Collections received from securitized receivables are used to pay interest to investors, servicing and other fees, and are available to absorb the investors’ share of credit losses. For revolving securitizations, amounts collected in excess of that needed to pay the above amounts are remitted to the Company, as described previously in “Servicing and Securitizations Income.” For amortizing securitizations, amounts in excess of the amount that is used to pay interest, fees and principal are generally remitted to the Company, but may be paid to investors in further reduction of their outstanding principal as described below. Investors in the Company’s revolving securitization program are generally entitled to receive principal payments either in one lump sum after an accumulation period or through monthly payments during an amortization period. Amortization may begin sooner in certain circumstances, including the possibility of the annualized portfolio yield (generally consisting of interest and fees) for a three-month period dropping below the sum of the security rate payable to investors, loan servicing fees and net credit losses during the period. Increases in net credit losses and payment rates could significantly decrease the spread and cause early amortization. This early amortization would have a significant effect on the ability of the Bank and the Savings Bank to meet the capital adequacy requirements as all off-balance sheet loans experiencing such early amortization would have to be recorded on the balance sheet. At December 31, 2002, the annualized portfolio yields on the Company’s off-balance sheet securitizations sufficiently exceeded the sum of the related security rates payable to investors, loan servicing fees and net credit losses, and as such, early amortizations of its off-balance sheet securitizations was not indicated or expected. In revolving securitizations, prior to the commencement of the amortization or accumulation period, the investors’ shares of the principal payments received on the trusts’ receivables are reinvested in new receivables to maintain the principal balance of the securities. During the amortization period, the investors’ share of principal payments is paid to the security holders until the securities are repaid. When the trust allocates principal payments to the security holders, the Company’s reported consumer loans increase by the amount of any new activity on the accounts. During the accumulation period, the investors’ share of principal payments is paid into a principal funding account designed to accumulate principal collections so the securities can be paid in full on the expected final payment date. Table 4 indicates the impact of the consumer loan securitizations on average earning assets, net interest margin and loan yield for the periods presented. The Company intends to continue to securitize consumer loans. Table 4: Comparison of Managed and Reported  Operating Data and Ratios Risk Adjusted Revenue Margin Year Ended December 31 (Dollars in Thousands) 2002 2001 2000 Reported: Average earning assets $ 31,147,599 $ 20,706,172 $ 13,252,033  Net interest margin (1) 8.73% 8.45% 12.47% Loan yield (2) 15.15 15.79 20.46 Managed: Average earning assets $ 57,266,637 $ 38,650,677 $ 24,399,119 Net interest margin (1) 9.23% 9.40% 11.11% Loan yield (2) 14.64 15.88 18.25 (1) Reported and managed net interest margin increased 12 basis points and 7 basis points, respectively as a result of the one-time impact of the change in recoveries assumption for the year ended December 31, 2002. (2) Reported and managed loan yield increased 15 basis points and 7 basis points, respectively as a result of the one-time impact of the change in recoveries assumption for the year ended December 31, 2002. The Company’s products are designed with the objective of maximizing customer value while optimizing revenue for the level of risk undertaken. Management believes that comparable measures for external analysis are the risk adjusted revenue and risk adjusted margin of the managed portfolio. Risk adjusted revenue is defined as net interest income and non-interest income less net charge-offs. Risk adjusted margin measures risk adjusted revenue as a percentage of average earning assets. These measures consider not only the loan yield and net interest margin, but also the fee income associated with these products. By deducting net charge-offs, consideration is given to the risk inherent in the Company’s portfolio. NET INTEREST MARGIN (%) 2001 9.23 2002 8.73 9.40 8.45 2000 11.11 12.47 MANAGED NET  INTEREST MARGIN REPORTED NET  INTEREST MARGIN LOAN YIELD (%) MANAGED LOAN YIELD 2001 14.64 2002 15.15 15.88 15.79 2000 18.25 20.46 REPORTED LOAN YIELD 28