EELN E-Loan (MM)

- Q2 2005 Total Revenue of $40 Million and EPS of $0.01 Per Share; PLEASANTON, Calif., Aug. 9 /PRNewswire-FirstCall/ -- E-LOAN, Inc. (NASDAQ:EELN), an online consumer direct lender, today reported results for the second quarter ended June 30, 2005. Overview of Results -- Net income for the second quarter of 2005 was $400 Thousand or $0.01 per share on 68 million diluted shares. -- Total revenue of $40 million, up 19% from Q2 2004. -- Diversified revenue -- comprising total revenue, excluding prime refinance mortgage -- was $29 million, up 24% from Q2 2004, which accounted for 73% of E-LOAN's total revenue in Q2 2005. -- Home Equity revenue was $14 million, up 45% from Q2 2004. Home equity sold loan volume and revenue per loan increased 5% and 48%, respectively, in the quarter compared to Q2 2004. -- Diversified mortgage revenue -- comprising purchase and non-prime mortgage -- was $10.5 million, up 9% from the second quarter of 2004. Diversified mortgage revenue per loan decreased 1% in the quarter compared to Q2 2004, while the sold loan volume increased by 8% compared to Q2 2004. -- Refinance mortgage revenue was $10.7 million, up 9% from Q2 2004. Refinance mortgage sold loan volume decreased 11% in the quarter compared to Q2 2004, offset by a 22% increase in revenue per loan compared to Q2 2004. -- Direct margin -- defined as revenue minus variable and fixed operations expense -- was $20.6 million, up 20% from Q2 2004. -- Marketing expense totaled $14.6 million, up 16% from Q2 2004. -- Cash balance of $63 million. Merger Agreement On August 3, 2005, Popular, Inc. (NASDAQ:BPOP), the leading financial institution in Puerto Rico, and E-LOAN, Inc. announced the signing of a definitive merger agreement under which Popular, Inc. will acquire 100 percent of the issued and outstanding shares of common stock and common stock equivalents of E-LOAN, Inc. for $4.25 per share in cash, or approximately $300 million. The transaction, which was unanimously approved by the boards of directors of both companies, is subject to E-LOAN, Inc. shareholder approval and is expected to close in the fourth quarter of 2005. Operating and Financial Tables Revenues E-LOAN's revenues are primarily from the gain on sale of first mortgage, home equity and auto loans that we originate, fund and then sell. We also earn interest income on mortgage and home equity loans from the time of funding through the time of sale. Components of Revenue Q2 2005 Q1 2005 Q2 2004 ($ in thousands) % of % of % of $ Total Revenue $ Total Revenue $ Total Revenue Refi Mortgage $9,244 23% $9,896 26% $8,430 25% Interest Income on Refi Mortgage 1,461 4% 1,546 4% 1,392 4% Diversified Mortgage (1) 8,865 22% 6,890 18% 8,659 26% Interest Income on Diversified Mortgage 1,663 4% 1,190 3% 1,036 3% Home Equity 11,825 30% 10,247 27% 8,738 26% Interest Income on Home Equity 2,255 6% 1,389 4% 944 3% Auto (2) 2,474 6% 5,494 14% 2,921 9% Closing Services (3) 1,804 5% 1,438 4% 985 3% Other (4) 285 1% 294 1% 295 1% Total Revenue $39,876 100% $38,385 100% $33,399 100% Total Diversified Revenue (5) $29,171 73% $26,943 70% $23,577 71% (1) Diversified Mortgage comprises purchase and non-prime mortgage loans. (2) Auto Revenues include interest income from the retained interest asset. (3) Closing Services Revenues are from Escrow Closing Services, Inc., a wholly-owned subsidiary, which provides mortgage closing and appraisal services. (4) Other Revenue comes from credit monitoring services and credit card, personal loan and student loan referrals. (5) Diversified Revenue is comprised of total revenues excluding prime refinance mortgage and its related interest income. Loan Volume The following table provides a comparison of unit and volume statistics: Q2 2005 Q1 2005 Q2 2004 $ Loans $ Loans $ Loans Millions Millions Millions Sold Loans Refinance Mortgage $443 1,879 $475 2,031 $496 2,105 Diversified Mortgage 437 2,238 335 1,711 403 2,049 Home Equity 348 6,550 336 6,274 332 6,674 Auto 112 7,472 129 8,145 162 9,606 Total Sold Loans $1,340 18,139 $1,274 18,161 $1,393 20,434 Closed Loans Refinance Mortgage $445 1,897 $476 2,034 $460 1,951 Diversified Mortgage 438 2,239 341 1,745 387 1,967 Home Equity 346 6,532 337 6,286 328 6,590 Auto 117 7,852 128 8,145 161 9,568 Total Closed Loans $1,346 18,520 $1,282 18,210 $1,336 20,076 Direct Margin Direct margin is defined as revenue minus variable and fixed operations expense. The following table provides detail of direct margin classified by revenue-related categories, both in dollars and expressed as a percentage of its related revenue. Direct Margins Q2 2005 Q1 2005 Q2 2004 ($ in thousands) % of % of % of $ Total Revenue $ Total Revenue $ Total Revenue Mortgage $10,432 58% $9,860 59% $10,212 60% Mortgage Interest Margin 1,109 35% 925 34% 1,424 59% Home Equity 6,978 59% 5,274 51% 3,491 40% Home Equity Interest Margin 1,064 47% 604 43% 509 54% Auto 449 18% 3,494 64% 1,085 37% Closing Services 323 18% 339 24% 119 12% Other 285 100% 294 100% 295 100% Total $20,640 $20,790 $17,135 Conversion Statistics We release conversion rates on a one-quarter lagged basis because of the lag time that exists between the time an application is submitted and the time the associated loan actually funds. Our conversion rates are based on a static pool analysis calculated by dividing the number of qualified applications received in the quarter by the number of funded loans that resulted from those applications. Conversion % Q2 2004 Q3 2004 Q4 2004 Q1 2005 Mortgage Pre-Approval 7% 7% 7% 5% Purchase 13% 14% 15% 12% Refinance 19% 21% 21% 20% Total Mortgage 13% 14% 15% 13% Home Equity 35% 33% 32% 33% Auto 27% 27% 23% 20% Conference Call and Webcast Mark Lefanowicz, Chief Executive Officer and President, will host a conference call to discuss the company's second quarter 2005 financial results today, August 9 at 7:30 a.m. (PDT). Please dial 630-395-0018 at 7:25 a.m. (PDT) and reference pass code "E-LOAN." A replay of the call will be available after 9:00 a.m. (PDT) on August 9, 2005 until 11:59 p.m. (PDT), August 16, 2005. The replay may be accessed by dialing 203-369-1279. A live webcast and replay of the conference call will be available via the investor relations section of the company's website at http://www.eloan.com/. This news release contains forward-looking statements based on current expectations that involve risks and uncertainties. E-LOAN's actual results may differ from the results described in the forward-looking statements. Factors that could cause actual results to differ include, but are not limited to, general conditions in the mortgage and auto industries, interest rate fluctuations, and the impact of competitive products. These and other risk factors are detailed in E-LOAN's periodic filings with the Securities and Exchange Commission. About E-LOAN E-LOAN(R) is an online consumer direct lender dedicated to providing borrowers with a Radically Simple(SM) way to obtain mortgage, auto and home equity loans. Since its launch in 1997, E-LOAN has drawn upon its pro consumer values to improve the lending experience in revolutionary ways. By eliminating the traditional incentive structure to charge consumers higher rates, giving consumers free access to credit scores and getting rid of lender fees, E-LOAN is providing a uniquely open, fair and honest loan process. Protecting consumers' financial privacy is also a paramount concern, prompting E-LOAN to implement industry leading privacy practices and advocate strong consumer financial privacy protection laws. Consumers have recognized E- LOAN's trustworthiness and respect for customers. An independent study conducted by TRUSTe and The Ponemon Institute ranked E-LOAN as one of the top 20 most trusted companies for privacy in America. E-LOAN was the highest ranked online financial services company to make the top 20. In another independent study by The Customer Respect Group, E-LOAN received the overall highest rating in the Online Customer Respect Study of North America's largest financial services firms. From inception through June 2005, E-LOAN has originated and sold over $26.7 billion in consumer loans. E-LOAN is publicly traded on the Nasdaq National Market under the symbol EELN. To find out more about E-LOAN and its products and services, logon to http://www.eloan.com/ or call 1-888-E-LOAN-22. Press & Investor Contact: Tiffany Fox 925-847-6314 E-LOAN, Inc. Statement of Operations (in thousands, except per share amounts) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2005 2004 2005 2004 Revenues $39,876 $33,399 $78,261 $64,030 Operating Expenses Operations 19,237 16,264 36,832 31,206 Sales & marketing 14,558 12,506 27,967 23,638 Technology 2,320 2,091 4,795 4,257 General & administration 3,361 2,358 6,027 5,874 Total operating expenses 39,476 33,219 75,621 64,975 Income from operations 400 180 2,640 (945) Other income, net 22 10 34 25 Income before taxes 422 190 2,674 (920) Income taxes (13) -- (46) -- Net income/(loss) $409 $190 $2,628 $(920) Net income/(loss) per share: Income per share Basic $0.01 $0.00 $0.04 $(0.01) Diluted $0.01 $0.00 $0.04 $(0.01) Weighted average shares Basic 65,407 62,915 65,250 62,620 Diluted 68,017 65,784 68,158 62,620 E-LOAN, Inc. Consolidated Balance Sheet (in thousands) June 30, December 31, 2005 2004 ASSETS Cash and cash equivalents ($2,350 restricted cash) $62,517 $55,066 Loans held-for-sale 33,236 17,505 Accounts receivable, prepaids and other current assets 26,346 19,014 Fixed assets, net 15,121 15,860 Retained interests in auto loans - trading 634 13,954 Total assets $137,854 $121,399 LIABILITIES AND STOCKHOLDERS' EQUITY Warehouse and other lines payable $25,057 $14,735 Accounts payable, accrued expenses and other liabilities 22,615 20,476 Total liabilities 47,672 35,211 Stockholders' equity: Common stock 66 64 Additional paid-in-capital 270,258 268,894 Accumulated deficit (180,142) (182,770) Total stockholders' equity 90,182 86,188 Total liabilities and stockholders' equity $137,854 $121,399 DATASOURCE: E-LOAN, Inc. CONTACT: Tiffany Fox of E-LOAN, Inc., +1-925-847-6314, or Web site: http://www.eloan.com/

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