2010 ANNUAL REPORT MARLIN BUSINESS SERVICES CORP. TM CONSOLIDATED FINANCIAL SUMMARy YEAR ($ in Thousands) 2006 2007 2008 2009 2010 Revenues $102,930 $118,434 $115,597 $90,299 $66,738 Net Income (Loss) $18,318 $18,000 ($5,230) $1,036 $5,668 Net Income – Adjusted(1) $18,318 $18,000 $4,474 $2,221 $5,738 Net Investment in Leases and Loans $693,003 $764,553 $669,109 $448,610 $351,569 Total Assets Deposits(2) $794,544 $958,269 $794,431 $565,803 $468,062 $63,835 $80,288 $92,919 Total Stockholders’ Equity(3) $137,391 $152,961 $150,272 $151,885 $160,003 Total Originations (Leases and Loans) $388,661 $390,766 $256,554 $88,935 $134,030 Total Number of New Leases and Loans Originated 34,214 33,141 24,869 9,763 12,407 Net Interest and Fee Margin 11.59% 10.42% 9.86% 10.05% 11.75% Net Charge-Offs(4) 1.56% 2.00% 3.80% 5.42% 3.58% REguLATORY CApITAL RATIOS:(5) Tier 1 Leverage Capital Tier 1 Risk-based Capital Total Risk-based Capital 24.89% 34.87% 30.19% 39.58% 31.45% 40.84% (1) Net Income - Adjusted represents net income excluding the loss on derivatives and hedging activities, net of tax, and is provided to evaluate the Company’s core business performance without such activities. The Company believes that Net Income - Adjusted is a useful performance metric for management, investors and lenders because it excludes the volatility resulting from derivatives activities subsequent to discontinuing hedge accounting in mid-2008. (2) FDIC insured deposits. (3) Information has been updated to reflect the restatement discussed in Note 20 of the Notes to Consolidated Financial Statements in the enclosed Form 10-K. The impact of the restatement decreased net deferred income tax liability and increased retained earnings by $3.6 million as of December 31, 2006, 2007, 2008 and 2009. (4) As a percentage of average total finance receivables. (5) Effective in 2009 upon conversion to bank holding company status. 2010 ANNUAL REPORT MARLIN BUSINESS SERVICES CORP. TM To Our Shareholders: After enduring and navigating through several years of severe market and economic uncertainty, I’m pleased to report significant progress in 2010. The Company dramatically lowered credit losses, grew lease originations, invested for future growth and improved profits. In 2010, we redirected our efforts and took major steps to expand our market presence and capitalize on the untapped opportunity to grow our core business - serving the financing needs of small business. Over the past year we were heavily committed to expanding the size of the sales force. Additionally, we launched our National Accounts and Healthcare groups aimed at serving the manufacturer and value-added reseller segments. We’re excited about the momentum of 2010 and confident that the investments made will re-establish the Company’s historical positioning of consistent asset and profit growth. While a lot of time was dedicated to rebuilding the sales capabilities of the organization, we also made meaningful strides to strengthen other aspects of our business critically important to supporting and enhancing the business’s growth and profitability. One initiative is the Company’s transition to a bank operating model, pairing Marlin’s historically strong asset and credit platform with the distinct advantage a bank depository offers to lower borrowing rates and strengthen the liquidity profile of the organization. Marlin Business Bank is well-capitalized, profitable and in the future will grow in significance, funding a greater percentage of the consolidated balance sheet. Marlin’s market-leading asset origination and servicing platform combined with the advantages of a banking franchise, we believe, gives us an unrivaled source of competitive strength to better serve the needs of customers. The past few years reminded us of the primary role credit management has to protect against unforeseen downside risks during turbulent times and contributing to stable, consistent asset quality performance. This time last year I reported on management’s actions to address credit trends, and I’m pleased to report 2010 was a meaningful year of progress. We ended 2010 with credit default levels 54% lower than 2009, with the average default rate on average portfolio outstandings declining to 3.58% from 5.42% in 2009. Asset quality trends are in terrific shape, and the Company’s disciplined credit culture will serve us well in the future. With an abundance of capital and liquidity and very strong balance sheet capital ratios, the business is in an enviable position. Our intentions are to expand our franchise by seizing on the market opportunities within our core business and to increase our return on capital. Where it makes sense, we will also opportunistically pursue other value enhancing growth and profit initiatives that exploit our core strengths and capabilities as an organization. Looking ahead, generating portfolio growth and executing on a focused strategy that delivers high-quality assets at attractive margins, while re-leveraging the fixed costs operating infrastructure of the business, will produce higher profits and returns on capital. Our future is bright thanks in large part to Marlin’s dedicated workforce doing the necessary tasks to make our business successful. Of course, this success is nothing without the support of our customers and stakeholders and the confidence they have shown us. In closing, to our shareholders, our mission is to maintain your trust and create a valued franchise. Daniel P. Dyer Co-Founder & Chief Executive Officer