EX-99.1 2 a5459177ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Advanta Posts Another Strong Quarter SPRING HOUSE, Pa.--(BUSINESS WIRE)--July 31, 2007--Advanta Corp. (NASDAQ: ADVNB; ADVNA) today reported second quarter 2007 net income from continuing operations of $0.51 per diluted share for Class A and Class B shares combined. This is $0.03 per share higher than the first quarter. It includes a $0.01 per share asset valuation gain associated with the Company's venture capital portfolio. "The powerful dynamics we have described in the business are once again demonstrated by the performance in the quarter," said Dennis Alter, Chairman and CEO. Ending managed receivables grew to $6.0 billion at quarter end with ending owned receivables totaling $1.1 billion. During the quarter, 103,000 new customers were added and transaction volume increased to $3.7 billion. The managed net credit loss rate was 3.48% and the owned net credit loss rate was 3.06%. Conference Call Details Advanta management will hold a conference call with analysts and institutional investors today, July 31 at 9:00 a.m. Eastern Time, to review the second quarter results for 2007. The call can be accessed by dialing 800-289-0468 and referring to pass code 4830400. 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 confirmation code 4830400. 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. 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 June 30, 2007 ---------------------------------------------------------------------- Advanta Business Cards Other (A) Total -------- --------- -------- Interest income $ 38,655 $ 8,903 $ 47,558 Interest expense 13,149 10,484 23,633 -------- --------- -------- Net interest income 25,506 (1,581) 23,925 Provision for credit losses 11,806 0 11,806 -------- --------- -------- Net interest income after provision for credit losses 13,700 (1,581) 12,119 Noninterest revenues: Interchange income 62,130 0 62,130 Securitization income 22,766 0 22,766 Servicing revenues 22,541 0 22,541 Business rewards (21,353) 0 (21,353) Other revenues, net 4,653 2,566 7,219 -------- --------- -------- Total noninterest revenues 90,737 2,566 93,303 Operating expenses 68,613 164 68,777 -------- --------- -------- Income before income taxes 35,824 821 36,645 Income tax expense 13,619 314 13,933 -------- --------- -------- Income from continuing operations 22,205 507 22,712 Gain on discontinuance of mortgage and leasing businesses, net of tax 0 1,022 1,022 -------- --------- -------- Net income $ 22,205 $ 1,529 $ 23,734 ======== ========= ======== Three Months Ended June 30, 2006 ---------------------------------------------------------------------- Advanta Business Cards Other (A) Total -------- --------- -------- Interest income $ 34,450 $ 6,061 $ 40,511 Interest expense 10,400 7,079 17,479 -------- --------- -------- Net interest income 24,050 (1,018) 23,032 Provision for credit losses 10,145 0 10,145 -------- --------- -------- Net interest income after provision for credit losses 13,905 (1,018) 12,887 Noninterest revenues: Interchange income 51,217 0 51,217 Securitization income 29,686 0 29,686 Servicing revenues 15,329 0 15,329 Business rewards (16,295) 0 (16,295) Other revenues, net 6,167 1,208 7,375 -------- --------- -------- Total noninterest revenues 86,104 1,208 87,312 Operating expenses 62,545 191 62,736 -------- --------- -------- Income (loss) before income taxes 37,464 (1) 37,463 Income tax expense 14,423 0 14,423 -------- --------- -------- Income (loss) from continuing operations 23,041 (1) 23,040 Gain on discontinuance of mortgage and leasing businesses, net of tax 0 738 738 -------- --------- -------- Net income $ 23,041 $ 737 $ 23,778 ======== ========= ======== (A) Other includes venture capital operations as well as investment and other activities not attributable to the Advanta Business Cards segment. ADVANTA HIGHLIGHTS (A) (in thousands, except per share data) Three Months Ended Percent Change From ---------------------------- June 30, Mar. 31, June 30, Prior Prior EARNINGS 2007 2007 2006 Quarter Year ---------------------------------------------------------------------- Basic income from continuing operations per common share: Class A $ 0.52 $ 0.49 $ 0.56 6.1% (7.1)% Class B 0.56 0.53 0.58 5.7 (3.4) Combined (B) 0.55 0.52 0.57 5.8 (3.5) Diluted income from continuing operations per common share: Class A 0.50 0.47 0.52 6.4 (3.8) Class B 0.51 0.48 0.52 6.3 (1.9) Combined (B) 0.51 0.48 0.52 6.3 (1.9) Basic net income per common share: Class A 0.55 0.49 0.58 12.2 (5.2) Class B 0.59 0.53 0.60 11.3 (1.7) Combined (B) 0.57 0.52 0.59 9.6 (3.4) Diluted net income per common share: Class A 0.52 0.47 0.54 10.6 (3.7) Class B 0.54 0.48 0.54 12.5 0.0 Combined (B) 0.53 0.48 0.54 10.4 (1.9) Return on average common equity (annualized) 16.01% 14.78% 17.99% 8.3 (11.0) COMMON STOCK DATA ---------------------------------------------------------------------- Weighted average common shares used to compute: Basic earnings per common share Class A 13,331 13,318 13,281 0.1% 0.4 % Class B 28,039 27,734 26,918 1.1 4.2 -------- -------- -------- Total 41,370 41,052 40,199 0.8 2.9 Diluted earnings per common share Class A 13,331 13,318 13,281 0.1 0.4 Class B 31,343 31,172 30,689 0.5 2.1 -------- -------- -------- Total 44,674 44,490 43,970 0.4 1.6 Ending shares outstanding: Class A 14,410 14,410 14,410 0.0 0.0 Class B 29,014 28,968 26,798 0.2 8.3 -------- -------- -------- Total 43,424 43,378 41,208 0.1 5.4 Stock price: Class A High $ 31.47 $ 29.40 $ 25.49 7.0 23.5 Low 26.09 23.96 21.01 8.9 24.2 Closing 28.40 26.72 21.86 6.3 29.9 Class B High 34.51 31.72 27.83 8.8 24.0 Low 28.57 26.31 23.00 8.6 24.2 Closing 31.14 29.23 23.97 6.5 29.9 Cash dividends declared: Class A 0.1771 0.1417 0.1417 25.0 25.0 Class B 0.2125 0.1700 0.1700 25.0 25.0 Book value per common share 14.39 14.11 13.02 2.0 10.5 (A) All share and per share amounts have been adjusted to reflect the three-for-two stock split effective June 15, 2007. (B) Combined represents income available to common stockholders divided by the combined total of Class A and Class B weighted average common shares outstanding. ADVANTA BUSINESS CREDIT CARD STATISTICS ($ in thousands) Three Months Ended Percent Change From --------------------------------- June 30, Mar. 31, June 30, Prior Prior 2007 2007 2006 Quarter Year ----------------------------------------------------- New account originations 102,937 96,781 86,398 6.4 % 19.1 % Average number of active accounts (A) 894,610 848,375 687,912 5.4 30.0 Ending number of accounts 1,255,557 1,191,820 978,517 5.3 28.3 Customer transaction volume $3,692,780 $3,389,065 $3,031,493 9.0 21.8 Securitization volume increase excluding replenishment sales $ 405,000 $ 368,453 $ 275,000 9.9 47.3 Average receivables: Owned $1,248,235 $1,284,900 $ 997,754 (2.9) 25.1 Securitized 4,581,666 4,152,857 3,222,380 10.3 42.2 --------- --------- --------- Managed (B) 5,829,901 5,437,757 4,220,134 7.2 38.1 Ending receivables: Owned $1,133,198 $1,142,006 $1,062,249 (0.8) 6.7 Securitized 4,856,001 4,444,055 3,323,869 9.3 46.1 --------- --------- --------- Managed (B) 5,989,199 5,586,061 4,386,118 7.2 36.5 ---------------------------------------------------------------------- CREDIT QUALITY - OWNED ----------------- Receivables 30 days or more delinquent $ 27,115 $ 28,544 $ 25,482 Receivables 90 days or more delinquent 13,466 12,878 12,560 As a percentage of receivables: Receivables 30 days or more delinquent 2.39% 2.50% 2.40% (4.4)% (0.4)% Receivables 90 days or more delinquent 1.19 1.13 1.18 5.3 0.8 Net principal charge-offs: Amount $ 9,556 $ 9,783 $ 7,520 As a percentage of average receivables (annualized) 3.06% 3.05% 3.01% 0.3 1.7 CREDIT QUALITY - SECURITIZED ----------------- Receivables 30 days or more delinquent $ 136,468 $ 122,426 $ 90,987 Receivables 90 days or more delinquent 68,424 54,633 45,008 As a percentage of receivables: Receivables 30 days or more delinquent 2.81% 2.75% 2.74% 2.2 % 2.6 % Receivables 90 days or more delinquent 1.41 1.23 1.35 14.6 4.4 Net principal charge-offs: Amount $ 41,115 $ 35,082 $ 26,633 As a percentage of average receivables (annualized) 3.59% 3.38% 3.31% 6.2 8.5 CREDIT QUALITY - MANAGED (B) ----------------- Receivables 30 days or more delinquent $ 163,583 $ 150,970 $ 116,469 Receivables 90 days or more delinquent 81,890 67,511 57,568 As a percentage of receivables: Receivables 30 days or more delinquent 2.73% 2.70% 2.66% 1.1 % 2.6 % Receivables 90 days or more delinquent 1.37 1.21 1.31 13.2 4.6 Net principal charge-offs: Amount $ 50,671 $ 44,865 $ 34,153 As a percentage of average receivables (annualized) 3.48% 3.30% 3.24% 5.5 7.4 (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. 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