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SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-K/A

Amendment No. 1

For the fiscal year ended December 31, 2002

of

|                        |     
|----------------------- | ----
|COMPUCREDIT CORPORATION | LOGO

a
Georgia Corporation
IRS Employer Identification No. 58-2336689
SEC File Number 0-25751

245 Perimeter Center Parkway, Suite 600
Atlanta, Georgia 30346
(770) 206-6200

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CompuCredit's Common Stock, no par value per share, is registered pursuant to Section 12(g) of the Act.

CompuCredit
(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.

CompuCredit believes that during the 2002 fiscal year its executive officers, directors and 10% beneficial owners subject to Section 16(a) of the Securities Exchange Act of 1934
complied with all applicable filing requirements, except as set forth under the caption "Section 16(a) Beneficial Ownership Reporting Compliance" in CompuCredit's Proxy Statement for the 2003
Annual Meeting of Shareholders.

CompuCredit
is an accelerated filer (as defined in Exchange Act Rule 12b-2). The aggregate market value of the registrant's Common Stock (based upon the closing sales price quoted
on the Nasdaq National Market) held by nonaffiliates as of June 28, 2002, was $98,634,134, for this purpose, directors, officers and 5% shareholders have been assumed to be affiliates.

The
aggregate market value of the registrant's Common Stock (based upon the closing sales price quoted on the Nasdaq National Market) held by nonaffiliates as of March 3, 2003,
was $52,492,184, for this purpose, directors, officers and 5% shareholders have been assumed to be affiliates. As of March 3, 2003, 45,976,265 shares of CompuCredit's Common Stock were
outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

EXPLANATORY NOTE

This Amendment No. 1 to Annual Report on Form 10-K/A for the year ended December 31, 2002 is being filed by the Registrant solely for the purpose of
correcting typographical errors incurred in the edgarization process. Otherwise, no other changes have been made to the Annual Report.

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PART II

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the Index to Financial Statements in "Item 15. Exhibits, Financial Statements Schedules and Reports on Form 8-K."

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K

The following documents are filed as a part of this Report.





PageReport of Independent Certified Public Accountants

F-1Consolidated Balance Sheets as of December 31, 2002, and 2001

F-2Consolidated Statements of Operations for the Years ended December 31, 2002, 2001 and 2000

F-3Consolidated Statements of Shareholders' Equity for the Years ended December 31, 2002, 2001 and 2000

F-4Consolidated Statements of Cash Flows for the Years ended December 31, 2002, 2001 and 2000

F-5Notes to Consolidated Financial Statements for the Years ended December 31, 2002, and 2001

F-6




1

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|Exhibit
Number |  | Description of Exhibit                                                                                                                                                                                                                                          |  | Incorporated by reference from
CompuCredit's SEC filings unless otherwise indicated:
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------
|3.1            |  | Amended and Restated Articles of Incorporation of CompuCredit Corporation.                                                                                                                                                                                      |  | August 27, 1998, Form S-1, exhibit 3.1                                              
|3.1(a)         |  | Amendment to Amended and Restated Articles of Incorporation of CompuCredit Corporation.                                                                                                                                                                         |  | August 14, 2000, Form 10-Q, exhibit 3.1(a)                                          
|3.1(b)         |  | Articles of Amendment creating Series A Preferred Stock and Series B Preferred Stock                                                                                                                                                                            |  | December 28, 2001, Form 8-K, exhibit 3.3                                            
|3.2            |  | Second Amended and Restated Bylaws of CompuCredit Corporation.                                                                                                                                                                                                  |  | September 30, 2000, Form 10-Q, exhibit 3.2                                          
|4.1            |  | Form of certificate representing shares of the Registrant's common stock.                                                                                                                                                                                       |  | August 27, 1998, Form S-1, exhibit 4.1                                              
|10.1           |  | Stockholders Agreement, dated as of April 28, 1999, by and among CompuCredit, Frank J. Hanna, III, individually and as Trustee of Bravo Trust One, David G. Hanna, individually and as Trustee of Bravo Trust Two, Richard W.
Gilbert and Richard R. House, Jr. |  | August 27, 1998, Form S-1, exhibit 10.1                                             
|10.2          |  | Amended and Restated 1998 Stock Option Plan.                                                                                                                                                                                                                    |  | August 27, 1998, Form S-1, exhibit 10.2                                             
|10.2(a)       |  | CompuCredit Corporation's 2000 Stock Option Plan.                                                                                                                                                                                                               |  | March 30, 2001, Form DEF 14A, Appendix A                                            
|10.3          |  | CompuCredit Employee Stock Purchase Plan.                                                                                                                                                                                                                       |  | December 16, 1999, Form S-8, exhibit 4.3                                            
|10.4          |  | Employment Agreement between CompuCredit Corporation and Richard R. House, Jr.                                                                                                                                                                                  |  | March 30, 2001, Form 10-K, exhibit 10.3(a)                                          
|10.5          |  | Employment Agreement between CompuCredit Corporation and David G. Hanna.                                                                                                                                                                                        |  | March 30, 2001, Form 10-K, exhibit 10.3(c)                                          
|10.6          |  | Employment Agreement between CompuCredit Corporation and Richard W. Gilbert.                                                                                                                                                                                    |  | March 30, 2001, Form 10-K, exhibit 10.3(d)                                          
|10.7           |  | Employment Agreement between CompuCredit Corporation and J.Paul Whitehead III.                                                                                                                                                                                  |  | November 14, 2002, Form 10-Q, exhibit 10.6                                          
|10.8           |  | Asset purchase agreement, dated as of May 11, 2001 by and among CompuCredit Corporation, VSx, Corporation and James A. Eckstein.                                                                                                                                |  | April 1, 2002, Form 10-K, exhibit 10.8                                              
|10.8(a)        |  | Agreement, dated as of May 11, 2001, by and among CompuCredit Corporation, Visionary Systems, Inc. and James A. Eckstein.                                                                                                                                       |  | April 1, 2002, Form 10-K, exhibit 10.8(a)                                           
|10.9*          |  | Affinity Card Agreement, dated as of January 6, 1997, between Columbus Bank and Trust Company and CompuCredit, L.P.                                                                                                                                             |  | August 27, 1998, Form S-1, exhibit 10.7.1                                           
|10.9(a)        |  | Amendment to Affinity Card Agreement, dated as of March 26, 1998, between Columbus Bank and Trust Company and CompuCredit Corporation, as successor to CompuCredit, L.P.                                                                                        |  | August 27, 1998, Form S-1, exhibit 10.7.2                                           
|10.9(b)        |  | Amendment to Affinity Card Agreement, dated as of August 1, 1998, by and among Columbus Bank and Trust Company and CompuCredit Corporation, as successor to CompuCredit, L.P., and CompuCredit Acquisition Corp.                                                |  | August 27, 1998, Form S-1, exhibit 10.7.3                                           

2

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|10.9(c)* |  | Facilities Management Services Agreement, dated as of August 1, 1998, between Columbus Bank and Trust Company and CompuCredit Corporation, as successor to CompuCredit, L.P.                                                                                      |  | August 27, 1998, Form S-1, exhibit 10.7.4       
|-------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------
|10.9(d)  |  | Amendment to Affinity Card Agreement and Facilities Management Agreement, dated as of November 11, 1998, by and among Columbus Bank and Trust Company, CompuCredit Corporation, as successor to CompuCredit, L.P., and
CompuCredit Acquisition Corp.              |  | August 27, 1998, Form S-1, exhibit 10.7.5       
|10.9(e)  |  | Amendments to Affinity Card Agreement among Columbus Bank and Trust Company, CompuCredit Corporation, as successor to CompuCredit, L.P., and CompuCredit Acquisition Corporation.                                                                                 |  | March 30, 2001, Form 10-K, exhibit 10.5.6       
|10.9(f)  |  | Amendments to Facilities Management Services Agreement between Columbus Bank and Trust Company and CompuCredit Corporation, as successor to CompuCredit, L.P.                                                                                                     |  | March 30, 2001, Form 10-K, exhibit 10.5.7       
|10.9(g)  |  | Amendment to Affinity Agreement, dated as of September 23, 2002, among Columbus Bank and Trust Company, CompuCredit Corporation and CompuCredit Acquisition Corporation.                                                                                          |  | September 30, 2002, Form 10-Q, exhibit 10.1     
|10.9(h)  |  | Pledge and Security Agreement, dated as of September 23, 2002, between CompuCredit Corporation and Columbus Bank and Trust Company.                                                                                                                               |  | September 30, 2002, Form 10-Q, exhibit 10.2     
|10.9(i)  |  | Receivables Purchase and Security Agreement, dated as of September 23, 2002, by and between CFC LLC and Columbus Bank and Trust Company.                                                                                                                          |  | September 30, 2002, Form 10-Q, exhibit 10.3     
|10.9(j)  |  | Receivables Purchase and Security Agreement, dated as of September 23, 2002, by and between CFC II LLC and Columbus Bank and Trust Company.                                                                                                                       |  | September 30, 2002, Form 10-Q, exhibit 10.4     
|10.9(k)  |  | Shareholders Agreement, dated as of September 23, 2002, by and between Columbus Bank and Trust Company and CompuCredit Corporation.                                                                                                                               |  | September 30, 2002, Form 10-Q, exhibit 10.5     
|10.10    |  | Master Indenture, dated as of July 14, 2000, among CompuCredit Credit Card Master Note Business Trust, as Issuer, The Bank of New York, as Indenture Trustee, and CompuCredit Corporation, as Servicer.                                                           |  | September 30, 2000, Form 10-Q, exhibit 10.1     
|10.10(a) |  | First Amendment to Master Indenture, dated as of September 7, 2000, among CompuCredit Credit Card Master Note Business Trust, The Bank of New York, and CompuCredit Corporation.                                                                                  |  | September 30, 2000, Form 10-Q, exhibit 10.1(a)  
|10.10(b) |  | Form of Indenture Supplement.                                                                                                                                                                                                                                     |  | September 30, 2000, Form 10-Q/A, exhibit 10.1(b)
|10.11    |  | Transfer and Servicing Agreement, dated as of July 14, 2000, among CompuCredit Funding Corp., as Transferor, CompuCredit Corporation, as Servicer, CompuCredit Credit Card Master Note Business Trust, as Issuer, and The
Bank of New York, as Indenture Trustee. |  | March 24, 2002, Form 10-K, exhibit 10.11        

3

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|10.11(a) |  | First Amendment to Transfer and Servicing Agreement, dated as of September 7, 2000, among CompuCredit Funding Corporation, CompuCredit Corporation, CompuCredit Credit Card Master Note Business Trust and The Bank of New
York.                                           |  | September 30, 2000, Form 10-Q, exhibit 10.2(a)
|-------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------
|10.11(b) |  | Second Amendment to Transfer and Servicing Agreement, dated as of December 28, 2000, among CompuCredit Funding Corporation, CompuCredit Corporation, CompuCredit Credit Card Master Note Business Trust and The Bank of New
York.                                          |  | March 30, 2001, Form 10-K, exhibit 10.8(b)    
|10.12    |  | Master Indenture, dated as of December 28, 2000, among CompuCredit Credit Card Master Note Business Trust II, as Issuer, The Bank of New York, as Indenture Trustee, and CompuCredit Corporation, as Servicer.                                                             |  | March 30, 2001, Form 10-K, exhibit 10.9       
|10.12(a) |  | Form of Indenture Supplement to the Master Indenture, dated as of December 28, 2000.                                                                                                                                                                                       |  | March 30, 2001, Form 10-K, exhibit 10.10      
|10.13    |  | Transfer and Servicing Agreement, dated as of October 20, 2000, among CompuCredit Funding Corp. II, as Transferor, CompuCredit Corporation, as Servicer, CompuCredit Credit Card Master Note Business Trust II, as Issuer,
and The Bank of New York, as Indenture Trustee. |  | March 30, 2001, Form 10-K, exhibit 10.11      
|10.14    |  | Securities Purchase Agreement (J.P. Morgan Corsair II Capital Partners, L.P., J.P. Morgan Capital, L.P., Winding Creek, L.P. and Paladin Capital Partners Fund, L.P.) dated as of December 17, 2001.                                                                       |  | December 28, 2001, Form 8-K, exhibit 10.12    
|10.15    |  | Securities Purchase Agreement (Rainbow Trust One and Rainbow Trust Two) dated as of December 17, 2001.                                                                                                                                                                     |  | December 28, 2001, Form 8-K, exhibit 10.13    
|10.16    |  | Shareholders Agreement dated as of December 17, 2001.                                                                                                                                                                                                                      |  | December 28, 2001, Form 8-K, exhibit 10.14    
|12.1     |  | Computation of Ratio of Earnings to Fixed Charges.                                                                                                                                                                                                                         |  | March 24, 2002, Form 10-K, exhibit 12.1       
|21.1     |  | Subsidiaries of the Registrant.                                                                                                                                                                                                                                            |  | March 24, 2002, Form 10-K, exhibit 21.1       
|23.1     |  | Consent of BDO Seidman, LLP.                                                                                                                                                                                                                                               |  | Filed herewith                                
|23.2     |  | Consent of Ernst & Young LLP.                                                                                                                                                                                                                                              |  | March 24, 2002, Form 10-K, exhibit 23.2       

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4

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, as amended, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia, on March 27, 2003.

| |  | COMPUCREDIT CORPORATION
| |  | -----------------------
| |  | By:                    
| |  |                        

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CERTIFICATIONS

I,
David G. Hanna, certify that:





Date: March 27, 2003

| |  |                                                                                   
| |  | ----------------------------------------------------------------------------------
| |  | /s/ David G. HannaDavid G. Hanna Chief Executive Officer and Chairman of the Board

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I, J.Paul Whitehead III, certify that:





Date: March 27, 2003

| |  |                                                                      
| |  | ---------------------------------------------------------------------
| |  | /s/ J.Paul Whitehead, IIIJ.Paul Whitehead III Chief Financial Officer

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Report of Independent Certified Public Accountants

The Board of Directors
CompuCredit Corporation

We
have audited the accompanying consolidated balance sheet of CompuCredit Corporation and subsidiaries as of December 31, 2002, and the related consolidated statements of
operations, shareholders' equity, and cash flows for the year ended December 31, 2002. These financial statements are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit. The financial statements of CompuCredit Corporation as of December 31, 2001, and for each of the two years in the period
ended December 31, 2001, were audited by other auditors whose report dated March 26, 2002, expressed an unqualified opinion on those statements.

We
conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of CompuCredit Corporation and subsidiaries at
December 31, 2002, and the consolidated results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States
of America.

| | /s/BDO SEIDMAN, LLP
| | -------------------

Atlanta,
Georgia
January 24, 2003

F-1

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CompuCredit Corporation and Subsidiaries  Consolidated Balance Sheets

|                                                                                                                            |  | December 31, |        
|--------------------------------------------------------------------------------------------------------------------------- |  | ------------ | -------
|
|
|Assets                                                                                                                      |  |              |        
|Cash and cash equivalents                                                                                                   |  | $            | 120,416
|Restricted cash                                                                                                             |  |              | 10,112 
|Retained interests in credit card receivables securitized                                                                   |  |              | 275,635
|Accrued interest and fees                                                                                                   |  |              | 15,804 
|                                                                                                                            |  |              |        
|Net credit card receivables                                                                                                 |  |              | 291,439
|Amounts due from securitization                                                                                             |  |              | 7,235  
|Deferred costs, net                                                                                                         |  |              | 8,314  
|Software, furniture, fixtures and equipment, net                                                                            |  |              | 29,296 
|Investment in equity method investee                                                                                        |  |              | 15,593 
|Investment in debt security                                                                                                 |  |              | 18,819 
|Prepaid expenses                                                                                                            |  |              | 1,093  
|Other assets                                                                                                                |  |              | 16,598 
|                                                                                                                            |  |              |        
|Total assets                                                                                                                |  | $            | 518,915
|                                                                                                                            |  |              |        
|Liabilities                                                                                                                 |  |              |        
|Accounts payable and accrued expenses                                                                                       |  | $            | 32,570 
|Notes payable                                                                                                               |  |              |       
|Deferred revenue                                                                                                            |  |              | 8,979  
|Income tax liability                                                                                                        |  |              | 29,498 
|                                                                                                                            |  |              |        
|Total liabilities                                                                                                           |  |              | 71,047 
|Shareholders' equity                                                                                                        |  |              |        
|Preferred stock, no par value, 10,000,000 shares authorized:                                                                |  |              |        
|Series A preferred stock, 30,000 shares issued and outstanding at December 31, 2002 and 2001, respectively                  |  |              | 32,466 
|Series B preferred stock, 10,000 shares issued and outstanding at December 31, 2002 and 2001, respectively                  |  |              | 11,035 
|Common stock, no par value:                                                                                                 |  |              |        
|150,000,000 shares authorized, 45,976,265 and 46,559,165 issued and outstanding at December 31, 2002 and 2001, respectively |  |              |       
|Additional paid-in capital                                                                                                  |  |              | 241,400
|Treasury stock, at cost, 832,900 shares at December 31, 2002                                                                |  |              | (4,338 
|Deferred compensation                                                                                                       |  |              | (1,013 
|Note issued to purchase stock                                                                                               |  |              | (500   
|Retained earnings                                                                                                           |  |              | 168,818
|                                                                                                                            |  |              |        
|Total shareholders' equity                                                                                                  |  |              | 447,868
|                                                                                                                            |  |              |        
|Total liabilities and shareholders' equity                                                                                  |  | $            | 518,915
|                                                                                                                            |  |              |        

See
accompanying notes.

F-2

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CompuCredit Corporation and Subsidiaries  Consolidated Statements of Operations

|                                                                             |  | For the year ended December 31, |        
|---------------------------------------------------------------------------- |  | ------------------------------- | -------
|
|
|Interest income                                                              |  | $                               | 2,494  
|Interest expense                                                             |  |                                 | (7,579 
|                                                                             |  |                                 |        
|Net interest income                                                          |  |                                 | (5,085 
|                                                                             |  |                                 |        
|Other operating income:                                                      |  |                                 |        
|Securitization (loss) income, net                                            |  |                                 | (18    
|(Loss) income from retained interests in credit card receivables securitized |  |                                 | (25,049
|Servicing income                                                             |  |                                 | 37,772 
|Other credit card fees                                                       |  |                                 | 95,877 
|Interchange fees                                                             |  |                                 | 15,867 
|Ancillary products                                                           |  |                                 | 14,846 
|Equity in income of equity method investee                                   |  |                                 | 45,717 
|                                                                             |  |                                 |        
|Total other operating income                                                 |  |                                 | 185,012
|Other operating expense:                                                     |  |                                 |        
|Non-servicing salaries and benefits                                          |  |                                 | 18,514 
|Credit card servicing                                                        |  |                                 | 94,046 
|Marketing and solicitation                                                   |  |                                 | 11,907 
|Professional fees                                                            |  |                                 | 4,488  
|Data processing                                                              |  |                                 | 6,754  
|Net occupancy                                                                |  |                                 | 5,185  
|Ancillary product expense                                                    |  |                                 | 4,832  
|Depreciation                                                                 |  |                                 | 14,801 
|Other                                                                        |  |                                 | 10,368 
|                                                                             |  |                                 |        
|Total other operating expense                                                |  |                                 | 170,895
|                                                                             |  |                                 |        
|Income before income taxes                                                   |  |                                 | 9,032  
|Income taxes                                                                 |  |                                 | (3,161 
|                                                                             |  |                                 |        
|Net income                                                                   |  | $                               | 5,871  
|                                                                             |  |                                 |        
|Net income attributable to common shareholders                               |  | $                               | 1,703  
|                                                                             |  |                                 |        
|Net income per common share-basic                                            |  | $                               | 0.04   
|Net income per common share-assuming dilution                                |  | $                               | 0.04   

See
accompanying notes.

F-3

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CompuCredit Corporation and Subsidiaries  Consolidated Statements of Shareholders' Equity  For the years ended December 31, 2002, 2001 and 2000

|                             |                                                |   |        | Common Stock |            |           |   |   |   |   |         |         |   |        |        |   |       
|---------------------------- | ---------------------------------------------- | - | ------ | ------------ | ---------- | --------- | - | - | - | - | ------- | ------- | - | ------ | ------ | - | ------
|
|
|
|Balance at December 31, 1999 |                                                | $ |       |              | 41,834,725 |           | $ |  |   | $ | 93,374  |         | $ |       |        | $ |      
|                             | Issuance of common stock in secondary offering |   |        |             |            | 4,600,000 |   |   |  |   |         | 145,242 |   |        |       |   |       
|                             | Stock options exercised                        |   |        |             |            | 79,914    |   |   |  |   |         | 1,173   |   |        |       |   |       
|                             | Cash dividend paid by pooled company           |   |        |             |            |          |   |   |  |   |         |        |   |        |       |   |       
|                             | Net income                                     |   |        |             |            |          |   |   |  |   |         |        |   |        |       |   |       
|                             |                                                |   |        |              |            |           |   |   |   |   |         |         |   |        |        |   |       
|Balance at December 31, 2000 |                                                |   |       |              | 46,514,639 |           |   |  |   |   | 239,789 |         |   |       |        |   |      
|                             | Issuance of Series A preferred stock           |   |        | 29,512       |            |          |   |   |  |   |         |        |   |        |       |   |       
|                             | Issuance of Series B preferred stock           |   |        | 10,000       |            |          |   |   |  |   |         |        |   |        |       |   |       
|                             | Preferred dividends                            |   |        |             |            |          |   |   |  |   |         |        |   |        |       |   |       
|                             | Issuance of common stock                       |   |        |             |            | 44,526    |   |   |   |   |         | 563     |   |        |       |   |       
|                             | Note issued to purchase stock                  |   |        |             |            |          |   |   |  |   |         |        |   |        |       |   |       
|                             | Net income                                     |   |        |             |            |          |   |   |  |   |         |        |   |        |       |   |       
|                             |                                                |   |        |              |            |           |   |   |   |   |         |         |   |        |        |   |       
|Balance at December 31, 2001 |                                                |   | 39,512 |              | 46,559,165 |           |   |  |   |   | 240,352 |         |   |       |        |   |      
|                             | Issuance costs of Series A preferred stock     |   |        | (140         | )          |          |   |   |  |   |         |        |   |        |       |   |       
|                             | Preferred dividends                            |   |        |             |            |          |   |   |  |   |         |        |   |        |       |   |       
|                             | Accretion of preferred dividends               |   |        | 4,129        |            |          |   |   |  |   |         |        |   |        |       |   |       
|                             | Restricted shares issued to employees          |   |        |              |            | 250,000   |   |   |  |   |         | 1,048   |   |        |       |   |       
|                             | Amortization of deferred compensation          |   |        |             |            |          |   |   |  |   |         |        |   |        |       |   |       
|                             | Treasury stock, at cost                        |   |        |             |            | (832,900  | ) |   |  |   |         |        |   |        | (4,338 | ) |       
|                             | Net income                                     |   |        |             |            |          |   |   |  |   |         |        |   |        |       |   |       
|                             |                                                |   |        |              |            |           |   |   |   |   |         |         |   |        |        |   |       
|Balance at December 31, 2002 |                                                | $ | 43,501 |              | 45,976,265 |           |   |  |   | $ | 241,400 |         | $ | (4,338 | )      | $ | (1,013
|                             |                                                |   |        |              |            |           |   |   |   |   |         |         |   |        |        |   |       

See accompanying notes.

F-4

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CompuCredit Corporation and Subsidiaries  Consolidated Statements of Cash Flows

|                                                                                  |                                                    | For the year ended December 31,                        |         
|--------------------------------------------------------------------------------- | -------------------------------------------------- | ------------------------------------------------------ | --------
|
|
|Operating activities                                                              |                                                    |                                                        |         
|Net income                                                                        |                                                    | $                                                      | 5,871   
|Adjustments to reconcile net income to net cash provided by operating activities: |                                                    |                                                        |         
|                                                                                  | Depreciation expense                               |                                                        |         
|                                                                                  | Amortization expense                               |                                                        |         
|                                                                                  | Amortization of deferred compensation              |                                                        |         
|                                                                                  | Securitization (income) loss                       |                                                        |         
|                                                                                  | Retained interests income adjustment, net          |                                                        |         
|                                                                                  | (Benefit) provision for deferred taxes             |                                                        |         
|                                                                                  | Income from equity investee (net of distributions) |                                                        |         
|                                                                                  | Changes in assets and liabilities:                 |                                                        |         
|                                                                                  |                                                    | (Increase) decrease in restricted cash                 |         
|                                                                                  |                                                    | Decrease (increase) in accrued interest and fees       |         
|                                                                                  |                                                    | Decrease (increase) in amounts due from securitization |         
|                                                                                  |                                                    | Increase in deferred costs                             |         
|                                                                                  |                                                    | Decrease (increase) in prepaid expenses                |         
|                                                                                  |                                                    | Increase in accounts payable and accrued expenses      |         
|                                                                                  |                                                    | (Decrease) increase in deferred revenue                |         
|                                                                                  |                                                    | (Decrease) increase in income tax liability            |         
|                                                                                  |                                                    | Other                                                  |         
|                                                                                  |                                                    |                                                        |         
|Net cash provided by operating activities                                         |                                                    |                                                        | 248,606 
|Investing activities                                                              |                                                    |                                                        |         
|Investment in equity investee                                                     |                                                    |                                                        | (34,890 
|Proceeds from bond investment                                                     |                                                    |                                                        | 2,666   
|Purchases of credit card portfolios and retained interests                        |                                                    |                                                        | (75,247 
|Net loans originated                                                              |                                                    |                                                        | (71,055 
|Recoveries of receivables previously charged off                                  |                                                    |                                                        | 22,174  
|Net proceeds from securitization                                                  |                                                    |                                                        | 2,987   
|Purchases of and development of software, furniture, fixtures and equipment       |                                                    |                                                        | (9,576  
|                                                                                  |                                                    |                                                        |         
|Net cash used in investing activities                                             |                                                    |                                                        | (162,941
|Financing activities                                                              |                                                    |                                                        |         
|Proceeds from issuance of preferred stock                                         |                                                    |                                                        | (140    
|Preferred dividends                                                               |                                                    |                                                        |        
|Proceeds from issuance of common stock and capital contributions                  |                                                    |                                                        |        
|Cash dividend paid by pooled company                                              |                                                    |                                                        |        
|Note issued to purchase stock                                                     |                                                    |                                                        |        
|Purchase of treasury stock                                                        |                                                    |                                                        | (4,338  
|Proceeds from short-term borrowings                                               |                                                    |                                                        | 126,679 
|Repayment of short-term borrowings                                                |                                                    |                                                        | (143,196
|Proceeds from exercise of stock options                                           |                                                    |                                                        |        
|                                                                                  |                                                    |                                                        |         
|Net cash (used in) provided by financing activities                               |                                                    |                                                        | (20,995 
|                                                                                  |                                                    |                                                        |         
|Net increase (decrease) in cash                                                   |                                                    |                                                        | 64,670  
|Cash and cash equivalents at beginning of year                                    |                                                    |                                                        | 55,746  
|                                                                                  |                                                    |                                                        |         
|Cash and cash equivalents at end of year                                          |                                                    | $                                                      | 120,416 
|                                                                                  |                                                    |                                                        |         
|Supplemental cash flow information                                                |                                                    |                                                        |         
|Cash paid for interest                                                            |                                                    | $                                                      | 7,731   
|Cash paid for income taxes                                                        |                                                    | $                                                      | 4,893   
|Accretion of preferred stock dividends                                            |                                                    | $                                                      | 4,129   
|Issuance of restricted stock                                                      |                                                    | $                                                      | 1,048   
|Distribution of bonds from equity method investee                                 |                                                    | $                                                      | 21,485  

See accompanying notes.

F-5

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CompuCredit Corporation and Subsidiaries        Notes to Consolidated Financial Statements        December 31, 2002 and 2001

1.    Organization and Basis of Presentation

The consolidated financial statements include the accounts of CompuCredit Corporation and its wholly owned subsidiaries (collectively, "the Company"). The Company
was formed for the purpose of offering unsecured credit and fee based products and services to a segment of the consumer credit market. The Company sources the accounts to which it offers these
products and services through direct mail, telemarketing, television, the internet, and acquisition from other credit card issuers. Because only financial institutions can issue general-purpose credit
cards, the Company has a contractual arrangement with a third party financial institution pursuant to which the financial institution issues general-purpose Visa and MasterCard credit cards, and the
Company purchases the receivables relating to such accounts on a daily basis. Additionally, the Company purchases the receivables relating to accounts generated by other third party financial
institutions from time to time as a further source for growth in its business. These credit card receivables are sold into different structures, which are not reflected on the Company's balance sheet.
(See Note 6, "Off Balance Sheet Arrangements.") The Company markets to its cardholders other fee-based products, including card registration, memberships in preferred buying clubs,
travel services and credit life, disability and unemployment insurance.

The
accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States that require management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, as
well as the reported amount of revenues and expenses during the reporting period. These estimates are based on information available to the Company as of the date of the financial statements. Actual
results could differ materially from these estimates. Certain estimates such as credit losses, payments, discount rates and the yield earned
on securitized receivables have a significant impact on the gains and losses recorded on securitizations and the value of retained interests in credit card receivables securitized.

Certain
amounts in prior period financial statements have been reclassified to conform to the current period presentation. All significant intercompany balances and transactions have
been eliminated for financial reporting purposes.

2.    Significant Accounting Policies

The following is a summary of significant accounting policies followed in the preparation of the consolidated financial statements.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash, money market investments, and overnight deposits. The Company considers all other highly liquid cash investments with
low interest rate risk and maturities of three months or less to be cash equivalents. Cash equivalents are valued at cost, which approximates market.

Restricted Cash

During the first quarter of 2002, the Company entered into an irrevocable standby letter of credit agreement for $10.0 million with a bank, for the purpose
of securing the Company's obligations to the

F-6

---

financial institution that issues the credit cards marketed by the Company. The purpose of the letter of credit is to protect the financial institution from non-payment by the Company of
its obligation to purchase receivables arising in the credit card accounts on a daily basis. The Company is required to maintain a cash balance of $10.0 million with the bank that has issued
the letter of credit. Such cash has been disclosed as "Restricted cash" on the face of the balance sheet.

Asset Securitization

All of the Company's credit card receivables are securitized. When the Company sells originated receivables in securitizations, it retains certain undivided
ownership interests, interest-only ("I/O") strips
and servicing rights. Although the Company continues to service the underlying credit card accounts and maintains the customer relationships, these securitizations are treated as sales, and the
securitized receivables are not reflected on the consolidated balance sheet. The retained ownership interests and the interest-only strips are included in Retained Interests in Credit Card
Receivables Securitized.

Under
Statement of Financial Accounting Standards No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities" ("Statement
No. 140"), gains and losses are recognized at the time of each sale. These gains or losses on sales of receivables depend in part on the previous carrying amount of the financial assets sold as
well as the fair value of the assets and cash proceeds received. The cash flows used in measuring the gains and losses represent estimates of finance charges and late fees, servicing fees, costs of
funds paid to investors, payment rates, credit losses, and required amortization payments to investors. The Company initially records a servicing liability within a securitization structure when the
servicing fees the Company expects to receive do not provide adequate compensation for servicing the receivables. The initial servicing liability is recorded at estimated fair market value. The
servicing liability is then evaluated each quarter and carried at its estimated fair value with changes in fair value included in determining income from retained interests. The change in the fair
value is included as a component of the Company's income from retained interests in credit card receivables securitized with actual expenses being recorded into operations as incurred. Because quoted
market prices are generally not available, the Company estimates fair value based on the estimated present value of future cash flows using management's best estimates of key assumptions as outlined
in Note 6, "Off Balance Sheet Arrangements." The servicing liability is netted against the value of the I/O strip and included in retained interests in credit card receivables securitized on
the Company's balance sheet. In accordance with Statement No. 140, the Company does not consolidate any of the qualified special purpose entities ("QSPEs") in its securitizations.

The
retained interests for securitized portfolios are accounted for as trading securities and reported at estimated fair market value, with changes in fair value included in operations
in accordance with Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" ("Statement No. 115"). The estimates used to
determine the gains and losses and the related fair values of interest-only strips and retained ownership interests are influenced by factors outside the Company's control, and, as a
result, such estimates could materially change from quarter to quarter.

The
retained interests purchased by the Company during 2002 are carried at the lower of amortized cost or fair market value, net of a servicing liability. In accordance with Emerging
Issues Task Force Issue 99-20, "Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets" ("EITF 99-20"),
expected cash flows in excess of

F-7

---

the cost of the purchased retained interests are being amortized into income from retained interests using the effective interest method.

Amounts
due from securitization include payments recently received on the securitized receivables that are still held by the securitization structure but are due and payable to the
Company within the next 30 days.

Deferred Costs

The principal components of deferred costs include certain costs paid to third parties related to the Company's credit card receivables securitizations and direct
receivables origination costs. Deferred securitization costs include legal fees and fees incurred for services provided for establishing securitization facilities that have ongoing benefit to the
Company, such as the master trust used for future securitizations, which result in ongoing securitization income to the Company. These capitalized securitization costs are amortized over the estimated
lives of the securitizations, which are from one to three years. Under Statement of Financial Accounting Standards No. 91, "Accounting for Non refundable Fees and Costs Associated with
Originating or Acquiring Receivables and Initial Direct Costs of Leases" and Emerging Issues Task Force 93-1, "Accounting for Individual Credit Card Acquisitions" direct receivables
origination costs are deferred and amortized against credit card fee income on a straight-line basis over the privilege period, which is typically a one-year period.

Software, Furniture, Fixtures, and Equipment

The Company capitalizes costs related to internal development and implementation of software used in operating activities of the Company in accordance with AICPA
Statement of Position 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use." Software development, furniture, fixtures, equipment and leasehold
improvements are stated at cost less accumulated depreciation or amortization. Depreciation and amortization expenses are computed using the straight-line method over the estimated useful
lives of the assets, which are approximately 3 years for software, 5 years for furniture, fixtures and equipment. Leasehold improvements are depreciated over the shorter of their
estimated useful lives or the terms of the respective leases. The Company periodically reviews the assets to determine if any impairment, other than a temporary impairment exists. There were no such
impairments in the periods presented.

Accrued Interest and Fees

Accrued interest and fees on the Company's originated portfolios represent the estimated collectable portion of fees earned but not billed to the cardholder at
any period end. Prior to the second quarter of 2002, the Company estimated accrued interest and fees using its estimates of total accrued interest and fees earned but not yet billed. The new estimates
better reflect the Company's expectations of the collectible portion of these interest and fees and are in response to evolving regulatory guidance within the industry.

Equity Investment

The Company accounts for investments using the equity method of accounting if the investments give the Company the ability to exercise significant influence, but
not control, over the investees. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of an investee of between 20% and 50%, although other
factors, such as representation on

F-8

---

an investee's board of directors and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. The Company has a 50% interest in a
limited liability company and records its 50% interest in the income or loss of such investee within other operating income each period. The carrying amount of the Company's investment is recorded on
the balance sheet as investment in equity method investee. There is no difference between the cost of the investment and the underlying equity in net assets of the equity method investee. The Company
evaluates its investment in the equity method investee for impairment each quarter by comparing the carrying amount of the investment to its fair value. Because no active market exists for the
investment's membership interests, the Company compares the carrying amount to the expected undiscounted future cash flows the investment is expected to produce. If the expected undiscounted future
cash flows are less than the carrying amount, the asset is considered impaired and written down to its fair value.

Investments in Debt Securities

During the third quarter of 2002, CSG, LLC, the Company's equity method investee, (see Note 4, "Equity Method Investment in CSG, LLC" below) distributed
certain bonds to its members as a partial return of their initial investment in CSG, LLC. The Company recorded the bonds it received at their fair value. In accordance with Statement No. 115,
and based on the Company's intentions and ability to hold these bonds to maturity, the Company has classified these bonds as held-to-maturity and accounts for these bonds at
their amortized cost. Investments in debt securities are regularly reviewed for impairment.

Stock Options

The Company has two stock-based employee compensation plans, which are more fully described in Note 13, "Stock Options." As permitted by Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("Statement No. 123"), the Company accounts for those plans under the recognition and measurement
principles of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), and its related interpretations. Because all options granted under the Company's
plans had an exercise price equal to the market value of the underlying common stock on the date of grant, no stock-based compensation cost is reflected in net income under the Company's application
of APB 25. Additionally, the Company did not issue any options to non-employees who were not directors for the years ended December 31, 2002, 2001 and 2000.

F-9

---

The
following table presents the effects on net income (loss) and net income (loss) per share if the Company had recognized compensation expense under the fair value recognition
provisions of Statement No. 123:

For the year ended December 31,2002

2001

2000(In thousands)Net income, as reported

$
1,703

$
2,723

$
82,374Stock-based employee compensation expense determined under fair value basis, net of tax


(3,029
)

(7,792
)

(3,139
)Pro forma net income

$
(1,326
)
$
(5,069
)
$
79,235Earnings per share:Basicas reported

$
0.04

$
0.06

$
1.80Basicpro forma

$
(0.03
)
$
(0.11
)
$
1.73Dilutedas reported

$
0.04

$
0.06

$
1.79Dilutedpro forma

$
(0.03
)
$
(0.11
)
$
1.72


The
pro forma results may not be indicative of the future effect on the results of operations due to a variety of factors including timing and number of awards. The following table
summarizes the value per share as determined by the Black-Scholes models as well as the key assumptions for the years ended:

At December 31,2002

2001

2000Fair value per share

$
4.34

$
6.15

$
29.48Dividend rate


0
%

0
%

0
%Risk free rate


3.8
%

4.2
%

5.0
%Expected volatility


96.4
%

85.0
%

80.0
%Expected life of the options


5 years


5 years


5 years


Servicing Income

As of December 31, 2002, the Company is the servicer for the receivables underlying its securitizations transactions, and is the servicer for 100% of the
receivables underlying the CSG Trust. (See Note 4, "Equity Method Investment in CSG, LLC" below.) The Company receives servicing fees equal to 0.1% of the principal receivables that it
purchases from its primary account originating financial institution relationship. (See Note 1, "Organization and Basis of Presentation.") The Company receives between 2% and 5% on all other
receivables the Company services, or 5% of cash collected, depending on the terms of the securitization structure. Gross servicing revenue is recognized as income on a monthly basis during the same
period in which the servicing is performed and is included as servicing income in
the Company's Consolidated Statements of Operations. Total assets being serviced by the Company were $3.3 billion as of December 31, 2002, and $1.9 billion as of
December 31, 2001.

F-10

---

Credit Card Fees

Credit card fees include annual membership, overlimit, returned check, cash advance transaction fees and other fees. Credit card fees are assessed according to
the terms of the related cardholder agreements and, except for annual fees, are recognized as revenue when charged to the cardholder's account. Annual fees are amortized into revenue on a
straight-line basis over the privilege period, which is twelve months. As noted above in "Deferred Costs," direct receivables origination costs are amortized against credit card fee
income.

Ancillary Product Revenue

The Company offers various fee-based products and services to its customers, including memberships, insurance products and subscription services. When
the Company markets its own products, the fees, net of estimated cancellations, are recorded as deferred revenue upon the customer's acceptance of the product and are amortized on a
straight-line basis over the life of the product (which ranges from one to twelve months). When the Company markets products for third parties under a commission arrangement, the revenue
is recognized when earned, which is generally during the same month the product is sold to the customer. The Company considers revenue to be earned once delivery has occurred (i.e., there is no
further performance obligation), the commission is fixed, and collectibility is reasonably assured. Once these conditions are satisfied, the Company recognizes its commission as ancillary product
revenue.

Solicitation Expenses

Credit card account and other product solicitation costs, including printing, credit bureaus, list processing costs, telemarketing and postage, are expensed as
the solicitation occurs. See "Deferred Costs" for discussion of the accounting for costs considered to be receivables origination costs.

Income Taxes

The Company accounts for income taxes based on the liability method required by Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("Statement No. 109").

Under
the liability method, deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.

Recent Accounting Pronouncements

In December 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 148, "Accounting for Stock-Based
CompensationTransition and Disclosure" ("Statement No. 148"). Statement No. 148 amends Statement No. 123, to provide alternative methods of transition to Statement
No. 123's fair value method of accounting for stock-based employee compensation. Statement No. 148 also amends the disclosure provisions of Statement No. 123 and Accounting
Principles Board Opinion No. 28, "Interim Financial Reporting," to require disclosure of the effects of an entity's accounting policy with respect to stock-based employee compensation on
reported net income and earnings per share in the summary of significant accounting policies within annual and interim financial statements. While Statement No. 148 does not amend Statement
No. 123 to require companies to account for employee stock options using the fair value method, the disclosure

F-11

---

provisions of Statement No. 148 are applicable to all companies with stock-based employee compensation, regardless of whether they account for that compensation using the fair value method of
Statement No. 123 or the intrinsic value method of APB 25. The Company has adopted the required disclosures in the Notes herein.

In
November 2002, the FASB issued FASB interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others" ("Interpretation No. 45"), which addresses the accounting for and disclosures of guarantees. Interpretation No. 45 requires a guarantor to recognize a liability
for the fair value of a guarantee at inception. The recognition of the liability is required even if it is not probable that payments will be required under the guarantee. The disclosure requirements
are effective for interim and annual financial statements ending after December 15, 2002. (See Note 10, "Commitments and Contingencies.") In accordance with Interpretation No. 45,
the Company will apply the initial recognition and measurement provisions on a prospective basis for all guarantees within the scope of Interpretation No. 45 issued or modified after
December 31, 2002. The Company is currently evaluating the impact of this interpretation on its financial statements, but does not expect it to be material.

In
January 2003, the FASB issued FASB interpretation No. 46, "Consolidated Financial Statements" ("Interpretation No. 46"), which addresses consolidation by business
enterprises of variable interest entities that have certain characteristics. In general, Interpretation No. 46 requires a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable interest entity's activities or is entitled to receive a majority of the entity's residual returns or both. An entity that meets
this definition is considered the "primary beneficiary." Interpretation No. 46 requires disclosures about variable interest entities by the primary beneficiary and an enterprise that holds
significant variable interests in a variable interest entity but is not the primary beneficiary. Interpretation No. 46 provides for exceptions to the scope of this interpretation including
transfers to qualifying special purpose entities subject to the reporting of Statement No. 140, which would not be consolidated. Interpretation No. 46 applies immediately to variable
interest entities created after January 31, 2003 and to variable interest entities in which an enterprise obtains an interest after January 31, 2003. Interpretation No. 46 applies
in the first fiscal year, or interim period, beginning after June 15, 2003 to variable interests entities in which an enterprise holds a variable interest that it acquired before
February 1, 2003. The Company is currently evaluating the impact of this interpretation on its financial statements, but does not expect it to be material.

3.    Shareholders' Equity

Loan to consultant

On May 21, 2001, in connection with the Company's entry into a consulting agreement, the Company loaned the consultant $500,000 to purchase 39,526 shares
of CompuCredit common stock.

Issuance of Preferred Shares

In December 2001, the Company issued 30,000 shares (aggregate initial liquidation preference $30 million) of its Series A Preferred Stock and
10,000 shares (aggregate initial liquidation preference $10 million) of its Series B Preferred Stock in a private placement. Net proceeds were $39.5 million. Dividends on the
preferred stock accumulate at the rate of 10% per annum and are payable quarterly, in arrears, in cash or, at the Company's option, by an increase in the accretive value of the preferred stock. The
dividend rate will increase if the shares are still outstanding after five years. In general, each

F-12

---

outstanding share of preferred stock entitles the holder to that number of votes equal to the number of shares of common stock into which the holder's shares of preferred stock could be converted at
the time of the vote, subject (solely for purposes of determining the number of votes) to a floor on the conversion price of $9.01 per share. The preferred stock is convertible into common stock at
the holder's option. The holders are entitled to traditional weighted average anti-dilution rights (i.e. for stock splits, the issuance or sale of equity securities, etc.). The Company can
require the conversion of
the preferred stock commencing December 2004 if the market price per common share is at least 200% of the initial conversion price ($9.14 per share, subject to anti-dilution
adjustment). The Company can redeem the Series A Preferred Stock for cash after 5 years, or upon a change of control, provided all accrued dividends are paid; the Series B
Preferred Stock does not have a cash redemption feature.

To
date, all dividends on the Series A and B Preferred Stock have been paid by accreting the value of the preferred shares. The carrying and liquidation value of the preferred
shares was $43,501,000 at December 31, 2002. The shares would have converted into approximately 4.8 million shares at December 31, 2002, and such common stock shares are reserved
for issuance upon conversion.

Treasury Share Repurchases

During the third quarter of 2002, the Company's Board of Directors authorized a program to repurchase up to 5 million shares (approximately
11 percent) of its outstanding common stock. Under the repurchase plan, the Company may buy back shares of its common stock from time to time either on the open market or through privately
negotiated transactions in compliance with SEC guidelines. During 2002, the Company repurchased a total of 832,900 shares of common stock for an aggregate cost of $4.3 million. The Company
accounts for the common shares repurchased using the cost method.

Restricted Share Awards

During the quarter ended December 31, 2002, the Company granted 250,000 of restricted stock to certain employees. On the date of grant, the fair market
value of the restricted stock was $1,048,000, which has been recorded as deferred compensation and is shown as a separate component of shareholders' equity. These restricted shares vest over a range
of 24 to 36 months and are being amortized to compensation expense ratably over the vesting period.

4.    Equity Method Investment in CSG, LLC

CSG, LLC ("CSG") was formed during the second quarter of 2002 by affiliates of Goldman, Sachs & Co., Salomon Smith Barney and a wholly owned subsidiary of
the Company to acquire notes and a certificated interest issued by a trust ("CSG Trust") that owns a portfolio of credit card receivables, which were initially purchased from Providian National Bank.
The Company accounts for its interest in CSG using the equity method of accounting. The Company has a 50% interest in CSG and funded its initial $34.9 million investment in CSG with cash of
$3.5 million and by borrowing $31.4 million, which was repaid during the fourth quarter of 2002. (See Note 9, "Borrowings.")

F-13

---

The
following represents condensed results of operations of CSG as of and for the period from inception to December 31, 2002:

As of
December 31, 2002(in thousands)Retained interests in credit card receivables securitized

$
21,147Total assets


31,385Total liabilities


200Members' capital


31,185


For the period from inception
(April 8, 2002) to
December 31, 2002(in thousands)Income from retained interests in credit card receivables securitized

$
89,717Total other operating income


90,823Net income


91,434


In
exchange for servicing 100% of the receivables owned by the CSG Trust, the Company receives a servicing fee from the securitization structure, which the Company considers adequate to
exceed the estimated cost of servicing.

5.    Purchase of Assets

In July 2002, the Company completed a transaction with Federated Department Stores, Inc. in which the Company purchased the retained interests in a
trust (the "Fingerhut Trust") that owned approximately $1.0 billion in face amount of receivables. The receivables included in the trust are private label revolving credit cards used to
purchase items from the Fingerhut catalog. This portfolio will decrease over time because payments from cardholders are expected to be significantly greater than purchases. In accordance with EITF
99-20, the Company accounts for the retained interests it purchased at the lower of amortized cost or fair market value. The expected cash flows in excess of the cost of the purchased
retained interests are being amortized into income from retained interest using the effective interest method.

6.    Off Balance Sheet Arrangements

The Company securitizes all of its credit card receivables originated on a daily basis under its primary third party financial institution relationship (the
"originated portfolio") through Master Trusts. Credit card receivables are transferred to the Master Trusts, which issue notes representing undivided ownership interests in the assets of the Master
Trusts. The Company also securitized two purchased credit card receivables portfolios, which were acquired in 1998, through securitization structures with third party commercial paper conduits
administered by a national banking institution. Additionally, during the third quarter of 2002, the Company acquired retained interests in a credit card receivables trust. (See Note 5,
"Purchase of Assets.")

In
accordance with the above, all of the Company's credit card receivables (whether from the originated portfolio or the purchased portfolio) are held by securitization trusts, and the
exclusive interest of the Company in these receivables is in the form of retained interests in the trusts. Generally

F-14

---

accepted accounting principles require the Company to treat the transfers as sales, and the receivables are removed from the Company's consolidated balance sheet. Under Statement No. 140, an
entity recognizes the assets it controls and liabilities it has incurred, and derecognizes the financial assets for which control has been surrendered and all liabilities that have been extinguished.
An entity is considered to have surrendered control over the transferred assets and, therefore, to have sold the assets if the following conditions are met:



The
securitization transactions do not affect the relationship the Company has with its customers, and the Company continues to service the credit card receivables.

The
table below summarizes all of the Company's securitization activity:

For the year ended
December 31,2002

2001(In thousands)Gross amount of receivables securitized at year end

$
2,334,939

$
1,891,842Excess cash flows received on retained interests


311,423


202,350Pretax securitization income (loss)


(18
)

(8,400
)Proceeds from collections reinvested in Revolving-period securitizations


1,123,938


1,208,413(Loss) income from retained interests in credit card receivables securitized


(25,049
)

11,328


The
investors in the Company's securitization transactions have no recourse against the Company for its customers' failure to pay their credit card receivables. However, most of the
Company's retained interests are subordinated to the investors' interests until the investors have been fully paid.

All
collections received from the cardholders underlying each securitization are included in the securitization cash flows. This includes collections from the cardholders for interest,
fees and other charges on the accounts and collections from the cardholders repaying the principal portion of their account balances. The cash flows are then distributed to the Company as servicer for
its servicing fee, to the investors as interest on their outstanding notes, to the investors to repay any portion of their outstanding notes that become due and payable, and to the Company as the
seller to fund new purchases. Any collections from cardholders remaining each month after making the payments noted above are paid to the Company on its retained interests.

In
the securitization structures associated with the Company's purchased portfolios, each month either a certain dollar amount or a percentage of the excess cash collected from the
cardholders is paid

F-15

---

to the investors to decrease their remaining invested amount. This excess cash that the Company paid to the investors totaled $145.1 million and $13.0 million for the years ended
December 31, 2002, and 2001, respectively. Once the investors are repaid, any remaining receivables and funds held in the securitization structure will be payable to the Company.

The
pretax securitization (loss) recorded by the Company and the measurement of the Company's retained interests are dependent upon management's estimates of future cash flows using the
cash-out method. Under the cash-out method, the future cash flows (including the release of any cash related to credit enhancements) are recorded at a discounted value. The
cash flows are discounted based on the timing of when the Company expects to receive the cash flows. The discount rates are based on management's estimates of returns that would be required by
investors in an investment with similar terms and credit quality. Interest rates received on the credit card receivables are estimated based on the stated annual percentage rates in the credit card
agreements. Estimated default and payment rates are based on historical results, adjusted for expected changes based on the Company's credit risk models. Credit card receivables are typically charged
off when the receivable becomes 180 days past due, although earlier charge offs may occur specifically related to accounts of bankrupt or deceased customers. Bankrupt and deceased customers'
accounts are typically charged off within 30 days of verification.

Subsequent
to each sale, the Company's retained interests are carried at the lower of amortized cost or estimated fair market value, and because they are classified as trading
securities, any changes in fair value included in income. Since quoted market prices for the Company's retained interests in its originated portfolio are generally not available, the Company estimates
fair value based on the estimated present value of future cash flows using management's best estimates of key assumptions.

The
Company's retained interests in credit card receivables securitized include the following:

At December 31,2002

2001

2000(In thousands)I/O strip

$
99,964

$
84,390

$
52,249Fair value of Seller's Interest


283,681


312,622


295,141Servicing liability


(108,010
)

(38,123
)

(21,807
)Retained interests in credit card receivables securitized

$
275,635

$
358,889

$
325,583


The
I/O strip reflects the fair value of the Company's rights to future income from the Company's originated portfolio and includes certain credit enhancements. The servicing liability
reflects, for those securitizations for which servicing compensation is not adequate, the fair value of the costs to service the receivables above and beyond the servicing income the Company expects
to receive from the securitizations. The change in the servicing liability is included in the income from retained interests in the credit card receivables securitized and includes
$28.9 million of amortization of the servicing liability associated with the Fingerhut Trust acquired in July 2002. The fair value of seller's interest includes those interests the
Company retains in securitizations of the originated and purchased portfolio receivables.

Changes
in any of the assumptions used to value the Company's retained interests could impact the fair value estimates. The weighted average key assumptions used to estimate the fair
value of the

F-16

---

Company's retained interests in receivables the Company has securitized as of the end of each year are presented below:

At December 31,2002

2001Payment rate (monthly)

6.7
%
8.0
%Expected credit loss rate (annualized)

18.0
%
16.7
%Residual cash flows discount rate

22.5
%
34.9
%Servicing liability discount rate

14.1
%
14.0
%


During
the fourth quarter of 2001, the Company sold approximately $36.3 million of its retained interests in credit card receivables securitized for net proceeds of approximately
$26.7 million in two transactions. As a result of these transactions, the Company increased its residual cash flow discount rate to 34.9% in 2001. During 2002, the Company hired an independent
financial advisory firm to assist in the Company's evaluation of its estimate of the residual cash flow discount rate. The independent financial advisory firm advised that the appropriate residual
cash flow discount rate was 22.5%. The Company adopted that recommendation and revised the estimate for the residual cash flow discount rate to 22.5%.

At
December 31, 2002, the following illustrates the hypothetical effect an adverse 5 and 10 percent change in key economic assumptions has on the retained interests in
credit card receivables securitized ($ in thousands):

Credit card
ReceivablesPayment rate (monthly)


6.7
%Impact on fair value of 5% adverse change

$
(1,596
)Impact on fair value of 10% adverse change

$
(3,020
)Expected credit loss rate (annualized)


18.0
%Impact on fair value of 5% adverse change

$
(8,368
)Impact on fair value of 10% adverse change

$
(16,734
)Residual cash flows discount rate


22.5
%Impact on fair value of 5% adverse change

$
(2,944
)Impact on fair value of 10% adverse change

$
(5,800
)Servicing discount rate


14.1
%Impact on fair value of 5% adverse change

$
(136
)Impact on fair value of 10% adverse change

$
(272
)


These
sensitivities are hypothetical and should be used with caution. As the figures indicate, changes in fair value based on a 5% and a 10% variation in assumptions generally cannot be
extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of a variation in a particular assumption on the fair
value of the retained interest is calculated without changing any other assumptions; in reality, changes in one assumption may result in changes in another. For example, increases in market interest
rates may result in lower prepayments and increased credit loses, which could magnify or counteract the sensitivities.

F-17

---



The retained interests purchased by the Company during 2002 are carried at the lower of amortized cost or fair market value, net of a servicing liability. In
accordance with EITF 99-20, expected cash flows in excess of the cost of the purchased retained interests are being amortized into income from retained interests using the effective
interest method.

The
Company's managed receivables portfolio underlying its securitizations (including its 50% ownership in the CSG receivables) is comprised of retained interests in receivables
securitized and the investors' shares of securitized credit card receivables. The investors' shares of securitized credit card receivables are not assets of the Company. Therefore, they are not
included in the Company's consolidated balance sheets. The principal balances outstanding as of December 31, 2002, and 2001, were approximately $2.5 billion and $1.7 billion,
respectively. The following table summarizes the balances included in the CompuCredit's managed receivables portfolio underlying its securitizations.

December 31,2002

2001(In thousands)Total managed principal balance

$
2,492,890

$
1,705,119Total managed finance charge balance


302,999


179,389Total managed receivables

$
2,795,889

$
1,884,508Receivables delinquent60 or more days

$
388,651

$
210,382Net charge offs

$
336,884

$
252,002


7.    Software, Furniture, Fixtures, and Equipment

Software, furniture, fixtures and equipment consist of the following:

December 31,2002

2001(In thousands)Software

$
32,938

$
28,922Furniture and fixtures


3,455


3,619Data processing and telephone equipment


17,448


13,368Leasehold improvements


5,839


4,821Total cost


59,680


50,730Less accumulated depreciation


(30,384
)

(16,208
)Software, furniture, fixtures, and equipment, net

$
29,296

$
34,522


8.    Leases

The Company leases premises and equipment under cancelable and noncancelable leases, some of which contain renewal options under various terms. Total rental
expense was $5,148,000 and $3,858,000 for the years ended December 31, 2002 and 2001, respectively. As of December 31, 2002, the future

F-18

---

minimum rental commitments for all noncancelable leases with initial or remaining terms of more than one year net of any sublease income are as follows (in thousands):

Gross

Sub-lease Income

Net2003

$
5,859

$
(164
)
$
5,6952004


5,719


(169
)

5,5502005


5,060


(174
)

4,8862006


4,117


(179
)

3,9382007


4,126


(185
)

3,941Thereafter


15,214


(707
)

14,507$
40,095

$
(1,578
)
$
38,517


9.    Borrowings

As of December 31, 2002, the Company had no outstanding debt. As of December 31, 2001, $15.0 million was outstanding under a
$25 million one-year line of credit facility, which was repaid and terminated in January 2002.

During
the second quarter of 2002, the Company entered into a loan in the amount of $31.4 million to partially fund the purchase of its equity interest in CSG. This loan was
repaid during the fourth quarter of 2002. Notwithstanding the Company's repayment of this loan's principal, the lender continues to receive a portion of future excess cash flows received by the
Company from CSG. These payments are classified as interest expense.

10.  Commitments and Contingencies

The Company enters into financial instruments with off balance sheet risk in the normal course of business through the origination of unsecured credit card
receivables. These financial instruments consist of commitments to extend credit totaling approximately $3.7 billion and $4.4 billion, at December 31, 2002 and 2001, respectively.
These instruments involve, to varying degrees, elements of credit risk in excess of the amount securitized. The principal amount of these instruments reflects the maximum exposure the Company has in
the instruments. The Company has not experienced and does not anticipate that all of its customers will exercise their entire available line of credit at any given point in time. The Company has the
right to reduce or cancel these available lines of credit at any time.

The
Company is an equity member of CSG. During the second quarter of 2002, CSG entered into a note purchase agreement whereby it agreed to buy additional interests in a portfolio of
credit card receivables owned by CSG Trust should there be net new growth in the receivables or should collections not be available to fund new cardholder purchases. As of December 31, 2002,
CSG would be obligated to purchase up to $96.4 million of new notes from the CSG Trust should this contingency arise. In general, this contingency amount will decline as the amount of credit
available to cardholders for future purchases declines. The portfolio has and is expected to continue to decline during the life of the CSG Trust as payments are expected to exceed new purchases each
month. As a member of CSG, the Company has agreed to guarantee the payment of the purchase price of the aforementioned new notes if the events giving rise to this contingency arise, but only if CSG
itself should fail to purchase the new notes under the note purchase agreement. As of December 31, 2002, CSG had not and was

F-19

---

not required to purchase any additional notes under the note purchase agreement. The Company's guarantee is limited to its ownership percentage in CSG (which at December 31, 2002, was 50%)
times the total amount of the notes that CSG would be required to purchase. Therefore, as of December 31, 2002, the maximum amount of the Company's guarantee was $48.2 million. The
Company currently does not have any liability recorded with respect to this guarantee.

In
connection with the third quarter of 2002 extension of the Company's agreement with its principal third-party originating financial institution through March 2006, the Company,
through certain of its subsidiaries, has pledged retained interests carried at approximately $67.9 million to secure its obligations to purchase credit card receivables originated on a daily
basis through the third-party financial institution's cardholder accounts. Additionally, if the Company were to terminate its service agreement with this institution, there would be penalties of
approximately $5.2 million to exit the contract as of January 2003.

The
Company's most significant source of liquidity is the securitization of credit card receivables. The maturity terms of the Company securitizations vary. The Company has two,
three-year securitizations that it completed in July 2001 and August 2000, several one-year securitizations, and, through the Fingerhut Trust, an amortizing term
securitization. Once repayment begins, payments from customers on credit card receivables are accumulated to repay the investors and are no longer reinvested in new credit card receivables. At such
time, the Company's funding requirements for new credit card receivables will increase accordingly. The occurrence of adverse events may also cause the securitization transactions to amortize earlier
than scheduled or may require additional enhancements. These events include a decline in the portfolio's annualized net yield or a decline in the payment rate, in each case, below set rates, or an
increase in delinquencies or charge offs, in each case, above set rates. The portfolio's annualized net yield typically includes monthly finance charges and past due fees collected on the receivables
less monthly servicing fees, credit losses and cost of funds. These events would accelerate the need to utilize alternative funding sources. If the Company's securitization facilities begin to trap
cash flows or otherwise increase their required credit enhancement and the Company is unable to obtain additional sources of liquidity (such as other securitization facilities structurally subordinate
to those facilities that are trapping cash or are in their amortization period, other debt or the issuance of additional equity), the Company would begin to close the credit card accounts that are
open to new purchases and thus significantly reduce the Company's need for any additional cash. Under each of the Company's securitization structures, there has not been an early amortization period;
however, the Fingerhut Trust Series 1998-2 issuance began an early amortization during the first quarter of 2003. In line with the Company's expectations at the time of the
Company's acquisition and projections upon which the Company based its purchase price for the Fingerhut Trust retained interests, the Fingerhut Trust Series 1998-2 triggered an
early amortization as a result of the principal balance of receivables in the trust falling below the minimum balance required by this series. As each facility expires or comes up for renewal, there
can be no assurance that the facility will be renewed or if renewed there can be no assurance that the terms will be as favorable as the terms that currently exist. Either of these events could
significantly increase the Company need for additional liquidity. The Company also anticipates that, due to an expected reduction in the principal balance of the receivables within the CSG Trust, the
retained interests in which are owned by the Company's equity method investee, CSG, a principal balance trigger will occur, and hence early amortization will begin, during the second quarter of 2003.
The occurrence of this event will cause CSG to cease its cash distributions to the Company, although it will continue to compensate the Company in cash for servicing the Providian portfolio.

F-20

---

11.  Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities, such temporary differences
representing those differences between amounts reported for financial reporting purposes and amounts used for income tax purposes.

The
current and deferred portions of federal and state income tax expense are as follows:

|                                 |                      | For the year ended December 31,
|-------------------------------- | -------------------- | -------------------------------
|
|
|Federal income tax expense:      |                      |                                
|                                 | Current tax expense  |                                
|                                 | Deferred tax expense |                                
|                                 |                      |                                
|Total federal income tax expense |                      |                                
|State income tax expense:        |                      |                                
|                                 | Current tax expense  |                                
|                                 | Deferred tax expense |                                
|                                 |                      |                                
|Total state income tax expense   |                      |                                
|                                 |                      |                                
|Total income tax expense         |                      | $                              
|                                 |                      |                                

The
Company has no state income tax expense because its income is earned by consolidated subsidiaries that are organized, domiciled, and operated exclusively within a jurisdiction that
does not impose a state income tax. Income tax expense in 2000 differed from amounts computed by applying the statutory U.S. Federal income tax rate to pretax income from operations as a result of the
following permanent differences: option expense, the stub period for the purchase of Citadel Group, Inc., tax
exempt interest and meals and entertainment. The following table reconciles the Company's effective tax rate to the federal statutory rate:

|                                                    |                        | For the year ended December 31, |  
|--------------------------------------------------- | ---------------------- | ------------------------------- | -
|
|
|Statutory rate                                      |                        | 35                              | %
|Increase (decrease) in income taxes resulting from: |                        |                                 |  
|                                                    | Other differences, net |                                 | 
|                                                    |                        |                                 |  
|Effective tax rate                                  |                        | 35                              | %
|                                                    |                        |                                 |  

F-21

---

The
tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities at December 31, 2002, and 2001, are presented
below:

|                                   |                            | December 31, |       
|---------------------------------- | -------------------------- | ------------ | ------
|
|
|Deferred tax assets/(liabilities): |                            |              |       
|                                   | Prepaid expenses           |              | $     
|                                   | Cash advance fees          |              |       
|                                   | Software development costs |              |       
|                                   | Deferred costs             |              |       
|                                   | Gain on securitization     |              |       
|                                   | Other                      |              |       
|                                   |                            |              |       
|Net deferred tax liability         |                            | $            | (1,667
|                                   |                            |              |       

12.  Earnings Per Share

The following table sets forth the computation of basic earnings per share:

|             |                                                                              | For the year ended December 31,
|------------ | ---------------------------------------------------------------------------- | -------------------------------
|
|
|Numerator:   |                                                                              |                                
|             | Net income                                                                   |                                
|             | Preferred stock dividends                                                    |                                
|             |                                                                              |                                
|             | Income attributable to common shareholders                                   |                                
|Denominator: |                                                                              |                                
|             | Denominator for basic earnings per share-weighted-average shares outstanding |                                
|             | Effect of dilutive stock options                                             |                                
|             |                                                                              |                                
|             | Denominator for diluted earnings per share-adjusted weighted-average shares  |                                
|             | Basic earnings per share                                                     |                                
|             | Diluted earnings per share                                                   |                                

The
preferred stock investment was convertible into 4,828,079 and 4,376,368 shares of common stock at $9.14 per share as of December 31, 2002, and 2001. These shares are not
included in the computation of diluted EPS for the years ended December 31, 2002 and 2001, because including these shares would have been anti-dilutive.

13.  Stock Options

The Company has two Stock Option Plans, the 1998 Stock Option Plan ("1998 Plan") and the 2000 Stock Option Plan ("2000 Plan"). Under the 1998 and the 2000 Plans,
the Company may grant shares of the Company's common stock to members of the Board of Directors, employees, consultants and advisors of the Company. The exercise price per share of the options may be
less than, equal to or

F-22

---

greater than the market price on the date the option is granted. The option period is not to exceed 10 years from the date of grant. The vesting requirements for options granted by the Company
are determined by management and range from immediate to 3 years. The majority of the options vest 331/3% in the 1st year, 331/3% in the
2nd year, and 331/3% in the 3rd year. The maximum number of shares of common stock that may be granted under the 1998 Plan is 1,200,000 shares. As of
December 31, 2002, a total of 1,067,710 options had been granted under the 1998 Plan. The maximum number of shares of common stock that may be granted under the 2000 Plan is 1,200,000 shares. A
total of 1,135,868 options had been granted under the 2000 Plan as of December 31, 2002. The total number of options outstanding under both plans was 2,203,578 as of December 31, 2002.
Information related to options outstanding under the Plans is as follows:

|                                 |  | For the year ended December 31,
|-------------------------------- |  | -------------------------------
|
|
|Outstanding at beginning of year |  | 1,886,751                      
|Granted                          |  | 1,172,818                      
|Exercised                        |  |                               
|Cancelled/Forfeited              |  | (855,991                       
|                                 |  |                                
|Outstanding at end of year       |  | 2,203,578                      
|                                 |  |                                

The
following table summarizes information about stock options outstanding as of December 31, 2002:

|  |              | Options Outstanding |           | Options Exercisable
|- | ------------ | ------------------- | --------- | -------------------
|
|$ | 0.00$12.00  |                     | 1,800,449 |                    
|$ | 12.00$25.00 |                     | 169,579   |                    
|$ | 25.01$38.00 |                     | 195,050   |                    
|$ | 38.01$50.00 |                     | 32,500    |                    
|$ | 50.01$62.00 |                     | 6,000     |                    
|  |              |                     |           |                    
|  |              |                     | 2,203,578 |                    
|  |              |                     |           |                    

As
permitted by Statement No. 123, the Company recognizes compensation cost for stock-based employee compensation awards in accordance with APB 25. Other than with respect to the
Company's restricted stock awards (see Note 3, "Shareholders' Equity"), the Company did not recognize any compensation expense for stock-based employee compensation awards or independent board
members compensation awards, nor did the Company issue any options to non-employees who were not directors for the years ended December 31, 2002, 2001 and 2000.

F-23

---

14.  Employee Benefit Plans

The Company has a 401(k) plan and an Employee Stock Purchase Plan. Employees who have completed one year of employment and at least 1,000 hours of service
are eligible to participate in the
401(k) plan. The 401(k) plan provides for a matching contribution by the Company, which amounted to approximately $276,000 in 2002, and $136,000 in 2001.

The
Company has an Employee Stock Purchase Plan ("ESPP"). All employees, excluding executive officers, are eligible to participate in the ESPP. Under the ESPP, employees can elect to
have up to 10% of their annual wages withheld to purchase CompuCredit common stock. The amounts deducted and accumulated by each participant are used to purchase shares of common stock at the end of
each one-month offering period. The price of stock purchased under the ESPP is approximately 85% of the fair market value per share of the Company's common stock on the last day of the
offering period. Employees contributed approximately $226,000 to purchase 44,710 shares of common stock under the ESPP during 2002 and approximately $318,000 to purchase 44,790 shares of common stock
under the ESPP during 2001. The ESPP covers up to 150,000 shares of common stock. The Company's charge to expense associated with the ESPP was approximately $44,000 in 2002 and $50,000 in 2001.

15.  Related Party Transactions

The Series A Preferred Stock that was issued in December 2001, was issued to a group of investors that included J.P. Morgan Corsair II Capital
Partners, L.P. and Paladin Capital Partners Fund, L.P. ("Paladin"). J.P. Morgan Corsair II Capital Partners is a holder of greater than 5% of the Company's outstanding common stock. CompuCredit issued
4,808 shares of its Series A Preferred Stock to Paladin for an aggregate purchase price of approximately $4.8 million. In addition to the preferred stock investment noted above, during
the fourth quarter of 2001, Paladin purchased approximately $27 million of the Company's retained interests in credit card receivables securitized for approximately $20 million. Paladin
may be deemed to be an affiliate of an entity controlled by Mr. Frank J. Hanna, Jr., who is the father of the Company's Chairman and Chief Executive Officer, David G. Hanna, and one of
the Company's directors, Frank J. Hanna, III.

In
December 2001, the Company also issued 10,000 shares of Series B Preferred Stock, in a private placement, for an aggregate purchase price of $10 million. The
Series B Preferred Stock was issued to entities controlled by David G. Hanna and Frank J. Hanna, III.

The
holders of the Series A Preferred Stock, Series B Preferred Stock, certain holders of common stock and the Company entered into a Shareholders Agreement whereby (in
addition to the provisions described in Note 3, "Shareholders' Equity") (i) the holders of the Series A Preferred Stock are entitled to participate in a sale or transfer of
securities of CompuCredit by Frank J. Hanna, III, David G. Hanna (being the holders of the Series B Preferred Stock), and certain other common stock holders that in the aggregate
are equal to 25% or more of the outstanding shares of common stock, on a fully diluted basis, and (ii) the holders of the Series A and Series B Preferred Stock are entitled to
registration rights, such that their converted shares of common stock may be registered by CompuCredit on a registration statement filed with the SEC.

Under
a shareholders agreement into which the Company entered with David G. Hanna, a trust of which David G. Hanna is the sole trustee, Frank J. Hanna, III, a trust of which Frank J.
Hanna, III is the sole trustee, Richard R. House, Jr. (the Company's President) and Richard W. Gilbert (the Company's Chief Operating Officer and Vice Chairman) following the Company's initial public
offering

F-24

---

(i) if one or more of the shareholders accepts a bona fide offer from a third party to purchase more than 50% of the outstanding common stock, each of the other shareholders that are a party
to the agreement may elect to sell their shares to the purchaser on the same terms and conditions, and (ii) if shareholders that are a party to the agreement owning more than 50% of the common
stock propose to transfer all of their shares to a third party, then such transferring shareholders may require the other shareholders that are a party to the agreement to sell all of the shares owned
by them to the proposed transferee on the same terms and conditions.

Richard
R. House, Jr. and Richard W. Gilbert each indirectly own 13.0% of Visionary Systems, Inc., or VSI, the third party developer of the Company's database management system.
During 2002, the Company paid approximately $11.2 million to VSI and its subsidiaries for software development, account origination, and consulting services. In connection with the purchase of
intellectual property, the Company entered into a promissory note of $1.4 million, due and paid in January 2002. During 2001, the Company loaned a subsidiary of VSI $1.0 million
for working capital and general corporate purposes. This loan bears interest at the prime rate and is due in January 2005; approximately $1.0 million was outstanding as of
December 31, 2002. During 2001, the Company paid approximately $20.1 million to VSI for software development, account origination, consulting services, intellectual property and two
patents.

During
2001, the Company began subleasing 7,316 square feet of excess office space to Frank J. Hanna, Jr., for $21.50 per square foot. The sublease rate is the same as the rate that
CompuCredit pays on the prime lease. Total rent for 2002 was approximately $157,000.

F-25

---



Report of Independent Certified Public Accountants

The
Board of Directors
CSG, LLC

We
have audited the accompanying consolidated balance sheet of CSG, LLC and subsidiary as of December 31, 2002, and the related consolidated statements of operations, members'
capital, and cash flows for the period from inception (April 8, 2002) to December 31, 2002. These financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on our audit.

We
conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of CSG, LLC and subsidiary at December 31,
2002, and the consolidated results of their operations and their cash flows for the period from inception (April 8, 2002) to December 31, 2002 in conformity with accounting principles
generally accepted in the United States of America.

| | /s/BDO SEIDMAN, LLP
| | -------------------

Atlanta,
Georgia
February 25, 2003

F-26

---



CSG, LLC and Subsidiary  Consolidated Balance Sheet

|                                                          |  | December 31,
2002
|--------------------------------------------------------- |  | -----------------
|
|Assets                                                    |  |                  
|Cash and cash equivalents                                 |  | $                
|Restricted cash                                           |  |                  
|Retained interests in credit card receivables securitized |  |                  
|Other assets                                              |  |                  
|                                                          |  |                  
|Total assets                                              |  | $                
|                                                          |  |                  
|Liabilities                                               |  |                  
|Accrued expenses                                          |  | $                
|Members' Capital                                          |  |                  
|                                                          |  |                  
|Total liabilities and members' capital                    |  | $                
|                                                          |  |                  

See
accompanying notes.

F-27

---

CSG, LLC and Subsidiary  Consolidated Statement of Operations

|                                                                           |  | For the period from
inception (April 8, 2002) to
December 31, 2002
|-------------------------------------------------------------------------- |  | ------------------------------------------------------------------
|
|Interest income                                                            |  | $                                                                 
|Interest expense                                                           |  |                                                                   
|                                                                           |  |                                                                   
|Net interest income                                                        |  |                                                                   
|                                                                           |  |                                                                   
|Other operating income:                                                    |  |                                                                   
|Income from retained interests in credit card receivables securitized, net |  |                                                                   
|Servicing income                                                           |  |                                                                   
|                                                                           |  |                                                                   
|Total other operating income                                               |  |                                                                   
|Other operating expense:                                                   |  |                                                                   
|Credit card servicing                                                      |  |                                                                   
|Professional fees                                                          |  |                                                                   
|                                                                           |  |                                                                   
|Total other operating expense                                              |  |                                                                   
|                                                                           |  |                                                                   
|Net income                                                                 |  | $                                                                 
|                                                                           |  |                                                                   

See
accompanying notes.

F-28

---



CSG, LLC and Subsidiary  Consolidated Statement of Members' Capital  For the period from inception (April 8, 2002) to December 31, 2002

|                                     |                    | CCAC |        | MTGLQ   |   | SB Funding |         | Total
Members'
Equity |      
|------------------------------------ | ------------------ | ---- | ------ | ------- | - | ---------- | ------- | --------------------- | -----
|Balance at Inception (April 8, 2002) |                    | $    | 1      |         | $ |           |         | $                     |     
|                                     | Net income         |      |        | 45,716  |   |            | 22,859  |                       |      
|                                     | Contributions      |      |        | 34,889  |   |            | 17,445  |                       |      
|                                     | Cash distributed   |      |        | (43,528 | ) |            | (21,765 | )                     |      
|                                     | Bonds distributed. |      |        | (21,485 | ) |            | (10,743 | )                     |      
|                                     |                    |      |        |         |   |            |         |                       |      
|Balance at December 31, 2002         |                    | $    | 15,593 |         | $ | 7,796      |         | $                     | 7,796
|                                     |                    |      |        |         |   |            |         |                       |      

See
accompanying notes.

F-29

---

CSG, LLC and Subsidiary  Consolidated Statement of Cash Flows

|                                                                                  |                                           | For the period from
inception (April 8, 2002) to
December 31, 2002 |        
|--------------------------------------------------------------------------------- | ----------------------------------------- | ------------------------------------------------------------------ | -------
|
|Operating activities                                                              |                                           |                                                                    |        
|Net income                                                                        |                                           | $                                                                  | 91,434 
|Adjustments to reconcile net income to net cash provided by operating activities: |                                           |                                                                    |        
|                                                                                  | Retained interests income adjustment, net |                                                                    |        
|                                                                                  | Changes in assets and liabilities:        |                                                                    |        
|                                                                                  |                                           | Increase in restricted cash                                        |        
|                                                                                  |                                           | Increase in other assets                                           |        
|                                                                                  |                                           | Increase in accrued expenses                                       |        
|                                                                                  |                                           |                                                                    |        
|Net cash provided by operating activities                                         |                                           |                                                                    | 79,593 
|Investing activities                                                              |                                           |                                                                    |        
|Purchase of subordinated interest                                                 |                                           |                                                                    | (19,247
|Investment in bonds                                                               |                                           |                                                                    | (45,532
|Proceeds from bond investment                                                     |                                           |                                                                    | 2,561  
|                                                                                  |                                           |                                                                    |        
|Net cash used in investing activities                                             |                                           |                                                                    | (62,218
|Financing activities                                                              |                                           |                                                                    |        
|Capital contributions                                                             |                                           |                                                                    | 69,780 
|Capital distributions                                                             |                                           |                                                                    | (87,058
|                                                                                  |                                           |                                                                    |        
|Net cash used in financing activities                                             |                                           |                                                                    | (17,278
|                                                                                  |                                           |                                                                    |        
|Net increase in cash                                                              |                                           |                                                                    | 97     
|                                                                                  |                                           |                                                                    |        
|Cash and cash equivalents at beginning of period                                  |                                           |                                                                    |       
|                                                                                  |                                           |                                                                    |        
|Cash and cash equivalents at end of period                                        |                                           | $                                                                  | 97     
|                                                                                  |                                           |                                                                    |        
|Supplemental disclosures:                                                         |                                           |                                                                    |        
|Interest paid                                                                     |                                           | $                                                                  |       
|                                                                                  |                                           |                                                                    |        
|Supplemental non-cash disclosures:                                                |                                           |                                                                    |        
|Bonds distributed                                                                 |                                           | $                                                                  | 42,971 
|                                                                                  |                                           |                                                                    |        

See
accompanying notes.

F-30

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CSG, LLC and Subsidiary        Notes to Consolidated Financial Statements        December 31, 2002

1.    Organization and Basis of Presentation

The consolidated financial statements include the accounts of CSG, LLC and its wholly owned subsidiary, CSG Funding, LLC (collectively, "the Company"). Pursuant
to a Limited Liability Company Agreement dated as of April 8, 2002, as amended and restated on June 25, 2002 by and amongst MTGLQ Investors, L.P. ("MTGLQ"), an affiliate of Goldman,
Sachs & Co., SB Funding Corp. ("SB Funding"), an affiliate of Salomon Smith Barney, and CompuCredit Acquisition Corporation ("CCAC"), an affiliate of CompuCredit Corporation, the Company was
formed to purchase a retained interest in a portfolio of performing, sub-performing, and non-performing receivables from Providian National Bank ("Providian"). MTGLQ and SB
Funding own 25% each of the Company and CCAC owns the remaining 50%, but unanimous approval is required on all matters subject to a vote.

In
June 2002, the Company closed a transaction with Providian in which the Company purchased the retained interests in a trust (the "Providian Trust") that owned approximately
$1.2 billion in face amount of receivables and Class B notes (the "bonds"). The bonds were distributed to the members in August 2002 at their net amortized value. This portfolio
will decrease in size over time because payments from cardholders are expected to be significantly greater than purchases being made by cardholders. All significant intercompany balances and
transactions have been eliminated for financial reporting purposes.

The
accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States that require 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 consolidated financial statements as well as
the reported amount of
revenues and expenses during the reporting period. These estimates are based on information available to the Company as of the date of the financial statements. Actual results could differ materially
from these estimates.

2.    Significant Accounting Policies

The following is a summary of significant accounting policies followed in the preparation of the consolidated financial statements.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash, money market investments, and overnight deposits. The Company considers all other highly liquid cash investments with
low interest rate risk and maturities of three months or less to be cash equivalents. Cash equivalents are valued at cost, which approximates market.

Restricted Cash

Restricted cash represents amounts agreed upon by the members to be set aside for operational purposes ($5 million at December 31, 2002) and amounts
required by the servicing bank ($5 million at December 31, 2002). These funds are restricted from general corporate use. See Note 4 "Commitments and Contingencies" for further
discussions.

Asset Securitization

The Company owns a retained interest in a pool of assets, which were securitized by Providian National Bank in a Master Trust. Credit card receivables are
transferred to the Master Trust, which

F-31

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issues notes representing undivided ownership interests in the assets of the Master Trust. The following table summarizes the Master Trust at December 31, 2002 (in millions):

Total principal balance

$
866.3Total finance charge balance


77.7Total receivables

$
944.0Receivables delinquent 60 or more days

$
120.7Net charge offs since inception (April 8, 2002)

$
57.9


In
accordance with the above, all of the credit card receivables are held by securitization trust, and the exclusive interest of the Company in these receivables is in the form of
retained interests in the trust. The Company's retained interests in such receivables are included in retained interests in credit card receivables securitized and are carried at the lower of the
amortized cost or fair market value. The Company accounts for its retained interests in accordance with EITF No. 99-20, "Recognition of Interest Income and Impairment on Purchased
and Retained Beneficial Interests in Securitized Financial Assets." Under EITF 99-20, CSG recognizes the excess of all cash flows attributable to the beneficial interest estimated at the
acquisition date over the initial investment as income from retained interest on credit cards receivables securitized, net over the life of the beneficial interest using the effective interest method.
As adjustments to the estimated cash flows are made based upon expected market conditions, the Company adjusts the rate at which income is earned prospectively. Additionally, EITF 99-20
provides guidance as to when the holder of a retained interest must conclude that a decline in value below the carrying amount is considered a permanent impairment. CSG's policy is that if a decrease
in the estimated future cash flows results in a fair value below the carrying value and the decline is considered permanent, then the asset is written down through earnings.

Interest
rates received on the credit card receivables are estimated based on the stated annual percentage rates in the credit card agreements. Estimated default and payment rates are
based on historical results, adjusted for expected changes based on the Company's credit risk models. Credit card receivables are typically charged off when the receivable becomes 180 days past
due, although earlier charge offs may occur specifically related to accounts of bankrupt or deceased customers. Bankrupt and deceased customers' accounts are typically charged off within
30 days of verification.

Changes
in any of the assumptions used to value retained interests could impact the fair value estimates. Certain estimates such as credit losses and payment rates have a significant
impact on the value of retained interests in credit card receivables securitized. The weighted-average key assumptions used to estimate the fair value of the retained interest in receivables the
Company has securitized at December 31, 2002, are included in the following table:

Payment rate (monthly)

5.3
%Expected credit loss rate (annualized)

35.0
%Servicing rate

5.0
%


Income Taxes

Since the Company is a limited liability corporation, all income is considered passed through to the stockholders for income tax purposes.

F-32

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Recent Accounting Pronouncements

In January 2003, the FASB issued FASB interpretation No. 46, "Consolidated Financial Statements" ("Interpretation No. 46"), which addresses
consolidation by business enterprises of variable interest entities that have certain characteristics. In general, Interpretation No. 46 requires a variable interest entity to be consolidated
by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or is entitled to receive a majority of the entity's residual returns or both.
An entity that meets this definition is considered the "primary beneficiary." Interpretation No. 46 requires disclosures about variable interest entities by the primary beneficiary and an
enterprise that holds significant variable interests in a variable interest entity but is not the primary beneficiary. Interpretation No. 46 provides for exceptions to the scope of this
interpretation including transfers to qualifying special purpose entities subject to the reporting of Statement No. 140, which would not be consolidated. Interpretation No. 46 applies
immediately to variable interest entities created after January 31, 2003 and to variable interest entities in which an enterprise obtains an interest after January 31, 2003.
Interpretation No. 46 applies in the first fiscal year, or interim period, beginning after June 15, 2003 to variable interests entities in which an enterprise holds a variable interest
that it acquired before February 1, 2003. Since CSG Trust is a qualifying special purpose entity, this interpretation will not apply to the Company.

3.    Members' Capital

During 2002, the Company issued 1,000 shares of its Common Stock for $1,000. During 2002, the members contributed $69.8 million in cash and received
distributions of $87.1 million in cash and $43.0 million in bonds. The Company distributes net income in excess of the amount agreed to be retained in the Company by the members monthly
based on the members' ownership percentages. At December 31, 2002, there were $4.4 million of undistributed earnings included in Members' Capital in the accompanying financial
statements.

4.    Commitments and Contingencies

During the second quarter of 2002, the Company entered into a note purchase agreement whereby it agreed to buy additional interests in a portfolio of credit card
receivables owned by CSG Trust should there be net new growth in the receivables or should collections not be available to fund new cardholder purchases. As of December 31, 2002, the Company
would be obligated to purchase up to $96.4 million of new notes from the CSG Trust should this contingency arise. In general, this contingency amount will decline as the amount of credit
available to cardholders for future purchases declines. The portfolio has and is expected to continue to decline during the life of the CSG Trust as payments are expected to exceed new purchases each
month. The members have agreed to guarantee the payment of the purchase price of the aforementioned new notes if the events giving rise to this contingency arise, but only if the Company itself should
fail to purchase the new notes under the note purchase agreement. As of December 31, 2002, the Company had not and was not required to purchase any additional notes under the note purchase
agreement.

5.    Related Party Transactions

CompuCredit Corporation services the underlying receivables and was paid $25.7 million for such services for the period from inception (April 8,
2002) to December 31, 2002. These amounts are a component of income from retained interests in credit card receivables securitized in the accompanying statement of operations. In the opinion of
management, such fees were charged at prevailing market rates.

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