ATLANTA, GA – CompuCredit (NasdaqNM: CCRT) reported fourth quarter 2004 net income attributable to common shareholders of $27.0 million, or $0.54 per diluted share, as compared to its fourth quarter 2003 net income attributable to common shareholders of $10.8 million, or $0.23 per diluted share. These 2004 results are net of CompuCredit’s $9 million charitable contribution (which reduced net income by $0.11 per diluted share) during the fourth quarter under the 2004 CompuCredit Corporation Charitable Designation Program.
The net interest margin was 20.2 percent in the fourth quarter of 2004, as compared to 22.1 percent for the fourth quarter of 2003. The adjusted charge-off rate was 8.4 percent in the fourth quarter of 2004, as compared to 7.8 percent for the fourth quarter of 2003. Also, as of December 31, 2004, the 60-plus day delinquency rate was 10.4 percent, as compared to 12.0 percent as of December 31, 2003.
Various references within this press release and the accompanying financial information are to the Company’s managed receivables, which include the Company’s non-securitized receivables, as well as the receivables underlying the Company’s off balance sheet securitization facilities. Financial, operating, and statistical data based on these aggregate managed receivables are key to any evaluation of the Company’s performance in managing (including underwriting, valuing purchased receivables, servicing and collecting) the aggregate of the portfolios of receivables reflected on the Company’s balance sheet and underlying the Company’s securitization facilities. In allocating the Company’s resources and managing the Company’s business, management relies heavily upon financial, operating, and statistical data prepared on a so-called “managed basis.” It is also important to analysts, investors and others that the Company provides selected metrics and data on a managed basis because this allows a comparison of CompuCredit to others within the specialty finance industry. Moreover, the Company’s management, analysts, investors and others believe it is critical that they understand the credit performance of the entire portfolio of the Company’s managed receivables because it reveals information concerning the quality of loan originations and the related credit risks inherent within the securitized portfolios and the Company’s retained interests in its securitization facilities.
Managed receivables data assume that none of the credit card receivables underlying the Company’s off balance sheet securitization facilities were ever transferred to securitization facilities and present the net credit losses and delinquent balances on the receivables as if the Company still owned the receivables. Reconciliation of the managed receivables data to the Company’s GAAP financial statements requires: (1) recognition that a significant majority of the Company’s loans and fees receivable (i.e., all but $145.2 million of GAAP loans and fees receivables at gross face value) had been sold in securitization transactions as of December 31, 2004; (2) a look-through to the Company’s economic share of the receivables that it manages for its two equity-method investees; (3) removal of the Company’s minority interest holders’ interests in the managed receivables underlying the Company’s GAAP consolidated results; and (4) recognition that the de-securitized Fingerhut managed receivables are recorded at a $0.0 basis in the Company’s GAAP financial statements.
Further details regarding CompuCredit’s fourth quarter 2004 financial performance will be discussed during management’s conference call on Thursday, February 17, 2005 at 8:00 a.m., Eastern Time. The media and public are invited to listen to the live webcast of the call, accessible on the Internet at www.CompuCredit.com. A replay of the conference call also will be available on the web site.
CompuCredit is a specialty finance company and marketer of branded credit cards and related financial services. CompuCredit provides these services to consumers who are underserved by traditional financial institutions. Through corporate and affinity contributions focused on the underserved and un-banked communities, CompuCredit also uses its financial resources and volunteer efforts to address the numerous challenges affecting its customers. For more information about CompuCredit, visit www.CompuCredit.com.
