E-LOAN, Inc. Reports First Quarter Results for 2005

PLEASANTON, CA – E-LOAN, Inc. (Nasdaq: EELN), an online consumer direct lender, today reported results for the first quarter ended March 31, 2005.

Overview of Results

• Net income for the first quarter of 2005 was $2.2 million or $0.03 per share on 68 million diluted shares.

• Total revenue of $38 million, up 25% from Q1 2004.

• Diversified revenue — comprising total revenue, excluding prime refinance mortgage — was $27 million, up 25% from Q1 2004, which accounted for 70% of E-LOAN’s total revenue in Q1 2005.

• Home Equity revenue was $11.6 million, up 16% from Q1 2004. Home equity sold loan volume and revenue per loan increased 11% and 21%, respectively, in the quarter compared to Q1 2004.

• Diversified mortgage revenue – comprising purchase and non-prime mortgage — was $8 million, up 5% from the first quarter of 2004.

• Diversified mortgage sold loan volume decreased 4% in the quarter compared to Q1 2004, offset by a 16% increase in revenue per loan compared to Q1 2004.

• Auto revenue was $5.5 million, including a $2.65 million benefit from the QSPE auto loan sale, up from $3.1 million auto revenue in Q1 2004. In March 2005, a major financial institution purchased substantially all of the auto loans held by E-LOAN Auto Fund One, LLC, a Qualified Special Purpose Entity (QSPE) of E-LOAN, Inc. The purchase resulted in a $2.65 million increase in the fair value of E-LOAN, Inc.’s retained interest in the purchased auto loans, which is included as a component of auto revenue.

• Refinance mortgage revenue was $11.4 million, up 27% from Q1 2004. Refinance mortgage sold loan volume and revenue per loan increased 16% and 18%, respectively, in the quarter compared to Q1 2004.

• Direct margin — defined as revenue minus variable and fixed operations expense — was $20.8 million, up 33% from Q1 2004.

• Marketing expense totaled $13.4 million, up 20% from Q1 2004.

• Cash balance increases to $65 million, which is the highest level since our IPO in June 1999.

“A significant accomplishment in the first quarter of 2005 was the development of our Radically Simple(SM) branding and advertising campaign, which launched last week,” said Chris Larsen, Chairman and Founder of E-LOAN. “The vision of this company has always rested on a foundation of pro consumer values and the core belief that, in addition to getting good rates, consumers have the right to be treated with respect and to be confident that their lender is fair and honest. With the launch of this campaign, we believe that for the first time our advertising strongly conveys these values and clearly differentiates E-LOAN from the competition. We are confident that this Radically Simple(SM) marketing initiative will do great things for our brand and our business.”

To view a sample of the Radically Simple(SM) television commercials, click here: www.eloan.com/tv.

Executive Changes
E-LOAN today announced that it has promoted its Head of Capital Markets, Darren Nelson, to Chief Financial Officer. The former Chief Financial Officer of E-LOAN, Matt Roberts, will remain an employee of the company until the transition has been completed.

“Having successfully completed our first annual Sarbanes-Oxley 404 process and with the confidence that E-LOAN’s management team and business operations are poised for continued success, after a six year tenure I felt the time was right to pursue my next professional growth opportunity and join an early stage, private company in a different industry,” said Matt Roberts, former Chief Financial Officer of E-LOAN. “I look forward to working with Darren to ensure a seamless transition.”

Darren Nelson has more than a decade of financial services, capital markets and accounting leadership experience. Prior to joining E-LOAN to head up its capital markets group in March 2004, Nelson held a series of executive positions at Greenpoint Mortgage Funding, Inc. During his five-year tenure with Greenpoint, he served as the company’s Vice President of Affiliated Business Relationships, Vice President of Finance, and Vice President – Assistant Controller. In these capacities, his responsibilities included credit facility management and negotiations, secondary marketing activities, budget process and profit and loss plan management, financial reporting and preparation of quarterly and annual financial statements, and coordination of external auditing activities.

Nelson also served as Vice President of Finance and Secondary Marketing at Provident Funding Associates, L.P. where he oversaw loan sales and hedging activities. Before Provident, he served as the Assistant Vice President and Assistant Controller for Bank of the Northwest where he was responsible for accounting functions for the commercial bank and analysis relating to interest rate risk management, funding strategies and acquisition opportunities. Prior to Bank of the Northwest, Nelson served as a Senior Accountant at U.S. Bancorp and as a Senior Associate at Coopers & Lybrand in the financial services group.

Darren Nelson holds a Bachelor of Science degree in Economics with an emphasis in Accounting from the University of California, Santa Barbara. Nelson is a Certified Public Accountant, a member of AICPA, and a Chartered Financial Analyst.

“Darren has done an exceptional job leading our capital markets efforts over the past year,” said Mark Lefanowicz, Chief Executive Officer and President of E-LOAN. “I am confident that his prior financial leadership experience coupled with his deep capital markets knowledge is just the right combination to support E-LOAN’s continued success.”

Financial Guidance
“We’re pleased to reaffirm guidance for fiscal year 2005,” said Mark Lefanowicz, Chief Executive Officer and President of E-LOAN. “We expect total 2005 revenues of approximately $165 million — representing a 22 percent improvement over 2004 results. In 2005, we anticipate that diversified revenue will grow to approximately $122 million, comprising 74 percent of total revenue, and representing a 25 percent increase over our 2004 diversified revenue. We expect 2005 pre-tax EPS of approximately $0.13 per share compared to EPS of $0.01 per share in 2004.”

Key assumptions in the forecast for 2005 are as follows:

• 10-year Treasury rates of 4.0 to 5.0 % for the remainder of the year.
• E-LOAN total 2005 sold loan volume of approximately $5.8 billion.
• Marketing spend of approximately $58 million.
• Combined technology and G&A expense of $20 million.
• Average diluted shares outstanding of 68 million.

E-LOAN’s revenues are primarily from the gain on sale of first mortgage, home equity and auto loans that we originate, fund and then sell. We also earn interest income on mortgage and home equity loans from the time of funding through the time of sale.