InterCept Tinkers with Going Private as Earnings Dip

Atlanta-based Intercept indicated yesterday it is considering going private. The company also lowered its earnings guidance for 2003. InterCept’s Chairman and CEO, John Collins, informed the board of directors that he intends to submit an offer to take the company private and has engaged in preliminary discussions with financing sources for this transaction. The board has established a committee of independent directors to consider any proposal received from Collins. InterCept previously announced that it expected its 2003 earnings per share to be in the range of $0.63 to $0.68 per share. InterCept now expects that its 2003 earnings per share will be in the range of $0.34 to $0.42 per share, excluding $3.8 million of non-recurring items related to SLM, a $780,000 assessment for non-compliance with association charge-back guidelines, and $685,000 in severance payments related to InterCept’s merchant processing unit. The company is releasing its third quarter results on November 12th.

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Citibank Targets College Students with a New Online Resource

Citibank this week launched a new online resource to help educate college students about credit cards and using credit wisely. Although 91 percent of college students agree that they are responsible for their own credit cards, nearly half (43%) of those surveyed feel that they lack enough credit education to use credit wisely. Citi Cards launched a free, new website . This newest offering from Citi’s Credit-ED program advances its long-standing commitment to credit education by providing students with the latest information and tools to manage their credit responsibly. Citi Cards is part of Citigroup, the preeminent global financial services company with some 200 million customer accounts in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage, and asset management.

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Gemplus’ Card Unit Profits Rise 59% Over 2Q/03

Smart card manufacturer, Gemplus, reported that revenues for the third quarter were 10% above the prior quarter and that its losses have been cut by two-thirds since the third quarter of last year. The company’s Financial and Security Services segment posted revenues of $67 million, a 20% gain over the last quarter, as gross profits soared nearly 59% to $17million during the same period. According to this week’s edition of CardFlash International, overall revenues hit $221million for the third quarter, compared to $200 million for the second quarter. However, compared to the third quarter of 2002, revenues are down 7.6%. The net loss for the third quarter of this year was $15 million, compared to $96 million in the previous quarter, and $45 million one-year ago. However, at the operating level Gemplus posted a tiny profit compared to a loss of $7.5 million for the third quarter of last year. Gemplus says that EMV shipments doubled sequentially for the second quarter in a row and nearly quadrupled compared with the same quarter a year ago. Sales were mainly driven by the UK market, but were also supported by South America, Turkey and Malaysia. Other payment smart cards increased 64% compared with the second quarter and 66% compared with the same quarter a year ago. Malaysia and France mainly drove sales. For complete details on Gemplus’ third quarter performance visit CardData (www.carddata.com.)

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APAC Customer Services Profits Fall 73% in 3Q

Card marketing specialist, APAC Customer Services, reported 3Q/03 net income of $300,000, compared to net income of $1.1 million in the same period a year ago. Net revenues declined 6% to $79.7 million, compared to one-year ago. The Company says that revenue decreased $2.4 million from the second quarter, primarily due to reductions in marketing programs by several financial services clients partly offset by an increase in services provided to certain telecommunications clients. The decline in revenue versus the third quarter of 2002 relates principally to these marketing cutbacks and the expected reduction of services performed under a facility management contract renewed in October of 2002. IL-based APAC employs approximately 11,600 people and maintains 33 customer interaction centers. For complete details on APAC’s performance visit CardData (www.carddata.com).

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Least Cost Routing Service Offered for Bill Payments

First Hawaiian Bank and Bank of the West are now utilizing InteliData’s “Least Cost Routing Service” for routing bill payments from their 100,000 online customers to MasterCard and other remittance providers. While this in-house migration will result in a reduction in certain ASP recurring revenue sources for InteliData going forward, the Company has previously received license fees and will continue to realize annual maintenance revenues for the software license, as well as continuing transaction fees associated with electronic payment matching and least-cost routing services from the banks. InteliData provides Internet banking and Electronic Bill Presentment and Payment (EBPP) technology and services to leading banks, credit unions, financial institution processors and credit card issuers.

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Providian’s Profits Rise as Charge-Offs Decline Sharply

Providian reported net income for the third quarter of $85.3 million, double its profits for the third quarter of last year. During the quarter, the issuer added approximately 400,000 gross new accounts and ended the quarter with about 10.8 million customer accounts. Providian’s managed loans declined to $16.95 billion following the sale of approximately $667 million in loans on August 1st. The issuer says that its net credit losses in the third quarter were better than expected at $607.0 million, resulting in a managed net credit loss rate of 14.37%. The second quarter net credit loss rate was 16.84%. Providian’s managed 30+ day delinquency rates at the end of the third quarter were 9.68%, compared to 9.72% at the end of the second quarter. During the third quarter, the Company formed strategic partnerships with MBNA to cooperatively issue the eBay “Anything Points” MasterCard, an agreement with the Democratic National Committee to market “DNC VISA” cards, and an agreement with the North American Membership Group to issue affinity credit cards for its membership clubs. For complete details on Providian’s 3Q/03 performance visit CardData (www.carddata.com).

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Cardtronics Picks POSLink for Dial-Line Consolidation

Houston-based Cardtronics has selected Transaction Network Services’ POSLink subsidiary to consolidate dial-line access and lower network communications costs for its 12,500 ATM network. By using POSLink for dial-line consolidation and higher-bandwidth connections when necessary, Cardtronics and its customers will experience the benefits of reduced costs and a single point of contact for the thousands of phone lines used to connect its network ATM to the processing network. Cardtronics is the nation’s largest independent owner/operator of ATMs with a network of over 12,000 locations operating in every major U.S. market. Transaction Network Services is one of the leading providers of fast, cost-effective data communications services for transaction-oriented applications. Since its inception in 1990, TNS has designed and implemented one of the fastest, most reliable and lowest cost networks for the transport of transaction-oriented data.

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Capital One Says Revenue Margins will Decline in 04

Capital One said Wednesday that its earnings for 2004 will come in on the low side of analyst projections. The issuer said it expects earnings for next year to be between $5.20 per share and $5.40 per share. The company also announced that it expects the growth rate of its managed loans to be in the mid-teens in 2004, while gradually shifting its managed loan portfolio upmarket and continuing to diversify beyond U.S. credit cards. As a result of this continued diversification and shift upmarket in its portfolio, the company expects its revenue margin to trend lower, and its managed net charge-offs, marketing expenses and operating expenses to also continue to trend lower. Last week, Capital One reported that its profits declined for the third consecutive quarter this year. For the third quarter, Capital One posted net income of $276.3 million, compared to $286.8 million in the second quarter, and $309.1 million in the first quarter of this year. For complete details on Capital One’s third quarter performance visit CardData (www.carddata.com).

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Securitized Card Metrics Show Stability

Fitch Ratings–Encouraging reports on both sides of the employment equation — job creation and jobless claims — have bolstered markets and optimism in recent weeks could provide some much needed relief for out-of-work consumers in the months to come. While it is still early to pronounce a trend, the latest results are welcome news in an area that has prompted the greatest concern for consumer credit quality and credit card asset-backed securities (ABS) performance metrics, according to Fitch’s the latest edition of ‘Credit Card Movers & Shakers.’

For the August collection period, prime chargeoffs fell for the third time in six months, as reported in Fitch’s credit card index. Delinquencies continued to stabilize which could prove positive for future chargeoffs.

Subprime issuers reported weaker performance measures for the August collection period. As measured in the Fitch subprime credit card index, chargeoffs continued to rise and remained above year ago levels.

The latest edition of ‘Credit Card Movers & Shakers,’ which covers the latest trends in the credit card ABS market, is available on Fitch’s web site at ‘www.fitchratings.com’ in the ‘newsletters’ section corresponding with the ‘ABS sector’ or by contacting the Ratings Desk at 1-800-893-4824.

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NYCE Wins Processing Excellence Award

ITUG, The International HP NonStop Users Group, has named NYCE Corporation 1st place overall availability winner for this year. ITUG presents the award annually to information technology companies that maintain the highest overall system uptime and exercise sound quality assurance practices. For ITUG award consideration, NYCE reported overall availability of the systems that host the NYCE Network and EFT Processing Platform of 99.99 percent during the ITUG reporting period. NYCE Corporation is at the forefront of electronic payments in the U.S., providing consumers with secure, real-time account access 100 million times each month.

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US Dataworks Triples Revenues in Third Quarter

Payment processing software developer US Dataworks this morning reported third quarter revenues of $959,000, nearly triple the revenue reported one-year ago. Net loss for the quarter was $3.4 million, compared to a net loss of $849,000, for the corresponding period in the prior year. About $3.1 million of the loss was due to some debt conversions and refinancings. During the quarter, the Company successfully closed a private placement financing of common stock and convertible debt that raised $4.2 million. US Dataworks says the recent passage by Congress of “Check 21” will help transform the Company dramatically. US Dataworks’ core products include: “MICRworks,” “MICRworks-Lite,” “Returnworks,” “Remitworks,” and “Remoteworks-Daemon.” For complete details on US Dataworks’ 3Q/03 performance visit CardData (www.carddata.com).

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