<PAGE>

                                    Form 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

|X|   Quarterly report pursuant to section 13 or 15(d) of the Securities
      Exchange Act of 1934 for the quarterly period ended September 30, 2002 or

| |   Transition report pursuant to section 13 or 15(d) of the Securities
      Exchange Act of 1934 for the transition period from ______ to _______

Commission File Number 0-14120

                                  Advanta Corp.
             (Exact name of registrant as specified in its charter)

                  Delaware                                23-1462070
       (State or other jurisdiction of                 (I.R.S. Employer
       incorporation or organization)                 Identification No.)

          Welsh and McKean Roads, P.O. Box 844, Spring House, PA 19477
               (Address of Principal Executive Offices) (Zip Code)

                                 (215) 657-4000
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes |X| No | |

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

Yes |X| No | |

      Applicable only to issuers involved in bankruptcy proceedings during the
      preceding five years:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

Yes | | No | |

      Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                Class A                         Outstanding at November 6, 2002
     Common Stock, $.01 par value                      10,041,017 shares

                Class B                         Outstanding at November 6, 2002
     Common Stock, $.01 par value                      17,865,344 shares

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           PAGE
<S>                                                                        <C>
PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements

          Consolidated Balance Sheets (Unaudited)                            3
          Consolidated Income Statements (Unaudited)                         4
          Consolidated Statements of Changes in
            Stockholders' Equity (Unaudited)                               5-6
          Consolidated Statements of Cash Flows (Unaudited)                  7
          Notes to Consolidated Financial Statements (Unaudited)             8

Item 2.   Management's Discussion and Analysis of Financial
            Condition and Results of Operations                             23

Item 3.   Quantitative and Qualitative Disclosures
            About Market Risk                                               43

Item 4.   Controls and Procedures                                           43

PART II - OTHER INFORMATION

Item 1.   Legal Proceedings                                                 44

Item 6.   Exhibits and Reports on Form 8-K                                  46
</TABLE>


                                       2
<PAGE>

ITEM 1. FINANCIAL STATEMENTS

                         ADVANTA CORP. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (UNAUDITED)

<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT SHARE DATA)                         SEPTEMBER 30,    DECEMBER 31,
                                                              2002             2001
                                                          -------------    ------------
<S>                                                       <C>              <C>
ASSETS
Cash                                                      $    41,785      $    20,952
Federal funds sold                                            224,146          229,889
Restricted interest-bearing deposits                           80,750          113,956
Investments available for sale                                175,976          246,679
Receivables, net:
  Held for sale                                               218,128          202,612
  Other                                                       231,934          220,795
                                                          -----------      -----------
Total receivables, net                                        450,062          423,407
Retained interests in securitizations                         105,158           88,658
Amounts due from securitizations                               83,454           80,325
Premises and equipment, net                                    24,140           25,722
Other assets                                                  285,414          264,689
Net assets of discontinued operations                         141,941          142,403
                                                          -----------      -----------
TOTAL ASSETS                                              $ 1,612,826      $ 1,636,680
                                                          -----------      -----------
LIABILITIES
Deposits:
  Noninterest-bearing                                     $     5,485      $     6,500
  Interest-bearing                                            657,013          630,415
                                                          -----------      -----------
Total deposits                                                662,498          636,915
Debt                                                          303,707          323,582
Other borrowings                                                    0           32,317
Other liabilities                                             183,831          177,567
                                                          -----------      -----------
TOTAL LIABILITIES                                           1,150,036        1,170,381
                                                          -----------      -----------
Commitments and contingencies

Company-obligated mandatorily redeemable preferred
 securities of subsidiary trust holding solely
 subordinated debentures of Advanta Corp.                     100,000          100,000

STOCKHOLDERS' EQUITY
Class A preferred stock, $1,000 par value:
 authorized, issued and outstanding - 1,010
 shares in 2002 and 2001                                        1,010            1,010
Class A voting common stock, $.01 par value:
 authorized - 200,000,000 shares; issued - 10,041,017
 shares in 2002 and 2001                                          100              100
Class B non-voting common stock, $.01 par value:
 authorized - 200,000,000 shares; issued - 20,424,849
 shares in 2002 and 17,939,639 shares in 2001                     204              179
Additional paid-in capital                                    244,563          223,362
Deferred compensation                                         (18,820)             (64)
Unearned ESOP shares                                          (10,942)         (11,295)
Accumulated other comprehensive income                            273            1,259
Retained earnings                                             182,391          179,370
Less: Treasury stock at cost, 2,226,253 Class B
  common shares in 2002 and 1,348,079 Class B
  common shares in 2001                                       (35,989)         (27,622)
                                                          -----------      -----------
TOTAL STOCKHOLDERS' EQUITY                                    362,790          366,299
                                                          -----------      -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $ 1,612,826      $ 1,636,680
                                                          -----------      -----------
</TABLE>

See Notes to Consolidated Financial Statements


                                       3
<PAGE>

                         ADVANTA CORP. AND SUBSIDIARIES
                   CONSOLIDATED INCOME STATEMENTS (UNAUDITED)

<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA)               THREE MONTHS ENDED           NINE MONTHS ENDED
                                                       SEPTEMBER 30,               SEPTEMBER 30,
                                                  ----------------------      ------------------------
                                                    2002          2001          2002            2001
                                                  --------      --------      ---------      ---------
<S>                                               <C>           <C>           <C>            <C>
Interest income:
 Receivables                                      $ 18,770      $ 19,901      $  60,253      $  57,663
 Investments                                         2,520         6,487          8,366         35,565
 Other interest income                               2,629         2,660          7,941          7,424
                                                  --------      --------      ---------      ---------
Total interest income                               23,919        29,048         76,560        100,652
Interest expense:
 Deposits                                            5,676         8,655         17,964         36,248
 Debt                                                5,376         8,264         18,508         30,231
 Other borrowings                                        0             0             59            835
                                                  --------      --------      ---------      ---------
Total interest expense                              11,052        16,919         36,531         67,314
                                                  --------      --------      ---------      ---------
Net interest income                                 12,867        12,129         40,029         33,338
Provision for credit losses                          9,421         9,528         31,462         25,852
                                                  --------      --------      ---------      ---------
NET INTEREST INCOME AFTER PROVISION FOR
 CREDIT LOSSES                                       3,446         2,601          8,567          7,486
NONINTEREST REVENUES:
 Securitization income                              29,168        28,701         88,838         74,311
 Interchange income                                 24,237        20,932         67,167         59,140
 Servicing revenues                                  8,334         7,726         24,419         21,287
 Other revenues, net                                (3,718)      (10,728)        (5,771)       (37,042)
                                                  --------      --------      ---------      ---------
TOTAL NONINTEREST REVENUES                          58,021        46,631        174,653        117,696
                                                  --------      --------      ---------      ---------
EXPENSES:
 Operating expenses                                 48,977        44,742        147,822        131,911
 Minority interest in income of consolidated
  subsidiary                                         2,220         2,220          6,660          6,660
 Unusual charges                                         0             0              0         41,750
                                                  --------      --------      ---------      ---------
TOTAL EXPENSES                                      51,197        46,962        154,482        180,321
                                                  --------      --------      ---------      ---------
Income (loss) before income taxes                   10,270         2,270         28,738        (55,139)
Income tax expense (benefit)                         3,954             0         11,064        (16,880)
                                                  --------      --------      ---------      ---------
INCOME (LOSS) FROM CONTINUING OPERATIONS             6,316         2,270         17,674        (38,259)
Loss from discontinued operations, net of tax            0             0              0         (8,438)
Loss, net, on discontinuance of
 mortgage and leasing businesses, net of tax             0       (44,000)        (8,610)       (31,639)
                                                  --------      --------      ---------      ---------
NET INCOME (LOSS)                                 $  6,316      $(41,730)     $   9,064      $ (78,336)
                                                  --------      --------      ---------      ---------
Basic income (loss) from continuing
 operations per common share
  Class A                                         $   0.24      $   0.08      $    0.65      $   (1.53)
  Class B                                             0.26          0.09           0.72          (1.48)
  Combined                                            0.25          0.09           0.69          (1.50)
                                                  --------      --------      ---------      ---------
Diluted income (loss) from continuing
 operations per common share
  Class A                                         $   0.23      $   0.08      $    0.63      $   (1.53)
  Class B                                             0.25          0.09           0.69          (1.48)
  Combined                                            0.25          0.09           0.67          (1.50)
                                                  --------      --------      ---------      ---------
Basic net income (loss) per common share
  Class A                                         $   0.24      $  (1.62)     $    0.31      $   (3.09)
  Class B                                             0.26         (1.60)          0.38          (3.04)
  Combined                                            0.25         (1.61)          0.35          (3.06)
                                                  --------      --------      ---------      ---------
Diluted net income (loss) per common share
  Class A                                         $   0.23      $  (1.60)     $    0.30      $   (3.09)
  Class B                                             0.25         (1.59)          0.36          (3.04)
  Combined                                            0.25         (1.59)          0.34          (3.06)
                                                  --------      --------      ---------      ---------
Basic weighted average common shares
 outstanding
  Class A                                            9,162         9,116          9,146          9,094
  Class B                                           15,876        16,820         16,117         16,590
  Combined                                          25,038        25,936         25,263         25,684
                                                  --------      --------      ---------      ---------
Diluted weighted average common shares
 outstanding
  Class A                                            9,163         9,120          9,151          9,094
  Class B                                           16,501        17,121         17,038         16,590
  Combined                                          25,664        26,241         26,189         25,684
                                                  --------      --------      ---------      ---------
</TABLE>

See Notes to Consolidated Financial Statements


                                       4
<PAGE>

ADVANTA CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
($ IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                      CLASS A          CLASS A          CLASS B        ADDITIONAL
                                                COMPREHENSIVE        PREFERRED          COMMON          COMMON           PAID-IN
                                                 INCOME (LOSS)         STOCK            STOCK            STOCK           CAPITAL
                                                --------------       ---------         -------          -------        ----------
<S>                                             <C>                  <C>               <C>              <C>            <C>
BALANCE AT DECEMBER 31, 2000                                           $1,010            $100             $176           $220,371
                                                                       ------            ----             ----           --------
Net income (loss)                                  $(70,533)
Other comprehensive income (loss):
 Change in unrealized
  appreciation (depreciation)
  of investments, net of tax
  benefit (expense) of ($1,379)                       2,561
                                                   --------
Comprehensive income (loss)                        $(67,972)
                                                   ========
Preferred and common cash
 dividends declared
Exercise of stock options                                                                                    4              3,476
Stock option exchange for stock
 and restricted stock tender offer                                                                                            934
Modification of stock options                                                                                               1,966
Issuance of restricted stock                                                                                 1                720
Amortization of deferred
 compensation
Retirement of restricted stock                                                                              (2)            (4,118)
Stock buyback
ESOP shares committed to be released                                                                                           13
                                                                       ------            ----             ----           --------
BALANCE AT DECEMBER 31, 2001                                           $1,010            $100             $179           $223,362
                                                                       ------            ----             ----           --------
Net income (loss)                                  $  9,064
Other comprehensive income (loss):
 Change in unrealized
  appreciation (depreciation)
  of investments, net of tax
  benefit (expense) of $531                            (986)
                                                   ---------
Comprehensive income (loss)                        $  8,078
                                                   ========
Preferred and common cash
 dividends declared
Exercise of stock options                                                                                    1                350
Stock option exchange program
 stock distribution
Issuance of restricted stock                                                                                26             21,171
Amortization of deferred
 compensation
Retirement of restricted stock                                                                              (2)              (276)
Stock buyback
ESOP shares committed to be released                                                                                          (44)
                                                                       ------            ----             ----           --------
BALANCE AT SEPTEMBER 30, 2002                                          $1,010            $100             $204           $244,563
                                                                       ------            ----             ----           --------
</TABLE>

See Notes to Consolidated Financial Statements


                                       5
<PAGE>

($ IN THOUSANDS)

<TABLE>
<CAPTION>
                                             DEFERRED         ACCUMULATED
                                           COMPENSATION          OTHER                                                   TOTAL
                                            & UNEARNED       COMPREHENSIVE        RETAINED            TREASURY       STOCKHOLDERS'
                                            ESOP SHARES      INCOME (LOSS)        EARNINGS              STOCK            EQUITY
                                           ------------      -------------        --------            --------       -------------
<S>                                        <C>               <C>                  <C>                 <C>            <C>
BALANCE AT DECEMBER 31, 2000                  $(19,050)         $(1,302)          $257,562            $(17,965)        $440,902
                                              --------          -------           --------            --------         --------
Net income (loss)                                                                  (70,533)                             (70,533)
Other comprehensive income (loss):
 Change in unrealized
  appreciation (depreciation)
  of investments, net of tax
  benefit (expense) of ($1,379)                                   2,561                                                   2,561
Comprehensive income (loss)
Preferred and common cash
 dividends declared                                                                 (7,659)                              (7,659)
Exercise of stock options                                                                                                 3,480
Stock option exchange for stock
 and restricted stock tender offer                 618                                                  (2,152)            (600)
Modification of stock options                                                                                             1,966
Issuance of restricted stock                      (721)                                                                       0
Amortization of deferred
 compensation                                    3,256                                                                    3,256
Retirement of restricted stock                   4,120                                                                        0
Stock buyback                                                                                           (7,505)          (7,505)
ESOP shares committed to be released               418                                                                      431
                                              --------          -------           --------            --------         --------
BALANCE AT DECEMBER 31, 2001                  $(11,359)         $ 1,259           $179,370            $(27,622)        $366,299
                                              --------          -------           --------            --------         --------
Net income (loss)                                                                    9,064                                9,064
Other comprehensive income (loss):
 Change in unrealized
  appreciation (depreciation)
  of investments, net of tax
  benefit (expense) of $531                                        (986)                                                   (986)
Comprehensive income (loss)
Preferred and common cash
 dividends declared                                                                 (6,043)                              (6,043)
Exercise of stock options                                                                                                   351
Stock option exchange program
 stock distribution                                                                                        542              542
Issuance of restricted stock                   (21,197)                                                                       0
Amortization of deferred
 compensation                                    2,287                                                                    2,287
Retirement of restricted stock                     154                                                                     (124)
Stock buyback                                                                                           (8,909)          (8,909)
ESOP shares committed to be released               353                                                                      309
                                              --------          -------           --------            --------         --------
BALANCE AT SEPTEMBER 30, 2002                 $(29,762)         $   273           $182,391            $(35,989)        $362,790
                                              --------          -------           --------            --------         --------
</TABLE>

See Notes to Consolidated Financial Statements


                                       6
<PAGE>

ADVANTA CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                NINE MONTHS ENDED
($ IN THOUSANDS)                                                                                  SEPTEMBER 30,
                                                                                         --------------------------------
                                                                                            2002                  2001
                                                                                         ---------            -----------
<S>                                                                                      <C>                  <C>
OPERATING ACTIVITIES - CONTINUING OPERATIONS
Net income (loss)                                                                        $   9,064            $   (78,336)
Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities:
   Loss from discontinued operations, net of tax                                                 0                  8,438
   Loss, net, on discontinuance of mortgage and leasing businesses, net of tax               8,610                 31,639
   Investment securities losses                                                              5,379                 24,316
   Valuation adjustments on other receivables held for sale                                  1,085                      0
   Loss on sale of deposits                                                                      0                  2,835
   Depreciation                                                                              7,124                  7,173
   Provision for credit losses                                                              31,462                 25,852
   Change in deferred origination costs, net of deferred
     fees                                                                                   (2,044)                (7,631)
   Change in receivables held for sale                                                    (189,277)              (281,168)
   Proceeds from sale of receivables held for sale                                         162,511                272,549
   Change in amounts due from securitizations, other
     assets and other liabilities                                                           (9,864)                (5,046)
   Change in retained interests in securitizations                                         (16,500)               (15,750)
                                                                                         ---------            -----------
Net cash provided by (used in) operating activities                                          7,550                (15,129)
                                                                                         ---------            -----------
INVESTING ACTIVITIES - CONTINUING OPERATIONS
   Change in federal funds sold and restricted interest-
     bearing deposits                                                                       38,949               (376,019)
   Purchase of investments available for sale                                             (278,707)            (1,012,516)
   Proceeds from sales of investments available for sale                                   260,752                845,658
   Proceeds from maturing investments available for sale                                    81,762                766,376
   Change in receivables not held for sale                                                 (30,392)               (48,532)
   Purchases of premises and equipment, net                                                 (5,542)                (5,591)
                                                                                         ---------            -----------
Net cash provided by investing activities                                                   66,822                169,376
                                                                                         ---------            -----------
FINANCING ACTIVITIES - CONTINUING OPERATIONS
   Change in demand and savings deposits                                                    (3,040)                (6,738)
   Proceeds from issuance of time deposits                                                 304,365                664,856
   Payments for maturing time deposits                                                    (283,258)              (947,345)
   Payment for sale of deposits and related accrued
     interest                                                                                    0               (392,511)
   Proceeds from issuance of debt                                                           83,261                140,310
   Payments on redemption of debt                                                         (115,361)              (582,470)
   Change in other borrowings                                                              (32,317)                (4,289)
   Proceeds from exercise of stock options                                                     351                  3,464
   Cash dividends paid                                                                      (6,043)                (5,770)
   Stock buyback                                                                            (8,909)                (5,185)
                                                                                         ---------            -----------
Net cash used in financing activities                                                      (60,951)            (1,135,678)
                                                                                         ---------            -----------
DISCONTINUED OPERATIONS
   Proceeds from the exit of our mortgage business                                               0              1,093,975
   Other cash provided by (used in) operating activities                                     7,412                (87,108)
                                                                                         ---------            -----------
Net cash provided by operating activities of
   discontinued operations                                                                   7,412              1,006,867
                                                                                         ---------            -----------
Net increase in cash                                                                        20,833                 25,436
Cash at beginning of period                                                                 20,952                  1,716
                                                                                         ---------            -----------
Cash at end of period                                                                    $  41,785            $    27,152
                                                                                         ---------            -----------
</TABLE>

See Notes to Consolidated Financial Statements


                                       7
<PAGE>

                         ADVANTA CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          (IN THOUSANDS EXCEPT PER SHARE DATA, UNLESS OTHERWISE NOTED)

                               SEPTEMBER 30, 2002
                                   (UNAUDITED)

In these notes to consolidated financial statements, "we", "us", and "our" refer
to Advanta Corp. and its subsidiaries, unless the context otherwise requires.

NOTE 1) BASIS OF PRESENTATION

Advanta Corp. (collectively with its subsidiaries, "Advanta") has prepared the
consolidated financial statements included herein pursuant to the rules and
regulations of the Securities and Exchange Commission. We have condensed or
omitted certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with accounting
principles generally accepted in the United States pursuant to such rules and
regulations. In the opinion of management, the statements include all
adjustments (which include normal recurring adjustments) required for a fair
statement of financial position, results of operations and cash flows for the
interim periods presented. These financial statements should be read in
conjunction with the financial statements and notes thereto included in our
latest annual report on Form 10-K. The results of operations for the interim
periods are not necessarily indicative of the results for the full year.

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting periods.
Estimates are used when accounting for securitization income, retained interests
in securitizations, the allowance for credit losses, the fair value of venture
capital investments, litigation, income taxes, cardholder rewards programs and
discontinued operations, among others. Actual results could differ from those
estimates.

Certain prior period balances have been reclassified to conform to the current
period presentation.

NOTE 2) RESTRICTED INTEREST-BEARING DEPOSITS AND INVESTMENTS AVAILABLE FOR SALE

Restricted interest-bearing deposits include amounts held in escrow in
connection with our litigation with Fleet Financial Group ("Fleet") of $73.1
million at September 30, 2002 and $72.0 million at December 31, 2001. Restricted
interest-bearing deposits also include amounts held in escrow in connection with
other litigation-related contingencies of $2.9 million at September 30, 2002 and
$36.1 million at December 31, 2001.


                                       8
<PAGE>

Investments available for sale consisted of the following:

<TABLE>
<CAPTION>
                                                       SEPTEMBER 30, 2002                       DECEMBER 31, 2001
                                                 ------------------------------          ------------------------------
                                                 AMORTIZED              MARKET           AMORTIZED              MARKET
                                                    COST                VALUE               COST                 VALUE
                                                 ---------             --------          ---------             --------
<S>                                              <C>                   <C>               <C>                   <C>
U.S. Treasury & other U.S.
  Government securities                           $ 25,447             $ 25,521           $ 77,842             $ 78,980
State and municipal securities                       1,960                2,028              3,889                4,005
Collateralized mortgage obligations                  5,220                5,380             20,909               21,318
Mortgage-backed securities                           3,485                3,603              9,961               10,235
Equity securities (1)                               18,573               18,573             26,621               26,621
Money market funds                                 116,264              116,264            105,395              105,395
Other                                                4,607                4,607                126                  125
                                                  --------             --------           --------             --------
      Total investments available for sale        $175,556             $175,976           $244,743             $246,679
                                                  ========             ========           ========             ========
</TABLE>

(1)   Includes venture capital investments of $13.7 million at September 30,
      2002 and $18.6 million at December 31, 2001. The amount shown as amortized
      cost represents fair value for these investments.

NOTE 3) RECEIVABLES

Receivables on the balance sheet, including those held for sale, consisted of
the following:

<TABLE>
<CAPTION>
                                                                   SEPTEMBER 30,      DECEMBER 31,
                                                                       2002               2001
                                                                   -------------      ------------
<S>                                                                <C>                <C>
Business credit card receivables                                     $445,241           $416,265
Other receivables                                                      27,100             28,189
                                                                     --------           --------
       Gross receivables                                              472,341            444,454
                                                                     --------           --------
Add: Deferred origination costs, net of deferred fees                  22,968             20,924
Less: Allowance for credit losses
  Business credit cards                                               (43,776)           (41,169)
  Other receivables                                                    (1,471)              (802)
                                                                     --------           --------
       Total allowance                                                (45,247)           (41,971)
                                                                     --------           --------
Receivables, net                                                     $450,062           $423,407
                                                                     ========           ========
</TABLE>

We engage unrelated third parties to solicit and originate business credit card
account relationships. Amounts paid to third parties to acquire business credit
card accounts and certain other origination costs are deferred and netted
against any related business credit card origination fee, and the net amount is
amortized on a straight-line basis over the privilege period of one year. These
costs represent the cost of acquiring business credit card account
relationships, and the net amortization is included in operating expenses.
Effective July 1, 2002, we refined our estimate of the timing of when accounts
are acquired to better match the resulting estimated period of benefit to the
amortization of deferred acquisition costs. The impact of this change in
estimate in the three and nine months ended September 30, 2002 was a decrease in
operating expenses of $535 thousand resulting in an increase in net income of
$329 thousand or $0.01 per diluted share.


                                       9
<PAGE>

Gross managed receivables (owned receivables and securitized receivables) and
managed credit quality data were as follows:

<TABLE>
<CAPTION>
                                                            SEPTEMBER 30,      DECEMBER 31,
                                                                2002               2001
                                                            -------------      ------------
<S>                                                          <C>               <C>
Owned business credit card receivables                       $  445,241        $  416,265
Owned other receivables                                          27,100            28,189
Securitized business credit card receivables                  1,808,272         1,626,709
                                                             ----------        ----------
Total managed receivables                                     2,280,613         2,071,163
                                                             ----------        ----------
Nonperforming assets - managed                                  111,307            81,666
Receivables 90 days or more delinquent - managed                 68,012            67,465
Receivables 30 days or more delinquent - managed                151,720           137,517
Net charge-offs year-to-date - managed                          145,531           143,593
                                                             ----------        ----------
</TABLE>

NOTE 4) ALLOWANCE FOR CREDIT LOSSES

The following table presents activity in the allowance for credit losses for the
periods presented:

<TABLE>
<CAPTION>
                                                                    NINE MONTHS ENDED
                                                                      SEPTEMBER 30,
                                                            ----------------------------------
                                                              2002                      2001
                                                            --------                  --------
<S>                                                         <C>                       <C>
Beginning balance                                           $ 41,971                  $ 33,367
Provision for credit losses                                   31,462                    25,852
Gross charge-offs                                            (31,648)                  (23,067)
Recoveries                                                     3,462                     3,620
                                                            --------                  --------
Net charge-offs                                              (28,186)                  (19,447)
                                                            --------                  --------
Ending balance                                              $ 45,247                  $ 39,772
                                                            ========                  ========
</TABLE>


                                       10
<PAGE>

NOTE 5) SECURITIZATION ACTIVITIES

The following represents business credit card securitization data for the three
and nine months ended September 30, 2002 and 2001, and the key assumptions used
in measuring the fair value of retained interests at the time of each new
securitization or replenishment during those periods.

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED                   NINE MONTHS ENDED
                                                          ------------------------------     --------------------------------
                                                          SEPTEMBER 30,    SEPTEMBER 30,     SEPTEMBER 30,      SEPTEMBER 30,
                                                               2002             2001             2002               2001
                                                          -------------    -------------     -------------      -------------
<S>                                                       <C>              <C>               <C>                <C>
Average securitized
   receivables                                            $1,784,825        $1,544,915       $1,680,251         $1,448,350
Securitization income                                         29,168            28,701           88,838             74,311
Discount accretion                                             2,629             2,660            7,941              7,424
Interchange income                                            18,585            16,807           51,455             44,951
Servicing revenues                                             8,334             7,726           24,419             21,287
Proceeds from new securitizations                             47,511            75,000          162,511            272,549
Proceeds from collections reinvested in
   revolving-period securitizations                        1,044,178           850,575        2,863,617          2,373,820
Cash flows received on
   retained interests                                         54,021            44,387          154,026            122,719

KEY ASSUMPTIONS:
  Discount rate                                            9.0% - 14.3%      12.0% - 15.0%      9.0% - 15.0%      12.0% - 15.0%
  Monthly payment rate                                    18.2% - 21.0%      17.9% - 21.0%     18.2% - 21.0%      17.9% - 21.0%
  Loss rate                                                9.6% - 11.5%       9.8% - 11.2%      9.6% - 12.8%       7.8% - 11.2%
  Finance charge yield, net
   of interest paid to
   note holders                                           14.9% - 15.2%      13.2% - 14.8%     14.9% - 15.9%      10.8% - 14.8%
                                                          -------------    ---------------   ---------------    ---------------
</TABLE>

There were no purchases of delinquent accounts during the three or nine months
ended September 30, 2002 or 2001.

The following assumptions were used in measuring the fair value of retained
interests in business credit card securitizations at September 30, 2002 and
December 31, 2001. The assumptions listed represent weighted averages of
assumptions used for each securitization.

<TABLE>
<CAPTION>
                                                              SEPTEMBER 30,                DECEMBER 31,
                                                                  2002                         2001
                                                              -------------               --------------
<S>                                                           <C>                         <C>
Discount rate                                                 10.3% - 12.8%               12.0% - 15.0%
Monthly payment rate                                          18.6% - 21.0%               18.2% - 21.0%
Loss rate                                                      9.6% - 11.5%               10.4% - 12.4%
Finance charge yield, net of interest
  paid to note holders                                                15.2%                       15.8%
                                                              -------------               --------------
</TABLE>

In addition to the assumptions identified above, management also considered
qualitative factors such as the impact of the current economic environment on
the performance of the business credit card receivables sold and the potential
volatility of the current market for similar instruments in assessing the fair
value of retained interests in business credit card securitizations.


                                       11
<PAGE>

We have prepared sensitivity analyses of the valuations of retained interests in
securitizations. The sensitivity analyses show the hypothetical effect on the
fair value of those assets of two unfavorable variations from the expected
levels for each key assumption, independently from any change in another key
assumption. The following are the results of those sensitivity analyses on the
valuation at September 30, 2002.

<TABLE>
<S>                                                                      <C>
       Fair value at September 30, 2002                                  $105,158
       Effect on fair value of the following
        hypothetical changes in key assumptions:
           Discount rate increased by 2%                                 $ (1,825)
           Discount rate increased by 4%                                   (3,574)
           Monthly payment rate at 110% of base assumption                 (1,220)
           Monthly payment rate at 125% of base assumption                 (2,364)
           Loss rate at 110% of base assumption                            (4,511)
           Loss rate at 125% of base assumption                           (11,231)
           Finance charge yield, net of interest paid to note
             holders, decreased by 1%                                      (4,699)
           Finance charge yield, net of interest paid to note
             holders, decreased by 2%                                      (9,398)
</TABLE>

The objective of these hypothetical analyses is to measure the sensitivity of
the fair value of the retained interests to changes in assumptions. The
methodology used to calculate the fair value in the analyses is a discounted
cash flow analysis, the same methodology used to value the retained interests at
each reporting date. These estimates do not factor in the impact of simultaneous
changes in other key assumptions. The above scenarios do not reflect
management's expectation regarding the future direction of these rates, and they
depict only certain possibilities out of a large set of possible scenarios.

For managed receivables (owned receivables and securitized receivables) and
managed credit quality data, see Note 3.

NOTE 6) SELECTED BALANCE SHEET INFORMATION

<TABLE>
<CAPTION>
                                                                 SEPTEMBER 30,        DECEMBER 31,
OTHER ASSETS                                                         2002                 2001
                                                                 -------------        ------------
<S>                                                              <C>                  <C>
Current and deferred income taxes, net                             $ 90,665            $ 94,922
Amounts due from transfer of consumer credit
  card business                                                      70,545              70,545
Cash surrender value of insurance contracts                          23,845              26,065
Investment in Fleet Credit Card LLC                                  20,000              20,000
Other                                                                80,359              53,157
                                                                   --------            --------
Total other assets                                                 $285,414            $264,689
                                                                   ========            ========
</TABLE>

<TABLE>
<CAPTION>
                                                                 SEPTEMBER 30,        DECEMBER 31,
OTHER LIABILITIES                                                    2002                 2001
                                                                 -------------        ------------
<S>                                                              <C>                  <C>
Accounts payable and accrued expenses                              $ 40,244             $ 43,554
Accrued interest payable                                             16,773                9,095
Business credit card rewards                                         13,918               10,389
Other                                                               112,896              114,529
                                                                   --------             --------
Total other liabilities                                            $183,831             $177,567
                                                                   ========             ========
</TABLE>

We offer bonus mile and cash-back reward programs with certain of our business
credit cards. Eligible cardholders earn points for bonus mile rewards or up to
2% cash-back rewards based on net purchases charged on their business credit
card account. The cost of future reward redemptions are estimated and recorded
at the time bonus mile points or cash-back rewards are earned by the cardholder.
These costs of future reward redemptions are recorded as a reduction of other
revenues. Through the second quarter of 2002, we estimated that 80% to 100% of
cardholders would ultimately claim rewards. The estimate


                                       12
<PAGE>

of the percentage of cardholders that will ultimately claim rewards varies
depending on the structure of the rewards program. In the third quarter of 2002,
we revised our estimate of the bonus mile reward liability, including a change
in the estimate of the percentage of cardholders that will ultimately claim
bonus mile rewards from 80% to 70% based on experience for that program
life-to-date. After this change, our estimated range of cardholders that will
ultimately claim rewards for all programs is 70% to 100%. The impact of this
change in estimate was an approximate $700 thousand increase in other revenues
in the three and nine months ended September 30, 2002, resulting in an increase
in net income of approximately $430 thousand or $0.02 per diluted share.

NOTE 7) CAPITAL STOCK

In 2001, the Board of Directors of Advanta Corp. authorized the purchase of up
to 1.5 million shares of Advanta Corp. common stock or the equivalent dollar
amount of our capital securities, or some combination thereof. In August 2002,
the Board of Directors authorized the purchase of up to an additional 1.5
million shares of Advanta Corp. common stock, bringing the total authorization
to up to 3.0 million shares. During the year ended December 31, 2001, we
repurchased 693,300 shares of our Class B Common Stock. In the nine months ended
September 30, 2002, we repurchased 884,900 shares of our Class B Common Stock.

Our management incentive programs give eligible employees the opportunity to
elect to take portions of their anticipated or target bonus payments for future
years in the form of restricted shares of Advanta Corp. Class B Common Stock. In
the nine months ended September 30, 2002, 2.6 million restricted shares were
issued in connection with the current program covering the performance years
2002-2005.

Cash dividends per share of common stock declared during the three months ended
September 30, 2002 and 2001 were $0.063 for Class A Common Stock and $0.076 for
Class B Common Stock. Cash dividends per share of common stock declared during
the nine months ended September 30, 2002 and 2001 were $0.189 for Class A Common
Stock and $0.227 for Class B Common Stock.


                                       13
<PAGE>

NOTE 8) SEGMENT INFORMATION

<TABLE>
<CAPTION>
                                                        ADVANTA
                                                       BUSINESS              VENTURE
                                                         CARDS               CAPITAL            OTHER (1)               TOTAL
                                                      ----------            --------           ----------            ----------
<S>                                                   <C>                   <C>                <C>                   <C>
THREE MONTHS ENDED SEPTEMBER 30, 2002
Interest income                                       $   21,082            $      0           $    2,837            $   23,919
Interest expense                                           8,978                 176                1,898                11,052
Noninterest revenues (losses), net                        61,652              (3,505)                (126)               58,021
Pretax income (loss) from continuing operations           16,594              (4,369)              (1,955)               10,270
Average managed receivables                            2,230,089                   0               27,655             2,257,744
Total assets                                             690,216              14,779              907,831             1,612,826
                                                      ----------            --------           ----------            ----------
THREE MONTHS ENDED SEPTEMBER 30, 2001
Interest income                                       $   22,285            $      2           $    6,761            $   29,048
Interest expense                                           8,791                 435                7,693                16,919
Noninterest revenues (losses), net                        56,488              (9,988)                 131                46,631
Pretax income (loss) from continuing operations           17,250             (11,019)              (3,961)                2,270
Average managed receivables                            1,946,737                   0               28,328             1,975,065
Total assets                                             555,344              22,641            1,076,943             1,654,928
                                                      ----------            --------           ----------            ----------
NINE MONTHS ENDED SEPTEMBER 30, 2002
Interest income                                       $   67,218            $      2           $    9,340            $   76,560
Interest expense                                          26,524                 562                9,445                36,531
Noninterest revenues (losses), net                       180,878              (6,115)                (110)              174,653
Pretax income (loss) from continuing operations           44,900              (8,583)              (7,579)               28,738
Average managed receivables                            2,118,666                   0               28,108             2,146,774
                                                      ----------            --------           ----------            ----------
NINE MONTHS ENDED SEPTEMBER 30, 2001
Interest income                                       $   64,655            $     35           $   35,962            $  100,652
Interest expense                                          24,009               1,274               42,031                67,314
Noninterest revenues (losses), net                       152,498             (26,950)              (7,852)              117,696
Unusual charges                                                0                   0               41,750                41,750
Pretax income (loss) from continuing operations           44,941             (30,285)             (69,795)              (55,139)
Average managed receivables                            1,829,815                   0               28,352             1,858,167
                                                      ----------            --------           ----------            ----------
</TABLE>

(1)   Other includes insurance operations and assets, investment and other
      activities not attributable to reportable segments. Total assets in the
      "Other" segment include net assets of discontinued operations.


                                       14
<PAGE>

NOTE 9) UNUSUAL CHARGES

Effective February 28, 2001, we completed the exit of our mortgage business,
Advanta Mortgage, through a purchase and sale agreement with Chase Manhattan
Mortgage Corporation as buyer (the "Mortgage Transaction"). Subsequent to the
Mortgage Transaction and discontinuance of our leasing business in the first
quarter of 2001, we implemented a plan to restructure our corporate functions to
a size commensurate with our ongoing businesses and incurred certain other
unusual charges related to employee costs. Costs associated with this
restructuring activity and other employee costs are included in unusual charges
in the consolidated income statements. Accruals related to these costs are
included in other liabilities in the consolidated balance sheets. The details of
these costs are as follows:

<TABLE>
<CAPTION>
                                                                                       DEC. 31,                      SEPT. 30,
                                                                         CHARGED         2001         CHARGED           2002
                                                          ACCRUED      TO ACCRUAL      ACCRUAL       TO ACCRUAL       ACCRUAL
                                                          IN 2001       IN 2001        BALANCE        IN 2002         BALANCE
                                                          -------      ----------      --------      ----------      ---------
<S>                                                       <C>          <C>             <C>           <C>             <C>
Employee costs                                            $27,296       $24,768         $2,528         $2,528         $   0
Expenses associated with exited businesses/products        11,895        11,266            629            629             0
Asset impairments                                           2,559         2,559              0              0             0
                                                          -------       -------         ------         ------         -----
Total                                                     $41,750       $38,593         $3,157         $3,157         $   0
                                                          =======       =======         ======         ======         =====
</TABLE>

Employee costs

In the first quarter of 2001, we recorded a $4.1 million charge for severance
and outplacement costs associated with the restructuring of corporate functions.
There were 69 employees severed who were entitled to benefits. These employees
worked in corporate support functions including accounting and finance, human
resources, information technology, legal and facilities management. Employees
were notified in March 2001, and severance amounts were payable over a 12-month
period following the employee's termination date. These payments were completed
in the third quarter of 2002.

Additionally, during 2001, we incurred $23.2 million of other employee costs.
This amount included approximately $10 million attributable to bonuses to
certain key employees in recognition of their efforts on behalf of Advanta in
the strategic alternatives process. It also included approximately $4.5 million
of bonuses in recognition of the restructuring of the company and other
significant transitional efforts. These bonuses were paid over a 12-month
period. In the second quarter of 2001, we recorded a $1.0 million increase in
employee costs related to a revision in estimate associated with these bonuses.
In 2001, we accelerated vesting of 32% of outstanding options that were not
vested at the date of the closing of the Mortgage Transaction. This acceleration
resulted in a noncash charge of $1.3 million. In connection with reviewing our
compensation plans after the Mortgage Transaction and restructuring of corporate
functions, we implemented a program whereby all outstanding stock appreciation
rights and shares of phantom stock were terminated in exchange for cash to be
paid through a deferred compensation arrangement. We recorded charges of $2.9
million associated with this exchange. The charge reflects a $0.7 million
reduction recorded in the three months ended September 30, 2001, as actual cash
settlement costs were less than estimated. Due to the restructuring of the
company, we implemented programs whereby certain out-of-the-money options were
exchanged for shares of stock, and whereby certain shares of restricted stock
were exchanged for cash and stock options in a tender offer, subject to certain
performance conditions and vesting requirements. Noncash


                                       15
<PAGE>

charges associated with the issuance of the stock, stock options and the tender
offer totaled $3.6 million. This charge reflects a $1.4 million increase
recorded in the three months ended September 30, 2001, as actual noncash charges
associated with the tender offer were more than estimated.

Expenses associated with exited businesses/products

In the first quarter of 2001, we recorded charges of $2.2 million related to
other products exited for which no future revenues or benefits would be
received. In the third quarter of 2001, we were able to settle some of these
commitments for less than originally estimated, and reduced the charge by $0.7
million. We paid the remaining costs, which included lease and other
commitments, in the third quarter of 2002.

In 1998, in connection with the transfer of our consumer credit card business to
Fleet Credit Card LLC (the "Consumer Credit Card Transaction"), we made major
organizational changes to reduce corporate expenses incurred in the past: (a) to
support the business contributed to Fleet Credit Card LLC in the Consumer Credit
Card Transaction, and (b) associated with the business and products no longer
being offered or not directly associated with our mortgage, business credit card
and leasing units. As of December 31, 2000, the remaining accrual related to
charges associated with these organizational changes was $13.0 million. This
accrual related to contractual commitments to certain customers, and non-related
financial institutions that were providing benefits to those customers, under a
product that was no longer offered and for which no future revenues or benefits
would be received. A third party assumed the liabilities associated with these
commitments in the first quarter of 2001, and we recorded an additional charge
relating to the settlement of these commitments of $10.3 million.

Asset impairments

In connection with our plan to restructure our corporate functions to a size
commensurate with our ongoing businesses during the first quarter of 2001, we
identified certain assets that would no longer be used, and the carrying costs
of these assets were written off resulting in a charge of $2.6 million. We
estimated the realizable value of these assets to be zero due to the nature of
the assets, which include leasehold improvements and capitalized software.

NOTE 10) DISCONTINUED OPERATIONS

Loss from discontinued operations, net of tax, for the period from January 1,
2001 through February 28, 2001, the effective date of the Mortgage Transaction,
was $8.4 million. The Mortgage Transaction was consummated pursuant to a
purchase and sale agreement that provided for the sale, transfer and assignment
of substantially all of the assets and operating liabilities associated with our
mortgage business, as well as specified contingent liabilities arising from our
operation of the mortgage business prior to closing that were identified in the
purchase and sale agreement. We retained contingent liabilities, primarily
relating to litigation, arising from our operation of the mortgage business
before closing that were not specifically assumed by the buyer.

On January 23, 2001, we announced that after a thorough review of strategic
alternatives available for our leasing business, Advanta Leasing Services, we
decided to cease originating leases. We are continuing to service the existing
leasing portfolio rather than sell the business or the portfolio.


                                       16
<PAGE>

Our exit from the mortgage business and discontinuance of the leasing business
represent the disposal of business segments following Accounting Principles
Board Opinion No. 30. Accordingly, results of these operations are classified as
discontinued in all periods presented. Estimates are used in the accounting for
discontinued operations, including estimates of the future costs of mortgage
business-related litigation and estimates of operating results through the
remaining term of the leasing portfolio. As all estimates used are influenced by
factors outside our control, there is uncertainty inherent in these estimates,
making it reasonably possible that they could change in the near term.

The following tables summarize the components of the gain (loss) on
discontinuance of our mortgage and leasing businesses for the three and nine
months ended September 30, 2002 and 2001:

<TABLE>
<CAPTION>
                                                                            THREE MONTHS ENDED
                                                ---------------------------------------------------------------------
                                                    SEPTEMBER 30, 2002                        SEPTEMBER 30, 2001
                                                ----------------------------              ---------------------------
                                                                    ADVANTA                                  ADVANTA
                                                 ADVANTA            LEASING               ADVANTA            LEASING
                                                MORTGAGE            SERVICES              MORTGAGE           SERVICES
                                                --------            --------              --------           --------
<S>                                             <C>                  <C>                 <C>                <C>
Pretax loss on discontinuance
   of mortgage and leasing
   businesses                                   $      0             $     0             $(5,000)           $(39,000)
Income tax benefit                                     0                   0                   0                   0
                                                --------             -------             -------            --------
Loss on discontinuance of
   mortgage and leasing
   businesses, net of tax                       $      0             $     0             $(5,000)           $(39,000)
                                                ========             =======             =======            ========
</TABLE>

<TABLE>
<CAPTION>
                                                                           NINE MONTHS ENDED
                                                ---------------------------------------------------------------------
                                                    SEPTEMBER 30, 2002                        SEPTEMBER 30, 2001
                                                ----------------------------              ---------------------------
                                                                    ADVANTA                                  ADVANTA
                                                 ADVANTA            LEASING               ADVANTA            LEASING
                                                MORTGAGE            SERVICES              MORTGAGE           SERVICES
                                                --------            --------              --------           --------
<S>                                             <C>                 <C>                   <C>                <C>
Pretax gain (loss) on
   discontinuance of mortgage and
   leasing businesses                           $(25,300)            $11,300              $20,753            $(45,000)
Income tax (expense) benefit                       9,740              (4,350)              (8,637)              1,245
                                                --------             -------              -------            --------
Gain (loss) on discontinuance
   of mortgage and leasing
   businesses, net of tax                       $(15,560)            $ 6,950              $12,116            $(43,755)
                                                ========             =======              =======            ========
</TABLE>

The proceeds from the Mortgage Transaction exceeded $1 billion, subject to
closing adjustments, resulting in an estimated pretax gain in the year ended
December 31, 2001 of $20.8 million after transaction expenses, severance
expenses and other costs. The gain does not reflect any impact from the
post-closing adjustment process that has not yet been completed due to
litigation related to the Mortgage Transaction. See Note 12 to the consolidated
financial statements. The pretax gain of $20.8 million in the nine months ended
September 30, 2001 included a $5.0 million increase in the estimated future
costs of mortgage business-related litigation in the three months ended
September 30, 2001.

In the nine months ended September 30, 2002, we increased our estimate of other
costs related to the exit of our mortgage business by $25.3 million, comprised
of $7.5 million for a litigation settlement related to a mortgage loan servicing
agreement termination fee collected in December 2000, and $17.8 million
primarily related to an increase in our estimated future costs of mortgage


                                       17
<PAGE>

business-related contingent liabilities. The $17.8 million relates primarily to
an increase in our estimated future costs of mortgage business-related
contingent liabilities in connection with (a) contingent liabilities and
litigation costs arising from the operation of the mortgage business prior to
the Mortgage Transaction that were not assumed by the buyer, and (b) costs
related to Advanta's litigation with Chase Manhattan Mortgage Corporation in
connection with the Mortgage Transaction. The change in estimate reflects the
legal and consulting fees and other costs that we expect to incur based on
current levels of contingent liabilities and expense rates, and considers the
status of the discovery process associated with the Mortgage Transaction
litigation.

In connection with the discontinuance of the leasing business, we recorded a
$4.3 million pretax loss effective December 31, 2000, representing the estimated
operating results through the remaining term of the leasing portfolio. Estimated
operating results of the leasing business included estimated valuations of
retained interests in leasing securitizations, estimated cash flows from
on-balance sheet lease receivables, interest expense and operating expenses. In
the nine months ended September 30, 2001, we recorded an additional $45.0
million pretax loss due to a change in estimate of those operating results based
on credit loss experience in 2001. Of this total, $39.0 million was recorded in
the three months ended September 30, 2001. A principal factor contributing to
the increased credit losses in 2001 was that one of our former leasing vendors
had filed for bankruptcy protection and this vendor's financial problems were
impacting its ability to service the leased equipment in a segment of our
leasing portfolio.

In the nine months ended September 30, 2002, we recorded an $11.3 million pretax
gain on leasing discontinuance representing a revision in the estimated
operating results of the leasing segment over the remaining life of the lease
portfolio due primarily to favorable credit performance. The leasing portfolio
performed favorably as compared to the expectations and assumptions established
in 2001. This improvement was the result of successfully obtaining a replacement
vendor to service leased equipment for the former leasing vendor that had filed
for bankruptcy protection, as described above, and operational improvements in
the leasing collections area.

Per share data was as follows:

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED SEPTEMBER 30,            NINE MONTHS ENDED SEPTEMBER 30,
                                              -------------------------------------------    --------------------------------------
                                                     ADVANTA           ADVANTA LEASING            ADVANTA          ADVANTA LEASING
                                                     MORTGAGE             SERVICES                MORTGAGE             SERVICES
                                              --------------------   --------------------    -----------------    -----------------
                                               2002          2001     2002          2001      2002       2001      2002       2001
                                              ------        ------   ------        ------    ------     ------    ------     ------
<S>                                           <C>           <C>      <C>           <C>       <C>        <C>       <C>        <C>
Basic loss from discontinued
  operations per common share
    Class A                                   $ 0.00        $ 0.00   $ 0.00        $ 0.00    $ 0.00     $(0.33)   $ 0.00     $ 0.00
    Class B                                     0.00          0.00     0.00          0.00      0.00      (0.33)     0.00       0.00
    Combined                                    0.00          0.00     0.00          0.00      0.00      (0.33)     0.00       0.00
Diluted loss from discontinued
  operations per common share
    Class A                                   $ 0.00        $ 0.00   $ 0.00        $ 0.00    $ 0.00     $(0.33)   $ 0.00     $ 0.00
    Class B                                     0.00          0.00     0.00          0.00      0.00      (0.33)     0.00       0.00
    Combined                                    0.00          0.00     0.00          0.00      0.00      (0.33)     0.00       0.00
Basic gain (loss), net, on
  discontinuance of mortgage and leasing
  businesses, net of tax, per common share
    Class A                                   $ 0.00        $(0.19)  $ 0.00        $(1.50)   $(0.62)    $ 0.47    $ 0.28     $(1.70)
    Class B                                     0.00         (0.19)    0.00         (1.50)    (0.62)      0.47      0.28      (1.70)
    Combined                                    0.00         (0.19)    0.00         (1.50)    (0.62)      0.47      0.28      (1.70)
Diluted gain (loss), net, on
  discontinuance of mortgage and leasing
  businesses, net of tax, per common share
    Class A                                   $ 0.00        $(0.19)  $ 0.00        $(1.49)   $(0.59)    $ 0.47    $ 0.27     $(1.70)
    Class B                                     0.00         (0.19)    0.00         (1.49)    (0.59)      0.47      0.27      (1.70)
    Combined                                    0.00         (0.19)    0.00         (1.49)    (0.59)      0.47      0.27      (1.70)
                                              ------        ------   ------        ------    ------     ------    ------     ------
</TABLE>


                                       18
<PAGE>

The components of net assets of discontinued operations were as follows:

<TABLE>
<CAPTION>
                                                       SEPTEMBER 30,        DECEMBER 31,
                                                            2002                2001
                                                       -------------        ------------
<S>                                                    <C>                  <C>
Loans and leases, net                                    $ 50,648             $ 52,739
Other assets                                               98,765              100,061
Liabilities                                                (7,472)             (10,397)
                                                         --------             --------
Net assets of discontinued operations                    $141,941             $142,403
                                                         ========             ========
</TABLE>

As discussed above, we are continuing to service the existing lease portfolio.
At September 30, 2002, there were $188 million of securitized leases
outstanding, and we had retained interests in leasing securitizations of $52
million. At December 31, 2001, there were $365 million of securitized leases
outstanding, and we had retained interests in leasing securitizations of $44
million. The retained interests in leasing securitizations are included in net
assets of discontinued operations in the consolidated balance sheets. At
September 30, 2002, the fair value of the retained interests in leasing
securitizations was estimated using a 12.0% discount rate on future cash flows,
loss rates ranging from 5.0% to 5.4% and a weighted average life of 1.0 year. At
December 31, 2001, the fair value of the retained interests in leasing
securitizations was estimated using a 12.0% discount rate on future cash flows,
loss rates ranging from 9.0% to 9.9% and a weighted average life of 1.1 year.


                                       19
<PAGE>

NOTE 11) EARNINGS (LOSS) PER SHARE

The following table presents the calculation of basic earnings (loss) per common
share and diluted earnings (loss) per common share.

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED           NINE MONTHS ENDED
                                                    SEPTEMBER 30,               SEPTEMBER 30,
                                               ----------------------      ----------------------
                                                 2002          2001           2002         2001
                                               --------      --------      --------      --------
<S>                                            <C>           <C>           <C>           <C>
Income (loss) from continuing operations       $  6,316      $  2,270      $ 17,674      $(38,259)
 Less: Preferred A dividends                          0             0          (141)         (141)
                                               --------      --------      --------      --------
Income (loss) from continuing operations
 available to common shareholders                 6,316         2,270        17,533       (38,400)
Loss from discontinued operations,
 net of tax                                           0             0             0        (8,438)
Gain (loss), net, on discontinuance of
 mortgage and leasing businesses, net of
 tax                                                  0       (44,000)       (8,610)      (31,639)
                                               --------      --------      --------      --------
Net income (loss) available to common
 shareholders                                     6,316       (41,730)        8,923       (78,477)
 Less: Class A dividends declared                  (576)         (574)       (1,726)       (1,720)
 Less: Class B dividends declared                (1,401)       (1,314)       (4,176)       (3,909)
                                               --------      --------      --------      --------
Undistributed net income (loss)                $  4,339      $(43,618)     $  3,021      $(84,106)
                                               --------      --------      --------      --------
Basic income (loss) from continuing
 operations per common share
  Class A                                      $   0.24      $   0.08      $   0.65      $  (1.53)
  Class B                                          0.26          0.09          0.72         (1.48)
  Combined(1)                                      0.25          0.09          0.69         (1.50)
Diluted income (loss) from continuing
 operations per common share
  Class A                                      $   0.23      $   0.08      $   0.63      $  (1.53)
  Class B                                          0.25          0.09          0.69         (1.48)
  Combined(1)                                      0.25          0.09          0.67         (1.50)
Basic net income (loss) per common share
  Class A                                      $   0.24      $  (1.62)     $   0.31      $  (3.09)
  Class B                                          0.26         (1.60)         0.38         (3.04)
  Combined(1)                                      0.25         (1.61)         0.35         (3.06)
Diluted net income (loss) per common
 share
  Class A                                      $   0.23      $  (1.60)     $   0.30      $  (3.09)
  Class B                                          0.25         (1.59)         0.36         (3.04)
  Combined(1)                                      0.25         (1.59)         0.34         (3.06)
                                               --------      --------      --------      --------
Basic weighted average common shares
 outstanding
  Class A                                         9,162         9,116         9,146         9,094
  Class B                                        15,876        16,820        16,117        16,590
  Combined                                       25,038        25,936        25,263        25,684
Options Class B                                     289           205           487             0
Restricted shares Class A                             1             4             5             0
Restricted shares Class B                           336            96           434             0
Diluted weighted average common shares
 outstanding
  Class A                                         9,163         9,120         9,151         9,094
  Class B                                        16,501        17,121        17,038        16,590
  Combined                                       25,664        26,241        26,189        25,864
Antidilutive shares
  Options Class B                                 1,699         1,226         1,474         2,539
  Restricted shares Class A                           0            10             4            28
  Restricted shares Class B                       2,175           269         1,955           595
                                               --------      --------      --------      --------
</TABLE>

(1)   Combined represents a weighted average of Class A and Class B earnings
      (loss) per common share.


                                       20
<PAGE>

NOTE 12) CONTINGENCIES

On January 22, 1999, Fleet and certain of its affiliates filed a lawsuit against
Advanta Corp. and certain of its subsidiaries in Delaware Chancery Court.
Fleet's allegations, which we deny, center around Fleet's assertions that we
failed to complete certain post-closing adjustments to the value of the assets
and liabilities we contributed to Fleet Credit Card LLC in connection with the
Consumer Credit Card Transaction in 1998. Fleet seeks damages of approximately
$141 million. We filed an answer to the complaint denying the material
allegations of the complaint, but acknowledging that we contributed $1.8 million
in excess liabilities in the post-closing adjustment process, after taking into
account the liabilities we have already assumed. We also filed a
countercomplaint against Fleet for approximately $101 million in damages we
believe have been caused by certain actions of Fleet following the closing of
the Consumer Credit Card Transaction. In October 2001, the court issued a ruling
on summary judgment in favor of Fleet on certain legal issues and positions
advocated by Fleet and against others that Fleet advocated. As a result, for
purposes of trial only, the parties stipulated to a number of issues relating to
the court's orders including certain amounts that would be owed by each party to
the other, while preserving their rights to appeal. Many issues remained to be
determined at trial, including the financial impact of all issues in dispute.
The trial took place in November and December 2001. Post-trial briefing is
complete and on April 10, 2002, the Court heard oral argument. As a result of
related litigation with Fleet, $70.1 million of our reserves in connection with
this litigation were funded in an escrow account in February 2001. Taking into
account amounts that Fleet owes to us and the amount escrowed, including
interest, we have funded our estimated maximum net exposure to Fleet in the
litigation. Management expects that the ultimate resolution of this litigation
will not have a material adverse effect on our financial position or future
operating results given the amount escrowed, our reserves and amounts that Fleet
owes us. Our litigation reserves are included in other liabilities on the
consolidated balance sheets.

On December 5, 2000, a former executive of Advanta obtained a jury verdict
against Advanta in the amount of $3.9 million in the United States District
Court for the Eastern District of Pennsylvania, in connection with various
claims against Advanta related to the executive's termination of employment. In
September 2001, the District Court Judge issued orders denying both parties'
post-trial motions. A judgment in the amount of approximately $6 million, which
includes the $3.9 million described above, was entered against Advanta. In
September 2001, Advanta filed an appeal to the United States Court of Appeals
for the Third Circuit. Advanta has posted a supersedeas bond in the amount of $8
million. The plaintiff filed a cross-appeal from the order adverse to him. On
July 8, 2002, the Court of Appeals issued a Judgment and Opinion affirming in
part and reversing in part the District Court judgment. The Court of Appeals
affirmed the judgment on liability but determined that the jury award of damages
was excessive. The Court of Appeals reduced the jury verdict by $1.1 million and
also ordered the District Court to recalculate liquidated damages based on the
reduced award. Other operating expenses in the three months ended June 30, 2002
include a $1.1 million decrease in litigation reserves resulting from this
reduced jury verdict. On July 22, 2002, Advanta filed a motion for rehearing
and/or rehearing en banc asserting that a new trial was required to remedy the
error found by the Court of Appeals. The motion was denied by Order dated August
8, 2002, and Advanta is now considering further appellate review. The District
Court Judge has not yet ruled on the executive's petition for attorney's fees
and costs in the amount of approximately $1.2 million, which Advanta has
contested. Management expects that the ultimate resolution of


                                       21
<PAGE>

this litigation will not have a material adverse effect on our financial
position or future operating results.

On July 26, 2001, Chase Manhattan Mortgage Corporation ("Chase") filed a
complaint against Advanta and certain of its subsidiaries in the United States
District Court for the District of Delaware alleging, among other things, that
Advanta breached its contract with Chase in connection with the Mortgage
Transaction. Chase claims that Advanta misled Chase concerning the value of
certain of the assets sold to Chase. In September 2001, Advanta filed an answer
to the complaint in which Advanta denied all of the substantive allegations of
the complaint and asserted a counterclaim against Chase for breach of contract
relating to funds owed by Chase to Advanta in connection with the transaction.
The matter is in discovery and trial is not anticipated before September 2003.
We believe that the lawsuit is without merit and will vigorously defend Advanta
in this litigation. We do not expect this lawsuit to have any impact on our
continuing business and, based on the complete lack of merit, we do not
anticipate that the lawsuit will have a material adverse impact on Advanta or
the named subsidiaries.

In addition to the cases described above, Advanta Corp. and its subsidiaries are
involved in class action lawsuits, other litigation, claims and legal
proceedings arising in the ordinary course of business or discontinued
operations, including litigation arising from our operation of the mortgage
business prior to the Mortgage Transaction in the first quarter of 2001.
Management believes that the aggregate liabilities, if any, resulting from all
litigation, claims and other legal proceedings will not have a material adverse
effect on the consolidated financial position or results of our operations based
on the level of litigation reserves we have established and our expectations
regarding the ultimate resolutions of these actions. However, due to the
inherent uncertainty in litigation and since the ultimate resolutions of our
litigation, claims and other legal proceedings are influenced by factors outside
of our control, it is reasonably possible that our estimated liability under
these proceedings may change or that actual results will differ from our
estimates.


                                       22
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

In this Form 10-Q, "Advanta", "we", "us", and "our" refer to Advanta Corp. and
its subsidiaries, unless the context otherwise requires.

OVERVIEW

Our primary business segment is Advanta Business Cards, one of the nation's
largest issuers of business credit cards to small businesses. In addition to our
business credit card lending business, we have venture capital investments.
Through the first quarter of 2001, we had two additional lending businesses,
Advanta Mortgage and Advanta Leasing Services. In the first quarter of 2001, we
exited our mortgage business, announced the discontinuance of our leasing
business, and restructured our corporate functions to a size commensurate with
our ongoing businesses. We are continuing to service the existing leasing
portfolio rather than sell the business or the portfolio. The results of the
mortgage and leasing businesses are reported as discontinued operations in all
periods presented. The results of our ongoing businesses are reported as
continuing operations for all periods presented.

For the three months ended September 30, 2002, we reported net income from
continuing operations of $6.3 million or $0.25 per combined diluted common
share, compared to net income from continuing operations of $2.3 million or
$0.09 per combined diluted common share for the same period of 2001. For the
nine months ended September 30, 2002, we reported net income from continuing
operations of $17.7 million or $0.67 per combined diluted common share, compared
to net loss from continuing operations of $38.3 million or $1.50 per combined
diluted common share for the nine months ended September 30, 2001. Net loss from
continuing operations for the nine months ended September 30, 2001 included
pretax unusual charges of $41.8 million, representing costs associated with the
restructure of our corporate functions to a size commensurate with our ongoing
businesses and certain other unusual charges related to employee costs. Net
income (loss) from continuing operations included the following business segment
results ($ in thousands):

<TABLE>
<CAPTION>
                                THREE MONTHS ENDED               NINE MONTHS ENDED
                                   SEPTEMBER 30,                    SEPTEMBER 30,
                             ------------------------        ------------------------
                               2002            2001            2002            2001
                             --------        --------        --------        --------
<S>                          <C>             <C>             <C>             <C>
ADVANTA BUSINESS CARDS
Pretax income                $ 16,594        $ 17,250        $ 44,900        $ 44,941
Income tax (expense)           (6,388)         (6,641)        (17,286)        (17,301)
                             --------        --------        --------        --------
Net income                   $ 10,206        $ 10,609        $ 27,614        $ 27,640
                             --------        --------        --------        --------
VENTURE CAPITAL
Pretax loss                  $ (4,369)       $(11,019)       $ (8,583)       $(30,285)
Income tax benefit              1,682           4,242           3,305          11,659
                             --------        --------        --------        --------
Net loss                     $ (2,687)       $ (6,777)       $ (5,278)       $(18,626)
                             --------        --------        --------        --------
</TABLE>

For the nine months ended September 30, 2002, we recorded an after-tax loss on
the discontinuance of our mortgage and leasing businesses of $8.6 million, or
$0.33 per combined diluted common share. For the nine months ended September 30,
2001, we recorded an after-tax loss on the discontinuance of our mortgage and
leasing businesses of $31.6 million, or $1.23 per combined diluted common share.
Loss from discontinued operations, net of tax, was $8.4 million, or $0.33 per
combined diluted share, for the period from January 1, 2001 through February 28,
2001, the effective date of the Mortgage Transaction.


                                       23
<PAGE>

This report contains forward-looking statements that are subject to certain
risks and uncertainties that could cause actual results to differ materially
from those projected. These forward-looking statements can be identified by the
use of forward-looking phrases such as "will likely result," "may," "are
expected to," "is anticipated," "estimate," "projected," "intends to" or other
similar words or phrases. The most significant among these risks and
uncertainties are:

      (1)   our managed net interest margin;

      (2)   competitive pressures;

      (3)   political, social and/or general economic conditions that affect the
            level of new account acquisitions, customer spending, delinquencies
            and charge-offs;

      (4)   factors affecting fluctuations in the number of accounts or loan
            balances including retention of cardholders after promotional
            pricing periods have expired;

      (5)   interest rate fluctuations;

      (6)   the level of expenses;

      (7)   the timing of the securitizations of our receivables;

      (8)   factors affecting the value of investments that we hold;

      (9)   the effects of government regulation, including restrictions and
            limitations imposed by banking laws, regulators, examinations,
            audits, and agreements between our bank subsidiaries and their
            regulators;

      (10)  relationships with customers, significant vendors and business
            partners;

      (11)  the amount and cost of financing available to us;

      (12)  the ratings on our debt and the debt of our subsidiaries;

      (13)  revisions to estimates associated with the discontinued operations
            of our mortgage and leasing businesses;

      (14)  the impact of litigation; and

      (15)  the proper design and operation of our disclosure controls and
            procedures.

Additional risks that may affect our future performance are set forth elsewhere
in this Quarterly Report on Form 10-Q, in our Annual Report on Form 10-K for the
year ended December 31, 2001 and in our other filings with the Securities and
Exchange Commission.

ADVANTA BUSINESS CARDS

Overview

Advanta Business Cards offers business credit cards to small businesses through
targeted direct mail and telemarketing solicitations and the Internet. This
product provides approved customers with access, through merchants, banks,
checks and ATMs, to an instant unsecured revolving business credit line. Advanta
Business Cards generates interest and other income through finance charges
assessed on outstanding balances, interchange income, cash advance and other
credit card fees.

The managed business credit card receivable portfolio grew from $2.0 billion at
September 30, 2001 and December 31, 2001 to $2.3 billion at September 30, 2002.
Advanta Business Cards originated 53,784 new accounts in the three months ended
September 30, 2002, compared to 57,394 new accounts for the same period of 2001.
Originations for the nine months ended September 30, 2002 were 158,333 new
accounts, compared to 192,711 new accounts for the same period of 2001. The
level of originations in the three and nine months ended September 30, 2002
reflects our strategic initiative to selectively attract and retain more higher
credit quality customers and the competitive environment. We expect originations
in the three months ended December 31, 2002 to be higher than originations in
the three months ended September 30, 2002. General industry trends have shown
that originations in


                                       24
<PAGE>

the first and fourth quarters of the year are typically higher than the second
and third quarters. In addition, response rate trends we experienced in October
2002 indicate increased growth rates for the fourth quarter of 2002.

Pretax income for Advanta Business Cards was $16.6 million for the three months
ended September 30, 2002 as compared to $17.3 million for the same period of
2001. Pretax income for both the nine months ended September 30, 2002 and the
same period of 2001 was $44.9 million. The components of pretax income for
Advanta Business Cards for the three and nine months ended September 30, 2002
and 2001 were as follows ($ in thousands):

<TABLE>
<CAPTION>
                                                  THREE MONTHS ENDED               NINE MONTHS ENDED
                                                     SEPTEMBER 30,                    SEPTEMBER 30,
                                               ------------------------        --------------------------
                                                 2002            2001             2002             2001
                                               --------        --------        ---------        ---------
<S>                                            <C>             <C>             <C>              <C>
Net interest income on owned
  receivables                                  $ 12,104        $ 13,494        $  40,694        $  40,646
Noninterest revenues                             61,652          56,488          180,878          152,498
Provision for credit losses                      (9,179)         (9,325)         (30,779)         (25,449)
Operating expenses                              (47,983)        (43,407)        (145,893)        (122,754)
                                               --------        --------        ---------        ---------
Pretax income                                  $ 16,594        $ 17,250        $  44,900        $  44,941
                                               --------        --------        ---------        ---------
</TABLE>

Net interest income on owned receivables decreased by $1.4 million for the three
months ended September 30, 2002 as compared to the same period of 2001 due
primarily to a decrease in the average yield earned on our business credit card
receivables. The decrease in yield is a result of our focus on selectively
attracting and retaining more higher credit quality customers with a broader
array of competitively-priced offerings and products, including promotional
pricing and rewards programs, which has shifted business credit card revenue
components towards noninterest revenues. Partially offsetting the decrease in
yield was a decrease in our cost of funds and a $43 million increase in average
owned business credit card receivables in the three months ended September 30,
2002 as compared to the same period of 2001. In the nine months ended September
30, 2002, the decrease in the average yield earned on our business credit card
receivables was substantially offset by the decrease in our cost of funds and a
$57 million increase in average owned business credit card receivables,
resulting in consistent levels of net interest income on owned receivables as
compared to the same period of 2001.

The increase in noninterest revenues in both periods is due primarily to growth
in managed receivables and increased interchange income. The increase in the
provision for credit losses in the nine months ended September 30, 2002 as
compared to the same period of 2001, reflects an increase in average owned
business credit card receivables, partially offset by estimates as of September
30, 2002 of a lower level of inherent losses in the portfolio, based on
delinquency and net charge-off rate trends and the current composition of the
portfolio, as compared to estimates as of September 30, 2001. The increase in
operating expenses in both periods resulted from growth in managed receivables
and additional investments in initiatives to strengthen our position as a
leading issuer of business credit cards to the small business market.


                                       25
<PAGE>

The following table provides selected information on a managed portfolio basis.

<TABLE>
<CAPTION>
                                                                                    SEPTEMBER 30,
                                                                             ----------------------------
MANAGED PORTFOLIO DATA ($ IN THOUSANDS)                                         2002              2001
                                                                             ----------        ----------
<S>                                                                          <C>               <C>
Average managed business credit card receivables:
  Three months ended September 30                                            $2,230,089        $1,946,737
  Nine months ended September 30                                              2,118,666         1,829,815
Ending managed business credit card receivables                               2,253,513         1,996,963
Ending number of business credit card accounts - managed                        730,174           689,678
As a percentage of average managed business
  credit card receivables:
  Net interest margin
    Three months ended September 30                                                14.9%             15.3%
    Nine months ended September 30                                                 15.8              14.5
  Fee revenues
    Three months ended September 30                                                 5.6%              5.5%
    Nine months ended September 30                                                  5.6               5.5
  Net charge-offs
    Three months ended September 30                                                 8.9%              7.9%
    Nine months ended September 30                                                  9.2               7.3
  Risk-adjusted revenues (1)
    Three months ended September 30                                                11.6%             12.9%
    Nine months ended September 30                                                 12.2              12.7
  Total receivables 90 days or more delinquent at
    September 30                                                                    3.0%              2.8%
  Total receivables 30 days or more delinquent at
    September 30                                                                    6.7%              5.9%
                                                                             ----------        ----------
</TABLE>

(1)   Risk-adjusted revenues represent net interest margin and fee revenues,
      less net charge-offs.

Securitization Income

Advanta Business Cards recognized securitization income of $29.2 million for the
three months ended September 30, 2002 and $88.8 million for the nine months
ended September 30, 2002. This compares to $28.7 million of securitization
income recognized for the three months ended September 30, 2001 and $74.3
million of securitization income recognized for the nine months ended September
30, 2001. Advanta Business Cards sells interests in receivables through
securitizations. During the revolving period of the securitizations, Advanta
Business Cards also sells receivables to the existing securitization trust on a
continuous basis to replenish the investors' interest in trust receivables that
have been repaid by the cardholders. The increases in securitization income in
the three and nine months ended September 30, 2002 as compared to the same
periods of 2001 were due primarily to increased volume of securitized
receivables. Securitization income in both the three and nine months ended
September 30, 2002 is also impacted by a decline in yields on securitized
receivables, a decrease in the interest rate paid to note holders, and an
increased net charge-off rate on securitized receivables. These fluctuations in
yields and rates are similar to those experienced in on-balance sheet business
credit card receivables as discussed in the "Interest Income and Expense" and
"Provision and Allowance for Credit Losses" sections of Management's Discussion
and Analysis of Financial Condition and Results of Operations.


                                       26
<PAGE>

Interchange Income

Business credit card interchange income on managed business credit card
receivables was $24.2 million for the three months ended September 30, 2002 and
$67.2 million for the nine months ended September 30, 2002. This compares to
business credit card interchange income on managed business credit card
receivables of $20.9 million for the three months ended September 30, 2001 and
$59.1 million for the nine months ended September 30, 2001. The increase in
interchange income was due primarily to higher purchase volume resulting from
the increase in average managed business credit card accounts and receivables,
as well as our strategic initiative to selectively attract and retain more
higher credit quality customers that tend to have higher purchase volumes per
account. The average interchange rate was 2.1% for the three months ended
September 30, 2002, compared to 2.2% for the same period of 2001. The average
interchange rate was 2.1% for the nine months ended September 30, 2002 and 2001.

Servicing Revenues

Advanta Business Cards recognized servicing revenue of $8.3 million for the
three months ended September 30, 2002 and $24.4 million for the nine months
ended September 30, 2002. This compares to servicing revenue of $7.7 million for
the three months ended September 30, 2001 and $21.3 million for the nine months
ended September 30, 2001. The increase in servicing revenue was due to increased
volume of securitized receivables.

VENTURE CAPITAL

Our venture capital segment makes venture capital investments through certain of
our affiliates. The investment objective is to earn attractive returns by
building the long-term values of the businesses in which we invest. The
estimated fair value of our venture capital investments was $13.7 million at
September 30, 2002 and $18.6 million at December 31, 2001. The fair values of
these equity investments are subject to significant volatility. Our investments
in specific companies and industry segments may vary over time, and changes in
concentrations may affect fair value volatility. We primarily invest in
privately-held companies, including early stage companies. These investments are
inherently risky as the market for the technologies or products the investees
have under development may never materialize.

Pretax loss for the venture capital segment was $4.4 million for the three
months ended September 30, 2002, and included $3.5 million of decreases in
valuations of venture capital investments. Pretax loss for the venture capital
segment was $11.0 million for the three months ended September 30, 2001, and
included $10.0 million of decreases in valuations of venture capital
investments. For the nine months ended September 30, 2002, pretax loss for the
venture capital segment was $8.6 million as compared to pretax loss of $30.3
million for the same period of 2001. Pretax loss for the nine months ended
September 30, 2002 included $6.1 million of decreases in valuations of venture
capital investments. Pretax loss for the nine months ended September 30, 2001
included $27.0 million of decreases in valuations and losses on venture capital
investments.


                                       27
<PAGE>

INTEREST INCOME AND EXPENSE

Interest income decreased by $5.1 million for the three months ended September
30, 2002 as compared to the same period of 2001. Interest income decreased by
$24.1 million for the nine months ended September 30, 2002 as compared to the
same period of 2001. The decrease in interest income for the three and nine
months ended September 30, 2002 was due primarily to a decrease in the average
yield earned on our investments and receivables as a result of the prevailing
interest rate environment and the shift in business credit card revenue
components discussed below. Also contributing to the decrease in interest income
was a decrease in average investments of $133 million for the three months ended
September 30, 2002 and $448 million for the nine months ended September 30, 2002
as compared to the same periods of 2001. Excess liquid assets resulting from the
Mortgage Transaction in 2001 were held in short-term, high quality investments
until they could be deployed. Partially offsetting these decreases were
increases in average receivables of $43 million for the three months ended
September 30, 2002 and $57 million for the nine months ended September 30, 2002
as compared to the same periods of 2001.

In 2002, our marketing campaigns have included a broader array of
competitively-priced offerings and products, including promotional pricing and
rewards programs, geared specifically toward attracting more higher credit
quality customers. In the three and nine months ended September 30, 2002, these
strategic initiatives resulted in a shift in business credit card revenue
components represented by a decrease in interest income, including late fees, on
business credit card receivables and an increase in noninterest revenues,
principally driven by higher interchange income due to higher purchase volume.
We believe that the changes in revenue components are consistent with the shift
in the business credit card portfolio towards more higher credit quality
customers and anticipate that this trend towards noninterest revenues will
continue in future periods.

During the three months ended September 30, 2002, interest expense decreased by
$5.9 million as compared to the same period of 2001. Interest expense decreased
by $30.8 million during the nine months ended September 30, 2002 as compared to
the same period of 2001. The decrease in interest expense for the three and nine
months ended September 30, 2002 was due to a reduction in outstanding deposits
and debt and a decrease in our average cost of funds. Our average cost of funds
decreased to 4.94% for the three months ended September 30, 2002 from 7.35%
during the same period of 2001, and decreased to 5.36% for the nine months ended
September 30, 2002 from 7.33% for the same period of 2001. The decrease in our
average cost of funds is primarily a result of the prevailing interest rate
environment.

The following table provides an analysis of interest income and expense data,
average balance sheet data, net interest spread and net interest margin for both
continuing and discontinued operations. The net interest spread represents the
difference between the yield on interest-earning assets and the average rate
paid on interest-bearing liabilities. The net interest margin represents the
difference between the yield on interest-earning assets and the average rate
paid to fund interest-earning assets. Interest income includes late fees on
business credit card receivables. Average receivables include deferred
origination costs, net of deferred fees.


                                       28
<PAGE>

INTEREST RATE ANALYSIS
($ IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED SEPTEMBER 30,
                                        ---------------------------------------------------------------------------------
                                                          2002                                        2001
                                       --------------------------------------       --------------------------------------
                                         AVERAGE                      AVERAGE        AVERAGE                       AVERAGE
                                        BALANCE(1)      INTEREST        RATE        BALANCE(1)       INTEREST        RATE
                                       ----------       --------      -------       ----------       --------      -------
<S>                                    <C>              <C>           <C>           <C>              <C>           <C>
ON-BALANCE SHEET
Receivables:
 Business credit cards(2)              $  445,264       $ 18,452       16.44%       $  401,822       $ 19,361       19.12%
 Other receivables                         27,655            308        4.42            28,328            349        4.89
                                       ----------       --------                    ----------       --------
Total owned receivables                   472,919         18,760       15.74           430,150         19,710       18.18
Investments(3)                            485,165          2,527        2.05           618,018          6,340        4.03
Retained interests in
 securitizations                          102,109          2,629       10.30            88,658          2,660       12.00
Interest-earning assets of
 discontinued operations                   53,117          1,579       11.89            85,788          1,898        8.84
                                       ----------       --------                    ----------       --------
Total interest-earning
 assets                                $1,113,310       $ 25,495        9.09%       $1,222,614       $ 30,608        9.93%

Interest-bearing
 liabilities(4)                        $  934,251       $ 11,640        4.94%       $1,010,311       $ 18,720        7.35%

Net interest spread                                                     4.15%                                        2.58%
Net interest margin                                                     4.94%                                        3.86%

OFF-BALANCE SHEET
Average securitized
 business credit cards                 $1,784,825                                   $1,544,915

Including securitized
 business credit card
 assets:
Interest-earning assets(5)             $2,898,135       $107,132       14.67%       $2,767,529       $106,832       15.31%
Interest-bearing
 liabilities                           $2,719,076       $ 21,976        3.21%       $2,555,226       $ 34,246        5.32%
Net interest spread                                                    11.46%                                        9.99%
Net interest margin                                                    11.66%                                       10.41%
</TABLE>


                                       29
<PAGE>

INTEREST RATE ANALYSIS
($ IN THOUSANDS)

<TABLE>
<CAPTION>
                                                            NINE MONTHS ENDED SEPTEMBER 30,
                                     -----------------------------------------------------------------------------------
                                                        2002                                        2001
                                     ---------------------------------------      --------------------------------------
                                      AVERAGE                        AVERAGE       AVERAGE                       AVERAGE
                                     BALANCE(1)       INTEREST        RATE        BALANCE(1)       INTEREST        RATE
                                     ----------       --------       -------      ----------       --------      -------
<S>                                  <C>              <C>            <C>          <C>              <C>            <C>
ON-BALANCE SHEET
Receivables:
 Business credit cards(2)            $  438,415       $ 59,277       18.08%       $  381,465       $ 56,388       19.76%
 Other receivables                       28,108            932        4.43            28,352            907        4.28
                                     ----------       --------                    ----------       --------
Total owned receivables                 466,523         60,209       17.26           409,817         57,295       18.69
Investments(3)                          514,655          8,394        2.17           962,599         35,398        4.87
Retained interests in
 securitizations                         93,103          7,941       11.25            82,485          7,424       12.00
Interest-earning assets of
 discontinued operations                 52,543          3,812        9.67           253,676         27,618       14.52
                                     ----------       --------                    ----------       --------
Total interest-earning
 assets                              $1,126,824       $ 80,356        9.51%       $1,708,577       $127,735        9.96%

Interest-bearing
 liabilities(4)                      $  941,184       $ 37,741        5.36%       $1,530,501       $ 83,999        7.33%

Net interest spread                                                   4.15%                                        2.63%
Net interest margin                                                   5.06%                                        3.42%

OFF-BALANCE SHEET
Average securitized
 business credit cards               $1,680,251                                   $1,448,350

Including securitized
 business credit card
 assets:
Interest-earning assets(5)           $2,807,075       $318,962       15.19%       $3,156,927       $339,546       14.38%
Interest-bearing
 liabilities                         $2,621,435       $ 66,512        3.39%       $2,978,851       $137,845        6.19%
Net interest spread                                                  11.80%                                        8.19%
Net interest margin                                                  12.02%                                        8.54%
</TABLE>

(1)   Includes assets held and available for sale and non-accrual receivables.

(2)   Interest income includes late fees for on-balance sheet business credit
      card receivables of $1.6 million for the three months ended September 30,
      2002 and $0.9 million for the three months ended September 30, 2001.
      Interest income includes late fees for on-balance sheet business credit
      card receivables of $6.0 million for the nine months ended September 30,
      2002 and $4.6 million for the nine months ended September 30, 2001.

(3)   Interest and average rate for tax-free securities are computed on a tax
      equivalent basis using a statutory rate of 35%.

(4)   Includes funding of assets for both continuing and discontinued
      operations.

(5)   Interest income on managed (owned and securitized) business credit card
      receivables includes late fees of $8.1 million for both the three months
      ended September 30, 2002 and the same period of 2001. Interest income on
      managed business credit card receivables includes late fees of $25.3
      million for the nine months ended September 30, 2002 and $25.7 million for
      the nine months ended September 30, 2001.


                                       30
<PAGE>

PROVISION AND ALLOWANCE FOR CREDIT LOSSES

The provision for credit losses of $9.4 million for the three months ended
September 30, 2002 decreased by $0.1 million as compared to the provision for
credit losses of $9.5 million for the same period of 2001. The provision
reflects a reduction in our estimate of losses inherent in the portfolio as of
September 30, 2002, based on improving delinquency trends in 2002 and the
current composition of the portfolio, as compared to our estimate as of
September 30, 2001, when we were anticipating worsening net charge-off rate
trends for the period from October 2001 to March 2002 due to the seasoning of
the portfolio. This favorable impact was substantially offset by growth in
average owned business credit card receivables, which increased $43 million in
the three months ended September 30, 2002 as compared to the same period of
2001.

The provision for credit losses of $31.5 million for the nine months ended
September 30, 2002 increased by $5.6 million as compared to the provision for
credit losses of $25.9 million for the same period of 2001. Similar to the
variance in the three month period, the increase represents growth in average
owned business credit card receivables, which increased $57 million in the nine
months ended September 30, 2002 as compared to the same period of 2001,
partially offset by estimates in 2002 of a lower level of inherent losses in the
portfolio as compared to the estimates in 2001 as discussed above.

The allowance for credit losses on business credit card receivables was $43.8
million at September 30, 2002, or 9.8% of owned receivables, as compared to the
allowance of $41.2 million, or 9.9% of owned receivables at December 31, 2001.
The decrease in the allowance for credit losses as a percentage of owned
business credit card receivables reflects our estimate of a lower level of
inherent losses in the portfolio and the current composition of the portfolio as
discussed above.

Delinquency and Charge-Off Rate
   Trends on Owned Business
   Credit Card Receivables

<TABLE>
<CAPTION>
                                         SEPT. 30,     DEC. 31,      MAR. 31,      JUN. 30,      SEPT. 30,
                                           2001          2001          2002          2002           2002
                                         ---------     --------      --------      --------      ---------
<S>                                      <C>           <C>           <C>           <C>           <C>
Receivables 90 days or more
  delinquent                               2.8%          3.3%          3.4%          3.3%          2.9%
Receivables 30 days or more
  delinquent                               5.7%          6.7%          7.1%          6.5%          6.4%
Net charge-offs as a % of owned
  business credit card receivables
  for the three months ended
  (annualized)                             7.3%          8.2%          9.4%          8.2%          8.3%
                                           ---           ---           ---           ---           ---
</TABLE>

The improvements in delinquency rates are the result of enhancements in the
collections area of operations and the current composition of the portfolio. In
June 2000, we ceased origination of business credit card accounts with credit
scores of less than 661. We estimate that charge-offs for accounts with credit
scores at origination of less than 661 reached their peak in the first quarter
of 2002, based on the average age of that segment of the portfolio. Although
charge-off levels are not always predictable since they are impacted by the
economic environment and other factors beyond our control, we anticipate
improvements in charge-off rates for business credit card receivables for the
fourth quarter of 2002, based on the current composition of the portfolio and
the current level of receivables 90 days or more delinquent. Because the rate of
business credit card


                                       31
<PAGE>

receivables 30 days or more delinquent has not declined significantly, we do not
expect this trend to continue in the first quarter of 2003.

In July 2002, the bank regulatory agencies issued draft guidance on account
management and loss allowance for credit card lending. It describes the
agencies' expectations for prudent risk management practices for credit card
activities, particularly with regard to credit line management, over-limit
accounts, and workouts. The draft guidance also addresses income recognition and
loss allowance practices for credit card lending. We believe that the draft
guidance, if implemented in the form released, could result in a slight decrease
in overlimit fees that is not expected to have a material adverse effect on our
financial condition or results of operations. It is not possible to predict at
this time whether the draft guidance will be adopted or, if adopted, whether any
of the provisions contained in the current draft will change.


                                       32
<PAGE>

The following table provides a summary of allowance for credit losses,
nonperforming assets, delinquencies and charge-offs as of and for the
year-to-date periods indicated ($ in thousands). Consolidated data includes
business credit cards and other receivables.

<TABLE>
<CAPTION>
                                                         SEPTEMBER 30,     DECEMBER 31,      SEPTEMBER 30,
CREDIT QUALITY                                               2002              2001              2001
                                                         -------------     ------------      -------------
<S>                                                      <C>               <C>               <C>
CONSOLIDATED - MANAGED
Nonperforming assets                                       $111,307          $ 81,666          $ 68,807
Receivables 90 days or more delinquent                       68,012            67,465            57,152
Receivables 30 days or more delinquent                      151,720           137,517           119,793
As a percentage of gross receivables:
 Nonperforming assets                                           4.9%              3.9%              3.4%
 Receivables 90 days or more delinquent                         3.0               3.3               2.8
 Receivables 30 days or more delinquent                         6.7               6.6               5.9
Net charge-offs:
 Amount                                                    $145,531          $143,593          $100,301
 As a percentage of average gross receivables
  (annualized)                                                  9.0%              7.6%              7.2%

CONSOLIDATED - OWNED
Allowance for credit losses                                $ 45,247          $ 41,971          $ 39,772
Nonperforming assets                                         21,918            20,052            15,715
Receivables 90 days or more delinquent                       13,623            14,474            10,722
Receivables 30 days or more delinquent                       30,208            29,520            22,629
As a percentage of gross receivables:
 Allowance for credit losses                                    9.6%              9.4%             10.0%
 Nonperforming assets                                           4.6               4.5               4.0
 Receivables 90 days or more delinquent                         2.9               3.3               2.7
 Receivables 30 days or more delinquent                         6.4               6.6               5.7
Net charge-offs:
 Amount                                                    $ 28,186          $ 27,372          $ 19,447
 As a percentage of average gross receivables
  (annualized)                                                  8.1%              6.7%              6.3%

BUSINESS CREDIT CARDS - MANAGED
Nonperforming assets                                       $110,567          $ 81,083          $ 68,277
Receivables 90 days or more delinquent                       67,272            66,882            56,622
Receivables 30 days or more delinquent                      150,137           136,037           118,163
As a percentage of gross receivables:
 Nonperforming assets                                           4.9%              4.0%              3.4%
 Receivables 90 days or more delinquent                         3.0               3.3               2.8
 Receivables 30 days or more delinquent                         6.7               6.7               5.9
Net charge-offs:
 Amount                                                    $145,517          $143,590          $100,298
 As a percentage of average gross receivables
  (annualized)                                                  9.2%              7.7%              7.3%

BUSINESS CREDIT CARDS - OWNED
Allowance for credit losses                                $ 43,776          $ 41,169          $ 39,170
Nonperforming assets                                         21,178            19,469            15,185
Receivables 90 days or more delinquent                       12,883            13,891            10,192
Receivables 30 days or more delinquent                       28,625            28,040            20,999
As a percentage of gross receivables:
 Allowance for credit losses                                    9.8%              9.9%             10.6%
 Nonperforming assets                                           4.8               4.7               4.1
 Receivables 90 days or more delinquent                         2.9               3.3               2.8
 Receivables 30 days or more delinquent                         6.4               6.7               5.7
Net charge-offs:
 Amount                                                    $ 28,172          $ 27,369          $ 19,444
 As a percentage of average gross receivables
  (annualized)                                                  8.6%              7.2%              6.8%
</TABLE>


                                       33
<PAGE>

OTHER REVENUES

<TABLE>
<CAPTION>
($ in thousands)                          THREE MONTHS ENDED              NINE MONTHS ENDED
                                             SEPTEMBER 30,                  SEPTEMBER 30,
                                        -----------------------        -----------------------
                                          2002           2001            2002           2001
                                        -------        --------        -------        --------
<S>                                     <C>            <C>             <C>            <C>
Investment securities losses, net       $(3,286)       $(10,000)       $(5,379)       $(24,316)
Business credit card rewards             (2,837)         (2,379)        (7,864)         (6,287)
Cash advance fees                           773             872          2,464           1,669
Loss on sale of deposits                      0               0              0          (2,835)
Insurance revenues (losses),
  net, and other                          1,632             779          5,008          (5,273)
                                        -------        --------        -------        --------
  Total other revenues, net             $(3,718)       $(10,728)       $(5,771)       $(37,042)
                                        =======        ========        =======        ========
</TABLE>

Investment securities losses, net, include changes in the fair value and
realized gains or losses on venture capital investments. Investment securities
losses for the three months ended September 30, 2002 include $3.5 million of
decreases in valuations of venture capital investments and $0.2 million of
realized gains on other investments. Investment securities losses for the nine
months ended September 30, 2002 include $6.1 million of decreases in valuations
of venture capital investments and $0.7 million of realized gains on other
investments. Investment securities losses for the three months ended September
30, 2001 include $10.0 million of decreases in valuations of venture capital
investments. Investment securities losses for the nine months ended September
30, 2001 include a $4.9 million loss on the sale of a venture capital
investment, $22.1 million of decreases in valuations of venture capital
investments, and $2.7 million of realized gains on other investments.

Business credit card rewards, which include bonus miles and cash-back rewards,
are earned by eligible cardholders based on net purchases charged to their
accounts. Increases in business credit card rewards in the three and nine months
ended September 30, 2002 as compared to the same periods of the prior year, were
due to the increase in average managed business credit card accounts in the
rewards programs and the corresponding purchase activity in those accounts,
partially offset by a reduction in the estimated cost of future reward
redemptions recorded in the three months ended March 31, 2002 and our change in
estimate in the three months ended September 30, 2002. In the third quarter of
2002, we revised our estimate of the bonus mile reward liability, including a
change in the estimate of the percentage of cardholders that will ultimately
claim rewards from 80% to 70% based on experience for that program life-to-date.
The impact of this change in estimate was an approximate $0.7 million increase
in other revenues in the three and nine months ended September 30, 2002. See
Note 6 to the consolidated financial statements for further discussion. We
anticipate that this change in estimate will have a favorable, but not material,
impact on results of operations in future periods, dependent on the levels of
bonus mile rewards earned by cardholders in those periods.

Cash advance fees decreased in the three months ended September 30, 2002 as
compared to the same period of 2001. This decrease was due primarily to a
decrease in cash advance activity per account resulting from our strategic
initiative to selectively attract and retain more higher credit quality
customers that tend to take less cash advances on their accounts, partially
offset by the growth in managed business credit card accounts. In the nine
months ended September 30, 2002, the decrease in cash advance activity per
account was more than offset by an increase in activity due to the growth in
managed business credit card accounts.


                                       34
<PAGE>

In the second quarter of 2001, we sold $389.7 million of deposit liabilities to
E*TRADE Bank, a wholly-owned subsidiary of E*TRADE Group, Inc., resulting in a
$2.8 million loss.

Insurance revenues (losses), net, and other includes charges of $0.5 million for
the three months ended September 30, 2002 and $1.1 million for the nine months
ended September 30, 2002 related to valuation adjustments on other receivables
held for sale. In the first quarter of 2001, we successfully negotiated an early
termination of our strategic alliance with Progressive Casualty Insurance
Company to direct market auto insurance. Insurance revenues, net, and other for
the nine months ended September 30, 2001 includes operating results of insurance
operations, the impact of the termination of the strategic alliance with
Progressive Casualty Insurance Company and $10 million of charges related to the
write-off of insurance-related deferred acquisition costs that were unrealizable
subsequent to the termination of the auto insurance strategic alliance.

OPERATING EXPENSES

<TABLE>
<CAPTION>
($ in thousands)                              THREE MONTHS ENDED           NINE MONTHS ENDED
                                                 SEPTEMBER 30,               SEPTEMBER 30,
                                           ------------------------     -----------------------
                                             2002            2001         2002           2001
                                           -------          -------     --------       --------
<S>                                        <C>              <C>         <C>            <C>
Salaries and employee benefits             $16,645          $15,172     $ 50,309       $ 45,049
Amortization of business credit
   card deferred origination
   costs, net                               11,845           10,492       36,277         27,601
External processing                          4,204            4,147       12,463         11,555
Marketing                                    2,730            1,752        8,294          8,726
Equipment                                    2,683            1,955        7,750          6,045
Professional fees                            2,675            4,029        9,922         10,251
Occupancy                                    1,647            1,683        4,945          4,411
Credit                                       1,308            1,586        4,603          3,928
Telephone                                    1,152              855        2,890          1,882
Insurance                                      873            1,452        1,987          4,250
Postage                                        840              789        2,462          2,405
Other                                        2,375              830        5,920          5,808
                                           -------          -------     --------       --------
Total operating expenses                   $48,977          $44,742     $147,822       $131,911
                                           =======          =======     ========       ========
</TABLE>

Salaries and employee benefits, external processing, equipment and telephone
expense have increased in the three and nine months ended September 30, 2002 as
compared to the same periods of 2001. These increases are due primarily to
growth in managed business credit card receivables and additional investments in
initiatives to strengthen our position as a leading issuer of business credit
cards to the small business market. These included initiatives to provide
additional value to our existing customers, customer retention activities,
development of additional products and services, development of affinity cards
and partnership relationships, and enhancement of internet capabilities for
servicing our customers. External processing expenses in 2002 also reflect a
reduction in the contracted rate for these services that occurred during the
first quarter of 2002.

The increase in amortization of business credit card deferred origination costs,
net, in the three and nine months ended September 30, 2002 as compared to the
same periods of 2001, and the increase in marketing expense in the three months
ended September 30, 2002 as compared to the same period of 2001, are
attributable to our strategic initiative to selectively attract and retain more
higher credit quality customers and the competitive environment for credit card
issuers. In the nine months ended September 30, 2002, increases in marketing
expense resulting from this initiative were more than offset by decreased
origination activities in our retail


                                       35
<PAGE>

note program as a result of our high liquidity position subsequent to the
Mortgage Transaction in 2001. The amortization of business credit card deferred
origination costs in the three and nine months ended September 30, 2002 also
includes a change in estimate of $0.5 million. Effective July 1, 2002, we
refined our estimate of the timing of when accounts are acquired to better match
the resulting estimated period of benefit to the amortization of deferred
acquisition costs. The impact of this change in estimate in the three months
ended September 30, 2002 was a decrease in amortization of business credit card
deferred origination costs of $0.5 million. See Note 3 to the consolidated
financial statements for further discussion.

Professional fees decreased in the three and nine months ended September 30,
2002 as compared to the same periods of 2001 due primarily to a reduction in
legal expenses related to the timing of litigation activity. Credit expense
decreased in the three months ended September 30, 2002 as compared to the same
period of 2001 due to a decrease in expenses associated with outsourced
individual account recovery efforts. In the three months ended September 30,
2002 as compared to the same period of 2001, there was an increase in the
proportion of total recoveries collected through sales of pools of charged-off
accounts and a decrease in the proportion collected through outsourced
individual account recovery efforts. Credit expense increased in the nine months
ended September 30, 2002 as compared to the same period of 2001 due to growth in
the volume of charged-off accounts, partially offset by the shift in the types
of recoveries discussed above.

The decrease in insurance expense in the three and nine months ended September
30, 2002 as compared to 2001 is primarily a result of a decrease in FDIC
insurance costs on deposit liabilities. Our FDIC insurance costs decreased due
to the significant reduction in our outstanding deposits at Advanta National
Bank subsequent to the Mortgage Transaction, and due to a decrease in the
insurance assessment rate at Advanta Bank Corp. In addition, insurance expense
in the nine months ended September 30, 2002 includes a $0.4 million reduction of
our estimated liability related to worker's compensation insurance.

Other operating expenses in the three and nine months ended September 30, 2001
include a $2.2 million cash rebate related to prior periods' business credit
card processing costs. Other operating expenses in the nine months ended
September 30, 2002 include a $1.1 million decrease in litigation reserves
resulting from a reduction of damages in a jury verdict. See further discussion
in Note 12 to the consolidated financial statements.

LITIGATION CONTINGENCIES

Advanta Corp. and its subsidiaries are involved in class action lawsuits, other
litigation, claims and legal proceedings arising in the ordinary course of
business or discontinued operations, including litigation arising from our
operation of the mortgage business prior to the Mortgage Transaction in the
first quarter of 2001. See discussion in Note 12 to the consolidated financial
statements. Management believes that the aggregate liabilities, if any,
resulting from these actions will not have a material adverse effect on the
consolidated financial position or results of our operations based on the level
of litigation reserves we have established and our expectations regarding the
ultimate resolutions of these actions. However, due to the inherent uncertainty
in litigation and since the ultimate resolutions of these proceedings are
influenced by factors outside of our control, it is reasonably possible that our
estimated liability under these proceedings may change or that actual results
will differ from our estimates. Our litigation reserves are included in other
liabilities on the consolidated balance sheets.


                                       36
<PAGE>

UNUSUAL CHARGES

Subsequent to the exit of our mortgage business and discontinuance of our
leasing business in the first quarter of 2001, we implemented a plan to
restructure our corporate functions to a size commensurate with our ongoing
businesses and incurred certain other unusual charges related to employee costs.
The restructuring activities had no significant impact on operations while they
were ongoing. Due to the termination of employees and the write-off of certain
assets no longer used, we expected and realized lower personnel expenses in the
support functions in the 12 months following the charges, and expected to
realize lower depreciation and amortization expense over the following 5-7
years. These decreases were due to the termination of employees and the
write-off or write-down of assets previously deployed in connection with exited
businesses. We also expected and realized the elimination of the costs of the
contractual commitments associated with exited business products from future
operating results over the estimated timeframe of the contracts.

Employee Costs

In the first quarter of 2001, we recorded a $4.1 million charge for severance
and outplacement costs associated with the restructuring of corporate functions.
There were 69 employees severed who were entitled to benefits. These employees
worked in corporate support functions including accounting and finance, human
resources, information technology, legal and facilities management. Employees
were notified in March 2001, and severance amounts were payable over a 12-month
period following the employee's termination date. These payments were completed
in the third quarter of 2002.

Additionally, during 2001, we incurred $23.2 million of other employee costs.
This amount included approximately $10 million attributable to bonuses to
certain key employees in recognition of their efforts on behalf of Advanta in
the strategic alternatives process. It also included approximately $4.5 million
of bonuses in recognition of the restructuring of the company and other
significant transitional efforts. These bonuses were paid over a 12-month
period. In the second quarter of 2001, we recorded a $1.0 million increase in
employee costs related to a revision in estimate associated with these bonuses.
In 2001, we accelerated vesting of 32% of outstanding options that were not
vested at the date of the closing of the Mortgage Transaction. This acceleration
resulted in a noncash charge of $1.3 million. In connection with reviewing our
compensation plans after the Mortgage Transaction and restructuring of corporate
functions, we implemented a program whereby all outstanding stock appreciation
rights and shares of phantom stock were terminated in exchange for cash to be
paid through a deferred compensation arrangement. We recorded charges of $2.9
million associated with this exchange. The charge reflects a $0.7 million
reduction recorded in the three months ended September 30, 2001, as actual cash
settlement costs were less than estimated. Due to the restructuring of the
company, we implemented programs whereby certain out-of-the-money options were
exchanged for shares of stock, and whereby certain shares of restricted stock
were exchanged for cash and stock options in a tender offer, subject to certain
performance conditions and vesting requirements. Noncash charges associated with
the issuance of the stock, stock options and the tender offer totaled $3.6
million. This charge reflects a $1.4 million increase recorded in the three
months ended September 30, 2001, as actual noncash charges associated with the
tender offer were more than estimated.


                                       37
<PAGE>

Expenses Associated with Exited Businesses/Products

In the first quarter of 2001, we recorded charges of $2.2 million related to
other products exited for which no future revenues or benefits would be
received. In the third quarter of 2001, we were able to settle some of these
commitments for less than originally estimated, and reduced the charge by $0.7
million. We paid the remaining costs, which included lease and other
commitments, in the third quarter of 2002.

In 1998, in connection with the transfer of our consumer credit card business to
Fleet Credit Card LLC, we made major organizational changes to reduce corporate
expenses incurred in the past: (a) to support the business contributed to Fleet
Credit Card LLC in the transfer of our consumer credit card business, and (b)
associated with the business and products no longer being offered or not
directly associated with our mortgage, business credit card and leasing units.
As of December 31, 2000, the remaining accrual related to charges associated
with these organizational changes was $13.0 million. This accrual related to
contractual commitments to certain customers, and non-related financial
institutions that were providing benefits to those customers, under a product
that was no longer offered and for which no future revenues or benefits would be
received. A third party assumed the liabilities associated with these
commitments in the first quarter of 2001, and we recorded an additional charge
relating to the settlement of these commitments of $10.3 million.

Asset Impairments

In connection with our plan to restructure our corporate functions to a size
commensurate with our ongoing businesses during the first quarter of 2001, we
identified certain assets that would no longer be used, and the carrying costs
of these assets were written off resulting in a charge of $2.6 million. We
estimated the realizable value of these assets to be zero due to the nature of
the assets, which include leasehold improvements and capitalized software.

DISCONTINUED OPERATIONS

Effective February 28, 2001, we completed the Mortgage Transaction and exit of
our mortgage business, Advanta Mortgage, through a purchase and sale agreement
with Chase Manhattan Mortgage Corporation as buyer. Loss from discontinued
operations, net of tax, for the period from January 1, 2001 through February 28,
2001, the effective date of the Mortgage Transaction, was $8.4 million. The
purchase and sale agreement provided for the sale, transfer and assignment of
substantially all of the assets and operating liabilities associated with our
mortgage business, as well as specified contingent liabilities arising from our
operation of the mortgage business prior to closing that were identified in the
purchase and sale agreement. We retained contingent liabilities, primarily
relating to litigation, arising from our operation of the mortgage business
before closing that were not specifically assumed by the buyer.

On January 23, 2001, we announced that after a thorough review of strategic
alternatives available for our leasing business, Advanta Leasing Services, we
decided to cease originating leases. We are continuing to service the existing
leasing portfolio rather than sell the business or the portfolio.

In the nine months ended September 30, 2002, we recorded an after-tax loss on
the discontinuance of our mortgage and leasing businesses of $8.6 million. The
components of this loss include a pretax charge of $7.5 million for a litigation
settlement related to a mortgage loan servicing agreement termination fee
collected


                                       38
<PAGE>

in December 2000, a $17.8 million pretax charge primarily related to an increase
in our estimated future costs of mortgage business-related contingent
liabilities, an $11.3 million pretax gain on leasing discontinuance, and a tax
benefit of $5.4 million. The $17.8 million relates primarily to an increase in
our estimated future costs of mortgage business-related contingent liabilities
in connection with (a) contingent liabilities and litigation costs arising from
the operation of the mortgage business prior to the Mortgage Transaction that
were not assumed by the buyer, and (b) costs related to Advanta's litigation
with Chase Manhattan Mortgage Corporation in connection with the Mortgage
Transaction. The change in estimate reflects the legal and consulting fees and
other costs that we expect to incur based on current levels of contingent
liabilities and expense rates, and considers the status of the discovery process
associated with the Mortgage Transaction litigation. The $11.3 million pretax
gain on leasing discontinuance represents a revision in the estimated operating
results of the leasing segment over the remaining life of the lease portfolio
due primarily to favorable credit performance. The leasing portfolio performed
favorably as compared to the expectations and assumptions established in 2001.
This improvement was the result of successfully obtaining a replacement vendor
to service leased equipment for a former leasing vendor that had filed for
bankruptcy protection, and operational improvements in the leasing collections
area.

In the nine months ended September 30, 2001, we recorded an after-tax loss on
the discontinuance of our mortgage and leasing businesses of $31.6 million. The
components of this net loss include a pretax gain on the Mortgage Transaction of
$20.8 million, a pretax loss on the discontinuance of our leasing business of
$45.0 million, and a tax provision of $7.4 million. The gain on the Mortgage
Transaction does not reflect any impact from the post-closing adjustment process
that has not yet been completed due to litigation related to the Mortgage
Transaction. See Note 12 to the consolidated financial statements.

Estimates are used in the accounting for discontinued operations, including
estimates of the future costs of mortgage business-related litigation and
estimates of operating results through the remaining term of the leasing
portfolio. As all estimates used are influenced by factors outside our control,
there is uncertainty inherent in these estimates, making it reasonably possible
that they could change in the near term.

ASSET/LIABILITY MANAGEMENT

We manage our financial condition with a focus on maintaining high credit
quality standards, disciplined management of market risks and prudent levels of
growth, leverage and liquidity.

MARKET RISK SENSITIVITY

We are exposed to equity price risk on the equity securities in our investments
available for sale portfolio. A 20% adverse change in equity prices would result
in an approximate $3.7 million decrease in the fair value of our equity
investments as of September 30, 2002.

We measure our interest rate risk using a rising rate scenario and a declining
rate scenario. Net interest income is estimated using a third party software
model that uses standard income modeling techniques. We also measure the effect
of interest rate risk on our managed net interest income, which includes net
interest income on owned assets and net interest income on securitized
receivables. The measurement of managed net interest income in addition to net
interest income on owned assets is useful to us because our securitization
income fluctuates with yields on


                                       39
<PAGE>

securitized receivables and interest rates paid to note holders. Both increasing
and decreasing rate scenarios assume an instantaneous shift in rates and measure
the corresponding change in expected net interest income as compared to a base
case scenario.

We estimate that at September 30, 2002, our net interest income on owned assets
over a 12-month period would increase by approximately 14% if interest rates
were to rise by 200 basis points, and that it would decrease by approximately 1%
if interest rates were to fall by 200 basis points over the same period. We
estimate that at September 30, 2002, our managed net interest income over a
12-month period would decrease by approximately 2% if interest rates were to
rise by 200 basis points, and that it would increase by approximately 9% if
interest rates were to fall by 200 basis points over the same period. Our
business credit card receivables include interest rate floors that cause our
managed net interest income to rise in the declining rate scenario. Our managed
net interest income decreases in a rising rate scenario due to the portion of
the business credit card portfolio that is effectively at a fixed rate because
of the nature of the pricing of the accounts.

The above estimates of net interest income sensitivity alone do not provide a
comprehensive view of our exposure to interest rate risk. The quantitative risk
information is limited by the parameters and assumptions utilized in generating
the results. These analyses are useful only when viewed within the context of
the parameters and assumptions used. The above rate scenarios in no way reflect
management's expectation regarding the future direction of interest rates, and
they depict only two possibilities out of a large set of possible scenarios.


                                       40
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Our goal is to maintain an adequate level of liquidity, for both long-term and
short-term needs, through active management of both assets and liabilities.
Since Advanta Corp.'s debt rating is not investment grade, our access to
unsecured, institutional debt is limited. However, we do have access to a
diversity of funding sources as described below, and had a high level of
liquidity at September 30, 2002. In the third quarter of 2002, we completed our
fourth public business credit card securitization. At September 30, 2002, we had
$224 million of federal funds sold, $218 million of receivables held for sale,
and $132 million of investments, which could be sold to generate additional
liquidity. Components of funding were as follows ($ in thousands):

<TABLE>
<CAPTION>
                                                              SEPTEMBER 30, 2002         DECEMBER 31, 2001
                                                             -------------------        -------------------
                                                               AMOUNT         %           AMOUNT         %
                                                             ----------      ---        ----------      ---
<S>                                                          <C>             <C>        <C>             <C>
Securitized business credit card
  receivables                                                $1,808,272       56%       $1,626,709       53%
Deposits                                                        662,498       21           636,915       21
Debt and other borrowings                                       303,707        9           355,899       11
Equity, including capital securities                            462,790       14           466,299       15
                                                             ----------      ---        ----------      ---
Total                                                        $3,237,267      100%       $3,085,822      100%
                                                             ----------      ---        ----------      ---
</TABLE>

At September 30, 2002 our ratio of equity, including capital securities, to
owned assets was 28.7% as compared to 28.5% at December 31, 2001. In managing
our capital needs, we also consider our ratio of equity to managed assets, which
includes securitized assets. The ratio of equity, including capital securities,
to managed assets was 13.3% at September 30, 2002 and 13.2% at December 31,
2001.

At September 30, 2002, we had a $280 million committed commercial paper conduit
facility secured by business credit card receivables, all of which was unused at
September 30, 2002. Upon the expiration of this commercial paper conduit
facility in June 2003, management expects to obtain the appropriate level of
replacement funding under similar terms and conditions.

In the first and second quarters of 2003, the revolving periods of two series of
the business credit card securitization trust will end, and the series will
start their expected amortization periods. As a result, we will need to replace
approximately $750 million of funding currently being provided by these series.
Management expects to replace this funding through a combination of increased
deposits and private and public securitization transactions under similar terms
and conditions.

We continue to offer unsecured debt securities of Advanta Corp., in the form of
RediReserve Certificates and Investment Notes, to retail investors through our
retail note program. We change the interest rates we offer frequently, depending
on market conditions and our funding needs. The rates also vary depending on the
size of each investment. At September 30, 2002, $304 million of RediReserve
Certificates and Investment Notes were outstanding with interest rates ranging
from 3.75% to 11.56%.

In the first quarter of 2001, after consideration of the parent liquidity and
the capital requirements for the ongoing business, the Board of Directors of
Advanta Corp. authorized management to purchase up to 1.5 million shares of
Advanta Corp. common stock or the equivalent dollar amount of our capital
securities, or some combination thereof. In August 2002, the Board of Directors
authorized the purchase of up to an additional 1.5 million shares of Advanta
Corp. common stock, bringing the total authorization to up to 3.0 million
shares. We intend to


                                       41
<PAGE>

continue to make purchases modestly and when we believe it is prudent to do so
while we analyze evolving capital requirements. During the year ended December
31, 2001, we repurchased 693,300 shares of our Class B Common Stock. In the nine
months ended September 30, 2002 we repurchased 884,900 shares of our Class B
Common Stock.

In 2000, Advanta Bank Corp. entered into agreements with its bank regulatory
agencies, primarily relating to the bank's subprime lending operations. These
agreements imposed temporary deposit growth limits at Advanta Bank Corp. and
required prior regulatory approval of cash dividends. In April 2002, the
agreements were removed and, as a result, the restrictions in the agreements on
deposit growth and payment of cash dividends are no longer applicable. In
connection with removing the agreements, Advanta Bank Corp. reached an
understanding with its regulators, reflecting continued progress in our ongoing
efforts to enhance Advanta Bank Corp.'s practices and procedures. Effective
October 2002, the understanding was revised. The revised understanding replaces
the provisions of the prior understanding and provides for the bank to enhance
certain of its internal planning and monitoring processes. The revised
understanding is consistent with the manner in which Advanta Bank Corp. is
currently operating its business and includes no restrictions expected to have
any impact on our financial results.

In 2000, Advanta National Bank also reached agreements with its bank regulatory
agency, primarily relating to the bank's subprime lending operations. The
agreements established temporary asset growth limits at Advanta National Bank,
imposed restrictions on taking brokered deposits and required that Advanta
National Bank maintain certain capital ratios in excess of the minimum
regulatory standards. In 2001, Advanta National Bank entered into an additional
agreement with its regulatory agency regarding restrictions on new business
activities and product lines at Advanta National Bank after the Mortgage
Transaction, and the resolution of outstanding Advanta National Bank
liabilities. The agreement also reduced the capital requirements for Advanta
National Bank to 12.7% for Tier 1 and Total capital to risk-weighted assets, and
to 5% for Tier 1 capital to adjusted total assets as defined in the agreement.
In addition, the agreement prohibits the payment of dividends by Advanta
National Bank without prior regulatory approval.

At September 30, 2002, Advanta Bank Corp.'s combined total capital ratio
(combined Tier I and Tier II capital to risk-weighted assets) was 22.73%, and
Advanta National Bank's combined total capital ratio was 23.36%. At December 31,
2001, Advanta Bank Corp.'s combined total capital ratio (combined Tier I and
Tier II capital to risk-weighted assets) was 18.80% and Advanta National Bank's
combined total capital ratio was 23.34%. In each case, Advanta Bank Corp. and
Advanta National Bank had capital at levels a bank is required to maintain to be
classified as "well-capitalized" under the regulatory framework for prompt
corrective action. However, Advanta National Bank does not meet the definition
of "well-capitalized" because of the existence of its agreement with the Office
of the Comptroller of the Currency, even though we have achieved the higher
imposed capital ratios required by the agreement.

In the second quarter of 2002, the bank regulatory agencies issued an
interagency advisory that requires accrued interest receivable relating to
securitized credit cards to be treated as a subordinated residual interest for
regulatory capital calculations no later than December 31, 2002. Advanta Bank
Corp. and Advanta National Bank will adopt this guidance effective December 31,
2002. The adoption of this guidance will not impact the regulatory capital
requirements of Advanta National Bank. We estimate that the adoption of this
interagency guidance, as well as other regulatory guidance, will result in
Advanta Bank Corp.'s combined total capital ratio being approximately eight
percentage points lower. Based on the


                                       42
<PAGE>

estimated impact, we anticipate that Advanta Bank Corp. will remain classified
as "well-capitalized" under the regulatory framework for prompt corrective
action after adoption.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information required by this item is set forth in "Item 2-Management's
Discussion and Analysis of Financial Condition and Results of Operations" in
this Report on Form 10-Q. See "Asset/Liability Management-Market Risk
Sensitivity."

ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our Exchange Act reports is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to management, including our Chief Executive
Officer and Chief Financial Officer as appropriate, to allow timely decisions
regarding required disclosure. In designing and evaluating the disclosure
controls and procedures, management recognized that any disclosure controls and
procedures, no matter how well designed and operated, can provide only
reasonable, rather than absolute, assurance of achieving the desired control
objectives, and management necessarily was required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and procedures.

Within the 90 days prior to the filing of this quarterly report, an evaluation
was performed under the supervision and with the participation of management,
including our Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on this evaluation, the Chief Executive Officer and Chief
Financial Officer have concluded that our disclosure controls and procedures are
effective to ensure that information required to be disclosed in the reports
that we file or submit under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Securities and Exchange
Commission's rules and forms. There have been no significant changes in our
internal controls or in other factors that could significantly affect these
controls subsequent to the date of the evaluation.


                                       43
<PAGE>

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On January 22, 1999, Fleet and certain of its affiliates filed a lawsuit against
Advanta Corp. and certain of its subsidiaries in Delaware Chancery Court.
Fleet's allegations, which we deny, center around Fleet's assertions that we
failed to complete certain post-closing adjustments to the value of the assets
and liabilities we contributed to Fleet Credit Card LLC in connection with the
Consumer Credit Card Transaction in 1998. Fleet seeks damages of approximately
$141 million. We filed an answer to the complaint denying the material
allegations of the complaint, but acknowledging that we contributed $1.8 million
in excess liabilities in the post-closing adjustment process, after taking into
account the liabilities we have already assumed. We also filed a
countercomplaint against Fleet for approximately $101 million in damages we
believe have been caused by certain actions of Fleet following the closing of
the Consumer Credit Card Transaction. In October 2001, the court issued a ruling
on summary judgment in favor of Fleet on certain legal issues and positions
advocated by Fleet and against others that Fleet advocated. As a result, for
purposes of trial only, the parties stipulated to a number of issues relating to
the court's orders including certain amounts that would be owed by each party to
the other, while preserving their rights to appeal. Many issues remained to be
determined at trial, including the financial impact of all issues in dispute.
The trial took place in November and December 2001. Post-trial briefing is
complete and on April 10, 2002, the Court heard oral argument. As a result of
related litigation with Fleet, $70.1 million of our reserves in connection with
this litigation were funded in an escrow account in February 2001. Taking into
account amounts that Fleet owes to us and the amount escrowed, including
interest, we have funded our estimated maximum net exposure to Fleet in the
litigation. Management expects that the ultimate resolution of this litigation
will not have a material adverse effect on our financial position or future
operating results given the amount escrowed, our reserves and amounts that Fleet
owes us.

On December 5, 2000, a former executive of Advanta obtained a jury verdict
against Advanta in the amount of $3.9 million in the United States District
Court for the Eastern District of Pennsylvania, in connection with various
claims against Advanta related to the executive's termination of employment. In
September 2001, the District Court Judge issued orders denying both parties'
post-trial motions. A judgment in the amount of approximately $6 million, which
includes the $3.9 million described above, was entered against Advanta. In
September 2001, Advanta filed an appeal to the United States Court of Appeals
for the Third Circuit. Advanta has posted a supersedeas bond in the amount of $8
million. The plaintiff filed a cross-appeal from the order adverse to him. On
July 8, 2002, the Court of Appeals issued a Judgment and Opinion affirming in
part and reversing in part the District Court judgment. The Court of Appeals
affirmed the judgment on liability but determined that the jury award of damages
was excessive. The Court of Appeals reduced the jury verdict by $1.1 million and
also ordered the District Court to recalculate liquidated damages based on the
reduced award. On July 22, 2002, Advanta filed a motion for rehearing and/or
rehearing en banc asserting that a new trial was required to remedy the error
found by the Court of Appeals. The motion was denied by Order dated August 8,
2002, and Advanta is now considering further appellate review. The District
Court Judge has not yet ruled on the executive's petition for attorney's fees
and costs in the amount of approximately $1.2 million, which Advanta has
contested. Management expects that the ultimate resolution of this litigation
will not have a material adverse effect on our financial position or future
operating results.


                                       44
<PAGE>

On July 26, 2001, Chase Manhattan Mortgage Corporation ("Chase") filed a
complaint against Advanta and certain of its subsidiaries in the United States
District Court for the District of Delaware alleging, among other things, that
Advanta breached its contract with Chase in connection with the Mortgage
Transaction. Chase claims that Advanta misled Chase concerning the value of
certain of the assets sold to Chase. In September 2001, Advanta filed an answer
to the complaint in which Advanta denied all of the substantive allegations of
the complaint and asserted a counterclaim against Chase for breach of contract
relating to funds owed by Chase to Advanta in connection with the transaction.
The matter is in discovery and trial is not anticipated before September 2003.
We believe that the lawsuit is without merit and will vigorously defend Advanta
in this litigation. We do not expect this lawsuit to have any impact on our
continuing business and, based on the complete lack of merit, we do not
anticipate that the lawsuit will have a material adverse impact on Advanta or
the named subsidiaries.

On November 8, 2001 and January 28, 2002, the accounting firm of Grant Thornton,
LLP ("Grant Thornton") filed third-party complaints against Advanta Mortgage
Corp., USA ("AMCUSA") in two related lawsuits in the United States District
Court for the Southern District of West Virginia. The third-party claims alleged
negligent misrepresentation, claiming without specificity or factual support
that Grant Thornton received inaccurate information from AMCUSA concerning the
amount of loans that AMCUSA had been servicing for the First National Bank of
Keystone, West Virginia ("Keystone Bank"). Grant Thornton was the former auditor
for Keystone Bank, which failed. Grant Thornton has been sued by the FDIC as
receiver of Keystone Bank and by shareholders and others with purported
ownership interests in Keystone Bank, alleging that Grant Thornton rendered an
unqualified opinion for Keystone Bank's financial statements, when in fact the
financial statements fraudulently overstated the bank's assets by more than $500
million. In December 2001 and February 2002, AMCUSA filed motions to dismiss the
third-party complaints, both of which were granted (on June 13, 2002 and June
26, 2002, respectively). On June 27, 2002, Grant Thornton again asserted a
third-party claim for negligent misrepresentation very similar to the one that
had just been dismissed, and an additional third-party claim for
"contribution-negligence" based on the same supposed provision of inaccurate
information regarding loans being serviced for Keystone Bank. On July 11, 2002,
AMCUSA again moved to dismiss, and that motion is pending. AMCUSA plans to
vigorously defend this litigation, and because AMCUSA believes that the
likelihood of a final judgment of liability against AMCUSA is remote, it is not
expected that the ultimate resolution of this litigation will have a material
adverse effect on Advanta's financial position or future operating results.

In addition to the cases described above, Advanta Corp. and its subsidiaries are
involved in class action lawsuits, other litigation, claims and legal
proceedings arising in the ordinary course of business or discontinued
operations, including litigation arising from our operation of the mortgage
business prior to the Mortgage Transaction in the first quarter of 2001.
Management believes that the aggregate liabilities, if any, resulting from all
litigation, claims and other legal proceedings will not have a material adverse
effect on the consolidated financial position or results of our operations based
on the level of litigation reserves we have established and our expectations
regarding the ultimate resolutions of these actions. However, due to the
inherent uncertainty in litigation and since the ultimate resolutions of our
litigation, claims and other legal proceedings are influenced by factors outside
of our control, it is reasonably possible that our estimated liability under
these proceedings may change or that actual results will differ from our
estimates.


                                       45
<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits - The following exhibits are being filed with this report on Form
      10-Q.

<TABLE>
<CAPTION>
        EXHIBIT
        NUMBER    DESCRIPTION OF DOCUMENT
        ------    -----------------------
<S>               <C>
         12       Consolidated Computation of Ratio of Earnings to Fixed Charges

         99.1     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

         99.2     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
</TABLE>

(b)   Reports on Form 8-K

      (b)(1)  A Current Report on Form 8-K, dated July 15, 2002, was filed by
              Advanta for the purpose of disclosing, filing as an exhibit and
              incorporating by reference into the Registration Statement on Form
              S-3 (No: 333-90642), documents related to the securities
              registered by such Registration Statement.

      (b)(2)  A Current Report on Form 8-K, dated July 30, 2002, was filed by
              Advanta setting forth the financial highlights of Advanta's
              results of operations for the three months ended June 30, 2002.

      (b)(3)  A Current Report on Form 8-K, dated August 13, 2002, was filed by
              Advanta announcing the authorization by the Board of Directors to
              increase its stock repurchase plan by an additional 1.5 million
              shares of Advanta's common stock. This Current Report on Form 8-K
              was amended by a Current Report on Form 8-K/A filed by Advanta on
              August 13, 2002 to correct a technical error in the original
              Current Report on Form 8-K.


                                       46
<PAGE>

SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                  Advanta Corp.
                                  (Registrant)


November 13, 2002                                  By /s/Philip M. Browne
                                                      ----------------------
                                                   Senior Vice President and
                                                   Chief Financial Officer


November 13, 2002                                  By /s/David B. Weinstock
                                                      ----------------------
                                                   Vice President and
                                                   Chief Accounting Officer


                                       47
<PAGE>

      CERTIFICATIONS

I, Dennis Alter, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Advanta Corp.;

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      quarterly report;

4.    The registrant's other certifying officers and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
      have:

      a)    Designed such disclosure controls and procedures to ensure that
            material information relating to the registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this
            quarterly report is being prepared;

      b)    Evaluated the effectiveness of the registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of this quarterly report (the "Evaluation Date"); and

      c)    Presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date;

5.    The registrant's other certifying officers and I have disclosed, based on
      our most recent evaluation, to the registrant's auditors and the audit
      committee of registrant's board of directors (or persons performing the
      equivalent function):

      a)    All significant deficiencies in the design or operation of internal
            controls which could adversely affect the registrant's ability to
            record, process, summarize and report financial data and have
            identified for the registrant's auditors any material weaknesses in
            internal controls; and

      b)    Any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls; and

6.    The registrant's other certifying officers and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.


/s/ Dennis Alter
----------------
Dennis Alter
Chief Executive Officer
November 13, 2002


                                       48
<PAGE>

I, Philip M. Browne, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Advanta Corp.;

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      quarterly report;

4.    The registrant's other certifying officers and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
      have:

      a)    Designed such disclosure controls and procedures to ensure that
            material information relating to the registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this
            quarterly report is being prepared;

      b)    Evaluated the effectiveness of the registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of this quarterly report (the "Evaluation Date"); and

      c)    Presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date;

5.    The registrant's other certifying officers and I have disclosed, based on
      our most recent evaluation, to the registrant's auditors and the audit
      committee of registrant's board of directors (or persons performing the
      equivalent function):

      a)    All significant deficiencies in the design or operation of internal
            controls which could adversely affect the registrant's ability to
            record, process, summarize and report financial data and have
            identified for the registrant's auditors any material weaknesses in
            internal controls; and

      b)    Any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls; and

6.    The registrant's other certifying officers and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.


/s/ Philip M. Browne
--------------------
Philip M. Browne
Chief Financial Officer
November 13, 2002


                                       49
<PAGE>

          EXHIBIT INDEX

<TABLE>
<CAPTION>
                                                                       MANNER OF
EXHIBIT   DESCRIPTION                                                   FILING
-------   -----------                                                   ------
<S>       <C>                                                          <C>
12        Consolidated Computation of Ratio of Earnings to Fixed           *
          Charges

99.1      Certification Pursuant to 18 U.S.C. Section 1350, as             *
          Adopted Pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002

99.2      Certification Pursuant to 18 U.S.C. Section 1350, as             *
          Adopted Pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002
</TABLE>

*     Filed electronically herewith.


                                       50