended September 30, 2021 and September 30, 2020, respectively.

For the three-month period ended September 30, 2021, average term securitization borrowings outstanding were $14.6 million at a

weighted average coupon of 4.93%. For the three-month period ended September 30, 2020, average term securitization borrowings

outstanding were $45.6 million at a weighted average coupon of 4.45%.

Our wholly-owned subsidiary, MBB, serves as our primary funding source. MBB raises fixed-rate and variable -rate FDIC-insured

deposits via the brokered certificates of deposit market, on a direct basis, and through the brokered MMDA Product. At September 30,

2021, brokered certificates of deposit represented approximately 70% of total deposits, while approximately 23% of total deposits

were obtained from direct channels, and 7% were in the brokered MMDA Product. 

Gain on Sale of Leases and Loans.

There were no asset sales for the three-month period ended September 30, 2021 as we retained all

of our origination volume on our balance sheet. There were $4.3 million of asset sales for the three-month period ended September 30,

2020 for a $0.1 million gain on sale of lease and loans. 

Our sales execution decisions, including the timing, volume and frequency of such sales, depend on many factors including our

origination volumes, the characteristics of our contracts versus market requirements, our current assessment of our balance sheet

composition and capital levels, and current market conditions, among other factors. There can be no assurance that we can execute

sales based on our prior experience or on terms that are acceptable to us.

Insurance premiums written and earned.

Insurance premiums written declined to $1.9 million for the three-month period ended

September 30, 2021, compared to $2.1 million for the three-month period ended September 30, 2020 as the overall portfolio

contracted.

Other income.

 Other income was $1.7 million and $2.0 million for the three-month periods ended September 30, 2021 and September

30, 2020, respectively.

Salaries and benefits expense.

 The following table summarizes the Company's Salary and benefits expense:

Three Months Ended September 30,

2021

2020

(Dollars in thousands)

Salary, benefits and payroll taxes

$

6,061

$

6,825

Incentive compensation

1,819

1,632

Commissions

282

58

 Total

$

8,162

$

8,515

Salaries and benefits expense.

 Salaries and benefits expense increased $0.4 million, or 4.2%, to $8.1 million for the three-month

period ended September 30, 2021 from $8.5 million for the corresponding period in 2020 primarily due to equity-based compensation

which was adjusted to lower target levels in the corresponding period in 2020 and due to higher commission and bonus in the 2021

period driven by increased origination volume.

-45-

General and administrative expense.

 The following table summarizes General and administrative expense:

Three Months Ended September 30,

2021

2020

(Dollars in thousands)

Occupancy and depreciation

$

1,174

$

1,483

Professional fees

965

910

Information technology

1,147

972

Marketing

398

162

Acquisition-related contingent payment fair value adjustment

—

(1,435)

Other G&A

2,516

2,625

 Total

$

6,200

$

4,717

General and administrative expense increased $1.5 million, or 31.6%, to $6.2 million for the three months ended September 30, 2021

from $4.7 million for the corresponding period in 2020 The primary driver of the change was a $1.4 million reduction in 2020 to the

fair value of the contingent consideration earn out liability related to our 2018 acquisition of the FFR business, driven by a forecasted

decrease in projected volumes, which decreased the liability for estimated payments. General and administrative expense as an

annualized percentage of average total finance receivables was 3.09% for the three-month period ended September 30, 2021,

compared to 2.48% for the three-month period ended September 30, 2020.

Provision for income taxes.

Income tax expense of $2.0 million was recorded for the three-month period ended September 30, 2021,

compared to $0.5 million for the three-month period ended September 30, 2020. Our effective tax rate was 27.1% for the three-month

period ended September 30, 2021, as compared to an effective tax rate of 16.1% for the three-month period ended September 30, 2020

which was driven by an interim reporting limitation on the amount of tax benefits that can be recognized under Accounting Standards

Codification (“ASC”) 740,

Income Taxes

.

-46-

Comparison of the Nine-Month Periods Ended September 30, 2021 and September 30, 2020

Net income/loss.

Net income of $22.6 million was reported for the nine-month period ended September 30, 2021, resulting in diluted EPS of $1.86,

compared to net loss of $15.0 million and diluted loss per share of $1.27 for the nine-month period ended September 30, 2020. This

$37.6 million increase in Net income was primarily driven by:

-

$65.2 million decrease in Provision for credit losses, primarily driven primarily by an improvement in economic conditions

during the past 12 months

;

-

$20.7 million decrease in interest and fee income driven primarily by a decline in the size of our finance receivable portfolio;

-

$7.1 million decrease in interest expense due to a decline in the deposit balance and rates, as well as continuing reduction of

long-term debt;

-

$2.4 million decrease in gain on leases and loans sold;

-

6.8 million decrease in Non-interest expense due to the primarily due to the $6.7 million goodwill impairment that was

recorded in the first quarter of 2020;

-

$16.8 million increase in Income tax expense.

Average balances and net interest margin.

The following table summarizes the Company’s average balances, interest income,

interest expense and average yields and rates on major categories of interest-earning assets and interest-bearing liabilities for the nine-

month periods ended September 30, 2021 and September 30, 2020 .

-47-

Nine Months Ended September 30,

2021

2020

(Dollars in thousands)

Average

Average

Average

Yields/

Average

Yields/

Balance

(1)

Interest

Rates

(2)

Balance

(1)

Interest

Rates

(2)

Interest-earning assets:

Interest-earning deposits with banks

$

117,394

$

57

0.07

%

$

161,528

$

388

0.32

%

Time Deposits

4,000

35

1.18

11,942

167

1.86

Restricted interest-earning deposits with banks

4,421

—

—

7,189

9

0.17

Securities available for sale

9,999

109

1.45

10,671

159

1.99

Net investment in leases

(3)

769,036

47,295

8.20

880,571

58,515

8.86

Loans receivable

(3)

48,637

6,118

16.77

90,353

13,873

20.47

 Total interest-earning assets

953,487

53,614

7.50

1,162,254

73,111

8.39

Non-interest-earning assets:

Cash and due from banks

6,113

5,547

Allowance for loan and lease losses

(37,863)

(47,253)

Intangible assets

5,453

7,189

Goodwill

—

2,221

Operating lease right-of-use assets

7,512

8,459

Property and equipment, net

8,948

8,387

Property tax receivables

9,401

9,270

Other assets

(4)

26,721

31,276

 Total non-interest-earning assets

26,285

25,096

 Total assets

$

979,772

$

1,187,350

Interest-bearing liabilities:

Certificate of Deposits

(5)

$

649,529

$

7,841

1.61

%

$

829,792

$

13,747

2.21

%

Money Market Deposits

(5)

53,323

117

0.29

42,883

196

0.61

Long-term borrowings

(5)

20,858

719

4.59

57,434

1,859

4.32

 Total interest-bearing liabilities

723,710

8,677

1.60

930,109

15,802

2.27

Non-interest-bearing liabilities:

Sales and property taxes payable

7,840

6,435

Operating lease liabilities

8,423

9,354

Accounts payable and accrued expenses

12,670

22,079

Net deferred income tax liability

23,916

25,959

 Total non-interest-bearing liabilities

52,849

63,827

 Total liabilities

776,559

993,936

Stockholders’ equity

203,213

193,414

 Total liabilities and stockholders’ equity

$

979,772

$

1,187,350

Net interest income

$

44,937

$

57,309

Interest rate spread

(6)

5.90

%

6.12

%

Net interest margin

(7)

6.28

%

6.57

%

Ratio of average interest-earning assets to

 average interest-bearing liabilities

131.75

%

124.96

%

-48-

_________________

(1)

Average balances were calculated using average daily balances.

(2)

Annualized.

(3)

Average balances of leases and loans include non-accrual leases and loans, and are presented net of unearned income. The average balances of leases and

loans do not include the effects of (i) the allowance for credit losses and (ii) initial direct costs and fees deferred.

(4)

Includes operating leases.

(5) 

Includes effect of transaction costs. Amortization of transaction costs is on a straight-line basis, resulting in an increased average rate whenever average

portfolio balances are at reduced levels.

(6)

Interest rate spread represents the difference between the average yield on interest-earning assets and the average rate on interest-bearing liabilities.

(7)

Net interest margin represents net interest income as an annualized percentage of average interest-earning assets.

The following table presents the components of the changes in net interest income by volume and rate.

Nine Months Ended September 30, 2021 Compared To

Nine Months Ended September 30, 2020

Increase (Decrease) Due To: 

Volume

(1)

Rate

(1)

Total

(Dollars in thousands)

Interest income:

Interest-earning deposits with banks

$

(84)

$

(247)

$

(331)

Time Deposits

(85)

(47)

(132)

Restricted interest-earning deposits with banks

(3)

(6)

(9)

Securities available for sale

(10)

(40)

(50)

Net investment in leases

(7,064)

(4,156)

(11,220)

Loans receivable

(5,573)

(2,182)

(7,755)

 Total interest income

(12,256)

(7,241)

(19,497)

Interest expense:

Certificate of Deposits

(2,626)

(3,280)

(5,906)

Money Market Deposits

40

(119)

(79)

Long-term borrowings

(1,253)

113

(1,140)

 Total interest expense

(3,063)

(4,062)

(7,125)

Net interest income

(9,929)

(2,443)

(12,372)

__________________

(1)

Changes due to volume and rate are calculated independently for each line item presented rather than presenting vertical subtotals for the individual

volume and rate columns.

Changes attributable to changes in volume represent changes in average balances multiplied by the prior period’s average

rates. Changes attributable to changes in rate represent changes in average rates multiplied by the prior year’s average balances. Changes attributable to

the combined impact of volume and rate have been allocated proportionately to the change due to volume and the change due to rate.

-49-

Net interest and fee margin.

The following table summarizes the Company’s net interest and fee income as an annualized percentage

of average total finance receivables for the nine-month periods ended September 30, 2021 and 2020.

Nine Months Ended September 30,

2021

2020

(Dollars in thousands)

Interest income 

$

53,622

$

73,111

Fee income 

6,795

8,019

 Interest and fee income 

60,417

81,130

Interest expense 

8,676

15,802

 Net interest and fee income 

$

51,741

$

65,328

Average total finance receivables

(1)

$

817,673

$

970,924

Percent of average total finance receivables:

Interest income 

8.74

%

10.04

%

Fee income 

1.11

1.10

 Interest and fee income 

9.85

11.14

Interest expense 

1.41

2.17

 Net interest and fee margin 

8.44

%

8.97

%

__________________

(1)

Total finance receivables include net investment in leases and loans. For the calculations above, the effects of (i) the allowance for credit losses and (ii)

initial direct costs and fees deferred are excluded. 

Net interest and fee income decreased $13.6 million, or 20.8%, to $51.7 million for the nine-month period ended September 30, 2021

from $65.3 million for the nine-month period ended September 30, 2020. The annualized net interest and fee margin decreased 53

basis points to 8.44% in the nine-month period ended September 30, 2021 from 8.97% for the corresponding period in 2020. 

Interest income, net of amortized initial direct costs and fees, decreased $19.5 million, or 26.7%, to $53.6 million for the nine-month

period ended September 30, 2021 from $73.1 million for the nine-month period ended September 30, 2020. The decrease in interest

income was principally due to a decrease in average yield of 130 basis points and by a 15.8% decrease in average total finance

receivables, which decreased $153.2 million to $817.7 million for the nine-months ended September 30, 2021 from $970.9 million for

the nine-months ended September 30, 2020. The decrease in average total finance receivables was primarily due to lower origination

volume along with the customary loan repayments and charge -offs. The weighted average implicit interest rate on new finance

receivables originated decreased 80 basis points to 10.16% for the nine-month period ended September 30, 2021, compared to 10.96%

for the nine-month period ended September 30, 2020. During the nine months of 2021, the company originated $282.7 million of total

originations compared to $284.1 million in the same period one year ago. Equipment finance approval percentage in the first nine

months of 2021 was 48% as compared to 41% for the same period one year ago.

Fee income was $6.8 million and $8.0 million for the nine-month periods ended September 30, 2021 and September 30, 2020,

respectively, and included approximately $4.0 million and $5.6 million in late fee income for the nine-month periods ended September

30, 2021 and September 30, 2020, respectively. Late fees remained the largest component of fee income at 0.66% as an annualized

percentage of average total finance receivables for the nine-month period ended September 30, 2021, compared to 0.77% for the nine-

month period ended September 30, 2020. Fee income also included approximately $2.7 million and $2.4 million of early buyout

income for the nine-month periods ended September 30, 2021 and September 30, 2020, respectively. Early buyout income is driven

by customer behavior, increased levels of this activity and related income have been recorded during the course of the pandemic. 

-50-

Interest expense decreased $7.1 million to $8.7 million for the nine-month period ended September 30, 2021 from $15.8 for the

corresponding period in 2020, primarily due to a decrease of $5.9 million on lower deposit balances and rates, as well as a decrease of

$1.0 million due to the continuing reduction of long-term debt. Interest expense, as an annualized percentage of average total finance

receivables, decreased 76 basis points to 1.41% for the nine-month period ended September 30, 2021, from 2.17% for the

corresponding period in 2020. The average balance of deposits was $702.9 million and $872.7 million for the nine-month periods

ended September 30, 2021 and September 30, 2020, respectively.

For the nine-month period ended September 30, 2021, average term securitization borrowings outstanding were $20.9 million at a

weighted average coupon of 4.59%. For the nine-month period ended September 30, 2020, average term securitization borrowings

outstanding were $57.4 million at a weighted average coupon of 4.32%

Our wholly-owned subsidiary, MBB, serves as our primary funding source. MBB raises fixed-rate and variable -rate FDIC-insured

deposits via the brokered certificates of deposit market, on a direct basis, and through the brokered MMDA Product. At September 30,

2021, brokered certificates of deposit represented approximately 70% of total deposits, while approximately 23% of total deposits

were obtained from direct channels, and 7% were in the brokered MMDA Product. 

Gain on Sale of Leases and Loans.

There were no asset sales for the nine-month period ended September 30, 2021 as we retained all

of our origination volume on our balance sheet. There were $28.3 million of asset sales for the nine-month period ended September

30, 2020 for a $2.4 million gain on sale of lease and loans. 

Our sales execution decisions, including the timing, volume and frequency of such sales, depend on many factors including our

origination volumes, the characteristics of our contracts versus market requirements, our current assessment of our balance sheet

composition and capital levels, and current market conditions, among other factors. In the current economy resulting from the

COVID-19 pandemic, we may have difficulty accessing the capital market and may find decreased interest and ability of

counterparties to purchase our contracts, or we may be unable to negotiate terms acceptable to us.

Insurance premiums written and earned.

Insurance premiums written declined to $5.9 million for the nine-month period ended

September 30, 2021, compared to $6.6 million for the nine-month period ended September 30, 2020 as the overall portfolio

contracted.

Other income.

 Other income was $9.8 million and $11.2 million for the nine-month periods ended September 30, 2021 and September

30, 2020, respectively. The decrease was primarily driven by a $0.6 million decrease on servicing of leases sold to third parties and a

$0.3 million decrease of lower insurance policy fees.

Salaries and benefits expense.

 The following table summarizes the Company's Salary and benefits expense:

Nine Months Ended September 30,

2021

2020

(Dollars in thousands)

Salary, benefits and payroll taxes

$

18,650

$

21,248

Incentive compensation

5,488

3,343

Commissions

858

1,111

 Total

$

24,996

$

25,702

Total salaries and benefits expense decreased to $25.0 million for the nine-month period ended September 30, 2021 compared to $25.7

million for the corresponding period in 2020. In 2020, in response to COVID-19, we reduced our workforce resulting in a lower

expense base. Our salary, benefits and payroll tax expense was $2.6 million lower for the nine-months ended September 30, 2021 than

for the same period of 2020, primarily driven by higher average headcount during the first nine months of 2020 and severance

recorded associated with the workforce reduction.

Incentive compensation increased $2.1 million, primarily due to equity-based compensation which was adjusted to lower target levels

in the corresponding period in 2020 and lower bonus on COVID related impacts on company performance. 

-51-

General and administrative expense.

 The following table summarizes General and administrative expense:

Nine Months Ended September 30,

2021

2020

(Dollars in thousands)

Property taxes

$

6,429

$

6,178

Occupancy and depreciation

3,276

4,218

Professional fees

5,329

2,994

Information technology

3,426

2,953

Marketing

917

870

FDIC Insurance

333

1,089

Acquisition-related contingent payment fair value adjustment

—

(1,435)

Other G&A

6,113

7,302

 Total

$

25,823

$

24,169

General and administrative expense increased to $25.8 million for the nine-months ended September 30, 2021 from $24.2 million

from the same period in 2020. Professional fees increased by $2.3 million primarily due to fees connected with the Merger

Agreement.

Goodwill impairment. 

In the first quarter of 2020, driven by negative events related to the COVID-19 economic shutdown, our

market capitalization falling below book value and other related impacts, we analyzed goodwill for impairment. We concluded that

the implied fair value of goodwill was less than it’s carrying amount, and recognized impairment equal to the entire $6.7 million

balance in the nine-months ended September 30, 2020.

Provision for income taxes.

Income tax expense of $8.0 million was recorded for the nine-month period ended September 30, 2021,

compared to an income tax benefit of $8.3 million for the nine-month period ended September 30, 2020. 

For the nine months ended September 30, 2021 our effective tax rate was 26.2% and for the nine months ended September 30, 2020,

our effective tax rate was 35.6%, driven by a $3.2 million discrete benefit, resulting from certain provisions in the Coronavirus Aid,

Relief, and Economic Security Act (“CARES Act”) that allow for a remeasurement of our federal net operating losses.

-52-

L

IQUIDITY AND

C

APITAL

R

ESOURCES

Our business requires a substantial amount of liquidity and capital to operate and grow. Our primary liquidity need is to fund new

originations; however, we also utilize liquidity for our financing needs (including our deposits and long term deposits), to fund

infrastructure and technology investment, to pay dividends and to pay administrative and other non-interest expenses. 

As a result of the uncertainties surrounding the actual and potential impacts of COVID-19 on our business and financial condition, in

the first quarter of 2020 we raised additional liquidity through the issuance of FDIC-insured deposits and we increased our borrowing

capacity at the Federal Reserve Discount Window. 

We are dependent upon the availability of financing from a variety of funding sources to satisfy these liquidity needs. Historically, we

have relied upon five principal types of external funding sources for our operations: 

•

FDIC-insured deposits issued by our wholly-owned subsidiary, MBB; 

 • borrowings under various bank facilities; 

 • financing of leases and loans in various warehouse facilities (all of which have since been repaid in full);

 • financing of leases through term note securitizations; and

 • sale of leases and loans through our capital markets capabilities.

Deposits issued by MBB represent our primary funding source for new originations, primarily through the issuance of FDIC insured

deposits. We are currently executing our De-banking process, after which time our primary sources of liquidity will transition to

third-party bank and securitization financing as opposed to FDIC-insured deposits. See “Items Subsequent to September 30, 2021”

below for more information regarding actions taken in the fourth quarter to effectuate this transition.

MBB is a Utah state-chartered, Federal Reserve member commercial bank. As such, MBB is supervised by both the Federal Reserve

Bank of San Francisco and the Utah Department of Financial Institutions.

We declared a dividend of $0.14 per share on July 29, 2021. The quarterly dividend was paid on August 19, 2021 to shareholders of

record on the close of business on August 9, 2021, which resulted in a dividend payment of approximately $1.7 million. It represented

the Company’s fortieth consecutive quarterly cash dividend. 

At September 30, 2021, we had approximately $25.0 million of available borrowing capacity from a federal funds line of credit with a

correspondent bank in addition to available cash and cash equivalents of $222.3 million. This amount excludes additional liquidity that

may be provided by the issuance of insured deposits through MBB.

Our debt to equity ratio was 3.69 to 1 at September 30, 2021 and 3.87 to 1 at December 31, 2020.

Net cash provided by investing activities was $52.5 million for the nine -month period ended September 30, 2021, compared to $87.6

million for the nine-month period ended September 30, 2020. The decrease in cash from investing activities is primarily due to

reductions of $29.7 million in principal collections on leases and loans and $25.7 million in proceeds from sales of leases originated

for investment offset by $11.1 million in proceeds received on the sale of our investment securities. 

Net cash provided by financing activities was $29.1 million for the nine-month period ended September 30, 2021, compared to net

cash used in financing activities of $61.7 million for the nine-month period ended September 30, 2020. The increase in cash flows

from financing activities is primarily due to an increase of $69.0 million in deposits and decreases of $17.5 million of term

securitization repayments and $4.5 million in repurchases of common stock. Financing activities also include transactions related to

the Company’s paymen t of dividends. 

Net cash provided by operating activities was $3.4 million and $45.0 million for the nine-month periods ended September 30, 2021

and September 30, 2020, respectively. Adjustments to reconcile net income or loss to net cash provided by operating activities

including goodwill impairment, provision for credit losses, changes in deferred income tax liability and leases originated for sale and

proceeds thereof are discussed in detail in the notes to the Consolidated Financial Statements.

We expect cash from operations, additional borrowings on existing and future credit facilities and funds from deposits to be adequate

to support our operations and projected growth for the next 12 months and the foreseeable future. 

-53-

Total Cash and Cash Equivalents.

Our objective is to maintain an adequate level of cash, investing any free cash in leases and loans.

We primarily fund our originations and growth using FDIC-insured deposits issued through MBB. Total cash and cash equivalents

available as of September 30, 2021 totaled $222.3 million, compared to $135.7 million at December 31, 2020. 

Time Deposits with Banks. 

Time deposits with banks are primarily composed of FDIC-insured certificates of deposits that have

original maturity dates of greater than 90 days. Generally, the certificates of deposits have the ability to redeem early, however, early

redemption penalties may be incurred. Total time deposits as of September 30, 2021 and December 31, 2020 totaled $1.0 million and

$6.0 million, respectively.

Restricted Interest-Earning Deposits with Banks

. As of September 30, 2021, and December 31, 2020, we had $3.2 million and $4.7

million, respectively, of cash that was classified as restricted interest-earning deposits with banks . Restricted interest-earning deposits

with banks consist primarily of various trust accounts related to our secured debt facilities. Therefore, these balances generally decline

as the term securitization borrowings are repaid. 

Borrowings.

Our primary borrowing relationship requires the pledging of eligible lease and loan receivables to secure amounts

advanced. Our secured borrowings amounted to $11.7 million at September 30, 2021 and $30.7million at December 31, 2020. 

Information pertaining to our borrowing facilities is as follows:

For the Nine Months Ended September 30, 2021

As of September 30, 2021

Maximum

Maximum

Month End

Average

Weighted

Weighted

Facility

Amount

Amount

Average

Amount

Average

Unused

Amount 

Outstanding 

Outstanding 

Rate

(3)

Outstanding 

Rate

(2)

Capacity

(1)

(Dollars in thousands)

Federal funds purchased

$

25,000

$

$

—

—

%

$

—

—

%

$

25,000

Term note securitizations

(4)

—

28,279

20,858

4.59

%

11,719

4.33

%

—

$

25,000

$

28,279

$

20,858

4.59

%

$

11,719

4.33

%

$

25,000

__________________

(1) Does not include MBB’s access to the Federal Reserve Discount Window, which is based on the amount of assets MBB chooses to pledge.

Based on assets pledged at September 30, 2021, MBB had $50.2 million in unused, secured borrowing capacity at the Federal Reserve Discount

Window. Additional liquidity that may be provided by the issuance of insured deposits is also excluded from this table.

 (2) Does not include transaction costs.

 (3) Includes transaction costs.

 (4) Our term note securitizations are one-time fundings that pay down over time without any ability for us to draw down additional amounts.

Federal Funds Line of Credit with Correspondent Bank

MBB has established a federal funds line of credit with a correspondent bank. This line allows for both selling and purchasing of

federal funds. The amount that can be drawn against the line is limited to $25.0 million. 

Federal Reserve Discount Window 

In addition, MBB has received approval to borrow from the Federal Reserve Discount Window based on the amount of assets MBB

chooses to pledge. MBB had $50.2 million in unused, secured borrowing capacity at the Federal Reserve Discount Window, based on

$55.9 million of net investment in leases pledged at September 30, 2021.

Term Note Securitizations

On July 27, 2018 we completed a $201.7 million asset-backed term securitization. It provides the company with fixed-cost borrowing

with the objective of diversifying its funding sources and is recorded in long-term borrowings in the Consolidated Balance Sheet.

In connection with this securitization transaction, we transferred leases to our bankruptcy remote special purpose wholly-owned

subsidiary (“SPE”) and issued term debt collateralized by such commercial leases to institutional investors in a private securities

offering. The SPE is considered variable interest entity (“VIE”) under U.S. GAAP. We continue to service the assets of our VIE and

-54-

retain equity and/or residual interests. Accordingly, assets and related debt of the VIE is included in the accompanying Consolidated

Balance Sheets. At September 30, 2021 and December 31, 2020 outstanding term securitizations amounted to $11.7 million and $30.8

million, respectively and the Company was in compliance with terms of the term note securitization agreement. See Note 10 – Debt

and Financing Arrangements in the accompanying Consolidated Financial Statements for detailed information regarding of our term

note securitization

Bank Capital and Regulatory Oversight

We are subject to regulation under the Bank Holding Company Act and we and all of our subsidiaries may be subject to examination

by the Federal Reserve Board and the Federal Reserve Bank even if not otherwise regulated by the Federal Reserve Board. We and

MBB are also subject to comprehensive federal and state regulations dealing with a wide variety of subjects, including minimum

capital standards, reserve requirements, terms on which a bank may engage in transactions with its affiliates, restrictions as to dividend

payments and numerous other aspects of operations. These regulations generally have been adopted to protect depositors and

creditors rather than shareholders. 

At September 30, 2021, Marlin Business Service Corp and MBB’s Tier 1 leverage ratio, common equity Tier 1 risk-based ratio, Tier 1

risk-based capital ratio and total risk-based capital ratios exceeded the requirements for well-capitalized status.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations —Executive Summary” for discussion

of updates to our capital requirements driven by the termination of the CMLA Agreement and driven by our election to utilize the five-

year transition related to the adoption of the CECL accounting standard. In addition, see Note 13—Stockholders’ Equity in the Notes

to Consolidated Financial Statements for additional information regarding these ratios and our levels at September 30, 2021.

Information on Stock Repurchases

Information on Stock Repurchases is provided in “Part II. Other Information, Item 2, Unregistered Sales of Equity Securities and Use

of Proceeds” herein.

Items Subsequent to September 30, 2021

The Company declared a dividend of $0.14 per share on October 28, 2021. The quarterly dividend, which is expected to result in a

dividend payment of approximately $1.7 million, is scheduled to be paid on November 18, 2021 to shareholders of record on the close

of business on November 8, 2021. It represents the Company’s forty-first consecutive quarterly cash dividend. The payment of future

dividends will be subject to satisfaction of regulatory requirements applicable to bank holding companies and approval by the

Company’s Board of Directors.

In addition, pursuant to the Merger Agreement, the Company may not, without the prior written

consent of Madeira Holdings, LLC, declare or pay any future dividends other than the Company’s regular quarterly cash dividend in

an amount not to exceed $0.14 per quarter.

On October 8, 2021, MBB entered into an agreement to transfer its portfolio of brokered certificates of deposit held through The

Depository Trust Company with an outstanding principal amount of approximately $204.8 million to a Federal Deposit Insurance

Corporation (“FDIC”)-insured depository institution. In exchange for the acquiror’s assumption of those deposits, MBB has agreed to

pay the acquiror at the time of transfer, in addition to the outstanding principal amount of the deposits, all accrued but unpaid interest

on the deposits as of the transfer date plus a sum of $750,000. The agreement contemplates that the transfer, which is subject to

(among other customary closing conditions) the approval of the Utah Department of Financial Institutions and of the FDIC pursuant to

Section 18(c) of the Federal Deposit Insurance Act, will occur in late December or early January.

MARKET INTEREST RATE RISK AND SENSITIVITY 

Market risk is the risk of losses arising from changes in values of financial instruments. We engage in transactions in the normal

course of business that expose us to market risks. We attempt to mitigate such risks through prudent management practices and

strategies such as attempting to match the expected cash flows of our assets and liabilities.

-55-

We are exposed to market risks associated with changes in interest rates and our earnings may fluctuate with changes in interest rates. 

The lease and loan assets we originate are almost entirely fixed-rate. Accordingly, we generally seek to finance these assets primarily

with fixed interest certificates of deposit issued by MBB, and to a lesser extent through the variable rate MMDA Product at MBB. 

C

RITICAL

A

CCOUNTING

P

OLICIES

There have been no significant changes to our Critical Accounting Policies as described in our Form 10-K for the year ended

December 31, 2020.

R

ECENTLY

I

SSUED

A

CCOUNTING

S

TANDARDS

Information on recently issued accounting pronouncements and the expected impact on our financial statements is provided in Note 2,

Summary of Significant Accounting Policies in the accompanying Notes to Consolidated Financial Statements.

R

ECENTLY

A

DOPTED

A

CCOUNTING

S

TANDARDS

Information on recently adopted accounting pronouncements and the expected impact on our financial statements is provided in Note

2, Summary of Significant Accounting Policies in the accompanying Notes to Consolidated Financial Statements.

-56-

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The information appearing in the section captioned “Management’s Discussion and Analysis of Financial Condition and Results of

Operations – Market Interest Rate Risk and Sensitivity” under Item 2 of Part I of this Form 10-Q is incorporated herein by reference.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Off icer (“CEO”) and Chief Financial Officer (“CFO”), evaluated the

effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. 

Based on that evaluation, the CEO and CFO concluded that our disclosure controls and procedures as of the end of the period covered

by this report are designed and operating effectively to provide reasonable assurance that the information required to be disclosed by

us in reports filed under the 1934 Act is (i) recorded, processed, summarized and reported within the time periods specified in the

SEC's rules and forms and (ii) accumulated and communicated to our management, including the CEO and CFO, as appropriate to

allow timely decisions regarding disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting identified in connection with management’s

evaluation that occurred during the Company's third fiscal quarter of 2021 that have materially affected, or are reasonably likely to

materially affect, the Company’s internal control over financial reporting. 

PART II. Other Information

Item 1. Legal Proceedings 

We are party to various legal proceedings, which include claims and litigation arising in the ordinary course of business. In the

opinion of management, these actions will not have a material impact on our business, financial condition, results of operations or

cash flows.

Following the announcement on April 18, 2021 of the proposed Merger, four complaints were filed against us and each member of our

Board of Directors, two of which were filed in the United States District Court for the Southern District of New York, one of which

was filed in the United States District Court for the Eastern District of New York and one of which was filed in the United States

District Court for the District of New Jersey. The complaints assert, among other things, claims under Section 14(a) and Section 20(a)

of the 1934 Act, and Rule 14a-9 promulgated thereunder, for allegedly causing a materially incomplete and misleading preliminary

proxy statement to be filed with the SEC and disseminated to the Company’s shareholders. The Company subsequently engaged in

arm’s-length negotiations with parties to three of the four complaints to attempt to resolve the claims asserted and reached an

agreement whereby the Company filed a Current Report on Form 8-K on July 23, 2021 (the “July 23 Form 8-K”) containing certain

supplemental disclosures regarding the Merger. The Company believes that the allegations and claims asserted in the complaints lack

merit, and that the supplemental disclosures set forth in the July 23 Form 8-K were not required or necessary under applicable laws.

However, solely in order to avoid the risk of the litigation delaying or otherwise adversely affecting the Merger and to minimize the

costs, risks, and uncertainties inherent in defending the litigation, the Company voluntarily filed the July 23 Form 8-K. The Company

denies any liability or wrongdoing in connection with the alleged claims, and nothing in the July 23 Form 8-K should be construed as

-57-

an admission of the legal necessity or materiality under applicable laws of any of the supplemental disclosures. See “Part I—Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Summary” in this Form 10-Q

for more information regarding the proposed Merger.

Item 1A. Risk Factors 

There have been no material changes in the risk factors disclosed in the Company’s Form 10-K for the year ended December 31, 2020,

other than as discussed below.

We may fail to consummate the proposed Merger, and uncertainties related to the consummation of the Merger may have a

material adverse effect on our business, financial position, results of operations and cash flows, and negatively impact the price of

our Common stock.

As previously discussed, on April 18, 2021, we entered into the Merger Agreement, pursuant to which all outstanding shares of the

Company’s common stock will, subject to the terms and conditions of the Merger Agreement, be cancelled and converted into the

merger consideration specified in the Merger Agreement in an all cash transaction pursuant to the Merger.

The Merger is subject to, in addition to various other customary closing conditions, governmental and regulatory approvals and

completion of the De-banking.

The Merger Agreement includes customary representations and warranties of the parties. We have also made certain additional

covenants in the Merger Agreement, including (a) covenants regarding the operation of our business and that of our subsidiaries

pending the closing of the Merger, and (b) a customary non-solicitation covenant prohibiting us from soliciting, providing non-public

information in response to, or entering into discussions or negotiations with respect to, proposals relating to alternative business

combination transactions, except as permitted under the Merger Agreement. The Merger Agreement provides that, upon termination

of the Merger Agreement under certain specified circumstances, including the acceptance of a Superior Proposal (as defined in the

Merger Agreement) for an alternative business combination transaction, we will be required to pay a termination fee of approximately

$10.3 million.

There is no assurance that the Merger will occur on the terms and timeline as set forth in the Merger Agreement and currently

contemplated, or at all. Potential risks and uncertainties include, but are not limited to:

• The Merger Agreement generally requires that we operate our business in the ordinary course pending consummation of

the proposed Merger and restricts us, without Madeira Holdings, LLC’s consent, from taking certain specified actions until the Merger

is completed. These restrictions may affect our ability to execute our business strategies and attain our financial and other goals which

could negatively impact our business and results of operations. 

• The efforts to satisfy the closing conditions of the proposed Merger, including the De-banking and regulatory approval

processes, may place a significant burden on management and internal resources, and the Merger whether or not consummated, may

result in a diversion of management’s attention from our day-to-day operations and result in a disruption of our operations. Any

significant diversion of management attention away from our ongoing business and any difficulties encountered in the Merger process

could negatively impact our business and results of operations. 

• We could be subject to litigation related to the proposed Merger, which could result in significant costs and expenses. In

addition to potential litigation-related expenses, we have incurred and will continue to incur other costs, expenses and fees for

professional services and other transaction costs in connection with the proposed Merger, and many of these fees and costs are payable

regardless of whether or not the proposed Merger is consummated. 

• The Merger Agreement contains certain termination provisions. If the proposed Merger is not completed or the Merger

Agreement is terminated, the price of our common stock may decline, including to the extent that the current market price of our

common stock reflects an assumption that the Merger will be consummated without unexpected delays.

All of the foregoing could materially and adversely affect our business, financial position, results of operations and cash flows.

-58-

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Information on Stock Repurchases

On August 1, 2019, the Company’s Board of Directors approved a stock repurchase plan (the “2019 Repurchase Plan”) under which

the Company is authorized to repurchase up to $10 million in value of its outstanding shares of common stock. This authority may be

exercised from time to time and in such amounts as market conditions warrant. Any shares purchased under this plan are returned to

the status of authorized but unissued shares of common stock. The repurchases may be made on the open market, in block trades or

otherwise. The stock repurchase program does not obligate the Company to acquire any particular amount of common stock, and it

may be suspended at any time at the Company's discretion. The repurchases are funded using the Company’s working capital. 

The Company did not repurchase any of its common stock during the three months ended September 30, 2021. As of September 30,

2021, the Company had $4.7 million remaining in the 2019 Repurchase Plan. Pursuant to the Merger Agreement, the Company may

not repurchase shares of common stock (pursuant to the 2019 Repurchase Plan or otherwise) without the prior written consent of

Madeira Holdings, LLC.

Pursuant to the 2014 Plan and the 2019 Plan, participants may have shares withheld to cover income taxes. During the three-month

period ended September 30, 2021, there were 36 shares repurchased to cover income tax withholding under the 2014 Plan and the

2019 Plan at an average cost of $22.44 per share.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None

-59-

 Item 6. Exhibits

Exhibit

Number

Description 

3.1 

Amended and Restated Articles of Incorporation

(1)

3.2

Amended and Restated Bylaws

(2)

3.3

Amendment to Amended and Restated Bylaws, effective as of April 20, 2020

(3) 

31.1 

Certification of the Chief Executive Officer of Marlin Business Services Corp. required by Rule 13a-14(a) under the

Securities Exchange Act of 1934, as amended

 (Filed herewith) 

31.2 

Certification of the Chief Financial Officer of Marlin Business Services Corp. required by Rule 13a-14(a) under the

Securities Exchange Act of 1934, as amended.

 (Filed herewith)

32.1 

Certification of the Chief Executive Officer and Chief Financial Officer of Marlin Business Services Corp. required by

Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for

purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that

section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities

Exchange Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)

 (Furnished herewith) 

101 Financial statements from the Quarterly Report on Form 10-Q of Marlin Business Services Corp. for the period ended

September 30, 2021, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of

Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of

Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Unaudited Consolidated

Financial Statements. (Submitted electronically with this report)

__________________

(1)

Previo

usly filed with the SEC as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 filed

on March 5, 2008, and incorporated by reference herein.

(2)

Previously filed with the SEC as an exhibit to the Registrant’s Current Report on Form 8-K filed on October 20, 2016, and incorporated by

reference herein.

(3)

Previously filed with the SEC as an exhibit to the Registrant’s Current Report on Form 8-K filed on April 24, 2020, and incorporated by

reference herein.

-60-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf

by the undersigned thereunto duly authorized. 

MARLIN BUSINESS SERVICES CORP.

(Registrant)

By: /s/ Jeff Hilzinger

Chief Executive Officer

 Jeff Hilzinger 

(Principal Executive Officer) 

By:

/s/ Michael R. Bogansky 

Michael R. Bogansky 

Chief Financial Officer & Senior Vice 

President 

 (Principal Financial Officer)

Date: October 29, 2021

EX-31.1

Exhibit 31.1

CERTIFICATION REQUIRED BY RULE 13a-14(a) OF

THE SECURITIES EXCHANGE ACT OF 1934

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Jeff Hilzinger, certify that: 

1. I have reviewed this quarterly report on Form 10-Q of Marlin Business Services Corp.; 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact

necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading

with respect to the periods covered by this report; 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all

material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods

presented in this report; 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and

procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as

defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed

under our supervision, to ensure that material information relating to the registrant, including its consolidated

subsidiaries, is made known to us by others within those entities, particularly during the periods in which this report

is being prepared; 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be

designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and

the preparation of financial statements for external purposes in accordance with generally accepted accounting

principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our

conclusions about the effectiveness of the disclosure controls and procedures as of the end of the periods covered by

this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during

the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that

has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial

reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over

financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons

performing the equivalent functions): 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial

reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and

report financial information; and 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the

registrant’s internal control over financial reporting. 

Date: October 29, 2021 

/s/

Jeff Hilzinger 

 Jeff Hilzinger

 Chief Executive Officer

Principal Executive Officer

EX-31.2

Exhibit 31.2 

CERTIFICATION REQUIRED BY RULE 13a-14(a) OF

THE SECURITIES EXCHANGE ACT OF 1934

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Michael R. Bogansky, certify that: 

1. I have reviewed this quarterly report on Form 10-Q of Marlin Business Services Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact

necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading

with respect to the periods covered by this report; 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all

material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods

presented in this report; 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and

procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as

defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed

under our supervision, to ensure that material information relating to the registrant, including its consolidated

subsidiaries, is made known to us by others within those entities, particularly during the periods in which this report

is being prepared; 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be

designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and

the preparation of financial statements for external purposes in accordance with generally accepted accounting

principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our

conclusions about the effectiveness of the disclosure controls and procedures as of the end of the periods covered by

this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during

the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that

has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial

reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over

financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons

performing the equivalent functions): 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial

reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and

report financial information; and 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the

registrant’s internal control over financial reporting. 

Date: October 29, 2021

 /s/ Michael R. Bogansky 

 Michael R. Bogansky

 Chief Financial Officer and Senior Vice President

Principal Financial Officer

EX-32.1

Exhibit 32.1 

CERTIFICATION PURSUANT TO 

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Quarterly Report on Form 10-Q of Marlin Business Services Corp. for the quarter ended

September 30, 2021 (the “Quarterly Report”), Jeff Hilzinger, as Chief Executive Officer, and Michael R. Bogansky, Chief Financial

Officer of the Company, each hereby certifies, that pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002, that, to the best of his knowledge: 

(1) The Quarterly Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and 

(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results

of operations of Marlin Business Services Corp. 

Date:

October 29, 2021

/s/ Jeff Hilzinger 

 Jeff Hilzinger

 Chief Executive Officer

 (Principal Executive Officer)

 /s/ Michael R. Bogansky

 Michael R. Bogansky

 Chief Financial Officer & Senior Vice President

 (Principal Financial Officer)

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2021	Oct. 22, 2021
Document And Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document transition report	false
Entity File Number	000-50448
Entity registrant name	MARLIN BUSINESS SERVICES CORP.
Entity Incorporation, State or Country Code	PA
Entity Tax Identification Number	38-3686388
Address Line 1	300 Fellowship Road
Name of the City or Town	Mount Laurel
Entity Address, State or Province	NJ
Postal or zip code	08054
Area code	888
Phone number	479-9111
Entity current reporting status	Yes
Entity Interactive Data Current	Yes
Security 12b Title	Common Stock, $.01 per share
Entity filer category	Accelerated Filer
Trading Symbol	MRLN
Security Exchange Name	NASDAQ
Entity Shell Company	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity common stock shares outstanding		12,026,394
Document Fiscal Year Focus	2021
Entity central index key	0001260968
Amendment flag	false
Document Fiscal Period Focus	Q3
Current fiscal year end date	--12-31
Document period end date	Sep. 30, 2021

XML

Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2021	Dec. 31, 2020
ASSETS
Cash and due from banks	$ 4,914,000	$ 5,473,000
Interest-earning deposits with banks	217,346,000	130,218,000
Total cash and cash equivalents	222,260,000	135,691,000
Time deposits with banks	996,000	5,967,000
Restricted interest-earning deposits related to consolidated VIEs	3,202,000	4,719,000
Investment securities (amortized cost $11.5 million at December 31, 2020)	0	11,624,000
Net investment in leases and loans [abstract]
Leases	295,514,000	337,159,000
Loans	525,239,000	532,125,000
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	820,753,000	869,284,000
Allowance for credit losses	(27,521,000)	(44,228,000)
Total net investment in leases and loans	793,232,000	825,056,000
Intangible assets	5,175,000	5,678,000
Operating lease right-of-use assets	7,268,000	7,623,000
Property and equipment, net	9,359,000	8,574,000
Property tax receivables, net of allowance	9,260,000	6,854,000
Other assets	16,560,000	10,212,000
Total assets	1,067,312,000	1,021,998,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits	783,203,000	729,614,000
Operating lease liabilities	8,134,000	8,700,000
Other liabilities:
Sales and property taxes payable	6,203,000	6,316,000
Accounts payable and accrued expenses	19,086,000	27,734,000
Net deferred income tax liability	23,728,000	22,604,000
Total liabilities	852,030,000	825,633,000
Commitments and contingencies
Stockholders' equity:
Preferred Stock, $0.01 par value; 5,000,000 shares authorized; none issued	0	0
Common Stock, $0.01 par value;75,000,000 shares authorized; 12,026,429 and 11,974,530 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively	120,000	120,000
Additional paid-in capital	77,903,000	76,323,000
Accumulated other comprehensive income	0	69,000
Retained earnings	137,259,000	119,853,000
Total stockholders' equity	215,282,000	196,365,000
Total liabilities and stockholders' equity	1,067,312,000	1,021,998,000
Variable Interest Entity, Primary Beneficiary [Member]
Net investment in leases and loans [abstract]
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	12,100,000	30,400,000
Long-term borrowings related to consolidated VIEs	$ 11,676,000	$ 30,665,000

XML

Consolidated Balance Sheets (Parentheticals) (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Consolidated Balance Sheets [Abstract]
Investment securities at amortized cost	$ 0	$ 11,500
Preferred stock shares authorized	5,000,000	5,000,000
Preferred stock shares issued	0	0
Preferred stock - par or stated value	$ 0.01	$ 0.01
Common stock par value	$ 0.01	$ 0.01
Common stock shares authorized	75,000,000	75,000,000
Common stock shares issued	12,026,429	11,974,530
Common stock shares outstanding	12,026,429	11,974,530
Variable Interest Entity [Line Items]
Notes receivable gross	$ 820,753	$ 869,284
Variable Interest Entity, Primary Beneficiary [Member]
Variable Interest Entity [Line Items]
Notes receivable gross	$ 12,100	$ 30,400

XML

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Consolidated Statements of Operations (Unaudited)
Interest income	$ 17,656	$ 22,398	$ 53,622	$ 73,111
Fee income	2,027	2,803	6,795	8,019
Interest and fee income	19,683	25,201	60,417	81,130
Interest expense	2,594	4,694	8,676	15,802
Net interest and fee income	17,089	20,507	51,741	65,328
Provision for credit losses	(1,183)	7,204	(14,010)	51,160
Net interest and fee income after provision for credit losses	18,272	13,303	65,751	14,168
Non-interest income:
Gain on leases and loans sold	0	87	0	2,426
Insurance premiums written and earned	1,906	2,082	5,847	6,612
Other income	1,700	2,044	9,828	11,172
Non-interest income	3,606	4,213	15,675	20,210
Non-interest expense:
Salaries and benefits	8,162	8,515	24,996	25,702
General and administrative	6,200	4,717	25,823	24,169
Goodwill impairment	0	0	0	6,735
Impairment of intangible assets	0	1,016	0	1,016
Non-interest expense	14,362	14,248	50,819	57,622
Income (loss) before income taxes	7,516	3,268	30,607	(23,244)
Income tax expense (benefit)	2,035	525	8,019	(8,284)
Net income (loss)	$ 5,481	$ 2,743	$ 22,588	$ (14,960)
Basic earnings (loss) per share	$ 0.46	$ 0.23	$ 1.88	$ (1.27)
Diluted earnings (loss) per share	$ 0.45	$ 0.23	$ 1.86	$ (1.27)

XML

Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Comprehensive Income
Net income (loss)	$ 5,481	$ 2,743	$ 22,588	$ (14,960)
Other Comprehensive Income:
(Decrease) Increase in fair value of debt securities available for sale	(247)	10	(116)	47
Tax effect	82	(3)	47	(12)
Total other comprehensive (loss) income	(165)	7	(69)	35
Comprehensive income (loss)	$ 5,316	$ 2,750	$ 22,519	$ (14,925)

XML

Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)		Total	Adoption Impact [Member]	Common Stock [Member]	Common Stock [Member] Adoption Impact [Member]	Additional Paid-In Capital [Member]	Additional Paid-In Capital [Member] Adoption Impact [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Accumulated Other Comprehensive Income (Loss) [Member] Adoption Impact [Member]	Retained Earnings [Member]	Retained Earnings [Member] Adoption Impact [Member]
Balance at Dec. 31, 2019		$ 214,956,000		$ 121,000		$ 79,665,000		$ 58,000		$ 135,112,000
Balance (Accounting Standards Update ("ASU") 2016-13 and related ASUs collectively referred to as "CECL" [Member]) at Dec. 31, 2019	[1]		$ (8,877,000)		$ 0		$ 0		$ 0		$ (8,877,000)
Repurchase of common stock		(4,538,000)		(3,000)		(4,535,000)		0		0
Stock issued in connection with restricted stock and RSUs, net of forfeitures		0		1,000		(1,000)		0		0
Stock option compensation recognized		518,000		0		518,000		0		0
Net change in unrealized gain/loss on securities available for sale, net of tax		(38,000)		0		0		(38,000)		0
Net income (loss)		(11,821,000)		0		0		0		(11,821,000)
Cash dividends paid ($0.14 per share)		(1,710,000)		0		0		0		(1,710,000)
Balance at Mar. 31, 2020		188,490,000		$ 119,000		75,647,000		20,000		112,704,000
Balance, Shares at Dec. 31, 2019				12,113,585
Repurchase of common stock, shares				(285,593)
Stock issued in connection with restricted, stock and RSU's, net of forfeitures				56,481
Balance, Shares at Mar. 31, 2020				11,884,473
Balance at Dec. 31, 2019		214,956,000		$ 121,000		79,665,000		58,000		135,112,000
Balance (Accounting Standards Update ("ASU") 2016-13 and related ASUs collectively referred to as "CECL" [Member]) at Dec. 31, 2019	[1]		$ (8,877,000)		$ 0		$ 0		$ 0		$ (8,877,000)
Net income (loss)		(14,960,000)
Balance at Sep. 30, 2020		182,350,000		$ 120,000		75,893,000		93,000		106,244,000
Balance, Shares at Dec. 31, 2019				12,113,585
Balance, Shares at Sep. 30, 2020				11,974,651
Balance at Mar. 31, 2020		188,490,000		$ 119,000		75,647,000		20,000		112,704,000
Issuance of common stock		120,000		0		120,000		0		0
Repurchase of common stock		(12,000)		0		(12,000)		0		0
Stock option compensation recognized		(149,000)		0		(149,000)		0		0
Net change in unrealized gain/loss on securities available for sale, net of tax		66,000		0		0		66,000		0
Net income (loss)		(5,882,000)		0		0		0		(5,882,000)
Cash dividends paid ($0.14 per share)		(1,629,000)		0		0		0		(1,629,000)
Balance at Jun. 30, 2020		181,004,000		$ 119,000		75,606,000		86,000		105,193,000
Balance, Shares at Mar. 31, 2020				11,884,473
Issuance of common stock, shares				14,891
Repurchase of common stock, shares				(1,897)
Stock issued in connection with restricted, stock and RSU's, net of forfeitures				44,780
Balance, Shares at Jun. 30, 2020				11,942,247
Repurchase of common stock		(149,000)		$ 0		(149,000)		0		0
Stock issued in connection with restricted stock and RSUs, net of forfeitures		0		1,000		(1,000)		0		0
Stock option compensation recognized		437,000		0		437,000		0		0
Net change in unrealized gain/loss on securities available for sale, net of tax		7,000		0		0		7,000		0
Net income (loss)		2,743,000		0		0		0		2,743,000
Cash dividends paid ($0.14 per share)		(1,692,000)		0		0		0		(1,692,000)
Balance at Sep. 30, 2020		182,350,000		$ 120,000		75,893,000		93,000		106,244,000
Repurchase of common stock, shares				(18,446)
Stock issued in connection with restricted, stock and RSU's, net of forfeitures				50,850
Balance, Shares at Sep. 30, 2020				11,974,651
Balance at Dec. 31, 2020		196,365,000		$ 120,000		76,323,000		69,000		119,853,000
Repurchase of common stock		(224,000)		0		(224,000)		0		0
Stock option compensation recognized		583,000		0		583,000		0		0
Net change in unrealized gain/loss on securities available for sale, net of tax		(184,000)		0		0		(184,000)		0
Net income (loss)		6,851,000		0		0		0		6,851,000
Cash dividends paid ($0.14 per share)		(1,689,000)		0		0		0		(1,689,000)
Balance at Mar. 31, 2021		$ 201,702,000		$ 120,000		76,682,000		(115,000)		125,015,000
Balance, Shares at Dec. 31, 2020		11,974,530		11,974,530
Repurchase of common stock, shares				(16,038)
Stock issued in connection with restricted, stock and RSU's, net of forfeitures				50,831
Balance, Shares at Mar. 31, 2021				12,009,323
Balance at Dec. 31, 2020		$ 196,365,000		$ 120,000		76,323,000		69,000		119,853,000
Net income (loss)		22,588,000
Balance at Sep. 30, 2021		$ 215,282,000		$ 120,000		77,903,000		0		137,259,000
Balance, Shares at Dec. 31, 2020		11,974,530		11,974,530
Balance, Shares at Sep. 30, 2021		12,026,429		12,026,429
Balance at Mar. 31, 2021		$ 201,702,000		$ 120,000		76,682,000		(115,000)		125,015,000
Repurchase of common stock		(3,000)		0		(3,000)		0		0
Stock option compensation recognized		600,000		0		600,000		0		0
Net change in unrealized gain/loss on securities available for sale, net of tax		280,000		0		0		280,000		0
Net income (loss)		10,256,000		0		0		0		10,256,000
Cash dividends paid ($0.14 per share)		(1,756,000)		0		0		0		(1,756,000)
Balance at Jun. 30, 2021		211,079,000		$ 120,000		77,279,000		165,000		133,515,000
Balance, Shares at Mar. 31, 2021				12,009,323
Repurchase of common stock, shares				(124)
Stock issued in connection with restricted, stock and RSU's, net of forfeitures				17,274
Balance, Shares at Jun. 30, 2021				12,026,473
Repurchase of common stock		(1,000)		$ 0		(1,000)		0		0
Stock option compensation recognized		625,000		0		625,000		0		0
Net change in unrealized gain/loss on securities available for sale, net of tax		(165,000)		0		0		(165,000)		0
Net income (loss)		5,481,000		0		0		0		5,481,000
Cash dividends paid ($0.14 per share)		(1,737,000)		0		0		0		(1,737,000)
Balance at Sep. 30, 2021		$ 215,282,000		$ 120,000		$ 77,903,000		$ 0		$ 137,259,000
Repurchase of common stock, shares				6
Stock issued in connection with restricted, stock and RSU's, net of forfeitures				50
Balance, Shares at Sep. 30, 2021		12,026,429		12,026,429

[1] (1)   Represents the impact of Accounting Standards Update ("ASU")   2016-13 and related ASUs collectively referred to as "CECL".

XML

Consolidated Statements of Stockholders' Equity (Parenthetical) (Unaudited) - $ / shares	3 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020
Statements Of Stockholders Equity [Abstract]
Cash dividends paid per share	$ 0.14	$ 0.14	$ 0.14	$ 0.14	$ 0.14	$ 0.14

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities:
Net income (loss)	$ 22,588	$ (14,960)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	2,848	2,996
Stock-based compensation	1,808	806
Impairment of goodwill and intangible assets	0	7,751
Change in fair value of equity securities	(20)	(89)
Provision for credit losses	(14,010)	51,160
Change in net deferred income tax liability	1,107	(7,777)
Amortization of deferred initial direct costs and fees	7,770	9,244
Gain on equipment disposed	0	116
Gain on leases sold	0	(2,426)
Leases originated for sale	0	(4,882)
Proceeds from sale of leases originated for sale	0	5,123
Noncash lease expense	683	1,365
Adjustment to value of contingent consideration	0	(1,435)
Effect of changes in other operating items:
Other assets	(9,153)	(1,642)
Other liabilities	(10,183)	(311)
Net cash (used in) provided by operating activities	3,438	45,039
Cash flows from investing activities:
Net change in time deposits with banks	4,971	4,471
Purchases of equipment for lease contracts and funds used to originate loans	(289,391)	(298,244)
Principal collections on leases and loans	325,824	356,133
Proceeds from sale of leases originated for investment	0	25,663
Security deposits collected, net of refunds	18	(176)
Proceeds from the sale of equipment	2,148	1,567
Acquisitions of property and equipment	(2,616)	(2,266)
Proceeds received from sale of investment securities	11,567	432
Net cash provided by investing activities	52,521	87,580
Cash flows from financing activities:
Net change in deposits	53,589	(15,425)
Term securitization repayments	(19,080)	(36,538)
Business combinations earn-out consideration payments	(3)	(180)
Issuances of common stock	0	120
Repurchases of common stock	(228)	(4,699)
Dividends paid	(5,185)	(5,021)
Net cash (used in) provided by financing activities	29,093	(61,743)
Net (decrease) increase in total cash, cash equivalents and restricted cash	85,052	70,876
Total cash, cash equivalents and restricted cash, beginning of period	140,410	130,027
Total cash, cash equivalents and restricted cash, end of period	225,462	200,903
Supplemental disclosures of cash flow information:
Cash paid for interest on deposits and borrowings	8,491	17,308
Net cash (received) paid for income taxes	22,591	(5,005)
Leases and loans transferred into held for sale from investment	0	23,460
Supplemental disclosures of non cash investing activities:
Purchase of equipment for lease contracts and loans originated	3,191	2,253
Reconciliation of Cash, cash equivalents and restricted cash to the Consolidated Balance Sheets
Cash and Cash Equivalents	222,260	195,132
Restricted interest-earning deposits	3,202	5,771
Cash, cash equivalents and restricted cash at end of period	$ 225,462	$ 200,903

XML

The Company

9 Months Ended

Sep. 30, 2021

The Company [Abstract]

The company

NOTE 1 – The Company

We are a nationwide provider of credit products and services to small businesses and were incorporated in the Commonwealth of

Pennsylvania

 in

2003

. In 2008, we opened Marlin Business Bank (“MBB”), a commercial bank chartered by the State of

Utah

 and a

member of the Federal Reserve System, which serves as the Company’s primary funding source through its issuance of Federal

Deposit Insurance Corporation (“FDIC”)-insured deposits. In 2009, Marlin Business Services Corp. became a bank holding company

subject to the Bank Holding Company Act and in 2010, the Federal Reserve Bank of Philadelphia confirmed the effectiveness of

Marlin Business Services Corp.’s election to become a financial holding company (while remaining a bank holding company)

pursuant to Sections 4(k) and (l) of the Bank Holding Company Act and section 225.82 of the Federal Reserve Board’s Regulation

Y.

Such election permits Marlin Business Services Corp. to engage in activities that are financial in nature or incidental to a financial

activity, including the maintenance and expansion of our reinsurance activities conducted through our wholly-owned subsidiary,

AssuranceOne, Ltd. (“AssuranceOne”).

On April 18, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the

Company, Madeira Holdings, LLC and Madeira Merger Subsidiary, Inc. (“HPS Merger Sub”) pursuant to which all outstanding

shares of the Company’s common stock will, subject to the terms and conditions of the Merger Agreement, be cancelled and

converted into the merger consideration specified in the Merger Agreement in an all cash transaction pursuant to a merger of the

Company with and into HPS Merger Sub, with the Company surviving (the “Merger”). On August 4, 2021, our shareholders

approved the adoption of the Merger Agreement. The Merger remains subject to, in addition to various other customary closing

conditions, governmental and regulatory approvals and completion of MBB’s surrender of its banking licenses and authority and

termination of its FDIC insured deposits (a process we refer to as “De-banking”).

References to the “Company,” “Marlin,” “Registrant,” “we,” “us” and “our” herein refer to Marlin Business Services Corp. and its

wholly-owned subsidiaries, unless the context otherwise requires.

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2021

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 2 – Summary of Significant Accounting Policies

Basis of financial statement presentation.

 The unaudited consolidated financial statements include the accounts of the Company and

its wholly-owned subsidiaries. Marlin Leasing Corporation (“MLC”) and MBB are managed together as a single business segment and

are aggregated for financial reporting purposes as they exhibit similar economic characteristics, share the same leasing and loan

portfolio and have a single consolidated product offering platform. All intercompany accounts and transactions have been eliminated

in consolidation.

The accompanying unaudited consolidated financial statements present the Company’s financial position at September 30, 2021 and

the results of operations for the three- and nine -month periods ended September 30, 2021 and 2020, and cash flows for the nine-

month periods ended September 30, 2021 and 2020. In management’s opinion, the unaudited consolidated financial statements

contain all adjustments, which include normal and recurring adjustments, necessary for a fair presentation of the financial position and

results of operations for the interim periods presented. These unaudited consolidated financial statements should be read in

conjunction with the consolidated financial statements and note disclosures included in the Company’s Form 10-K for the year ended

December 31, 2020, filed with the Securities and Exchange Commission (“SEC”) on March 5, 2021. The consolidated results and

statements of cash flows for these interim financial statements are not necessarily indicative of the results of operations or cash flows

for the respective full years or any other period.

Use of Estimates.

 These unaudited consolidated financial statements require management to make estimates and assumptions that

affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial

statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used when accounting for

income recognition, the residual values of leased equipment, the allowance for credit losses, deferred initial direct costs and fees, late

fee receivables, the fair value of financial instruments, estimated losses from insurance program, and income taxes. Actual results

could differ from those estimates.

Income taxes.

Our statutory tax rate, which is a combination of federal and state income taxes, was

25.1

% and

25.4

% for the three months ended

September 30, 2021 and September 30, 2020, respectively.

For the nine months ended September 30, 2021, our effective tax rate was

26.2

%. For the nine months ended September 30, 2020, our

effective tax rate was

35.6

%, driven by a $

3.2

 million discrete benefit, resulting from certain provisions in the Coronavirus Aid,

Relief, and Economic Security Act (“CARES Act”) that allow for a remeasurement of our federal net operating losses.

For the three and nine-month periods ended September 30, 2021, our effective tax rates were

27.1

% and

26.2

%, respectively. 

The Company’s IRS federal audit for tax years ending December 31, 2013 to 2018 resulting from Joint Committee Review as part of

an IRS refund claim closed in the second quarter of 2021 with no adjustments. The Company remains subject to examination for the

2017 tax year to the present as of September 30, 2021 under regular statute of limitations.

Significant Accounting Policies. 

There have been no significant changes to our Significant Accounting Policies as described in our

Annual Report on Form 10-K for the year ended December 31, 2020.

Recently Adopted Accounting Standards

. 

Credit Losses.

 In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and related

ASUs collectively referred to as “CECL”.

The Company adopted the guidance in these ASUs, effective January 1, 2020, applying changes resulting from the application of the

new standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in

which the guidance was effective (i.e., modified retrospective approach). See our Annual Report on Form 10-K for the year ended

December 31, 2020 for a detailed discussion of our adoption of this guidance.

Income Taxes

. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for

Income Taxes, which removes certain exceptions to the general principles of ASC 740 in order to reduce the cost and complexity of

its application. The amendments also clarify and amend existing guidance to improve consistent application. The ASU is effective for

fiscal years beginning after December 15, 2020, including interim periods within those annual periods. We adopted ASU 2019-12 on

January 1, 2021, and the adoption did not have a material impact on our consolidated financial position or results of operations.

XML

Non-Interest Income

9 Months Ended

Sep. 30, 2021

Non-interest Income [Abstract]

Non-interest Income [Text Block]

NOTE 3 – Non-Interest Income

The following table summarizes non-interest income for the periods presented:

Three Months Ended

Nine Months Ended 

September 30,

September 30,

(Dollars in thousands)

2021

2020

2021

2020

Insurance premiums written and earned

$

1,906

$

2,082

$

5,847

$

6,612

Gain on sale of leases and loans

—

87

—

2,426

Other income: 

Property tax income

149

123

5,190

5,247

Servicing income

270

462

963

1,517

Net (loss) gain recognized during the period on investment securities

(3)

—

(59)

89

Non-interest income - other than from contracts with customers

2,322

2,754

11,941

15,891

Other income:

Insurance policy fees

749

819

2,268

2,610

Property tax administrative fees on leases

213

243

622

713

ACH payment fees

62

35

184

143

Referral fees

26

15

57

123

Other

234

347

603

730

Non-interest income from contracts with customers

1,284

1,459

3,734

4,319

Total non-interest income

$

3,606

$

4,213

$

15,675

$

20,210

XML

Investment securities

9 Months Ended

Sep. 30, 2021

Investment securities [Abstract]

Investment securities [Text Block]

NOTE 4 - Investment Securities 

In accordance with the Merger Agreement and De-banking process discussed in Note 1, the Company sold all its investment securities

in the third quarter of 2021 and recognized an immaterial gain on the sale of those securities:

The Company had the following investment securities as of the dates presented:

September 30,

December 31,

(Dollars in thousands)

2021

2020

Equity Securities

Mutual fund

$

—

$

3,760

Debt Securities, Available for Sale:

Asset-backed securities ("ABS")

—

3,719

Municipal securities

—

4,145

 Total investment securities

$

—

$

11,624

The following schedule summarizes changes in fair value of equity securities and the portion of unrealized gains and losses for each

period presented:

Three Months Ended September 30,

Nine Months Ended September 30,

(Dollars in thousands)

2021

2020

2021

2020

Net gains (losses) recognized during the period on equity securities 

$

75

$

—

$

20

$

89

Less: Net gains (losses) recognized during the period

 on equity securities sold during the period

75

—

20

—

Unrealized gains recognized during the reporting period

 on equity securities still held at the reporting date

$

—

$

—

$

—

$

89

Available for Sale

There are no available for sale investments as of September 30, 2021 due to the liquidation of all the Company’s available for sale

investments in the third quarter of 2021 resulting in immaterial gains in the three and nine month periods ending September 30, 2021.

The following schedules are a summary of available for sale investments as of December 31, 2020, and the aggregate amount of

unrealized losses on available for sale securities in the Company’s investment securities classified according to the amount of time

those securities have been in a continuous loss position as of December 31, 2020

Gross 

Gross

Amortized

Unrealized 

Unrealized

Estimated

Cost

Gains

Losses

Fair Value

(Dollars in thousands)

ABS

$

3,666

$

53

$

—

$

3,719

Municipal securities

4,082

64

(1)

4,145

 Total Debt Securities, Available for Sale

$

7,748

$

117

$

(1)

$

7,864

Less than 12 months

12 months or longer

Total

Gross 

Gross

Gross

Unrealized 

Fair

Unrealized

Fair

Unrealized

Fair

Losses

Value

Losses

Value

Losses

Value

(Dollars in thousands)

Municipal securities

$

(1)

$

141

$

—

$

—

$

(1)

$

141

Total available for sale investment

securities

$

(1)

$

141

$

—

$

—

$

(1)

$

141

XML

Net Investment in Leases and Loans

9 Months Ended

Sep. 30, 2021

Net Investment in Leases and Loans [Abstract]

Net Investment in Leases and Loans

NOTE 5 – Net Investment in Leases and Loans 

Net investment in leases and loans consists of the following:

September 30, 2021

December 31, 2020

(Dollars in thousands)

Minimum lease payments receivable

$

308,479

$

354,298

Estimated residual value of equipment

24,999

26,983

Unearned lease income, net of initial direct costs and fees deferred

(37,560)

(43,737)

Security deposits

(404)

(385)

Total leases

295,514

337,159

Commercial loans, net of origination costs and fees deferred

Working Capital Loans

31,178

20,034

CRA

(1)

1,019

1,091

Equipment loans

(2)

414,392

449,149

CVG

78,650

61,851

Total commercial loans

525,239

532,125

Net investment in leases and loans, excluding allowance

820,753

869,284

Allowance for credit losses

(27,521)

(44,228)

Total net investment in leases and loans

$

793,232

$

825,056

CRA loans are comprised of loans originated under a line of credit to satisfy its obligations under the Community Reinvestment Act of 1977

(“CRA”).

(2)

Equipment loans are comprised of Equipment Finance Agreements, Installment Purchase Agreements and other loans.

In response to COVID-19, starting in mid-March 2020, the Company instituted a payment deferral contract modification program in

order to assist our small-business customers. See Note 6, “Allowance for Credit Losses” for discussion of that program.

At September 30, 2021, $

12.8

 million in net investment in leases were pledged as collateral for the Company’s outstanding asset-

backed securitization balance and $

55.9

 million in net investment in leases were pledged as collateral for the secured borrowing

capacity at the Federal Reserve Discount Window. 

The amount of deferred initial direct costs and origination costs net of fees deferred were $

13.6

 million and $

14.6

 million as of

September 30, 2021 and December 31, 2020, respectively. Initial direct costs are netted in unearned income and are amortized to

income using the effective interest method. Origination costs are netted in commercial loans and are amortized to income using the

effective interest method. At September 30, 2021 and December 31, 2020, $

20.8

 million and $

21.9

 million, respectively, of the

estimated residual value of equipment retained on our Consolidated Balance Sheets was related to copiers.

Maturities of lease receivables under lease contracts and the amortization of unearned lease income, including initial direct costs and

fees deferred, were as follows as of September 30, 2021:

Minimum Lease

Payments

Net Income

Receivable

(1)

Amortization

(2)

(Dollars in thousands)

Period Ending December 31,

Remainder of 2021

$

33,951

$

7,902

2022

120,586

16,069

2023

80,663

8,510

2024

45,306

3,668

2025

20,550

1,221

Thereafter

7,423

190

$

308,479

$

37,560

Represents the undiscounted cash flows of the lease payments receivable.

(2)

Represents the difference between the undiscounted cash flows and the discounted cash flows.

The lease income recognized was as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(Dollars in thousands)

Interest Income

$

6,070

$

8,357

$

19,073

$

25,977

As of September 30, 2021 and December 31, 2020, the Company maintained total finance receivables which were on a non-accrual

basis with net investment of $

10.1

 million and $

14.3

 million, respectively. See Note 6 “Allowance for Credit Losses” for additional

discussion of loan modifications due to COVID-19.

Portfolio Sales

The Company has historically originated certain lease and loans for sale to third parties, based on their underwriting criteria and

specifications. In addition, the Company may periodically enter into agreements to sell certain leases and loans that were originated

for investment to third parties. 

For agreements that qualify as a sale where the Company has continuing involvement through servicing, the Company recognizes a

servicing liability at its initial fair value, and then amortizes the liability over the expected servicing period based on the effective yield

method, within Other income in the Consolidated Statements of Operations. The Company’s sale agreements typically do not contain

a stated servicing fee, so the initial value recognized as a servicing liability is a reduction of the proceeds received and is based on an

estimate of the fair value attributable to that obligation. The Company’s servicing liability was $

0.7

 million and $

1.3

 million as of

September 30, 2021, and December 31, 2020, respectively, and is recognized within Accounts payable and accrued expenses in the

Consolidated Balance Sheets. As of September 30, 2021 and December 31, 2020, the portfolio of leases and loans serviced for others

was $

146

 million and $

230

 million, respectively. 

In addition, the Company may have continuing involvement in contracts sold through any recourse obligations that may include

customary representations and warranties or specific recourse provisions. 

The following table summarizes information related to portfolio sales for the periods presented:

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(Dollars in thousands)

Sales of leases and loans 

$

—

$

4,286

$

—

$

28,342

Gain on sale of leases and loans

—

87

—

2,426

XML

Allowance for Credit Losses

9 Months Ended

Sep. 30, 2021

Allowance For Credit Losses [Abstract]

Allowance For Credit Losses

NOTE 6 – Allowance for Credit Losses

Effective January 1, 2020, we

 adopted

ASU 2016-13 and related ASUs collectively referred to as CECL

,

 which replaced the probable,

incurred loss model with a measurement of expected credit losses for the contractual term of the Company’s current portfolio of loans

and leases. See our Annual Report on Form 10-K for the year ended December 31, 2020 for a detailed discussion of our adoption of

this guidance

.

The following tables summarize activity in the allowance for credit losses

Three Months Ended September 30, 2021

(Dollars in thousands)

Equipment

Finance

Working

Capital

Loans

CVG

CRA

Total

Allowance for credit losses, beginning of period

$

19,718

$

1,003

$

8,036

$

—

$

28,757

 Charge-offs

(2,407)

(262)

(27)

—

(2,696)

 Recoveries

1,273

158

85

—

1,516

Net charge-offs

(1,134)

(104)

58

—

(1,180)

Realized cashflows from Residual Income

1,127

—

—

—

1,127

 Provision for credit losses

(1,334)

300

(149)

—

(1,183)

Allowance for credit losses, end of period

$

18,377

$

1,199

$

7,945

$

—

$

27,521

Net investment in leases and loans, before allowance

$

717,697

$

31,178

$

70,859

$

1,019

$

820,753

Three Months Ended September 30, 2020

(Dollars in thousands)

Equipment

Finance

Working

Capital

Loans

CVG

CRA &

PPP

Total

Allowance for credit losses, beginning of period

$

48,550

$

7,962

$

7,132

$

—

$

63,644

 Charge-offs

(10,509)

(633)

(524)

—

(11,666)

 Recoveries

983

101

94

—

1,178

 Net charge-offs

(9,526)

(532)

(430)

—

(10,488)

Realized cashflows from Residual Income

965

—

—

—

965

 Provision for credit losses

7,226

(3,974)

3,952

—

7,204

Allowance for credit losses, end of period

$

47,215

$

3,456

$

10,654

$

—

$

61,325

Net investment in leases and loans, before allowance

$

803,689

$

26,472

$

76,778

$

1,114

$

908,053

Nine Months Ended September 30, 2021

(Dollars in thousands)

Equipment

Finance

Working

Capital

Loans

CVG

CRA

Total

Allowance for credit losses, beginning of period

$

33,184

$

1,206

$

9,838

$

—

$

44,228

 Charge-offs

(8,556)

(813)

(1,176)

—

(10,545)

 Recoveries

3,933

432

308

—

4,673

Net charge-offs

(4,623)

(381)

(868)

—

(5,872)

Realized cashflows from Residual Income

3,175

—

—

—

3,175

 Provision for credit losses

(13,359)

374

(1,025)

—

(14,010)

Allowance for credit losses, end of period

$

18,377

$

1,199

$

7,945

$

—

$

27,521

Net investment in leases and loans, before allowance

$

717,697

$

31,178

$

70,859

$

1,019

$

820,753

Nine Months Ended September 30, 2020

(Dollars in thousands)

Equipment

Finance

Working

Capital

Loans

CVG

CRA &

PPP

Total

Allowance for credit losses, December 31, 2019

$

18,334

$

1,899

$

1,462

$

—

$

21,695

Adoption of ASU 2016-13 (CECL)

(1)

9,264

(3)

2,647

—

11,908

Allowance for credit losses, beginning of period

$

27,598

$

1,896

$

4,109

$

—

$

33,603

 Charge-offs

(24,723)

(2,598)

(2,157)

—

(29,478)

 Recoveries

2,237

156

257

—

2,650

 Net charge-offs

(22,486)

(2,442)

(1,900)

—

(26,828)

Realized cashflows from Residual Income

3,390

—

—

—

3,390

 Provision for credit losses

38,713

4,002

8,445

—

51,160

Allowance for credit losses, end of period

$

47,215

$

3,456

$

10,654

$

—

$

61,325

Net investment in leases and loans, before allowance

$

803,689

$

26,472

$

76,778

$

1,114

$

908,053

(1)

 The Company adopted ASU 2016-13,

Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on

Financial Instruments

, which changed our accounting policy and estimated allowance, effective January 1, 2020. See further

discussion in Note 2, “Summary of Significant Accounting Policies”, and below.

Estimate of Current Expected Credit Losses (CECL)

The Company uses a vintage loss model as the approach to estimate and measure its expected credit losses for all portfolio segments

and for all pools, primarily because the timing of the losses realized has been consistent across historical vintages, such that the

company is able to develop a predictable and reliable loss curve for each separate portfolio segment. The vintage model assigns loans

to vintages by origination date, measures our historical average actual loss and recovery experience within that vintage, develops a

loss curve based on the averages of all vintages, and predicts (or forecasts) the remaining expected net losses of the current portfolio

by applying the expected net loss rates to the remaining life of each open vintage.

Additional detail specific to the measurement of each portfolio segment as of September 30, 2021, is summarized below. 

Equipment Finance:

Equipment Finance consists of Equipment Finance Agreements, Installment Purchase Agreements and other leases and loans. 

The risk characteristics referenced to develop pools of Equipment Finance leases and loans are based on internally developed

credit score ratings, which is a measurement that combines many risk characteristics, including loan size, external credit

scores, existence of a guarantee, and various characteristics of the borrower’s business. In addition, the Company separately

measured a pool of true leases so that any future cashflows from residuals could be used to partially offset the allowance for

that pool. 

The Company’s measurement of Equipment Finance pools is based on its own historical loss experience. The Company

analyzed the correlation of its own loss data from 2004 to 2019 against various economic variables in order to determine an

approach for reasonable and supportable forecast. The Company then selected certain economic variables to reference for its

forecast about the future, specifically the unemployment rate and growth in business bankruptcy. The Company’s

methodology reverts from the forecast data to its own loss data adjusted for the long-term average of the referenced economic

variables, on a straight-line basis.

At each reporting date, the Company considers current conditions, including changes in portfolio composition or the business

environment, when determining the appropriate measurement of current expected credit losses for the remaining life of its

portfolio. As of the January 1, 2020 adoption date, the Company utilized a 12-month forecast period and 12-month straight-

line reversion period, based on its initial assessment of the appropriate timing. 

However, starting with the March 31, 2020 measurement, the Company adjusted its model to reference a 6-month forecast

period and 12-month straight line reversion period. The change in the length of the reasonable and supportable forecast was

based on observed market volatility in March 2020. During the first quarter of 2021, the Company reverted to the pre-

COVID 12-month forecast period and 12-month straight line reversion period and continued using this forecast in the second

and third quarters of 2021 as uncertainty in the macroeconomic environment has lessened and the Company’s portfolio has

stabilized with low net charge-offs and delinquencies. The continued positive economic forecast resulted in provision

benefits for Equipment Finance of $

1.3

 million and $

13.4

 million for the three and nine-months ended September 30, 2021,

respectively, as compared to provisions of $

7.2

 million and $

38.7

 million for the same periods in 2020 during the height of

the COVID-19 pandemic. 

Working Capital:

The risk characteristics referenced to develop pools of Working Capital loans is based on origination channel, separately

considering an estimation of loss for direct-sourced loans versus loans that were sourced from a broker. The Company’s

historical relationship with its direct-sourced customers typically results in a lower level of credit risk than loans sourced

from brokers where the Company has no prior credit relationship with the customer. 

The Company’s measurement of Working Capital pools is based on its own historical loss experience. The Company’s

Working Capital loans typically range from 6 – 12 months of duration. For this portfolio segment, due to the short contract

duration, the Company did not define a standard methodology to adjust its loss estimate based on a forecast of economic

conditions. However, the Company will continually assess through a qualitative adjustment whether there are changes in

conditions and the environment that will impact the performance of these loans that should be considered for qualitative

adjustment.

At each reporting date, the Company considers current conditions, including changes in portfolio composition or the business

environment, when determining the appropriate measurement of current expected credit losses for the remaining life of its

portfolio. As of the January 1, 2020 adoption date, there was no qualitative adjustment to the Working Capital portfolio. 

However, starting with its March 31, 2020 measurement, driven by the elevated risk of credit loss driven by market

conditions due to COVID-19, the Company developed alternate scenarios for credit loss based on an analysis of the

characteristics of its portfolio, considering different timing and magnitudes of potential exposures. 

During the third quarter, the Company updated its expectation for credit losses for the Working Capital segment based on the

favorable actual portfolio performance during the quarter and a revised forecast based on its current assessment of risks in the

portfolio. Based on that analysis, the Company recognized a provision of $

0.3

 million for the three months ended September

30, 2021, bringing the total provision associated with Working Capital to $

0.4

 million for the nine months ended September

30, 2021.

Commercial Vehicle Group (CVG):

Transportation-related equipment leases and loans are analyzed as a single pool, as the Company did not consider any risk

characteristics to be significant enough to warrant disaggregating this population. 

The Company’s measurement of CVG is based on a combination of its own historical loss experience and industry loss data

from an external source. The Company has limited history of this product, and therefore the Company determined it was

appropriate to develop an estimate based on a combination of internal and industry data. Due to the Company’s limited

history of performance of this segment, and the limited size of the portfolio, the Company did not develop a standard

methodology to adjust its loss estimate based on a forecast of economic conditions. However, the Company will continually

assess through a qualitative adjustment whether there are changes in conditions and the environment that will impact the

performance of these loans that should be considered for qualitative adjustment.

At each reporting date, the Company considers current conditions, including changes in portfolio composition or the business

environment, when determining the appropriate measurement for the remaining life of the current portfolio. As of the

January 1, 2020 adoption date, there were no qualitative adjustment to the CVG portfolio. However, starting with the March

31, 2020 measurement, driven by the elevated risk of credit loss driven by market conditions due to COVID-19, the

Company developed alternate scenarios for expected credit loss for this segment, considering different timing and

magnitudes of potential exposures. 

Beginning in the first quarter of 2021, the Company updated its expectation for credit losses for the CVG segment, including

separately assessing the elevated risks of a population of motor coach industry contracts that are facing prolonged impacts

from COVID-19. While the segment continues to evidence negative impacts from COVID-19 as seen in the segment’s

delinquency and modification balances, it is also experiencing positive indicators such as paydown of balance. These factors,

including no further significant reduction in collateral values resulted in the qualitative reserve remaining unchanged from the

prior quarter at $

4.7

 million of total CVG qualitative adjustments for COVID-19 related risks.

Community Reinvestment Act (CRA) Loans:

CRA loans are comprised of loans originated under a line of credit to satisfy the Company’s obligations under the CRA. The

Company does not measure an allowance specific to this population because the exposure to credit loss is nominal.

For the three and nine-months ended September 30, 2021, the Company recognized provision benefits of $

1.2

 million, and $

14.0

million, respectively, driven primarily by improving economic forecasts and portfolio performance.

Our reserve as of September 30, 2021, and the qualitative and economic adjustments discussed above, were calculated referencing our

historical loss experience, including loss experience through the 2008 economic cycle, and our adjustments to that experience based

on our judgements about the extent of the impact of the COVID-19 pandemic. Those judgements include certain expectations for the

extent and timing of impacts from COVID-19 on unemployment rates and business bankruptcies and are based on our current

expectations of the performance of our portfolio in the current environment. We may recognize credit losses in excess of our reserve

or revise our estimate of credit losses in the future, and such amounts may be significant, based on (i) the actual performance of our

portfolio, including the performance of the modified portfolio, (ii) any further changes in the economic environment, or (iii) other

developments or unforeseen circumstances that impact our portfolio.

Loan Modification Program:

In response to COVID-19, starting in mid-March 2020, the Company instituted a Loan modification payment deferral program in

order to assist its customers that requested relief and were current under their existing agreement. The payment deferral program

allows for up to 6 months of fully deferred or reduced payments. As of September 30, 2021, the Company’s Loan modification

program has been terminated, with future modifications considered and granted on a case-by-case basis.

As of September 30, 2021, the Company had

3,460

 active modified leases and loans totaling $

69.5

 million of which all except $

0.5

million were out of the deferral period. Out of the deferral period means the contract has returned to its regular payment schedule. For

loans in deferral period, the deferral may either be full, with zero payment owed during the deferral period, or partial, with reduced

payments during deferral that are primarily

25

%-

50

% of schedule, or the deferral period payment may be a nominal amount.

Total resolved modifications include

311

 contracts charged off where a $

7.0

 million credit loss was realized, and

1,848

 contracts that

paid in full.

TDRs are restructurings of leases and loans in which, due to the borrower's financial difficulties, a lender grants a concession that it

would not otherwise consider for borrowers of similar credit quality. In accordance with the interagency guidance as updated in April

2020, that the FASB concurred with, loans modified under the Company’s payment deferral program are not considered TDRs. As of

September 30, 2021, the Company had $

10.3

 million of active contracts designated as TDRs.

Credit Quality

At origination, the Company utilizes an internally developed credit score ratings as part of its underwriting assessment and pricing

decisions for new contracts. The internal credit score is a measurement that combines many risk characteristics, including loan size,

external credit scores, existence of a guarantee, and various characteristics of the borrower’s business. The internal credit score is

used to create pools of loans for analysis in the Company’s Equipment Finance portfolio segment, as discussed further above. We

believe this segmentation allows our loss modeling to properly reflect changes in portfolio mix driven by sales activity and

adjustments to underwriting standards. However, this score is not updated after origination date for analyzing the Company’s

provision.

On an ongoing basis, to monitor the credit quality of its portfolio, the Company primarily reviews the current delinquency of the

portfolio and delinquency migration to monitor risk and default trends . We believe that delinquency is the best factor to use to monitor

the credit quality of our portfolio on an ongoing basis because it reflects the current condition of the portfolio and is a good predictor

of near-term charge-offs and can help with identifying trends and emerging risks to the portfolio. 

The following tables provide information about delinquent leases and loans in the Company’s portfolio based on the contract’s status

as-of the dates presented. In particular, contracts that are part of the Loan Modification Program discussed above are presented in the

below delinquency table and the non-accrual information for September 30, 2021 based on their status with respect to the modified

terms.

Portfolio by Origination Year as of September 30, 2021

Total

2021

2020

2019

2018

2017

Prior

Receivables

(Dollars in thousands)

Equipment Finance

30-59

$

612

$

688

$

1,149

$

435

$

230

$

31

$

3,145

60-89

179

146

584

277

78

28

1,292

90+

91

266

323

197

90

31

998

Total Past Due

882

1,100

2,056

909

398

90

5,435

Current

203,688

196,444

192,259

83,310

32,507

4,054

712,262

Total

204,570

197,544

194,315

84,219

32,905

4,144

717,697

Working Capital

30-59

224

26

—

—

—

—

250

60-89

51

—

43

—

—

—

94

90+

—

24

—

—

—

—

24

Total Past Due

275

50

43

—

—

—

368

Current

28,626

1,901

283

—

—

—

30,810

Total

28,901

1,951

326

—

—

—

31,178

CVG

30-59

—

—

—

7

2

41

50

60-89

51

157

91

14

—

—

313

90+

—

—

74

55

—

—

129

Total Past Due

51

157

165

76

2

41

492

Current

21,695

13,879

23,270

8,735

2,393

395

70,367

Total

21,746

14,036

23,435

8,811

2,395

436

70,859

CRA

Total Past Due

—

—

—

—

—

—

—

Current

1,019

—

—

—

—

—

1,019

Total

1,019

—

—

—

—

—

1,019

Net investment in leases

and loans, before allowance

$

256,236

$

213,531

$

218,076

$

93,030

$

35,300

$

4,580

$

820,753

Portfolio by Origination Year as of December 31, 2020

Total

2020

2019

2018

2017

2016

Prior

Receivables

(Dollars in thousands)

Equipment Finance

30-59

$

1,162

$

1,526

$

1,349

$

690

$

292

$

14

$

5,033

60-89

367

1,111

463

532

130

6

2,609

90+

503

1,370

804

377

199

16

3,269

Total Past Due

2,032

4,007

2,616

1,599

621

36

10,911

Current

265,036

276,140

138,142

65,722

18,805

1,615

765,460

Total

267,068

280,147

140,758

67,321

19,426

1,651

776,371

Working Capital

30-59

125

481

—

—

—

—

606

60-89

—

135

—

—

—

—

135

90+

—

—

—

—

—

—

—

Total Past Due

125

616

—

—

—

—

741

Current

12,741

6,528

24

—

—

—

19,293

Total

12,866

7,144

24

—

—

—

20,034

CVG

30-59

591

1,039

173

29

21

—

1,853

60-89

—

69

33

—

68

—

170

90+

—

340

179

5

11

—

535

Total Past Due

591

1,448

385

34

100

—

2,558

Current

17,065

30,805

13,733

5,938

1,659

30

69,230

Total

17,656

32,253

14,118

5,972

1,759

30

71,788

CRA

Total Past Due

—

—

—

—

—

—

—

Current

1,091

—

—

—

—

—

1,091

Total

1,091

—

—

—

—

—

1,091

Net investment in leases

and loans, before allowance

$

298,681

$

319,544

$

154,900

$

73,293

$

21,185

$

1,681

$

869,284

Net investments in Equipment Finance and CVG leases and loans are generally charged-off when they are contractually past due for

120 days or more. Income recognition is discontinued when a default on monthly payment exists for a period of 90 days or more.

Income recognition resumes when a lease or loan becomes less than 90 days delinquent. At September 30, 2021 and December 31,

2020, there were

no

 finance receivables past due 90 days or more and still accruing. 

Working Capital Loans are generally placed in non-accrual status when they are 30 days past due and generally charged-off at 60 days

past due. Both Equipment Finance and Working Capital loans are considered for non-accrual status if and when they are modified and

classified as a troubled debt restructuring. The loan is removed from non-accrual status once sufficient payments are made to bring the

loan current and reviewed by management. At September 30, 2021 and December 31, 2020, there were

no

 Working Capital Loans

past due 30 days or more and still accruing.

The following tables provide information about non-accrual leases and loans:

September 30,

December 31,

(Dollars in thousands)

2021

2020

Equipment Finance

$

2,485

$

5,543

Working Capital Loans

139

932

CVG

7,495

7,814

Total Non-Accrual

$

10,119

$

14,289

XML

Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets [Abstract]

Goodwill and Intangible Assets [Text Block]

NOTE 7 - Goodwill and Intangible Assets

Goodwill

In the first quarter of 2020, driven by negative events that impacted the Company related to the COVID-19 economic shutdown, the

Company concluded that the implied fair value of its $

6.7

 million goodwill balance was less than the carrying amount and recognized

impairment equal to the $

6.7

 million balance in the March 31, 2020 Consolidated Statements of Operations.

Intangible assets

The following table presents details of the Company’s intangible assets as of September 30, 2021:

Gross Carrying

Accumulated

Net

(Dollars in thousands)

Useful Life

Amount

Amortization

Value

Vendor relationships

11

years

$

7,290

$

2,134

$

5,156

Corporate trade name

7

years

60

41

19

 Total

$

7,350

$

2,175

$

5,175

The Company’s intangible assets consist of definite-lived assets in connection with the January 2017 acquisition of Horizon Keystone

Financial, and definite-lived intangible assets in connection with the September 2018 acquisition of Fleet Financing Resources. The

Company has

no

 indefinite-lived intangible assets. 

There was

no

 impairment of these assets in the nine-months ended September 30, 2021 or 2020. Amortization related to the

Company’s definite lived intangible assets was $

0.5

 million and $

0.6

 million for the nine-month periods ended September 30, 2021

and September 30, 2020, respectively.

The Company expects the amortization expense for the next five years will be as follows:

Amortization

(Dollars in thousands)

Expense

Remainder of 2021

$

168

2022

671

2023

671

2024

663

2025

663

XML

Other Assets

9 Months Ended

Sep. 30, 2021

Other Assets [Abstract]

Other Assets

NOTE 8 – Other Assets

Other assets are comprised of the following:

September 30,

December 31,

2021

2020

(Dollars in thousands)

Accrued fees receivable

$

2,289

$

2,928

Prepaid expenses

2,404

2,790

Income taxes receivable 

8,214

—

Federal Reserve Bank Stock

1,711

1,711

Other 

1,942

2,783

$

16,560

$

10,212

XML

Deposits

9 Months Ended

Sep. 30, 2021

Deposits [Abstract]

Deposits

NOTE 9 – Deposits

MBB serves as the Company’s primary funding source. MBB issues fixed-rate FDIC-insured certificates of deposit raised nationally

through various brokered deposit relationships and fixed-rate FDIC-insured deposits received from direct sources. MBB offers FDIC-

insured money market deposit accounts (the “MMDA Product”) through participation in a partner bank’s insured savings account

product. This brokered deposit product has a variable rate, no maturity date and is offered to the clients of the partner bank and

recorded as a single deposit account at MBB. As of September 30, 2021, money market deposit accounts totaled $

55.0

 million.

As of September 30, 2021, the scheduled maturities of certificates of deposits are as follows:

Scheduled

Dollars in thousands

Maturities

Period Ending December 31,

Remainder of 2021

$

391,752

2022

204,023

2023

91,829

2024

33,321

2025

9,054

Total

$

729,979

Certificates of deposits issued by MBB are time deposits and are generally issued in denominations of $

250,000

 or less. The MMDA

Product is also issued to customers in amounts less than $

250,000

. The FDIC insures deposits up to $

250,000

 per depositor. The

weighted average all-in interest rate of deposits at September 30, 2021 was

1.07

%.

See Note 14 –

Subsequent Events

 for a discussion of an agreement entered into by MBB in October 2021 to transfer its portfolio of

brokered certificates of deposit held through The Depository Trust Company.

XML

Debt and Financing Arrangements

9 Months Ended

Sep. 30, 2021

Debt and Financing Arrangements [Abstract]

Debt and Financing Arrangements [Text Block]

NOTE 10 – Debt and Financing Arrangements

Long-term Borrowings

Borrowings with an original maturity date of one year or more are classified as long-term borrowings. The Company’s term note

securitizations are classified as long-term borrowings.

The balance of long-term borrowings consisted of the following:

September 30,

December 31,

2021

2020

(Dollars in thousands)

Term securitization 2018-1

$

11,719

$

30,800

Unamortized debt issuance costs

(43)

(135)

$

11,676

$

30,665

Long-term Borrowings

On July 27, 2018, the Company completed a $

201.7

 million asset-backed term securitization. Each tranche of the term note

securitization has a fixed term, fixed interest rate and fixed principal amount. At September 30, 2021, outstanding term securitizations

amounted to $

11.7

 million and are collateralized by $

12.8

 million of minimum lease and loan payments receivable and $

3.2

 million of

restricted interest-earning deposits. The Company’s term note securitizations are classified as long-term borrowings.

The term note securitization is summarized below:

Outstanding Balance as of

Notes

Final

Original 

September 30,

December 31,

Originally 

Maturity 

Coupon 

2021

2020

Issued

Date

Rate

(Dollars in thousands)

2018 — 1

 Class A-1 

$

—

$

—

$

77,400

July, 2019

2.55

%

 Class A-2 

—

—

55,700

October, 2020

3.05

 Class A-3 

—

—

36,910

April, 2023

3.36

 Class B

—

9,560

10,400

May, 2023

3.54

 Class C

1,869

11,390

11,390

June, 2023

3.70

 Class D

5,470

5,470

5,470

July, 2023

3.99

 Class E

4,380

4,380

4,380

May, 2025

5.02

Total Term Note Securitizations

$

11,719

$

30,800

$

201,650

3.05

%

(1)(2)

(1)

Represents the original weighted average initial coupon rate for all tranches of the securitization. In addition to this coupon

interest, term note securitizations have other transaction costs which are amortized over the life of the borrowings as additional

interest expense.

 (2)

The weighted average coupon rate of the 2018-1 term note securitization will approximate 4.33% over the remaining term of the

borrowing.

Based on current expected cashflows of leases underlying our term note securitization, principal and interest payments are estimated

as of September 30, 2021 as follows:

Principal

Interest

(Dollars in thousands)

Period Ending December 31,

Remainder of 2021

$

3,137

$

121

2022

8,582

$

159

$

11,719

$

280

Federal Funds Line of Credit with Correspondent Bank

MBB has established a federal funds line of credit with a correspondent bank. This line allows for both selling and purchasing of

federal funds. The amount that can be drawn against the line is limited to $

25.0

 million. As of September 30, 2021, and December 31,

2020, there were

no

 balances outstanding on this line of credit.

Federal Reserve Discount Window

In addition, MBB has received approval to borrow from the Federal Reserve Discount Window based on the amount of assets MBB

chooses to pledge. MBB had $

50.2

 million in unused, secured borrowing capacity at the Federal Reserve Discount Window, based on

$

55.9

 million of net investment in leases pledged at September 30, 2021.

XML

Fair Value Measurements and Disclosures about the Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2021

Fair Value Measurements And Disclosures About Fair Value Of Financial Instruments [Abstract]

Fair Value Measurements and Disclosures about the Fair Value of Financial Instruments

NOTE 11 – Fair Value Measurements and Disclosures about the Fair Value of Financial Instruments

Fair Value Measurements

Fair value is defined in GAAP as the price that would be received to sell an asset or the price that would be paid to transfer a liability

on the measurement date. GAAP focuses on the exit price in the principal or most advantageous market for the asset or liability in an

orderly transaction between market participants. A three-level valuation hierarchy is required for disclosure of fair value

measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The fair value

hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the

lowest priority to unobservable inputs (Level 3). The level in the fair value hierarchy within which the fair value measurement in its

entirety falls is determined based on the lowest level input that is significant to the measurement in its entirety.

In accordance with the Merger Agreement and De-banking process discussed in Note 1, the Company sold all its investment securities

in the third quarter of 2021.

The Company’s balances measured at fair value on a recurring basis include the following as of September 30, 2021 and December

31, 2020:

September 30, 2021

December 31, 2020

Fair Value Measurements Using

Fair Value Measurements Using

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

(Dollars in thousands)

Assets

ABS

$

—

$

—

$

—

$

—

$

3,719

$

—

Municipal securities

—

—

—

—

4,145

—

Mutual fund

—

—

—

3,760

—

—

At this time, the Company has not elected to report any assets and liabilities using the fair value option. There have been

no

 transfers

between Level 1 and Level 2 of the fair value hierarchy for any of the periods presented.

Non-Recurring Measurements

Non-recurring fair value measurements include assets and liabilities that are periodically remeasured or assessed for impairment using

Fair value measurements. Non-recurring measurements include the Company’s evaluation of goodwill and residual assets for

impairment, and the Company’s remeasurement of contingent consideration and assessment of the carrying amount of its servicing

liability. 

For the nine months ended September 30, 2021, there were no significant amounts recognized in the Consolidated Statements of

Operations in connection with non-recurring fair value measurements.

For the nine months ended September 30, 2020, the Company recognized $

6.7

 million for the impairment of goodwill as discussed

further in Note 7 -

Goodwill and Intangible Assets

.

Fair Value of Other Financial Instruments 

The following summarizes the carrying amount and estimated fair value of the Company’s other financial instruments, including those

not measured at fair value on a recurring basis:

September 30, 2021

December 31, 2020

Carrying

Fair

Carrying

Fair

Amount

Value

Amount

Value

(Dollars in thousands)

Financial Assets

Cash and cash equivalents

$

222,260

$

222,260

$

135,691

$

135,691

Time deposits with banks

996

1,000

5,967

6,003

Restricted interest-earning deposits with banks

3,202

3,202

4,719

4,719

Loans, net of allowance

504,335

513,431

500,768

507,362

Federal Reserve Bank Stock

1,711

1,711

1,711

1,711

Financial Liabilities

 Deposits

$

783,203

$

790,175

$

729,614

$

742,882

 Long-term borrowings

11,676

11,961

30,665

31,114

There have been no significant changes in the methods and assumptions used in estimating the fair values of financial instruments, as

outlined in our consolidated financial statements and note disclosures in the Company’s Form 10-K for the year ended December 31,

2020.

XML

Earnings Per Share

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Earnings Per Share

NOTE 12 – Earnings Per Share 

The Company’s restricted stock awards are paid non-forfeitable common stock dividends and thus meet the criteria of participating

securities. Accordingly, earnings per share (“EPS”) has been calculated using the two-class method, under which earnings are

allocated to both common stock and participating securities. 

Basic EPS has been computed by dividing net income or loss allocated to common stock by the weighted average common shares

used in computing basic EPS. For the computation of basic EPS, all shares of restricted stock have been deducted from the weighted

average shares outstanding. 

Diluted EPS has been computed by dividing net income or loss allocated to common stock by the weighted average number of

common shares used in computing basic EPS, further adjusted by including the dilutive impact of the exercise or conversion of

common stock equivalents, such as stock options, into shares of comm on stock as if those securities were exercised or converted.

The following table provides net income and shares used in computing basic and diluted EPS:

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(Dollars in thousands, except per-share data)

Basic EPS

Net income (loss)

$

5,481

$

2,743

$

22,588

$

(14,960)

Less: net income allocated to participating securities

(69)

(36)

(281)

—

Net income (loss) allocated to common stock

$

5,412

$

2,707

$

22,307

$

(14,960)

Weighted average common shares outstanding 

12,026,443

11,946,549

12,007,963

11,951,375

Less: Unvested restricted stock awards considered participating

securities

(150,339)

(155,408)

(149,462)

(142,186)

Adjusted weighted average common shares used in computing

basic EPS

11,876,104

11,791,141

11,858,501

11,809,189

Basic EPS

$

0.46

$

0.23

$

1.88

$

(1.27)

Diluted EPS

Net income (loss) allocated to common stock

$

5,412

$

2,707

$

22,307

$

(14,960)

Adjusted weighted average common shares used in computing

basic EPS

11,876,104

11,791,141

11,858,501

11,809,189

Add: Effect of dilutive stock-based compensation awards

186,146

41,272

113,767

—

Adjusted weighted average common shares used in computing

diluted EPS

12,062,250

11,832,413

11,972,268

11,809,189

Diluted EPS

$

0.45

$

0.23

$

1.86

$

(1.27)

For the three-month periods ended September 30, 2021 and September 30, 2020, weighted average outstanding stock-based

compensation awards in the amount of

112,216

 and

230,428

, respectively, were considered antidilutive and therefore were not

considered in the computation of potential common shares for purposes of diluted EPS. 

For the nine-month periods ended September 30, 2021 and September 30, 2020, weighted average outstanding stock-based

compensation awards in the amount of

132,619

 and

286,349

, respectively, were considered antidilutive and therefore were not

considered in the computation of potential common shares for purposes of diluted EPS.

XML

Stockholders' Equity

9 Months Ended

Sep. 30, 2021

Stockholders' Equity [Abstract]

Stockholders' Equity

NOTE 13 – Stockholders’ Equity 

Share Repurchases

During the three month and nine-month periods ended September 30, 2021, the Company did

no

t purchase any shares of its common

stock under the stock repurchase plan approved by the Company’s Board of Directors on August 1, 2019 (the “2019 Repurchase

Plan”). 

During the three-month period ended September 30, 2020, the Company did

no

t purchase any shares of its common stock under the

2019 Repurchase Plan. During the nine-month period ended September 30, 2020, the Company purchased

264,470

 shares of its

common stock under the 2019 Repurchase Plan at an average cost of $

16.09

 per share.

At September 30, 2021, the Company had $

4.7

 million of remaining authorizations under the 2019 Repurchase Plan. Pursuant to the

Merger Agreement, the Company may not repurchase shares of common stock (pursuant to the 2019 Repurchase Plan or otherwise)

without the prior written consent of Madeira Holdings, LLC.

In addition to the repurchases described above, participants in the Company’s 2014 Equity Compensation Plan (approved by the

Company’s shareholders on June 3, 2014) (the “2014 Plan”) and the Company’s 2019 Equity Compensation Plan (approved by the

Company’s shareholders on May 30, 2019) (as amended by the First Amendment approved by the Company’s shareholders on June 2,

2021, the “2019 Plan”) may have shares withheld to cover income taxes. During the three-month periods ended September 30, 2021

and September 30, 2020, there were

36

 shares and

18,446

 shares repurchased to cover income tax withholding under the 2014 Plan

and the 2019 Plan at an average cost of $

22.44

 per share and $

8.06

 per share, respectively. During the nine-month periods ended

September 30, 2021 and September 30, 2020, there were

16,198

 and

41,466

 shares repurchased to cover income tax withholding in

connection with shares granted under the 2014 Plan and the 2019 Plan at average per-share costs of $

14.07

 and $

10.70

, respectively.

Regulatory Capital Requirements

Through its issuance of FDIC-insured deposits, MBB serves as the Company’s primary funding source. Over time, MBB may offer

other products and services to the Company’s customer base. MBB operates as a Utah state-chartered, Federal Reserve member

commercial bank, insured by the FDIC. As a state-chartered Federal Reserve member bank, MBB is supervised by both the Federal

Reserve Bank of San Francisco and the Utah Department of Financial Institutions.

The Company and MBB are subject to capital adequacy regulations issued jointly by the federal bank regulatory agencies. These risk-

based capital and leverage guidelines make regulatory capital requirements more sensitive to differences in risk profiles among

banking organizations and consider off -balance sheet exposures in determining capital adequacy. The federal bank regulatory agencies

and/or the U.S. Congress may determine to increase capital requirements in the future due to the current economic environment.

Under the capital adequacy regulation, at least half of a banking organization’s total capital is required to be "Tier 1 Capital" as

defined in the regulations, comprised of common equity, retained earnings and a limited amount of non-cumulative perpetual

preferred stock. The remaining capital, "Tier 2 Capital," as defined in the regulations, may consist of other preferred stock, a limited

amount of term subordinated debt or a limited amount of the reserve for possible credit losses. The regulations establish minimum

leverage ratios for banking organizations, which are calculated by dividing Tier 1 Capital by total average assets. Recognizing that the

risk-based capital standards principally address credit risk rather than interest rate, liquidity, operational or other risks, many banking

organizations are expected to maintain capital in excess of the minimum standards. 

The Company and MBB operate under the Basel III capital adequacy standards. These standards require a minimum for Tier 1

leverage ratio of

4

%, minimum Tier 1 risk-based ratio of

6

%, and a total risk-based capital ratio of

8

%. The Basel III capital adequacy

standards established a new common equity Tier 1 risk-based capital ratio with a required

4.5

% minimum (

6.5

% to be considered

well-capitalized). The Company is required to have a level of regulatory capital in excess of the regulatory minimum and to have a

capital buffer above

2.5

%. If a banking organization does not maintain capital above the minimum plus the capital conservation buffer

it may be subject to restrictions on dividends, share buybacks, and certain discretionary payments such as bonus payments. 

CMLA Agreement. 

On March 25, 2020, MBB received notice from the FDIC that it had approved MBB’s request to rescind certain

nonstandard conditions in the FDIC’s order granting federal deposit insurance issued on March 20, 2007. Furthermore, effective

March 26, 2020, the FDIC, the Company and certain of the Company’s subsidiaries terminated the Capital Maintenance and Liquidity

Agreement (the “CMLA Agreement”) and the Parent Company Agreement, each entered into by and among the Company, certain of

its subsidiaries and the FDIC in conjunction with the opening of MBB. As a result of these actions, MBB is no longer required

pursuant to the CMLA Agreement to maintain a total risk-based capital ratio above

15

%. Rather, MBB must continue to maintain a

total risk-based capital ratio above

8

% to be considered adequately capitalized and above

10

% to be considered well-capitalized as

defined by banking regulations, while the Company must continue to maintain a total risk-based capital ratio as discussed in the

immediately preceding paragraph. The additional capital released by the termination of the CMLA Agreement is held at MBB and is

subject to the restrictions outlined in Title 12 part 208 of the Code of Federal Regulations (12 CFR 208.5), which places limitations on

bank dividends, including restricting dividends for any year to the earnings from the current and prior two calendar years less the

amount of cumulative dividends paid over that period. Any dividends declared above that amount and any return of permanent capital

would require prior approval of the Federal Reserve Board of Governors. As of September 30, 2021, MBB has the capacity under 12

CFR 208.5 to pay dividends to the Company without explicit approval from the Federal Reserve Board of Governors.

MBB’s Tier 1 Capital balance at September 30, 2021 was $

165.9

 million, which met all capital requirements to which MBB is subject

and qualified MBB for “well-capitalized” status. At September 30, 2021, the Company also exceeded its regulatory capital

requirements and was considered “well-capitalized” as defined by federal banking regulations and as required by the FDIC

Agreement. 

CECL Capital Transition. 

The Company adopted CECL, or a new measurement methodology for the allowance estimate, on January

1, 2020, as discussed further in Note 2—Summary of Significant Accounting Policies. Rules governing the Company’s regulatory

capital requirements give entities the option of delaying for two years the estimated impact of CECL on regulatory capital, followed

by a three-year transition period to phase out the aggregate amount of capital benefit, or a five-year transition in total. The Company

has elected to avail itself of the five-year transition. For measurements of regulatory capital in 2020 and 2021, under the two year

delay the Company shall prepare: (i) a measurement of its estimated allowance for credit losses under CECL, as reported in its balance

sheets; and (ii) a measurement of its estimated allowance under the historical incurred loss methodology, as prescribed by the

regulatory calculation. Any amount of provisions under CECL that is in excess of the incurred estimate will be an adjustment the

Company’s capital during the two-year delay. The three-year transition, starting in 2022, will phase in that adjustment straight -line,

such that

25

% of the transitional amounts will be included in the first year, and an additional

25

% over each of the next two years,

such that we will have phased in

75

% of the adjustment during year three. At the beginning of year 6 (2025) the Company will have

completely reflected the effects of CECL in its regulatory capital.

The following table sets forth the Tier 1 leverage ratio, common equity Tier 1 risk-based capital ratio, Tier 1 risk-based capital ratio

and total risk-based capital ratio for Marlin Business Services Corp. and MBB at September 30, 2021.

Minimum Capital

Well-Capitalized Capital

Actual

Requirement

Requirement

Ratio

Amount

Ratio

Amount

Ratio

Amount

(Dollars in thousands)

Tier 1 Leverage Capital

 Marlin Business Services Corp.

21.71%

$

217,465

4.00%

$

40,076

5.00%

$

50,095

 Marlin Business Bank

17.84%

$

165,937

4.00%

$

37,210

5.00%

$

46,513

Common Equity Tier 1 Risk-Based Capital

 Marlin Business Services Corp.

25.33%

$

217,465

4.50%

$

38,640

6.50%

$

55,813

 Marlin Business Bank

20.67%

$

165,937

4.50%

$

36,131

6.50%

$

52,189

Tier 1 Risk-based Capital

 Marlin Business Services Corp.

25.33%

$

217,465

6.00%

$

51,519

8.00%

$

68,693

 Marlin Business Bank

20.67%

$

165,937

6.00%

$

48,174

8.00%

$

64,232

Total Risk-based Capital

 Marlin Business Services Corp.

26.60%

$

228,405

8.00%

$

68,693

10.00%

$

85,866

 Marlin Business Bank

21.94%

$

176,181

8.00%

$

64,232

10.00%

$

80,290

Prompt Corrective Action

. The Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) requires the federal

regulators to take prompt corrective action against any undercapitalized institution. Five capital categories have been established

under federal banking regulations: well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and

critically undercapitalized. Well-capitalized institutions significantly exceed the required minimum level for each relevant capital

measure. Adequately capitalized institutions include depository institutions that meet but do not significantly exceed the required

minimum level for each relevant capital measure. Undercapitalized institutions consist of those that fail to meet the required minimum

level for one or more relevant capital measures. Significantly undercapitalized characterizes depository institutions with capital levels

significantly below the minimum requirements for any relevant capital measure. Critically undercapitalized refers to depository

institutions with minimal capital and at serious risk for government seizure.

Under certain circumstances, a well-capitalized, adequately capitalized or undercapitalized institution may be treated as if the

institution were in the next lower capital category. A depository institution is generally prohibited from making capital distributions,

including paying dividends, or paying management fees to a holding company if the institution would thereafter be undercapitalized. 

Institutions that are adequately capitalized but not well-capitalized cannot accept, renew or roll over brokered deposits except with a

waiver from the FDIC and are subject to restrictions on the interest rates that can be paid on such deposits. Undercapitalized

institutions may not accept, renew or roll over brokered deposits.

The federal bank regulatory agencies are permitted or, in certain cases, required to take certain actions with respect to institutions

falling within one of the three undercapitalized categories. Depending on the level of an institution’s capital, the agency’s corrective

powers include, among other things: 

• prohibiting the payment of principal and interest on subordinated debt ;

• prohibiting the holding company from making distributions without prior regulatory approval;

• placing limits on asset growth and restrictions on activities;

• placing additional restrictions on transactions with affiliates;

• restricting the interest rate the institution may pay on deposits;

• prohibiting the institution from accepting deposits from correspondent banks; and

• in the most severe cases, appointing a conservator or receiver for the institution.

A banking institution that is undercapitalized is required to submit a capital restoration plan, and such a plan will not be accepted

unless, among other things, the banking institution’s holding company guarantees the plan up to a certain specified amount. Any such

guarantee from a depository institution’s holding company is entitled to a priority of payment in bankruptcy. 

MBB’s total risk-based capital ratio of

21.94

% at September 30, 2021 exceeded the threshold for “well capitalized” status under the

applicable laws and regulations.

Dividends

. The Federal Reserve Board has issued policy statements requiring insured banks and bank holding companies to have an

established assessment process for maintaining capital commensurate with their overall risk profile. Such assessment process may

affect the ability of the organizations to pay dividends. Although generally organizations may pay dividends only out of current

operating earnings, dividends may be paid if the distribution is prudent relative to the organization’s financial position and risk profile,

after consideration of current and prospective economic conditions. As mentioned above, MBB’s ability to pay dividends to the

Company is subject to various regulatory requirements, including Title 12 part 208 of the Code of Federal Regulations (12 CFR

208.5), which places limitations on bank dividends. Furthermore, as a bank holding company, the Company’s ability to pay dividends

to its shareholders is also subject to various regulatory requirements, including Supervisory Letter SR 09-4,

Applying Supervisory

Guidance and Regulations on the Payment of Dividends, Stock Redemptions and Stock Repurchases at Bank Holding Companies.

Pursuant to the Merger Agreement, the Company may not, without the prior written consent of Madeira Holdings, LLC, declare or pay

any dividends, other than the Company’s regular quarterly cash dividends in an amount not to exceed $

0.14

 per quarter.

XML

Subsequent Events

9 Months Ended

Sep. 30, 2021

Subsequent Events [Abstract]

Events Subsequent to Year-End

NOTE 14 – Subsequent Events 

Quarterly Dividend

The Company declared a dividend of $

0.14

 per share on October 28, 2021. The quarterly dividend, which is expected to result in a

dividend payment of approximately $

1.7

 million, is scheduled to be paid on

November 18, 2021

 to shareholders of record on the close

of business on

November 8, 2021

. It represents the Company’s

forty-first

 consecutive quarterly cash dividend. The payment of future

dividends will be subject to satisfaction of regulatory requirements appli cable to bank holding companies and approval by the

Company’s Board of Directors. In addition, pursuant to the Merger Agreement, the Company may not, without the prior written

consent of Madeira Holdings, LLC, declare or pay any future dividends other than the Company’s regular quarterly cash dividend in

an amount not to exceed $

0.14

 per quarter. 

Deposit Assignment & Assumption Agreement. 

On October 8, 2021, MBB entered into an agreement to transfer its portfolio of brokered certificates of deposit held through The

Depository Trust Company with an outstanding principal amount of approximately $

204.8

 million to a Federal Deposit Insurance

Corporation (“FDIC”)-insured depository institution. In exchange for the acquiror’s assumption of those deposits, MBB has agreed to

pay the acquiror at the time of transfer, in addition to the outstanding principal amount of the deposits, all accrued but unpaid interest

on the deposits as of the transfer date plus a sum of $

750,000

. The agreement contemplates that the transfer, which is subject to

(among other customary closing conditions) the approval of the Utah Department of Financial Institutions and of the FDIC pursuant to

Section 18(c) of the Federal Deposit Insurance Act, expected to occur in late December 2021 or early January 2022.

XML

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2021

Summary of Significant Accounting Policies [Abstract]

Basis of financial statement presentation

Basis of financial statement presentation.

 The unaudited consolidated financial statements include the accounts of the Company and

its wholly-owned subsidiaries. Marlin Leasing Corporation (“MLC”) and MBB are managed together as a single business segment and

are aggregated for financial reporting purposes as they exhibit similar economic characteristics, share the same leasing and loan

portfolio and have a single consolidated product offering platform. All intercompany accounts and transactions have been eliminated

in consolidation.

The accompanying unaudited consolidated financial statements present the Company’s financial position at September 30, 2021 and

the results of operations for the three- and nine -month periods ended September 30, 2021 and 2020, and cash flows for the nine-

month periods ended September 30, 2021 and 2020. In management’s opinion, the unaudited consolidated financial statements

contain all adjustments, which include normal and recurring adjustments, necessary for a fair presentation of the financial position and

results of operations for the interim periods presented. These unaudited consolidated financial statements should be read in

conjunction with the consolidated financial statements and note disclosures included in the Company’s Form 10-K for the year ended

December 31, 2020, filed with the Securities and Exchange Commission (“SEC”) on March 5, 2021. The consolidated results and

statements of cash flows for these interim financial statements are not necessarily indicative of the results of operations or cash flows

for the respective full years or any other period.

Use of Estimates

Use of Estimates.

 These unaudited consolidated financial statements require management to make estimates and assumptions that

affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial

statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used when accounting for

income recognition, the residual values of leased equipment, the allowance for credit losses, deferred initial direct costs and fees, late

fee receivables, the fair value of financial instruments, estimated losses from insurance program, and income taxes. Actual results

could differ from those estimates.

Income taxes

Income taxes.

Our statutory tax rate, which is a combination of federal and state income taxes, was

25.1

% and

25.4

% for the three months ended

September 30, 2021 and September 30, 2020, respectively.

For the nine months ended September 30, 2021, our effective tax rate was

26.2

%. For the nine months ended September 30, 2020, our

effective tax rate was

35.6

%, driven by a $

3.2

 million discrete benefit, resulting from certain provisions in the Coronavirus Aid,

Relief, and Economic Security Act (“CARES Act”) that allow for a remeasurement of our federal net operating losses.

For the three and nine-month periods ended September 30, 2021, our effective tax rates were

27.1

% and

26.2

%, respectively. 

The Company’s IRS federal audit for tax years ending December 31, 2013 to 2018 resulting from Joint Committee Review as part of

an IRS refund claim closed in the second quarter of 2021 with no adjustments. The Company remains subject to examination for the

2017 tax year to the present as of September 30, 2021 under regular statute of limitations.

Accounting Standards Update 2016-13 [Member]

Recent Accounting Pronouncements, Policy [Policy Text Block]

Credit Losses.

 In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and related

ASUs collectively referred to as “CECL”.

The Company adopted the guidance in these ASUs, effective January 1, 2020, applying changes resulting from the application of the

new standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in

which the guidance was effective (i.e., modified retrospective approach). See our Annual Report on Form 10-K for the year ended

December 31, 2020 for a detailed discussion of our adoption of this guidance.

Accounting Standards Update 2019-12 [Member]

Recent Accounting Pronouncements, Policy [Policy Text Block]

Income Taxes

. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for

Income Taxes, which removes certain exceptions to the general principles of ASC 740 in order to reduce the cost and complexity of

its application. The amendments also clarify and amend existing guidance to improve consistent application. The ASU is effective for

fiscal years beginning after December 15, 2020, including interim periods within those annual periods. We adopted ASU 2019-12 on

January 1, 2021, and the adoption did not have a material impact on our consolidated financial position or results of operations.

XML

Non-Interest Income (Tables)

9 Months Ended

Sep. 30, 2021

Non-interest Income [Abstract]

Summary of non-interest income

Three Months Ended

Nine Months Ended 

September 30,

September 30,

(Dollars in thousands)

2021

2020

2021

2020

Insurance premiums written and earned

$

1,906

$

2,082

$

5,847

$

6,612

Gain on sale of leases and loans

—

87

—

2,426

Other income: 

Property tax income

149

123

5,190

5,247

Servicing income

270

462

963

1,517

Net (loss) gain recognized during the period on investment securities

(3)

—

(59)

89

Non-interest income - other than from contracts with customers

2,322

2,754

11,941

15,891

Other income:

Insurance policy fees

749

819

2,268

2,610

Property tax administrative fees on leases

213

243

622

713

ACH payment fees

62

35

184

143

Referral fees

26

15

57

123

Other

234

347

603

730

Non-interest income from contracts with customers

1,284

1,459

3,734

4,319

Total non-interest income

$

3,606

$

4,213

$

15,675

$

20,210

XML

Investment SecurIties (Tables)

9 Months Ended

Sep. 30, 2021

Investment securities [Abstract]

Investment Securities Summary [Table Text Block]

September 30,

December 31,

(Dollars in thousands)

2021

2020

Equity Securities

Mutual fund

$

—

$

3,760

Debt Securities, Available for Sale:

Asset-backed securities ("ABS")

—

3,719

Municipal securities

—

4,145

 Total investment securities

$

—

$

11,624

Equity Securities, FV-NI [Table Text Block]

Three Months Ended September 30,

Nine Months Ended September 30,

(Dollars in thousands)

2021

2020

2021

2020

Net gains (losses) recognized during the period on equity securities 

$

75

$

—

$

20

$

89

Less: Net gains (losses) recognized during the period

 on equity securities sold during the period

75

—

20

—

Unrealized gains recognized during the reporting period

 on equity securities still held at the reporting date

$

—

$

—

$

—

$

89

Summary of available for sale investments [Table Text Block]

Gross 

Gross

Amortized

Unrealized 

Unrealized

Estimated

Cost

Gains

Losses

Fair Value

(Dollars in thousands)

ABS

$

3,666

$

53

$

—

$

3,719

Municipal securities

4,082

64

(1)

4,145

 Total Debt Securities, Available for Sale

$

7,748

$

117

$

(1)

$

7,864

Schedule of Unrealized Loss on Investments [Table Text Block]

Less than 12 months

12 months or longer

Total

Gross 

Gross

Gross

Unrealized 

Fair

Unrealized

Fair

Unrealized

Fair

Losses

Value

Losses

Value

Losses

Value

(Dollars in thousands)

Municipal securities

$

(1)

$

141

$

—

$

—

$

(1)

$

141

Total available for sale investment

securities

$

(1)

$

141

$

—

$

—

$

(1)

$

141

XML

Net Investment in Leases and Loans (Tables)

9 Months Ended

Sep. 30, 2021

Net Investment in Leases and Loans [Abstract]

Net investment in leases and loans

September 30, 2021

December 31, 2020

(Dollars in thousands)

Minimum lease payments receivable

$

308,479

$

354,298

Estimated residual value of equipment

24,999

26,983

Unearned lease income, net of initial direct costs and fees deferred

(37,560)

(43,737)

Security deposits

(404)

(385)

Total leases

295,514

337,159

Commercial loans, net of origination costs and fees deferred

Working Capital Loans

31,178

20,034

CRA

(1)

1,019

1,091

Equipment loans

(2)

414,392

449,149

CVG

78,650

61,851

Total commercial loans

525,239

532,125

Net investment in leases and loans, excluding allowance

820,753

869,284

Allowance for credit losses

(27,521)

(44,228)

Total net investment in leases and loans

$

793,232

$

825,056

CRA loans are comprised of loans originated under a line of credit to satisfy its obligations under the Community Reinvestment Act of 1977

(“CRA”).

(2)

Equipment loans are comprised of Equipment Finance Agreements, Installment Purchase Agreements and other loans.

In response to COVID-19, starting in mid-March 2020, the Company instituted a payment deferral contract modification program in

order to assist our small-business customers. See Note 6, “Allowance for Credit Losses” for discussion of that program.

At September 30, 2021, $

12.8

 million in net investment in leases were pledged as collateral for the Company’s outstanding asset-

backed securitization balance and $

55.9

 million in net investment in leases were pledged as collateral for the secured borrowing

capacity at the Federal Reserve Discount Window. 

The amount of deferred initial direct costs and origination costs net of fees deferred were $

13.6

 million and $

14.6

 million as of

September 30, 2021 and December 31, 2020, respectively. Initial direct costs are netted in unearned income and are amortized to

income using the effective interest method. Origination costs are netted in commercial loans and are amortized to income using the

effective interest method. At September 30, 2021 and December 31, 2020, $

20.8

 million and $

21.9

 million, respectively, of the

estimated residual value of equipment retained on our Consolidated Balance Sheets was related to copiers.

Maturities of lease receivables under lease contracts and the amortization of unearned lease income

Minimum Lease

Payments

Net Income

Receivable

(1)

Amortization

(2)

(Dollars in thousands)

Period Ending December 31,

Remainder of 2021

$

33,951

$

7,902

2022

120,586

16,069

2023

80,663

8,510

2024

45,306

3,668

2025

20,550

1,221

Thereafter

7,423

190

$

308,479

$

37,560

Represents the undiscounted cash flows of the lease payments receivable.

(2)

Represents the difference between the undiscounted cash flows and the discounted cash flows.

Lease Income

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(Dollars in thousands)

Interest Income

$

6,070

$

8,357

$

19,073

$

25,977

Summary of information related to portfolio sales

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(Dollars in thousands)

Sales of leases and loans 

$

—

$

4,286

$

—

$

28,342

Gain on sale of leases and loans

—

87

—

2,426

XML

Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2021

Allowance For Credit Losses [Abstract]

Summary of activity in the allowance for credit losses

Three Months Ended September 30, 2021

(Dollars in thousands)

Equipment

Finance

Working

Capital

Loans

CVG

CRA

Total

Allowance for credit losses, beginning of period

$

19,718

$

1,003

$

8,036

$

—

$

28,757

 Charge-offs

(2,407)

(262)

(27)

—

(2,696)

 Recoveries

1,273

158

85

—

1,516

Net charge-offs

(1,134)

(104)

58

—

(1,180)

Realized cashflows from Residual Income

1,127

—

—

—

1,127

 Provision for credit losses

(1,334)

300

(149)

—

(1,183)

Allowance for credit losses, end of period

$

18,377

$

1,199

$

7,945

$

—

$

27,521

Net investment in leases and loans, before allowance

$

717,697

$

31,178

$

70,859

$

1,019

$

820,753

Three Months Ended September 30, 2020

(Dollars in thousands)

Equipment

Finance

Working

Capital

Loans

CVG

CRA &

PPP

Total

Allowance for credit losses, beginning of period

$

48,550

$

7,962

$

7,132

$

—

$

63,644

 Charge-offs

(10,509)

(633)

(524)

—

(11,666)

 Recoveries

983

101

94

—

1,178

 Net charge-offs

(9,526)

(532)

(430)

—

(10,488)

Realized cashflows from Residual Income

965

—

—

—

965

 Provision for credit losses

7,226

(3,974)

3,952

—

7,204

Allowance for credit losses, end of period

$

47,215

$

3,456

$

10,654

$

—

$

61,325

Net investment in leases and loans, before allowance

$

803,689

$

26,472

$

76,778

$

1,114

$

908,053

Nine Months Ended September 30, 2021

(Dollars in thousands)

Equipment

Finance

Working

Capital

Loans

CVG

CRA

Total

Allowance for credit losses, beginning of period

$

33,184

$

1,206

$

9,838

$

—

$

44,228

 Charge-offs

(8,556)

(813)

(1,176)

—

(10,545)

 Recoveries

3,933

432

308

—

4,673

Net charge-offs

(4,623)

(381)

(868)

—

(5,872)

Realized cashflows from Residual Income

3,175

—

—

—

3,175

 Provision for credit losses

(13,359)

374

(1,025)

—

(14,010)

Allowance for credit losses, end of period

$

18,377

$

1,199

$

7,945

$

—

$

27,521

Net investment in leases and loans, before allowance

$

717,697

$

31,178

$

70,859

$

1,019

$

820,753

Nine Months Ended September 30, 2020

(Dollars in thousands)

Equipment

Finance

Working

Capital

Loans

CVG

CRA &

PPP

Total

Allowance for credit losses, December 31, 2019

$

18,334

$

1,899

$

1,462

$

—

$

21,695

Adoption of ASU 2016-13 (CECL)

(1)

9,264

(3)

2,647

—

11,908

Allowance for credit losses, beginning of period

$

27,598

$

1,896

$

4,109

$

—

$

33,603

 Charge-offs

(24,723)

(2,598)

(2,157)

—

(29,478)

 Recoveries

2,237

156

257

—

2,650

 Net charge-offs

(22,486)

(2,442)

(1,900)

—

(26,828)

Realized cashflows from Residual Income

3,390

—

—

—

3,390

 Provision for credit losses

38,713

4,002

8,445

—

51,160

Allowance for credit losses, end of period

$

47,215

$

3,456

$

10,654

$

—

$

61,325

Net investment in leases and loans, before allowance

$

803,689

$

26,472

$

76,778

$

1,114

$

908,053

(1)

 The Company adopted ASU 2016-13,

Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on

Financial Instruments

, which changed our accounting policy and estimated allowance, effective January 1, 2020. See further

discussion in Note 2, “Summary of Significant Accounting Policies”, and below.

Information about delinquent leases and loans in the Company's portfolio

Portfolio by Origination Year as of September 30, 2021

Total

2021

2020

2019

2018

2017

Prior

Receivables

(Dollars in thousands)

Equipment Finance

30-59

$

612

$

688

$

1,149

$

435

$

230

$

31

$

3,145

60-89

179

146

584

277

78

28

1,292

90+

91

266

323

197

90

31

998

Total Past Due

882

1,100

2,056

909

398

90

5,435

Current

203,688

196,444

192,259

83,310

32,507

4,054

712,262

Total

204,570

197,544

194,315

84,219

32,905

4,144

717,697

Working Capital

30-59

224

26

—

—

—

—

250

60-89

51

—

43

—

—

—

94

90+

—

24

—

—

—

—

24

Total Past Due

275

50

43

—

—

—

368

Current

28,626

1,901

283

—

—

—

30,810

Total

28,901

1,951

326

—

—

—

31,178

CVG

30-59

—

—

—

7

2

41

50

60-89

51

157

91

14

—

—

313

90+

—

—

74

55

—

—

129

Total Past Due

51

157

165

76

2

41

492

Current

21,695

13,879

23,270

8,735

2,393

395

70,367

Total

21,746

14,036

23,435

8,811

2,395

436

70,859

CRA

Total Past Due

—

—

—

—

—

—

—

Current

1,019

—

—

—

—

—

1,019

Total

1,019

—

—

—

—

—

1,019

Net investment in leases

and loans, before allowance

$

256,236

$

213,531

$

218,076

$

93,030

$

35,300

$

4,580

$

820,753

Portfolio by Origination Year as of December 31, 2020

Total

2020

2019

2018

2017

2016

Prior

Receivables

(Dollars in thousands)

Equipment Finance

30-59

$

1,162

$

1,526

$

1,349

$

690

$

292

$

14

$

5,033

60-89

367

1,111

463

532

130

6

2,609

90+

503

1,370

804

377

199

16

3,269

Total Past Due

2,032

4,007

2,616

1,599

621

36

10,911

Current

265,036

276,140

138,142

65,722

18,805

1,615

765,460

Total

267,068

280,147

140,758

67,321

19,426

1,651

776,371

Working Capital

30-59

125

481

—

—

—

—

606

60-89

—

135

—

—

—

—

135

90+

—

—

—

—

—

—

—

Total Past Due

125

616

—

—

—

—

741

Current

12,741

6,528

24

—

—

—

19,293

Total

12,866

7,144

24

—

—

—

20,034

CVG

30-59

591

1,039

173

29

21

—

1,853

60-89

—

69

33

—

68

—

170

90+

—

340

179

5

11

—

535

Total Past Due

591

1,448

385

34

100

—

2,558

Current

17,065

30,805

13,733

5,938

1,659

30

69,230

Total

17,656

32,253

14,118

5,972

1,759

30

71,788

CRA

Total Past Due

—

—

—

—

—

—

—

Current

1,091

—

—

—

—

—

1,091

Total

1,091

—

—

—

—

—

1,091

Net investment in leases

and loans, before allowance

$

298,681

$

319,544

$

154,900

$

73,293

$

21,185

$

1,681

$

869,284

Information about non-accrual leases and loans

September 30,

December 31,

(Dollars in thousands)

2021

2020

Equipment Finance

$

2,485

$

5,543

Working Capital Loans

139

932

CVG

7,495

7,814

Total Non-Accrual

$

10,119

$

14,289

XML

Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets [Abstract]

Schedule of Finite Lived Intangible Assets

Gross Carrying

Accumulated

Net

(Dollars in thousands)

Useful Life

Amount

Amortization

Value

Vendor relationships

11

years

$

7,290

$

2,134

$

5,156

Corporate trade name

7

years

60

41

19

 Total

$

7,350

$

2,175

$

5,175

Schedule of amortization expense for the next five years

The Company expects the amortization expense for the next five years will be as follows:

Amortization

(Dollars in thousands)

Expense

Remainder of 2021

$

168

2022

671

2023

671

2024

663

2025

663

XML

Other Assets (Tables)

9 Months Ended

Sep. 30, 2021

Other Assets [Abstract]

Schedule of Other Assets

September 30,

December 31,

2021

2020

(Dollars in thousands)

Accrued fees receivable

$

2,289

$

2,928

Prepaid expenses

2,404

2,790

Income taxes receivable 

8,214

—

Federal Reserve Bank Stock

1,711

1,711

Other 

1,942

2,783

$

16,560

$

10,212

XML

Deposits (Tables)

9 Months Ended

Sep. 30, 2021

Deposits [Abstract]

Schedule of maturities of certificates of deposits

Scheduled

Dollars in thousands

Maturities

Period Ending December 31,

Remainder of 2021

$

391,752

2022

204,023

2023

91,829

2024

33,321

2025

9,054

Total

$

729,979

XML

Debt and Financing Arrangements (Tables)

9 Months Ended

Sep. 30, 2021

Debt and Financing Arrangements [Abstract]

Schedule of balance of long-term borrowings

September 30,

December 31,

2021

2020

(Dollars in thousands)

Term securitization 2018-1

$

11,719

$

30,800

Unamortized debt issuance costs

(43)

(135)

$

11,676

$

30,665

Schedule of term note securitization

The term note securitization is summarized below:

Outstanding Balance as of

Notes

Final

Original 

September 30,

December 31,

Originally 

Maturity 

Coupon 

2021

2020

Issued

Date

Rate

(Dollars in thousands)

2018 — 1

 Class A-1 

$

—

$

—

$

77,400

July, 2019

2.55

%

 Class A-2 

—

—

55,700

October, 2020

3.05

 Class A-3 

—

—

36,910

April, 2023

3.36

 Class B

—

9,560

10,400

May, 2023

3.54

 Class C

1,869

11,390

11,390

June, 2023

3.70

 Class D

5,470

5,470

5,470

July, 2023

3.99

 Class E

4,380

4,380

4,380

May, 2025

5.02

Total Term Note Securitizations

$

11,719

$

30,800

$

201,650

3.05

%

(1)(2)

(1)

Represents the original weighted average initial coupon rate for all tranches of the securitization. In addition to this coupon

interest, term note securitizations have other transaction costs which are amortized over the life of the borrowings as additional

interest expense.

 (2)

The weighted average coupon rate of the 2018-1 term note securitization will approximate 4.33% over the remaining term of the

borrowing.

Scheduled principal and interest payments on outstanding borrowings

Based on current expected cashflows of leases underlying our term note securitization, principal and interest payments are estimated

as of September 30, 2021 as follows:

Principal

Interest

(Dollars in thousands)

Period Ending December 31,

Remainder of 2021

$

3,137

$

121

2022

8,582

$

159

$

11,719

$

280

XML

Fair Value Measurements and Disclosures about the Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value Measurements And Disclosures About Fair Value Of Financial Instruments [Abstract]

Schedule of balances measured at fair value on a recurring basis

September 30, 2021

December 31, 2020

Fair Value Measurements Using

Fair Value Measurements Using

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

(Dollars in thousands)

Assets

ABS

$

—

$

—

$

—

$

—

$

3,719

$

—

Municipal securities

—

—

—

—

4,145

—

Mutual fund

—

—

—

3,760

—

—

Schedule of Carrying Amount and Estimated Fair Value of Financial Instruments

September 30, 2021

December 31, 2020

Carrying

Fair

Carrying

Fair

Amount

Value

Amount

Value

(Dollars in thousands)

Financial Assets

Cash and cash equivalents

$

222,260

$

222,260

$

135,691

$

135,691

Time deposits with banks

996

1,000

5,967

6,003

Restricted interest-earning deposits with banks

3,202

3,202

4,719

4,719

Loans, net of allowance

504,335

513,431

500,768

507,362

Federal Reserve Bank Stock

1,711

1,711

1,711

1,711

Financial Liabilities

 Deposits

$

783,203

$

790,175

$

729,614

$

742,882

 Long-term borrowings

11,676

11,961

30,665

31,114

XML

Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Schedule of net income and shares used in computing basic and diluted EPS

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(Dollars in thousands, except per-share data)

Basic EPS

Net income (loss)

$

5,481

$

2,743

$

22,588

$

(14,960)

Less: net income allocated to participating securities

(69)

(36)

(281)

—

Net income (loss) allocated to common stock

$

5,412

$

2,707

$

22,307

$

(14,960)

Weighted average common shares outstanding 

12,026,443

11,946,549

12,007,963

11,951,375

Less: Unvested restricted stock awards considered participating

securities

(150,339)

(155,408)

(149,462)

(142,186)

Adjusted weighted average common shares used in computing

basic EPS

11,876,104

11,791,141

11,858,501

11,809,189

Basic EPS

$

0.46

$

0.23

$

1.88

$

(1.27)

Diluted EPS

Net income (loss) allocated to common stock

$

5,412

$

2,707

$

22,307

$

(14,960)

Adjusted weighted average common shares used in computing

basic EPS

11,876,104

11,791,141

11,858,501

11,809,189

Add: Effect of dilutive stock-based compensation awards

186,146

41,272

113,767

—

Adjusted weighted average common shares used in computing

diluted EPS

12,062,250

11,832,413

11,972,268

11,809,189

Diluted EPS

$

0.45

$

0.23

$

1.86

$

(1.27)

XML

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2021

Stockholders' Equity [Abstract]

Schedule of Tier 1 leverage ratio, common equity Tier 1 risk-based capital ratio, Tier 1 risk-based capital ratio and total risk-based capital ratio

Minimum Capital

Well-Capitalized Capital

Actual

Requirement

Requirement

Ratio

Amount

Ratio

Amount

Ratio

Amount

(Dollars in thousands)

Tier 1 Leverage Capital

 Marlin Business Services Corp.

21.71%

$

217,465

4.00%

$

40,076

5.00%

$

50,095

 Marlin Business Bank

17.84%

$

165,937

4.00%

$

37,210

5.00%

$

46,513

Common Equity Tier 1 Risk-Based Capital

 Marlin Business Services Corp.

25.33%

$

217,465

4.50%

$

38,640

6.50%

$

55,813

 Marlin Business Bank

20.67%

$

165,937

4.50%

$

36,131

6.50%

$

52,189

Tier 1 Risk-based Capital

 Marlin Business Services Corp.

25.33%

$

217,465

6.00%

$

51,519

8.00%

$

68,693

 Marlin Business Bank

20.67%

$

165,937

6.00%

$

48,174

8.00%

$

64,232

Total Risk-based Capital

 Marlin Business Services Corp.

26.60%

$

228,405

8.00%

$

68,693

10.00%

$

85,866

 Marlin Business Bank

21.94%

$

176,181

8.00%

$

64,232

10.00%

$

80,290

XML

The Company (Details)	9 Months Ended
	Sep. 30, 2021
Business Combination, Description [Abstract]
Entity Incorporation, State or Country Code	PA
Entity Incorporation, Date of Incorporation	Aug. 05, 2003
Marlin Business Bank [Member]
Business Combination, Description [Abstract]
Entity Incorporation, State or Country Code	UT

XML

Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Summary of Significant Accounting Policies [Abstract]
Other income tax, discrete (benefit)			$ 3.2
Statutory tax rate	25.10%	25.40%
Effective Income Tax Rate Reconciliation, Percent	27.10%		26.20%	35.60%

XML

Non-Interest Income (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Non-interest Income [Abstract]
Insurance premiums written and earned	$ 1,906,000	$ 2,082,000	$ 5,847,000	$ 6,612,000
Gain on sale of leases and loans	0	87,000	0	2,426,000
Property tax income	149,000	123,000	5,190,000	5,247,000
Servicing income	270,000	462,000	963,000	1,517,000
Net (loss) gain recognized during the period on investment securities	(3,000)	0	(59,000)	89,000
Non-interest income - other than from contracts with customers	2,322,000	2,754,000	11,941,000	15,891,000
Insurance policy fees	749,000	819,000	2,268,000	2,610,000
Property tax administrative fees on leases	213,000	243,000	622,000	713,000
ACH payment fees	62,000	35,000	184,000	143,000
Referral fees	26,000	15,000	57,000	123,000
Other	234,000	347,000	603,000	730,000
Non-interest income from contracts with customers	1,284,000	1,459,000	3,734,000	4,319,000
Non-interest income	$ 3,606,000	$ 4,213,000	$ 15,675,000	$ 20,210,000

XML

Investment Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt Securities Available-for-sale [Line Items]
Investment securities	$ 0	$ 11,624
Mutual Fund [Member]
Debt Securities Available-for-sale [Line Items]
Investment securities	0	3,760
Asset Backed Securities [Member]
Debt Securities Available-for-sale [Line Items]
Investment securities	0	3,719
Municipal Securities [Member]
Debt Securities Available-for-sale [Line Items]
Investment securities	$ 0	$ 4,145

XML

Investment Securities - Schedule of changes in Fair Value of Equity securities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Equity Securities, FV-NI, Gain (Loss) [Abstract]
Net gains (losses) recognized during the period on equity securities	$ 75	$ 0	$ 20	$ 89
Less: Net gains (losses) recognized during the period on equity securities sold during the period	75	0	20	0
Unrealized gains recognized during the reporting period on equity securities still held at the reporting date	$ 0	$ 0	$ 0	$ 89

XML

Investment Securities - Schedule of Available for Sale Investments (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt Securities Available-for-sale [Line Items]
Estimated Fair Value	$ 0	$ 11,624
Debt Securities [Member]
Debt Securities Available-for-sale [Line Items]
Amortized cost		7,748
Gross Unrealized Gains		117
Gross Unrealized Losses		(1)
Estimated Fair Value		7,864
ABS [Member]
Debt Securities Available-for-sale [Line Items]
Amortized cost		3,666
Gross Unrealized Gains		53
Gross Unrealized Losses		0
Estimated Fair Value	0	3,719
Municipal Securities [Member]
Debt Securities Available-for-sale [Line Items]
Amortized cost		4,082
Gross Unrealized Gains		64
Gross Unrealized Losses		(1)
Estimated Fair Value	$ 0	$ 4,145

XML

Investment Securities - Gross Unrealized Loss and Fair Value of Securities Available for Sale (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Debt Securities Available-for-sale [Line Items]
Gross Unrealized Losses, Less than 12 months	$ (1)
Fair Value, Less than 12 months	141
Gross Unrealized Losses, 12 months or longer	0
Fair Value, 12 months or longer	0
Gross Unrealized Losses, Total	(1)
Fair Value, Total	141
Municipal Securities [Member]
Debt Securities Available-for-sale [Line Items]
Gross Unrealized Losses, Less than 12 months	(1)
Fair Value, Less than 12 months	141
Gross Unrealized Losses, 12 months or longer	0
Fair Value, 12 months or longer	0
Gross Unrealized Losses, Total	(1)
Fair Value, Total	$ 141

XML

Net Investment in Leases and Loans - Narratives (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020
Net Investment in Leases and Loans [Abstract]
Initial direct costs and origination costs	$ 13,600	$ 14,600
Servicing liability	700	1,300
Portfolio of leases and loans serviced for others	146,000	230,000
Finance receivables on a non-accrual basis	10,119	14,289
Net investments [Line Items]
Estimated residual value of equipment	24,999	26,983
Total active modifications, net investment	820,753	869,284	$ 908,053
Loan Modification Program [Member]
Net investments [Line Items]
Total active modifications, net investment	69,500
Asset Backed Securities [Member]
Net investments [Line Items]
Net investment in leases are pledged as collateral	12,800
Federal Reserve Discount Window [Member]
Net investments [Line Items]
Net investment in leases are pledged as collateral	55,900
Copier Product [Member]
Net investments [Line Items]
Estimated residual value of equipment	$ 20,800	$ 21,900

XML

Net Investment in Leases and Loans - Net Investment in Leases and Loans (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Net Investment in Leases and Loans [Abstract]
Sales-type and Direct Financing Leases, Lease Receivable, Payments to be Received	$ 308,479		$ 354,298
Estimated residual value of equipment	24,999		26,983
Unearned lease income, net of initial direct costs and fees deferred	(37,560)		(43,737)
Security deposits	(404)		(385)
Total leases	295,514		337,159
Allowance for Credit Losses [Line Items]
Net Investment In Commercial Loans	525,239		532,125
Net investment in leases and loans, before allowance	820,753		869,284	$ 908,053
Allowance for credit losses	(27,521)	$ (28,757)	(44,228)	(61,325)	$ (63,644)	$ (21,695)
Total net investment in leases and loans	793,232		825,056
Working capital Loans [Member]
Allowance for Credit Losses [Line Items]
Net Investment In Commercial Loans	31,178		20,034
Net investment in leases and loans, before allowance	31,178		20,034	26,472
Allowance for credit losses	(1,199)	(1,003)	(1,206)	(3,456)	(7,962)	(1,899)
CRA [Member]
Allowance for Credit Losses [Line Items]
Net Investment In Commercial Loans	1,019		1,091
Net investment in leases and loans, before allowance	1,019		1,091	1,114
Allowance for credit losses	0	0	0	0	0	0
Equipment Finance [Member]
Allowance for Credit Losses [Line Items]
Net Investment In Commercial Loans	414,392		449,149
Net investment in leases and loans, before allowance	717,697		776,371	803,689
Allowance for credit losses	(18,377)	(19,718)	(33,184)	(47,215)	(48,550)	(18,334)
CVG [Member]
Allowance for Credit Losses [Line Items]
Net Investment In Commercial Loans	78,650		61,851
Net investment in leases and loans, before allowance	70,859		71,788	76,778
Allowance for credit losses	$ (7,945)	$ (8,036)	$ (9,838)	$ (10,654)	$ (7,132)	$ (1,462)

XML

Net Investment in Leases and Loans - Maturities of Lease Receivables Under Lease Contracts and the Amortization of Unearned Lease Income (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Future Minimum Lease Payments Receivable Schedule [Abstract]
Remaining part of 2021	$ 33,951
2022	120,586
2023	80,663
2024	45,306
2025	20,550
Thereafter	7,423
Minimum Lease Payments Receivable	308,479	$ 354,298
Future Scheduled Income Amortization [Abstract]
Remaing part of 2021	7,902
2022	16,069
2023	8,510
2024	3,668
2025	1,221
Thereafter	190
Net income amortization	$ 37,560	$ 43,737

XML

Net Investment in Leases and Loans - Summary of Information Related to Portfolio Sales (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Sales of leases and loans	$ 0	$ 4,286	$ 0	$ 28,342
Gain on sale of leases and loans	0	87	0	2,426
Interest Income [Member]
Lease income	$ 6,070	$ 8,357	$ 19,073	$ 25,977

XML

Allowance for Credit Losses - Narratives (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) Contracts	Sep. 30, 2020 USD ($)	Jun. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)
Allowance For Credit Losses [Abstract]
Finance Receivables 90 Days or More Past Due and Still Accruing	$ 0		$ 0			$ 0
Working Capital Loans past due 30 days or more and still accruing	0		0			0
Financing Receivable, Troubled Debt Restructuring	10,300,000		10,300,000
Allowance for Credit Losses [Line Items]
Provision for credit losses	(1,183,000)	$ 7,204,000	(14,010,000)	$ 51,160,000
Loans and leases receivable, allowance	27,521,000	61,325,000	27,521,000	61,325,000	$ 28,757,000	44,228,000	$ 63,644,000	$ 21,695,000
Net investment in leases and loans	820,753,000	908,053,000	$ 820,753,000	908,053,000		869,284,000
Loan Modification Program [Member]
Allowance for Credit Losses [Line Items]
Number of lease contracts modified | Contracts			3,460
Financing Receivable, Modifications, Number of Contracts charged off | Contracts			311
Accounts Receivable, Allowance for Credit Loss, Writeoff			$ 7,000,000.0
Financing Receivable, Modifications, Number of Contracts Paid In Full | Contracts			1,848
Net investment in leases and loans	69,500,000		$ 69,500,000
Loan Modification Program [Member] | Maximum [Member]
Allowance for Credit Losses [Line Items]
Percentage of reduced payment of deferral schedule			50.00%
Loan Modification Program [Member] | Minimum [Member]
Allowance for Credit Losses [Line Items]
Percentage of reduced payment of deferral schedule			25.00%
Loan Modification Program [Member] | Out of deferral [Member]
Allowance for Credit Losses [Line Items]
Net investment in leases and loans	500,000		$ 500,000
Equipment Finance [Member]
Allowance for Credit Losses [Line Items]
Provision for credit losses	(1,334,000)	7,226,000	(13,359,000)	38,713,000
Loans and leases receivable, allowance	18,377,000	47,215,000	18,377,000	47,215,000	19,718,000	33,184,000	48,550,000	18,334,000
Net investment in leases and loans	717,697,000	803,689,000	717,697,000	803,689,000		776,371,000
Equipment Finance [Member] | Total Past Due [Member]
Allowance for Credit Losses [Line Items]
Net investment in leases and loans	5,435,000		5,435,000			10,911,000
Equipment Finance [Member] | Adjustments related to Covid 19 [Member]
Allowance for Credit Losses [Line Items]
Provision for credit losses	(1,300,000)	7,200,000	(13,400,000)	38,700,000
Working capital Loans [Member]
Allowance for Credit Losses [Line Items]
Provision for credit losses	300,000	(3,974,000)	374,000	4,002,000
Loans and leases receivable, allowance	1,199,000	3,456,000	1,199,000	3,456,000	1,003,000	1,206,000	7,962,000	1,899,000
Net investment in leases and loans	31,178,000	26,472,000	31,178,000	26,472,000		20,034,000
Working capital Loans [Member] | Total Past Due [Member]
Allowance for Credit Losses [Line Items]
Net investment in leases and loans	368,000		368,000			741,000
Working capital Loans [Member] | Adjustments related to Covid 19 [Member]
Allowance for Credit Losses [Line Items]
Provision for credit losses	300,000		400,000
CVG [Member]
Allowance for Credit Losses [Line Items]
Provision for credit losses	(149,000)	3,952,000	(1,025,000)	8,445,000
Loans and leases receivable, allowance	7,945,000	10,654,000	7,945,000	10,654,000	8,036,000	9,838,000	7,132,000	1,462,000
Net investment in leases and loans	70,859,000	76,778,000	70,859,000	76,778,000		71,788,000
CVG [Member] | Loan Modification Program [Member]
Allowance for Credit Losses [Line Items]
Loans and leases receivable, allowance	4,700,000		4,700,000
CVG [Member] | Total Past Due [Member]
Allowance for Credit Losses [Line Items]
Net investment in leases and loans	492,000		492,000			2,558,000
CRA [Member]
Allowance for Credit Losses [Line Items]
Provision for credit losses	0	0	0	0
Loans and leases receivable, allowance	0	0	0	0	$ 0	0	$ 0	$ 0
Net investment in leases and loans	1,019,000	$ 1,114,000	1,019,000	$ 1,114,000		1,091,000
CRA [Member] | Total Past Due [Member]
Allowance for Credit Losses [Line Items]
Net investment in leases and loans	0		0			$ 0
CRA [Member] | Adjustments related to Covid 19 [Member]
Allowance for Credit Losses [Line Items]
Provision for credit losses	$ (1,200,000)		$ (14,000,000.0)

XML

Allowance for Credit Losses - Activity in the allowance for credit losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Allowance for Credit Losses [Roll Forward]
Allowance for credit losses, beginning of period	$ 28,757	$ 63,644	$ 44,228	$ 21,695
Charge-offs	(2,696)	(11,666)	(10,545)	(29,478)
Recoveries	1,516	1,178	4,673	2,650
Net charge-offs	(1,180)	(10,488)	(5,872)	(26,828)
Realized cashflows from Residual Income	1,127	965	3,175	3,390
Provision for credit losses	(1,183)	7,204	(14,010)	51,160
Allowance for credit losses, end of period	27,521	61,325	27,521	61,325
Net investment in leases and loans, before allowance	820,753	908,053	820,753	908,053	$ 869,284
Accounting Standards Update 2016-13 [Member]
Allowance for Credit Losses [Roll Forward]
Allowance for credit losses, beginning of period				33,603
Accounting Standards Update 2016-13 [Member] | Adoption Impact [Member]
Allowance for Credit Losses [Roll Forward]
Allowance for credit losses, beginning of period				11,908
Equipment Finance [Member]
Allowance for Credit Losses [Roll Forward]
Allowance for credit losses, beginning of period	19,718	48,550	33,184	18,334
Charge-offs	(2,407)	(10,509)	(8,556)	(24,723)
Recoveries	1,273	983	3,933	2,237
Net charge-offs	(1,134)	(9,526)	(4,623)	(22,486)
Realized cashflows from Residual Income	1,127	965	3,175	3,390
Provision for credit losses	(1,334)	7,226	(13,359)	38,713
Allowance for credit losses, end of period	18,377	47,215	18,377	47,215
Net investment in leases and loans, before allowance	717,697	803,689	717,697	803,689	776,371
Equipment Finance [Member] | Accounting Standards Update 2016-13 [Member]
Allowance for Credit Losses [Roll Forward]
Allowance for credit losses, beginning of period				27,598
Equipment Finance [Member] | Accounting Standards Update 2016-13 [Member] | Adoption Impact [Member]
Allowance for Credit Losses [Roll Forward]
Allowance for credit losses, beginning of period				9,264
Working capital Loans [Member]
Allowance for Credit Losses [Roll Forward]
Allowance for credit losses, beginning of period	1,003	7,962	1,206	1,899
Charge-offs	(262)	(633)	(813)	(2,598)
Recoveries	158	101	432	156
Net charge-offs	(104)	(532)	(381)	(2,442)
Realized cashflows from Residual Income	0	0	0	0
Provision for credit losses	300	(3,974)	374	4,002
Allowance for credit losses, end of period	1,199	3,456	1,199	3,456
Net investment in leases and loans, before allowance	31,178	26,472	31,178	26,472	20,034
Working capital Loans [Member] | Accounting Standards Update 2016-13 [Member]
Allowance for Credit Losses [Roll Forward]
Allowance for credit losses, beginning of period				1,896
Working capital Loans [Member] | Accounting Standards Update 2016-13 [Member] | Adoption Impact [Member]
Allowance for Credit Losses [Roll Forward]
Allowance for credit losses, beginning of period				(3)
CVG [Member]
Allowance for Credit Losses [Roll Forward]
Allowance for credit losses, beginning of period	8,036	7,132	9,838	1,462
Charge-offs	(27)	(524)	(1,176)	(2,157)
Recoveries	85	94	308	257
Net charge-offs	58	(430)	(868)	(1,900)
Realized cashflows from Residual Income	0	0	0	0
Provision for credit losses	(149)	3,952	(1,025)	8,445
Allowance for credit losses, end of period	7,945	10,654	7,945	10,654
Net investment in leases and loans, before allowance	70,859	76,778	70,859	76,778	71,788
CVG [Member] | Accounting Standards Update 2016-13 [Member]
Allowance for Credit Losses [Roll Forward]
Allowance for credit losses, beginning of period				4,109
CVG [Member] | Accounting Standards Update 2016-13 [Member] | Adoption Impact [Member]
Allowance for Credit Losses [Roll Forward]
Allowance for credit losses, beginning of period				2,647
CRA [Member]
Allowance for Credit Losses [Roll Forward]
Allowance for credit losses, beginning of period	0	0	0	0
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Net charge-offs	0	0	0	0
Realized cashflows from Residual Income	0	0	0	0
Provision for credit losses	0	0	0	0
Allowance for credit losses, end of period	0	0	0	0
Net investment in leases and loans, before allowance	$ 1,019	$ 1,114	$ 1,019	1,114	$ 1,091
CRA [Member] | Accounting Standards Update 2016-13 [Member]
Allowance for Credit Losses [Roll Forward]
Allowance for credit losses, beginning of period				0
CRA [Member] | Accounting Standards Update 2016-13 [Member] | Adoption Impact [Member]
Allowance for Credit Losses [Roll Forward]
Allowance for credit losses, beginning of period				$ 0

XML

Allowance for Credit Losses - Portfolio by Origination year- Current Year (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020
Amount of portfolio [Line Items]
2021	$ 256,236	$ 298,681
2020	213,531	319,544
2019	218,076	154,900
2018	93,030	73,293
2017	35,300	21,185
Prior	4,580	1,681
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	820,753	869,284	$ 908,053
Equipment Finance [Member]
Amount of portfolio [Line Items]
2021	204,570	267,068
2020	197,544	280,147
2019	194,315	140,758
2018	84,219	67,321
2017	32,905	19,426
Prior	4,144	1,651
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	717,697	776,371	803,689
Working capital Loans [Member]
Amount of portfolio [Line Items]
2021	28,901	12,866
2020	1,951	7,144
2019	326	24
2018	0	0
2017	0	0
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	31,178	20,034	26,472
CVG [Member]
Amount of portfolio [Line Items]
2021	21,746	17,656
2020	14,036	32,253
2019	23,435	14,118
2018	8,811	5,972
2017	2,395	1,759
Prior	436	30
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	70,859	71,788	76,778
CRA [Member]
Amount of portfolio [Line Items]
2021	1,019	1,091
2020	0	0
2019	0	0
2018	0	0
2017	0	0
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	1,019	1,091	$ 1,114
30-59 [Member] | Equipment Finance [Member]
Amount of portfolio [Line Items]
2021	612	1,162
2020	688	1,526
2019	1,149	1,349
2018	435	690
2017	230	292
Prior	31	14
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	3,145	5,033
30-59 [Member] | Working capital Loans [Member]
Amount of portfolio [Line Items]
2021	224	125
2020	26	481
2019	0	0
2018	0	0
2017	0	0
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	250	606
30-59 [Member] | CVG [Member]
Amount of portfolio [Line Items]
2021	0	591
2020	0	1,039
2019	0	173
2018	7	29
2017	2	21
Prior	41	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	50	1,853
60-89 [Member] | Equipment Finance [Member]
Amount of portfolio [Line Items]
2021	179	367
2020	146	1,111
2019	584	463
2018	277	532
2017	78	130
Prior	28	6
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	1,292	2,609
60-89 [Member] | Working capital Loans [Member]
Amount of portfolio [Line Items]
2021	51	0
2020	0	135
2019	43	0
2018	0	0
2017	0	0
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	94	135
60-89 [Member] | CVG [Member]
Amount of portfolio [Line Items]
2021	51	0
2020	157	69
2019	91	33
2018	14	0
2017	0	68
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	313	170
90+ [Member] | Equipment Finance [Member]
Amount of portfolio [Line Items]
2021	91	503
2020	266	1,370
2019	323	804
2018	197	377
2017	90	199
Prior	31	16
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	998	3,269
90+ [Member] | Working capital Loans [Member]
Amount of portfolio [Line Items]
2021	0	0
2020	24	0
2019	0	0
2018	0	0
2017	0	0
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	24	0
90+ [Member] | CVG [Member]
Amount of portfolio [Line Items]
2021	0	0
2020	0	340
2019	74	179
2018	55	5
2017	0	11
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	129	535
Total Past Due [Member] | Equipment Finance [Member]
Amount of portfolio [Line Items]
2021	882	2,032
2020	1,100	4,007
2019	2,056	2,616
2018	909	1,599
2017	398	621
Prior	90	36
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	5,435	10,911
Total Past Due [Member] | Working capital Loans [Member]
Amount of portfolio [Line Items]
2021	275	125
2020	50	616
2019	43	0
2018	0	0
2017	0	0
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	368	741
Total Past Due [Member] | CVG [Member]
Amount of portfolio [Line Items]
2021	51	591
2020	157	1,448
2019	165	385
2018	76	34
2017	2	100
Prior	41	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	492	2,558
Total Past Due [Member] | CRA [Member]
Amount of portfolio [Line Items]
2021	0	0
2020	0	0
2019	0	0
2018	0	0
2017	0	0
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	0	0
Current [Member] | Equipment Finance [Member]
Amount of portfolio [Line Items]
2021	203,688	265,036
2020	196,444	276,140
2019	192,259	138,142
2018	83,310	65,722
2017	32,507	18,805
Prior	4,054	1,615
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	712,262	765,460
Current [Member] | Working capital Loans [Member]
Amount of portfolio [Line Items]
2021	28,626	12,741
2020	1,901	6,528
2019	283	24
2018	0	0
2017	0	0
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	30,810	19,293
Current [Member] | CVG [Member]
Amount of portfolio [Line Items]
2021	21,695	17,065
2020	13,879	30,805
2019	23,270	13,733
2018	8,735	5,938
2017	2,393	1,659
Prior	395	30
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	70,367	69,230
Current [Member] | CRA [Member]
Amount of portfolio [Line Items]
2021	1,019	1,091
2020	0	0
2019	0	0
2018	0	0
2017	0	0
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	$ 1,019	$ 1,091

XML

Allowance for Credit Losses - Portfolio by Origination Year - Previous Year (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020
Amount of portfolio [Line Items]
2020	$ 256,236	$ 298,681
2019	213,531	319,544
2018	218,076	154,900
2017	93,030	73,293
2016	35,300	21,185
Prior	4,580	1,681
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	820,753	869,284	$ 908,053
Equipment Finance [Member]
Amount of portfolio [Line Items]
2020	204,570	267,068
2019	197,544	280,147
2018	194,315	140,758
2017	84,219	67,321
2016	32,905	19,426
Prior	4,144	1,651
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	717,697	776,371	803,689
Working capital Loans [Member]
Amount of portfolio [Line Items]
2020	28,901	12,866
2019	1,951	7,144
2018	326	24
2017	0	0
2016	0	0
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	31,178	20,034	26,472
CVG [Member]
Amount of portfolio [Line Items]
2020	21,746	17,656
2019	14,036	32,253
2018	23,435	14,118
2017	8,811	5,972
2016	2,395	1,759
Prior	436	30
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	70,859	71,788	76,778
CRA [Member]
Amount of portfolio [Line Items]
2020	1,019	1,091
2019	0	0
2018	0	0
2017	0	0
2016	0	0
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	1,019	1,091	$ 1,114
30-59 [Member] | Equipment Finance [Member]
Amount of portfolio [Line Items]
2020	612	1,162
2019	688	1,526
2018	1,149	1,349
2017	435	690
2016	230	292
Prior	31	14
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	3,145	5,033
30-59 [Member] | Working capital Loans [Member]
Amount of portfolio [Line Items]
2020	224	125
2019	26	481
2018	0	0
2017	0	0
2016	0	0
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	250	606
30-59 [Member] | CVG [Member]
Amount of portfolio [Line Items]
2020	0	591
2019	0	1,039
2018	0	173
2017	7	29
2016	2	21
Prior	41	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	50	1,853
60-89 [Member] | Equipment Finance [Member]
Amount of portfolio [Line Items]
2020	179	367
2019	146	1,111
2018	584	463
2017	277	532
2016	78	130
Prior	28	6
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	1,292	2,609
60-89 [Member] | Working capital Loans [Member]
Amount of portfolio [Line Items]
2020	51	0
2019	0	135
2018	43	0
2017	0	0
2016	0	0
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	94	135
60-89 [Member] | CVG [Member]
Amount of portfolio [Line Items]
2020	51	0
2019	157	69
2018	91	33
2017	14	0
2016	0	68
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	313	170
90+ [Member] | Equipment Finance [Member]
Amount of portfolio [Line Items]
2020	91	503
2019	266	1,370
2018	323	804
2017	197	377
2016	90	199
Prior	31	16
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	998	3,269
90+ [Member] | Working capital Loans [Member]
Amount of portfolio [Line Items]
2020	0	0
2019	24	0
2018	0	0
2017	0	0
2016	0	0
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	24	0
90+ [Member] | CVG [Member]
Amount of portfolio [Line Items]
2020	0	0
2019	0	340
2018	74	179
2017	55	5
2016	0	11
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	129	535
Total Past Due [Member] | Equipment Finance [Member]
Amount of portfolio [Line Items]
2020	882	2,032
2019	1,100	4,007
2018	2,056	2,616
2017	909	1,599
2016	398	621
Prior	90	36
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	5,435	10,911
Total Past Due [Member] | Working capital Loans [Member]
Amount of portfolio [Line Items]
2020	275	125
2019	50	616
2018	43	0
2017	0	0
2016	0	0
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	368	741
Total Past Due [Member] | CVG [Member]
Amount of portfolio [Line Items]
2020	51	591
2019	157	1,448
2018	165	385
2017	76	34
2016	2	100
Prior	41	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	492	2,558
Total Past Due [Member] | CRA [Member]
Amount of portfolio [Line Items]
2020	0	0
2019	0	0
2018	0	0
2017	0	0
2016	0	0
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	0	0
Current [Member] | Equipment Finance [Member]
Amount of portfolio [Line Items]
2020	203,688	265,036
2019	196,444	276,140
2018	192,259	138,142
2017	83,310	65,722
2016	32,507	18,805
Prior	4,054	1,615
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	712,262	765,460
Current [Member] | Working capital Loans [Member]
Amount of portfolio [Line Items]
2020	28,626	12,741
2019	1,901	6,528
2018	283	24
2017	0	0
2016	0	0
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	30,810	19,293
Current [Member] | CVG [Member]
Amount of portfolio [Line Items]
2020	21,695	17,065
2019	13,879	30,805
2018	23,270	13,733
2017	8,735	5,938
2016	2,393	1,659
Prior	395	30
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	70,367	69,230
Current [Member] | CRA [Member]
Amount of portfolio [Line Items]
2020	1,019	1,091
2019	0	0
2018	0	0
2017	0	0
2016	0	0
Prior	0	0
Net investment in leases and loans, excluding allowance for credit losses (includes $12.1 million and $30.4 million at September 30, 2021 and December 31, 2020, respectively, related to consolidated VIEs)	$ 1,019	$ 1,091

XML

Allowance for Credit Losses - Non-accrual Leases and Loans in Company's Portfolio (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual leases and loans, end of period	$ 10,119	$ 14,289
Equipment Finance [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual leases and loans, end of period	2,485	5,543
Working capital Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual leases and loans, end of period	139	932
CVG [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual leases and loans, end of period	$ 7,495	$ 7,814

XML

Goodwill and Intangible Assets - Narratives (Details) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020
Acquired Finite-Lived Intangible Assets [Line Items]
Goodwill			$ 6,700,000
Amortization of Intangible Assets				$ 500,000	$ 600,000
Goodwill Impairment Loss	$ 0	$ 0	$ 6,700,000	0	6,735,000
Indefinite-lived Intangible Assets	$ 0			0
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill)				$ 0	$ 0

XML

Goodwill and Intangible Assets - Intangible Assets (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 7,350
Accumulated Amortization	2,175
Net Value	$ 5,175
Vendor Relationships [Member]
Finite Lived Intangible Assets [Line Items]
Useful Life	11 years
Gross Carrying Amount	$ 7,290
Accumulated Amortization	2,134
Net Value	$ 5,156
Corporate Trade Name [Member]
Finite Lived Intangible Assets [Line Items]
Useful Life	7 years
Gross Carrying Amount	$ 60
Accumulated Amortization	41
Net Value	$ 19

XML

Goodwill and Intangible Assets - Amortization Expense (Details) $ in Thousands	Sep. 30, 2021 USD ($)
Amortization expense for the next five years [Abstract]
Remainder of 2021	$ 168
2022	671
2023	671
2024	663
2025	$ 663

XML

Other Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Other Assets [Abstract]
Accrued fees receivable	$ 2,289	$ 2,928
Prepaid expenses	2,404	2,790
Income taxes receivable	8,214	0
Federal Reserve Bank Stock	1,711	1,711
Other	1,942	2,783
Other assets, total	$ 16,560	$ 10,212

XML

Deposits (Details) - USD ($)	Sep. 30, 2021	Dec. 31, 2020
Contractual Maturities of Time Deposits [Abstract]
Remainder of 2021	$ 391,752,000
2022	204,023,000
2023	91,829,000
2024	33,321,000
2025	9,054,000
Total	729,979,000	$ 729,614,000
Cash and Cash Equivalents [Line Items]
Money market deposit accounts	55,000,000.0
Cash FDIC Insured Amount	$ 250,000
Weighted average all-in interest rate of all deposit liabilities outstanding	1.07%
MBB Certificate of Deposit [Member]
Cash and Cash Equivalents [Line Items]
Maximum time deposit liability denomination	$ 250,000
MMDA [Member]
Cash and Cash Equivalents [Line Items]
Maximum time deposit liability denomination	$ 250,000

XML

Debt and Financing Arrangements - Narratives (Details) - USD ($)	Sep. 30, 2021	Dec. 31, 2020	Jul. 27, 2018
Debt and Financing Arrangements [Abstract]
Term securitization 2018-1	$ 11,719,000	$ 30,800,000	$ 201,650,000
Debt collateralized	12,800,000
Debt instrument collateralized by restricted deposits	3,200,000
Federal Funds [Member] | Marlin Business Bank [Member]
Debt Instrument Terms [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	25,000,000.0
Line of credit	0	$ 0
Federal Reserve Discount Window [Member]
Debt Instrument Terms [Line Items]
Net investment in leases are pledged as collateral	55,900,000
Federal Reserve Discount Window [Member] | Marlin Business Bank [Member]
Debt Instrument Terms [Line Items]
Debt Instrument, Unused Borrowing Capacity, Amount	50,200,000
Net investment in leases are pledged as collateral	$ 55,900,000

XML

Debt and Financing Arrangements - Long-term Borrowings (Details) - USD ($)	Sep. 30, 2021	Dec. 31, 2020	Jul. 27, 2018
Variable Interest Entity [Line Items]
Term securitization 2018-1	$ 11,719,000	$ 30,800,000	$ 201,650,000
Unamortized debt issuance costs	(43,000)	(135,000)
Variable Interest Entity, Primary Beneficiary [Member]
Variable Interest Entity [Line Items]
Long-term borrowings related to consolidated VIEs	$ 11,676,000	$ 30,665,000

XML

Debt and Financing Arrangements - Term Note Securitization (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Dec. 31, 2020	Jul. 27, 2018
Debt Instrument [Line Items]
Term note securitization	$ 11,719	$ 30,800	$ 201,650
Class A-1 [Member]
Debt Instrument [Line Items]
Term note securitization	$ 0	0	77,400
Debt instrument maturity date	July, 2019
Weighted average coupon rate	2.55%
Class A-2 [Member]
Debt Instrument [Line Items]
Term note securitization	$ 0	0	55,700
Debt instrument maturity date	October, 2020
Weighted average coupon rate	3.05%
Class A-3 [Member]
Debt Instrument [Line Items]
Term note securitization	$ 0	0	36,910
Debt instrument maturity date	April, 2023
Weighted average coupon rate	3.36%
Class B [Member]
Debt Instrument [Line Items]
Term note securitization	$ 0	9,560	10,400
Debt instrument maturity date	May, 2023
Weighted average coupon rate	3.54%
Class C [Member]
Debt Instrument [Line Items]
Term note securitization	$ 1,869	11,390	11,390
Debt instrument maturity date	June, 2023
Weighted average coupon rate	3.70%
Class D [Member]
Debt Instrument [Line Items]
Term note securitization	$ 5,470	5,470	5,470
Debt instrument maturity date	July, 2023
Weighted average coupon rate	3.99%
Class E [Member]
Debt Instrument [Line Items]
Term note securitization	$ 4,380	$ 4,380	$ 4,380
Debt instrument maturity date	May, 2025
Weighted average coupon rate	5.02%
2018-1 [Member]
Debt Instrument [Line Items]
Weighted average coupon rate	3.05%

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Debt and Financing Arrangements - Scheduled Principal and Interest Payments (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020	Jul. 27, 2018
Scheduled principal and interest payments on outstanding borrowings [Abstract]
Remainder of 2021, principal	$ 3,137
Principal, 2022	8,582
Scheduled principal payments	11,719	$ 30,800	$ 201,650
Remainder of 2021, interest	121
Interest, 2022	159
Scheduled interest payments	$ 280

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Fair Value Measurements and Disclosures About Fair Value of Financial Instruments - Narrative (Details) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract]
Goodwill Impairment Loss	$ 0	$ 0	$ 6,700,000	$ 0	$ 6,735,000
Fair Value Assets Level 1 To Level 2 Transfers Amount	$ 0			$ 0

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Fair Value Measurements and Disclosures About Fair Value of Financial Instruments - Balances Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 0	$ 11,624
ABS [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	3,719
Municipal Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	4,145
Mutual Fund [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	3,760
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ABS [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | Municipal Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | Mutual Fund [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	3,760
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ABS [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	3,719
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Municipal Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	4,145
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Mutual Fund [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ABS [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Municipal Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Mutual Fund [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 0	$ 0

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Fair Value Measurements and Disclosures About Fair Value of Financial Instruments - Carrying Amount and Estimated Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Jul. 27, 2018
Assets, Fair Value Disclosure [Abstract]
Cash and Cash Equivalents	$ 222,260	$ 135,691	$ 195,132
Time deposits with banks	996	5,967
Restricted interest-earning deposits with banks	3,202	4,719	$ 5,771
Loans, net of allowance	793,232	825,056
Federal Reserve Bank Stock	1,711	1,711
Liabilities, Fair Value Disclosure [Abstract]
Deposits	783,203	729,614
Long-term borrowings	11,719	30,800		$ 201,650
Carrying Amount [Member]
Assets, Fair Value Disclosure [Abstract]
Cash and Cash Equivalents	222,260	135,691
Time deposits with banks	996	5,967
Restricted interest-earning deposits with banks	3,202	4,719
Loans, net of allowance	504,335	500,768
Federal Reserve Bank Stock	1,711	1,711
Liabilities, Fair Value Disclosure [Abstract]
Deposits	783,203	729,614
Long-term borrowings	11,676	30,665
Fair Value [Member]
Assets, Fair Value Disclosure [Abstract]
Cash and Cash Equivalents	222,260	135,691
Time deposits with banks	1,000	6,003
Restricted interest-earning deposits with banks	3,202	4,719
Loans, net of allowance	513,431	507,362
Federal Reserve Bank Stock	1,711	1,711
Liabilities, Fair Value Disclosure [Abstract]
Deposits	790,175	742,882
Long-term borrowings	$ 11,961	$ 31,114

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Earnings Per Share - Net Income and Shares Used in Computing Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020
Earnings Per Share, Basic [Abstract]
Net income (loss)	$ 5,481	$ 10,256	$ 6,851	$ 2,743	$ (5,882)	$ (11,821)	$ 22,588	$ (14,960)
Less: net income allocated to participating securities	(69)			(36)			(281)	0
Net income (loss) allocated to common stock	$ 5,412			$ 2,707			$ 22,307	$ (14,960)
Weighted average common shares outstanding	12,026,443			11,946,549			12,007,963	11,951,375
Less: Unvested restricted stock awards considered participating securities	(150,339)			(155,408)			(149,462)	(142,186)
Adjusted weighted average common shares used in computing basic EPS	11,876,104			11,791,141			11,858,501	11,809,189
Basic earnings (loss) per share	$ 0.46			$ 0.23			$ 1.88	$ (1.27)
Earnings Per Share, Diluted [Abstract]
Net income (loss) allocated to common stock	$ 5,412			$ 2,707			$ 22,307	$ (14,960)
Adjusted weighted average common shares used in computing basic EPS	11,876,104			11,791,141			11,858,501	11,809,189
Add: Effect of dilutive stock-based compensation awards	186,146			41,272			113,767	0
Adjusted weighted average common shares used in computing diluted EPS	12,062,250			11,832,413			11,972,268	11,809,189
Diluted earnings (loss) per share	$ 0.45			$ 0.23			$ 1.86	$ (1.27)
Antidilutive securities excluded from computation of earnings per share amount	112,216			230,428			132,619	286,349

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Stockholders' Equity - Narratives (Details) $ / shares in Units, $ in Thousands		3 Months Ended						9 Months Ended
	Oct. 28, 2021 $ / shares	Sep. 30, 2021 USD ($) $ / shares shares	Jun. 30, 2021 $ / shares	Mar. 31, 2021 $ / shares	Sep. 30, 2020 $ / shares shares	Jun. 30, 2020 $ / shares	Mar. 31, 2020 $ / shares	Sep. 30, 2021 USD ($) $ / shares shares	Sep. 30, 2020 $ / shares shares
Regulatory Capital Requirements Miscellaneous Information [Abstract]
Total Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets		0.08						0.08
Total Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets		0.10						0.10
Percentage of transitional amounts for measurment of estimated allowance year one								25.00%
Percentage of transitional amounts for measurment of estimated allowance next two years								25.00%
Percentage of transitional amounts for measurment of estimated allowance during year three								75.00%
Cash dividends paid per share		$ 0.14	$ 0.14	$ 0.14	$ 0.14	$ 0.14	$ 0.14
Subsequent Event [Member]
Dividends Paid [Abstract]
Cash dividend declared on common stock, payable date	Nov. 18, 2021
Cash dividend declared on common stock, date of record	Nov. 08, 2021
Maximum [Member]
Regulatory Capital Requirements Miscellaneous Information [Abstract]
Cash dividends paid per share								$ 0.14
Maximum [Member] | Subsequent Event [Member]
Regulatory Capital Requirements Miscellaneous Information [Abstract]
Cash dividends paid per share	$ 0.14
Marlin Business Services Corp. [Member]
Regulatory Capital Requirements Miscellaneous Information [Abstract]
Total stockholders equity (regulatory) | $		$ 217,465						$ 217,465
Total Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets		0.0800						0.0800
Tier One Leverage Capital Required for Capital Adequacy to Average Assets		0.0400						0.0400
Total Risk Based Capital to Risk Weighted Assets		0.2660						0.2660
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets		0.0600						0.0600
Total Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets		0.1000						0.1000
Common Equity Tier One Risk Based Capital Required For Capital Adequacy To Risk Weighted Assets		0.0450						0.0450
Common Equity Tier One Risk Based Capital Required To Be Well Capitalized To Risk Weighted Assets		0.0650						0.0650
Marlin Business Bank [Member]
Regulatory Capital Requirements Miscellaneous Information [Abstract]
Total stockholders equity (regulatory) | $		$ 165,937						$ 165,937
Total Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets		0.08						0.08
Tier One Leverage Capital Required for Capital Adequacy to Average Assets		0.04						0.04
FDIC Agreement Capital Required To Be Well Capitalized To Risk Weighted Assets		15.00%						15.00%
Total Risk Based Capital to Risk Weighted Assets		0.2194						0.2194
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets		0.06						0.06
Total Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets		0.1000						0.1000
Common Equity Tier One Risk Based Capital Required For Capital Adequacy To Risk Weighted Assets		0.045						0.045
Common Equity Tier One Risk Based Capital Required To Be Well Capitalized To Risk Weighted Assets		0.065						0.065
New Capital Conservation Buffer		2.50%						2.50%
2017 Stock Repurchase Plan [Member]
Stock Repurchase [Abstract]
Stock Repurchased During Period, Average Cost Per Share									$ 16.09
Stock Repurchased During Period, Shares | shares									264,470
2014 Stock Repurchase Plan [Member]
Stock Repurchase [Abstract]
Stock Repurchased During Period, Average Cost Per Share		$ 22.44			$ 8.06			$ 14.07	$ 10.70
Stock Repurchased During Period, Shares | shares		36			18,446			16,198	41,466
2019 Stock Repurchase Plan [Member]
Stock Repurchase [Abstract]
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $		$ 4,700						$ 4,700
Stock Repurchased During Period, Shares | shares		0			0			0

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Stockholders' Equity - Regulatory Capital Ratios (Details) $ in Thousands	Sep. 30, 2021 USD ($)
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	0.08
Total Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	0.10
Marlin Business Services Corp. [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Tier One Leverage Capital	$ 217,465
Tier One Leverage Capital Required for Capital Adequacy	40,076
Tier One Leverage Capital Required to be Well Capitalized	50,095
Common Equity Tier One Risk Based Capital	217,465
Common Equity Tier One Risk Based Capital Required For Capital Adequacy	38,640
Common Equity Tier One Risk Based Capital Required To Be Well Capitalized	55,813
Tier One Risk Based Capital	217,465
Tier One Risk Based Capital Required for Capital Adequacy	51,519
Tier One Risk Based Capital Required to be Well Capitalized	68,693
Total Risk Based Capital	228,405
Total Risk Based Capital Required for Capital Adequacy	68,693
Total Risk Based Capital Required to be Well Capitalized	$ 85,866
Tier One Leverage Capital to Average Assets	0.2171
Tier One Leverage Capital Required for Capital Adequacy to Average Assets	0.0400
Tier One Leverage Capital Required to be Well Capitalized to Average Assets	0.0500
Common Equity Tier One Risk Based Capital To Risk Weighted Assets	0.2533
Common Equity Tier One Risk Based Capital Required For Capital Adequacy To Risk Weighted Assets	0.0450
Common Equity Tier One Risk Based Capital Required To Be Well Capitalized To Risk Weighted Assets	0.0650
Tier One Risk Based Capital to Risk Weighted Assets	0.2533
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	0.0600
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	0.0800
Total Risk Based Capital to Risk Weighted Assets	0.2660
Total Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	0.0800
Total Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	0.1000
Marlin Business Bank [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Tier One Leverage Capital	$ 165,937
Tier One Leverage Capital Required for Capital Adequacy	37,210
Tier One Leverage Capital Required to be Well Capitalized	46,513
Common Equity Tier One Risk Based Capital	165,937
Common Equity Tier One Risk Based Capital Required For Capital Adequacy	36,131
Common Equity Tier One Risk Based Capital Required To Be Well Capitalized	52,189
Tier One Risk Based Capital	165,937
Tier One Risk Based Capital Required for Capital Adequacy	48,174
Tier One Risk Based Capital Required to be Well Capitalized	64,232
Total Risk Based Capital	176,181
Total Risk Based Capital Required for Capital Adequacy	64,232
Total Risk Based Capital Required to be Well Capitalized	$ 80,290
Tier One Leverage Capital to Average Assets	0.1784
Tier One Leverage Capital Required for Capital Adequacy to Average Assets	0.04
Tier One Leverage Capital Required to be Well Capitalized to Average Assets	0.0500
Common Equity Tier One Risk Based Capital To Risk Weighted Assets	0.2067
Common Equity Tier One Risk Based Capital Required For Capital Adequacy To Risk Weighted Assets	0.045
Common Equity Tier One Risk Based Capital Required To Be Well Capitalized To Risk Weighted Assets	0.065
Tier One Risk Based Capital to Risk Weighted Assets	0.2067
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	0.06
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	0.0800
Total Risk Based Capital to Risk Weighted Assets	0.2194
Total Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	0.08
Total Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	0.1000

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Subsequent Events - Narratives (Details)		3 Months Ended						9 Months Ended
	Oct. 28, 2021 USD ($) Number $ / shares	Sep. 30, 2021 USD ($) $ / shares	Jun. 30, 2021 $ / shares	Mar. 31, 2021 $ / shares	Sep. 30, 2020 $ / shares	Jun. 30, 2020 $ / shares	Mar. 31, 2020 $ / shares	Sep. 30, 2021 USD ($) $ / shares	Oct. 22, 2021 USD ($)
Subsequent Event [Line Items]
Quarterly cash dividends | $ / shares		$ 0.14	$ 0.14	$ 0.14	$ 0.14	$ 0.14	$ 0.14
Cash FDIC Insured Amount | $		$ 250,000						$ 250,000
Maximum [Member]
Subsequent Event [Line Items]
Quarterly cash dividends | $ / shares								$ 0.14
Subsequent Event [Member]
Subsequent Event [Line Items]
Cash dividend declared on common stock, payable date	Nov. 18, 2021
Cash dividend declared on common stock, date of record	Nov. 08, 2021
Dividends Payable, Amount Per Share | $ / shares	$ 0.14
Dividends Payable | $	$ 1,700,000
Number of consecutive quarterly cash dividends declared. | Number	41
Subsequent Event [Member] | Marlin Business Bank [Member]
Subsequent Event [Line Items]
Cash FDIC Insured Amount | $									$ 204,800,000
Fees related to assuming deposits by acquirer | $									$ 750,000
Subsequent Event [Member] | Maximum [Member]
Subsequent Event [Line Items]
Quarterly cash dividends | $ / shares	$ 0.14