8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) March 25, 2020

MARLIN BUSINESS SERVICES CORP.

(Exact name of registrant as specified in its charter)

Pennsylvania	000-50448	38-3686388
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
300 Fellowship Road, Mount Laurel, NJ		08054
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (888) 479-9111

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). 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.  ☐

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 par value	MRLN	NASDAQ Global Select Market

Item 7.01. Regulation FD Disclosure

Press Release regarding CMLA Agreement Termination and COVID-19 Response and Impact

On March 31, 2020, Marlin Business Services Corp. (the “Company”) issued a press release announcing the termination of the CMLA Agreement (as defined below) and describing the Company’s response to the COVID-19 pandemic and the impact on the Company’s operations. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Information contained in this Item 7.01, including Exhibit 99.1, shall not be deemed filed for the purposes of the Securities Exchange Act of 1934, nor shall such information and Exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such a filing.

Item 8.01. Other Events.

Modification of Federal Deposit Insurance Corporation Order and Termination of Related Agreements

On March 25, 2020, Marlin Business Bank (the “Bank”), a wholly-owned subsidiary of the Company, received notice from the Federal Deposit Insurance Corporation (the “FDIC”) that the FDIC approved the Bank’s request to rescind certain nonstandard conditions in the FDIC’s order granting federal deposit insurance issued on March 20, 2007. Furthermore, effective March 26, 2020, the FDIC, the Company and certain of the Company’s subsidiaries terminated the Capital Maintenance and Liquidity Agreement (the “CMLA Agreement”) and the Parent Company Agreement, each entered into by and among the Company, certain of its subsidiaries and the FDIC in conjunction with the opening of the Bank.

As a result of the above-described actions, the Bank is no longer required pursuant to the CMLA Agreement to maintain a total risk-based capital ratio above 15%. Rather, the Bank 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 above 10.5% in order to avoid restrictions on capital returns to shareholders and certain discretionary payments such as bonuses.

As of December 31, 2019, the Bank was required to maintain $143.29 million of capital under the CMLA Agreement and $100.31 million of capital in order to maintain “well -capitalized” status, while the Company was required to maintain $112.53 million of capital in order to maintain a total risk-based capital ratio above 10.5%.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

99.1 Press Release issued by Marlin Business Services Corp. on March 31, 2020.

Forward Looking Statements

Certain statements in this Current Report on Form 8-K are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, forward looking-statements are not based on historical facts but instead represent only the Company’s current beliefs regarding future events. All forward-looking statements are, by their nature, subject to risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied in such forward-looking statements. Stockholders are cautioned not to place undue reliance on these forward-looking statements. Such statements may be identified by words such as “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” “may increase,” “may fluctuate” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” and include all statements regarding the financial projections for the Company included in this Current Report on Form 8-K. Stockholders should understand that forward-looking statements are not guarantees of performance or results and are preliminary in nature. Economic, business, funding, market, competitive, legal and/or regulatory factors, among others, affecting the Company’s business are examples of factors that could cause actual results to differ materially from those described in the forward-looking statements. More detailed information about these factors is contained under the headings “Forward-Looking Statements” and “Risk Factors” in the Company’s periodic reports filed with the SEC, including the Company’s most recent Annual Report on Form 10-K for the year ended December 31, 2019, in connection with any forward-looking statements that may be made by the Company or the Company’s businesses generally. Such periodic reports are available in the “Investors” section of the Company’s website at http://www.marlincapitalsolutions.com and are also available at http://www.sec.gov. We caution stockholders not to

place undue reliance on any such forward-looking statements, which speak only as of the date on which such statements were made. Except for the Company’s ongoing obligations to disclose material information under the federal securities laws, applicable stock exchange listing standards and unless otherwise required by law, the Company undertakes no obligation to release publicly any updates or revisions to any forward-looking statements or to report the occurrence or non-occurrence of anticipated or unanticipated events.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MARLIN BUSINESS SERVICES CORP.
Date: March 31, 2020	By:	/s/ Michael R. Bogansky
	Name:	Michael R. Bogansky
	Title:	Senior Vice President & Chief Financial Officer

EX-99.1

Exhibit 99.1

PRESS RELEASE  

Marlin Announces Relief From Capital Maintenance and Liquidity Agreement

Provides Business Update on Impact of COVID-19 Pandemic

MOUNT LAUREL, N.J., March 31, 2020 — Marlin Business Services Corp. (NASDAQ: MRLN), a nationwide provider of capital solutions to small businesses (“Marlin” or the “Company”), announced today the termination of its Capital Maintenance and Liquidity Agreement (the “CMLA Agreement”) with the Federal Deposit Insurance Corporation (the “FDIC”), and the FDIC’s rescission of certain nonstandard conditions in the FDIC’s original order granting federal deposit insurance to the Company’s wholly-owned subsidiary, Marlin Business Bank.

As a result of the termination of the CMLA Agreement, the Company’s consolidated capital maintenance requirements have been reduced going forward to the standard regulatory thresholds. Based on the termination of the CMLA Agreement, the Company’s capital requirements would have been reduced by approximately $30 million as of December 31, 2019.

Commenting on today’s announcement, Marlin’s President and CEO, Jeff Hilzinger, said, “We are very pleased with the FDIC’s decision to terminate our CMLA Agreement that has existed since the inception of Marlin Business Bank. We are a very well-capitalized institution and the termination of this agreement puts us in an even stronger position to serve our partners and customers as they deal with the effects of the pandemic.”

Marlin also announced that it has been carefully evaluating the emerging public health crisis and resulting economic impact resulting from the COVID-19 outbreak. Beginning in early March, the Company started a series of proactive measures to protect its employees from the effects of the COVID-19 pandemic and to manage its liquidity and capital position and portfolio performance.

Business Continuity

Throughout the week of March 16^th, 2020, Marlin implemented its business continuity plan designed to allow the Company to continue operating as normal under extraordinary circumstances. Included in the plan is the ability for Marlin’s workforce to access systems remotely. Since Friday, March 20, 2020, Marlin’s entire workforce has been working remotely and all business-related employee travel has been suspended. Through the successful execution of the plan, Marlin has not experienced any interruption of its normal business operations.

Operational Response

The Company is continuing to support its customers and partners during the COVID-19 pandemic. While the Company is still accepting applications for its equipment finance and working capital products, it has taken significant actions to protect the value of its portfolio. This includes limiting origination activities within certain high-risk industries, tightening underwriting criteria and tightening the process under which we acquire equipment from our partners on behalf of our customers. In addition, for existing customers and partners, Marlin has implemented several programs to help them weather the crisis, as appropriate.

Strong Liquidity Position

Marlin primarily funds its origination volume and portfolio through the issuance of FDIC-insured deposits issued by Marlin Business Bank, which is a Utah state-chartered Federal Reserve member bank. Over time, Marlin Business Bank has proven its ability to provide the Company with reliable access to funding through various market cycles. The brokered deposit market remains highly liquid and, through MBB, the Company is maintaining a strong liquidity position.

Due to the significant negative effects of COVID-19 on the global economy, Marlin anticipates that the Company’s financial and operational results for the first quarter ended March 31, 2020 and the fiscal year ending December 31, 2020 will also be adversely impacted. Marlin will provide an update on its business and financial outlook for 2020 during its first quarter earnings release and earnings conference call in early-May.

Mr. Hilzinger concluded, “As we continue to navigate the evolving and uncertain environment, we remain focused on the tasks at hand—supporting our employees and valued customers, maintaining ample capital and liquidity and continuing to build Marlin for the future. We look forward to supporting our partners and customers during this time of crisis.”

About Marlin

Marlin is a nationwide provider of capital solutions to small businesses with a mission of helping small businesses fulfill their American dream. Our products and services are offered directly to small businesses and through financing programs with independent equipment dealers and other intermediaries. Marlin is publicly traded (NASDAQ: MRLN). For more information about Marlin, visit marlincapitalsolutions.com or call toll free at (888) 479-9111.

Forward-Looking Statements

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements represent only the company’s current beliefs regarding future events and are not guarantees of performance or results. All forward-looking statements (including statements regarding expectations of future financial and operating results) involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words “anticipate,” “believe,” “expect,” “estimate,” “plan,” “may,” “could”, “intend” and similar expressions are generally intended to identify forward-looking statements. Economic, business, funding, market, competitive, legal and/or regulatory factors, among others, affecting our business are examples of factors that could cause actual results to differ materially from those described in the forward-looking statements. More detailed information about these factors is contained under the headings “Forward-Looking Statements” and “Risk Factors” in our periodic reports filed with the United States Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are also available in the “Investors” section of our website. We are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events or otherwise. Investors are cautioned not to place undue reliance on such forward-looking statements.

Investor Contacts:

Mike Bogansky

Senior Vice President & Chief Financial Officer

(856) 505-4108

Lasse Glassen

Addo Investor Relations

lglassen@addoir.com

(424) 238-6249