CCRT » Topics » Fees and related income on securitized earning assets.

This excerpt taken from the CCRT 8-K filed May 22, 2009.
Fees and related income on securitized earning assets. Fees and related income on securitized earning assets include (1) securitization gains, (2) income from retained interests in credit card receivables securitized and (3) returned-check, cash advance and other fees associated with our securitized credit card receivables. The increase in total fees and related income on securitized earning assets reflects:
 
 
a securitization gain of $100.4 million related to our U.K. Portfolio, which we acquired and securitized during the second quarter of 2007;
 
 
$211.1 million of income from our retained interest in our securitized lower-tier credit card receivables based on our securitization of these receivables in December 2007—such income being attributable to our December 31, 2007 write-up of these retained interests to their fair market value;
 
 partially offset, however, by:
 
 
$77.8 million of losses on our retained interest in the securitization trust underlying our U.K. Portfolio, which we acquired and securitized during the second quarter of 2007—such losses being principally attributable to our mark-to-market of these retained interests at various reporting period ends throughout 2007;
 
 
a first quarter 2007 reduction in the income from retained interests in credit card receivables securitized attributable to the fourth quarter 2006 implementation of our billing practice change to no longer bill finance charges and fees on credit card accounts that become ninety or more days delinquent;
 
 
a reduction in income from retained interests in credit card receivables securitized associated with the de-securitization of the Fingerhut Trust III receivables in the fourth quarter of 2006; and
 
 
contraction in income from retained interests in and fees associated with our purchased portfolios of securitized credit card receivables due in part to continued reductions in managed receivables levels within their respective securitization trusts in 2007.
 
In our Credit Cards segment discussion below, we provide further details concerning delinquency and credit quality trends, which affect the level of our income from retained interests in credit card receivables securitized and fees on securitized receivables.
 
These excerpts taken from the CCRT 10-K filed Feb 25, 2009.
Fees and related income on securitized earning assets. Fees and related income on securitized earning assets include (1) securitization gains, (2) income from retained interests in credit card receivables securitized and (3) returned-check, cash advance and other fees associated with our securitized credit card receivables.
 
We acquired our U.K. Portfolio of approximately £490 million ($970 million) of gross face amount of credit card receivables in the second quarter of 2007 and immediately securitized the portfolio, generating a $100.4 million securitization gain in that period. Given the current net liquidating status of each of our credit card receivables portfolios within their respective securitization trusts, we have not recognized any securitization gains during 2008, and absent portfolio additions we do not anticipate any securitization gains in 2009.
 
We experienced losses on retained interests in credit card receivables securitized during 2008. The U.K. Portfolio acquisition and its subsequent securitization in the second quarter of 2007 resulted in the large securitization gain noted above, but also generated $48.6 million of losses on our retained interests in that same period. Our other securitized portfolios generated income in the 2007 periods partially offsetting the losses in the U.K. Portfolio. In contrast, the 2008 periods reflect much lower losses on our retained interests in the U.K. Portfolio, but large losses resulting in part from charge offs associated with our lower-tier credit card receivables that we securitized in December 2007. This portfolio generated high levels of charge offs associated with the record number of new accounts originated in the second and third quarters of 2007, which negatively impacted our income from retained interests principally during the first and second quarters of 2008. Our 2008 losses also resulted from (1) our inability to re-price accounts owned by CB&T at market-appropriate pricing (a matter that is the subject of litigation between us and CB&T), (2) the continued effects on fee billings of the fourth quarter 2007 changes made to our billing practices in response to regulatory guidance and comments regarding negative amortization, (3) certain adverse changes to our retained interest valuation assumptions given current negative trends in the U.S. economy; and (4) certain account actions (including reductions in credit lines and account closures) which have negatively affected the fair value of our interest-only strips embedded within our income from retained interests in credit card receivables securitized computations.
 
Fees on securitized receivables increased in 2008 due to our December 2007 securitization of our lower-tier credit card receivables.


 
In the Credit Cards Segment section below, we provide further details concerning delinquency and credit quality trends, which affect the level of our income from retained interests in credit card receivables securitized and fees on securitized receivables.
 
Fees and related
income on securitized earning assets.
Fees and related income on
securitized earning assets include (1) securitization gains,
(2) income from retained interests in credit card receivables securitized
and (3) returned-check, cash advance and other fees associated with our
securitized credit card receivables.

 

We
acquired our U.K. Portfolio of approximately £490 million ($970 million) of
gross face amount of credit card receivables in the second quarter of 2007 and
immediately securitized the portfolio, generating a $100.4 million
securitization gain in that period. Given the current net liquidating status of
each of our credit card receivables portfolios within their respective
securitization trusts, we have not recognized any securitization gains during
2008, and absent portfolio additions we do not anticipate any securitization
gains in 2009.

 

We
experienced losses on retained interests in credit card receivables securitized
during 2008. The U.K. Portfolio acquisition and its subsequent securitization in
the second quarter of 2007 resulted in the large securitization gain noted
above, but also generated $48.6 million of losses on our retained interests in
that same period. Our other securitized portfolios generated income in the 2007
periods partially offsetting the losses in the U.K. Portfolio. In contrast, the
2008 periods reflect much lower losses on our retained interests in the U.K.
Portfolio, but large losses resulting in part from charge offs associated with
our lower-tier credit card receivables that we securitized in December 2007.
This portfolio generated high levels of charge offs associated with the record
number of new accounts originated in the second and third quarters of 2007,
which negatively impacted our income from retained interests principally during
the first and second quarters of 2008. Our 2008 losses also resulted from (1)
our inability to re-price accounts owned by CB&T at market-appropriate
pricing (a matter that is the subject of litigation between us and CB&T),
(2) the continued effects on fee billings of the fourth quarter 2007 changes
made to our billing practices in response to regulatory guidance and comments
regarding negative amortization, (3) certain adverse changes to our retained
interest valuation assumptions given current negative trends in the U.S.
economy; and (4) certain account actions (including reductions in credit lines
and account closures) which have negatively affected the fair value of our
interest-only strips embedded within our income from retained interests in
credit card receivables securitized computations.

 

Fees on
securitized receivables increased in 2008 due to our December 2007
securitization of our lower-tier credit card receivables.






 

In the
Credit Cards Segment
section below, we provide further details concerning delinquency and credit
quality trends, which affect the level of our income from retained interests in
credit card receivables securitized and fees on securitized
receivables.

 

Fees and related income on securitized earning assets. Fees and related income on securitized earning assets include (1) securitization gains, (2) income from retained interests in credit card receivables securitized and (3) returned-check, cash advance and other fees associated with our securitized credit card receivables. The increase in total fees and related income on securitized earning assets reflects:
 
 
a securitization gain of $100.4 million related to our U.K. Portfolio, which we acquired and securitized during the second quarter of 2007;
 
 
$211.1 million of income from our retained interest in our securitized lower-tier credit card receivables based on our securitization of these receivables in December 2007—such income being attributable to our December 31, 2007 write-up of these retained interests to their fair market value;
 
partially offset, however, by:
 
 
$77.8 million of losses on our retained interest in the securitization trust underlying our U.K. Portfolio, which we acquired and securitized during the second quarter of 2007—such losses being principally attributable to our mark-to-market of these retained interests at various reporting period ends throughout 2007;


 
 
a first quarter 2007 reduction in the income from retained interests in credit card receivables securitized attributable to the fourth quarter 2006 implementation of our billing practice change to no longer bill finance charges and fees on credit card accounts that become ninety or more days delinquent;
 
 
a reduction in income from retained interests in credit card receivables securitized associated with the desecuritization of the Fingerhut Trust III receivables in the fourth quarter of 2006; and
 
 
contraction in income from retained interests in and fees associated with our purchased portfolios of securitized credit card receivables due in part to continued reductions in managed receivables levels within their respective securitization trusts in 2007.
 
In our Credit Cards segment discussion below, we provide further details concerning delinquency and credit quality trends, which affect the level of our income from retained interests in credit card receivables securitized and fees on securitized receivables.
 
Fees and related
income on securitized earning assets.
Fees and related income on
securitized earning assets include (1) securitization gains,
(2) income from retained interests in credit card receivables securitized
and (3) returned-check, cash advance and other fees associated with our
securitized credit card receivables. The increase in total fees and related
income on securitized earning assets reflects:

 









 




a
securitization gain of $100.4 million related to our U.K. Portfolio, which
we acquired and securitized during the second quarter of
2007;



 









 




$211.1
million of income from our retained interest in our securitized lower-tier
credit card receivables based on our securitization of these receivables
in December 2007—such income being attributable to our December 31,
2007 write-up of these retained interests to their fair market
value;



 

partially
offset, however, by:

 









 




$77.8
million of losses on our retained interest in the securitization trust
underlying our U.K. Portfolio, which we acquired and securitized during
the second quarter of 2007—such losses being principally attributable to
our mark-to-market of these retained interests at various reporting period
ends throughout 2007;








 









 




a
first quarter 2007 reduction in the income from retained interests in
credit card receivables securitized attributable to the fourth quarter
2006 implementation of our billing practice change to no longer bill
finance charges and fees on credit card accounts that become ninety or
more days delinquent;



 









 




a
reduction in income from retained interests in credit card receivables
securitized associated with the desecuritization of the Fingerhut Trust
III receivables in the fourth quarter of 2006;
and



 









 




contraction
in income from retained interests in and fees associated with our
purchased portfolios of securitized credit card receivables due in part to
continued reductions in managed receivables levels within their respective
securitization trusts in 2007.



 

In our
Credit Cards segment discussion below, we provide further details concerning
delinquency and credit quality trends, which affect the level of our income from
retained interests in credit card receivables securitized and fees on
securitized receivables.

 

This excerpt taken from the CCRT 10-Q filed Nov 5, 2008.
Fees and related income on securitized earning assets. Fees and related income on securitized earning assets include (1) securitization gains, (2) income from retained interests in credit card receivables securitized and (3) returned-check, cash advance and other fees associated with our securitized credit card receivables.
 
In the three months ended September 30, 2007, we acquired our U.K. Portfolio of approximately £490 million ($970 million) of gross face amount of credit card receivables and immediately securitized the portfolio, generating a $100.4 million securitization gain in that period. Given the current net liquidating status of each of our credit card receivables portfolios within their respective securitization trusts, we have not recognized any securitization gains in the three and nine months ended September 30, 2008.
 
We experienced losses on retained interests in credit card receivables securitized in both the three and nine month periods ended September 30, 2008 and for the nine months ended September 30, 2007. The U.K. Portfolio acquisition and its subsequent securitization in the second quarter of 2007 resulted in the large securitization gain noted above, but also generated $48.6 million of losses on our retained interests in that same period. Our other securitized portfolios generated income in the 2007 periods partially offsetting the losses in the U.K. Portfolio. In contrast, the 2008 periods reflect much lower losses on our retained interests in the U.K. Portfolio, but large losses resulting principally from charge offs associated with our lower-tier credit card receivables that we securitized in December 2007. This portfolio generated high levels of charge offs associated with the record number of new accounts originated in the second and third quarters of 2007, which negatively impacted our income from retained interests principally during the first and second quarters of 2008. Our second and third quarter 2008 losses on retained interests in credit card receivables securitized also reflect our inability to re-price accounts owned by CB&T at market-appropriate pricing (a matter that is the subject of litigation between us and CB&T), the continued effects on fee billings of the fourth quarter 2007 changes made to our billing practices in response to regulatory guidance and comments regarding negative amortization and certain adverse changes to our retained interest valuation assumptions given current trends in the U.S. economy.
 
Fees on securitized receivables increased in the 2008 periods due to our December 2007 securitization of our lower-tier credit card receivables.
 
In the Credit Cards Segment section below, we provide further details concerning delinquency and credit quality trends, which affect the level of our income from retained interests in credit card receivables securitized and fees on securitized receivables.
 
This excerpt taken from the CCRT 10-Q filed Aug 5, 2008.

Fees and Related Income on Securitized Earning Assets

Fees and related income on securitized earning assets include (1) securitization gains, (2) income from retained interests in credit card receivables securitized and (3) returned-check, cash-advance and certain other fees associated with our securitized credit card receivables, each of which is detailed (in thousands) in the following table.

 

     For the Three Months
Ended June 30,
    For the Six Months
Ended June 30,
 
     2008     2007     2008     2007  

Securitization gains

   $ —       $ 100,957     $ —       $ 100,957  

Income from retained interests in credit card receivables securitized

     (68,614 )     (33,828 )     (34,394 )     (19,266 )

Fees on securitized receivables

     7,499       4,859       15,770       9,999  
                                

Total fees and related income on securitized earning assets

   $ (61,115 )   $ 71,988     $ (18,624 )   $ 91,690  
                                

We assess fees on credit card accounts underlying our securitized receivables according to the terms of the related cardholder agreements and, except for activation and annual membership fees, we recognize these fees as contributing to income from retained interests in credit card receivables securitized or as fees on securitized receivables when they are charged to the cardholders’ accounts. We accrete activation and annual membership fees associated with our securitized credit card receivables as a contribution to our income from retained interests in credit card receivables securitized on a straight-line basis over the twelve-month cardholder privilege period. We amortize direct receivables origination costs against fees on securitized receivables. See Note 7, “Off-Balance-Sheet Arrangements,” for further discussion on securitization gains and income from retained interests in credit card receivables securitized (including the effects of changes in retained interest valuations).

This excerpt taken from the CCRT 10-Q filed May 7, 2008.

Fees and Related Income on Securitized Earning Assets

Fees and related income on securitized earning assets include (1) securitization gains, (2) income from retained interests in credit card receivables securitized and (3) returned-check, cash advance and other fees associated with our securitized credit card receivables, each of which is detailed (in thousands) in the following table.

 

     For the Three Months
Ended March 31,
     2008    2007

Securitization gains

   $ —      $ —  

Income from retained interests in credit card receivables securitized

     34,220      14,875

Fees on securitized receivables

     8,271      4,827
             

Total fees and related income on securitized earning assets

   $ 42,491    $ 19,702
             

We assess fees on credit card accounts underlying our securitized receivables according to the terms of the related cardholder agreements and, except for activation and annual membership fees, we recognize these fees as contributing to income from retained interests in credit card receivables securitized or as fees on securitized receivables when they are charged to the cardholders’ accounts. We accrete activation and annual membership fees associated with our securitized credit card receivables as a contribution to our income from retained interests in credit card receivables securitized on a straight-line basis over the twelve-month cardholder privilege period. We amortize direct receivables origination costs against fees on securitized receivables. See Note 7, “Off-Balance-Sheet Arrangements,” for further discussion on securitization gains and income from retained interests in credit card receivables securitized (including the effects of changes in retained interest valuations).

These excerpts taken from the CCRT 10-K filed Feb 29, 2008.

Fees and Related Income on Securitized Earning Assets

Fees and related income on securitized earning assets include (1) securitization gains, (2) income from retained interests in credit card receivables securitized and (3) returned-check, cash advance and other fees associated with our securitized credit card receivables, each of which is detailed (in thousands) in the following table.

 

     For the year ended December 31,
     2007    2006    2005

Securitization gains

   $ 106,489    $ 6,193    $ 40,142

Income from retained interests in credit card receivables securitized

     176,040      173,670      73,143

Fees on securitized receivables

     18,957      20,369      14,494
                    

Total fees and related income on securitized earning assets

   $ 301,486    $ 200,232    $ 127,779
                    

We assess fees on credit card accounts underlying our securitized receivables according to the terms of the related cardholder agreements and, except for annual membership fees, we recognize these fees as contributing to income from retained interests in credit card receivables securitized or as fees on securitized receivables when they are charged to the cardholders’ accounts. We accrete annual membership fees associated with our securitized credit card receivables as a contribution to our income from retained interests in credit card receivables securitized on a straight-line basis over the twelve-month cardholder privilege period. We amortize direct receivables origination costs against fees on securitized receivables. See Asset Securitization above for further discussion on securitization gains and income from retained interests in credit card receivables (including the effects of changes in retained interests’ valuations).

Fees and Related Income on Securitized Earning Assets

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Fees and related income on securitized earning assets include (1) securitization gains, (2) income from retained interests in credit card
receivables securitized and (3) returned-check, cash advance and other fees associated with our securitized credit card receivables, each of which is detailed (in thousands) in the following table.

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 





























































































   For the year ended December 31,
   2007  2006  2005

Securitization gains

  $106,489  $6,193  $40,142

Income from retained interests in credit card receivables securitized

   176,040   173,670   73,143

Fees on securitized receivables

   18,957   20,369   14,494
            

Total fees and related income on securitized earning assets

  $301,486  $200,232  $127,779
            

We assess fees on credit card accounts underlying our securitized receivables according to the
terms of the related cardholder agreements and, except for annual membership fees, we recognize these fees as contributing to income from retained interests in credit card receivables securitized or as fees on securitized receivables when they are
charged to the cardholders’ accounts. We accrete annual membership fees associated with our securitized credit card receivables as a contribution to our income from retained interests in credit card receivables securitized on a straight-line
basis over the twelve-month cardholder privilege period. We amortize direct receivables origination costs against fees on securitized receivables. See Asset Securitization above for further discussion on securitization gains and income
from retained interests in credit card receivables (including the effects of changes in retained interests’ valuations).

This excerpt taken from the CCRT 10-Q filed Nov 5, 2007.

Fees and Related Income on Securitized Earning Assets

Fees and related income on securitized earning assets include (1) securitization gains, (2) income from (loss on) retained interests in credit card receivables securitized and (3) returned-check, cash advance and other fees associated with our securitized credit card receivables, each of which is detailed (in thousands) in the following table.

 

     For the three months
ended September 30,
   For the nine months
ended September 30,
     2007    2006    2007    2006

Securitization gains

   $ 2,089    $ 929    $ 103,046    $ 5,333

Income from (Loss on) retained interests in credit card receivables securitized

     21,773      44,734      3,794      125,276

Fees on securitized receivables

     5,780      5,174      14,492      15,837
                           

Total fees and related income on securitized earning assets

   $ 29,642    $ 50,837    $ 121,332    $ 146,446
                           

We assess fees on credit card accounts underlying our securitized receivables according to the terms of the related cardholder agreements and, except for annual membership fees, we recognize these fees as contributing to income from retained interests in credit card receivables securitized or as fees on securitized receivables when they are charged to the cardholders’ accounts. We accrete annual membership fees associated with our securitized credit card receivables as a contribution to our income from retained interests in credit card receivables securitized on a straight-line basis over the twelve-month cardholder privilege period. We amortize direct receivables origination costs against fees on securitized receivables. See Note 7, “Off-Balance-Sheet Arrangements,” for further discussion on securitization gains and income from (loss on) retained interests in credit card receivables securitized (including the effects of changes in retained interest valuations).

This excerpt taken from the CCRT 10-Q filed Aug 1, 2007.

Fees and Related Income on Securitized Earning Assets

Fees and related income on securitized earning assets include (1) securitization gains, (2) (loss on) income from retained interests in credit card receivables securitized and (3) returned-check, cash advance and other fees associated with our securitized credit card receivables, each of which is detailed (in thousands) in the following table.

 

     For the three months
ended June 30,
   For the six months
ended June 30,
     2007     2006    2007     2006

Securitization gains

   $ 100,957     $ 3,541    $ 100,957     $ 4,404

(Loss on) income from retained interests in credit card receivables securitized

     (33,828 )     35,746      (19,266 )     80,542

Fees on securitized receivables

     4,859       5,853      9,999       10,663
                             

Total fees and related income on securitized earning assets

   $ 71,988     $ 45,140    $ 91,690     $ 95,609
                             

We assess fees on credit card accounts underlying our securitized receivables according to the terms of the related cardholder agreements and, except for annual membership fees, we recognize these fees as contributing to income from retained interests in credit card receivables securitized or as fees on securitized receivables when they are charged to the cardholders’ accounts. We accrete annual membership fees associated with our securitized credit card receivables as a contribution to our income from retained interests in credit card receivables securitized on a straight-line basis over the twelve-month cardholder privilege period. We amortize direct receivables origination costs against fees on securitized receivables. See Note 7, “Off-Balance-Sheet Arrangements,” for further discussion on securitization gains and (loss on) income from retained interests in credit card receivables securitized (including the effects of changes in retained interest valuations).

 

9


Table of Contents

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

 

This excerpt taken from the CCRT 10-Q filed May 8, 2007.

Fees and Related Income on Securitized Earning Assets

Fees and related income on securitized earning assets include (1) securitization gains, (2) income from retained interests in credit card receivables securitized and (3) returned-check, cash advance and other fees associated with our securitized credit card receivables, each of which is detailed (in thousands) in the following table.

 

     For the three months
ended March 31,
     2007    2006

Securitization gains

   $ —      $ 863

Income from retained interests in credit card receivables securitized

     14,562      44,796

Fees on securitized receivables

     5,140      4,810
             

Total fees and related income on securitized earning assets

   $ 19,702    $ 50,469
             

We assess fees on credit card accounts underlying our securitized receivables according to the terms of the related cardholder agreements and, except for annual membership fees, we recognize these fees as contributing to income from retained interests in credit card receivables securitized or as fees on securitized receivables when they are charged to the cardholders’ accounts. We accrete annual membership fees associated with our securitized credit card receivables as a contribution to our income from retained interests in credit card receivables securitized on a straight-line basis over the twelve-month cardholder privilege period. We amortize direct receivables origination costs against fees on securitized receivables. See Note 7, “Off-Balance-Sheet Arrangements,” for further discussion on securitization gains and income from retained interests in credit card receivables securitized (including the effects of changes in retained interest valuations).

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki