mrln-20200630

 
 
 
 
 
 
 
 
 
 
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 
June 30, 2020
 
 
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 July 24, 2020, 
11,941,024
 
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 June 30, 2020
 
 
TABLE OF CONTENTS 
 
 
Page No.
 
 
Part I – Financial Information
 
................................................................ 
................................................................ 
................................ 3 
Item 1  Consolidated Financial Statements (Unaudited)
 
................................................................ 
........................................................... 
3 
 
Consolidated Balance Sheets at June 30, 2020 and December 31, 2019
 
................................................................ 
................. 3 
 
Consolidated Statements of Operations for the three- and six - month periods ended
 
 
June 30, 2020 and 2019
 
................................................................ 
................................................................ 
...................... 4 
 
Consolidated Statements of Comprehensive Income (Loss) for the three- and six - month periods ended
 
 
June 30, 2020 and 2019
 
................................................................ 
................................................................ 
...................... 5 
 
Consolidated Statements of Stockholders’ Equity for the three and six-month periods ended
 
 
June 30, 2020 and 2019
 
................................................................ 
................................................................ 
....................... 6 
 
Consolidated Statements of Cash Flows for the six-month periods ended
 
 
June 30, 2020 and 2019
 
................................................................ 
................................................................ 
...................... 8 
 
Notes to Unaudited Consolidated Financial Statements
 
................................................................ 
........................................ 
10 
Item 2    Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
.................................................... 
42 
Item 3    Quantitative and Qualitative Disclosures about Market Risk
 
................................................................ 
.................................... 
70 
Item 4    Controls and Procedures
 
................................................................ 
................................................................ 
............................ 70 
Part II – Other Information
 
................................................................ 
................................................................ 
.................................. 
70 
Item 1    Legal Proceedings
................................................................ 
................................................................ 
...................................... 
70 
Item 1A Risk Factors
…
 
................................................................ 
................................................................ 
........................................... 
70 
Item 2    Unregistered Sales of Equity Securities and Use of Proceeds
 
................................................................ 
................................... 
72 
Item 3    Defaults upon Senior Securities
 
................................................................ 
................................................................ 
................. 72 
Item 4    Mine Safety Disclosures
 
................................................................ 
................................................................ 
............................ 72 
Item 5    Other Information
 
................................................................ 
................................................................ 
...................................... 
72 
Item 6    Exhibits
 
……. ................................................................................................ 
................................................................ 
............ 73 
Signatures
 
................................................................ 
................................................................ 
................................................................ 
74 
 
 

 
-3-
 
PART 
I. Financial Information 
 
Item 1.  Consolidated 
Financial Statements 
 
MARLIN BUSINESS SERVICES CORP. 
AND SUBSIDIARIES 
Consolidated Balance Sheets 
(Unaudited) 
 
June 30, 
December 31, 
 
2020 
2019 
(Dollars in thousands, except per-share data) 
ASSETS 
Cash and due from banks 
$ 
5,898
$ 
4,701
Interest-earning deposits with banks 
205,808
118,395
 
Total cash and cash equivalents 
211,706
123,096
Time deposits with banks 
9,941
12,927
Restricted interest-earning deposits related to consolidated VIEs 
6,072
6,931
Investment securities (amortized cost of 
$10.3
 
million and 
$11.1
 
million at 
June 30, 2020 and December 31, 2019, respectively) 
10,408
11,076
Net investment in leases and loans: 
 
Leases 
383,787
426,608
 
Loans 
590,892
601,607
Net investment in leases and loans, excluding allowance for credit losses (includes $ 
50.5
 
million and 
974,679
1,028,215
$ 
76.1
 
million at June 30, 2020 and December 31, 2019, respectively, related to consolidated VIEs) 
Allowance for credit losses 
(63,644)
(21,695)
 
Total net investment in leases and loans 
911,035
1,006,520
Intangible assets 
7,062
7,461
Goodwill 
—
6,735
Operating lease right-of-use assets 
8,146
8,863
Property and equipment, net 
8,594
7,888
Property tax receivables, net of allowance 
9,217
5,493
Other assets 
14,034
10,453
 
Total assets 
$ 
1,196,215
$ 
1,207,443
LIABILITIES AND STOCKHOLDERS’ EQUITY 
Deposits 
$ 
902,191
$ 
839,132
Long-term borrowings related to consolidated VIEs 
50,890
76,091
Operating lease liabilities 
9,242
9,730
Other liabilities: 
 
Sales and property taxes payable 
6,884
2,678
 
Accounts payable and accrued expenses 
24,245
34,028
 
Net deferred income tax liability 
21,759
30,828
 
Total liabilities 
1,015,211
992,487
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; 
11,942,247
 
and 
12,113,585
 
shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively 
119
121
 
Additional paid-in capital 
75,606
79,665
 
Accumulated other comprehensive income 
86
58
 
Retained earnings 
105,193
135,112
 
Total stockholders’ equity 
181,004
214,956
 
Total liabilities and stockholders’ equity 
$ 
1,196,215
$ 
1,207,443

 
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 June 30, 
Six Months Ended June 30, 
 
2020 
2019 
2020 
2019 
(Dollars in thousands, except per-share data) 
Interest income 
$ 
24,248
$ 
27,082
$ 
50,713
$ 
52,965
Fee income 
2,450
3,507
5,216
7,549
Interest and fee income 
26,698
30,589
55,929
60,514
Interest expense 
5,428
6,408
11,108
12,370
Net interest and fee income 
21,270
24,181
44,821
48,144
Provision for credit losses 
18,806
4,756
43,956
10,119
Net interest and fee income after provision for credit losses 
2,464
19,425
865
38,025
Non-interest income: 
 
Gain on leases and loans sold 
57
3,332
2,339
6,944
 
Insurance premiums written and earned 
2,249
2,176
4,531
4,308
 
Other income 
1,489
1,693
9,128
8,897
 
Non-interest income 
3,795
7,201
15,998
20,149
Non-interest expense: 
 
Salaries and benefits 
7,668
12,469
17,187
23,920
 
General and administrative 
5,847
6,068
19,452
19,422
 
Goodwill impairment 
—
—
6,735
—
 
Non-interest expense 
13,515
18,537
43,374
43,342
 
(Loss) income before income taxes 
(7,256)
8,089
(26,511)
14,832
Income tax (benefit) expense 
(1,374)
1,974
(8,808)
3,576
 
Net (loss) income 
$ 
(5,882)
6,115
(17,703)
11,256
Basic (loss) earnings per share 
$ 
(0.50)
$ 
0.50
$ 
(1.50)
$ 
0.91
Diluted (loss) earnings per share 
$ 
(0.50)
$ 
0.49
$ 
(1.50)
$ 
0.91

 
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 June 30, 
Six Months Ended June 30, 
2020 
2019 
2020 
2019 
(Dollars in thousands) 
Net (loss) income 
$ 
(5,882)
$ 
6,115
$ 
(17,703)
$ 
11,256
Other comprehensive income (loss): 
 
Increase in fair value of debt securities available for sale 
88
69
37
123
 
Tax effect 
(22)
(17)
(9)
(31)
Total other comprehensive income 
66
52
28
92
 
Comprehensive (loss) income 
$ 
(5,816)
$ 
6,167
$ 
(17,675)
$ 
11,348

 
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, 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
(1) 
Represents the impact of Accounting Standards Update ("ASU") 
2016-13 and related ASUs collectively referred to as "CECL". 
See Note 2.

 
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 
Stock 
Other 
Total 
 
Common 
Stock 
Paid-In 
Subscription 
Comprehensive 
Retained 
Stockholders’ 
Shares 
Amount 
Capital 
Receivable 
Income (Loss) 
Earnings 
Equity 
(Dollars in thousands) 
Balance, December 31, 2018 
12,367,724
$ 
124
$ 
83,498
$ 
(2)
$ 
(44)
$ 
114,935
$ 
198,511
 
Repurchase of common stock 
(48,857)
(1)
(1,144)
—
—
—
(1,145)
 
Stock issued in connection with restricted 
 
stock and RSUs, net of forfeitures 
30,209
— 
— 
— 
— 
— 
— 
 
Stock-based compensation recognized 
— 
—
861
—
—
—
861
 
Net change in unrealized gain/loss on 
 
securities available for sale, net of tax 
— 
—
—
—
40
—
40
 
Net income 
— 
—
—
—
—
5,141
5,141
Cash dividends paid ($
0.14
 
per share) 
— 
—
—
—
—
(1,758)
(1,758)
Balance, March 31, 2019 
12,349,076
123
83,215
(2)
(4)
118,318
201,650
 
Issuance of common stock 
10,298
—
240
—
—
—
240
 
Repurchase of common stock 
(73,360)
—
(1,719)
—
—
—
(1,719)
 
Stock issued in connection with restricted 
 
stock and RSUs, net of forfeitures 
(450)
— 
— 
— 
— 
— 
— 
 
Stock-based compensation recognized 
— 
—
990
—
—
—
990
 
Net change in unrealized gain/loss on 
 
securities available for sale, net of tax 
— 
—
—
—
52
—
52
 
Net income 
— 
—
—
—
—
6,115
6,115
Cash dividends paid ($
0.14
 
per share) 
— 
—
—
—
—
(1,774)
(1,774)
Balance, June 30, 2019 
12,285,564
$ 
123
$ 
82,726
$ 
(2)
$ 
48
$ 
122,659
$ 
205,554

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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) 
 
 
Six Months Ended June 30, 
2020 
2019 
(Dollars in thousands) 
Cash flows from operating activities: 
Net (loss) income 
$ 
(17,703)
$ 
11,256
 
Adjustments to reconcile net (loss) income to net cash provided 
by operating activities: 
 
Depreciation and amortization 
2,059
2,390
 
Stock-based compensation 
369
1,851
 
Goodwill impairment 
6,735
—
 
Change in fair value of equity securities 
(89)
(94)
 
Provision for credit losses 
43,956
10,119
 
Change in net deferred income tax liability 
(6,047)
4,142
 
Amortization of deferred initial direct costs and fees 
6,393
7,252
 
(Gain) loss on equipment disposed 
(37)
911
 
Gain on leases sold 
(2,339)
(6,944)
 
Leases originated for sale 
(4,820)
(29,036)
 
Proceeds from sale of leases originated for sale 
5,058
30,062
 
Noncash lease expense 
872
551
 
Effect of changes in other operating items: 
 
Other assets 
(7,665)
(4,549)
 
Other liabilities 
(1,320)
(892)
 
Net cash provided by operating activities 
25,422
27,019
Cash flows from investing activities: 
 
Net change in time deposits with banks 
2,986
(3,020)
 
Purchases of equipment for lease contracts and funds used to 
originate loans 
(229,512)
(409,915)
 
Principal collections on leases and loans 
237,797
248,563
 
Proceeds from sale of leases originated for investment 
21,337
87,390
 
Security deposits collected, net of refunds 
(129)
(130)
 
Proceeds from the sale of equipment 
1,151
1,409
 
Acquisitions of property and equipment 
(1,790)
(816)
 
Principal payments received on securities available for sale 
779
529
 
Net cash provided by (used in) investing activities 
32,619
(75,990)
Cash flows from financing activities: 
 
Net change in deposits 
63,059
132,785
 
Term securitization repayments 
(25,402)
(40,829)
 
Business combinations earn-out consideration payments 
(168)
(223)
 
Issuances of common stock 
120
240
 
Repurchases of common stock 
(4,550)
(2,864)
 
Dividends paid 
(3,349)
(3,456)
 
Net cash provided by financing activities 
29,710
85,653
Net increase in total cash, cash equivalents and restricted cash 
87,751
36,682
Total cash, cash equivalents 
and restricted cash, beginning of period 
130,027
111,201
Total cash, cash equivalents 
and restricted cash, end of period 
$ 
217,778
$ 
147,883

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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) 
 
 
 
Six Months Ended June 30, 
 
2020 
2019 
(Dollars in thousands) 
Supplemental disclosures of cash flow information: 
 
Cash paid for interest on deposits and borrowings 
$ 
11,368
$ 
11,504
 
Net cash paid for income taxes 
1,868
1,362
 
Leases transferred into held for sale from investment 
19,235
81,472
Supplemental disclosures of non cash investing activities: 
 
Business combinations assets acquired 
$ 
—
$ 
146
 
Purchase of equipment for lease contracts and loans originated 
4,106
7,038
Reconciliation of Cash, cash equivalents and restricted cash 
to 
the Consolidated Balance Sheets: 
Cash and cash equivalents 
$ 
211,706
$ 
139,731
Restricted interest-earning deposits 
6,072
8,152
Cash, cash equivalents and restricted cash at end of period 
$ 
217,778
$ 
147,883

 
 
 
 
 
 
 
 
 
 
 
 
 
 
-10-
 
MARLIN BUSINESS SERVICES CORP. 
AND SUBSIDIARIES 
NOTES TO UNAUDITED CONSOLIDATED 
FINANCIAL STATEMENTS 
 
 
NOTE 1 – The Company 
 
 
Marlin Business Services Corp. (the “Company”) is a nationwide provider 
of credit products and services to small 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 which now incorporates Transportation 
Finance Group (“TFG”)) and working capital 
loans. The Company was incorporated in the Commonwealth 
of Pennsylvania on August 5, 2003. 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. Effective 
March 12, 2008, the Company 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 (“HKF”), an equipment leasing company which 
primarily identifies and sources lease and loan contracts 
for investor partners for a fee. 
On September 19, 2018, the Company completed the acquisition of Fleet 
Financing Resources 
(“FFR”), a leading provider of equipment finance credit products 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. 
 
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. 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 June 30, 2020 and the 
results of operations for the three- 
and six -month periods ended June 30, 2020 and 2019 
, 
and cash flows for the six-month periods 
ended June 30, 2020 and 2019. 
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, 2019, 
filed with the 
Securities and Exchange Commission (“SEC”) on March 13, 
2020. 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.
 
 
Provision for income taxes.
 
 
Our statutory tax rate was 
25.4
% for the three months ended June 30, 2020. 
For the three-month period ended June 30, 2020, the 
effective tax rate was 
18.9
%, driven by an interim reporting limitation on the amount of tax benefits 
that can be recognized under 
Accounting Standards Codification (“ASC”) 740, 
Income Taxes
. 
 
For the six-month period ended June 30, 2020, the effective 
tax rate in recognizing our benefit was 
33.2
%, 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. 
The Company has filed for a refund of carryback net operating losses 

 
 
 
-11-
 
as permitted under the CARES act. 
The impact to our effective rate from that benefit was partially 
offset by the limitation on interim 
tax benefits, as discussed above. 
 
For the three and six month periods ended June 30, 2019, 
our effective tax rates were 
24.4
% and 
24.1
%, respectively, and there were 
no significant reconciling items from our statutory rate.
 
 
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, 2019, other than the adoption of ASU 2016-13 as described 
below.
 
 
Recently Adopted Accounting Standards
. 
 
Credit Losses.
 
In June 2016, the FASB 
issued ASU 2016-13, 
Financial Instruments - Credit Losses (Topic 
326): Measurement of 
Credit Losses on Financial Instruments
, which changes the methodology for evaluating impairment 
of most financial instruments. 
This guidance was subsequently amended by ASU 2018-19, 
Codification Improvements,
 
ASU 2019-04, 
Codification Improvements
, 
ASU 2019-05, 
Targeted 
Transition Relief, 
ASU 2019-10, 
Effective Dates, 
and ASU 2019-11, 
Codification Improvements
. 
These 
ASUs are referred to collectively as “CECL”. 
 
CECL replaces 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. 
Under CECL, an 
allowance, or estimate of credit losses, is recognized immediately 
upon the origination of a loan or lease and will be adjusted in 
each subsequent reporting period. 
This estimate of credit losses takes 
into consideration all cashflows the Company expects to receive or 
derive from the pools of contracts, including recoveries after 
charge-off, amounts related to initial direct cost 
and origination costs net of fees deferred, accrued interest receivable 
and certain 
future cashflows from residual assets. The Company had previously 
recognized residual income within Fee Income in its Consolidated 
Statements 
of Operations; the adoption of CECL results in such residual income 
being captured as a component of the activity of the 
allowance. The Company’s poli 
cy for charging off contracts against the 
allowance, and non-accrual policy are not impacted by the 
adoption of CECL.
 
 
The provision for credit losses recognized in the Consolidated 
Statements of Operations under CECL will be primarily driven by 
originations, offset by the reversal of the allowance 
for any contracts sold, plus any amounts of realized cashflows, 
such as charge-
offs, above or below our modeled estimates, plus adjustments 
for changes in estimate each subsequent reporting period. 
 
Estimating an allowance under CECL requires the Company to 
develop and maintain a consistent systematic methodology to 
measure 
the estimated credit losses inherent in its current portfolio, 
over the entire life of the contracts. 
The Company assesses the appropriate 
collective, or pool, basis to use to aggregate its portfolio based 
on the existence of similar risk characteristics and determined that its 
measurement begins by separately considering segments of financing 
receivables, which is similar to how it has historically analyzed 
its allowance for credit losses: (i) equipment finance lease and loan; 
(ii) working capital loans; (iii) commercial vehicles “CVG”; 
and 
(iv) Community Reinvestment Act and Paycheck Protectio 
n 
loans. 
However, these classes of receivables are 
further disaggregated 
into pools of loans based on risk characteristics that may include: 
lease or loan type, origination channel, and internal credit 
score 
(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). 
 
As part of our analysis of expected credit losses, we may analyze 
contracts on an individual basis, or create additional pools of 
contracts, in situations where such loans exhibit unique risk characteristics 
and are no longer expected to experience similar losses to 
the rest of their pool. 
 
As part of its estimate of expected credit losses, specific to each 
measurement date, management considers relevant qualitative and 
quantitative factors to assess whether the historical loss experience 
being referenced should be adjusted to better reflect the risk 
characteristics of the current portfolio and the expected future 
loss experience for the life of these contracts. 
This assessment 
incorporates all available information relevant to considering the collectability 
of its current portfolio, including considering economic 
and business conditions, default trends, changes in its portfolio 
composition, changes in its lending policies and practices, among 
other 
internal and external factors. 
 
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 is effective (i.e., modified retrospective 
approach). 
 

 
-12-
 
The adoption of this standard resulted in the following adjustment 
to the Company’s Consolidated 
Balance Sheets:
 
Balance as of 
Balance as of 
December 31, 
Adoption 
January 1, 
2019 
Impact 
2020 
(Dollars in thousands) 
Assets: 
Net investment in leases and loans 
$ 
1,028,215
$ 
—
$ 
1,028,215
Allowance for credit losses 
(21,695)
(11,908)
(33,603)
Total net investment in leases 
and loans 
1,006,520
994,612
Liabilities: 
Net deferred income tax liability 
30,828
(3,031)
27,797
Stockholders' Equity: 
Retained Earnings 
135,112
(8,877)
126,235
 
See Note 6 – Allowance for Credit Losses, for further discussion of the 
January 1, 2020 measurement of allowance under CECL, as 
well as discussion of the Company’s 
new Accounting Policy governing its Allowance. 
 
See Note 13 – Stockholders’ Equity, 
for discussion of the Company’s 
election to delay for two-years the effect of CECL 
on regulatory 
capital, followed by a three-year phase-in for a five-year total 
transition. 
 
In addition, as a result of adoption this standard, future measurements of 
the impairment of our investment securities will 
incorporate 
the guidance in these ASUs, including analyzing any decline 
in fair value between credit quality-driven factors versus other factors. 
There was no impact as of the adoption date to our investment 
securities.

 
-13-
 
NOTE 3 – Non-Interest Income 
 
The following table summarizes non-interest income for the periods 
presented:
 
Three Months Ended 
Six Months Ended 
June 30, 
June 30, 
(Dollars in thousands) 
2020 
2019 
2020 
2019 
Insurance premiums written and earned 
$ 
2,249
$ 
2,176
$ 
4,531
$ 
4,308
Gain on sale of leases and loans 
57
3,332
2,339
6,944
Servicing income 
489
339
1,055
626
Property tax (loss) income 
(380)
79
5,124
5,722
Net gains recognized during the period on equity securities 
31
50
89
94
Non-interest income - other than from contracts with customers 
2,446
5,976
13,138
17,694
Property tax administrative fees on leases 
236
261
470
529
ACH payment fees 
36
74
108
160
Insurance policy fees 
873
666
1,791
1,334
Referral fees 
14
164
108
318
Other 
190
60
383
114
Non-interest income from contracts with customers 
1,349
1,225
2,860
2,455
Total non-interest income 
$ 
3,795
$ 
7,201
$ 
15,998
$ 
20,149

 
-14-
 
NOTE 4 - Investment Securities 
 
The Company had the following investment securities as of the 
dates presented:
 
June 30, 
December 31, 
2020 
2019 
(Dollars in thousands) 
Equity Securities 
Mutual fund 
$ 
3,740
$ 
3,615
Debt Securities, Available 
for Sale: 
Asset-backed securities ("ABS") 
3,935
4,332
Municipal securities 
 
2,733
 
3,129
 
Total investment securities 
$ 
10,408
$ 
11,076
 
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 June 30, 
Six Months Ended June 30, 
(Dollars in thousands) 
2020 
2019 
2020 
2019 
Net gains recognized during the period on equity securities 
$ 
31
$ 
50
$ 
89
$ 
94
Less: Net gains recognized during the period 
 
on equity securities sold during the period 
 
—
 
—
—
—
Unrealized gains recognized during the reporting period 
 
on equity securities still held at the reporting date 
$ 
31
$ 
50
$ 
89
$ 
94

 
-15-
 
Available for 
Sale 
The following schedule is a summary of available for sale investments 
as of the dates presented:
 
June 30, 2020 
Gross 
Gross 
Amortized 
Unrealized 
Unrealized 
Estimated 
Cost 
Gains 
Losses 
Fair Value 
(Dollars in thousands) 
ABS 
$ 
3,865
$ 
70
$ 
—
$ 
3,935
Municipal securities 
2,664
69
—
2,733
 
Total Debt 
Securities, Available for Sale 
$ 
6,529
$ 
139
$ 
—
$ 
6,668
December 31, 2019 
Gross 
Gross 
Amortized 
Unrealized 
Unrealized 
Estimated 
Cost 
Gains 
Losses 
Fair Value 
(Dollars in thousands) 
ABS 
$ 
4,302
$ 
33
$ 
(3)
$ 
4,332
Municipal securities 
3,058
71
—
3,129
 
Total Debt 
Securities, Available for Sale 
$ 
7,360
$ 
104
$ 
(3)
$ 
7,461
The Company evaluates its available for sale securities in an unrealized 
loss position for other than temporary impairment on at least a 
quarterly basis. The Company did not recognize any other than temporary 
impairment to earnings for each of the periods ended June 
30, 2020 and June 30, 2019. 
The following tables present 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 June 30, 2020 
and 
December 31, 2019:
 
June 30, 2020 
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)
$ 
—
$ 
170
$ 
—
$ 
—
$ 
—
$ 
170
Total available 
for sale investment 
securities 
$ 
—
$ 
170
$ 
—
$ 
—
$ 
—
$ 
170
(1) The unrealized loss is immaterial 
December 31, 2019 
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) 
ABS 
$ 
—
$ 
—
$ 
(3)
$ 
430
$ 
(3)
$ 
430
Total available 
for sale investment 
securities 
$ 
—
$ 
—
$ 
(3)
$ 
430
$ 
(3)
$ 
430

 
-16-
 
The following table presents the amortized cost, fair value, and 
weighted average yield of available for sale investments at June 30, 
2020, 
based on estimated average life. Receipt of cash flows may differ 
from those estimated maturities because borrowers may have 
the right to call or prepay obligations with or without penalties:
 
Distribution of Maturities 
1 Year 
 
Over 1 to 
 
Over 5 to 
Over 10 
or Less 
5 Years 
10 Years 
Years 
Total 
(Dollars in thousands) 
Amortized Cost: 
ABS 
$ 
—
$ 
2,351
$ 
1,514
$ 
—
$ 
3,865
Municipal securities 
 
15
 
346
 
2,133
 
170
 
2,664
Total available 
for sale investments 
$ 
15
$ 
2,697
$ 
3,647
$ 
170
$ 
6,529
Estimated fair value 
$ 
15
$ 
2,762
$ 
3,721
$ 
170
$ 
6,668
Weighted-average 
yield, GAAP basis 
4.75%
2.01%
2.31%
2.10%
2.19%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-17-
 
NOTE 5 – Net Investment in Leases and Loans 
 
Net investment in leases and loans consists of the following:
 
 
June 30, 2020 
December 31, 2019 
(Dollars in thousands) 
Minimum lease payments receivable 
$ 
407,019
$ 
457,602
Estimated residual value of equipment 
28,851
29,342
Unearned lease income, net of initial direct costs and fees deferred 
(51,625)
(59,746)
Security deposits 
(458)
(590)
Total leases 
383,787
426,608
Commercial loans, net of origination costs and fees deferred 
Working Capital 
Loans 
42,078
60,942
CRA
(1)
1,098
1,398
Equipment loans
(2)
473,267
464,655
CVG 
70,452
74,612
PPP Loans 
3,997
—
Total commercial loans 
590,892
601,607
Net investment in leases and loans, excluding allowance 
974,679
1,028,215
Allowance for credit losses 
(63,644)
(21,695)
Total net investment in leases 
and loans 
$ 
911,035
$ 
1,006,520
________________________ 
(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 2020, the Company was a participating lender, 
offering loans to its customers that are guaranteed under 
the Small Business 
Administration’s (SBA’s) 
Paycheck Protection Program (“PPP”). 
The SBA pays lender fees for processing PPP loans, and the 
Company will recognize the fee income associated with originating 
these loans over the life of the contracts on the effective 
interest 
method. 
 
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 June 30, 2020, $
50.5
 
million in net investment in leases were pledged as collateral 
for the Company’s outstanding asset-backed 
securitization balance and $
56.3
 
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 $
17.9
 
million and $
20.5
 
million as of June 
30, 2020 and December 31, 2019, 
respectively. Initial direct 
costs are netted in unearned income and are amortized to income using 
the effective interest method. 
ASU 2016-02 limited the types of costs that qualify for deferral 
as initial direct costs for leases, which 
reduced the deferral of unit lease costs and resulted in an increase 
in current period expense. Origination costs are netted in 
commercial loans and are amortized to income using the effective 
interest method. At June 30, 2020 and December 31, 
2019, $
23.1
 
million and $
23.4
 
million, respectively, of the estimated 
residual value of equipment retained on our Consolidated Balance 
Sheets was 
related to copiers.
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-18-
 
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 June 30, 2020:
 
 
 
 
Minimum Lease 
 
Payments 
Net Income 
Receivable 
(1)
Amortization 
(2)
(Dollars in thousands) 
Period Ending December 31, 
Remainder of 2020 
$ 
87,364
$ 
15,111
2021 
142,161
19,713
2022 
94,796
10,463
2023 
53,312
4,588
2024 
23,862
1,403
Thereafter 
5,524
347
$ 
407,019
$ 
51,625
________________________ 
 
(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.
 
 
 
Portfolio Sales 
The Company originates 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 $
1.9
 
million and $
2.5
 
million as of 
June 30, 2020 and December 31, 2019, respectively, 
and is recognized within Accounts payable and accrued expenses 
in the 
Consolidated Balance Sheets. 
As of June 30, 2020 and December 31, 2019, the portfolio 
of leases and loans serviced for others was 
$
296
 
million and $
340
 
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 Company’s reserve 
for expected losses from recourse 
obligations was $
0.8
 
million as of June 30, 2020 and $
0.4
 
million as of December 31, 2019. 
The following table summarizes information related to portfolio 
sales for the periods presented:
 
 
 
Three Months Ended June 30, 
Six Months Ended June 30, 
2020 
2019 
2020 
2019 
(Dollars in thousands) 
Sales of leases and loans 
$ 
1,127
$ 
57,640
$ 
24,056
$ 
110,508
Gain on sale of leases and loans 
57
3,332
2,339
6,944

 
-19-
 
NOTE 6 – Allowance for Credit Losses
 
For 2019 and prior, we maintained an allowance 
for credit losses at an amount sufficient to absorb 
losses inherent in our existing lease 
and loan portfolios as of the reporting dates based on our estimate of probable 
incurred net credit losses in accordance with the 
Contingencies Topic 
of the FASB ASC. 
 
Effective January 1, 2020, we
 
adopted 
ASU 2016-13, 
Financial Instruments - Credit Losses (Topic 
326): Measurement of Credit 
Losses on Financial Instruments
 
(“CECL”)
,
 
which changed our accounting policy and estimated allowance. 
CECL replaces 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. 
After the adoption of CECL, an allowance, or estimate of credit 
losses, is recognized immediately upon 
the origination of a loan or lease and will be adjusted in each 
subsequent reporting period. 
See further discussion of the adoption of 
this accounting standard and a summary of the Company’s 
revised Accounting Policy for Allowance for Credit Losses 
in Note 2, 
Summary of Significant Accounting Policies. 
Detailed discussion of our measurement of allowance under CECL 
as of the adoption 
date and June 30, 2020 is below. 
 
The following tables summarize activity in the allowance for 
credit losses
: 
 
Three Months Ended June 30, 2020 
(Dollars in thousands) 
Equipment 
Finance 
Working 
Capital 
Loans 
CVG 
CRA & 
PPP 
Total 
Allowance for credit losses, beginning of period 
$ 
37,774
$ 
7,200
$ 
7,086
$ 
—
$ 
52,060
 
Charge-offs 
(7,724)
(686)
(904)
—
(9,314)
 
Recoveries 
729
17
74
—
820
Net charge-offs 
(6,995)
(669)
(830)
—
(8,494)
Realized cashflows from Residual Income 
1,272
—
—
—
1,272
 
Provision for credit losses 
16,499
1,431
876
—
18,806
Allowance for credit losses, end of period 
$ 
48,550
$ 
7,962
$ 
7,132
$ 
—
$ 
63,644
Net investment in leases and loans, before 
allowance 
$ 
846,057
$ 
42,078
$ 
81,449
$ 
5,095
$ 
974,679
 
Three Months Ended June 30, 2019 
(Dollars in thousands) 
Equipment 
Finance 
Working 
Capital 
Loans 
CVG 
CRA 
Total 
Allowance for credit losses, beginning of period 
$ 
13,975
$ 
1,684
$ 
1,223
$ 
—
$ 
16,882
 
Charge-offs 
(4,508)
(602)
(345)
—
(5,455)
 
Recoveries 
482
51
61
—
594
 
Net charge-offs 
(4,026)
(551)
(284)
—
(4,861)
 
Provision for credit losses 
3,467
807
482
—
4,756
Allowance for credit losses, end of period 
$ 
13,416
$ 
1,940
$ 
1,421
$ 
—
$ 
16,777
Net investment in leases and loans, before 
allowance 
$ 
942,508
$ 
51,748
$ 
83,299
$ 
1,493
$ 
1,079,048

 
-20-
 
Six Months Ended June 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, January 1, 2020 
$ 
27,598
$ 
1,896
$ 
4,109
$ 
—
$ 
33,603
 
Charge-offs 
(14,214)
(1,965)
(1,633)
—
(17,812)
 
Recoveries 
1,254
55
163
—
1,472
Net charge-offs 
(12,960)
(1,910)
(1,470)
—
(16,340)
Realized cashflows from Residual Income 
2,425
—
—
—
2,425
 
Provision for credit losses 
31,487
7,976
4,493
—
43,956
Allowance for credit losses, end of period 
$ 
48,550
$ 
7,962
$ 
7,132
$ 
—
$ 
63,644
Net investment in leases and loans, before 
allowance 
$ 
846,057
$ 
42,078
$ 
81,449
$ 
5,095 
$ 
974,679
 
Six Months Ended June 30, 2019 
(Dollars in thousands) 
Equipment 
Finance 
Working 
Capital 
Loans 
CVG 
CRA 
Total 
Allowance for credit losses, beginning of period 
$ 
13,531
$ 
1,467
$ 
1,102
$ 
—
$ 
16,100
 
Charge-offs 
(8,840)
(1,275)
(673)
—
(10,788)
 
Recoveries 
1,214
71
61
—
1,346
 
Net charge-offs 
(7,626)
(1,204)
(612)
—
(9,442)
 
Provision for credit losses 
7,511
1,677
931
—
10,119
Allowance for credit losses, end of period 
$ 
13,416
$ 
1,940
$ 
1,421
$ 
—
$ 
16,777
Net investment in leases and loans, before 
allowance 
$ 
942,508
$ 
51,748
$ 
83,299
$ 
1,493
$ 
1,079,048
__________________ 
 
(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) 
Starting with the January 1, 2020 adoption of CECL, the Company recognizes 
an allowance, or estimate of credit losses, immediately 
upon the origination of a loan or lease, and that estimate will 
be reassessed in each subsequent reporting period. 
This estimate of 
credit losses takes into consideration all cashflows the Company 
expects to receive or derive from the pools of contracts, including 
recoveries after charge-off, amounts related to 
initial direct cost and origination costs net of fees deferred, 
accrued interest receivable 
and certain future cashflows from residual assets.

 
 
 
 
 
 
-21-
 
As part of its estimate of expected credit losses, specific to each 
measurement date, management considers relevant qualitative and 
quantitative factors to assess whether the historical loss experience 
being referenced should be adjusted to better reflect the risk 
characteristics of the current portfolio and the expected future 
loss experience for the life of these contracts. 
This assessment 
incorporates all available information relevant to considering the collectability 
of its current portfolio, including considering economic 
and business conditions, default trends, changes in its portfolio 
composition, changes in its lending policies and practices, among 
other 
internal and external factors. 
Current Measurement 
The Company selected 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 under CECL as of January 1, 2020 and June 30, 
2020 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 cashflo 
ws 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 late March, 
and the Company continues to reference a 6-month forecast 
period at June 
30, 2020 due to continuing uncertainty of the duration and level of impact 
of the COVID-19 virus on the macroeconomic 
environment and the Company’s portfolio, 
including uncertainty about the forecasted impact of COVID 
-19 that was 
underlying its economic forecasted variables beyond a 6-month period. 
The forecast adjustment to the Equipment Finance 
portfolio segment resulted in the recognition of provision of $
10.1
 
million and $
20.9
 
million for the three and six months 
ended June 30, 2020, respectively. 
After completing the forecast adjustment, the Company assessed 
the output of the Equipment Finance reserve estimate and 
increased the reserve for a $
3.4
 
million qualitative adjustment as of June 30,
 
2020 based on an analysis that incorporates the 
current forecasted peak levels of unemployment and business bankruptcy. 
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. 

 
 
 
 
 
 
 
-22-
 
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. 
The Company determined 
its most likely expectation for credit losses for the Working 
Capital segment based on the increased risk to its borrowers and 
increased risk to the collectability of its portfolio from COVID 
-19. 
Based on that analysis, the Working 
Capital reserve was 
increased and the Company recognized provision associated with 
qualitative adjustments of $
1.5
 
million and $
7.0
 
million for 
the three and six months ended June 30, 2020, respectively. 
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 pools 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. 
The Company determined its most likely expectation for 
credit losses for the CVG 
segment based on the increased risk to its borrowers and increased 
risk to the collectability of its portfolio from COVID-19, 
and increased the reserve and recognized provision associated 
with qualitative adjustments of $
0.4
 
million and $
3.3
 
million 
for the three and six months ended June 30, 2020, 
respectively. 
Community Reinvestment Act (CRA) and Paycheck Protection 
Program (PPP) 
Loans:
 
CRA loans are comprised of loans originated under a line of 
credit to satisfy the Company’s obligations 
under the CRA. PPP 
loans are comprised of loans that are guaranteed by the Small Business 
Administration. 
The Company does not measure an 
allowance specific to these populations 
because the exposure to credit loss is nominal. 
Specific Analysis:
 
As part of our analysis of expected credit losses, we may analyze 
contracts on an individual basis, or create additional pools 
of contracts, in situations where such loans exhibit unique risk characteristics 
and are no longer expected to experience 
similar losses to the rest of their pool. 
As of June 30, 2020 and January 1, 2020, there were 
no
 
contracts subject to specific 
analysis. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-23-
 
For the three and six months ended June 30, 2020, the Company has recognized 
$15.5 million and $
34.7
 
million of provision, 
respectively, driven by increasing 
the allowance for qualitative and forecast adjustments as 
a result of conditions driven by the 
COVID-19 pandemic. 
The COVID-19 pandemic, business shutdowns and impacts to our 
customers, is still ongoing, and the extent of 
the effects of the pandemic on our portfolio 
depends on future developments, which are highly uncertain and 
are difficult to predict. 
Further, the Company instituted a 
Loan modification payment deferral program, as discussed further 
below, to give payment 
relief to 
customers during this period. 
As of June 30, 2020, the performance of loans modified under 
that program remains uncertain, due to 
the timing of the modified loans resuming payment. 
Our reserve as of June 30, 2020, 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 increases to our credit loss estimate, in the future, and such 
increases 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 payment deferral program in order 
to assist its small-
business customers that request relief who were current under 
their existing agreement. 
The payment deferral program through June 
30,
 
2020 for Equipment Finance and CVG typically included 
a deferral of the full payment amount, and for Working 
Capital, included 
a deferral of the partial amount of payment. 
The Company’s COVID-modification 
program allows for up to 6 months of deferred payments. 
The Company typically processed 
first requests to defer customers for up to 3 months; starting in June, 
the Company has been evaluating and processing requests to 
extend the modification period for certain customers 
using specific underwriting criteria, such that the modification 
terms may extend 
up to 6 months in total. 
The below table outlines certain data on the modified population 
based on the balance and status as of June 30, 2020. 
See discussion 
below the table on the status of this population subsequent to 
quarter-end.
 
 
Equipment 
Finance 
Working 
(Dollars in thousands) 
and CVG 
Capital 
Total 
Net investment in leases and loans 
Completed modifications 
$ 
115,941
$ 
17,876
$ 
133,817
% of total segment 
12.5%
42.4%
13.7%
Number of active modifications as of June 30, 2020 
4,564
453
5,017
Interest income recognized for the three months 
ended June 30, 2020 on modified loans
(1)
$ 
2,295
$ 
1,633
$ 
3,928
Weighted-average 
total term (months): 
before modification 
56.0
15.7
after modification 
59.0
18.9
 
_________________ 
(1)
 
As discussed further below, the 
Company did not account for these modifications as Troubled 
Debt Restructurings (“TDRs”), 
and as such these loans were not put on non-accrual upon modification. 
The amount presented for interest income reflects 
total income recognized for the three months, for any loan that 
was modified in the quarter.
 
 

 
 
 
 
 
 
 
 
-24-
 
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 
June 30, 2020 and December 31, 2019, the Company did 
no
t have any TDRs. 
 
Based on their modified terms as of June 30, 2020, 
25
% of our total modified contracts had already resumed their regular payment 
schedule before the end of the second quarter, 
7
2% were scheduled to resume payment in the third quarter and the 
remaining 
3
% were 
scheduled to resume payment in the fourth quarter. 
 
Through July 24, 2020, we processed modifications for an additional 
$5.9 million of Equipment Finance net investment and additions 
to the modified population of Working 
Capital were not significant. 
 
 
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 response to COVID-19, starting in mid-March 2020, 
the Company instituted a payment deferral program in order 
to assist its small-
business customers that request relief who are current under 
their existing obligations and can demonstrate that their ability to 
repay 
has been impacted by the COVID-19 crisis. 
This program includes either reduced or full-payment deferrals for 
the modified 
contracts, and those contracts are presented in the below delinquency 
table and the non-accrual information for June 30, 
2020 based on 
their status with respect to the modified terms. 
See “Loan Modification Program” section above for 
further information on the 
modifications.
 
 

 
-25-
 
Portfolio by Origination Year as of 
June 30, 2020 
Total 
2020 
2019 
2018 
2017 
2016 
Prior 
Receivables 
(Dollars in thousands) 
Equipment Finance 
30-59 
$ 
1,392
$ 
5,493
$ 
2,764
$ 
1,833
$ 
501
$ 
144
$ 
12,127
60-89 
1,277
5,008
3,551
2,030
810
190
12,866
90+ 
461
3,519
2,722
1,564
784
139
9,189
Total Past Due 
3,130
14,020
9,037
5,427
2,095
473
34,182
Current 
163,706
333,621
179,308
94,036
34,558
6,646
811,875
Total 
166,836
347,641
188,345
99,463
36,653
7,119
846,057
Working Capital 
30-59 
91
344
32
—
—
—
467
60-89 
177
206
—
—
—
—
383
90+ 
—
279
—
—
—
—
279
Total Past Due 
268
829
32
—
—
—
1,129
Current 
16,277
24,238
396
38
—
—
40,949
Total 
16,545
25,067
428
38
—
—
42,078
CVG 
30-59 
58
313
147
210
9
—
737
60-89 
220
124
143
160
13
—
660
90+ 
54
62
236
252
33
—
637
Total Past Due 
332
499
526
622
55
—
2,034
Current 
11,940
37,580
17,728
8,951
3,138
78
79,415
Total 
12,272
38,079
18,254
9,573
3,193
78
81,449
CRA & PPP 
Total Past Due 
—
—
—
—
—
—
—
Current 
5,095
—
—
—
—
—
5,095
Total 
5,095
—
—
—
—
—
5,095
Net investment in leases 
and loans, before allowance 
$ 
200,748
$ 
410,787
$ 
207,027
$ 
109,074
$ 
39,846
$ 
7,197
$ 
974,679

 
-26-
 
Portfolio by Origination Year as of 
December 31, 2019 
Total 
2019 
2018 
2017 
2016 
2015 
Prior 
Receivables 
(Dollars in thousands) 
Equipment Finance 
30-59 
$ 
1,420
$ 
1,755
$ 
935
$ 
454
$ 
169
$ 
17
$ 
4,750
60-89 
1,023
1,055
685
366
80
4
3,213
90+ 
947
1,522
1,090
527
163
7
4,256
Total Past Due 
3,390
4,332
2,710
1,347
412
28
12,219
Current 
424,559
236,068
135,419
55,119
16,461
1,407
869,033
Total 
427,949
240,400
138,129
56,466
16,873
1,435
881,252
Working Capital 
30-59 
566
18
—
—
—
—
584
60-89 
16
52
—
—
—
—
68
90+ 
203
—
—
—
—
—
203
Total Past Due 
785
70
—
—
—
—
855
Current 
57,706
2,343
38
—
—
—
60,087
Total 
58,491
2,413
38
—
—
—
60,942
CVG 
30-59 
50
126
90
99
—
—
365
60-89 
5
15
188
46
—
—
254
90+ 
—
178
158
53
—
—
389
Total Past Due 
55
319
436
198
—
—
1,008
Current 
42,536
22,531
13,442
4,976
130
—
83,615
Total 
42,591
22,850
13,878
5,174
130
—
84,623
CRA 
Total Past Due 
—
—
—
—
—
—
—
Current 
1,398
—
—
—
—
—
1,398
Total 
1,398
—
—
—
—
—
1,398
Net investment in leases 
and loans, before allowance 
$ 
530,429
$ 
265,663
$ 
152,045
$ 
61,640
$ 
17,003
$ 
1,435
$ 
1,028,215
 
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 June 30, 2020 and December 
31, 2019, 
there were 
no
 
finance receivables past due 90 days or more and still accruing.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-27-
 
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. The loan is removed from non-accrual status once sufficient 
payments are made to bring the loan current and reviewed 
by 
management. At June 30, 2020 and December 31, 2019, 
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:
 
 
June 30, 
December 31, 
(Dollars in thousands) 
2020 
2019 
Equipment Finance 
$ 
9,205
$ 
4,256
Working Capital Loans 
1,189
946
CVG 
637
389
Total 
Non-Accrual 
$ 
11,031
$ 
5,591
 
 
NOTE 7 - Goodwill and Intangible 
Assets 
Goodwill 
The Company’s goodwill balance of $
6.7
 
million at December 31, 2019 included $
1.2
 
million from the Company’s acquisition of 
HKF, in January 2017, 
and $
5.5
 
million from the September 2018 acquisition of FFR. 
The goodwill balance represents the excess 
purchase price over the Company’s 
fair value of the assets acquired and is not amortizable but is deductible 
for tax purposes. 
The Company assigns its goodwill to a single, consolidated reporting 
unit, Marlin Business Services Corp. In the first quarter 
of 2020, 
events or circumstances indicated that it was more likely than 
not that the fair value of its reporting unit was less than its carrying 
amount, driven in part by market capitalization of the Company falling 
below its book value, and negative current events that impact 
the Company related to the COVID-19 economic shutdown. 
The Company calculated the fair value of the reporting unit, 
by taking 
the average stock price over a reasonable period of time multiplied 
by shares outstanding as of March 31, 2020 and then further 
applying a control premium, and compared it to its carryin 
g 
amount, including goodwill. 
The Company concluded that the implied 
fair value of goodwill was less than its carrying amount, and 
recognized impairment equal to the $
6.7
 
million balance in the 
Consolidated Statements of Operations. 
The changes in the carrying amount of goodwill for the six-month period 
ended June 30, 2020 are as follows:
 
(Dollars in thousands) 
Total Company 
Balance at December 31, 2019 
$ 
6,735
Impairment of Goodwill 
(6,735)
Balance at June 30, 2020 
$ 
—
 
Intangible assets 
The Company’s intangible assets consist 
of $
1.3
 
million of definite-lived assets with a weighted-average amortization period 
of 
8.7
 
years that were recognized in connection with the January 2017 
acquisition of HKF, and 
$
7.6
 
million 
of definite-lived intangible 
assets with a weighted-average amortization period of 
10.8
 
years that were recognized in connection with the September 
2018 
acquisition of FFR. 
The Company has no indefinite-lived intangible assets. 
The following table presents details of the Company’s 
intangible assets as of June 30, 2020:
 

 
-28-
 
(Dollars in thousands) 
Gross Carrying 
Accumulated 
Net 
Description 
Useful Life 
Amount 
Amortization 
Value 
Lender relationships 
3
 
to 
10
years 
$ 
1,630
$ 
582
$ 
1,048
Vendor 
relationships 
11
years 
7,290
1,306
5,984
Corporate trade name 
7
years 
60
30
30
$ 
8,980
$ 
1,918
$ 
7,062
 
There was 
no
 
impairment of these assets in the six-months ended June 30, 
2020 or 2019. 
Amortization related to the Company’s 
definite lived intangible assets was $
0.4
million and $
0.5
million for the six-month periods ended June 30, 2020 and June 30, 
2019, 
respectively.
 
The Company expects the amortization expense for the next 
five years will be as follows: 
(Dollars in thousands) 
Remainder of 2020 
$ 
399
2021 
798
2022 
798
2023 
798
2024 
790
 
NOTE 8 – Other Assets 
 
Other assets are comprised of the following:
 
June 30, 
December 31, 
 
2020 
2019 
(Dollars in thousands) 
Accrued fees receivable 
$ 
3,213
$ 
3,509
Prepaid expenses 
2,776
2,872
Income taxes receivable 
(1)
4,348
—
Federal Reserve Bank Stock 
1,711
1,711
Other 
1,986
2,361
$ 
14,034
$ 
10,453
 
_______________________ 
 
(1)
 
See Note 2 – 
Summary of Significant Accounting Policies, 
for discussion of the Provision for income taxes.

 
-29-
 
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 a 
nd 
recorded as a single deposit account at MBB. As of June 30, 
2020, money market deposit accounts totaled $
53.2
 
million. 
 
As of June 30, 2020, the scheduled maturities of certificates of 
deposits are as follows:
 
Scheduled 
Maturities 
(Dollars in 
thousands) 
Period Ending December 31, 
Remainder of 2020 
$ 
300,996
2021 
293,009
2022 
147,704
2023 
71,375
2024 
29,290
Thereafter 
7,299
Total 
$ 
849,673
 
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 June 30, 
2020 was 
1.99
%.
 
NOTE 10 – Debt and Financing Arrangements
 
Short-Term 
Borrowings 
 
The Company has a secured, variable rate revolving line of credit 
in the amount of $
5.0
 
million that was scheduled to expire on 
November 20, 2020
. There were 
no
 
outstanding balances on this line of credit as of June 30, 2020, 
and the line of credit was 
terminated by mutual agreement with the line of credit provider 
in July 2020.
 
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 June 30, 2020, 
outstanding term securitizations 
amounted to $
51.2
 
million and are collateralized by $
55.4
 
million of minimum lease and loan payments receivable and 
$
6.1
 
million of 
restricted interest-earning deposits. The Company’s 
term note securitizations are classified as long-term borrowings. 
 
The balance of long-term borrowings consisted of the following:
 
June 30, 
December 31, 
 
2020 
2019 
 
(Dollars in thousands) 
Term securitization 2018 
-1 
$ 
51,161
$ 
76,563
Unamortized debt issuance costs 
(271)
(472)
$ 
50,890
$ 
76,091

 
-30-
 
The term note securitization is summarized below: 
Outstanding Balance as of 
Notes 
Final 
Original 
June 30, 
December 31, 
Originally 
Maturity 
Coupon 
2020 
2019 
Issued 
Date 
Rate 
(Dollars in thousands) 
2018 — 1 
 
Class A-1 
$ 
—
$ 
—
$ 
77,400
July, 2019 
2.55
% 
 
Class A-2 
—
8,013
55,700
October, 2020 
3.05
 
Class A-3 
19,521
36,910
36,910
April, 2023 
3.36
 
Class B 
10,400
10,400
10,400
May, 2023 
3.54
 
Class C 
11,390
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 
$ 
51,161
$ 
76,563
$ 
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 
3.68
% over the remaining term of the 
borrowing.
 
Scheduled principal and interest payments on outstanding borrowings 
as of June 30, 2020 are as follows: 
Principal 
Interest 
(Dollars in thousands) 
Period Ending December 31, 
Remainder of 2020 
$ 
18,950
$ 
803
2021 
23,629
813
2022 
8,582
159
$ 
51,161
$ 
1,775

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-31-
 
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.
 
 
The Company’s balances measured 
at fair value on a recurring basis include the following 
as of June 30, 2020 and December 31, 
2019:
 
 
June 30, 2020 
December 31, 2019 
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 
$ 
—
$ 
3,935
$ 
—
$ 
—
$ 
4,332
$ 
—
Municipal securities 
—
2,733
—
—
3,129
—
Mutual fund 
3,740
—
—
3,615
—
—
 
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 six months ended June 30, 2020, the Company recognized 
$
6.7
 
million for the impairment of goodwill in the Consolidated 
Statements of Operations, as discussed further in Note 7, Goodwill 
and Intangible Assets. 
For the six months ended June 30, 
2019, 
there were no significant amounts recognized in the Consolidated 
Statements of Operations in connection with non-recurring fair 
value measurements.
 
 
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:
 
 

 
-32-
 
June 30, 2020 
December 31, 2019 
Carrying 
Fair 
Carrying 
Fair 
Amount 
Value 
Amount 
Value 
(Dollars in thousands) 
Financial Assets 
Cash and cash equivalents 
$ 
211,706
$ 
211,706
$ 
123,096
$ 
123,096
Time deposits with banks 
9,941
10,034
12,927
12,970
Restricted interest-earning deposits with banks 
6,072
6,072
6,931
6,931
Loans, net of allowance 
548,989
561,140
588,688
593,406
Federal Reserve Bank Stock 
1,711
1,711
1,711
1,711
Financial Liabilities 
 
Deposits 
$ 
902,191
$ 
921,196
$ 
839,132
$ 
846,304
 
Long-term borrowings 
50,890
51,469
76,091
76,781
 
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, 
2019.

 
-33-
 
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 common 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 June 30, 
Six Months Ended June 30, 
2020 
2019 
2020 
2019 
(Dollars in thousands, except per-share data) 
Basic EPS 
Net (loss) income 
$ 
(5,882)
$ 
6,115
$ 
(17,703)
$ 
11,256
Less: net income allocated to participating securities 
—
 
(74)
—
 
(147)
Net (loss) income allocated to common stock 
$ 
(5,882)
$ 
6,041
$ 
(17,703)
$ 
11,109
Weighted average common 
shares outstanding 
11,893,235
12,333,383
11,953,815
12,335,545
Less: Unvested restricted stock awards considered participating 
securities 
(132,756)
(148,387)
(135,502)
(160,170)
Adjusted weighted average common shares used in computing 
basic EPS 
11,760,479
12,184,996
11,818,313
12,175,375
Basic EPS 
$ 
(0.50)
$ 
0.50
$ 
(1.50)
$ 
0.91
Diluted EPS 
Net (loss) income allocated to common stock 
$ 
(5,882)
$ 
6,041
$ 
(17,703)
$ 
11,109
Adjusted weighted average common shares used in computing 
basic EPS 
11,760,479
12,184,996
11,818,313
12,175,375
Add: Effect of dilutive stock-based compensation awards 
—
 
81,855
—
 
84,624
Adjusted weighted average common shares used in computing 
diluted EPS 
11,760,479
12,266,851
11,818,313
12,259,999
Diluted EPS 
$ 
(0.50)
$ 
0.49
$ 
(1.50)
$ 
0.91
 
For the three-month periods ended June 30, 2020 
and June 30, 
2019, 
weighted average outstanding stock-based compensation awards 
in the amount of 
289,635
 
and 
174,458
, respectively, were considered antidilutive 
and therefore were not considered in the 
computation of potential common shares for purposes of diluted 
EPS.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-34-
 
For the six-month periods ended June 30, 2020 
and June 30, 2019, 
weighted average outstanding stock-based compensation awards in 
the amount of 
297,057
 
and 
187,093
, respectively, were considered 
antidilutive and therefore were not considered in the computation 
of potential common shares for purposes of diluted EPS.
 
 
NOTE 13 – Stockholders’ Equity 
Share Repurchases 
During the three-month period ended June 30, 2020, 
the Company did 
no
t purchase any shares of its common stock under the 2019 
Repurchase Plan. During the six-month period ended June 30, 
2020, the Company purchased 
264,470
 
shares of its common stock 
under a stock repurchase plan approved by the Company’s 
Board of Directors on August 1, 2019 (the “2019 Repurchase Plan”) 
at an 
average cost of $ 
16.09
 
per share. 
During the three-month period ended June 30, 2019, 
the Company purchased 
72,824
 
shares of its common stock in the open market 
under the 2017 Repurchase Plan at an average cost of $
23.44
 
per share. During the six-month period ended June 30, 2019, 
the 
Company purchased 
102,771
 
shares of its common stock under a stock repurchase plan approved 
by the Company’s Board of 
Directors on May 30, 2017 (the “2017 Repurchase Plan”) at an 
average cost of $
23.57
 
per share. 
At June 30, 2020, the Company had $
4.7
 
million of remaining authorizations under the 2019 Repurchase Plan. 
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”) may have 
shares withheld to cover income taxes. During the three-month 
periods ended June 30, 2020 and June 30, 2019, there were 
1,897
 
shares and 
536
 
shares repurchased to cover income tax withholding 
under the 2014 Plan at an average cost of $ 
6.50
 
per share and $
22.81
 
per share, respectively. During the 
six-month periods ended 
June 30, 2020 and June 30, 2019, there were 
23,020
 
and 
19,446
 
shares repurchased to cover income tax withholding in connection 
with shares granted under the 2014 Plan at average per-share 
costs of $ 
12.81
 
and $
22.74
, 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 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-35-
 
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 10% in order to maintain 
“well-capitalized” status 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. 
Any dividends declared above that amount and 
any return of permanent capital would require prior 
approval of the Federal Reserve Board of Governors. 
MBB’s Tier 
1 Capital balance at June 30, 2020 was$ 
133.6
 
million, which met all capital requirements to which MBB is subject 
and 
qualified MBB for “well-capitalized” status. At June 30, 2020 
, 
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
 
percent 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 June 30, 2020.
 
 
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. 
15.05%
$ 
190,244
4.00%
$ 
50,558
5.00%
$ 
63,197
 
Marlin Business Bank 
11.79%
$ 
133,551
4.00%
$ 
45,322
5.00%
$ 
56,652
Common Equity Tier 1 Risk-Based Capital 
 
Marlin Business Services Corp. 
19.33%
$ 
190,244
4.50%
$ 
44,282
6.50%
$ 
63,962
 
Marlin Business Bank 
14.91%
$ 
133,551
4.50%
$ 
40,297
6.50%
$ 
58,207
Tier 1 Risk-based Capital 
 
Marlin Business Services Corp. 
19.33%
$ 
190,244
6.00%
$ 
59,042
8.00%
$ 
78,723
 
Marlin Business Bank 
14.91%
$ 
133,551
6.00%
$ 
53,729
8.00%
$ 
71,639
Total 
Risk-based Capital 
 
Marlin Business Services Corp. 
20.65%
$ 
203,178
8.00%
$ 
78,723
10.00%
$ 
98,404
 
Marlin Business Bank 
16.23%
$ 
145,364
8.00%
$ 
71,639
10.00%
$ 
89,549
 

 
 
 
 
 
-36-
 
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 
1623
% at June 30, 2020 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 of June 30, 2020, MBB does not have the capacity to pay 
dividends to the Company without explicit approval from the 
Federal Reserve Board of Governors because of the current 
period losses 
and the amount of cumulative dividends paid over the past two years.
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-37-
 
NOTE 14 – Stock-Based Compensation 
 
 
Awards for 
Stock-Based Compensation are governed by the Company’s 
2003 Equity Compensation Plan, as amended (the “2003 
Plan”), 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) (the “2019 Plan” 
and, together with the 2014 Plan and the 2003 Plan, the “Equity Compensation 
Plans”). Under the terms of the Equity Compensation 
Plans, employees, certain consultants and advisors and non-employee 
members of the Company’s Board 
of Directors have the 
opportunity to receive incentive and nonqualified grants of stock options, 
stock appreciation rights, restricted stock and other equity-
based awards as approved by the Company’s 
Board of Directors. 
These award programs are used to attract, retain and motivate 
employees and to encourage individuals in key management 
roles to retain stock. 
The Company has a policy of issuing new shares to 
satisfy awards under the Equity Compensation Plans. The aggregate number 
of shares under the 2019 Plan that may be issued for 
Grants is 
826,036
. There were 
541,222
 
shares available for future awards under the 2019 Plan as of June 30, 
2020. 
 
There was 
no
 
stock-based compensation expense recognized for the three-month 
period ended June 30, 2020. Total 
stock-based 
compensation expense was $
1.0
 
million for the three-month period ended June 30, 2019. 
Total stock-based compensation 
expense was 
$
0.4
 
million and $
1.9
 
million for the six-month periods ended June 30, 2020 and 
June 30, 2019, respectively. Excess 
tax benefits from 
stock-based payment arrangements were less than $
0.1
 
million for the six-month period ended June 30, 2019.
 
 
Stock Options 
 
Option awards are generally granted with an exercise price equal 
to the market price of the Company’s 
stock at the date of the grant 
and have 
7
 
year contractual terms. 
All options issued contain service conditions based on the participant’s 
continued service with the 
Company and provide for accelerated vesting if there is a change in control 
as defined in the Equity Compensation Plans. 
Employee 
stock options generally vest over 
three
 
to 
four years
. 
There were 
no
 
stock options granted during the three-month and six periods ended 
June 30, 2020 and June 30, 2019, respectively. 
The expected life for options is estimated based on their vesting and 
contractual terms and was determined by applying the simplified 
method as defined by the SEC’s Staff 
Accounting Bulletin No. 107 (“SAB 107”). The risk-free interest rate 
reflected the yield on 
zero-coupon Treasury securities with a term 
approximating the expected life of the stock options. The 
expected volatility was 
determined using historical volatilities based on historical stock 
prices
 
. 
A summary of option activity for the six-month period ended 
June 30, 2020 follows: 
 
Weighted 
 
Average 
 
Number of 
Exercise Price 
Options 
Shares 
Per Share 
Outstanding, December 31, 2019 
135,159
$ 
26.79
 
Granted 
—
—
 
Exercised 
—
—
 
Forfeited 
(3,929)
27.31
 
Expired 
(11,270)
26.41
Outstanding, June 30, 2020 
119,960
26.82
 
The Company recognized $
0.1
 
million of compensation expense related to options during the three and 
six-month periods ended June 
30, 2020. 
The Company recognized $
0.1
 
million and $
0.2
 
million of compensation expense related to options during the three 
and 
six-month periods ended June 30, 2019. 
There were 
no
 
stock options exercised during the three or six-month periods ended 
June 30, 2020 and June 30, 2019.
 
 
 

 
-38-
 
The following table summarizes information about the stock 
options outstanding and exercisable as of June 30, 2020: 
Options Outstanding 
 
Options Exercisable 
Weighted 
Weighted 
Aggregate 
Weighted 
Weighted 
 
Aggregate 
Average 
Average 
Intrinsic 
Average 
Average 
 
Intrinsic 
Range of 
Number 
Remaining 
Exercise 
Value 
Number 
Remaining 
Exercise 
 
Value 
Exercise Prices 
 
Outstanding 
Life (Years
) 
Price 
(In thousands) 
Exercisable 
Life (Years
) 
Price 
(In thousands) 
$
25.75 
68,818
3.8
$
25.75
$
—
68,818
3.8
$
25.75
—
$
28.25 
51,142
4.7
$
28.25
$
—
34,092
4.7
$
28.25
$
—
119,960
4.2
$
26.82
$
—
102,910
4.1
$
26.58
$
—
 
The aggregate intrinsic value in the preceding table represents 
the total pretax intrinsic value, based on the Company’s 
closing stock 
price of $
8.46
 
as of June 30, 2020, which would have been received by the option holders 
had all option holders exercised their 
options as of that date. 
 
As of June 30, 2020, there was $
0.1
 
million of unrecognized compensation cost related to non-vested stock options 
not yet recognized 
in the Consolidated Statements of Operations scheduled to be recognized 
over a weighted average period of 
0.7
 
year.
 
Restricted Stock Awards 
 
The Company’s restricted stock 
awards provide that, during the applicable vesting periods, 
the shares awarded may not be sold or 
transferred by the participant. The vesting period for restricted 
stock awards generally ranges from 
three
 
to 
seven years
. All awards 
issued contain service conditions based on the participant’s 
continued service with the Company and may provide for accelerated 
vesting if there is a change in control as defined in the Equity Compensation 
Plans. 
 
The vesting of certain restricted shares may be accelerated to 
a minimum of 
three years
 
based on achievement of various individual 
performance measures. Acceleration of expense for awards based 
on individual performance factors occurs when the achievement of 
the performance criteria is determined. 
 
Vesting 
was accelerated in 2019 on certain awards based on the achievement 
of certain performance criteria determined annually, 
as 
described below. 
 
The Company also issues restricted stock to non-employee independent 
directors. 
These shares generally vest in 
seven years
 
from the 
grant date or 
six months
 
following the director’s termination from Board 
of Directors service.
 
The following table summarizes the activity of non-vested restricted 
stock for the six-month period ended June 30, 2020: 
 
Weighted 
Average 
Grant-Date 
Non-vested restricted stock 
Shares 
 
Fair Value 
Outstanding at December 31, 2019 
143,935
$ 
21.88
 
Granted 
45,830
8.64
 
Vested 
(29,774)
22.02
 
Forfeited 
(1,600)
25.67
Outstanding at June 30, 2020 
158,391
17.98

 
-39-
 
During the three-month periods ended June 30, 2020 
and June 30, 
2019, the Company granted restricted stock awards with grant-date 
fair values totaling $
0.4
 
million and $
0.1
 
million, respectively. During the 
six-month periods ended June 30, 2020 and June 30, 
2019, 
the Company granted restricted stock awards with grant-date 
fair values totaling $
0.4
 
million and $
0.1
 
million, respectively. 
 
As vesting occurs, or is deemed likely to occur, 
compensation expense is recognized over the requisite service 
period and additional 
paid-in capital is increased. The Company recognized $
0.1
 
million and $
0.2
 
million of compensation expense related to restricted 
stock for the three-month periods ended June 30, 2020 
and June 30, 2019, respectively. The 
Company recognized $
0.2
 
million and 
$
0.5
 
million of compensation expense related to restricted stock for the six-month 
periods ended June 30, 2020 and June 30, 2019, 
respectively. 
 
Of the $
0.2
 
million total compensation expense related to restricted stock for the six-month 
period ended June 30, 2020, 
no
 
expense 
was related to accelerated vesting based on achievement of certain performance 
criteria determined annually. 
Of the $0.5 million total 
compensation expense related to restricted stock for the six-month 
period ended June 30, 2019, approximately $
0.1
 
million related to 
accelerated vesting during the first quarter of 2019, 
which was also based on the achievement of certain performance criteria 
determined annually. 
 
As of June 30, 2020, there was $
1.6
 
million of unrecognized compensation cost related to non-vested restricted 
stock compensation 
scheduled to be recognized over a weighted average period 
of 
5.0
 
years. 
 
The fair value of shares that vested during the three-month periods 
ended June 30, 2020 and June 30, 2019 was $
0.1
 
million and $
0.3
 
million, respectively. The 
fair value of shares that vested during the six-month periods 
ended June 30, 2020 and June 30, 2019 was 
$
0.3
 
million and $
1.1
 
million, respectively.
 
Restricted Stock Units 
Restricted stock units (“RSUs”) are granted with vesting conditions 
based on fulfillment of a service condition (generally three to 
four 
years from the grant date), and may also require achievement 
of certain operating performance criteria, 
achievement of certain market-
based targets associated with the Company’s 
stock price or relative total shareholder return, or a 
combination of both performance 
criteria and market-based targets. 
For those awards subject to achievement of certain market 
performance criteria, the market-based 
target measurement period begins one year from the grant 
date and ends three years from the grant date. Expense for 
equity-based
 
awards with market and performance conditions is recognized 
over the performance period based on the grant-date fair value of the 
award for those awards which are expected to be 
earned.

 
-40-
 
The following tables summarize restricted stock unit activity for 
the 
six-month period ended June 30, 2020: 
 
Weighted 
Average 
Number of 
Grant-Date 
Performance-based & market-based RSUs 
RSUs 
 
Fair Value 
Outstanding at December 31, 2019 
257,476
$ 
18.00
Granted 
95,758
17.55
Forfeited 
(5,081)
23.99
Converted 
(13,810)
25.75
Cancelled due to non-achievement of market condition 
(30,390)
25.65
Outstanding at June 30, 2020 
303,953
16.64
Service-based RSUs 
Outstanding at December 31, 2019 
99,951
$ 
23.59
Granted 
69,422
20.43
Forfeited 
(19,299)
22.25
Converted 
(39,879)
24.30
Outstanding at June 30, 2020 
110,195
21.58
 
There were 
no
 
RSUs with vesting conditions based solely on market conditions granted 
during the six-month periods ended June 30, 
2020 and June 30, 2019, 
respectively. The weighted average 
grant-date fair value of RSUs with both performance and market-based 
vesting conditions granted during the six-month periods ended 
June 30, 2020 and June 30, 2019 
was $
12.90
 
and 
12.91
 
per unit, 
respectively. The weighted 
average grant date fair value of these performance and market-based 
RSUs was estimated using a Monte 
Carlo simulation valuation model with the following assumptions:
 
Six Months Ended June 30, 
2020 
2019 
Grant date stock price 
$ 
20.43
21.50
Risk-free interest rate 
1.40
% 
2.16
Expected volatility 
26.18
% 
26.68
Dividend yield 
—
—
 
The risk free interest rate reflected the yield on zero coupon Treasury 
securities with a term approximating the expected life of the 
RSUs. The expected volatility was based on historical volatility 
of the Company’s common 
stock. Dividend yield was assumed at zero 
as the grant assumes dividends distributed during the performance period 
are reinvested. 
When valuing the grant, we have assumed a 
dividend yield of zero, which is mathematically equivalent to 
reinvesting dividends in the issuing entity.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-41-
 
There were 
no
 
RSUs granted during the three-month periods ended June 30, 
2020 and June 30, 2019, respectively. 
During the six-
month periods ended June 30, 2020 and June 30, 2019, 
the Company granted RSUs with grant-date fair values totaling $
3.1
 
million 
and $
3.4
 
million, respectively. 
The Company did 
no
t recognize compensation expense related to RSUs for the three-month 
period 
ended June 30, 2020. 
The Company recognized $
0.7
 
million of compensation expense related to RSUs for the three-month period 
ended June 30, 2019. The Company did 
no
t recognize compensation expense related to RSUs for 
the six-month period ended June 30, 
2020. 
The Company recognized $
1.1
 
million of compensation expense related to RSUs for the six-month period 
ended June 30, 2019. 
During the three-month period ended June 30, 2020 
the Company reversed $
0.7
 
million of previously recognized compensation 
expense related to RSUs based on the adjustment of the most probable 
performance assumptions related to certain non-market 
performance awards. 
The fair value of restricted stock units that converted to shares of common 
stock during the six-month periods 
ended June 30, 2020 and June 30, 2019 was $
0.6
 
million and $
0.8
 
million, respectively. As of June 30, 
2020, there was $
2.1
 
million of 
unrecognized compensation cost related to RSUs scheduled to 
be recognized over a weighted average period of 
1.5
 
years based on the 
most probable performance assumptions. In the event maximum performance 
targets are achieved, an additional $
8.1
 
million of 
compensation cost would be recognized over a weighted average period 
of 
1.7
 
years. 
As of June 30, 2020, 
64,260
 
performance units 
are expected to convert to shares of common stock based on the 
most probable performance assumptions. In the event maximum 
performance targets are achieved, 
514,957
 
performance units would convert to shares of common stock.
 
 
 
NOTE 15 – Subsequent Events 
 
The Company declared a dividend of $ 
0.14
 
per share on July 30, 2020. The quarterly dividend, which is expected to 
result in a 
dividend payment of approximately $
1.7
 
million, is scheduled to be paid on 
August 20, 2020
 
to shareholders of record on the close of 
business on 
August 10, 2020
. It represents the Company’s thirty-sixth consecutive 
quarterly cash dividend. The payment of future 
dividends will be subject to approval by the Company’s 
Board of Directors. 
 
In addition, see Note 6—"Allowance for Credit Losses” for an update 
on our payment deferral contract modification program 
subsequent to June 30, 2020.
 

 
 
 
 
 
 
 
-42-
 
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, 2019 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 business strategy; (b) our projected 
operating 
results; (c) our ability to obtain external deposits or financing; (d) 
our understanding of our competition; and (e) 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: 
 
◾
 
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, 
2019 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 
(“HKF”), an equipment leasing company 
which primarily 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 (“FFR”), an 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 
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. 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-43-
 
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
 
 
Summary 
 
Through the second quarter, the impacts 
of the COVID-19 pandemic continued to be experienced 
by our business. Origination 
volumes for both equipment finance and working capital loans 
were down, a combined decrease of almost 70% from the 
second 
quarter of 2019. 
While we have tightened our underwriting standards for all of our products, 
the decline in volume is primarily due to 
decreased demand during this period of business shutdowns and 
economic uncertainty. 
We expect our 
origination volumes for the 
second half of 2020 will be negatively impacted as the effects 
of the pandemic continue and this period of uncertainty continues to 
impact the macroeconomic environment. 
Given the ongoing health crisis in the United States, especially the 
recent COVID-19 flare-
ups in the south and west, any return to pre-pandemic levels of 
activity remains uncertain. 
 
We implemented 
a payment deferral contract modification program to assist 
our customers who, during this period of economic 
decline, were current under their existing obligations. 
As of June 30, 2020, we had $133.8 million, or 13.7%, of our Net investment 
in 
leases and loans in payment deferral agreements, 
and on average the term of the modified contracts had increased 
by three months. 
We have begun to extend 
the deferrals for certain customers using specific underwriting 
criteria, 
for up to six months of total 
modification. 
 
As our contract modification program will allow for up-to six months 
of payment deferrals, and the program began in late March, 
the 
ultimate performance of this portfolio and the customers’ 
ability to resume full payment will be shown generally starting 
late in the 
third quarter or going into the fourth quarter of this year. 
Based on their modified terms as of June 30, 2020, 
25% of our total 
modified contracts had already resumed their regular payment schedule 
before the end of the second quarter, 
72% 
were scheduled to 
resume payment in the third quarter and the remaining 3% were 
scheduled to resume payment in the fourth quarter. 
We are closely 
monitoring the payment performance of our customers as their 
post-deferral obligations become due. 
While most modification 
extensions require partial payments, the ability of these customers 
to resume their scheduled payment obligations under their contract 
has yet to be confirmed. 
Additionally, their ability to resume 
payment may be highly impacted by the extent and duration of the 
continued impacts of the pandemic, which remains uncertain 
. 
 
Our delinquency statistics as of June 30, 2020 measure the portfolio 
based on their current effective terms, which would include 
intervals of either full or partial payment deferral for the modified 
portfolio. 
For Equipment Finance and Working 
Capital, 12.5% and 
42.4% of the respective portfolios were in the modification program. 
The 60+ delinquency rate for Equipment Finance has increased 
to 2.52% as of June 30, 2020 from 0.86% at December 31, 
2019. 
The 30+ delinquency rate for Working 
Capital has increased to 
2.68% as of June 30, 2020 from 1.42% at December 31, 
2019. Further, these delinquency rates have doubled 
from the quarter ended 
March 31, 2020. 
 
Year 
-to-date, we have recognized $34.7 million of increases to 
our allowance for qualitative and forecast adjustments as a result of the 
expected impacts of the COVID-19 pandemic on our portfolio. 
These increases include $15.5 million of provision recognized 
in the 
second quarter, and $19.2 million in the 
first quarter. 
Our allowance as a percent of receivables has increased for Equipment 
Finance 
to 6.00% from 2.05% at December 31, 2019, and increased 
for Working Capital 
to 18.92% from 3.12% at December 31, 
2019. 
 
Our total Allowance of $63.6 million as of June 30, 2020 
incorporates all of our current judgments about the impact of the COVID 
-19 
pandemic on our portfolio. 
Our estimate of credit losses is based on our assessment of the 
risks to our portfolio, including certain 
economic assumptions driven by forecasted unemployment and business 
bankruptcy levels, our expectations regarding the 
performance of our portfolio under these economic conditions, 
and such estimates are driven by limited information regarding the 
extent and timeline of impacts from COVID-19. All of the assumptions 
and expectations underlying our estimate of credit loss depend 
largely on future developments, and these estimates are 
highly uncertain; 
the ultimate amount of credit losses we may realize on our 
portfolio may vary from our current estimate. 
We may recognize credit 
losses in excess of our reserve, or adjustments to our required 
reserve based on future performance, 
and such adjustments 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. 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-44-
 
We recognized 
a $5.9 million Net loss for the quarter, 
driven largely by the $15.5 million COVID-related 
provision for loan loss. 
We 
began efforts to tighten our expense base, putting approximately 
120 employees on furlough in mid-April. 
In June, we made the 
decision to permanently reduce our workforce by approximately 
80 employees, which reduced our headcount to approximately 
250 
employees at the end of July, 
down from approximately 350 employees as of December 31, 
2019. 
Our total Salaries and benefits was 
$7.7 million for the second quarter of 2020, which is $4.8 
million lower than the same quarter of 2019. 
That reduction reflects $1.7 
million of lower salary expense, primarily driven by reduced 
headcount from the furlough, partially offset by $0.9 
million of 
severance recognized, plus $1.9 million lower incentive compensation cost and 
$2.1 
million of lower commission expense. 
We also 
made the decision to exit one office lease as part of our 
cost reduction efforts, and recognized $0.2 million of costs 
associated with 
that planned exit. 
We continue 
to assess all other aspects of our expense base in order to 
stabilize our operations and minimize the 
negative impacts of the ongoing pandemic. 
 
Through the second quarter, our employees 
continue to work remotely, 
and we have not experienced any significant interruption to 
our operations from that transition. 
We continue to 
assess how to best evolve our operations and how to best serve our customers 
in 
this changing environment. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-45-
 
F
INANCE 
R
ECEIVABLES 
AND 
A
SSET 
Q
UALITY
 
 
The following table summarizes certain portfolio statistics for 
the periods presented: 
June 30, 
March 31, 
December 31, 
June 30, 
 
2020 
2020 
2019 
2019 
(Dollars in thousands) 
Finance receivables: 
End of period 
$ 
974,679 
$ 
1,022,135 
$ 
1,007,706 
(1) 
$ 
1,057,727 
(1) 
Average for the quarter
(1)
979,313 
1,008,823 
1,034,464 
1,031,774 
Origination Volume 
- three months
(6)
65,419 
157,391 
215,161 
209,317 
Origination Volume 
- six months, through June 30
(6)
222,810 
— 
— 
402,757 
Assets Sold - three months 
1,127 
22,929 
114,483 
57,640 
Assets Sold - six months, through June 30 
24,056 
— 
— 
110,507 
Leases and Loans Modified:
(3)
Payment deferral program
(2)
End of period 
$ 
133,817 
$ 
19,518 
— 
— 
As a % of end of period receivables
(1)
13.7% 
1.9% 
— 
— 
Other Restructured leases and loans, end of period 
$ 
1,751 
$ 
3,095 
$ 
2,668 
$ 
3,122 
Allowance for credit losses :
(4)
End of period 
$ 
63,644 
$ 
52,060 
$ 
21,695 
$ 
16,777 
As a % of end of period receivables
(1)
6.53% 
5.09% 
2.15% 
1.59% 
Annualized net charge-offs 
 
to average total finance receivables 
(quarter)
(1)
3.47% 
3.11% 
3.00% 
1.88% 
Delinquencies, end of period: 
(3)(5)
Equipment Finance and CVG: 
Greater than 60 days past due, $ 
$ 
23,353 
$ 
10,156 
$ 
8,112 
$ 
6,593 
Greater than 60 days past due, % 
2.52% 
1.05% 
0.86% 
0.66% 
Working Capital: 
Greater than 30 days past due, $ 
$ 
1,130 
$ 
673 
$ 
855 
$ 
240 
Greater than 30 days past due, % 
2.68% 
1.14% 
1.42% 
0.47% 
__________________ 
(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. 
See  further  discussion of 
our  Loan 
modification program below. 
(3) 
No renegotiated leases 
or loans met 
the definition of 
a Troubled 
Debt Restructuring for 
any period presented, 
including our payment 
deferral 
modifications, as discussed further below. 
(4) 
The December 31, 
2019 end of 
period allowance and 
% of receivables 
were $33,603 and 
3.27% 
after the January 1, 
2020 adoption of 
CECL. 
See further discussion below. 
(5) 
Calculated as a percentage of net investment in leases and loans. 
(6) 
Amount of originations 
for the three and 
six months ended June 
30, 2020 presented 
above excludes $4.2 million 
of loans originated 
under the 
Paycheck Protection Program (PPP). 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-46-
 
For three and six months ended June 30, 2020, we have recognized 
$15.5 million and $34.7 million of provision for credit losses, 
respectively, driven by qualitative 
and forecast adjustments to 
the allowance for credit losses as a result of the economic impact of the 
COVID-19 pandemic. 
The COVID-19 pandemic, business shutdowns and impacts to our 
customers, are still ongoing, and the extent 
of the effects of the pandemic on our portfolio 
depends on future developments, which are highly uncertain and are 
difficult to predict. 
Further, we instituted a Loan modification 
payment deferral program, as discussed further below, 
to give payment relief to customers 
during this period. 
As of June 30, 2020, the performance of loans modified under that program 
remains uncertain. 
Our reserve as of June 30, 2020, and the qualitative and economic 
adjustments outlined below in our Provision discussion, 
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 expected 
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 increases to our estimated expected credit loss 
es, in the future, and such increases 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, 
we instituted a payment deferral program in order to assist our small 
-business 
customers that request relief who are current under their existing 
obligations. 
Our COVID-19 modification program allows for up to 6 
months of deferred payments. 
We typically processed 
first requests to defer customers for up to 3 months; starting 
in July, we have 
been evaluating and processing requests to extend the modification 
period for certain customers using specific underwriting criteria, 
such that the modification terms may extend to up to 6 
months in total. 
The below table outlines certain data on the modified population 
based on the balance and status as of June 30, 2020. 
See discussion 
below the table on the status of this population subsequent to 
quarter-end. 
Equipment 
Working 
Finance 
Capital 
Total 
(Dollars in thousands) 
Net investment in leases and loans 
Completed modifications 
$ 
115,941 
$ 
17,876 
$ 
133,817 
% of total segment 
12.5% 
42.4% 
13.7% 
Interest income recognized for the three months 
ended June 30, 2020 on modified loans
(1)
$ 
2,295 
$ 
1,633 
$ 
3,928 
Number of modifications (units) 
Modified and Active 
4,564 
453 
5,017 
Modified and Resolved
(2)
56 
15 
71 
Not Processed
(3)
3,107 
84 
3,191 
Total Applications - owned 
portfolio 
7,727 
552 
8,279 
Weighted-average 
total term (months) 
before modification 
56.0 
15.7 
after modification 
59.0 
18.9 
_________________ 
(1)
 
We did not account for these modifications as TDR, as allowed by interagency guidance issued in April 2020. 
As such these loans were 
not put on non-accrual upon modification. 
The amount presented for interest income reflects total income recognized for the three months, 
for any loan that was modified in the quarter. 
(2)
 
Resolved population through June 30, 2020 includes: 
for Equipment Finance, 55 loans paid in full and 1 charge-off, and for Working 
Capital, 11 loans paid in full and 4 charge-offs. 

 
-47-
 
(3)
 
Requests not processed includes requests declined or cancelled by the customer, requests declined by the Company, and 
an insignificant 
amount of requests in process pending underwriting or without finalized documentation as of June 30, 2020. 
Through June 30, 2020, the first round of modifications processed 
for Equipment Finance generally consisted of adding three 
months 
of $0 payments, or fully deferred payments. 
As a result, the weighted-average total contract yield for this population declined 
by 35 
basis points. 
The extension requests we are currently processing for 
Equipment Finance, to extend the term of the deferral to 
up to 6 
months total, are generally being processed to require a partial 
payment during the deferral period, with additions to the customers 
’ 
post-deferral payments to achieve a consistent level of yield. 
Through June 30, 2020, the modifications processed for Working 
Capital have generally consisted of up to 6 months of partial-
payment deferral, with additions to the customers post-deferral 
payments to achieve a consistent level of yield. 
 
Through July 24, 2020, we processed modifications for an additional 
$5.9 million of Equipment Finance net investment and additions 
to the modified population for Working 
Capital were not significant. 
 
Portfolio Trends 
 
During the three months ended June 30, 2020, 
we generated 3,178 new Equipment Finance leases and loans with equipment 
costs of 
$64.6 million, compared to 7,648 new Equipment Finance leases and 
loans with equipment costs of $181.8 million generated 
for the 
three months ended June 30, 2019. 
Working Capital loan 
originations were less than $1.0 million during the three-month 
period ended 
June 30, 2020, 
compared to $27.5 million for the three-month period ended June 30, 
2019. 
 
Overall, our average net investment in total finance receivables 
for the three-month period ended June 30, 2020 decreased 
5.1% to 
$979.3 million, compared to $1,031.8 million for the three-month period 
ended June 30, 2019. 
Our origination volumes in the three 
months ended June 30, 2020 were lower than our historical norms, 
primarily driven by decreased demand attributable to 
COVID-19 
related business shutdowns and other macroeconomic factors. 
We expect our 
origination volumes for the third quarter of 2020 will 
continue to be negatively impacted by these factors, and our 
portfolio of receivables may continue to decline as long as our 
origination 
volumes are less than portfolio runoff. 
Given the ongoing health crisis in the United States, especially the 
recent COVID-19 flare-ups 
in the south and west, any returns to pre-pandemic levels of activity 
remains uncertain. 
 
The following table outlines the delinquency status of the Company’s 
portfolio as of June 30, 2020, including information on the 
population of restructured contracts, and contracts with restructure 
requests: 
 
Net Investment (in thousands) 
Delinquency Rate by population 
30 
60 
90+ 
Current 
Total 
30 
60 
90+ 
Current 
Total 
Equipment Finance 
Non-Restructured Portfolio: 
Modification not requested 
$8,150 
$7,625 
$6,745 
$744,616 
$767,136 
1.06% 
0.99% 
0.88% 
97.07% 
100% 
Requested, Not Processed 
(1)
4,289 
5,793 
3,061 
31,287 
44,430 
9.65% 
13.04% 
6.89% 
70.42% 
100% 
Total Non-Restructured 
12,439 
13,418 
9,806 
775,903 
811,566 
1.53% 
1.65% 
1.21% 
95.61% 
100% 
Restructured Portfolio 
424 
109 
21 
115,387 
115,941 
0.37% 
0.09% 
0.02% 
99.52% 
100% 
Total 
Equipment Finance 
$12,864 
$13,527 
$9,826 
$891,290 
$927,507 
1.39% 
1.46% 
1.06% 
96.09% 
100%

 
-48-
 
Net Investment (in thousands) 
Delinquency Rate by population 
15 
30 
60+ 
Current 
Total 
15 
30 
60+ 
Current 
Total 
Working Capital 
Non-Restructured Portfolio: 
Modification not requested 
$98 
$212 
$368 
$22,243 
$22,921 
0.43% 
0.92% 
1.60% 
97.05% 
100% 
Requested, Not Processed 
(1)
7 
13 
81 
1,180 
1,281 
0.58% 
1.05% 
6.35% 
92.02% 
100% 
Total Non-Restructured 
105 
225 
449 
23,423 
24,202 
0.44% 
0.93% 
1.85% 
96.78% 
100% 
Restructured Portfolio 
608 
242 
212 
16,814 
17,876 
3.40% 
1.35% 
1.18% 
94.07% 
100% 
Total 
Working Capital 
$713 
$467 
$661 
$40,237 
$42,078 
1.69% 
1.11% 
1.57% 
95.63% 
100% 
_________________ 
(1)
 
Represents a subset of modification requests where the customer contacted the Company to initiate a modification, but the request was not 
processed. 
This includes requests cancelled because the customer declined the revised terms or did not finalize documents, requests 
declined by the Company, as well as an insignificant amount of requests that were in-process at the end of the second quarter. 
 
Contracts that are part of the payment deferral modification program 
will be reflected in our Delinquency and Non-Accrual measures 
based on their performance against their modified terms. 
 
Equipment Finance receivables over 30 days delinquent were 
390 basis points as of June 30, 2020, up 208 basis points from March 
31, 2020, and up 284 basis points from June 30, 2019. 
Working Capital receivables 
over 15 days delinquent were 438 basis points as 
of June 30, 2020, up 183 basis points from March 31, 2020 
and up 386 basis points from June 30, 2019. 
 
Equipment Finance leases and loans are generally charged 
-off when they are contractually past due for 120 days or 
more. 
Working 
Capital loans are generally charged-off at 60 
days past due. Annualized second quarter total net charge 
-offs were 3.47% of average 
total finance receivables versus 3.11% 
in the first quarter of 2020 and 1.88% a year ago. 
 
Through the end of the second quarter, 
we have not yet begun to experience any material increase in charge 
-offs driven by the impact 
of COVID-19. 
We are 
continuing to evaluate the delinquency trends of the non-modified portfolio, 
and we are monitoring the 
payment performance of the modified portfolio as those customers 
begin to resume payment. Based on their modified terms as 
of June 
30, 2020, 25% of our total modified contracts had already resumed 
their regular payment schedule before the end of the second 
quarter, 72% were scheduled to resume payment 
in the third quarter and the remaining 3% were scheduled to resume 
payment in the 
fourth quarter. 
We are 
closely monitoring the payment performance of our customers as their 
payments post-deferral become due. 
While most modification extensions require partial payments, the ability 
of these customers to resume their scheduled obligation of 
their contract has yet to be confirmed. 
Additionally, their ability to resume 
payment may be highly impacted by the extent and 
duration of the continued impacts of the pandemic, which remains 
uncertain. 
 
In accordance with interagency guidance as amended in April 
2020, as affirmed by the FASB, 
we are not accounting for our payment-
deferral modified loans as TDRs, and we are continuing to accrue 
interest on those loans. 
For the three months ended June 30, 2020, 
we recognized total Interest income of $3.93 million on loans in our 
COVID-19 loan modification program.

 
-49-
 
The following table summarizes non-accrual leases and loans 
in the Company’s portfolio: 
June 30, 
March 31, 
December 31 
June 30, 
2020 
2020 
2019 
2019 
(Dollars in thousands) 
 
Equipment finance 
$ 
9,205 
$ 
5,357 
$ 
4,256 
$ 
3,494 
 
Working capital 
1,189 
755 
946 
284 
 
CVG 
637 
593 
389 
199 
 
CRA and PPP 
— 
— 
— 
— 
 
Total non-accrual leases 
and loans 
$ 
11,031 
$ 
6,705 
$ 
5,591 
$ 
3,977 
 
Through June 30, 2020, the increase in leases and loans on non-accrual 
reflects the growth in delinquencies in our portfolio. 
Income 
recognition is discontinued on Equipment Finance leases or 
loans, including CVG loans, when a default on monthly payment 
exists 
for a period of 90 days or more. Income recognition resumes 
when the lease or loan becomes less than 
90 days delinquent. 
Working 
Capital Loans are generally placed in non-accrual status when they 
are 30 days past due. The loan is removed from non-accrual 
status 
once sufficient payments are made to bring the loan 
current and evidence of a sustained performance period 
as reviewed by 
management. 
The Company has no loans 90 days or more past due that were 
still accruing interest for any of the periods presented. 
 
Portfolio Concentration. 
 
The following table summarizes the concentrations of our portfolio 
of net investment in leases and loans as of June 30, 2020 
by state 
and industry: 
 
Top 10 Industries, by Borrower 
SIC Code 
Top 10 States 
Equipment 
Equipment 
Finance 
Working 
Finance 
Working 
and CVG 
Capital 
and CVG 
Capital 
Medical 
13.0 
% 
8.4 
% 
CA 
13.8 
% 
11.1 
% 
Misc. Services 
12.4 
8.2 
TX 
11.7 
10.5 
Retail 
10.4 
13.1 
FL 
9.7 
8.6 
Construction 
8.7 
13.1 
NY 
6.8 
5.7 
Restaurants 
7.5 
8.2 
NJ 
4.6 
6.7 
Professional Services 
6.6 
5.4 
PA 
3.6 
5.4 
Manufacturing 
5.9 
9.2 
GA 
3.4 
4.6 
Transportation 
5.3 
3.0 
IL 
3.3 
4.0 
Trucking 
4.5 
2.3 
NC 
3.1 
2.6 
Automotive 
3.4 
6.4 
MA 
3.0 
2.1 
All Other 
22.3 
22.7 
All Other 
37.0 
38.7 
Total 
100 
% 
100 
% 
Total 
100 
% 
100 
% 
 
As a result of the COVID-19 pandemic, we have been continually 
assessing the risks to our portfolio, including consideration 
of high-
risk industries and geographic locations that are being more significantly 
impacted by the spread of COVID-19. 
While we are attempting to mitigate the impact of the COVID 
-19 pandemic on our portfolio, by tightening underwriting standards 
for 
areas of elevated risk and by assisting borrowers that have been negatively 
impacted, the extent of the impacts of COVID-19 on our 
portfolio remains uncertain.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-50-
 
Allowance for credit losses. 
The following table provides a rollforward of our Allowance for 
credit loss: 
Three Months Ended 
Six Months Ended 
June 30, 
June 30, 
 
2020 
2019 
2020 
2019 
(Dollars in thousands) 
Allowance for credit losses, December 31, 2019 
$ 
21,695 
Adoption of ASU 2016-13 (CECL) 
11,908 
Allowance for credit losses, beginning of period 
$ 
52,060 
$ 
16,882 
33,603 
$ 
16,100 
Provision for credit losses 
18,806 
4,756 
43,956 
10,119 
Net Charge-offs: 
Equipment Finance 
(6,995) 
(4,026) 
(12,960) 
(7,626) 
Working Capital 
(669) 
(551) 
(1,910) 
(1,204) 
CVG 
(830) 
(284) 
(1,470) 
(612) 
 
Net Charge-offs 
(8,494) 
(4,861) 
(16,340) 
(9,442) 
Realized cashflows from Residual Income 
1,272 
— 
2,425 
— 
Allowance for credit losses, end of period 
$ 
63,644 
$ 
16,777 
$ 
63,644 
$ 
16,777 
 
The allowance for 
credit losses as a 
percentage of total finance 
receivables increased to 
6.53% as of June 
30, 2020, 
from 2.15% as of 
December 31, 
2019. 
This increase 
in reserve 
coverage is 
primarily driven 
by an 
$11.9 million 
increase from 
the Janu 
ary 1, 
2020 
adoption of CECL, and 
a $34.7 million Provision 
for credit losses recognized 
as a result of 
qualitative and forecast adjustments 
in the 
six months ended June 30, 
2020 as a result of the estimated impact to the portfolio from the 
COVID-19 pandemic. 
Provision for credit 
losses
. 
 
The provision for 
credit losses recognized 
after the adoption 
of CECL is 
primarily driven 
by origination volumes, 
offset by 
the 
reversal of the 
allowance for any 
contracts sold, plus 
adjustments for changes 
in estimate each 
subsequent reporting period. 
For 
2020, given 
the wide 
changes in 
the macroeconomic 
environment driven 
by COVID 
-19, the 
changes in 
estimate is 
the most 
significant driver 
of provision. 
In contrast, the 
allowance estimate 
recognized in 
2019 under 
the probable, 
incurred model 
was 
based on the current estimate of probable net credit 
losses inherent in the portfolio. 
For the three months ended 
June 30, 
2020, the $18.8 million provision 
for credit losses recognized was 
$14.0 million greater than 
the $4.8 
million provision recognized 
for the three 
months ended 
June 30, 
2019. 
For the 
six months ended 
June 30, 
2020, the 
$44.0 million provision for 
credit losses recognized was 
$33.9 million greater than 
the $10.1 million provision 
recognized for the 
three months ended 
June 30, 2019. 
The provision included 
COVID-related forecast and 
qualitative adjustments of 
$15.5 million 
for the three months ended June 30, 2020, and $34.7 million for 
the six months ended June 30, 2020. 
Our estimate 
of COVID 
-related losses 
for the 
Equipment Finance 
portfolio is 
primarily driven 
by updates 
to a 
reasonable and 
supportable forecast based 
on the modeled 
correlation of changes 
in the loss 
experience of the 
our portfolio to 
certain economic 
statistics, specifically 
changes in 
the unemployme 
nt rate 
and changes 
in the 
number of 
business bankruptcies. 
Our COVID-
provision for 
Equipment Finance 
was $10.8 
million for the 
first quarter 
of 2020, 
and $10.1 
million for the 
second quarter, 
and 
those provision levels 
were calculated using 
a 6-month period 
for the economic 
statistics. 
In the second 
quarter, the 
increase in 
provision estimate was driven 
by the forecasted economic 
conditions getting worse than 
what was expected at 
the end of the first 
quarter. 
In addition, as of June 30, 
we further increased our reserve for 
a $3.4 million qualitative adjustment 
based on an analysis 
that incorporates the current forecasted peak levels of unemployment 
and business bankruptcy. 

 
 
 
 
 
 
 
 
 
 
 
 
 
-51-
 
For the CVG and Working 
Capital portfolio segments, our estimate 
of increased losses is 
based on qualitative adjustments, 
taking 
into consideration alternative 
scenarios to determine 
the Company’s 
estimate of the 
probable impact of 
the economic shutdown. 
The COVID-related provision for CVG was $2.8 
million for the first quarter of 2020, and 
$0.4 million for the second quarter. 
The 
COVID-related provision 
for Working 
Capital was 
$5.5 million 
for the 
first quarter 
of 2020, 
and $1.5 
million for 
the second 
quarter. 
The qualitative and economic 
adjustments to our allowance 
take into consideration information 
and our judgments 
as of June 30, 
2020, and are 
based in part 
on an expectation 
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. 
The COVID-19 pandemic, 
and related business 
shutdowns, is still 
ongoing, and the 
extent of the 
effects of the 
pandemic on our 
portfolio depends on future developments, which 
are highly uncertain and are difficult 
to predict. 
We may recognize 
credit losses 
in excess of 
our reserve, 
or increases 
to our 
credit loss estimate, 
in the future, 
and such increases 
may be significant, 
based on 
future developments. 
Net Charge-offs.
 
 
Equipment Finance 
and TFG 
receivables are 
generally charged 
-off when 
they are 
contractually past 
due for 
120 days 
or more. 
Working Capital receivables 
are generally charged-off at 60 days past 
due. 
 
Total portfolio 
net charge 
-offs for 
the three 
months ended 
June 30 
, 
2020 were 
$8.5 million 
(3.47% 
of average 
total finance 
receivables on an 
annualized basis), compared 
to $7.7 million 
(3.00%) for the 
three months ended 
December 31, 2019 
, 
and $4.9 
million (1.8 
8%) for 
the three 
months ended 
June 30 
, 
2019. 
Compared to 
the same 
quarter of 
the prior 
year, the 
Company is 
experiencing elevated 
net charge 
-offs, due 
primarily to 
economic headwinds 
that already 
existed as of 
December 31, 
2019 that 
were disproportionally impacting the small business and lower 
credit quality borrowers in 
our portfolio. 
Through the end of the second quarter, 
our charge-offs are only slightly elevated compared 
to the levels in December. 
We believe 
we have not yet begun to experience the full impact of expected 
levels of elevated charge-offs as a result of the 
COVID-19 
pandemic. 
However, we are seeing portfolio trends 
that indicate that we will begin to realize those elevated 
levels in the third 
quarter of 2020. 
As of June 30, 2020, our portfolio delinquency rates have doubled 
from the quarter ended March 31, 2020, or a 
$13.1 million increase in Equipment Finance leases and loans 60+ 
days past due, and $0.5 million increase in Working 
capital 
loans 30+ past due. 
Further, a large amount of our 
portfolio is under deferred payment through our modification program, 
as 
discussed above. 
We are 
continually monitoring the performance of our portfolio and assessing all related 
risks to ensure that our 
allowance estimate is sufficient to cover the expected 
losses from COVID-19. 
See further discussion with the Provision above 
about the risks to our reserve estimate, and discussion with Portfolio 
Trends above about current delinquency levels. 
Residual Income. 
 
Residual income 
includes income 
from lease 
renewals and 
gains and 
losses on 
the realization 
of residual 
values of 
leased 
equipment disposed at 
the end of term
 
In 2019 and 
prior years, t
he Company had previously 
recognized residual income 
within 
Fee Income 
in its 
Consolidated Statement 
s 
of Operations; 
the adoption 
of CECL 
results in 
any realized 
amounts of 
residual 
income being 
captured as 
a component 
of the 
activity of 
the allowance 
because the 
Company’s estimate 
of credit 
losses under 
CECL takes into consideration all cashflows the Company expects 
to receive or derive from the pools of contracts.
 
 
Adoption of ASU 2016-13 / CECL.
 
 
Effective January 1, 
2020, we adopted 
new guidance for accounting 
for our allowance, 
or ASU 2016 
-13, Financial Instruments 
- 
Credit Losses 
(Topic 
326): Measurement 
of Credit 
Losses on 
Financial Instruments 
(“CECL”). 
CECL replaces 
the probable/ 
incurred loss 
model that 
we historically 
used to 
measure our 
allowance, with 
a measurement 
of expected 
credit losses 
for the 
contractual term 
of our 
current portfolio 
of loans 
and leases. 
Under CECL, 
an allowance, 
or estimate 
of credit 
losses, will be 
recognized immediately 
upon the origination 
of a loan 
or lease, 
and will be 
adjusted in each 
subsequent reporting 
period. 
This 
estimate of credit losses takes into consideration 
all remaining cashflows the Company expects 
to receive or derive from the pools 
of contracts, including 
recoveries after 
charge-off, accrued 
interest receivable and 
certain future cashflows 
from residual assets. 
The provision 
for credit 
losses recognized 
in our Consolidated 
Statements of Operations 
under CECL, 
starting in 
2020, will 
be 
primarily driven 
by origination 
volumes, offset 
by the 
reversal of 
the allowance 
for any 
contracts sold, 
plus adjustments 
for 
changes in 
estimate each 
subsequent reporting 
period, including 
adjustments for 
economic forecasts 
within a 
reasonable and 
supportable time period. 

 
 
 
 
 
 
-52-
 
The impact 
of adopting 
CECL effective 
January 1, 
2020 included 
a $11.9 
million incr 
ease to 
the allowance, 
an $8.9 
million 
decrease to 
Retained earnings 
and $3.0 
million impact 
to our 
Net deferred 
income tax 
liability. 
See Note 
2 – 
Summary of 
Significant Accounting Policies
, for further discussion of the adoption 
of this accounting standard, and see 
Note 6 – 
Allowance for 
Credit Losses
, for further 
discussion of the 
Company’s methodology 
for measuring its 
allowance as of 
the adoption date. 
Also, 
see – 
Executive Summary
 
and Note 13 
– 
Stockholders’ Equity
, for discussion 
of our election 
to delay for 
two-years the effect 
of 
CECL on regulatory capital, followed by a three-year phase 
-in, or a five-year total transition. 
Our recorded allowance 
reflects our current 
estimate of the 
expected credit losses 
of all contracts 
currently in portfolio, 
based on our 
current  assessment  of  information  regarding  the  risks  of  our  current  portfolio, 
default  and  collection  trends,  a  reasonable  and 
supportable forecast 
of economic 
factors, qualitative 
adjustments based 
on our 
best estimate 
of expected 
losses for 
certain portfolio 
segments, among 
other internal 
and external 
factors. 
Our allowance 
measurement is 
an estimate, 
is inherently 
uncertain, and 
is 
reassessed  at  each  measurement  date. 
Actual  performance  of  our  portfolio  and  updates  to  other  information 
involved  in  our 
assessment may drive 
changes in modeled 
assumptions, may cause 
management to adjust 
the allowance estimate 
through qualitative 
adjustments and/or may result in actual losses that vary significantly from 
of our current estimate. 
 
 

 
-53-
 
R
ESULTS 
OF 
O
PERATIONS
 
Comparison of the Three-Month Periods Ended June 30, 
2020 and June 30, 2019 
 
Net income.
 
Net loss of $5.9 million was reported for the three-month period 
ended June 30, 2020, 
resulting in diluted loss per share of $0.50, 
compared to net income of $6.1 million and diluted EPS of $0.49 
for the three-month period ended June 30, 2019. 
This $12.0 million 
decrease in Net income was primarily driven by: 
-
 
($14.1 million) increase in Provision for credit losses, primarily driven 
by updates to the Company’s 
estimate, reflecting 
forecasted economic conditions from 
COVID-19 pandemic. 
The Company adopted CECL on January 1, 2020 which 
substantially changed its methodology for measuring the estimate of credit 
loss. 
See further discussion of the Provision and 
the change in measurement in the prior section “—
Finance Receivables and Asset Quality”;
 
-
 
$3.9 million decrease in Interest and fee income, driven primarily by 
a decline in the size of our finance receivable portfolio; 
 
-
 
$3.3 million decrease in gains on leases and loans sold due to 
a decrease in assets sold resulting from disruptions in the 
capital markets during this current economic environment; 
 
-
 
$4.8 million decrease in Salaries and benefits, driven primarily by lower 
Commissions, Incentives and the Company’s 
proactive cost reduction measures. 
 
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 June 30, 2020 and June 30, 2019 
.

 
-54-
 
Three Months Ended June 30, 
2020 
2019 
(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 
$ 
218,748 
$ 
31 
0.06 
% 
$ 
129,210 
$ 
752 
2.33 
% 
Time Deposits 
12,248 
60 
1.97 
11,715 
72 
2.46 
Restricted interest-earning deposits with banks 
7,046 
- 
0.01 
14,671 
28 
0.77 
Securities available for sale 
10,481 
52 
1.98 
10,674 
74 
2.76 
Net investment in leases
(3)
885,482 
19,236 
8.69 
942,517 
21,556 
9.15 
Loans receivable
(3)
93,832 
4,868 
20.75 
89,257 
4,600 
20.61 
 
Total 
interest-earning assets 
1,227,837 
24,247 
7.90 
1,198,044 
27,082 
9.04 
Non-interest-earning assets: 
Cash and due from banks 
5,655 
5,319 
Allowance for loan and lease losses 
(50,963) 
(16,915) 
Intangible assets 
7,192 
8,070 
Goodwill 
- 
6,735 
Operating lease right-of-use assets 
8,530 
6,935 
Property and equipment, net 
8,488 
3,996 
Property tax receivables 
9,975 
8,479 
Other assets
(4)
34,303 
37,957 
 
Total 
non-interest-earning assets 
23,180 
60,576 
 
Total 
assets 
$ 
1,251,017 
$ 
1,258,620 
Interest-bearing liabilities: 
Certificate of Deposits
(5)
$ 
891,141 
$ 
4,741 
2.13 
% 
842,274 
$ 
5,042 
2.39 
% 
Money Market Deposits
(5)
52,765 
73 
0.56 
23,715 
158 
2.66 
Long-term borrowings
(5)
56,957 
613 
4.30 
120,407 
1,208 
4.01 
 
Total 
interest-bearing liabilities 
1,000,863 
5,427 
2.17 
986,396 
6,408 
2.59 
Non-interest-bearing liabilities: 
Sales and property taxes payable 
7,075 
8,213 
Operating lease liabilities 
9,403 
9,094 
Accounts payable and accrued expenses 
17,587 
27,315 
Net deferred income tax liability 
26,576 
24,601 
 
Total 
non-interest-bearing liabilities 
60,641 
69,223 
 
Total 
liabilities 
1,061,504 
1,055,619 
Stockholders’ equity 
189,513 
203,001 
 
Total 
liabilities and stockholders’ equity 
$ 
1,251,017 
$ 
1,258,620 
Net interest income 
$ 
18,820 
$ 
20,674 
Interest rate spread
(6)
5.73 
% 
6.45 
% 
Net interest margin
(7)
6.13 
% 
6.90 
% 
Ratio of average interest-earning assets to 
 
average interest-bearing liabilities 
122.68 
% 
121.46 
% 
__________________ 
(1) 
Average balances were calculated using average daily balances.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-55-
 
(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.
 
 
 
 
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 June 30, 2020 Compared To 
Three Months Ended June 30, 2019 
Increase (Decrease) Due To: 
Volume
(1)
Rate
(1)
Total 
(Dollars in thousands) 
Interest income: 
Interest-earning deposits with banks 
$ 
310 
$ 
(1,031) 
$ 
(721) 
Time Deposits 
3 
(15) 
(12) 
Restricted interest-earning deposits with banks 
(10) 
(18) 
(28) 
Securities available for sale 
(1) 
(21) 
(22) 
Net investment in leases 
(1,269) 
(1,051) 
(2,320) 
Loans receivable 
237 
31 
268 
 
Total 
interest income 
659 
(3,494) 
(2,835) 
Interest expense: 
Certificate of Deposits 
281 
(582) 
(301) 
Money Market Deposits 
100 
(185) 
(85) 
Long-term borrowings 
(677) 
82 
(595) 
 
Total 
interest expense 
93 
(1,074) 
(981) 
Net interest income 
504 
(2,357) 
(1,853) 
 
__________________ 
(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. 
 
 
 

 
-56-
 
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 June 30, 2020 and June 30, 2019. 
 
Three Months Ended June 30, 
 
2020 
2019 
(Dollars in thousands) 
Interest income 
$ 
24,248 
$ 
27,082 
Fee income 
2,450 
3,507 
 
Interest and fee income 
26,698 
30,589 
Interest expense 
5,428 
6,408 
 
Net interest and fee income 
$ 
21,270 
$ 
24,181 
Average total finance receivables
(1)
$ 
979,313 
$ 
1,031,774 
Annualized percent of average total finance 
receivables: 
Interest income 
9.90 
% 
10.50 
% 
Fee income 
1.00 
1.36 
 
Interest and fee income 
10.90 
11.86 
Interest expense 
2.22 
2.48 
 
Net interest and fee margin 
8.68 
% 
9.38 
% 
 
__________________
 
(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 $2.9 million, or 12.0%, 
to $21.3 million for the three months ended June 30, 2020 
from $24.2 
million for the three months ended June 30, 2019. 
The annualized net interest and fee margin decreased 70 
basis points to 8.68% in the 
three-month period ended June 30, 2020 from 9.38% for the corresponding 
period in 2019. 
 
Interest income, net of amortized initial direct costs and fees, 
was $24.2 million and $27.1 million for the three-month periods 
ended 
June 30, 2020 and June 30, 2019, respectively. 
Average total 
finance receivables decreased $52.5 million, or 5.1%, 
to $979.3 million 
at June 30, 2020 from $1,031.8 million at June 30, 2019 
. 
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 60 basis 
points to 9.90% from 10.50% in the prior year quarter. 
The weighted average implicit interest rate on new finance receivables 
originated decreased 378 basis points to 9.17% for 
the three-month period ended June 30, 2020 compared to 12.95% 
for the three-
month period ended June 30, 2019. 
That decrease was primarily driven by a shift in the mix of originations 
as higher-yield Working 
Capital originations comprised 1% of our originations for the six months 
ended June 30, 2020, compared to 13% in 2019. 
The 
reduction in Working Capital 
volume is driven by our tightening of underwriting standards 
in the second quarter in response to the 
uncertain macroeconomic environment. 
Given the ongoing health crisis in the United States, especially 
the COVID-19 flare-ups in the 
south and west, any returns to pre-pandemic levels of origination 
activity, and our ability to 
replenish or grow our portfolio, remains 
uncertain. 
 
Fee income was $2.5 million and $3.5 million for the three-month periods 
ended June 30, 2020 and June 30, 2019, 
respectively. Fee 
income included approximately $0.9 million of net residual 
income for the three-month period ended June 30, 
2019. 
For 2020, after 
the adoption of CECL, all future cashflows from the Company’s 
pools of loans are included in the measurement of the allowance, 
including future cashflows from net residual income. 
Amounts of residual income are presented within the rollforward 
of the 
Allowance, as discussed further in “—Finance Receivables and 
Asset Quality” 
 
Fee income also included approximately $1.8 million and $2.0 
million in late fee income for the three-month periods ended 
June 30, 
2020 and June 30, 2019, 
respectively. Late fees remained 
the largest component of fee income at 0.69% as an annualized 
percentage 
of average total finance receivables for the three-month period 
ended June 30, 2020, 
compared to 0.78% for the three-month period 
ended June 30, 2019.

 
-57-
 
Interest expense decreased $1.0 million to $5.4 million for the 
three-month period ended June 30, 2020 from $6.4 million for 
the 
corresponding period in 2019, primarily due to a decrease 
in interest expense of $0.6 million on lower outstanding long 
-term 
borrowings offset by an increase of $0.3 million on higher 
deposit balances. Interest expense, as an annualized percentage 
of average 
total finance receivables, decreased 26 basis points to 2.22% 
for the three-month period ended June 30, 2020, 
from 2.48% for the 
corresponding period in 2019. 
The average balance of deposits was $943.9 million and $866.0 
million for the three-month periods 
ended June 30, 2020 and June 30, 2019, 
respectively. 
 
For the three-month period ended June 30, 2020, 
average term securitization borrowings outstanding were $57.0 
million at a weighted 
average coupon of 4.30%. 
For the three-month period ended June 30, 2019, average term securitization 
borrowings outstanding were 
$120.4 million at a weighted average coupon of 4.01%. 
 
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 June 30, 
2020, 
brokered certificates of deposit represented approximately 52% 
of total deposits, while approximately 43% of total deposits were 
obtained from direct channels, and 6% were in the brokered 
MMDA Product. 
 
Gain on Sale of Leases and Loans.
 
Gain on sale of leases and loans was $0.1 million for the three 
-month period ended June 30, 
2020, 
compared to $3.3 million for the three-month period ended June 30, 
2019. 
Assets sold decreased to $1.1 million for the three 
months ended June 30, 2020, compared to $57.6 million for the three 
months ended June 30, 2019. 
 
Our sales execution decisions, including the timing, volu 
me 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 slowing 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 remained flat at $2.2 million for the three 
-month periods ended 
June 30, 2020 and June 30, 2019.
 
Other income.
 
Other income was $1.5 million and $1.7 million for the three-month periods 
ended June 30, 2020 and June 30, 2019, 
respectively. The decrease 
in other income was primarily driven by a $0.2 million decrease 
in servicing income. 
 
Salaries and benefits expense.
 
The following table summarizes the Company's Salary and benefits expense: 
Three Months Ended June 30, 
 
2020 
2019 
(Dollars in thousands) 
Salary, benefits and payroll 
taxes 
$ 
6,868 
$ 
7,640 
Incentive compensation 
806 
2,783 
Commissions 
(6) 
2,046 
 
Total 
$ 
7,668 
$ 
12,469 
 
Salaries and benefits expense decreased $4.8 million, or 
38.4%, to $7.7 million for the three-month period ended 
June 30, 2020 from 
$12.5 million for the corresponding period in 2019 
. 
In mid-April 2020, we began efforts to tighten our expense base 
in response 
COVID-19, putting approximately 120 employees on furlough. 
In June, we made the decision to permanently reduce our 
workforce 
by approximately 80 employees, which reduced our headcount to 
approximately 250 employees at the end of July, 
down from 
approximately 350 employees as of December 31, 2019. 
As such, our salary expense is $1.7 million lower than the three months 
ended June 30, 2019, 
primarily driven by reduced headcount from the furlough, partially offset 
by $0.9 million of severance 
recognized. 
 
Incentive compensation decreased $2.0 million, driven by lower 
recognized bonus and share-based compensation amounts 
driven by 
the Company’s operating results, 
including reversing $0.7 million of expense associated with performance 
-based RSU awards that are

 
-58-
 
now assessed as not probable of achievement. 
The decrease in Commissions for the three months ended June 
30, 2020 reflects a 
lower amount of commission earned driven by 69% lower origination 
volumes, which was fully offset by an annual commission 
true-
up adjustment in 2020. 
 
General and administrative expense.
 
The following table summarizes General and administrative expense: 
Three Months Ended June 30, 
 
2020 
2019 
(Dollars in thousands) 
Occupancy and depreciation 
$ 
1,415 
$ 
1,223 
Professional fees 
865 
931 
Information technology 
995 
901 
Marketing 
206 
498 
Other G&A 
2,366 
2,515 
 
Total 
$ 
5,847 
$ 
6,068 
 
General and administrative expense decreased $0.3 
million, or 4.9%, to $5.8 million for the three months ended June 30, 2020 
from 
$6.1 million for the corresponding period in 2019 
. 
 
General and administrative expense as an annualized percentage of average 
total finance receivables 
was 2.39% for the three-month 
period ended June 30, 2020, 
compared to 2.35% for the three-month period ended June 30, 2019 
. 
balance. 
 
Provision for income taxes. 
Income tax benefit of $1.4 million was recorded for the three-month period 
ended June 30, 2020, 
compared to expense of $2.0 million for the three-month period 
ended June 30, 2019. 
Our effective tax rate was 18.9% for the three-
month period ended June 30, 2020, 
driven by a limitation on the recognition of tax benefits when measuring 
the provision on a loss 
position in an interim period under ASC 740.

 
-59-
 
Comparison of the Six-Month Periods Ended June 30, 2020 
and June 30, 2019 
 
Net income. 
Net loss of $17.7 million was reported for the six-month period 
ended June 30, 2020, 
resulting in diluted loss per share of $1.50, 
compared to net income of $11.3 million and diluted 
EPS of $0.91 for the six-month period ended June 30, 
2019. This $29.0 million 
decrease in Net income was primarily driven by:
 
-
 
($33.8 million) increase in Provision for credit losses, primarily driven 
by updates to the Company’s 
estimate, reflecting 
forecasted economic conditions from COVID-19 pandemic. 
The Company adopted CECL on January 1, 2020 which 
substantially changed its methodology for measuring the estimate of credit 
loss. 
See further discussion of the Provision and 
the change in measurement in the prior section “—
Finance Receivables and Asset Quality”;
 
-
 
($6.7 million)
 
impairment of Goodwill, driven by declines in the fair value of its 
reporting unit; 
 
-
 
$4.6 million decrease in gains on leases and loans sold due to 
a decrease in assets sold resulting from the negative impact 
of 
the COVID-19 pandemic on capital markets activity; 
 
-
 
3.2 million benefit recognized in Income tax (benefit) from the remeasurement 
of the federal net operating losses driven by 
provisions of the CARES Act; 
 
-
 
$6.7 million decrease in Salaries and benefits, driven primarily by lower 
Commissions, Incentives and the Company’s 
proactive cost reduction measures. 
 
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 six-
month periods ended June 30, 2020 and June 30, 2019 
.

 
-60-
 
Six Months Ended June 30, 
2020 
2019 
(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 
$ 
159,665 
$ 
358 
0.45 
% 
$ 
126,084 
$ 
1,525 
2.42 
% 
Time Deposits 
12,878 
124 
1.92 
11,090 
133 
2.41 
Restricted interest-earning deposits with banks 
7,540 
9 
0.24 
15,146 
58 
0.77 
Securities available for sale 
10,629 
110 
2.06 
10,697 
142 
2.66 
Net investment in leases
(3)
895,015 
39,505 
8.83 
930,586 
42,491 
9.13 
Loans receivable
(3)
99,053 
10,607 
21.42 
85,017 
8,616 
20.27 
 
Total 
interest-earning assets 
1,184,780 
50,713 
8.56 
1,178,620 
52,965 
8.99 
Non-interest-earning assets: 
Cash and due from banks 
5,563 
5,459 
Allowance for loan and lease losses 
(40,144) 
(16,764) 
Intangible assets 
7,292 
7,961 
Goodwill 
3,332 
7,038 
Operating lease right-of-use assets 
8,653 
5,419 
Property and equipment, net 
8,291 
4,139 
Property tax receivables 
9,430 
7,546 
Other assets
(4)
32,719 
34,157 
 
Total 
non-interest-earning assets 
35,136 
54,955 
 
Total 
assets 
$ 
1,219,916 
$ 
1,233,575 
Interest-bearing liabilities: 
Certificate of Deposits
(5)
$ 
852,659 
$ 
9,597 
2.25 
% 
$ 
814,466 
$ 
9,489 
2.33 
% 
Money Market Deposits
(5)
38,544 
158 
0.82 
23,430 
299 
2.56 
Long-term borrowings
(5)
63,354 
1,352 
4.27 
130,454 
2,582 
3.96 
 
Total 
interest-bearing liabilities 
954,557 
11,107 
2.33 
968,350 
12,370 
2.56 
Non-interest-bearing liabilities: 
Sales and property taxes payable 
6,482 
6,796 
Operating lease liabilities 
9,524 
7,492 
Accounts payable and accrued expenses 
22,657 
27,251 
Net deferred income tax liability 
28,022 
23,773 
 
Total 
non-interest-bearing liabilities 
66,685 
65,312 
 
Total 
liabilities 
1,021,242 
1,033,662 
Stockholders’ equity 
198,674 
199,913 
 
Total 
liabilities and stockholders’ equity 
$ 
1,219,916 
$ 
1,233,575 
Net interest income 
$ 
39,606 
$ 
40,595 
Interest rate spread
(6)
6.23 
% 
6.43 
% 
Net interest margin
(7)
6.69 
% 
6.89 
% 
Ratio of average interest-earning assets to 
 
average interest-bearing liabilities 
124.12 
% 
121.71 
%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-61-
 
_________________ 
(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.
 
 
Six Months Ended June 30, 2020 Compared To 
Six Months Ended June 30, 2019 
Increase (Decrease) Due To: 
Volume
(1)
Rate
(1)
Total 
(Dollars in thousands) 
Interest income: 
Interest-earning deposits with banks 
$ 
325 
$ 
(1,492) 
$ 
(1,167) 
Time Deposits 
20 
(29) 
(9) 
Restricted interest-earning deposits with banks 
(21) 
(28) 
(49) 
Securities available for sale 
(1) 
(31) 
(32) 
Net investment in leases 
(1,595) 
(1,391) 
(2,986) 
Loans receivable 
1,482 
509 
1,991 
 
Total 
interest income 
276 
(2,528) 
(2,252) 
Interest expense: 
Certificate of Deposits 
436 
(328) 
108 
Money Market Deposits 
129 
(270) 
(141) 
Long-term borrowings 
(1,418) 
188 
(1,230) 
 
Total 
interest expense 
(174) 
(1,089) 
(1,263) 
Net interest income 
211 
(1,200) 
(989) 
 
__________________ 
(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. 
 
 
 

 
-62-
 
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 six-month periods ended 
June 30, 2020 and 2019. 
 
Six Months Ended June 30, 
 
2020 
2019 
(Dollars in thousands) 
Interest income 
$ 
50,713 
$ 
52,965 
Fee income 
5,216 
7,549 
 
Interest and fee income 
55,929 
60,514 
Interest expense 
11,108 
12,370 
 
Net interest and fee income 
$ 
44,821 
$ 
48,144 
Average total finance receivables
(1)
$ 
994,068 
$ 
1,015,603 
Percent of average total finance receivables: 
Interest income 
10.20 
% 
10.43 
% 
Fee income 
1.05 
1.49 
 
Interest and fee income 
11.25 
11.92 
Interest expense 
2.23 
2.44 
 
Net interest and fee margin 
9.02 
% 
9.48 
% 
 
__________________
 
(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 $3.3 million, or 6.9% 
, 
to $44.8 million for the six-month period ended June 30, 
2020 from 
$48.1 million for the six-month period ended June 30, 
2019. The annualized net interest and fee margin decreased 
46 basis points to 
9.02% in the six-month period ended June 30, 2020 
from 9.48% for the corresponding period in 2019. 
 
Interest income, net of amortized initial direct costs and fees, 
decreased $2.3 million, or 4.3%, to $50.7 million for the six-month 
period ended June 30, 2020 from $53.0 million for the six-month period 
ended June 30, 2019. 
The decrease in interest income was 
principally due to a 
decrease in average yield of 23 basis points and by a 2.1% 
decrease in average total finance receivables, which 
decreased $21.5 million to $994.1 million for the six-months ended 
June 30, 2020 from $1,015.6 million for the six-months ended 
June 30, 2019. 
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 140 basis points to 11.46% 
for the six-month period ended June 30, 2020, 
compared to 12.86% for the six-month period 
ended June 30, 2019. 
That decrease was primarily driven by a shift in the mix of originations 
as higher-yield Working 
Capital 
originations comprised 11% of our originations 
for the six months ended June 30, 2020, compared to 13% 
in 2019. 
As our origination 
volumes have been negatively impacted by the COVID 
-19 pandemic, our portfolio of finance receivables and related incomes 
may 
continue to decline. Any returns to normal levels of origination activity, 
and our ability to replenish or grow our portfolio, 
remains 
uncertain. 
 
Fee income was $5.2 million and $7.5 for the six-month periods 
ended June 30, 2020 and June 30, 2019, 
respectively. Fee income 
included approximately $1.9 million of residual income for the 
six-month period ended June 30, 2019. 
For 2020, after the adoption of 
CECL, all future cashflows from the Company’s 
pools of loans are included in the measurement of the allowance, 
including future 
cashflows from net residual income. 
Amounts of residual income are presented within the rollforward 
of the Allowance, as discussed 
further in “—Finance Receivables and Asset Quality”.

 
-63-
 
Fee income also included approximately $3.9 million in late fee income 
for the six-month period ended June 30, 2020, 
which 
decreased 9.3% from $4.3 million for the six-month period ended 
June 30, 2019. 
Late fees remained the largest component of fee 
income at 0.77% as an annualized percentage of average total finance receivables 
for the six-month period ended June 30, 2020, 
compared to 0.86% for the six-month period ended June 30, 
2019. 
 
Interest expense decreased $1.3 million to $11.1 
million for the six-month period ended June 30, 2020 from $12.4 
for the 
corresponding period in 2019. 
The decrease of $1.3 million was primarily due to a $1.0 
million decrease in term securitization interest, 
and a $0.2 million decrease in transaction costs. Interest expense, 
as an annualized percentage of average total finance receivables, 
decreased 21 basis points to 2.23% for the six-month period 
ended June 30, 2020, 
from 2.44% for the corresponding period in 2019. 
The average balance of deposits was $891.2 million and $837.9 
million for the six-month periods ended June 30, 2020 and June 30, 
2019, 
respectively. 
 
For the six-month period ended June 30, 2020, 
average term securitization borrowings outstanding were $63.4 
million at a weighted 
average coupon of 4.27%. 
For the six-month period ended June 30, 2019, 
average term securitization borrowings outstanding were 
$130.5 million at a weighted average coupon of 3.96% 
 
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 
June 30, 2020, 
brokered certificates of deposit represented approximately 52% 
of total deposits, while approximately 43% of total deposits were 
obtained from direct channels, and 6% were in the brokered 
MMDA Product. 
 
Gain on Sale of Leases and Loans.
 
Gain on sale of leases and loans was 2.3 million for the six-month period 
ended June 30, 2020, 
compared to 6.9 million for the six-month period ended 
June 30, 2019 due to a decline in assets sold to $24.1 million for the six-
month period ended June 30, 2020 from $110.5 
million for the six-month period ended June 30, 2019. 
 
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 slowing 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 and earned remained relatively flat at $4.5 
million for the six-
month period ended June 30, 2020, 
from $4.3 million for the six-month period ended June 30, 
2019.
 
Other income.
 
Other income remained consistent at $9.1 million and $8.9 million for 
the six-month periods ended June 30, 2020 and 
June 30, 2019, 
respectively. 
 
Salaries and benefits expense.
 
The following table summarizes the Company's Salary and benefits expense: 
Six Months Ended June 30, 
 
2020 
2019 
(Dollars in thousands) 
Salary, benefits and payroll 
taxes 
$ 
14,423 
$ 
14,992 
Incentive compensation 
1,711 
5,221 
Commissions 
1,053 
3,707 
 
Total 
$ 
17,187 
$ 
23,920 
 
Salaries and benefits expense in total decreased $6.7 million for 
the six months ended June 30, 2020, compared to the corresponding 
period in 2019. 
In mid-April 2020, we began efforts to tighten our expense base 
in response COVID-19, putting approximately 120 
employees on furlough. 
In June, we made the decision to permanently reduce our workforce 
by approximately 80 employees, which 
reduced our headcount to approximately 250 employees at the 
end of July, down from approximately 
350 employees as of December

 
-64-
 
31, 2019. 
As such, our salary expense was $1.4 million lower for the six-months 
ended June 30, 2020 than for the six months ended 
June 30, 2019, 
primarily driven by reduced headcount from the furlough, partially offset 
by $0.9 million of severance recognized. 
 
Incentive compensation decreased $3.5 million, driven by lower 
recognized bonus and share-based compensation amounts 
primarily 
driven by the Company’s operating 
results, including reversing $0.7 million of expense associated 
with performance-based RSU 
awards that are now assessed as not probable of achievement. 
Commissions decreased $2.7 million primarily driven by a 45% 
decrease in origination volume. 
 
General and administrative expense.
 
The following table summarizes General and administrative expense: 
Six Months Ended June 30, 
 
2020 
2019 
(Dollars in thousands) 
Property taxes 
$ 
6,026 
$ 
6,256 
Occupancy and depreciation 
2,735 
2,455 
Professional fees 
2,084 
2,231 
Information technology 
1,981 
1,960 
Marketing 
708 
1,095 
FDIC Insurance 
639 
130 
Other G&A 
5,279 
5,295 
 
Total 
$ 
19,452 
$ 
19,422 
 
General and administrative expense of $19.4 million for the six months 
ended June 30, 2020 was relatively consistent with the total 
from the corresponding period in 2019. 
General and administrative expense as an annualized percentage of average 
total finance 
receivables was 3.56% for the six-month period ended 
June 30, 2020, 
compared to 3.82% for the six-month period ended June 30, 
2019. 
 
Goodwill impairment. 
In the first quarter of 2020, driven by negative current 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 six months ended June 30, 2020. 
 
Provision for income taxes. 
Income tax benefit of 8.8 million was recorded for the six-month period 
ended June 30, 2020, 
compared 
to expense of $3.6 million for the six-month period ended 
June 30, 2019. 
 
Our effective tax rate from measuring our benefit for 
the six months ended June 30, 2020 was 33.2%, 
driven by a $3.2 million discrete 
benefit from certain provisions in the CARES Act that allowed 
for remeasuring our federal net operating losses. 
The impact to our 
effective rate from that benefit was partially offset 
by a limitation on the amount of tax benefits that can be recognized 
in an interim 
period under ASC 740.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-65-
 
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. 
 
MBB also offers an FDIC-insured MMDA Product 
as another source of deposit funding. This product is offered 
through participation 
in a partner bank’s insured savings 
account product to clients of that bank. 
It is a brokered account with a variable interest rate, 
recorded as a single deposit account at MBB. Over time, MBB 
may offer other products and services to the Company’s 
customer base. 
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 April 30, 2020. 
The quarterly dividend was paid on May 21, 2020 to shareholders 
of 
record on the close of business on May 11, 
2020, 
which resulted in a dividend payment of approximately $1.7 million. It 
represented 
the Company’s thirty-fifth consecutive 
quarterly cash dividend. 
 
At June 30, 2020, 
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 $211.7 million. This amount excludes ad 
ditional liquidity that 
may be provided by the issuance of insured deposits through 
MBB. 
 
Our debt to equity ratio was 5.27 to 1 at June 30, 
2020 and 4.26 to 1 at December 31, 2019. 
 
Net cash provided by investing activities was $32.6 million for 
the six-month period ended June 30, 2020, 
compared to net cash used 
in investing activities of $76.0 million for the six-month period 
ended June 30, 2019. 
The increase in cash outflows from investing 
activities is primarily due to a decrease of $180.4 million for 
purchases of equipment for lease contracts partially offset by 
a reduction 
of $66.1 million in proceeds from sales of leases originated for 
investment. The decrease in purchases of equipment was driven 
by 
lower origination volumes for the six months ended June 30 
, 
2020 compared to the corresponding period of 2019, and 
the reduction in 
proceeds from sales was driven by lower volumes of sales. 
 
Net cash provided by financing activities was $29.7 million for 
the six-month period ended June 30, 2020, 
compared to net cash 
provided by financing activities of $85.7 million for the six-month period 
ended June 30, 2019. 
The decrease in cash flows from 
financing activities is primarily due to a decrease of $69.8 
million in deposits offset by a decrease of $15.4 
million of term 
securitization repayments. 
Financing activities also include transactions related to 
the Company’s payment of divi 
dends. 
 
Net cash provided by operating activities was $25.4 million for 
the six-month period ended June 30, 2020, 
compared to net cash 
provided by operating activities of $27.0 million for the six-month period 
ended June 30, 2019. 
Transactions affecting net 
cash 
provided by operating activities including goodwill impairment, 
provision 
for credit losses, changes in income tax liability and leases 
originated for sale and proceeds thereof are discussed in detail in the 
notes to the Consolidated Financial Statements. 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-66-
 
We expect 
cash from operations, additional borrowings on existing and future 
credit facilities and funds from deposits issued through 
brokers, direct deposit sources, 
and the MMDA Product to be adequate to support our operations and 
projected growth for the next 12 
months and the foreseeable future. 
 
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 June 30, 2020 totaled $211.7 
million, compared to $123.1 million at December 31, 2019 
. 
 
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 June 30, 2020 and December 31, 2019 totaled 
$9.9 million and $12.9 
million, respectively. 
 
Restricted Interest-Earning Deposits with Banks
. As of June 30, 2020 and December 31, 2019 
, 
we had $6.1 million and $6.9 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 $51.2 
million at June 30, 2020 and $76.6 million at December 31, 2019 
. 
Information 
pertaining to our borrowing facilities is as follows: 
 
For the Six Months Ended June 30, 2020 
As of June 30, 2020 
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)
— 
71,721 
69,751 
4.24 
% 
51,161 
3.68 
% 
— 
Revolving line of credit
(5)
5,000 
— 
— 
— 
% 
— 
— 
% 
5,000 
$ 
30,000 
$ 
71,721 
$ 
69,751 
4.24 
% 
$ 
51,161 
3.68 
% 
$ 
30,000 
 
__________________ 
(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 June 30, 2020, 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. 
 
(5) 
The revolving line of credit was terminated by mutual agreement with the line of credit provider in July 2020. 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-67-
 
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 
$56.3 million of net investment in leases pledged at June 30, 
2020. 
 
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 entit 
y 
(“VIE”) under U.S. GAAP. 
We continue to 
service the assets of our VIE and 
retain equity and/or residual interests. Accordingly, 
assets and related debt of the VIE is included in the accompanying 
Consolidated 
Balance Sheets. 
At June 30, 2020 and December 31, 2019 outstanding term securitizations 
amounted to $50.9 million and $76.1 
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 all of our 
subsidiaries may be subject to examination by the 
Federal Reserve Board and the Federal Reserve Bank of Philadelphia 
even if not otherwise regulated by the Federal Reserve Board. 
MBB is 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 its operations. 
These regulations generally have been adopted 
to protect depositors and 
creditors rather than shareholders. 
 
At June 30, 2020, 
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 June 30, 2020 
. 
 
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 June 30, 2020 
 
The Company declared a dividend of 0.14 per share on July 
30, 2020. The quarterly dividend, which is expected to 
result in a dividend 
payment of approximately 1.7 million, is scheduled to be paid 
on August 20, 2020 to shareholders of record on the close of business 
on August 10, 2020. 
It represents the Company’s thirty-sixth 
consecutive quarterly cash dividend. The payment of future dividends 
will be subject to approval by the Company’s 
Board of Directors.
 
 
 

 
 
 
 
 
-68-
 
 
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. 
 
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, 2019, 
other than as discussed below. 
Allowance for credit losses. 
For 2019 and prior, we maintained an allowance 
for credit losses at an amount sufficient to absorb 
losses inherent in our existing lease 
and loan portfolios as of the reporting dates based on our estimate of probable 
incurred net credit losses in accordance with the 
Contingencies 
Topic of the FASB 
ASC. 
See further discussion of our policy under the incurred 
model in the “Critical Accounting 
Policy” section of our 2019 Form 10-K. 
Effective January 1, 2020, we adopted ASU 2016 
-13, Financial Instruments - Credit Losses (Topic 
326): Measurement of Credit 
Losses on Financial Instruments (“CECL”), which changed our 
accounting policy and estimated allowance. 
CECL replaces 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. 
After the adoption of CECL, an allowance, or estimate of credit 
losses, will be recognized immediately 
upon the origination of a loan or lease, and will be adjusted in each subsequent 
reporting period 
We maintain an 
allowance for credit losses at an amount that takes into consideration 
all future cashflows that we expect to receive or 
derive from the pools of contracts, including recoveries after 
charge-off, amounts related to initial direct cost 
and origination costs net 
of fees deferred, and certain future cashflows from residual assets. 
A provision is charged against earnings to maintain the allowance 
for credit losses at the appropriate level. 
We developed 
a consistent, systematic methodology to measure our estimate of the credi 
t 
losses inherent in our current portfolio, over 
the entire life of the contracts. 
We made certain key decisions 
that underlie our methodology, 
including our decisions of how to 
aggregate our portfolio into pools for analysis based on similar 
risk characteristics, the selection of appropriate historical loss data 
to 
reference in the model, our selection of a model to calculate the 
estimate, a reasonable and supportable forecast, and the length of 
our 
forecast and approach to reverting to historical loss data. 
For our Equipment Finance segment, we determine our reasonable 
and supportable forecast based on certain economic variables 
that 
were selected based on a statistical analysis of our own historical 
loss experience, going back to 2004. We 
selected unemployment rate 
and changes in the number of business bankruptcies as our economic variables, 
based on an analysis of the correlation of changes in 
those variables to our loss experience over time. 
As part 
of our estimate of expected credit losses, specific to each measurement 
date, management considers relevant qualitative and 
quantitative factors to assess whether the historical loss experience 
being referenced should be adjusted to better reflect the risk 
characteristics of the current portfolio and the expected future 
loss experience for the life of these contracts. 
This assessment 
incorporates all available information relevant to considering the collectability 
of our current portfolio, including considering 
economic and business conditions, default trends, changes in 
portfolio composition, changes in lending policies and practices, 
among 
other internal and external factors. 
Further, each measurement period we determine 
whether to separate any loans from their current 
pool for individual analysis based on their unique risk characteristics. 
Our approach to estimating qualitative adjustments takes into 
consideration all significant current information we believe appropriate 
to reflect the changes and risks in the portfolio or environment 
and involves significant judgment. 

 
 
 
 
 
-69-
 
Our estimates of expected net credit losses are inherently uncertain, 
and as a result we cannot predict with certainty the amount of 
such losses. We 
may recognize 
credit losses in excess of our reserve, or a significant increase to 
our credit loss estimate, in the future, 
driven by the update of assumptions and information underlying our 
estimate and/or driven by the actual amount of realized 
losses. 
Our estimate of credit losses will be revised each period 
to reflect current information, including current forecasts of economic 
conditions, changes in the risk characteristics and composition of the portfolio, 
and emerging trends in our portfolio, among other 
factors, and these updates for current information could drive 
a significant adjustment to our reserve. 
Further, actual credit losses may 
exceed our estimated reserve, and such excess may be significant, 
if the actual performance of our portfolio differs signif 
icantly from 
the current assumptions and judgements, including those underlying our 
forecast and qualitative adjustments, as of any given 
measurement date. 
 
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. 

 
 
 
 
 
 
-70-
 
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 Officer 
(“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 second fiscal 
quarter of 2020 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. 
 
 
 
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, 2019, 
other than as discussed below. 
The ongoing COVID-19 pandemic and measures intended to 
prevent its spread could have a material adverse effect 
on our 
business, results of operations and financial condition, and 
such effects will depend on future developments, which are 
highly 
uncertain and are difficult to predict. 
Global health concerns relating to the COVID-19 pandemic and 
related government actions taken to reduce the spread of 
the virus 
have been weighing on the macroeconomic environment, and 
the outbreak has significantly increased economic uncertainty and 

 
 
 
-71-
 
reduced economic activity. The 
pandemic has resulted in authorities implementing numerous measures 
to try to contain the virus, such 
as travel bans and restrictions, quarantines, shelter in place or 
total lock-down orders and business limitations and shutdowns. Such 
measures have significantly contributed to rising unemployment 
and negatively impacted consumer and business spending. The 
United States government has taken steps to attempt to mitigate 
some of the more severe anticipated economic effects of 
the virus, 
including the passage of the CARES Act, but there can be no 
assurance that such steps will be effective or achieve their 
desired results 
in a timely fashion. 
We continue to monitor 
and evaluate newly enacted and proposed government and banking 
regulations issued in 
response to the COVID-19 pandemic; further changes in regulation that 
impact our business or that impact our customers could 
have a 
significant impact on our future operations and business strategies. 
Our operations and financial results have already been negatively 
impacted as a result of COVID-19 pandemic, as discussed 
further in 
“Part I – Item 2. Management’s 
Discussion and Analysis of Financial Condition and Results of 
Operations —Overview” and ”—
Results of Operations”. 
The pandemic, reduction in economic activity, 
and current business limitations and shutdowns have increased 
risks to our business that include, but are not limited to: 
●
 
Credit Risk.
 
We extend 
credit primarily to small and mid-sized businesses, and many of 
our customers may be particularly 
susceptible to business limitations, shutdowns and possible recessions 
and may be unable to make scheduled lease or loan 
payments during these periods and may be at risk of discontinuing 
their operations. 
As a result, our delinquencies and credit 
losses may substantially increase. 
Our risk and exposure to future losses may be amplified to 
the extent economic activity 
remains shutdown for an extended period, or to the extent businesses 
have limited operations or are unable to return to 
normal levels of activity after the restrictions are lifted. 
Our estimate of expected future credit losses recognized within our 
allowance as of June 30, 
2020 is based on certain 
assumptions, forecasts and estimates about the impact of current 
economic conditions on our portfolio of receivables based 
on information known as of June 30, 
2020, including certain expectations about the extent and timing of impacts 
from 
COVID-19. 
If those assumptions, forecasts or estimates underlying our financial statements 
are incorrect, we may 
experience significant losses as the ultimate realization of value, or 
revisions to our estimates, may be materially different 
than the amounts reflected in our consolidated statement of financial 
position as of any particular date. 
●
 
Portfolio Risk.
 
We are 
currently experiencing a significant decrease in demand for our lease and 
loan products as a result of 
the COVID-19 pandemic, and we have limited visibility to the future 
recovery of such demand. 
We have shifted 
the focus of portions of our operations and certain personnel 
to implement specific programs and new 
products in response to the pandemic. 
In particular, we have focused efforts 
on loan modifications and a payment deferral 
program, implemented a new PPP loan product, and increased 
customer service efforts to respond to our borrower’s 
needs. 
There can be no assurances that such efforts will be 
successful in mitigating any risk of credit loss. 
●
 
Liquidity and Capital Risk. 
As of June 30, 
2020, all of our capital ratios, and our subsidiary bank’s 
capital ratios, were in 
excess of all regulatory requirements. 
While we currently have sufficient capital, our reported 
and regulatory capital ratios 
could be adversely impacted by further credit losses and other 
COVID-19 related impacts on our operations. 
We are 
managing the evolving risks of our business while closely monitoring 
and forecasting the potential impacts of COVID-19 on 
our future operations and financial position, including capital levels. 
However, given the uncertainty about 
future 
developments and the extent and duration of the impacts of COVID 
-19 on our business and future operations, we face 
elevated risks to our ability to forecast and estimate future capital 
levels. 
If we fail to meet capital requirements in the future, 
our business, financial condition or results of operations may be 
adversely affected. 
We have historically returned 
capital to shareholders through normal dividends, special dividends and 
share repurchases. 
There can be no assurances that these forms of capital returns are 
the optimal use of our capital or that they will continue in 
the future. 
●
 
Operational Risk. 
The spread of COVID-19 has caused us to modify our business practices 
(including implementing certain 
business continuity plans, and developing work from home and 
social distancing plans for our employees), and we may take 
further actions as may be required by government authorities 
or as we determine are in the best interests of our employees, 
customers and business partners. 
We face increased 
risk of any operational or procedural failures due to changes in our 
normal business practices necessitated by the pandemic. 
These factors may remain prevalent for a significant period of 
time and may continue to adversely affect our business, 
results of 
operations and financial condition even after the COVID-19 pandemic 
has subsided. 

 
 
 
 
 
 
 
 
 
 
 
-72-
 
The extent to which the coronavirus pandemic impacts our business, 
results of operations and financial condition will depend on 
future developments, which are highly uncertain and are difficult 
to predict, including, but not limited to, the duration and 
spread of 
the outbreak, its severity, the 
actions to contain the virus or treat its impact, and how quickly 
and to what extent normal economic and 
operating conditions can resume. Even after the COVID-19 
pandemic has subsided, we may continue to experience materially 
adverse 
impacts to our business as a result of the virus’s 
global economic impact, including the availability of credit, adverse 
impacts on our 
liquidity and any recession that has occurred or may occur in 
the future. 
There are no comparable recent events that provide guidance as to 
the effect the spread of COVID-19 as a global pandemic may 
have, 
and, as a result, the ultimate impact of the outbreak is highly 
uncertain and subject to change. We 
do not yet know the full extent of 
the impacts on our business, our operations or the global economy 
as a whole. However, the effects 
could have a material impact on 
our results of operations and heighten many of our known risks described 
in the “Risk Factors” section of our Annual Report on 
Form 
10-K for the year ended December 31, 2019. 
 
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 June 30, 2020. 
As of June 30, 2020, 
the 
Company had $4.7 million remaining in the 2019 Repurchase Plan. 
 
Pursuant to the 2014 Equity Compensation Plan, participants 
may have shares withheld to cover income taxes. There were 1,897 
shares repurchased to cover income tax withholding in connection 
with the shares granted under the 2014 Equity Compensation Plan 
during the three-month period ended June 30, 2020, 
at an average cost of $ 6.50 per share. 
 
Item 3.      Defaults Upon Senior Securities 
 
 
None. 
 
Item 4.  Mine 
Safety Disclosures 
None. 
 
Item 5.      Other Information 
 
 
None 

 
 
 
 
-73-
 
 
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) 
10.1 
Form of Restricted Stock Award for Independent Directors under the 2019 Equity Compensation Plan
 
(Filed Herewith) 
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 
June 30, 2020 
, 
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)
 
Previously 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. 
 
 
 
 

 
-74-
 
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: 
July 31, 2020