Fair Isaac 1Q/01

Fair, Isaac and Company, Incorporated announced record results for the second fiscal quarter ended March 31, 2001. Revenues for the quarter grew 11% to $81.1 million from $73.3 million in the second quarter of fiscal 2000.

Net income for the second fiscal quarter reached $10.7 million, or $0.71 per share (diluted), up 49% compared with net income of $7.1 million, or $0.49 per share (diluted), after restructuring charges, for the second quarter of last year.

Revenues for the six-month period ended March 31, 2001 totaled $158.2 million, an increase of 10% compared with $143.4 million for the first half of fiscal 2000. Net income for the six-month period reached $19.5 million, up 61% from $12.1 million, after restructuring charges and non-recurring expenses, for the first half of fiscal 2000.

“We delivered exceptional earnings growth this quarter as a result of productivity gains from our netsourced business model,” said Tom Grudnowski, Fair, Isaac CEO. “In addition to achieving record revenues and profitability, we saw solid demand for our decision technology in our core markets. Since businesses use our solutions to make more profitable decisions, our solutions are in demand even in the current difficult business climate.

“One of the highlights of the second quarter was our successful launch of our myFICO®.com Web site. Working in partnership with Equifax, we made available to consumers — for the first time ever — their FICO®(R) credit risk scores, effectively expanding our premier brand into the consumer market. Demand has been strong, and we are very pleased with the market’s response to this new service,” said Grudnowski.

About Fair, Isaac

Fair, Isaac and Company is a global provider of customer analytics and decision technology. Widely recognized for its pioneering work in credit scoring, Fair, Isaac revolutionized the way lending decisions are made. Today the company helps clients in multiple industries increase the value of customer relationships. Fair, Isaac has made the Forbes list of the top 200 U.S. small companies eight times in the last nine years and is headquartered in San Rafael, California.

For complete details on Fair Isaac’s latest quarter visit CardData ([www.carddata.com][1])

[1]: http://www.carddata.com/

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Trades Card

TD Waterhouse and First USA unveiled the ‘TD Waterhouse e.card VISA’ card this week. The new card enables customers to earn points toward free trades in their TD Waterhouse brokerage account. A free trade is earned for every $2,000 spent on retail purchases. The card also features no annual fee and a 5% rebate reflected on the customers credit card statement for purchases made at select online merchants. The card offers a prime +6.9% go-to APR after a six-month intro rate. TD Waterhouse currently services 4.5 million customer accounts in the United States, Canada, the United Kingdom, Australia, and Hong Kong.

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Disclosures Settlement

MemberWorks and its client Sears, Roebuck & Company, have entered into a voluntary agreement with the state of California to alleviate concerns that some consumers may be confused by disclosures made while marketing membership programs. MemberWorks will begin implementing its new national best marketing practices established earlier this year in an agreement with the Nebraska Attorney General. As part of the agreement, MemberWorks will pay costs of investigation and civil penalties of $1.5 million to be split between California and relevant counties. Sears will pay costs of investigation and civil penalties of $500,000 to be split between the state of California and the counties involved. Under its marketing agreement with Sears, MemberWorks will reimburse Sears the $500,000.

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Decision Code Cracked

Fair, Isaac announced that it has cracked the code for empirically developing decision strategies that maximize profit. Working with several top-tier credit card issuers, FI tested this new science and saw results far beyond those possible with today’s standard optimization technology. FI says the tests it conducted in the area of credit line strategies showed profit increases of 5-35% over 18 months, in an industry that has been applying rich analytics for years. The company believes its new technology will fuel a fundamental shift in how mission-critical business decisions are made across a range of highly competitive industries, including financial services, insurance, retail and telecommunications. Fair, Isaac’s technology marries analytic disciplines such as Bayesian networks to advanced, non-linear optimization techniques. In this hybrid technology, a holistic decision model maps the relationship between hundreds of variables — such as customer data, product preferences and features, and profit drivers — to the range of actions available to the user and the business objective, such as maximizing profit.

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Freddie Card

For the fourth consecutive year, Diners Club was named the top American credit card in the ‘Annual Freddie Awards’ for domestic and international frequent flyer programs. ‘Qantas Telstra VISA Card’ captured top international honors for the first time. VISA’s ‘Daily Double’ promotion with Marriott received an award for the ‘Best Bonus Promotion’ by a hotel. A total of 164,891 ballots were cast this year in the 13th annual poll. In the frequent flyer program category, ‘Continental OnePass’ and ‘SAS EuroBonus’ took the top awards. In the frequent guest programs, ‘Starwood Preferred Guest’ took the top honors in both the American and international sectors. This year’s ‘Freddie’ awards process and promotion was handled by InsideFlyer magazine, MCI WorldCom, Biztravel.com, Netcentives, USATODAY.com and MilePoint.com.

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Digital Insight 1Q/01

Digital Insight Corp. announced record results for the first quarter that ended March 31, 2001.

Revenues for the first quarter were $20.4 million, an increase of 134% from $8.7 million reported in the same period last year and a sequential increase of 12% from the previous quarter.

Pro forma net loss for the quarter, excluding non-cash charges for stock- based compensation, amortization of goodwill and intangibles, and restructuring charges, was $5.6 million, or ($0.19) per share based on 28.9 million common shares outstanding. The consensus forecast reported by First Call was ($.20) per share. During the corresponding quarter in 2000, the pro forma net loss excluding non-cash charges for stock-based compensation, merger-related charges and the cumulative effect of the accounting change as a result of implementing SAB 101 was $7.9 million, or ($0.35) per share based on 22.8 million common shares outstanding.

Net loss for the quarter was $20.0 million, including $2.3 million for the previously announced restructuring charge, or ($0.69) per share, compared to a net loss of $23.4 million, or ($1.03) per share, for the corresponding period in 2000.

Business Highlights

* There were 1,808,000 active Internet banking end-users at the end of the quarter, up 90% from a year earlier and up 17% sequentially from the prior quarter or about 260,000.

* New contracts signed during the quarter added about 1,000,000 potential end-users and 61 new financial institutions with 55 new Internet banking, 38 cash management and 8 lending clients. Average potential end-users for the new Internet banking clients signed increased to about 18,000 from 10,000 in the prior quarter.

* There were 9,141 active cash management users at the end of the quarter, up 32% from the prior quarter. During the quarter, 31 clients went “live” with the cash management service, increasing the total of live cash management clients to 184.

* Bill Payment users increased to 178,000 up 30,000 or up 20% sequentially. Bills paid increased to 2.1 million from 1.7 million in the prior quarter.

* The Company had a total of 788 Internet banking clients with live sites at March 31, 2001, with 74 going live during the quarter. Live Internet banking clients represented 23.2 million potential end-users and an overall penetration of 7.8%. The total number of potential end- users of the 1,066 contracted Internet banking institutions was 27 million.

“We achieved record revenue and robust end-user growth, surpassing 1.8 million active end-users with our Internet banking customers and we showed strong growth with our cash management service,” said John Dorman, chairman and CEO of Digital Insight. “Even in the midst of the current economic slowdown, our financial results illustrate the strength of our business model with the highly recurring nature of our revenue, as we continue to drive towards operating profitability in the fourth quarter of this year.”

Year 2001 Business Outlook

The Company expects second quarter revenues in 2001 to be between $23.0 million and $23.5 million. The pro forma net loss per diluted share in the second quarter is expected to be between ($0.10) and ($0.11), excluding non-cash charges for stock-based compensation, amortization of goodwill and intangibles and restructuring charges.

The Company continues to expect full year 2001 revenues to exceed $100 million. The pro forma net loss per diluted share for the full year is expected to be between ($0.29) and ($0.32), excluding non-cash charges for stock-based compensation, amortization of goodwill and intangibles, and restructuring charges.

Recent Announcements

– AXIS(TM) Wireless Banking. Digital Insight announced that Motorola Employees Credit Union – West is the first Arizona Credit Union to deploy AXIS Wireless Banking, allowing the credit union to offer its more than 55,000 members access to the AXIS Internet Banking service via Palm VII, WAP-enabled cell phones and text-enabled digital phones.

– Celent Rankings. Celent Communications, for the second year in a row, ranked Digital Insight as the number one provider of Internet banking services for financial institutions with up to $2 billion in assets and second for financial institutions between $2 and $10 billion in assets, moving up from fourth place last year. Digital Insight was the only vendor to receive rankings this high in two of the three categories.

– New Members on Board of Directors. Digital Insight added three experienced technology veterans to the Board of Directors. Betsy Atkins, Michael Hallman and Michael Splinter bring with them a wealth of knowledge, experience and vision from past affiliations with Boeing, Intel, Lucent, Microsoft and other public and private companies.

– Cash Management Enhancements. Digital Insight introduced significant enhancements to its AXIS Cash Management solution. The enhancements are designed to make AXIS Cash Management 3.1 easier to use. The enhancement adds feature functionality, improved communication and provides greater flexibility for business customers of financial institutions.

– Hawaii Impulse Signed with Digital Insight. Following an extensive vendor evaluation, Hawaii Impulse Systems selected Digital Insight based on company viability, pricing and product strength. The choice of Digital Insight enables Hawaii Impulse to offer its member credit unions our broad array of Internet-based services, including Internet banking and bill payment, as well as value-added services such as Internet lending.

– Digital Insight Named Dale R. Walker President and COO. With more than 30 years of experience from diverse financial services companies including Ford Motor Credit, AIG, ITT Financial Corporation, Wells Fargo, and Union Bank, Walker comes to Digital Insight with a strong background in running fast-paced financial services operations and with an intimate knowledge of that industry.

About Digital Insight

Digital Insight(TM) Corporation () is the preferred eFinance enabler for visionary financial institutions. Through its comprehensive portfolio of outsourced, Internet-based financial products and services built upon the company’s unique architecture, Digital Insight moves banks and credit unions Beyond Internet Banking(TM) to become the trusted transaction hub for their retail and commercial customers. Exclusively endorsed by the American Bankers Association(R) (ABA), and currently serving more than 1,300 financial institution clients nationwide, Digital Insight provides retail and commercial Internet banking, electronic bill payment and presentment, eCommerce portal technology, wireless channel delivery, advanced targeted marketing, website development and maintenance, as well as online and call center lending services. Each Digital Insight product and service reinforces the brands of its client financial institutions. Digital Insight. Beyond Internet Banking.(TM).

For more details on Digital Insight’s latest quarter visit CardData ([www.carddata.com][1])

[1]: http://www.carddata.com

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PointClickPay

[][1] [![][2]][3] [![][4]][5] Chrysler Financial selects FKNC’s PointClickPay.com [![][6]][7] [![][8]][9] [![][10]][11] ![][12] KY-based Fort Knox National Company announced this week that the company has been selected to provide internet payment services for Chrysler Financial Company through PointClickPay.com, FKNC¹s new internet payment transfer conduit. When customers go to Chrysler Financial¹s website and wish to make a payment to their account, they will click on an icon that will link them to the PointClickPay.com payment site. Customers will then be able to make a payment from their checking or savings account to their Chrysler Financial account. They will have the option to make their payment on any day of the week they choose and can set payments into the future. From the time the customer requests to make a payment, all the way to depositing the money in Chrysler Financial Company¹s account, PointClickPay controls the entire operation. As a transaction application provider, FKNC manages all of the security and certification requirements. Visit CardFlash Online for a video interview of this new service ([www.cardflash.com][13]).

[1]: http://www.cardweb.com/cardwatch/movies/qt/pointclick_t1.mov
[2]: /graphic/players/windowsmedia_sm400.gif
[3]: http://www.cardweb.com/cardwatch/movies/wm/pointclick_t1.wmv
[4]: /graphic/players/real_sm400.gif
[5]: http://www.cardweb.com:8080/movies/cardflash/pointclick_t1.rm
[6]: /graphic/players/quicktime_sm200.gif
[7]: http://www.cardweb.com/cardwatch/movies/qt/pointclick_dc.mov
[8]: /graphic/players/windowsmedia_sm200.gif
[9]: http://www.cardweb.com/cardwatch/movies/wm/pointclick_dc.wmv
[10]: /graphic/players/real_sm200.gif
[11]: http://www.cardweb.com:8080/movies/cardflash/pointclick_dc.rm
[12]: /graphic/pointclickpay/pointclickpay.gif
[13]: http://cardflash.com

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Advance Fee Scams

The Federal Trade Commission announced individual settlements with Victor Stanley Wilcox, Belinda Sweeney, and Lee Sumner Churchill, defendants named in a June 2000 lawsuit for allegedly operating a fraudulent advance fee credit card scam. The FTC alleged that the defendants, operating under the name Credit Approval Service, deceptively marketed “credit cards” for an up-front fee. Under the terms of their settlements, Wilcox and Sweeney are permanently banned from future involvement in the promotion or sale of any credit-related goods or services, and from engaging in or assisting others in telemarketing activities. Churchill is permanently banned from engaging, or assisting others engaged in the marketing and sale of any credit-related goods or services. All of the defendants are prohibited from future violations of the Telemarketing Sales Rule.

In June 2000, the FTC filed charges in federal district court in Galveston, Texas, against Lee Sumner Churchill and Troy Timothy Kisling, and later amended the complaint to include Wilcox and Sweeney. The complaint alleged that the defendants promised consumers that, for a $99 “processing” fee they were guaranteed to receive a Visa card, or for $129 they were guaranteed to receive both a Visa and a MasterCard credit card. Instead, consumers received a packet or kit of information which included a list of banks to which consumers could apply for the cards. The defendants failed to inform consumers that they had to apply on their own for a credit card with these banks. According to the FTC complaint, these practices violate the FTC Act and the Telemarketing Sales Rule (TSR). The court ordered a halt to the business practices of Credit Approval Service and froze the defendants’ assets. Subsequently, the court entered stipulated preliminary injunctions against Wilcox, Sweeney, and Churchill.

In November 2000, a federal district court judge jailed the three defendants, finding them in contempt for violating the June 2000 injunctions. The court found that the defendants, who were operating from an office in St. Paul, Minnesota, had continued to conduct credit card businesses under the names National Research Service, in Sioux Falls, South Dakota; and Consumer Information Service, in Mason City, Iowa, in violation of the preliminary injunctions. The court also found that Churchill had transferred large sums of money, in violation of the preliminary injunction’s asset freeze provision.

Under the terms of the settlements, which required the court’s approval, all of the individual defendants are prohibited from future violations of the TSR. Each settlement contains a $2.8 million monetary judgment against the individual defendants. However, the monetary judgment against Sweeney is suspended based on her sworn financial statement. Defendant Churchill has agreed to pay $125,000 in consumer redress. Upon full payment of the $125,000, the balance of the $2.8 million judgment against him will be suspended.

Finally, the proposed settlements contain various recordkeeping and reporting requirements designed to assist the FTC in monitoring the defendants’ compliance. On April 19, 2001, the complaint was dismissed without prejudice to be filed again as to Troy Timothy Kisling after he avoided service, and his whereabouts became unknown.

The Commission vote to file the three settlements was 5-0, with Commissioner Orson Swindle concurring in part and dissenting in part. In a separate statement, Commissioner Swindle stated that “[f]or the most part, the relief in these settlements is entirely appropriate to address the egregious law violations alleged in the Commission’s complaint.” He dissented to a provision in the settlement that would ban the defendants from soliciting charitable donations. Commissioner Swindle explained that “[s]eeking charitable donations is not sufficiently related to the alleged false claims in this case to justify a permanent ban on the solicitation of charitable contributions. In addition, even if such fencing-in relief were reasonably related to the violations alleged, I believe the public interest would be better served if the Commission imposed less restrictive forms of relief than a ban burdening non-misleading, fully protected speech.”

The individual stipulated final judgments and orders were filed in the U.S. District Court, Southern District of Texas, Galveston Division, on April 18, 2001 and approved by the court on April 20, 2001.

These settlements conclude an investigation conducted with the cooperation of the United States Attorney’s Office in Minnesota, the United States Postal Service in Minnesota, the St. Paul Police Department, the Texas and Minnesota Attorneys General’s office, the Texas Department of Public Service, and the Houston Better Business Bureau.

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Collectible Phone Cards

In the highly competitive long distance communications market, consumers are accustomed to almost every conceivable come-on pitch, usually preceded by promises of low rates and other savings enticements. While in no way forsaking the attractiveness of low rates, Brookneal, Virginia-based ezTel Communications recently introduced what maybe a whole new marketing concept for calling cards in its series of commemorative calling cards recently introduced for The Nationwide Companies in Louisville, Ky.

“The Nationwide Companies Commemorative Card for 2001 features a visual tribute to the City of Louisville,” says ezTel CEO, Patric Boggs. “It’s the best of all worlds. Nationwide was having its Spring Convention in Louisville. They are large customers of ezTel. We took famous scenes of Louisville, including the Kentucky Derby, and produced a beautiful card appealing to both the city and to Nationwide’s coast-to-coast membership.”

Did Boggs’ calling card design make a difference? “Absolutely,” says Boggs with a broad grin. “We sold every card.” In addition, Boggs had a special presentation of the calling card with an engraved inscription honoring Louisville’s Mayor David Armstrong made to city officials during a packed- house ceremony on the stage of Nationwide’s convention floor. “When the calling card tribute to the City of Louisville was presented,” according to Boggs, “the standing ovation, thundering applause and audience response almost tore the roof off. I can tell you unequivocally that the city is happy, Nationwide and its CEO Dick Loehr are happy, and ezTel’s marketing and sales department is ecstatic.”

Boggs is quick to remind all parties that the calling card was more than an unusual, if not unique, visual and collectible keepsake. “The card has intrinsic value. ezTel’s impressively low long distance rate is built in, and we sold the cards for $100 each.” And, the card has one more exceptional feature: It was designed by Mandy Boggs, the CEO’s wife, who also is a high- ranking executive with ezTel.

ezTel, just over one year in existence, is located in Brookneal, Virginia, the birthplace of American patriot and founding father Patrick Henry. The company was essentially hand-fashioned by Boggs to become a leader in the communications industry, enjoying record growth with soaring revenues in this short span of time. Boggs describes his company as having among the lowest long distance and internet access rates, plus one feature he is particularly proud of: “We have the very best customer service in our industry. No exceptions. We provide a professionally trained staff who is on duty always to handle new customers and address customer concerns. We call it our ‘smiling voices’.”

ezTel’s Louisville Commemorative Card, the first in a series, has already won praise from Louisville city officials and Nationwide’s CEO, Dick Loehr. Boggs, fresh on the heels of his Louisville success, provides a hint of things on his drawing board. “With our strategic partners, including The Nationwide Companies, we have major upcoming events in other cities. The concept which was outstandingly successful in Louisville is expected to break all records in first Nashville and Orlando — and possibly other legendary American cities.” Likely consumers will soon see Hank Williams, Patsy Cline and Faith Hill on an ezTel Calling Card, followed by Shamu, Mickey Mouse, Cinderella and other figures closely associated with popular resorts.

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Transmedia 1Q/01

Transmedia Network Inc., the leading provider of transaction-based dining rewards programs, announced its financial results for the second quarter ended March 31, 2001.

For the three-month period ended March 31, 2001, total operating revenues were $13.6 million, an increase of 15.2 percent, compared with $11.8 million in the same quarter a year earlier. Gross sales demonstrated a similar increase, aggregating $49 million for the quarter, compared with $45.2 million in the prior year period. In the quarter, the Company had net income of $457 thousand (or 1 cent per share), compared with net income of $437 thousand (or 1 cent per share) in the same quarter last year.

“We are very pleased that our financial results are starting to reflect the efforts of the past few years and the Company’s continued positive progress towards our stated goals,” said Stephen Lerch, Executive Vice President and Chief Financial Officer. “In addition to now having the universal conversion from the private label Transmedia charge card to the registered card platform behind us, we have fully integrated our e-commerce venture, iDine.com, into our infrastructure and have relaunched a very comprehensive website to support the entire business. Now we are rapidly moving forward with the national rollout of our variable incentive, revenue management product, which, along with our membership growth and present level of activation in our traditional fixed incentive dining programs, is providing us with the kind of leverage that we have always believed existed in our business model.”

Lerch went on to say, “As we start the second half of the year, we are pleased to have just enrolled approximately 1.2 million new airline frequent flyer members. We believe we are in a great position going into the remainder of the year. In a softening economy, members become more savings conscious and restaurants have a need for incremental traffic to fill empty tables. Sound execution of our strategy entails putting the right amount of desirable customer/members into those quality dining establishments that participate in our program in every market in which we operate. The value propositions we offer have a tremendous appeal to both groups, particularly right now.” For the six-month period ended March 31, 2001, net operating revenue increased 9.9 percent to $25.4 million, compared with $23.1 million in the same period last year. Gross dining sales were $93 million year-to-date, compared with $90.6 million in the prior year. Year-to-date, the Company has experienced a net loss of $437 thousand (6 cents per share) compared with a net loss of $1.3 million (13 cents per share) for the same period last year. Included in the previous year-to-date results is an extraordinary charge of $1.6 million (or 12 cents per share) relating to the early extinguishment of the secured non-recourse notes under the 1996 rights-to-receive securitization.

Transmedia Network Inc. presently offers its 5.6 million members a variety of dining savings and rewards programs at more than 7,500 restaurants throughout the United States via means of a registered credit card. The savings are offered through the Company’s dining programs, either branded under the name iDine or provided through private label partnerships, such as airline frequent flyer programs, club memberships or other affinity organizations. iDine members can access personalized, real-time restaurant listings, special dining incentives and more information via the newly re-launched web site, [www.idine.com][1]. Transmedia Network’s common stock trades on the American Stock Exchange under the symbol TMN and the Preferred Shares trade OTC Bulletin Board under the ticker symbol TMNWP.

For more details on Transmedia’s latest quarter visit CardData ([www.carddata.com][2]).

[1]: http://www.idine.com/
[2]: http://www.carddata.com/

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E-LOAN 1Q/01

E-LOAN, Inc. announced financial results for the quarter ended March 31, 2001.

Revenues for the first quarter of 2001 were $16.4 million, up 130 percent from the $7.1 million reported in the first quarter of 2000. Pro forma net loss for the first quarter of 2001 was $3.1 million or $0.06 per share on 53.6 million shares, compared with a pro forma net loss of $11.4 million or $0.27 per share on 41.9 million shares during the first quarter of 2000. These results are $0.04 per share better than the First Call consensus estimate. Sequentially, revenues increased $5.0 million while pro forma net loss was reduced by $3.4 million.

“We are pleased with our performance in the first quarter, in which we enjoyed a tailwind from refinancing activity, but more significantly, saw strong progress across all of our product lines: mortgage, auto, and home equity showing sequential revenue increases of 48 percent, 35 percent, and 224 percent, respectively,” said Chris Larsen, E-LOAN’s Chairman and CEO. “Our performance demonstrates that our business model is working well. For example, $0.67 of each additional revenue dollar went straight to the bottom line. We are also pleased that we marked another major milestone by achieving our acquisition cost goal of 30 percent of revenue, which is a substantial improvement from the 48 percent of revenue we reported last quarter.”

Pro forma results exclude compensation charges related to the company’s stock option plan, amortization of goodwill on the acquisition of CarFinance.com, and amortization of marketing costs related to warrants to purchase the Company’s common stock in connection with a marketing agreement.

Q1’01 Loan Volume

In the first quarter, E-LOAN sold 18,445 loans for a total dollar volume of $891.1 million, an increase in volume of 31 percent over the prior quarter. Of that total, 3,090 were mortgage loans for a total dollar volume of $555.4 million, an increase of 61 percent in total dollar volume over the prior quarter. E-LOAN sold 14,677 auto loans for a total dollar volume of $303.4 million, a decrease of 5 percent in total dollar volume over the prior quarter. Also in the first quarter, E-LOAN sold 678 home equity loans for a total dollar volume of approximately $32.2 million, an increase of 137% in total dollar volume over the prior quarter.

Discussion of Q1’01 Results

E-LOAN’s revenues are primarily from mortgage, auto, and home equity loans that are funded and sold on the secondary market, as well as loans that are brokered or referred out to third party sources.

Of the total revenue, $7.2 million or 44 percent was non-interest mortgage related, $5.3 million or 32 percent was auto related, $3.0 million or 19 percent was interest income on mortgage and home equity loans, $0.6 million or 4 percent was non-interest home equity related and $0.2 million or 1 percent was from other sources, principally credit card and small business loan partnerships.

Operations expenses — the fixed and variable costs of processing loan transactions — totaled $11.5 million or 70 percent of revenue in the first quarter compared to $9.3 million or 82 percent of revenue in the prior quarter.

Of total operations expenses, $5.1 million was non-interest mortgage related expense, $3.1 million was auto-related expense, $2.9 million was interest expense on mortgage and home equity loans, and $0.4 million was non-interest home equity related.

Direct operating margin — defined as revenue minus fixed and variable operations expense — improved for mortgage, auto, and home equity compared to the fourth quarter of 2000. Mortgage direct margin totaled $2.1 million or 30 percent of non-interest mortgage revenue. This represents an improvement to the 20 percent direct margin excluding interest in the prior quarter. Auto direct margin totaled $2.2 million or 41 percent of auto revenue. This represents an improvement to the 23 percent direct margin in the prior quarter. In the first full quarter of operation, home equity direct margin totaled $0.2 million or 38 percent of home equity revenue. Moreover, E-LOAN’s operations converted a $4.1 million improvement in non-interest revenue into a $2.7 million improvement in direct margin, reflecting substantial operations leverage on the margin.

Cash marketing expenses totaled $4.8 million or 30 percent of revenue in the first quarter compared to $5.5 million or 48 percent of revenue for the prior quarter.

Technology expenses were $1.8 million or 11 percent of revenue in the first quarter compared to $1.7 million or 15 percent of revenues in the prior quarter.

General and administrative expenses were $1.5 million or 9 percent of revenue in the first quarter compared to $1.6 million or 14 percent of revenue in the prior quarter.

Total assets at the end of the quarter were $102.1 million, which includes cash and cash equivalents of $24.8 million of which $4.5 million is restricted, loans held for sale of $36.8 million, and goodwill of $18.2 million.

Total liabilities at the end of the quarter were $47.3 million and included $28.8 million in borrowings related to mortgage and home equity loans held for sale. Total stockholders’ equity at the end of the quarter was $54.8 million.

Q1’01 Financial Guidance

Key assumptions supporting our guidance are:

(1) the interest rate environment remains favorable through the remainder of year as anticipated by the Mortgage Bankers Association most recent forecast

(2) the current auto manufacturer cut rate financing will be phased out in the third quarter of 2001

We anticipate our total revenue will increase to approximately $67 million in the year 2001. This represents a 15 percent increase to our earlier revenue guidance.

Based primarily on short term weakness in our auto business, we expect the current quarter to be essentially flat to first quarter 2001. Third quarter revenues will be approximately $16.5 million and fourth quarter revenues will be approximately $18.0 million.

Our expected revenue mix for the year 2001 will be approximately: 46 percent non-interest mortgage; 26 percent auto; 16 percent interest income, 10 percent non-interest home equity; and the remaining 2 percent related to credit card and other revenue.

We anticipate our total pro-forma operating loss will decrease to approximately $8.7 million in the year 2001. This represents a 38 percent improvement to our earlier guidance.

The expected quarterly distribution of pro-forma operating loss in quarters two through four will be approximately: $3.1 million in the second quarter; $2.5 million in the third quarter; and break even in the fourth quarter.

Weighted average shares outstanding should grow moderately throughout 2001 to approximately 54 million shares.

About E-LOAN, Inc.

E-LOAN, Inc., a leading online lending company, offers consumer loans and debt management services online at . E-LOAN has reinvented the consumer loan process by offering a broad choice of products from many lenders for mortgages, home equity loans, auto loans, credit cards and small business loans in a secure online environment, combined with comprehensive personal service from dedicated loan consultants. Through the first quarter of 2001, E-LOAN originated over $4.6 billion in consumer loans. The company’s loan processing centers are located in Dublin, CA and Jacksonville, FL. E-LOAN, Inc. is publicly traded on the Nasdaq system under the symbol EELN.

For complete details on E-LOAN’s latest quarter visit CardData ([www.carddata.com][1])

[1]: http://www.carddata.com

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Nexus 1 Acquirer

NY-based Aplettix yesterday rolled-out ‘Nexus-1 Acquirer’ for financial institutions operating in an “on-us” environment, that is those institutions that both issue payment cards for consumers and acquire merchant transactions. Institutions with a significant percentage of on-us business will now be able to provide their online merchants with the equivalent of a card-present environment and a payment guarantee. The ‘Nexus-1’ platform will also support the future ‘3D-Secure’ protocol from VISA. Aplettix’s ‘Nexus-1 Issuer’ secure online transaction solution allocates disposable credit card numbers for online transactions.

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