VISA Chairman

VISA U.S.A.’s board of directors have elected Philip Heasley as chairman of the board. Heasley, 50, is president and COO of U.S. Bancorp. He has been a VISA U.S.A. board member since 1998. Carl Pascarella, the president and CEO of VISA U.S.A. since 1993, will continue to oversee the association’s strategic plans and day-to-day operations. Heasley succeeds William Boardman, senior EVP of Bank One Corp. Boardman was named chairman of VISA International earlier this year. VISA U.S.A. has more than 330 million cards in circulation, including 78.9 million VISA Check Cards and has generated $668 billion in transactions in the U.S. alone over the twelve month period which ended June 30.

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BVG Smart Cards

The ERG Motorola Alliance announced this morning it has successfully implemented the first phase of a contactless, smart card automated fare collection system field trial for the Transport Authority of Berlin, or BVG. The BVG initiated the new fare system allowing a select group of 25,000 riders to use smart cards as a form of payment on the U-2 and U-4 subway lines and their 33 stations involved in the field trial. The remaining phases of the trial, which include two bus routes with 44 buses and one tramline with 14 trains, are scheduled to be implemented by the end of this year. Up to 150,000 transactions per day are expected, including transfers between stations and modes of transport. The BVG expects full system implementation covering Berlin and the surrounding greater Brandenburg area by 2002.

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EMMA Certification

Cash Technologies has successfully completed testing POS credit card transactions from its ‘EMMA’ system with the credit card processing arm of Concord EFS. Card Technologies recently received certification for ‘EMMA’ ATM card transactions. ‘EMMA’ is the first TCP/IP certification to be completed on Concord’s networks. Through ‘EMMA’, consumers will have access to a wide variety of financial services on an ATM or financial kiosk, including check cashing, electronic bill payment, real-time activated pre-paid phone cards, money order issuance, event ticketing, Internet based e-commerce products and services, interactive advertising, marketing data acquisition, traditional ATM cash dispensing and other functions, using a variety of payment methods, including ATM cards, credit cards and cash.

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Natl Proc 3Q/99

National Processing, Inc. reported that net income for the three months ended September 30, 1999, was $8,321,000 or $.16 per share, compared to $3,381,000 or $.06 per share for the corresponding period in 1998. Included in 1998 net income was a one-time settlement fee of $4,000,000, or $2,400,000 after tax, received for the cancellation of a processing contract. Absent this item, third quarter 1998 net income would have been $981,000 or $.02 per share.

Total revenues for the three months ended September 30, 1999, were $94,909,000, up 15% from comparable amounts in 1998, and were derived solely from the Company’s core business units — Merchant Card Services, Travel Services and Outsourcing Services. Comparable 1998 revenues were $82,372,000 from these core units. Reported revenues for the third quarter of 1998 were $121,430,000 and included $39,058,000 for business lines which were divested in the first half of 1999: Freight Payables, Payables Outsourcing, Remittance, and Merchant Check Services.

For the nine months ended September 30, 1999, exclusive of restructuring charges and impairment loss, net income was $22,247,000 or $.44 per share, compared to net income of $9,861,000 or $.19 per share for the corresponding period of 1998. After-tax impairment losses of $68,309,000 recorded in the first half relating to the business line divestitures noted above, and after- tax restructuring charges of $1,829,000 recorded in the first quarter for closure and relocation of certain processing facilities, resulted in a reported net loss for the first nine months of 1999 of $47,891,000 or $.94 per share. Included in net income for the first nine months of 1998 were the third quarter settlement fee noted above, plus after-tax charges of $1,558,000 recorded in the second quarter of 1998 for the write-off of software and related costs following the cancellation of a customer processing contract. Exclusive of these items, net income for the first nine months of 1998 would have been $9,019,000 or $.18 per share.

Total revenues for the first nine months of 1999 were $329,185,000 compared to $354,257,000 for the first nine months of 1998. For the Company’s core business units — Merchant Card Services, Travel Services, and Outsourcing Services — revenues were $271,850,000 for the first nine months of 1999, up 15% from $235,708,000 in 1998.

Commenting on the financial results, Thomas A. Wimsett, President and CEO, stated, “Revenues in each of the core units have increased sequentially through the first three quarters of the year, and year-to-date net income for each of these units has exceeded the business plan established at the start of the year. We are gratified that the restructuring and refocusing of the company has begun to pay off in a tangible way, and we will continue to work hard to keep things moving forward.”

National Processing, Inc. is a leading provider of merchant credit card processing services and corporate outsourcing solutions. Approximately one out of every six Visa and MasterCard transactions in the United States is processed by National Processing. The Company is 88 percent owned by National City Corporation (NYSE: NCC).

For more 3Q/99 data for National Processing visit CardData ([www.carddata.com][1])

[1]: http://www.carddata.com

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BofA 3Q/99

Bank of America Corporation reported record third quarter earnings of $2.15 billion, or $1.25 per share ($1.23 diluted).

Results far surpassed the $374 million, or $.21 per share ($.21 diluted), earnings of a year earlier that were impacted by global financial turbulence. Excluding a $725 million pre-tax merger-related charge, operating earnings a year ago were $893 million, or $.51 per share ($.50 diluted).

Diluted operating earnings per share were up 7 percent from the second quarter of this year.

The company’s return on equity rose to 18.40 percent in the third quarter, and the return on assets increased to 1.40 percent.

Cash operating earnings – which exclude the amortization of intangibles and merger-related charges – were $2.37 billion, or $1.38 per share ($1.35 diluted). The return on tangible equity was 29.48 percent. A year earlier, cash operating earnings were $1.12 billion, or $.64 per share ($.63 diluted).

“Bank of America made solid progress during the third quarter,” said Hugh L. McColl Jr., chairman and chief executive officer. “Our merger transition continues to go smoothly and remains on schedule. We are successfully building out our investment banking platform and delivering those services to our huge middle market customer base. And we are refocusing a number of our businesses to achieve greater value for customers and higher profitability for shareholders. We are accomplishing all of these initiatives while increasing earnings and improving returns.”

For the first nine months of 1999, operating earnings were up 25 percent to $6.13 billion, or $3.53 per share ($ 3.45 diluted) compared to $4.89 billion, or $2.81 per share ($2.73 diluted) a year earlier. Net income was 49 percent higher at $5.98 billion, or $3.45 per share ($3.37 diluted), compared to $4.00 billion, or $2.30 per share ($2.24 diluted), a year earlier.

Third Quarter Earnings Highlights (compared to a year ago)

* Revenue rose 21 percent, as noninterest income increased 55 percent and fully-taxable equivalent net interest income was up 3 percent.

* Average managed consumer loans increased by 17 percent.

* Fee-based income recorded strong improvement in almost all areas and rose to 45 percent of revenue.

* The efficiency ratio improved to 54 percent.

* Net charge-offs declined to .51 percent of loans.

Net Interest Income

Fully taxable-equivalent net interest income of $4.60 billion was 3 percent higher than a year earlier due to solid loan growth, somewhat offset by the impact of securitizations, loan sales and the funding cost of share repurchases. The net interest yield on earning assets was 3.46 percent compared to 3.60 percent a year earlier.

Noninterest Income

Noninterest income increased 55 percent to $3.73 billion due to widespread gains across the spectrum of Bank of America’s fee-based businesses. The primary gains were recorded in credit card, trading, investment banking, mortgage banking and service charge income. Fee income rose to 45 percent of revenue.

Securities gains were $44 million compared to $280 million in the third quarter of 1998.

Efficiency

Noninterest expense declined 1 percent to $4.53 billion, reflecting cost savings resulting from recent mergers offset by increased revenue-based incentives, accelerated spending on merger transition projects and continued expansion of the investment banking business. The efficiency ratio improved to 54 percent.

Credit Quality

The provision for credit losses in the third quarter was $450 million, compared to $1.4 billion a year earlier. Net charge-offs were $460 million, well below $902 million a year ago which included a $372 million charge-off related to the D.E. Shaw relationship. Net charge-offs represented .51 percent of loans and leases in the latest period.

Nonperforming assets were $3.04 billion, or .84 percent of loans, leases and foreclosed properties on September 30, 1999, compared to $2.58 billion, or .73 percent a year earlier. The allowance for credit losses totaled $7.08 billion on September 30, 1999, equal to 252 percent of nonperforming loans and 1.96 percent of loans and leases. The allowance was $7.21 billion, or 315 percent of nonperforming loans and 2.05 percent of loans and leases, a year earlier.

Capital Strength

Shareholders’ equity stood at $45.9 billion at September 30, 1999. The Tier 1 capital ratio was 7.71 percent. The company’s market capitalization was $95 billion. On June 23, the company authorized the repurchase of up to 130 million common shares over 24 months, with an expectation to complete the program within 18 months. Through September 30, the company had purchased 43 million shares.

Business Segment Results

Consumer Banking, which serves individuals and small businesses, earned $1.10 billion, while Commercial Banking, which serves companies with from $10 million to $500 million in revenue, earned $216 million. Together, they represented 61 percent of the company’s operating income. Global Corporate and Investment Banking, which serves large corporate customers, earned $530 million, representing 25 percent of the company’s earnings. Principal Investing and Asset Management, which encompasses the private bank, trust, investment management, mutual funds, retail brokerage and principal investing, earned $244 million, representing 11 percent.

Bank of America, with $621 billion in assets, is the largest bank in the United States. The company serves more than 30 million households and 2 million businesses across the country, offering customers the largest and most convenient delivery network from offices and ATMs to telephone and internet access. It also provides comprehensive international corporate financial services for clients doing business around the world. The company creates financial relationships featuring a wide array of financial services, from traditional banking products to investments and capital raising within the securities markets. Bank of America stock (ticker: BAC) is listed on the New York, Pacific and London stock exchanges and certain shares are listed on the Tokyo Stock Exchange. Further investor information can be found at For more 3Q/99 data for Bank of America visit CardData ([www.carddata.com][1])

[1]: http://www.carddata.com

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Elite SAM’s Card

SAM’S Club announced this morning the launch of the ‘SAM’S Club Elite Membership Card’. The card, which carries a $100 annual fee, offers special discounts and access privileges on long distance services, home improvement services, roadside assistance, Internet banking, personal and business checks, insurance, auto-buying services, selected entertainment opportunities, and pharmacy services. SAM’s says the benefits package is worth more than $1,600. The Internet banking benefit from Telebank offers bonus rates and reduced minimum balances on all premium yield FDIC-insured accounts as well as instant ‘ATM Refunder’ and free online bill paying with its ‘True.Net’ checking account. Current SAM’S Club members can upgrade to ‘Elite Card’ status for $65. SAM’S Club is the largest warehouse club in the United States with 454 clubs and 37 million cardholders.

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Fifth Third 3Q/99

Fifth Third Bancorp’s net income was $173,504,000 for the third quarter, up 20.4 percent, and $485,507,000 for the first nine months of 1999, up 21 percent compared to $144,073,000 and $401,637,000 on an operating basis, respectively, for the same periods in 1998. Diluted earnings per share were $.62 for the third quarter, up 17 percent compared to $.53 per share for the third quarter of 1998. For the first nine months of 1999, diluted earnings per share were $1.76, up 18 percent over last year’s diluted earnings per share of $1.49.

Return on average assets was 2.13 percent, a historic high for Fifth Third, up from 2.03 percent in the third quarter of last year. Return on average equity was 19.7 percent compared to 19.3 percent for the same period in 1998. Fifth Third’s industry-leading efficiency ratio also improved further to 39.4 percent.

“We are pleased to report another quarter of quality earnings growth,” stated George A. Schaefer, Jr., President and CEO. “Highlights for the quarter included historic highs for ROA and ROE, continued outstanding loan growth led by a 17 percent increase in commercial loans and leases, superior credit quality and a 20 percent dividend increase.”

“In a year that bank stocks seem to have fallen out of favor with investors, we continue to try to differentiate ourselves with some of the best results in our history,” Schaefer continued. “Our earnings momentum continues to be strong across all of our major businesses. Solid revenue increases and careful cost control drove our efficiency ratio down to 39.4 percent — a number we are very proud of. We believe that Fifth Third’s combination of the best operating efficiency in our peer group and our expanded processing of e:commerce transactions positions us very favorably for the future.”

Schaefer concluded, “We are well under way toward the smooth combination of CNB Bancshares, Inc. and Peoples Bank Corporation in Indiana. These acquisitions, along with our existing presence, will vault us to the #3 bank in the Indiana market with three affiliate banks in the state and offer us tremendous opportunity for growth. The employees of CNB and Peoples are to be commended for their hard work and dedication in building momentum for strong post-merger financial results. Our Fifth Third team also completed the conversion of Emerald Financial Corp. in Cleveland this quarter, making us the second largest bank in the state of Ohio and expanding our Northeastern Ohio affiliate to $3.6 billion in assets and 74 Banking Centers.”

Quality Earnings Fueled by Revenue Growth

Successful sales campaigns in Fifth Third’s Banking Centers drove direct installment loan originations of $704 million for the quarter, a 32 percent increase from last quarter’s $532 million and a 69 percent increase from the $417 million for the same period last year. Commercial loan and lease growth accelerated with a 17 percent increase over third quarter 1998. Residential mortgage originations increased 10 percent from last quarter to $1.1 billion despite rising interest rates. Consumer lease originations increased to $495 million, exceeding the $476 million reported last quarter and $279 million for the same period last year. Demand deposits and interest-bearing transaction account balances rose by 14 percent over the third quarter of 1998, driven by an increase in transaction accounts and the popularity of our Corporate One(R) account services for business customers.

Net interest income rose 14 percent over third quarter of last year, driven primarily by 13 percent growth in average loans and leases. Fifth Third’s net interest margin for the quarter was 3.96 percent. For the first nine months of 1999, net interest margin was 4.10 percent, a 21 basis point increase over the same period in 1998 due primarily to lower funding costs from a growing customer deposit base.

Double-digit revenue growth across all of our business lines fueled the 18 percent rise in fee income for the quarter. Higher electronic transaction volume from debit and ATM card usage, expansion of business-to-business e:commerce, and new sales contributed significantly to third quarter’s 27 percent data processing revenue growth. MPS expects to process over four billion electronic transactions in 1999. Investment advisory income increased 12 percent, driven by substantial revenue growth in all product lines. The profitability of the retail brokerage business acquired last year with The Ohio Company has significantly increased through its integration with Fifth Third Securities. Fifth Third Investment Advisors added several new annuity products and their success fueled a 51 percent increase in sales compared to last year. Fifth Third Investment Advisors now has $151 billion in assets under care, a 13 percent increase over September 30, 1998.

Industry-Leading Efficiency

Growing revenues faster than expenses further improved Fifth Third’s industry-leading efficiency ratio to 39.4 percent this quarter compared to 42.4 percent for the third quarter of 1998. Salaries, wages, incentives and employee benefits expense grew five percent in the third quarter from incentives for increased sales production, a tighter labor market and more employees as a result of recent acquisitions. Third quarter 1999 expenses were also affected to a lesser extent by routine adjustments of estimated accruals and reserves to actual. Overall, operating expenses rose by only eight percent compared to the same quarter last year.

Fifth Third is Year 2000 compliant. Our operating systems, applications and hardware meet the new processing standards for Year 2000. Fifth Third is also working diligently with our critical business partners to monitor their readiness for the next millennium. This effort includes facilities, utilities and communication partners, as well as other vendors.

Continued Solid and Improving Credit Quality

Underperforming assets (UPAs) continue to improve, declining to .60 percent of total loans and leases and other real estate owned at September 30, 1999, compared to .61 percent last quarter, and .78 percent in the third quarter of 1998. The reserve for credit losses at September 30, 1999 is 2.5 times UPAs, compared to 1.9 times UPAs in the same quarter last year. The reserve for credit losses as a percent of loans and leases is 1.48 percent at September 30, 1999, compared to 1.50 percent last year. Net charge-offs declined 20 percent to $16.4 million, compared to $20.6 million for last quarter. As a percentage of average loans and leases, net charge-offs fell to .33 percent, an 11 basis point decline from last quarter’s .44 percent.

Other Highlights

Fifth Third was awarded the #1 ranking in Salomon Smith Barney’s Top 50 Bank Annual for an unprecedented eighth year in a row. The report ranks the top 50 U.S. banks according to a combined measure of profitability, revenue growth, operating efficiency, capital strength and asset quality.

Fifth Third successfully completed its merger with Emerald Financial Corporation during the third quarter. Emerald added $680 million in assets (including $325 million in loans, net of securitization), $561 million in deposits and 15 new Banking Centers to the Cleveland, Ohio market. With this acquisition, Fifth Third became the second largest bank in Ohio in terms of deposit market share. Fifth Third also plans to complete its mergers of CNB Bancshares, Inc. and Peoples Bank Corporation of Indianapolis, in the fourth quarter. CNB has $7.9 billion in assets with 145 Banking Centers, predominantly in Indiana, with a presence in Michigan, Kentucky and Illinois. Peoples has $675 million in assets, $587 million in deposits and nine Banking Centers.

Corporate Profile

Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. The Company, which is Y2K ready, has $33 billion in assets, operates 12 affiliate banks with 497 full-service Banking Centers, including 106 Bank Mart(R) locations open seven-days-a-week inside select grocery stores and 1,179 Jeanie ATMs in Ohio, Kentucky, Indiana, Florida, Arizona and Michigan. A leader in e:commerce, Fifth Third expects to process over four billion electronic transactions in 1999. The Bank’s financial strength continues to be recognized by rating agencies with deposit ratings of AA- and Aa2 and commercial paper ratings of A1+ and P1 from Standard & Poor’s and Moody’s, respectively. Fifth Third operates four main businesses: Retail, Commercial, Investment Advisors, and Midwest Payment Systems, the Bank’s data processing subsidiary. The company’s common stock is traded in the over-the-counter market through the Nasdaq National Market under the symbol “FITB.”

For more 3Q/99 info for Fifth Third visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

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Citi 3Q/99

Citibank reported this morning that income from its card division rose 33% during the third quarter, reflecting growth in U.S. bankcards of 11% in receivables and 8% in sales volume, flat operating expenses, and continued improvements in credit costs. Citi reported 3Q/99 global card income of $297 million compared to $223 million for 3Q/98. For U.S. bankcards Citi had $70.7 billion in 3Q receivables compared to $70.3 billion for 2Q/99. U.S. charge volume for 3Q was $40.9 billion compared to $37.7 billion for 3Q/98. As of Sept. 30, Citi had 40.6 million bank card accounts, a drop of 500,000 accounts since June 30. Net chargeoffs for 3Q/99 were 4.40% compared to 5.15% for 3Q/98. Delinquency (90+ day) was 1.42% compared to 1.49% one year ago. For complete financials on Citibank’s 3Q/99 visit CardData ([www.carddata.com][1])

[1]: http://www.carddata.com

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CANTV Cards

Gemplus and the largest telecommunications provider in Venezuela, CANTV, have expanded the applications of the CANTV prepaid payphone smart card. Customers can now use their CANTV prepaid payphone cards to not only make phone calls, but also to purchase beverages at vending machines throughout the country. The new application is made possible due to the ‘Universal Security Access Module’, which was added to the second-generation smart card technology utilized to generate the prepaid phone cards. The project was initiated in Venezuela, where 26 machines have already been equipped with the technology. CANTV expects that an additional 200 machines will be installed by the end of year, with forecasts of more than 2000 installations during 2000. Gemplus also worked with Debitek, a systems integrator, and Dixie Narco, a vending machine provider, to bring the smart card technology to CANTV.

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MS-Based E-Procurement

Clarus Corp. and Data Return Corp. have teamed up to provide the ‘Clarus eProcurement’ solution on a hosted, subscription basis to companies using the ‘Microsoft Windows 2000’ platform. Data Return, itself a ‘Clarus eProcurement’ customer, will leverage its expertise in exclusively serving Microsoft customers to speed the widespread delivery of this Web buying application to new users. Clarus and Data Return will offer the ‘eProcurement’ application through a zero capital model. This means companies pay nothing up front for the service. Instead they pay a monthly subscription fee covering all hardware, software, maintenance and support costs.

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Fair, Isaac Promotion

Fair, Isaac and Company, Inc., announces the promotion of Stephen Diercks to vice president/Eastern Region Sales for the company’s Financial Services group.

Diercks joined the company in 1996, most recently working as strategic alliance manager. Prior to joining Fair, Isaac, Diercks was vice president of sales for Trans Union/Dateq. Preceding that position, he worked for TRW Information Services as a regional sales director in the Credit Services division. Prior to that, Diercks was president of Premis Corporation, a software company, as well as director of sales and marketing for both PrimeNet Data Systems and Scientific Computers. He also held several managerial positions at Control Data Corporation. He holds a bachelor’s degree in mathematics from the University of Minnesota.

Fair, Isaac helps companies make faster, more profitable decisions about marketing, customers, operations and portfolios. Widely recognized for its pioneering work in predictive technology, the company provides advanced decision-making solutions to the financial services, eBusiness, telecommunications and healthcare industries. Headquartered in San Rafael, Calif., Fair, Isaac employs 1600 people in 18 offices worldwide. For the fiscal year ended September 30, 1998, the company reported net income of $24.3 million on revenues of $245.5 million. For more information visit [http://www.fairisaac.com][1].

[1]: http://www.fairisaac.com/

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eVISA Thinks

Despite losing its leader last month, VISA’s new Internet unit, eVISA, is looking to develop a comprehensive strategy and program designed to make VISA the currency of choice for the Internet economy. Yesterday eVISA selected AnswerThink Consulting Group,Inc. and THINK New Ideas to assist with formation of its strategy. The two companies, both Nasdaq traded, are currently serving eVISA as a team in anticipation of their forthcoming merger. ‘Phase I’ of the eVISA initiative is to focus on key financial institutions and merchants, helping them streamline decision-making, and enhancing their ability to provide the high level of security and service necessary to take e-commerce to the next level.

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