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Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations
The following discussion and analysis of our financial
condition
condition and results of operations should
be read
be read in conjunction with our
Consolidated Financial Statements and the related
notes thereto in our Form 10-K for the year
ended
ended December 31,
20192020 filed with
the SEC.
This discussion contains certain statements of a
forwardforward-looking
-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
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
subject to various known and unknown risks and uncertainties
and the
Company cautions that any forward-looking information provided
by or on its behalf is not a guarantee of future performance.
Statements regarding the following subjects are forward-looking
by their
nature: (a) our
expectations related to our proposed mergerwith a subsidiary of funds managed by HPS Investment Partners, LLC (the“HPS Merger Sub”), including the timing thereof and the costs to be incurred in connection with MBB’ssurrender of its banking licenses and authority and terminationof its FDIC insured deposits (a process we refer to as “De-banking”); (b) our business strategy;
(b)(c) our
projected
projected operating
results; (c)(d) our ability to obtain
external deposits or financing;
(d)(e) our understanding of our competition; and
(e)(f) industry and market
trends. The Company’s
actual results
actualresults 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,
control, including,
without limitation:
◾
our ability to complete our proposed merger with theHPS Merger Sub, including to complete the De-banking withinthe timeline required under the merger agreement, if at all, andto obtain the requisite shareholder approval for the proposed merger;
◾
availability, terms and deployment
of funding and capital;
◾
changes in our industry,
interest
interest rates, the regulatory environment or the general economy resulting
in changes
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,
20192020 and in Part II—Item 1A of this Form 10-Q.
Forward-looking statements apply only as of the date made and
the Company
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
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
Services Corp. and its
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
of commercial equipment (including Commercial
Vehicle
Group (“CVG”) assets) and working capital loans. In May 2000,
we established
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
Marlin Business Bank (“MBB”) for our small business customers.
In 2008, we opened MBB, a commercial bank chartered by the State
of Utah
of Utah and a member of the Federal Reserve System. MBB
serves as the Company’s primary
funding
source through its issuance of Federal Deposit Insurance Corporation
(“FDIC”)-insured
deposits.
In January 2017, we completed the acquisition of Horizon Keystone Financial,
an equipment
(“HKF”), an equipment leasing company
whichwhich 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”), ana 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.