Money Tree IMS

For sales representatives, getting to “yes” has never been easier or more instant. At least for those using the newly released “Instant Merchant System” being offered to the sales reps of Money Tree Services, Inc., a national provider of credit and debit card accounts for retail and Internet merchants.

The IMS, first of its kind in the industry, allows Money Tree’s sales reps to complete an online merchant application and agreement at the merchant location, receive account approval within seconds, and then download a program for the merchant’s credit card terminal in minutes. Once the terminal is loaded with the program, the new customer is ready to go. “We’re thrilled with the possibilities of this technology,” says Mitch Lau, president of Money Tree. “In the past, it’s taken two and three days to do what our sales reps can do now in a matter of moments.” Lau says the innovation will eliminate the greatest objection most sales reps face in the industry. “It’s so competitive out there that it’s difficult to get attention,” says Lau. “But now, our sales reps are able to eliminate the biggest objection they receive. Typically merchants don’t like the hassle or the delays. They are all too busy. The IMS completely eliminates this barrier to getting a sale. It’s so easy it makes it hard to get a ‘No’.”

Lau expects this to have a great impact on his sales reps’ bottom line. “We’re projecting that they will be able to double and even triple their commissions. Not only is it going to greatly improve their turn ratios, it’s going to really free up their time to focus on getting more sales.”


CardBASE Technologies Ltd* , a leading provider
of multi-application smart card management solutions, announced that
it has joined the RSA Secured Partner Program to support
interoperability between ChipCERT and RSA Keon digital certificate
management software.

As part of the program, ChipCERT has been awarded “RSA Secured RSA Keon
Ready” certification signaling its compatibility with RSA Security’s digital
certificate management software. The RSA Secured certification lets
organizations know that ChipCERT is compatible with RSA Security’s
market-leading security products and technologies.

ChipCERT* from CardBASE Technologies, is a PKI solution built on the
CardBASE Multi-Application Smart Card Management System platform. ChipCERT
enables organizations to securely bulk issue and actively manage the
lifecycle of digital certificates on smart cards. ChipCERT integrates with
approved Certificate Authorities and is card-independent, with support for
the leading card and token manufacturers.

Gerry Looby, Chief Technical Office at CardBASE said: “We chose to team with
RSA Security because they are a leader in e-security solutions and their PKI
technology is proven. We were able to easily integrate the RSA Keon digital
certificate management software into the existing ChipCERT infrastructure,
providing a solution for the deployment of digital certificates on smart
cards within a proven security environment.”

“We are excited to welcome CardBASE Technologies to the RSA Secured Partner
Program,” said Robert Pritchard, vice president of corporate and partner
development at RSA Security. “Our strategic partner program is one of the
most aggressive and successful in the industry, and we look forward to
working with CardBASE to help deliver secure e-business solutions to our


CardBASE Technologies® a leading provider of smart card solutions for secure
e-commerce, is a European company serving world markets from its
headquarters in Ireland and offices in the United States and Africa. Since
its foundation in 1993, CardBASE Technologies has been providing innovative
smart card management systems for the Internet, Banking, Financial and
Airline markets.

The CardBASE solution supports Multiple Application Smart Cards, Card
Personalisation, Card Management, Transaction Processing and Settlement.
CardBASE solutions have been specifically designed to support the Visa
International led Common Electronic Purse Specification (CEPS), EMV and the
Public Key Infrastructure (PKI) standards.

Infrared Payments

Beaming payments between consumers and merchants is coming closer to a reality as the nation’s largest payment card network provides support. VISA International announced this morning it has developed specifications to enable payments to be beamed securely from a handheld device to a merchant terminal using infrared technology. The ‘VISA Financial Messaging Profile for Proximity Payment’ specifications will enable application developers and card issuers to develop new payment services for consumers who use portable devices such as mobile phones and PDAs. VISA estimates there are 150 million devices capable of infrared messaging in use worldwide. The new VISA specifications are built upon the ‘Point and Pay Protocol’ developed by the Infrared Financial Messaging Group. VISA says adding the VISA option to mobile phones and PDAs will expedite payments for consumers travelling or in a hurry, such as taxis, parking garages, and fast food restaurants.

Emergent Update

Emergent Financial Group has purchased NextTech Card Services Inc. and has hired a former Western Union executive. Emergent purchased the Junum subsidiary, NextTech, for total consideration of $5 million, payable in Emergent common stock. Emergent will continue the original vision of NextTech by bundling Junum’s credit management services with its credit card offerings. Emergent also announced that John Mendez has joined the company as Director of Sales. Mr. Mendez previously held several executive positions with Western Union’s Commercial Services and Moneygram Payment Systems. Emergent is principally engaged in building a distribution network for non-bank financial services delivered through countertop POS devices in retail locations globally.

VISA Rent Payments

Visa U.S.A. and Westdale Asset Management, Ltd. announced an agreement that will make rent payment more convenient for Westdale residents in the Atlanta, Georgia area. Effective immediately, more than 1,500 residents at Barringer Place in Atlanta, Brentwood Downs in Lilburn, Wellington Ridge in Lawrenceville, and Wood Bridge in Apharetta will have the option of paying their monthly rent automatically with their Visa card.

Following Westdale’s initial acceptance of automatic and one-time card-based payment at its four Georgia properties, the company looks forward to rolling out automatic bill payment at its 135 rental communities nationwide. By providing residents with this innovative payment option, Westdale joins several organizations in other industries already benefiting from Visa’s automatic bill payment program.

Card acceptance and the Visa automatic bill payment program not only provide convenience benefits to Westdale residents, but real business advantages for Westdale. Because the costs associated with cash and check handling are consistently higher than those associated with payment card transactions, this program will help to cut processing costs and streamline collections. Additionally, automatic bill payment will ensure Westdale’s receipt of on-time payment and will result in fewer delinquencies. The program will also enable Westdale to expand payment options, which can help them to differentiate themselves from competitors, leading to increased resident retention. Consumers are becoming increasingly more aware of the benefits automatic bill payment offers them. According to a national survey, one-third of all U.S. consumers would like merchants to establish automatic bill payment programs.(1)

Visa research has also found that 51 percent of credit and debit cardholders want the option of using a payment card to pay recurring bills automatically because it eliminates the need to write and mail multiple checks every month. “By implementing an automatic bill payment program with Visa, Westdale is demonstrating that it is a leader in the property management industry,” says Armen Khachadourian, SVP New Market Development, Visa U.S.A. “In addition to providing its residents with an ideal, convenient payment option, Westdale also gains a business enhancement tool. Automatic bill payment helps to address many of the billing and customer service challenges residential property management companies currently face and we look forward to further addressing the needs of this industry in the future.”

“Visa’s automatic bill payment program complements our existing commitment to our residents to make paying their monthly rent more convenient,” says Karen Tepera, Executive Vice President, Westdale Asset Management, Ltd. “While offering the option of automatic payment will help improve customer service, we expect that working with Visa to establish this program will also enable us to build resident loyalty and ultimately increase operating efficiency.”

About Visa U.S.A.

Visa is the world’s leading payment brand and largest consumer payment system, enabling banks to provide their consumer and merchant customers with a wide variety of payment alternatives. More than 14,000 U.S. financial institutions rely on Visa’s processing system, VisaNet, to facilitate over $835 billion in annual transaction volume – including roughly half of all Internet payments – with virtually 100 percent reliability. U.S. consumers carry 353 million Visa-branded smart, credit, commercial, stored value and check cards, accepted at approximately 22 million locations worldwide. Visa’s people, partnerships, brand, payment technology and security standards are helping to create universal commerce – the ability to safely conduct transactions anytime, anywhere, anyway. Please visit [][1] for additional information.

About Westdale

Westdale Asset Management, Ltd. is a real estate management company providing property management and asset management services for multi-family properties throughout the United States. Specializing in each of the facets, Westdale continues striving toward excellence, with a foundation built on commitment. Westdale currently has over 37,000 units in its portfolio inhabiting 13 states nationwide in 20 major metropolitan areas. Please visit [][2] for additional information.



Oberthur Card Systems, a
global leader and the innovator in the smart card industry has successfully
connected its SIMphonIC CDMA product to China Unicom’s first available
CDMA network. Oberthur is among the companies taking the lead in passing the
first series of tests using the R-UIM card.

SIMphonIC CDMA, with its application Toolkit functionality and varied
memory capacity, allows China’s mobile network operators to provide
personalized value-added services to their customers who can roam and
authenticate themselves on both GSM and CDMA networks. To ensure a high level
of compatibility, the test featured handsets from 19 manufacturers approved
for use on the CDMA network by the Chinese authorities. The tests prove the
compatibility of the SIMphonIC CDMA card both with the CDMA network and
with the approved CDMA handsets. Oberthur’s solution is used as a reference
for China Unicom’s framing standard and data test during the development and
deployment of its CDMA network.

Based on Qualcomm’s CDMA technologies, the SIMphonIC(TM) CDMA has been
developed following the 3GPP2(1) (3rd Generation Partnership Project 2)
specification for the design of the UIM (User Identity Module) of CDMA,
combined with the GSM standard from the ETSI (European Telecommunications
Standards Institute) thereby creating an international CDMA/GSM dual mode
roaming solution. Inserted into a GSM or CDMA handset with a smart card slot,
the SIMphonIC(TM) CDMA allows the portability of such information while
roaming from one environment to another, enabling users to gain access to
their data while travelling between technologies. Operators, in turn, will
benefit from a reduced cost of implementation and increased revenue through
international roaming.

The SIMphonIC(TM) CDMA is intended to allow access to the CDMA networks,
such as the current CdmaOne networks in China and Korea, and the imminent
CDMA2000 networks in Japan, Korea and the Americas. Furthermore, the
SIMphonIC(TM) CDMA also allows access to existing GSM networks in Europe,
China and the Americas. The SIMphonIC(TM) CDMA is the ideal module for
countries that do not currently use smart card technology and wish to
integrate the R-UIM (Removable User Identity Module) solution into their
CdmaOne networks.

Oberthur Card Systems has an R&D center in Beijing and a production site
in Shenzen in order to maintain and further develop its commitment to China’s
market, and in particular to support its relationships in the region with key
players such as China Unicom. Mr. Vincent Bernard, Chief Representative for
Oberthur Card Systems in China and his team reinforce this commitment by
stating their objective to deliver the most advanced technology available to

About Oberthur Card Systems:

Oberthur Card Systems (Paris Stock Exchange – Code Euroclear 12413), a
global leader and the innovator in the smart card industry, is shaping the
future by offering the ultimate in SIM, WAP, 3G (IMT-2000/UMTS), e-wallet
technologies & Internet-based card management services coupled with a firm
commitment to open standards.

Championing EMV migration, Oberthur is the world’s number one supplier of
MasterCard and Visa cards, a leader in the banking, e-commerce, m-commerce and
pay-TV sectors, and in Java(TM) and GSM technologies.

Oberthur Card Systems has an international reach with an industrial and
commercial presence in 21 countries across the five continents. Oberthur Card
Systems had sales of 451.1 million Euros in 2000.

PPP Promotes Smythe

Perfect Plastic Printing is pleased to announce the promotion of Gary Smythe to the position of Chief Operating Officer. Gary previously held the position of Executive Vice President and has been with Perfect Plastic for 18 years.

In addition, Christopher Smoczynski has been promoted to Executive Vice President. Christopher has been with Perfect Plastic for over 12 years and previously held the position of Group Vice President.

PPP is one of the world’s leaders in secure credit card manufacturing, and has been producing the finest quality secure credit cards since 1995.


Western Union Financial Services, Inc., a subsidiary of First Data
Corporation, announced it has completed the purchase of
a 25 percent equity interest in Christopher C. Varvias & Associates S.A., its
money transfer agent in Greece.
Terms of the transaction were not disclosed.

Based in Athens, Christopher C. Varvias & Associates has been Western Union’s
agent in Greece since 1992. The company manages a network of more than 540
locations in 80 cities throughout the country. The network includes several
significant banks in Greece: EFG Eurobank Ergasias, Bank of Cyprus, and Aspis

“This investment is consistent with Western Union’s evolving strategy to take
an equity stake in key agent networks around the world as a way of
strengthening our international partnerships,” said Bill Thomas, president,
Western Union International, based in France. “In addition, the equity
partnership with Varvias & Associates is the perfect vehicle for us to
accelerate our presence and growth in southeastern Europe, which continues to
increase in its importance to our network. We also believe we can leverage
relationship to sell First Data products and services, such as credit card and
merchant processing, to financial institutions and other entities.”
The market for money transfers in Greece has been growing rapidly since the
early 1990s. Western Union transactions through Christopher C. Varvias has
growing at a rate of about 55 percent per year, driven by an increasing
immigrant population, which accounts for roughly 10 percent of the country’s
10.8 million population. Some of the primary countries that receive consumer
money transfers from Greece are: Ukraine, Romania and Nigeria.
Western Union Financial Services, Inc., a subsidiary of First Data Corp.
FDC), is a worldwide leader in consumer money transfer services. Consumers can
quickly, safely and reliably transfer money at more than 117,000 Agent
locations in more than 185 countries and territories. Famous for its
telegraph service, the original Western Union dates back to 1851 and
electronic money transfer service in 1871. Western Union celebrated its 150th
anniversary in 2001. For more information, please visit the company’s Web site
First Data Corp., with global headquarters in Denver, powers the global
economy. Serving approximately 2.6 million merchant locations, more than 1,400
card issuers and millions of consumers, First Data makes it easier, faster and
more secure for people and businesses to buy goods and services, using
virtually any form of payment: credit, debit, smart card, stored-value card or
check at the point-of-sale, over the Internet or by money transfer. For more
information, please visit the company’s Web site at

Retail Volume

Consumer retail volume is projected to increase this year according to the National Retail Federation. NRF expects retail sales in the GAFS category (general merchandise, apparel specialty, furniture, home furnishings, electronics, appliances, and sporting goods, hobby, book and music stores) to increase 3.7% in 2002, compared to the 2.2% gain seen in 2001. The NRF attributes the rebound to low interest rates, falling energy prices, low inflation, mortgage refinancing and a rebound in the stock market.

Providan Update

Providian announced Monday that another top card executive from Fleet Boston has joined its top management. Warren Wilcox has joined Providian as Vice Chairman, Planning and Marketing. Wilcox served as EVP, Planning and Development of Fleet Credit Card Services since 1998. Prior to that, he spent twelve years with Household’s credit card unit. Wilcox joins colleague Joseph Saunders who recently left Fleet to become Providian’s President and CEO. Meanwhile Providian is the process of raising interest rates across its sub-prime portfolio from 23.99% to 29.99%. Providian suspended lending to the sub-prime market following its third quarter earnings report which disclosed soaring chargeoffs. Last week Providian cut 800 more jobs and shut-down marketing of its ‘Getsmart VISA’ and new ‘smart VISA’ program. (CF Library 10/22/01; 11/15/01; 11/26/01; 1/03/02; 1/08/02)

MPS 2001

Fifth Third Bancorp’s 2001 fourth quarter net income totaled $385,477,000, a 21 percent increase over fourth quarter 2000’s net income of $319,124,000. Fourth quarter earnings per diluted share were $.65, an increase of 18 percent over $.55 per share for the same period in 2000. For the year, operating income was $1,393,430,000, up 15 percent over 2000’s $1,207,126,000, resulting in operating earnings per diluted share of $2.37, an increase of 13 percent over last year’s $2.10. On an operating basis, 2001 return on average assets (ROA) was 1.97 percent and return on average equity (ROE) was 19.2 percent on an increased capital base, from 1.81 percent and 20.2 percent, respectively, in 2000. For the fourth quarter, ROA and ROE were 2.16 percent and 20.0 percent, respectively, compared to 1.87 percent and 20.4 percent in 2000’s fourth quarter. Fifth Third’s capital ratio improved throughout 2001 to 10.80 percent in the fourth quarter, comparing favorably to 9.18 percent in fourth quarter 2000.

“I would like to thank all of our employees for their hard work in producing another rewarding year for our shareholders. Their accomplishments have created an even stronger growth company for the future without interrupting our performance track record,” stated George A. Schaefer, Jr., President and CEO of Fifth Third Bancorp. “2001 was our 28th year of uninterrupted earnings increases, including the last 23 at double-digit growth rates. Earnings this quarter continued to be driven by strong revenue growth, an improved net interest margin and controlled credit quality that remains among the best in the industry despite the challenges of an uncertain external environment. The recognized financial strength of our balance sheet, the flexibility provided by $7.6 billion in equity capital, sales opportunities in both our new and existing markets and a culture of simply executing better on the basics serve to effectively position Fifth Third to continue to deliver consistent earnings growth.”

“In addition to delivering quality growth in our existing markets, our employees teamed up to execute flawlessly on several acquisitions in 2001, most notably Old Kent, the largest and most successful in our history. We are well on our way to achieving the financial objectives from these transactions and look forward to their continued earnings opportunities. More importantly, the fourth quarter and 2001 results prove that we are unwilling to compromise the financial performance and balance sheet quality that our shareholders expect in order to create these opportunities.”

Schaefer continued, “The last several months have brought a number of challenges to some of our competitors and the financial services industry in general. Hard work, a focused operating model and a conservative risk profile can never entirely insulate even the best performing companies. The foundation of our track record is not in operating with immunity from these challenges, but rather in maintaining the flexibility to respond without sacrificing the earnings our shareholders have come to expect. An investment in Fifth Third is defined by consistent, quality growth without regard for difficult credit cycles, a recessionary economy or other external factors. It is with a great deal of pride that we announce another year of record earnings and look forward to meeting the opportunities and challenges that 2002 will provide. We believe we made your company even stronger in terms of future growth prospects and safety.”

Operating earnings for 2001 and 2000 exclude nonrecurring pretax merger charges of $384 million and $99 million, respectively. The effect of these one-time charges in 2001 and 2000 was to reduce net income by $293.6 million, or $.50 per share, and $66.6 million, or $.12 per share, respectively. Operating earnings in 2001 also exclude an after tax charge for a nonrecurring change in accounting principle of $6.8 million or $.01 per share. Financial data for all prior periods have been restated for the acquisition of Old Kent Financial Corporation, accounted for as a pooling of interests. In general, the effects of the pooling lowered Fifth Third’s originally reported financial performance ratios and growth rates.

Outstanding Deposit Growth and Balance Sheet Trends

Successful sales and promotional campaigns for Retail and Commercial deposits produced a record number of new accounts in 2001 evidenced by 26 percent year-over-year growth in average transaction account balances. In Retail, the momentum begun by the highly successful Winter Wonderland and Spring Ahead consumer checking account campaigns and the expansion of products to new markets continued in the fourth quarter with the Rake In a Billion campaign featuring over 120,000 new account openings and $1.1 billion in new balances.

Overall, average demand deposit balances increased 29 percent and interest checking balances grew 27 percent versus last year’s fourth quarter, and 18 percent and 21 percent on the full year, respectively. In the fourth quarter, average consumer demand deposits posted 55 percent growth and commercial demand continued to exhibit positive growth with a 15 percent increase.

Loan and lease balances remained relatively stable this quarter with comparisons to prior periods affected by the numerous sales, divestitures, securitizations, and related off balance sheet movements of approximately $4.0 billion of loans and leases in 2001 and an additional $838 million in the latter part of last year’s fourth quarter. Adjusting for the impact of these transactions, average loans and leases increased approximately five percent on a comparative basis over the same quarter last year. Direct installment loan originations more than doubled last year’s production and exceeded $1.3 billion in the fourth quarter and $4.6 billion for the full year compared to $600 million in last year’s fourth quarter and $2.4 billion for the full year, driving increases in total installment loan balances of eight percent over last year’s fourth quarter and one percent sequentially.

Compared to the fourth quarter of 2000, net interest income on a fully- taxable equivalent basis increased nine percent due to three percent growth in average earning assets and a 24 basis point (bp) increase in the net interest margin. Sequentially, net interest income on a fully-taxable equivalent basis increased three percent on essentially flat earning assets and a 14 bp increase in the net interest margin. The net interest margin has improved steadily in 2001 due to a lower interest rate environment and the corresponding effect on funding costs.

In the fourth quarter, Fifth Third undertook risk management initiatives to effectively position the securities portfolio by selling $1.3 billion in short term securities at a gain of $17.9 million. The $12 million year-over- year increase in securities gains provided substantial year-end flexibility in addressing certain lower rated commercial credits above previously announced expectations.

Service Income Advances 25 Percent

Recent strong business line revenue growth trends continued in the fourth quarter with non-interest income up 25 percent over the same quarter last year and 20 percent for the full year excluding the impact of non-mortgage related securities gains. Data Processing once again led with 30 percent plus year- over-year growth. Even without the $15 million revenue added by the October 31st acquisition of Universal Companies (USB), a merchant processor headquartered in Milwaukee serving over 61,000 small business merchant locations, Data Processing revenue increased by 32 percent year-over-year. Overall, Data Processing posted 52 percent growth over last year’s fourth quarter and 38 percent over the full year on the addition of several significant new merchant and electronic funds transfer (EFT) customer relationships. Midwest Payment Systems (MPS), the bank’s data processing subsidiary, processed over 6.6 billion ATM, point of sale, and e-commerce transactions in 2001, a number that has more tha_ tripled in four years, for over 159,000 merchant locations and 1,100 financial institutions worldwide.

Successful sales of Retail and Commercial deposit accounts and corporate treasury management products fueled increases in deposit service income of 35 percent for the quarter and 23 percent for the full year. Overall fourth quarter Retail deposit revenues increased 27 percent year-over-year, driven by the success of sales campaigns and direct marketing programs in generating new account relationships in both new and existing markets. Similarly, Commercial deposit based revenues increased 49 percent over last year’s fourth quarter on the strength of product introduction and cross-sell as well as new customer relationships.

Investment Advisory revenues increased four percent over the same quarter last year and nine percent for the full year despite equity market weakness for much of the year. Declines in market sensitive service income were mitigated by double-digit increases in private client services across all product lines and in retail brokerage as annuity sales continue to increase through the Banking Centers. Fifth Third remains committed to investing in and broadening the sales efforts in order to take advantage of strong investment performance and continues to focus its sales efforts on integrating services across business lines to take advantage of an expanding customer base. Fifth Third Investment Advisors, among the largest money managers in the Midwest, has over $34 billion in assets under management, $188 billion in assets under care, and $12 billion in Fifth Third Funds, our nationally recognized family of 31 stock, bond and money market mutual funds. With eight affiliates delivering double digit revenue growth in 2001 and 10 funds awarded four or five-star ratings from Morningstar, Fifth Third looks forward to continuing to increase the revenue contribution from Investment Advisory in coming periods.

Mortgage net revenue in the fourth quarter totaled $50.4 million compared to $41.6 million last quarter and $64.3 million in 2000’s fourth quarter. The fourth quarter and future contribution of Mortgage Banking has been reduced from prior periods as a result of the previously disclosed divestiture of Old Kent’s out-of-market residential and subprime mortgage origination capabilities. Fifth Third remains committed to offering residential mortgages as part of its full financial services product offering to customers within its geographic footprint because of the importance of the resulting customer relationships and cross-sell opportunities. Fourth quarter mortgage net revenue was comprised of $77.8 million in total mortgage banking fees, plus $73.2 million of securities gains on the sale of balance sheet hedge investments, and less $100.6 million in amortization and valuation adjustments on mortgage servicing rights. The sale of these balance sheet instruments and the subsequent valuation adjustments were made necessary by declines in short- term interest rates, corresponding anticipated increases in prepayment speeds and the decreased origination capacity associated with the divestitures. Management will continue to evaluate alternatives related to the mortgage servicing portfolio. In-footprint mortgage origination totaled $8.5 billion in the twelve months ending December 31, 2001 versus $4.2 billion in 2000, an increase of 105 percent, with an additional $9.3 billion in origination contributed to 2001 results from divested operations. For the fourth quarter, mortgage origination totaled $2.5 billion versus $2.0 billion of in-footprint origination last quarter.

Other service charges and fees totaled $136.2 million in the fourth quarter and $542.2 million for the year, increases of 42 percent and 39 percent, respectively. The growth is primarily due to increases in loan fees across nearly all categories from continued steady loan demand. Other fourth quarter highlights include a 73 percent year-over-year and 16 percent sequential increase in Commercial banking revenues. Institutional fixed income trading and sales and card revenues also advanced 92 percent and 17 percent over the same quarter last year, respectively.

Controlled Credit Quality

With indicators mixed as to the depth and duration of the current economic downturn, we are realistic about the impact a protracted recession could have on credit quality throughout the industry and at Fifth Third. Fifth Third’s long history of low exposure limits, avoidance of national or sub-prime lending businesses, centralized risk management, and diversified portfolio position us well to effectively weather a downturn and reduce the likelihood of significant unexpected losses. While the amount of charge-offs has increased from prior periods, Fifth Third notes that it remains in line with historical ten-year averages and represents a small percentage of our total loan and lease portfolio.

Nonperforming assets (NPAs) now stand at 57 bp of total loans and leases and other real estate owned at December 31, 2001, relatively consistent with the 51 bp last quarter and in line with previously announced expectations. The fourth quarter provision for loan losses totaled $61.6 million, a 95 percent increase over last year’s fourth quarter and 30 percent increase over last quarter’s $47.5 million, remaining steady overall at 1.50 percent of total loans and leases outstanding. Net charge-offs for the quarter were $54.6 million, compared to $46.7 million last quarter and $34.9 million in the fourth quarter of 2000. As a percentage of total loans and leases, fourth quarter net charge-offs were 52 bp, compared to 33 bp in 2000’s fourth quarter and 44 bp last quarter.

Demonstrated Expense Control

Fourth quarter operating expenses increased nine percent over the same period last year versus a 15 percent increase in revenues, excluding non- mortgage related securities gains. Expense savings related to headcount reductions and divested businesses associated with the acquisition of Old Kent Financial Corp are partially mitigated by strong growth in all of our markets, the addition of sales officers in Investment Advisory, the purchase acquisition of USB and incremental expenses associated with traditionally higher fourth quarter transaction volumes. Demonstrating the ability to consistently grow revenues faster than expenses, Fifth Third’s fourth quarter efficiency ratio, inclusive of securities transactions associated with on balance sheet hedging activity related to the mortgage servicing portfolio, stands at 45.2 percent versus 45.3 percent last quarter on a comparable basis. Exclusive of all securities transactions, the fourth quarter efficiency ratio was 48.4 percent. Fifth Third expects a return to a more traditional level of operating expenses, relative to revenues, in the first quarter of 2002.

Corporate Profile

Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. The Company has $71 billion in assets, operates 16 affiliates with 933 full-service Banking Centers, including 142 Bank Mart(R)(R) locations open seven days a week inside select grocery stores and 1,847 Jeanie(R)(R) ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida and West Virginia. The financial strength of Fifth Third’s affiliate banks continues to be recognized by rating agencies with deposit ratings of AA- and Aa2 from Standard & Poor’s and Moody’s, respectively. Additionally, Fifth Third Bancorp continues to maintain the highest short-term ratings available at A-1+ and Prime-1, and was recently recognized by Moody’s with one of the highest senior debt ratings for any U.S. bank holding company of Aa3. Fifth Third operates four main businesses: Retail, Commercial, Investment Advisors and Midwest Payment Systems, the Bank’s data processing subsidiary. Investor information and press releases can be viewed at [][1] . The Company’s common stock is traded in the over-the-counter market through The NASDAQ National Market System under the symbol “FITB_”

For complete details on Fifth Third’s 4Q/01 results visit CardData ([][2]).