Advanta Business Cards Results Up 40% Year On Year.Business Editors SPRING HOUSE, Pa.--(BUSINESS WIRE)--Jan. 22, 2002 Advanta Advanta is an American banking company. Currently, it controls two banks, Advanta Bank Corp and Advanta National Bank. The banking corporation is not associated with Advanta Energy Corp., an energy consulting practice based in California. Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ADVNB; ADVNA ADVNA Advanta Corporation (stock symbol) ) today announced fourth quarter net income for Advanta Business Cards of $11.4 million, up 48% from $7.7 million for the fourth quarter 2000. Advanta Business Cards net income for full year 2001 rose 40% to $39.1 million as compared to $27.9 million for 2000. Results for 2000 are based on an effective tax rate of 38.5% for comparative purposes. Operating results from continuing business segments were $0.42 per share for the fourth quarter of 2001 and $1.41 per share for the full year 2001 for Class A and Class B shares combined on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis. "We have met our 2001 earnings goal during an uncertain economy and unusual times. While we are proud of this accomplishment, we are now focused on seizing the tremendous opportunity afforded to Advanta and its shareholders by the small business market during 2002 and beyond," said Chairman and Chief Executive Officer Dennis Dennis is a male first name derived from the Greco-Roman name Dionysius meaning "servant of Dionysus", the Thracian god of wine, which is ultimately derived from the Greek Dios (Διος, "of Zeus") combined with Nysos or Nysa (Νυσα), where the Alter. "Our intent is to build an enduring, highly profitable and growing enterprise while maintaining 20% earnings growth and approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. a 2% return on managed receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed ." For the quarter, Advanta Business Cards earned an after tax return on average managed receivables of 2.3% on an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis as compared to 2.2% for third quarter 2001 and 2.0% for fourth quarter 2000. The increased returns are principally due to increases in risk-adjusted margin, from 12.7% for the fourth quarter of 2000 to 12.9% for the third quarter of 2001 and 13.5% for the fourth quarter of 2001. The improvement in risk-adjusted margin during the quarter resulted from the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. interest rate environment which more than compensated compensated /com·pen·sat·ed/ (kom´pen-sa?tid) counterbalanced; offset. for an anticipated increase in charge-offs. Consistent with the forecasted seasoning of the business card portfolio and the current economic environment, over 30 day delinquencies were 6.7% at December December: see month. 31, 2001 and charge-offs were 8.7% on an annualized basis for the quarter. Advanta Business Cards ended the year with managed receivables of $2.04 billion, as compared to $1.66 billion at year end 2000. Advanta Corp. reported consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: net income for the quarter of $7.8 million or $0.30 per share for Class A and Class B shares combined on a diluted basis. Included in consolidated net income for the quarter is a $2 million pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern asset valuation charge associated with the Company's venture capital portfolio due to the continued weakness in the current venture capital market. For full year 2001, the Company reported a net loss of $70.5 million or $2.75 per share on a diluted basis for its Class A and Class B shares combined, reflecting results of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , asset valuation and restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and other unusual charges recorded in prior periods. The Company continued its stock repurchase plan stock repurchase plan 1. See buyback. 2. See self-tender. , bringing total purchases to approximately 700,000 shares of its Class B Common Stock at year end 2001. The Company intends further stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. during the first and second quarters under its previously announced repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. plan. Advanta management will hold a conference call with analysts and institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. today, January January: see month. 22, 2002, at 9:00 am Eastern time. The call will be broadcast simultaneously si·mul·ta·ne·ous adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics for the public over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the through www.advanta.com or www.vcall.com. To listen to the live call, please go to the web site at least fifteen minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , and install any necessary audio software. Replays of the call will be available beginning at noon today on the Internet at www.advanta.com or www.vcall.com or by dialing (719) 457-0820 and referring to confirmation code 758420. Advanta is a highly focused financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. company which has been providing innovative financial solutions since 1951. Advanta leverages its first-class direct marketing and information based expertise to develop state-of-the-art data warehousing See data warehouse. data warehousing - data warehouse and statistical modeling tools that identify potential customers and new target markets. It has used these distinctive capabilities to become one of the nation's largest issuers of MasterCard MasterCard Worldwide (NYSE: MA) is a mutinational corporation based in Purchase, NY in the United States. Throughout the world, its principal business is to process payments between the banks of merchants and the banks of purchasers that use its "Mastercard" branded debit- and business credit cards to small businesses. Learn more about Advanta at www.advanta.com. This Press Release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The most significant among these risks and uncertainties are: (1) the Company's managed net interest margin; (2) competitive pressures; (3) political, social and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. general economic conditions that affect the level of new account acquisitions, customer spending, delinquencies and charge-offs; (4) factors affecting fluctuations in the number of accounts or loan balances; (5) interest rate fluctuations; (6) the level of expenses; (7) the timing of the securitizations of the Company's receivables; (8) factors affecting the value of investments held by the Company; (9) the effects of government regulation, including restrictions and limitations imposed by banking laws, regulators, examinations, and the agreements between the Company's bank subsidiaries and their regulators; (10) relationships with significant vendors and business partners; (11) the amount and cost of financing available to the Company; (12) the completion of the post-closing process following the sale of our mortgage business and the ultimate amount of restructuring and other related charges associated with the conclusion of the strategic alternatives process for our mortgage and leasing businesses; and (13) the impact of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . Additional risks that may affect the Company's future performance are detailed in the Company's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and its Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. .
Advanta Corp.
Supplemental Consolidating Income Statement
(in thousands)
Three Months Ended
December 31, 2001
----------------------------------------------------------------------
Advanta
Business Venture
Cards Capital Other (A) Total
-------- -------- -------- --------
Interest income $ 19,610 $ 2 $ 5,011 $ 24,623
Interest expense 9,495 271 5,390 15,156
-------- -------- -------- --------
Net interest income 10,115 (269) (379) 9,467
Provision for credit
losses 9,924 0 200 10,124
-------- -------- -------- --------
Net interest income
after provision
for credit losses 191 (269) (579) (657)
Noninterest revenues:
Securitization
income 35,576 0 0 35,576
Servicing revenues 7,934 0 0 7,934
Interchange income 21,581 0 0 21,581
Other revenues, net 351 (1,902) 300 (1,251)
-------- -------- -------- --------
Total noninterest
revenues 65,442 (1,902) 300 63,840
Expenses:
Operating expenses 47,059 702 514 48,275
Minority interest
in income of
consolidated
subsidiary 0 0 2,220 2,220
-------- -------- -------- --------
Total expenses 47,059 702 2,734 50,495
-------- -------- -------- --------
Income (loss) before
income taxes 18,574 (2,873) (3,013) 12,688
Income tax expense
(benefit) 7,151 (1,106) (1,160) 4,885
-------- -------- -------- --------
Net income (loss) $ 11,423 $ (1,767) $ (1,853) $ 7,803
======== ======== ======== ========
(A) Other includes insurance operations, investment and other
activities not attributable to other segments.
Advanta Corp.
Supplemental Non-GAAP Disclosure
Managed Income Statement (A)
(in thousands)
Three Months Ended
December 31, 2001
----------------------------------------------------------------------
Advanta
Business Venture
Cards Capital Other (C) Total
-------- -------- -------- --------
Interest income $104,283 $ 2 $ 5,011 $109,296
Interest expense 21,506 271 5,390 27,167
-------- -------- -------- --------
Net interest income 82,777 (269) (379) 82,129
Provision for
credit losses (B) 45,291 0 200 45,491
-------- -------- -------- --------
Net interest income
after provision
for credit losses 37,486 (269) (579) 36,638
Noninterest
revenues:
Interchange
income 21,581 0 0 21,581
Other revenues,
net 6,566 (1,902) 300 4,964
-------- -------- -------- --------
Total noninterest
revenues 28,147 (1,902) 300 26,545
Expenses:
Operating
expenses 47,059 702 514 48,275
Minority
interest in
income of
consolidated
subsidiary 0 0 2,220 2,220
-------- -------- -------- --------
Total expenses 47,059 702 2,734 50,495
-------- -------- -------- --------
Income (loss)
before income
taxes 18,574 (2,873) (3,013) 12,688
Income tax expense
(benefit) 7,151 (1,106) (1,160) 4,885
-------- -------- -------- --------
Net income (loss) $ 11,423 $ (1,767) $ (1,853) $ 7,803
======== ======== ======== ========
(A) We analyze the financial performance of Advanta Business Cards on
a managed receivable portfolio basis. To do so, we adjust the
Advanta Business Cards income statement to reverse the effects of
securitization. Our managed business credit card receivable
portfolio is comprised of owned and securitized business credit
card receivables.
(B) The provision for credit losses includes the amount by which the
provision for credit losses would have been higher had the
securitized receivables remained as owned and the provision for
credit losses been equal to actual reported charge-offs.
(C) Other includes insurance operations, investment and other
activities not attributable to other segments.
Advanta Corp.
Highlights
(in thousands except per share data)
Three Months Ended Percent Change
------------------------------------ from
Dec. 31, Sept. 30, Dec. 31, Prior Prior
EARNINGS 2001 2001 2000 Quarter Year
----------------------------------------------------------------------
Gross revenues $ 88,463 $ 75,679 $ 68,303 16.9 % 29.5 %
Basic income
(loss) from
continuing
operations
per common
share 0.30 0.09 (0.50) 233.3 N/M
Diluted income
(loss) from
continuing
operations
per common
share 0.30 0.09 (0.50) 233.3 N/M
Basic net
income (loss)
per common
share 0.30 (1.61) 0.13 N/M 130.8
Diluted net
income (loss)
per common
share 0.30 (1.59) 0.13 N/M 130.8
Return on
average
common equity 8.52 % (42.07)% 2.94 % N/M 189.8
Net income per
common share
from
continuing
business
segments (A) $ 0.42 $ 0.38 N/M 10.5 N/M
COMMON STOCK
DATA
----------------------------------------------------------------------
Weighted
average
common shares
used to
compute:
Basic earnings
per common
share 25,677 25,936 25,293 (1.0)% 1.5 %
Diluted
earnings per
common share 25,844 26,241 25,293 (1.5) 2.2
Ending shares
outstanding 26,633 27,024 27,126 (1.4) (1.8)
Stock price:
Class A
High $ 11.720 $ 19.100 $ 11.875 (38.6) (1.3)
Low 8.000 8.000 5.750 0.0 39.1
Closing 9.940 9.400 8.813 5.7 12.8
Class B
High 10.790 17.100 8.375 (36.9) 28.8
Low 6.850 8.100 4.125 (15.4) 66.1
Closing 9.100 8.950 7.188 1.7 26.6
Cash dividends
declared
Class A 0.063 0.063 0.063 0.0 0.0
Class B 0.076 0.076 0.076 0.0 0.0
Book value per
common share 14.20 14.10 17.06 0.7 (16.8)
BUSINESS
CREDIT CARDS
----------------------------------------------------------------------
Origination
volume $1,157,491 $1,138,747 $ 945,088 1.6 % 22.5 %
Securitization
volume 0 75,000 250,000 (100.0) (100.0)
Average
managed
receivables 1,998,428 1,946,737 1,574,750 2.7 26.9
Ending managed
receivables 2,042,974 1,996,963 1,659,224 2.3 23.1
Managed net
interest
margin 16.57 % 15.24 % 12.89 % 8.7 28.5
As a
percentage of
gross managed
receivables:
Total loans
30 days or
more
delinquent 6.66 5.92 5.00 12.5 33.2
Net charge-
offs 8.67 7.90 5.54 9.7 56.5
(A) Includes net income of the Advanta Business Cards segment and
expenses, net of tax, of the venture capital segment. Excludes
venture capital valuation adjustments, net income of the Other
segment and results of discontinued operations.
- Statistical Supplement Available at www.advanta.com -
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