 Second Quarter Summary: Net loss of 5.9 million, or 0.50 per diluted share, compared with net income of 6.1 million, or 0.49 per diluted share a year ago and net loss of 11.8 million, or 1.00 per diluted share last quarter. Net loss on an adjusted basis of 5.1 million, or 0.43 per diluted share, compared with net income on an adjusted basis of 6.3 million, or 0.51 per diluted share a year ago Ended the quarter with total stockholders equity of 181.0 million, book value per share of 15.16 and a consolidated equity-to-assets ratio of 15.13 Assisted our customers by restructuring over 5,000 contracts totaling 133.8 million, or 13.7, of net investment through payment deferrals Total sourced origination volume of 67.2 million, down 71.0 year-over-year. Average total finance receivables were 979.3 million, down 5 year-over-year Total allowance for credit losses of 63.6 million; allowance as a percentage of receivables was 5.97 for equipment finance and 18.92 for working capital Annualized net charge-offs of 3.47, compared with 3.11 in the prior quarter and 1.88 in the second quarter last yearMOUNT LAUREL, N.J., July 30, 2020 GLOBE NEWSWIRE -- Marlin Business Services Corp. NASDAQ: MRLN, a nationwide provider of capital solutions to small businesses Marlin or the Company, today reported second quarter 2020 net loss of 5.9 million, or 0.50 per diluted share, compared with net loss of 11.8 million, or 1.00 per diluted share in the prior quarter, and net income of 6.1 million, or 0.49 per diluted share a year ago.Commenting on the Companys results, Jeffrey A. Hilzinger, Marlins President and CEO, said, We, along with the entire financial services industry, continue to operate in a challenging and uncertain environment arising from the unprecedented impact of the COVID-19 health crisis on our business. Our 5.9 million net loss during the quarter was driven by a significant increase in the allowance for loan losses, as our provision for credit losses was 18.8 million. Despite the loss for the quarter, our capital and liquidity positions remain very strong which enabled us to provide payment deferral contract modifications for a select group of customers. We also maintained our second quarter dividend and took steps to significantly reduce costs and re-align our organizational structure to take advantage of emerging opportunities that we believe will accelerate as the current economic uncertainty dissipates. Mr. Hilzinger concluded, As we manage the business through this challenging environment, we remain focused on our core fundamentals: protecting our employees and our portfolio, helping our customers, maintaining strong liquidity, reducing costs and proactively preparing for the future. I am extremely proud of our employees dedication to both our business and our customers during these challenging times. We are thankful for the support of our shareholders, and we look forward to continuing to serve our customers and communities during this time of need and emerging from this crisis in an even stronger competitive position.Results of Operations Total sourced origination volume for the second quarter of 67.2 million was down 71.0 from a year ago. Direct origination volume of 6.6 million in the second quarter was down 86.5 from 49.0 million in the second quarter of 2019. Indirect origination volume in the second quarter of 2020 was 58.8 million, down 63.3 from 160.3 million in the second quarter last year. Assets originated for sale in the second quarter of 1.1 million compared with 18.0 million in the second quarter last year. Referral volume totaled 0.7 million, down from 4.1 million in the second quarter last year. Net Investment in Leases and Loans was 911 million, down 14.2 from second quarter last year, while our total managed assets stood at approximately 1.2 billion, down 5.4 from the second quarter last year.Net interest and fee margin as a percentage of average finance receivables was 8.68 for the second quarter, down 66 basis points from the first quarter of 2020 and down 70 basis points from a year ago. The sequential quarter decrease was driven primarily by a decrease in new origination loan and lease yields, lower fee income, and portfolio mix, partially offset by a decrease in interest expense resulting from lower deposit rates. The year-over-year decrease in margin percentage was also primarily related to the decrease in new origination loan and lease yields, the change in the presentation of residual income driven by the adoption of CECL, and portfolio mix, partially offset by a decrease in interest expense resulting from lower deposit rates. During 2019 and prior periods, residual income was presented in fee income; however, effective in the first quarter 2020, residual income is included in the future cash flows used to assess credit losses and therefore this activity is reflected in the allowance for credit losses. The Companys interest expense as a percent of average total finance receivables was 222 basis points in the second quarter of 2020 compared with 225 basis points for the prior quarter and 248 basis points for the second quarter of 2019, resulting from lower rates and a shift in mix, as higher rate long-term debt pays down. On an absolute basis, net interest and fee income was 21.3 million for the second quarter of 2020 compared with 24.2 million in the second quarter last year.The provision for credit losses was 18.8 million in the second quarter of 2020, compared to 4.8 million in the second quarter of 2019. This increase reflects the change in the Companys outlook and estimated credit losses as a result of the ongoing impact of COVID-19, including lower economic activity, higher unemployment and a weaker credit environment. During the second quarter of 2020, deteriorating economic conditions and other qualitative factors accounted for 15.5 million of the total provision for credit losses. Under the new CECL standard, forward looking economic forecasting is a key factor in determining the allowance for credit losses. As a result, the worsening economic fallout from the COVID-19 pandemic significantly increased our estimated lifetime credit losses under CECL, driving a substantial increase to our provision for credit losses.Non-interest income was 3.8 million for the second quarter of 2020, compared with 12.2 million in the prior quarter and 7.2 million in the prior year period. The sequential decrease in non-interest income is primarily due to the seasonality of property taxes which are paid by the lessee to the lessor and required to be presented gross in the consolidated statement of operations, which are primarily incurred in the first quarter. The year-over-year decrease in non-interest income is primarily due to a decrease in gains from the sale of assets. Non-interest expense was 13.5 million for the second quarter of 2020, compared with 29.9 million in the prior quarter and 18.5 million in the second quarter of 2019. The sequential quarter decrease was due to the aforementioned seasonality of property tax expenses, a Goodwill impairment charge of 6.7 million in the first quarter, and a reduction in Salaries and Benefits associated with employee furlough actions, as well as lower commission and incentive compensation on lower origination volumes. The year-over-year decrease was primarily due to the aforementioned reduction in Salaries and Benefits. The Companys efficiency ratio for the second quarter was 53.9 compared with 59.1 in the second quarter last year. Excluding the impact of certain non-GAAP adjustments, the Companys efficiency ratio on an adjusted basis for the second quarter was 47.6 compared with 55.8 in the second quarter of 2019. Marlin recorded a 1.4 million tax benefit in the second quarter, representing an effective tax rate of 18.9. The low effective tax rate during the quarter was due to a 0.6 million discrete reduction in the income tax benefit resulting from interim tax allocations that is expected to normalize in the second half of 2020. In the first quarter of 2020, the Company recorded a 7.4 million tax benefit representing an effective tax rate of 38.6 reflecting changes in the valuation of the Companys NOL deferred tax assets resulting from the CARES Act, and in the second quarter of 2019, the Company recorded 2.0 million of tax expense, representing an effective tax rate of 24.1. Portfolio Performance Allowance for credit losses as a percentage of total finance receivables was 6.53 at June 30, 2020 compared with 5.09 at March 31, 2020. In addition, under the incurred loss allowance model in 2019, the percentage was 1.59 at June 30, 2019.For the three months ended June 30, 2020, the Company recorded an 18.8 million provision for credit losses, which was 14.1 million greater than the 4.8 million provision recognized for the three months ended June 30, 2019 and 6.4 million lower than the 25.2 million recognized in the first quarter of 2020. The year-over-year increase in provision was primarily due to updates to the Companys estimate for changes in economic conditions due to COVID-19.As a result of the ongoing impact from COVID-19, through the end of the second quarter the Company has completed over 5,000 loan and lease restructure requests from customers who have been impacted by the pandemic. These restructure agreements consisted of a 90-day payment deferral program for equipment finance loans and leases and a 30-60 day payment deferral program for working capital loans for customers who were current under their existing obligations. While a majority of the initial restructure requests have been processed, the Company is evaluating subsequent requests focused on the borrowers capacity to pay. 