Advanta Corp., which has been whittling down its business lines to focus exclusively on issuing commercial credit cards, on Tuesday reported a second-quarter net loss of $7.2 million, or 28 cents a share, including discontinued operations.
Operating earnings for the Spring House, Pa., company were 32 cents a share, up from 29 cents in the first quarter.
Advanta characterized the earnings as "essentially break-even" and said it had used the $1 billion of proceeds from the sale of its mortgage business in February to reduce its debt and deposits by $902 million, including substantially all of its outstanding institutional debt and a considerable amount of its retail notes.
Advanta Business Cards, which is now the center of the company's operations, reported second-quarter net income of $8.8 million, representing an after-tax return on average managed receivables of 1.9% on an annualized basis. Managed loans stood at $1.9 billion in outstandings at June 30, up from $1.78 billion at March 31.
"Our small-business credit card customers continue to provide earnings momentum to us," said Dennis Alter, Advanta's chairman and chief executive officer. "Our goal is to prudently grow our customer base through continuing product differentiation and market segmentation of our prospect base of almost 40 million small businesses."