Advanta Reports Third Quarter Earnings.Business Editors SPRING HOUSE, Pa.--(BUSINESS WIRE)--Oct. 24, 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 operating results from continuing business segments of $0.38 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 Class A and Class B shares combined, for the quarter ended September September: see month. 30, 2002, unchanged from the third quarter of 2001. 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 $6.3 million or $0.25 per share on a diluted basis for its Class A and Class B shares combined. This compares to a net loss of $41.7 million or $1.59 per share on a diluted basis reported for the third quarter of 2001. Business Card results for the third quarter included a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. decline in charge-offs to 8.9% 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 9.0% at June June: see month. 30, 2002. Over 90 day delinquencies declined 37 basis points to 2.99% while over 30 day delinquencies increased 7 basis points to 6.66% at the end of the third quarter. 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 9.8% at September 30, 2002, 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 third quarter net charge-offs. Managed receivables grew to $2.3 billion at September 30, 2002 as compared to $2 billion at September 30, 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. The Company also announced that its full-year 2002 earnings from continuing business segments are expected to be within a range of $1.42 and $1.50 per diluted share, the upper end of which is within analysts' estimates. "We continue to have declining loss rates despite a difficult economic environment," 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. . "While prudent growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. and the environment are now expected to keep earnings somewhat below our goals for the year, we are pleased with the solid developments in credit quality and the quality of the customer base we are building." The Company completed the 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. of the 1.5 million shares initially authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: under its stock repurchase plan stock repurchase plan 1. See buyback. 2. See self-tender. , and in connection with a second authorization The right or permission to use a system resource; the process of granting access. See access control. has repurchased an additional 210,000 shares, for a total repurchased through October October: see month. 23, 2002 of approximately 1,710,000 shares of its Class B Common Stock. The Company intends further stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. under the remaining unused authorization of approximately 1,290,000 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, October 24, 2002, at 9:00 a.m. Eastern time. The call will be broadcast simultaneously 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 309038. 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; (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 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
September 30, 2002
----------------------------------------------------------------------
Advanta
Business Venture
Cards Capital Other(A) Total
-------- -------- -------- --------
Interest income $ 21,082 $ 0 $ 2,837 $ 23,919
Interest expense 8,978 176 1,898 11,052
-------- -------- -------- --------
Net interest income 12,104 (176) 939 12,867
Provision for credit
losses 9,179 0 242 9,421
-------- -------- -------- --------
Net interest income after
provision for
credit losses 2,925 (176) 697 3,446
Noninterest revenues:
Securitization income 29,168 0 0 29,168
Interchange income 24,237 0 0 24,237
Servicing revenues 8,334 0 0 8,334
Other revenues, net (87) (3,505) (126) (3,718)
-------- -------- -------- --------
Total noninterest revenues 61,652 (3,505) (126) 58,021
Expenses:
Operating expenses 47,983 688 306 48,977
Minority interest in
income of consolidated
subsidiary 0 0 2,220 2,220
-------- -------- -------- --------
Total expenses 47,983 688 2,526 51,197
-------- -------- -------- --------
Income (loss) before
income taxes 16,594 (4,369) (1,955) 10,270
Income tax expense
(benefit) 6,388 (1,682) (752) 3,954
-------- -------- -------- --------
Net income (loss) $ 10,206 $ (2,687) $ (1,203) $ 6,316
======== ======== ======== ========
(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
September 30, 2002
----------------------------------------------------------------------
Advanta
Business Venture
Cards Capital Other (C) Total
-------- -------- -------- --------
Interest income $102,719 $ 0 $ 2,837 $105,556
Interest expense 19,314 176 1,898 21,388
-------- -------- -------- --------
Net interest income 83,405 (176) 939 84,168
Provision for credit
losses (B) 49,762 0 242 50,004
-------- -------- -------- --------
Net interest income after
provision for credit
losses 33,643 (176) 697 34,164
Noninterest revenues:
Interchange income 24,237 0 0 24,237
Other revenues, net 6,697 (3,505) (126) 3,066
-------- -------- -------- --------
Total noninterest revenues 30,934 (3,505) (126) 27,303
Expenses:
Operating expenses 47,983 688 306 48,977
Minority interest in
income of consolidated
subsidiary 0 0 2,220 2,220
-------- -------- -------- --------
Total expenses 47,983 688 2,526 51,197
-------- -------- -------- --------
Income (loss) before
income taxes 16,594 (4,369) (1,955) 10,270
Income tax expense
(benefit) 6,388 (1,682) (752) 3,954
-------- -------- -------- --------
Net income (loss) $ 10,206 $ (2,687) $ (1,203) $ 6,316
======== ======== ======== ========
(A) In addition to analyzing the financial performance of Advanta
Business Cards under generally accepted accounting principles,
we analyze Advanta Business Cards' performance 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 on securitized receivables 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
-------------------------------
Sept. 30, June 30, Sept. 30, Prior Prior
EARNINGS 2002 2002 2001 Quarter Year
----------------------------------------------------------------------
Gross revenues $ 81,940 $ 87,400 $ 75,679 (6.2)% 8.3%
Basic income
from
continuing
operations
per common
share 0.25 0.28 0.09 (10.7) N/M
Diluted
income from
continuing
operations
per common
share 0.25 0.27 0.09 (7.4) N/M
Basic net
income (loss)
per common
share 0.25 (0.06) (1.61) N/M N/M
Diluted net
income (loss)
per common
share 0.25 (0.06) (1.59) N/M N/M
Return on
average
common equity 6.99% (1.62)% (42.07)% N/M N/M
Diluted net
income per
common
share from
continuing
business
segments (A) $ 0.38 $ 0.32 $ 0.38 18.8 0.0
COMMON STOCK
DATA
----------------------------------------------------------------------
Weighted
average
common shares
used to
compute:
Basic earnings
per common
share 25,038 25,320 25,936 (1.1)% (3.5)%
Diluted
earnings per
common share 25,664 26,790 26,241 (4.2) (2.2)
Ending shares
outstanding 28,240 28,562 27,024 (1.1) 4.5
Stock price:
Class A
High $ 11.450 $ 14.550 $ 19.100 (21.3) (40.1)
Low 7.600 10.400 8.000 (26.9) (5.0)
Closing 10.050 10.860 9.400 (7.5) 6.9
Class B
High 11.440 14.040 17.100 (18.5) (33.1)
Low 7.350 10.240 8.100 (28.2) (9.3)
Closing 10.330 10.930 8.950 (5.5) 15.4
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 14.44 14.20 14.10 1.7 2.4
BUSINESS
CREDIT CARDS
----------------------------------------------------------------------
Origination
volume $1,348,154 $1,305,479 $1,138,747 3.3% 18.4%
Securitization
volume 65,000 110,000 75,000 (40.9) (13.3)
Average
managed
receivables 2,230,089 2,110,420 1,946,737 5.7 14.6
Ending managed
receivables 2,253,513 2,188,046 1,996,963 3.0 12.8
Managed net
interest
margin 14.96% 15.64% 15.24% (4.3) (1.8)
As a
percentage of
gross managed
receivables:
Total
receivables
30 days or
more
delinquent 6.66 6.59 5.92 1.1 12.5
Net
charge-offs 8.93 9.00 7.90 (0.8) 13.0
(A) Includes net income 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 of the
Other segment and results of discontinued operations.
- Statistical Supplement available at www.advanta.com -
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion