Exhibit 99.1
Advanta's Solid Fundamentals Underlie Another Good Quarter
SPRING HOUSE, Pa.--(BUSINESS WIRE)--Oct. 25, 2007--Advanta Corp.
(NASDAQ:ADVNB; ADVNA) today reported third quarter 2007 net income of
$22.1 million or $0.50 per diluted share for Class A and Class B
shares combined. This is consistent with the Company's full year
expectations.
Ending managed receivables grew to $6.2 billion at quarter end
with ending owned receivables totaling $1.2 billion. During the
quarter, over 74,000 new customers were added and transaction volume
totaled $3.6 billion. The managed net credit loss rate was 3.87% and
the owned net credit loss rate was 3.52%.
"Over the past years, we've been planning for a potentially more
difficult environment by focusing on high credit quality customers,"
said Dennis Alter Chairman and CEO. "This strategy continues to look
good to us now."
Conference Call Details
Advanta management will hold a conference call with analysts and
institutional investors today, October 25, at 9:00 a.m. Eastern Time,
to review the third quarter results for 2007. The call can be accessed
by dialing 877-857-6176 and referring to confirmation code 9344328.
The call will also be webcast simultaneously via a Vcall link on the
Company's website, www.advanta.com, or at www.investorcalendar.com.
Those interested in listening to the webcast should go to the website
at least 15 minutes before the call to register and download any
necessary software. Replays of the call will be available beginning at
noon today on the Internet at www.advanta.com or
www.investorcalendar.com or by dialing 888-203-1112 and referring to
pass code 9344328. The conference call may include a discussion of
non-GAAP financial measures, which are reconciled to the most directly
comparable GAAP financial measures in the Company's press releases or
the statistical supplements available at www.advanta.com in the
"Corporate Info" section.
About Advanta
Advanta is one of the nation's largest credit card issuers
(through Advanta Bank Corp.) in the small business market today.
Advanta's exclusive focus on this market, as well as its size,
experience and commitment to developing meaningful product offerings
and a high level of service tailored to the needs of small businesses,
differentiate the company from other issuers. Founded in 1951, Advanta
has long been an innovator in developing and introducing many of the
marketing techniques that are common in the financial services
industry today. Learn more about Advanta at www.advanta.com.
This Press Release contains forward-looking statements that are
subject to certain risks and uncertainties that could cause actual
results to differ from those projected. 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 and its Quarterly Reports on Form 10-Q.
In addition to the GAAP results provided throughout this document,
the Company has provided managed receivable data and other non-GAAP
financial measurements. Management believes that the non-GAAP
financial measures used to manage the business may provide users
additional useful information. The tables attached to this press
release include a reconciliation of these non-GAAP financial measures
to the most directly comparable GAAP financial measures and a
description of why the non-GAAP financial measures are useful to
investors.
ADVANTA
SEGMENT INCOME STATEMENT
(in thousands)
Three Months Ended
September 30, 2007
- ----------------------------------------------------------------------
Advanta
Business
Cards Other (A) Total
---------- --------- --------
Interest income $ 39,106 $ 10,854 $ 49,960
Interest expense 13,484 12,122 25,606
---------- --------- --------
Net interest income 25,622 (1,268) 24,354
Provision for credit losses 14,724 0 14,724
---------- --------- --------
Net interest income after provision
for credit losses 10,898 (1,268) 9,630
Noninterest revenues:
Interchange income 62,771 0 62,771
Securitization income 22,388 0 22,388
Servicing revenues 24,218 0 24,218
Business credit card rewards (23,525) 0 (23,525)
Other revenues, net 7,243 1,330 8,573
---------- --------- --------
Total noninterest revenues 93,095 1,330 94,425
Operating expenses 68,011 130 68,141
---------- --------- --------
Income (loss) before income taxes 35,982 (68) 35,914
Income tax expense (benefit) 13,889 (26) 13,863
---------- --------- --------
Net income (loss) $ 22,093 $ (42) $ 22,051
========== ========= ========
Three Months Ended
September 30, 2006
- ----------------------------------------------------------------------
Advanta
Business
Cards Other (A) Total
---------- --------- --------
Interest income $ 38,639 $ 7,289 $ 45,928
Interest expense 11,743 7,906 19,649
---------- --------- --------
Net interest income 26,896 (617) 26,279
Provision for credit losses 9,202 0 9,202
---------- --------- --------
Net interest income after provision
for credit losses 17,694 (617) 17,077
Noninterest revenues:
Interchange income 52,835 0 52,835
Securitization income 26,232 0 26,232
Servicing revenues 16,777 0 16,777
Business credit card rewards (17,639) 0 (17,639)
Other revenues, net 3,627 1,365 4,992
---------- --------- --------
Total noninterest revenues 81,832 1,365 83,197
Operating expenses 65,789 143 65,932
---------- --------- --------
Income before income taxes 33,737 605 34,342
Income tax expense 12,989 233 13,222
---------- --------- --------
Net income $ 20,748 $ 372 $ 21,120
========== ========= ========
(A) Other includes venture capital operations as well as investment
and other activities not attributable to the Advanta Business
Cards segment.
ADVANTA
EARNINGS AND COMMON STOCK DATA
(in thousands, except per share data)
Percent Change
Three Months Ended From
----------------------
Sept. June Sept.
30, 30, 30, Prior Prior
2007 2007 2006 Quarter Year
-------------------------------------
Basic income from continuing
operations per common share:
Class A $ 0.51 $ 0.52 $ 0.50 (1.9)% 2.0 %
Class B 0.55 0.56 0.54 (1.8) 1.9
Combined (A) 0.54 0.55 0.53 (1.8) 1.9
Diluted income from continuing
operations per common share:
Class A $ 0.48 $ 0.50 $ 0.47 (4.0)% 2.1 %
Class B 0.51 0.51 0.49 0.0 4.1
Combined (A) 0.50 0.51 0.49 (2.0) 2.0
Basic net income per common
share:
Class A $ 0.51 $ 0.55 $ 0.50 (7.3)% 2.0 %
Class B 0.55 0.59 0.54 (6.8) 1.9
Combined (A) 0.54 0.57 0.53 (5.3) 1.9
Diluted net income per common
share:
Class A $ 0.48 $ 0.52 $ 0.47 (7.7)% 2.1 %
Class B 0.51 0.54 0.49 (5.6) 4.1
Combined (A) 0.50 0.53 0.49 (5.7) 2.0
Return on average common
equity (annualized) 14.70% 16.01% 15.85% (8.2)%(7.3)%
Weighted average common shares
used to compute:
Basic earnings per common
share
Class A 13,343 13,331 13,293 0.1 % 0.4 %
Class B 27,800 28,039 26,831 (0.9) 3.6
------ ------ ------
Total 41,143 41,370 40,124 (0.5) 2.5
Diluted earnings per common
share
Class A 13,343 13,331 13,293 0.1 % 0.4 %
Class B 30,762 31,343 30,251 (1.9) 1.7
------ ------ ------
Total 44,105 44,674 43,544 (1.3) 1.3
Ending shares outstanding:
Class A 14,410 14,410 14,410 0.0 % 0.0 %
Class B 28,296 29,014 28,442 (2.5) (0.5)
------ ------ ------
Total 42,706 43,424 42,852 (1.7) (0.3)
Stock price:
Class A
High $ 30.65 $ 31.47 $ 23.33 (2.6)%31.4 %
Low 20.46 26.09 19.44 (21.6) 5.2
Closing 24.31 28.40 22.65 (14.4) 7.3
Class B
High $ 33.74 $ 34.51 $ 25.50 (2.2)%32.3 %
Low 23.32 28.57 21.28 (18.4) 9.6
Closing 27.42 31.14 24.60 (11.9) 11.5
Cash dividends declared:
Class A $0.1771 $0.1771 $0.1417 0.0 %25.0 %
Class B 0.2125 0.2125 0.1700 0.0 25.0
Book value per combined common
share $ 14.53 $ 14.39 $ 13.43 1.0 % 8.2 %
All share and per share amounts have been adjusted to reflect the
three-for-two stock split effective June 15, 2007.
(A) Combined represents income available to common stockholders
divided by the combined total of Class A and Class B weighted
average common shares outstanding.
ADVANTA
ADVANTA BUSINESS CARDS STATISTICS
($ in thousands)
Percent Change
Three Months Ended From
---------------------------------
Sept. 30, June 30, Sept. 30, Prior Prior
2007 2007 2006 Quarter Year
-------------------------------------------------
New account
originations 74,195 102,937 85,392 (27.9)%(13.1)%
Average number of
active accounts (A) 930,102 894,610 724,705 4.0 28.3
Ending number of
accounts 1,294,273 1,255,557 1,037,161 3.1 24.8
Customer transaction
volume $3,606,907 $3,692,780 $3,094,702 (2.3) 16.6
Securitization
volume increase
excluding
replenishment sales $ 115,000 $ 405,000 $ 125,000 (71.6) (8.0)
Average receivables:
Owned $1,215,485 $1,248,235 $1,114,122 (2.6) 9.1
Securitized 4,889,381 4,581,666 3,388,784 6.7 44.3
--------- --------- ---------
Managed (B) 6,104,866 5,829,901 4,502,906 4.7 35.6
Ending receivables:
Owned $1,233,233 $1,133,198 $1,198,550 8.8 2.9
Securitized 4,980,737 4,856,001 3,449,366 2.6 44.4
--------- --------- ---------
Managed (B) 6,213,970 5,989,199 4,647,916 3.8 33.7
Operating expense
ratio (C) 4.46% 4.71% 5.84% (5.3) (23.6)
CREDIT QUALITY -
OWNED
- --------------------
Receivables 30 days
or more delinquent $ 35,276 $ 27,115 $ 29,081
Receivables 90 days
or more delinquent 15,693 13,466 13,182
As a percentage of
receivables:
Receivables 30
days or more
delinquent 2.86% 2.39% 2.43% 19.7 % 17.7 %
Receivables 90
days or more
delinquent 1.27 1.19 1.10 6.7 15.5
Net principal
charge-offs:
Amount $ 10,708 $ 9,556 $ 9,002
As a percentage of
average
receivables
(annualized) 3.52% 3.06% 3.23% 15.0 9.0
CREDIT QUALITY -
SECURITIZED
- --------------------
Receivables 30 days
or more delinquent $ 160,375 $ 136,468 $ 96,240
Receivables 90 days
or more delinquent 71,951 68,424 43,911
As a percentage of
receivables:
Receivables 30
days or more
delinquent 3.22% 2.81% 2.79% 14.6 % 15.4 %
Receivables 90
days or more
delinquent 1.44 1.41 1.27 2.1 13.4
Net principal
charge-offs:
Amount $ 48,404 $ 41,115 $ 29,399
As a percentage of
average
receivables
(annualized) 3.96% 3.59% 3.47% 10.3 14.1
CREDIT QUALITY -
MANAGED (B)
- --------------------
Receivables 30 days
or more delinquent $ 195,651 $ 163,583 $ 125,321
Receivables 90 days
or more delinquent 87,644 81,890 57,093
As a percentage of
receivables:
Receivables 30
days or more
delinquent 3.15% 2.73% 2.70% 15.4 % 16.7 %
Receivables 90
days or more
delinquent 1.41 1.37 1.23 2.9 14.6
Net principal
charge-offs:
Amount $ 59,112 $ 50,671 $ 38,401
As a percentage of
average
receivables
(annualized) 3.87% 3.48% 3.41% 11.2 13.5
(A) Active accounts are defined as accounts with a balance at month-
end. Active account statistics do not include charged-off
accounts. The statistics reported above are the average number of
active accounts for the periods presented.
(B) Managed statistics are non-GAAP financial measures and represent
the sum of owned (GAAP) business credit card statistics and
securitized business credit card statistics. We believe that
performance on a managed basis provides useful supplemental
information to investors because we retain interests in the
securitized receivables and, therefore, we have a financial
interest in and exposure to the performance of the securitized
receivables.
(C) Operating expense ratio is annualized and calculated as a
percentage of average owned and securitized receivables.
CONTACT: Advanta Corp.
Amy B. Holderer
Vice President, Investor Relations
(215) 444-5335
aholderer@advanta.com
or
David M. Goodman
Director, Communications
(215) 444-5073
dgoodman@advanta.com