$35 Late Fees

Discover has joined Citibank and Fleet in the trend to boost late payment fees above the $29 barrier. Effective March 1, Discover will assess of $35 late fee on past due balances over $1,000. For balances under $100, the fee will drop to $15, and for past due balances between $100 and $1,000, the fee will be $25. In August, Citibank boosted late payment fees from $29 to $35 using the same tiered structure announced by Discover, according to CardWatch ([www.cardwatch.com][1]). Fleet, CompuCredit, and Direct Merchants have also crossed the $29 late fee level. CompuCredit now charges a $35 late fee and a $35 over-limit fee on its lineup of ‘Aspire VISA’ cards. Direct Merchants Bank charges a $34 late fee on its new ‘Titanium MasterCard’. In 2000, Fleet Credit Card Services began charging a $35 late fee on all its card products including the new ‘Fusion smart VISA’. Advanta was the first card issuer to institute $35 fees for holders of its business card products. On average, late payment fees, among issuers with portfolios over $100 million, have increased 5.5% over the past twelve months from $27.10 to $28.58. Since 1994, late fees have soared 134% according to CardData ([www.carddata.com][2]). (CF Library 8/30/01)

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

Details

AmEx Card Mix

The smart ‘Blue Card’, launched in 1999, now represents 15% of American Express’ consumer lending portfolio according to data released yesterday. Indeed, revolving credit cards and other card lending at AmEx grew 11.5% during the fourth quarter compared to a year ago, while charge volume declined 5.5% during the same period. Since 1994, the issuer’s card loans have soared 290%, from $8.2 billion to $32.0 billion. AmEx reported yesterday that its co-branded ‘Delta’ card now makes up 14% of the card loan mix, while its ‘Optima’ programs comprise 20% of card loans. The ‘Classic Optima’, the company’s first credit card launched in 1987, now represents 9% of consumer lending. The ‘Platinum Optima’ and ‘Gold Optima’, launched during the 1990s, now make up 11% of total card loans. Lending on charge cards is now 21% of total card loans. For complete details on AmEx’s 4Q/01 and 2001 full year results, as well as new supplemental information, visit CardData ([www.carddata.com][1]).

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

Details

PayPal IPO

PayPal’s IPO is set to hit the street tomorrow with final pricing to be completed this afternoon. Trading under the symbol ‘PYPL’, the online payment service is planning to offer 5.4 million shares for between $12 and $14 per share. The company launched its payments-via-email service in the fall of 1999 and has since lost nearly $300 million. About 80% of PayPal’s 12.8 million clients are individual consumers. The PayPal service is widely used among buyers and sellers of online auction services such as eBay. PayPal draws more than 68% of it revenues from eBay customers. The company acknowledged in its prospectus that the loss of business with online auction Web sites could make profitability difficult, if not impossible. About half of PayPal’s customers use credit cards for payments. For the first nine months of 2001, PayPal merchants charged back $5.8 million for invalid transactions. As a result, the company increased its provision for transaction losses by 71% in the third quarter. PayPal members send more than $10 million per day in approximately 200,000 daily transactions. Salomon Smith Barney is leading the PayPal IPO. (CF Library 10/2/01; 11/16/01)

Details

Gemplus 4Q/01 Loss

French smart card manufacturer Gemplus International reported this morning a fourth quarter net loss of 60 million Euros compared to a profit of 40 million Euros for 4Q/00. French newspapers are also reporting that Gemplus may be cutting up to 1,000 jobs with more than 400 of the cuts being made at the Gemenos site. Gemplus said that despite stringent hiring and expense controls, the divestiture of non-core businesses and the commencement of a restructuring program in Q2 last year, the Company continues to have a cost structure that is too high for the current business environment. For the fourth quarter, Gemplus reported revenues of 251 million Euros, a decline of 35% from the same quarter one year ago. Revenue for 2001 was 1.023 billion Euros, down 15% from the previous year’s 1.205 billion Euros. Net loss for 2001 was 100 million Euros compared to a net profit of 99 million Euros for the year 2000. The company also announced today that CFO Steve Gomo will leave Gemplus in mid-March. For complete details on Gemplus’ 4Q/01 results visit CardData ([www.carddata.com][1]).

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

Details

ID Theft Affidavit

The FTC unveiled a new tool today to assist victims of identity theft restore their good names. The ID Theft Affidavit provides a model form that can be used to report information to many companies, simplifying the process of alerting companies where a new account was opened in the victim’s name. Previously, victims of identity theft often had to fill out a separate reporting form for each fraudulent account opened by the identity thief. Developed by the FTC in conjunction with banks, credit grantors and consumer advocates, the ID Theft Affidavit is accepted by participating credit issuers, retailers, banks, and other financial institutions. For a copy of the ID Theft Affidavit, log on to , or call 1.877.ID.THEFT.”During 2001, ID theft was the number one consumer fraud complaint received by the FTC,” stated Timothy J. Muris, the chairman of the Bureau of Consumer Protection. “ID thieves steal personal information, such as a credit card account number or Social Security number. Then they open up accounts in the victim’s name and run up charges on the account, or use the personal information to charge goods and services to the victim. The ID Theft Affidavit simplifies the process of remedying the injury inflicted by identity theft. ” If you find that you’re a victim of ID theft, the FTC urges you to: Contact the fraud departments of each of the three major credit bureaus and report the theft. Ask that a “fraud alert” be placed on your file and that no new credit be granted without your approval.

·Equifax: 1.800.525.6285 ·Experian: 1.888.397.3742 ·Trans Union: 1.800.680.7289 For any accounts that have been fraudulently accessed or opened, contact the security department of the appropriate creditor or financial institution. Close these accounts. Put passwords (not your mother’s maiden name or Social Security number) on any new accounts you open. File a report with local police or the police where the identity theft took place. Get the report number or a copy of the report in case the bank, credit card company or others need proof of the crime later. Call the ID Theft Clearinghouse toll-free at 1.877.ID.THEFT (1.877.438.4338) to report the theft. Counselors will take your complaint and advise you on how to deal with the credit-related problems that could result from ID theft. The Identity Theft Hotline and the ID Theft Website () give you one place to report the theft to the federal government and receive helpful information. By sharing your identity theft complaint with the FTC, you will provide important information that can help law enforcement officials track down identity thieves and stop them.Additionally, a newly updated identity theft booklet, ID Theft: When Bad Things Happen to Your Good Name is now available in Spanish. Two new consumer assistance publications released by the FTC are Privacy: Tips for Protecting Your Personal Information and Privacy: What You Do Know Can Protect You. All FTC publications are available at [http://www.ftc.gov][1].

[1]: http://www.ftc.gov/

Details

Metris Ratings

Fitch Ratings affirms Metris Companies Inc. (Metris) secured bank credit facility at `BB+’ and senior debt at `BB’. In addition, the long- term deposit rating for Metris’ wholly-owned banking subsidiary, Direct Merchants Credit Card Bank N.A. (DMCCB) is also affirmed at `BB+’. The Rating Outlook has been revised to Negative from Stable. Fitch’s ratings and affirmation continue to reflect the company’s established niche in the credit card sector, adequate capitalization for the assigned rating and sustained profitability. To date, Metris continues to grow its managed credit card portfolio, which stands at $11.9 billion at year end 2001, through both internal and external account originations. The company’s capital structure is appropriate for the assigned rating and is augmented by the company’s $393 million Series C preferred stock. Metris continues to be profitable, despite higher reserving due to increased credit losses.

Fitch’s ratings also incorporate Metris’ focus on the low and moderate income segment of the consumer credit market, where loss and delinquency rates are higher and less predictable. Fitch also recognizes Metris’ more limited funding profile relative to traditional banking peers, as the company is more reliant on asset backed funding. Moreover, Fitch remains mindful of the heightened regulatory scrutiny placed on consumer lending practices and Metris will need to proactively manage its business and marketing activities to remain in compliance with new and emerging regulatory guidance.

Fitch’s Negative Outlook reflects the view that Metris will be challenged to manage credit quality and profitability throughout 2002. Metris has announced that its forecasted loss rate in 2002 will range between 12.7%-13.3% of average managed receivables, up from 11% during 2001. While some of this forecasted increase reflects a change in charge-off policy for accounts in consumer credit counseling and slower expected receivable growth, Fitch believes that given the uncertain economic environment, credit losses could exceed forecasted ranges which could impact profitability, if not offset through cost reductions. Metris Companies Inc. is a Minnesota-based marketer of consumer credit cards and related enhancement products. At Dec. 31, 2001, the company reported $11.9 billion of managed loans, and $1.1 billion of common and preferred equity.

Details

ATM RECHARGE

Euronet Worldwide, Inc., a leading provider of secure electronic financial
transaction solutions, has announced the launch of Euronet ATM Recharge for
Westel Mobile Telecommunications Company Ltd., Hungary’s largest mobile
operator and the second provider to implement Euronet’s prepaid airtime
solutions for GSM network subscribers.

Users of Westel’s ‘Domino’ prepay service can now automatically add airtime
minutes to their mobile phone accounts 24 hours a day, 7 days a week at any
one of 370 Euronet-branded ATMs across Hungary. With Euronet ATM Automatic
Recharge, the mobile operator gains a larger airtime recharge coverage area
with additional distribution points for its prepaid subscribers. By selling
airtime through this electronic delivery channel, Westel also reduces
airtime
distribution costs and eliminates scratch-card inventory.

With more than 2.5 million subscribers, Budapest-based Westel Mobile is the
largest mobile operator in the Hungarian market and the first to offer a
commercial GPRS service. Westel is also the first provider in Hungary to
offer Euronet ATM Automatic Recharge services to its customer base, which
eliminates the step requiring the user to enter a code from an ATM-printed
voucher to complete the transaction.

“With Euronet’s ATM Recharge solution, Westel will incorporate a strategic
element to our prepaid delivery program,” said András Sugár, President of
Westel Mobile. “The real competition in the mobile market is about which
service provider will be able to offer more convenient and more immediate
solutions to their customers. Euronet enabled us to provide this automated
delivery service in a quick-to-market solution.”

Euronet ATM Recharge is one of multiple recharge options available from
Euronet. Euronet Recharge solutions have been deployed by both mobile
operators and financial institutions in Europe and the Middle East, using
touchpoints such as POS devices, ATMs the Internet and mobile phones. These
comprehensive airtime recharge outsourcing solutions are processed through
the Euronet Operating Center in Budapest, Hungary.

“More than 50 percent of mobile phone subscribers in Europe use prepaid
services” said Daniel R. Henry, Euronet Worldwide President and Chief
Operating Officer. “This partnership with Westel Mobile solidifies our
leadership presence as a service provider in Hungary’s mobile operator
market. The Euronet ATM Mobile Recharge product clearly demonstrates our
commitment to innovation and to customer-focused solutions for Europe’s
mobile operators.”

About Euronet Worldwide

Euronet Worldwide is an industry leader in providing secure electronic
financial transaction solutions. The company offers financial payment
middleware, financial network gateways, outsourcing and consulting services
to financial institutions and mobile operators. These solutions enable their
customers to access personal financial information and perform secure
financial transactions — any time, any place. The company has processing
centers located in the United States, Europe and Asia, and owns and operates
the largest independent ATM network in Europe. With corporate
headquarters in
Leawood, Kansas, USA, and European headquarters in Budapest, Hungary,
Euronet
serves more than 200 clients in 60 countries. Visit our web site at
www.euronetworldwide.com.

About Westel Mobile

Westel Mobile Telecommunications Company Ltd. (Westel Mobil Rt.),
established
in 1993, is a subsidiary of Deutsche Telekom. In January 2002 the company
became the first Hungarian mobile service provider to reach 2.5 million
revenue-producing customers. In 2001, Westel received international
recognition as a top subsidiary of Deutsche Telekom and as a prizewinner in
the large business category at the European Quality Awards.

Details

CIBC Account Aggregation

CIBC launched a new online financial account aggregation service making it possible for customers to consolidate and view their financial assets held at CIBC and other online enabled financial institutions in Canada, the U.S. and the U.K.

The service called “Total View” is initially available to selected CIBC Imperial Service clients participating in a pilot and will then be rolled out to this customer segment in the spring. The service provides customers with secure, one-stop access to their banking, credit card, mortgage, loan and investment accounts on one screen through CIBC online banking.

“The addition of account aggregation is another significant step in improving our online banking offer by giving customers convenient access to and control of their finances,” said Corinne Charette, senior vice-president of CIBC’s Internet channel, retail and small business banking. “We expect that those with accounts across multiple financial institutions will value saving the time and hassle of having to gather their financial information, either manually or by downloads into personal financial management software, each time they wish to review their portfolios.”

CIBC uses account aggregation technology from CashEdge, Inc., global specialists in providing online applications to the financial services industry. Cash Edge is a privately-held company based in the U.S.

“The Total View aggregation service perfectly complements CIBC’s Imperial Service offer, which provides smart, simple solutions to clients with complex financial needs, ” says Peter Jursevskis, director of strategy and development, CIBC Imperial Service. “It can help clients interact more effectively with their dedicated financial adviser in building highly tailored financial planning solutions.”

Customer information will be protected by CIBC’s privacy policy and security measures that meet all of the bank’s stringent standards.

CIBC is a leading North American financial institution offering more than eight million personal banking and business customers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada, in the United States and around the world. CIBC is a leader in electronic banking, with more than 3 million e-banking customers accessing telephone and Internet banking. To find other news releases and information about CIBC, visit the bank’s Media Centre at [http://www.cibc.com][1].

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

Details

CardWeb.com 100

The ‘CardWeb.com 100’ stock index has fallen 4.8% since the start of this year, dropping sharply this week. Yesterday, Providian fell more than 9% after tumbling 8.8% on Monday, while NextCard hit a new low this week of 18 cents per share. Meanwhile, MBNA dropped 3.2% on both Tuesday and Wednesday. Capital One slipped 2.2% yesterday after declining nearly 6% on Monday. The Enron scandal and economic concerns have driven the market down this week. Pre-market activity this morning indicates another down day for the market. The ‘CardWeb.com 100’ stock index was launched January 1st and includes the stocks of highly focused credit card companies, card processors, card manufacturers, and other card related businesses. On the first trading day of 2002, the basket of 100 stocks stood at 1713.15. The daily index, along with current and historical data on each stock, is available to ‘Gold’ level subscribers of CardData ([www.carddata.com][1]).

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

Details

P2P Players

A new survey shows that nearly 80% of online consumers are “aware” of P2P e-payment services and its benefits. The study also found that PayPal will likely remain the dominant service provider in this market. The research by CT-based Gartner also predicts that PayPal may reach 25 million users compared to 12.8 million today, forcing large e-tailers begin accepting PayPal as an alternative to credit card payments. Gartner found that PayPal is used by 27% of survey respondents, 2.5 times more than its nearest competitor, Billpoint, which is used by 11%. The survey results showed C2IT (owned by Citibank) is used by 1% of respondents and Yahoo! PayDirect is used by 3% of respondents. Gartner surveyed more than 1,000 U.S. online consumers over the Internet during January. Gartner analysts said PayPal will no doubt have to contend with state regulators who have hinted that PayPal looks too much like a bank to escape regulation (PayPal divested itself of X.com, an Internet Bank, about one year ago). Already, four states including California and New York, are considering regulating PayPal, perhaps in response to some merchant complaints about the company.

Details

Humboldt Cuts ATM ISOs

Humboldt Bancorp reported fourth quarter net income of $2.7 million, or $0.25 per diluted share, an increase of 35% over the same period in 2000. Fourth quarter 2001 net income from continuing operations was $2.1 million, or $0.20 per diluted share, compared to $2.7 million, or $0.25 per diluted share in 2000. The fourth quarter 2001 results reflect an after-tax charge of $1.0 million related to the previously announced theft of ATM cash and $600,000 of net income related to discontinued operations. Excluding the impact of these items, fourth quarter 2001 net income was $3.1 million, or $0.29 per diluted share. The fourth quarter 2001 results, exclusive of the ATM theft loss and the net income from discontinued operations, produced a return on average assets of 1.29% and a return on average shareholders’ equity of 18.3%.

For the year 2001, Humboldt reported a net loss of $6.0 million, or $0.55 per diluted share. In addition to the ATM theft loss recorded in the fourth quarter, 2001 results included the after-tax impact of $2.8 million for expenses related to the merger with Tehama Bancorp and a $14.0 million after-tax loss related to the wind-down of Bancorp Financial Services, Inc., Humboldt’s leasing subsidiary. Excluding these charges, Humboldt’s net income for 2001 was $11.8 million, $1.09 per diluted share. All prior year financial results have been restated to reflect the merger with Tehama Bancorp, which was accounted for as a pooling of interests.

“The past year was a disappointment for Humboldt,” remarked Theodore S. Mason, President and CEO. “Two unexpected and isolated events — the wind down of our leasing company operations and the theft of ATM cash — overshadowed the otherwise strong results produced by our commercial banking and merchant bankcard operations. For 2002, we intend to refocus on areas of core strength, where we can produce returns that are commensurate with the associated business risks and reestablish our tradition of building shareholder value.”

Humboldt is continuing its efforts to recover the remaining $1.4 million of stolen ATM cash through cooperation with law enforcement investigation and the pursuit of insurance claims. An evaluation of the risk control processes in Humboldt’s ATM funding unit has already been completed by an independent consulting firm. Management is implementing all recommended changes, including the immediate termination of ATM cash service agreements which do not provide for sufficient segregation of cash control and ATM ownership functions. “The ATM agreement related the theft incident was not typical of our ATM Independent Service Organization (“ISO”) portfolio,” Mason commented. “It was one of only two arrangements where there was common ownership of the ATMs and cash transit company. Because of our concern over the cash controls, we gave notice to the principal in August 2001 that the contract would not be renewed upon its expiration in December. Regrettably, hindsight shows that we should have taken more aggressive action.” Humboldt expects to reduce the number of ATM ISOs from 22 to 7 by the end of the first quarter of 2002.

Total revenues, which include net interest income and non-interest income, increased 25% for the fourth quarter to $18.3 million, and 18% to $67.6 million for 2001. Net interest income for the fourth quarter of 2001 increased 14% to $10.4 million, compared to $9.1 million in the same period in 2000. For 2001, net interest income increased 9% to $37.8 million, compared to $34.6 million in 2000. “As expected, we experienced significant margin expansion during the fourth quarter,” remarked Pat Rusnak, Chief Financial Officer. The net interest margin for the fourth quarter was 4.86%, up 32 basis points from the prior quarter, and 4.72% for the year 2001. “Our balance sheet is well-positioned for additional Fed easing or a return to a rising rate environment that would be expected with economic recovery,” Rusnak added.

Non-interest income increased 43% to $8.0 million in the fourth quarter, compared to $5.6 million for the same period in 2000. Fourth quarter non-interest income included a gain of $615,000 recognized on the sale of a bank building that served as a branch and administrative office. Humboldt entered into an agreement to lease back the building for five months while plans to relocate to a smaller facility are finalized. For the year, non-interest income grew 32% to $29.7 million compared to $22.6 million in 2000. Non-interest income accounted for 44% of 2001 total revenues. As the 25th largest processor of credit and debit card transactions in the country, Humboldt generates a significant level of non-interest income from its merchant bankcard services operation. Following a modification of the terms of an agreement with a merchant processing ISO, Humboldt recorded revenue of $618,000 in the fourth quarter, and $3.6 million for the year 2001. The agreement, which was negotiated as part of Humboldt’s ongoing merchant services risk management process, provided for payment of this non-recurring fee. For the year 2001, Humboldt’s merchant services division processed $4.2 billion of total transaction volume and recognized only $151,000 of net losses.

Non-interest expense increased 34% during the fourth quarter to $14.1 million compared to $10.5 million in the same period a year ago. In addition to the impact of the ATM theft loss, fourth quarter 2001 non-interest expense also included $547,000 of expenses related to the consolidation of Capitol Thrift & Loan into Capitol Valley Bank. This consolidation was completed as of year-end and Humboldt expects to realize approximately $450,000 in related annual operating expense savings in 2002. Excluding merger-related charges, the ATM theft loss and severance costs associated with the charter consolidation, non-interest expense increased 15% during 2001. Humboldt’s efficiency ratio for the fourth quarter of 2001 was 70.4%.

Humboldt continued to generate strong balance sheet growth during 2001, with assets up 12% to $958 million at December 31, 2001, compared to $852 million a year ago. Loans grew 14% to $664 million and deposits grew 13% to $807 million at December 31, 2001. At December 31, 2001, shareholder equity was $67 million and book value per share was $6.39. In December 2001, Humboldt completed a private issuance of $10 million of trust preferred securities through a newly formed subsidiary, Humboldt Bancorp Statutory Trust II. The issuance was part of a pooled offering managed jointly by Keefe, Bruyette & Woods, Inc. and First Tennessee Capital Markets. Humboldt entered into a simultaneous transaction to convert the floating rate trust preferred securities to a pre-tax fixed rate of 8.4% for five years. Humboldt’s leverage ratio as of December 31, 2001 was 8.68%. Asset quality improved substantially during the fourth quarter.

Non-performing assets at December 31, 2001 totaled $3.8 million, or 0.39% of total assets, down from $6.8 million at September 30, 2001. Net charge-offs for the fourth quarter 2001 were $383,000, or 0.23% of average loans on an annualized basis. Net charge-offs for 2001 were $1.5 million, or 0.24% of average loans. The ratio of allowance for loan losses to total loans was 1.47% at December 31, 2001. “Credit quality continues to remain a top priority for us, especially given the current economic climate in the U.S. in general and California in particular,” remarked Mason. “Fortunately, we do not have any significant exposure to the real estate market in the Bay area.”

Humboldt Bancorp, headquartered in Eureka, California, offers consumer and business banking services through its three affiliate bank subsidiaries. Humboldt Bank, founded in 1989, operates ten branches located in Humboldt, Trinity and Mendocino counties. Capitol Valley Bank, founded in 1999, serves customers from its main office in Roseville and eight other locations throughout California. Tehama Bank, founded in 1984, serves four Northern California counties through six offices.

Details