Consumer Bankruptcies to Drop 8-12 Percent in 1999 and be Flat to Down in 2000; Earnings Estimates Raised On Six Finance Companies.

MINNEAPOLIS--(BUSINESS WIRE)--August 10, 1999--

Consumer bankruptcies should decline by 8-12 percent for 1999 and be flat to down four percent in the year 2000 as a result of the strong job market and slower than anticipated credit growth, according to a new report released this week by U.S. Bancorp Piper Jaffray.

The firm had previously been anticipating a decrease in consumer bankruptcies for 1999 of 5-10 percent, and had also projected a 5-10 percent increase in 2000. As a result of the improved credit picture, U.S. Bancorp Piper Jaffray analyst Jeffrey K. Evanson has raised earnings estimates on six of the consumer finance companies followed by the firm. The six are: Metris Companies+(NASDAQ: MTRS, 32 1/8), Providian+ (NYSE: PVN, 86 1/8), Capital One + (NYSE: COF, 40 11/16), MBNA Corporation# (NYSE: KRB, 27 13/16), American Express+ (NYSE: AXP, 125), and Associates First Capital+ (NYSE: AFS, 36 3/16).

"While installment credit continues to rise, the consumer's overall level of indebtedness has remained at manageable levels due to the strong job market, increases in personal income, and the historically low interest rates that have prevailed for much of this year," states Evanson. "As a result, the improvement in the consumer bankruptcy rate has exceeded even our optimistic forecasts from earlier this year."

Impact on Profitability

Evanson notes that a relatively small decrease in consumer bankruptcy rates can have a significant impact on the profitability of consumer finance companies. The U.S. Bancorp Piper Jaffray report estimates that a 5-10 percent reduction in credit losses would add from three to 37 percent more earnings power to selected lenders in 2000. However, not every lender will benefit equally, the report cautions, pointing out that such factors as poor underwriting and product pricing, the timing of a purchase or sale of a loan portfolio, and overall leverage and operating efficiency also play a key role in determining profitability. -0-

    The specific changes to earnings estimates made by Evanson are as
follows:
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Company        1999 Estimate      Previous 2000          Revised
                                   Estimates          2000 Estimates
----------------------------------------------------------------------
American
Express       $5.40 per share     $5.10 per share    $5.13 per share
----------------------------------------------------------------------
Metris        $2.00 per share     $2.55 per share     $2.60 per share
----------------------------------------------------------------------
MBNA          $1.20 per share     $1.40 per share     $1.44 per share
----------------------------------------------------------------------
Providian     $3.60 per share     $4.85 per share     $5.10 per share
----------------------------------------------------------------------
The
Associates    $3.05 per share     $2.35 per share     $2.40 per share
----------------------------------------------------------------------
Capital One   $1.75 per share     $2.15 per share     $2.23 per share
----------------------------------------------------------------------

    U.S. Bancorp Piper Jaffray reports are available to clients
through their U.S. Bancorp Piper Jaffray Representative. They are not
available to nonclients. Media who are interested in a copy of the
report should contact the U.S. Bancorp Piper Jaffray Research Hotline:
612/342-8850.

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    NOTE: + denotes a pound sign and indicates that U.S. Bancorp
Piper Jaffray Inc. makes a market in the company's securities.