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Advanta Reports First Quarter 2009 Results
SPRING HOUSE, Pa.--(BUSINESS WIRE)--April 30, 2009--Advanta Corp. (NASDAQ: ADVNB; ADVNA) today reported a net loss of $75.9 million for the first quarter of 2009 or $1.87 per diluted Class B share. These results include $32.3 million pretax, or $0.51 per Class B share after tax, of balance sheet charges and reserve build associated with its retained interests in securitizations and its allowance for principal receivable losses. In addition, operating expenses include $12.9 million of pretax severance and related costs, or $0.20 per Class B share after tax, related to reducing staffing levels associated with actions announced by the Company last quarter and with reductions associated with its offshoring initiatives.
Noteworthy activity and details for the first quarter, compared to the fourth quarter of 2008, include:
- Cash and liquid investments totaled $2.2 billion at the end of the quarter or 47% of owned and securitized receivables.
- Advanta Bank Corp. total risk-based and Tier 1 capital ratios of 21.8% and 19.7%, respectively, continue to be significantly above required ratios to be considered well capitalized.
- Advanta Corp. equity together with subordinated debt for trust preferred securities to managed receivables decreased slightly to 11.3% and to owned receivables decreased to 96.6%.
- A retained interests in securitizations valuation charge of $17.6 million was recorded to increase the discount rates on these assets associated with recent trust performance trends and downgrades.
- The allowance for receivable losses increased to 21.6% of Business Cards owned receivables at quarter end, after building reserves for credit losses on principal receivables by $14.6 million.
- Business Cards ending managed receivables decreased to $4.7 billion with owned receivables increasing to $549 million.
- Business Cards managed net interest yield declined to 11.19% and owned net interest yield declined to 1.62%.
- Customer transaction volume declined to $2.5 billion.
- Business Cards managed net credit loss rate rose to 15.9% and the owned net credit loss rate rose to 20.1%. The managed and owned 12 month lagged net credit loss rates were 12.2% and 10.7%, respectively.
The following information was filed by Advanta Corp on Thursday, April 30, 2009 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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