The provision for losses on the lending portfolio grew as a result of higher volume, partly offset by a continued improvement in credit quality. Human resources expenses rose as a result of increased business volumes and acquisitions. Other operating expenses rose, reflecting in part the cost of Cardmember loyalty programs, business growth and investment spending. The above discussion presents TRS results as if there had been no securitization transactions. As they have for the past three years, the attached financials present TRS results on both a managed and reported basis.
Net income is the same in both formats.
There were no securitization transactions in the fourth quarter of either year. These gains, and the previously mentioned benefit from software capitalization in 1999, were offset by higher spending on marketing and promotion related to card acquisition, Internet activities and other business building initiatives. These items had no material impact on net income or total expenses. Net revenues and earnings growth benefited from higher fees due to an increase in managed assets, reflecting positive net sales and market appreciation over the past twelve months, as well as wider investment margins. AEFA reported record sales of mutual funds, investment certificates, and life and other insurance products, as well as strong sales of variable annuities.