Advanta Reports Fourth Quarter and Full Year 2002 Earnings.Business Editors SPRING HOUSE, Pa.--(BUSINESS WIRE)--Jan. 23, 2003 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 reported operating results from continuing business segments of $0.43 per 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. share for fourth quarter and $1.42 per diluted share for full year 2002 for Class A and Class B shares combined, in line with the Company's previously announced expectations. Advanta 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 $9.8 million or $0.39 per diluted share and $18.8 million or $0.72 per diluted share for full year 2002 for Class A and Class B shares combined. This compares to net income of $0.30 per diluted share for the fourth quarter of 2001 and a net loss of $2.75 per diluted share for full year 2001. Consolidated net income for the quarter includes an asset valuation charge associated with the Company's venture capital portfolio and net interest expense not associated with continuing business segments. "We are pleased with the solid developments in credit quality and the quality of the customer base we built in 2002," said 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, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "In 2003, we plan to continue our emphasis on prudent growth, good credit quality and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. profitability." Business Card results for the fourth quarter included an approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. 80 basis point decline in charge-offs to 7.9% 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 8.7% at December December: see month. 31, 2001. Over 30 day delinquencies declined 51 basis points to 6.15% and over 90 day delinquencies decreased 14 basis points to 3.13% as compared to year end 2001. The on-balance sheet loan loss reserve as a percent of owned 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 was 10% at year end, representing approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 14 months of estimated losses based on fourth quarter net charge-offs. Business Card ended the year with managed receivables of $2.6 billion as compared to $2 billion at year end 2001. The Company continued its stock repurchase plan stock repurchase plan 1. See buyback. 2. See self-tender. bringing the total purchases to approximately 2,287,000 shares through January January: see month. 22, 2003. The Company intends further stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. under the remaining unused authorization The right or permission to use a system resource; the process of granting access. See access control. of approximately 713,000 shares. 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 23, 2003, at 9:00 a.m. 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 544710. 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 serving the small business market. Advanta leverages direct marketing and information based expertise to identify potential customers and new target markets and to provide a high level of service tailored to the unique needs of small business. Using these distinctive capabilities, Advanta has 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. Since 1951, Advanta has pioneered many of the marketing techniques common in the financial services industry today, including remote lending, direct mail, and affinity The relationship that a person has to the blood relatives of a spouse by virtue of the marriage. The doctrine of affinity developed from a Maxim of Canon Law that a Husband and Wife were made one by their marriage. There are three types of affinity. and relationship marketing. 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, including the retention of cardholders after promotional pricing periods have expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. ; (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 customers, significant vendors and business partners; (11) the amount and cost of financing available to the Company; (12) the ratings on the debt of the Company and its subsidiaries; (13) revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. to estimated charges associated with the discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of our mortgage and leasing businesses; and (14) 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, 2002
----------------------------------------------------------------------
Advanta Venture
Business Cards Capital Other (A) Total
-------------- ------------ --------- --------
Interest income $ 24,831 $ 1 $ 2,212 $27,044
Interest expense 10,321 152 576 11,049
-------------- ------------ --------- --------
Net interest income 14,510 (151) 1,636 15,995
Provision for credit
losses 9,227 0 217 9,444
-------------- ------------ --------- --------
Net interest income
after provision
for credit losses 5,283 (151) 1,419 6,551
Noninterest revenues:
Securitization income 30,138 0 0 30,138
Servicing revenues 9,554 0 0 9,554
Other revenues, net 26,387 (777) 146 25,756
-------------- ------------ --------- --------
Total noninterest
revenues 66,079 (777) 146 65,448
Expenses:
Operating expenses 53,018 590 311 53,919
Minority interest in
income of consolidated
subsidiary 0 0 2,220 2,220
-------------- ------------ --------- --------
Total expenses 53,018 590 2,531 56,139
-------------- ------------ --------- --------
Income (loss) before
income taxes 18,344 (1,518) (966) 15,860
Income tax expense
(benefit) 7,063 (584) (373) 6,106
-------------- ------------ --------- --------
Net income (loss) $ 11,281 $ (934) $ (593) $ 9,754
============== ============ ========= ========
(A) Other includes insurance operations, investment and other
activities not attributable to other segments.
Advanta Corp.
Supplemental Non-GAAP Disclosure
Advanta Business Cards Managed Income Statement
(in thousands)
In addition to analyzing the financial performance of Advanta Business
Cards under generally accepted accounting principles (GAAP), we
analyze Advanta Business Cards' performance on a managed receivable
portfolio basis. To do so, we adjust the Advanta Business Cards GAAP
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. Performance on a managed
receivable portfolio basis is relevant because we retain interests in
the securitized receivables, and we have a financial interest in and
exposure to the performance of the securitized receivables.
Three Months Ended
December 31, 2002
----------------------------------------------------------------------
Advanta Adjustments to Advanta
Business Reverse Effects Business
Cards of Cards
GAAP Securitizations Managed
-------------- --------------- -------------
Interest income $ 24,831 $ 80,364 $ 105,195
Interest expense 10,321 10,152 20,473
-------------- --------------- --------------
Net interest income 14,510 70,212 84,722
Provision for credit
losses 9,227 38,938(A) 48,165
-------------- --------------- --------------
Net interest income
after provision
for credit losses 5,283 31,274 36,557
Noninterest revenues:
Securitization
income 30,138 (30,138) 0
Servicing revenues 9,554 (9,554) 0
Other revenues,
net 26,387 8,418 34,805
-------------- --------------- --------------
Total noninterest
revenues 66,079 (31,274) 34,805
Operating expenses 53,018 0 53,018
-------------- --------------- --------------
Income before income
taxes 18,344 0 18,344
Income tax expense 7,063 0 7,063
-------------- --------------- --------------
Net income $ 11,281 $ 0 $ 11,281
============== =============== ==============
(A) 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 on securitized receivables been equal to actual
reported charge-offs.
Advanta Corp.
Highlights
(in thousands except per share data)
Three Months Ended Percent Change
---------------------------------- From
Dec. 31, Sept. 30, Dec. 31, Prior Prior
EARNINGS 2002 2002 2001 Quarter Year
----------------------------------------------------------------------
Basic income from
continuing
operations
per common share $ 0.40 $ 0.25 $ 0.30 60.0 % 33.3 %
Diluted income from
continuing
operations
per common share 0.39 0.25 0.30 56.0 30.0
Basic net income
per common share 0.40 0.25 0.30 60.0 33.3
Diluted net income
per common share 0.39 0.25 0.30 56.0 30.0
Return on average
common equity 10.75 % 6.99 % 8.52 % 53.8 26.2
Diluted net income
per common share
from continuing
business
segments (A) $ 0.43 $ 0.38 $ 0.42 13.2 2.4
Reconciliation of
diluted net income
per common share
from continuing
business segments
to diluted income
from continuing
operations per
common share:
Diluted net
income per
common share
from continuing
business
segments (A) $ 0.43 $ 0.38 $ 0.42 13.2 2.4
Less reconciling
items per
diluted common
share:
Other segment
net income
(loss) (B) (0.02) (0.05) (0.07) (60.0) (71.4)
Valuation
adjustments
from venture
capital
investments,
net of tax at
38.5% (0.02) (0.08) (0.05) (75.0) (60.0)
---------- ---------- ----------
Diluted income
from continuing
operations per
common share $ 0.39 $ 0.25 $ 0.30 56.0 30.0
Weighted average
common shares
used to compute:
Basic earnings
per common
share 24,463 25,038 25,677 (2.3) (4.7)
Diluted earnings
per common
share 25,278 25,664 25,844 (1.5) (2.2)
Ending shares
outstanding 27,471 28,240 26,633 (2.7) 3.1
BUSINESS CREDIT
CARDS
----------------------------------------------------------------------
Origination
volume $1,707,416 $1,348,154 $1,157,491 26.6 % 47.5 %
Securitization
volume 331,975 65,000 0 N/M N/M
Average managed
receivables 2,441,218 2,230,089 1,998,428 9.5 22.2
Ending managed
receivables 2,594,230 2,253,513 2,042,974 15.1 27.0
Managed net
interest margin 13.88 % 14.96 % 16.57 % (7.2) (16.2)
As a percentage of
gross managed
receivables:
Total
receivables 30
days or more
delinquent 6.15 6.66 6.66 (7.7) (7.7)
Net charge-offs 7.89 8.93 8.67 (11.6) (9.0)
(A) Includes net income (loss) of the Advanta Business Cards segment
and the Venture Capital segment with the exception of venture
capital valuation adjustments, net of tax. Excludes net income
(loss) of the Other segment and results of discontinued
operations.
(B) Other includes insurance operations, investment and other
activities not attributable to other segments.
N/M - Not Meaningful
Advanta Corp.
Highlights
(in thousands except per share data)
Three Months Ended Percent
------------------------------ Change From
Dec. 31, Sept. 30, Dec. 31, Prior Prior
COMMON STOCK DATA 2002 2002 2001 Quarter Year
----------------------------------------------------------------------
Stock price:
Class A
High $ 11.00 $ 11.45 $ 11.72 (3.9)% (6.1)%
Low 8.25 7.60 8.00 8.6 3.1
Closing 8.98 10.05 9.94 (10.6) (9.7)
Class B
High 11.10 11.44 10.79 (3.0) 2.9
Low 8.00 7.35 6.85 8.8 16.8
Closing 9.39 10.33 9.10 (9.1) 3.2
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 14.87 14.44 14.20 3.0 4.7
- Statistical Supplement available at www.advanta.com - |
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