Wells Cedes $75M Facility to Marlin

Wells Fargo & Company (WFC - Analyst Report) rendered a $75 million 3-year committed funding facility to Marlin Receivables Corp., an affiliate of Marlin Business Services Corp. (MRLN - Snapshot Report). Marlin Receivables intends to use the facility fund its growth, with an aim to extend increased flexible equipment financing options to numerous small and medium-sized businesses nationwide. 

Marlin Business and Wells Fargo have had similar commitments in the past as well. The continued relation will benefit Marlin as it will bolster its financing base, thereby readily meeting the needs of many small businesses. Wells Fargo is the fourth largest financial services company in the U.S. (in terms of assets) with $1.3 trillion in assets and over $800 million in deposits. 

The company provides retail and wholesale banking, mortgage banking, consumer finance, equipment leasing, insurance brokerage, agricultural finance, securities brokerage, trust, investment banking and other financial services through banking stores, the Internet and other distribution channels to individuals, businesses and institutions in all 50 states, the District of Columbia (D.C.) and in other countries. 

We think that Wells Fargo is relatively well positioned compared to its peers as it benefited from a larger share in the mortgage markets after acquiring Wachovia as well as from the demise of some smaller players. However, higher credit losses resulting from a continued deterioration in the housing markets will impact earnings in the coming quarters. As such, we are maintaining our Neutral recommendation on the shares.

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