EX-12 3 w96991exv12.txt COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES . . . EXHIBIT 12 ADVANTA CORP. AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
THREE MONTHS ENDED ($ IN THOUSANDS) MARCH 31, ------------------------------------------------------------------ 2004 2003 ------------------------------------------------------------------ Net income $ 9,439 $ 5,905 Income tax expense 6,163 3,696 ------------------------------------------------------------------ Earnings before income taxes 15,602 9,601 Fixed charges: Interest on debt and deposits 9,242 11,271 Interest on subordinated debt payable to preferred securities trust(2) 2,289 0 One-third of all rentals 634 640 Preferred stock dividend of consolidated subsidiary trust(2) 0 2,248 ------------------------------------------------------------------ Total fixed charges 12,165 14,159 ------------------------------------------------------------------ Earnings before income taxes and fixed charges 27,767 23,760 Ratio of earnings to fixed charges(1) 2.28 x 1.68 x ------------------------------------------------------------------
(1) For purposes of computing these ratios, "earnings" represent income before income taxes plus fixed charges. "Fixed charges" consist of interest expense, one-third (the portion deemed representative of the interest factor) of rental expense on operating leases, and preferred stock dividends of subsidiary trust. (2) Our adoption of FIN 46, as revised, resulted in the deconsolidation of the subsidiary trust that issued our trust preferred securities effective December 31, 2003. As a result of the deconsolidation of that trust, the consolidated income statement includes interest expense on subordinated debt payable to preferred securities trust beginning January 1, 2004, as compared to periods through December 31, 2003 that included payments on the trust preferred securities classified as minority interest in income of consolidated subsidiary.