Charge Offs, Delinquencies Send Advanta Profits Down

Advanta Corp., an issuer of credit cards for small businesses, reported today net income of $18.4 million in the first quarter, down from $21.4 million.

Net income per share for its combined Class A and Class B shares was 45 cents per share, down from 52 cents a share in the first quarter of 2007, but up from 18 cents a share in the fourth quarter of last year.

Spring House, Pa.-based Advanta (Nasdaq: ADVNB) finished the quarter with managed receivables of $6.3 billion while owned receivables totaled almost $1.0 billion. It added 67,000 new customers while transaction volume tallied $3.4 billion, up slightly from last year. Advanta had more than 1.3 million cardholders, down incrementally. Advanta stock was up more than 10 percent in mid-morning trading to $8.34.

The delinquency rate for managed receivables 30 days or more delinquent was 5.3 percent, nearly double from 2.7 percent a year ago; managed receivables 90 days or more delinquent were 2.46 percent, up from 1.21 percent a year ago. Net principal charges offs rose to $102 million, or 6.43 percent of average receivables, compared with $44.9 million or 3.30 percent a year ago.