NY Goes Global

The State of New York has signed a long- term agreement to use Global Payments Inc.’s comprehensive processing services for its first statewide payment-processing program.

Under the terms of the agreement, Global Payments will provide credit and debit card authorization and settlement, as well as check processing, ACH, and wire payment services to all participating New York state agencies. A variety of other agencies and associations, such as counties, cities, towns, non- profit schools, libraries and other public authorities may also take advantage of this program.

Using Global Payments’ end-to-end services, the State of New York will offer a convenient way to pay for licenses, taxes, permits, fees and other government services. Electronic payments including credit and debit cards and checks will be accepted at the point-of-sale, through optional Interactive Voice Response systems, over the Internet and within kiosks that will be strategically located in state offices and malls.

“With this new payment program, residents now have the flexibility of making payments electronically, as well as choosing from several location options to make payments more convenient. New York benefits by receiving the funds in a more timely and cost effective manner,” said Commissioner of the New York State Office of General Services, Kenneth J. Ringler, Jr. “Having a statewide contract with Global Payments also allows us to streamline the setup process and take advantage of larger volume discounts,” he said.

“We are very pleased to be working with the State of New York to offer residents their first electronic payment processing option,” said President and CEO of Global Payments, Paul R. Garcia. “Global understands the needs of government for secure and reliable service, and we look forward to the opportunity to build a long and successful relationship with the State of New York,” he said.

The New York State Office of General Services (OGS) provides a broad range of support services that facilitate the operations of State government, and also assist local governments, public authorities and public and private agencies. OGS offers numerous services to clients throughout the Empire State, including property management, design and construction, telecommunications, information technology, procurement and, various support services.

Global Payments Inc. is a leading provider of electronic transaction processing services to merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies and multi-national corporations located throughout the United States, Canada the United Kingdom and Europe. Global Payments offers a comprehensive line of payment solutions, including credit and debit cards, business-to-business purchasing cards, gift cards, Electronic Benefits Transfer (EBT) cards, check guarantee, check verification and recovery, terminal management and funds transfer services. Global’s Web address is [http://www.globalpaymentsinc.com][1].

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

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Low Cost ATM Deposits

NCR Corporation, the world’s leading supplier of self-service solutions, and eFunds Corporation, a leading provider of electronic payment, risk management and related professional services, announced they will further extend the reach of NCR’s advanced deposit technology. The new technology enables the ATM user to deposit cash or checks without an envelope, thereby increasing customer convenience and decreasing processing costs incurred by the financial institution.

NCR has certified eFunds Corporation’s CONNEX software solution to support cash acceptance and check deposit functions using NCR’s APTRA software. CONNEX is an electronic funds transfer processing solution which processes over 15 billion transactions worldwide annually.

“eFunds is excited to enhance the CONNEX platform to support NCR’s APTRA and advanced deposit modules,” said Hugh Gallagher, vice president, Payment Solutions, EFT Product Development, eFunds Corporation. “We see strong demand for this offer in the international marketplace, which is why we believe our relationship with NCR is invaluable. We can leverage both their #1 global position and the capability of driving the transaction through Microsoft(R) Windows(R) NT or XP.”

Andy Orent, NCR vice president of global sales and services, said, “We believe eFunds is uniquely positioned to capture a large share of the deposit marketplace through this extension of both our offerings. eFunds can provide advanced deposit technology as an in-house solution on CONNEX or as a data center solution.”

About eFunds

eFunds Corporation (Nasdaq: EFDS), delivers innovative, reliable and cost- effective technology solutions to meet its customers’ payment and risk management, e-commerce and business process improvement needs. eFunds provides its services to financial institutions, financial services companies, electronic funds networks, retailers, government agencies, e-commerce providers and other companies around the world. For more information, visit [http://www.efunds.com][1].

About NCR Corporation

NCR Corporation (NYSE: NCR) is a leader in providing Relationship Technology(TM) solutions to customers worldwide. NCR’s Relationship Technology solutions include the Teradata(R) database and analytical applications such as customer relationship management (CRM) and demand chain management, store automation systems and automated teller machines (ATMs). The company’s business solutions are built on the foundation of its long- established industry knowledge and consulting expertise, value-adding software, global customer support services, a complete line of consumable and media products, and leading edge hardware technology. NCR employs 32,900 in more than 100 countries, and is a component stock of the Standard & Poor’s 500 Index. More information about NCR and its solutions may be found at [http://www.ncr.com][2].

NCR and Teradata are trademarks or registered trademarks of NCR Corporation in the United States and other countries.

[1]: http://www.efunds.com/
[2]: http://www.ncr.com/

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OPC Signs WI

Official Payments Corporation, the leading provider of electronic payment options to more than 1,000 government entities in all 50 states, announced that 15 local authorities in Wisconsin have signed service agreements with the company.

The authorities include Racine County; the Cities of Burlington, Columbus, Fitchburg, Monona, Mosinee, Portage, South Milwaukee, and Verona; the Villages of Hartland, Union Grove, Waunakee, and Weston; and the Towns of Burlington and Caledonia, Wisconsin. The agreements enable local residents to make a variety of payments such as real estate and personal property taxes, utility bills, and parking citations over the Internet by visiting [www.officialpayments.com][1] or via telephone by calling 1-800-2PAY-TAX. American Express, Discover Card, MasterCard and Visa are the cards accepted by the programs, which will commence in January. Personal property and real estate taxes are due by January 31, 2002; utility bills are due on a monthly basis. The combined County, City, Village, and Town authorities collected over $200 million in taxes last year.

“We recently expanded our business at the state level, and today’s local expansion brings us to a total of 50 clients in Wisconsin,” stated Thomas R. Evans, Chairman & CEO of Official Payments. “Now, many Wisconsin residents have the ability to pay local taxes and fees in addition to making state and federal payments, all through Official Payments. It is gratifying to see our sales and marketing strategies pay off in this manner,” Evans added.

Official Payments has similar agreements with more than 1,000 government entities in all 50 states. The company has contacts with the Internal Revenue Service, 19 state governments, and the District of Columbia to collect taxes, fees, and fines by credit card over the Internet and telephone. Official Payments Corp. charges taxpayers a convenience fee for processing these credit card transactions. The fee schedule can be found on the Internet at [http://www.officialpayments.com][2]. For example, a taxpayer who charged $3,000 in real estate would find a total of $3,087 on their credit card statement: $3,000 for the tax bill and $87 for the convenience fee. Taxpayers using credit cards with bonus rewards programs can, depending on their card’s program, earn rewards, points, and cash back or airline frequent flyer miles for paying their taxes.

About Official Payments Corporation

Founded in 1996, Official Payments Corporation (Nasdaq: OPAY) is the leading provider of electronic payment options to more than 1,000 government entities in all 50 states. The company’s principal business is enabling consumers to pay their government taxes, fees, fines, and utility bills by credit card, via Internet and telephone. Official Payments has agreements to collect and process credit card payments with the Internal Revenue Service, 19 state governments, the District of Columbia, and over 1,000 county and municipal governments across the United States. In 2000, Official Payments collected and processed over $925 million in federal, state and local government payments. Thomas R. Evans, the former President & CEO of the Internet company GeoCities, became Chairman & CEO of Official Payments in the summer of 1999. Mr. Evans brought Official Payments public in November of 1999, raising $80 million in its IPO on the NASDAQ national market.

[1]: http://www.officialpayments.com/
[2]: http://www.officialpayments.com/

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Gasper Index

Gasper Corporation, the world leader in SST management software, announced the availability to their customers of their Gasper Index, a new service metric and measurement index that will allow for an unbiased comparison between Self-Service networks. The new system is expected to improve the overall quality of Self-Service terminals by helping industry leaders more accurately assess their performance.

“This program will ultimately allow Gasper Users to identify how their ATM network is performing in comparison to peer networks via a standardized set of reports,” said Phil Spofford, Vice President of Fleet Financial and the President of the Gasper Users’ Group. “I see this as an invaluable tool in establishing realistic goals and availability expectations.” The index provides monthly reports that highlight average ATM network availability among participating customers. By allowing institutions to compare their own services with competitors in a completely anonymous fashion, they can easily rate their own services against those of the industry as a whole. The index is part of Gasper Corporation’s Self-Service Management solution, which monitors, manages, and automates ATM devices and networks. Working with a customer base of over 170,000 ATMs worldwide, the Index is a comprehensive indicator of ATM performance in the industry. Currently, Gasper Corporation’s customer base includes approximately two thirds of the top SST deployers. All Gasper Index participants receive a ranking based upon their availability scores for the month. While the report indicates the number of participating institutions and the total number of ATMs included, all statistical data is presented in an anonymous fashion; participants are not identified by name in the Index.

Gasper Index will be available for demonstration in booth # 210 at the BAI Retail Delivery Conference and Expo in Anaheim, CA from December 12-14, 2001. For more information about Gasper Corporation, please visit [http://www.gasper-corp.com][1]

About Gasper Corporation

Gasper Corporation, a wholly-owned, independent subsidiary of NCR, is a leading provider of Self-Service management software. Gasper offers comprehensive solutions that are specifically tailored to solve Self-Service management problems. The company’s solutions monitor Self-Service Terminals (SSTs) and manage the entire SST support process to maximize SST availability, profitability and customer satisfaction for SST networks worldwide. Headquartered in Dayton, Ohio, the company’s solutions are used to manage more than 170,000 SSTs worldwide. Visit the Gasper Corporation web site at [http://www.gasper-corp.com][2].

[1]: http://www.gasper-corp.com/
[2]: http://www.gasper-corp.com/

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Anthrax Impact

A new study by Boston-based Aberdeen Group predicts that continued anthrax attacks via the U.S. mail pose significant risk to the economy, and would accelerate adoption of EBPP software and services. Some credit card issuers have already indicated that traffic to online bill payment centers has been picking up since the anthrax scare. The research firm says more than 26 billion invoices are processed via the U.S. postal system annually, and subsequent anthrax attacks have significantly slowed mail service in Washington, D.C., and the New York metropolitan region, exposing a new business risk to DSO or “days sales outstanding”. Aberdeen analyzed a number of public and private companies providing electronic bill/invoice delivery and payment, and related software and services in its latest report. A recent informal homepage poll conducted by CardWeb.com found that 72% of consumers are paying more attention to the address information on mail received, but only 26% say they experience anxiety when opening their mail. Over 40% indicated they would be more inclined to shop for a new credit card on the Internet, while half of Americans said they would prefer to use email to correspond with credit card companies. (CF Library 11/20/01)

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Activity Drops

While the percentage of active accounts has been dropping steadily this year, there was a significant drop between August and October. According to the latest issue of RAM Research Group’s ‘Bankcard Barometer’, to be released today, the percentage of gross accounts, active at the end of October, slipped to 56% from 60% in August. Among the top ten issuers, First USA maintains the highest average daily balance and year-to-date volume, per active account. Capital One, which focuses on lower credit limits as low as $100 per account, carries an average balance 40% below average and year-to-date volume about 50% lower than the top ten average.

TOP TEN ISSUER ANALYSIS
ISSUER ACTIVE DAAB YAAV
1. Citigroup 49% $2314 $3919
2. MBNA 59% $2393 $3839
3. First USA 54% $3032 $5127
4. Discover 53% $2062 $3278
5. Chase 61% $2736 $4079
6. Cap One 63% $1482 $1779
7. Providian 66% $2556 $2040
8. BofA 66% $2612 $4061
9. Household 54% $1624 $3000
10. Fleet 73% $2755 $3208
Tot/Avg 56% $2357 $3433
Active – Percentage of gross accounts with posted activity as of 10/31/01;
DAAB- daily average balance per active account; YAAV – year-to-date average
volume per active account Source: Bankcard Barometer 301-695-4660

For more info on BankCard Barometer or how to order contact: [rjohnson@cardweb.com][1]

[1]: mailto:rjohnson@cardweb.com

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Total ID

TransUnion has launched a new fraud detection service that verifies identities by matching application data against multiple databases, all with national coverage and timely updates, and returns match or non-match results. ‘TOTAL ID’ offers results which include a point assessment total to design and implement verification strategies. The service is also effective in detecting fraud by analyzing the application for inconsistencies provided by the applicant. ‘TOTAL ID’ can also be used in conjunction with TransUnion’s high-risk fraud database ‘HAWK’ product to boost the level of fraud detection capability.

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Fair Isaac Chairmanship

Fair, Isaac and Company, Incorporated, the leader in customer analytics and decision technology, announced that Dr. Robert Oliver, 70, plans to retire as chairman of Fair, Isaac’s board of directors at the end of his term on February 5, 2002. Dr. Oliver has served on the board since 1985 and as chairman since 1995. George “Skip” Battle, CEO of Ask Jeeves, Inc., and a member of Fair, Isaac’s board since 1996, will succeed Oliver as chairman of the eight-member board.

“It has been an honor to serve as chairman of Fair, Isaac and a privilege to work with the dedicated people of this company,” said Dr. Oliver. “Over the past 15 years, I’ve seen this company grow from a small private firm to a successful public company with a market cap in excess of a billion dollars. I’ve enjoyed working closely with the talented team at Fair, Isaac to aide in this growth and advance the field of predictive and decision technology. I’m confident that Fair, Isaac, under the strategic leadership of Skip and the rest of the board, will continue to deliver great value to Fair, Isaac clients, stockholders and employees.”

Speaking on behalf of Fair, Isaac, CEO Tom Grudnowski said, “With great appreciation and admiration, we thank Dr. Oliver for his vision, leadership and dedication to Fair, Isaac. Bob has served us well at a very important time in Fair, Isaac’s history. We will miss his wise counsel and wish him all the best in his retirement.

“Skip has brought significant vision and resources to the board over the past five years, and we look forward to his leadership guiding our next stage of growth as the preeminent leader of creative analytics,” added Grudnowski. “I am excited about the future of Fair, Isaac and look forward to serving as chairman of this leading-edge technology company,” said Battle. “We have the management, technology and an exciting portfolio of products and services that will fuel our growth by delivering value to our stakeholders.” Since December 2000, Skip Battle has served as CEO of Emeryville, Calif.-based Ask Jeeves, Inc., (NASDAQ:ASKJ), a leading provider of question-answering technologies and services. He retired from Andersen Consulting in 1995, having joined the firm in 1968 and served as a partner since 1978. During his tenure at Andersen, Battle held a series of management positions, including worldwide managing partner of market development and managing partner of U.S. operations and planning. In addition to Fair, Isaac, Battle is a member of the boards of directors of PeopleSoft, Inc., and Barra, Inc.

In addition to Battle, members of the Fair, Isaac board are: Tony Christianson, managing partner Cherry Tree Investments; Philip Heasley, chairman and CEO First USA; Guy Henshaw, managing director Henshaw & Vierra; David Hopkins, director of Health Information Improvement, Pacific Business Group on Health; Peggy Taylor, CEO of Venture Builders; and Fair, Isaac CEO Tom Grudnowski.

About Fair, Isaac

Fair, Isaac and Company is the preeminent provider of creative analytics that unlock value for people, businesses and industries. The company’s predictive modeling, decision analysis, intelligence management and decision engine systems power more than 14 billion decisions a year. Founded in 1956, Fair, Isaac helps thousands of companies in over 60 countries acquire customers more efficiently, increase customer value, reduce risk and credit losses, lower operating expenses and enter new markets more profitably. Most leading banks and credit card issuers rely on Fair, Isaac’s analytic solutions, as do insurers, retailers, telecommunications providers and other customer-oriented companies. Through the [www.myfico.com][1] Web site, consumers use the company’s FICO(R) scores, the standard measure of credit risk, to manage their financial health. For more information, visit [www.fairisaac.com][2].

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

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Privacy Perceptions

Thirty-five percent of consumers say they are more concerned about their financial privacy than they were a year ago. The other 65%, however, report either the same level or a lower level of concern. And 61% of respondents to the survey, released by Star Systems and conducted by SWR Worldwide, are satisfied with the way their primary financial institution has informed them of its privacy policies. Interestingly, respondents to the STAR survey believe the privacy of their financial information varies with the type of electronic payment method they use. They rated credit-card transactions the least private and PIN-secured ATM/debit-card transactions the most private. They said signature-authorized ATM/debit-card transactions fall between the other two categories. Asked which entities can access information collected electronically at the time of purchase, “government agencies” (76%) ranked ahead of “the store where the purchase was made” (73%), “marketing companies” (65%), and “the company that makes the product that was purchased” (48%). Only “the financial institution that issued the card” (85%) and “the companies involved with processing the electronic transaction” (80%) were perceived to have greater access than government agencies.

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LAURENTIAN 3Q/01

Laurentian Bank reported that for the year ended October 31, 2001 diluted
earnings per share before goodwill and excluding special items increased to
$3.56 from $2.95 in 2000, a 21% increase. Diluted earnings per share before
goodwill and excluding special items increased by 11% to $0.92 per common
share
in the fourth quarter ended October 31, 2001 from $0.83 for the same period in
2000.

Commenting on the fourth quarter and annual results, Henri-Paul Rousseau,
President and Chief Executive Officer said: “We are pleased with these strong
earnings and the Bank’s stronger capital position after a very active year on
the debt and equity markets. The Bank completed a record level of initiatives
during the year, namely: the integration of the 43 Quebec Scotiabank branches,
the B2B Trust IPO, the outsourcing of certain technology activities to CGI,
and numerous growth projects in our lines of business.” He added that, “For
2002, the Bank’s management is committed to generating improved growth,
efficiency and returns.”

SUMMARY RESULTS

For the fourth quarter ended October 31, 2001, the Bank reported net
income before goodwill of $24.6 million or $0.92 diluted per common share
compared to $30.7 million or $1.33 diluted per common share in the same period
in 2000. The 2000 fourth quarter results included a special income tax item of
$10.0 million ($0.50 per common share) as described below. Excluding special
items, diluted earnings per share increased from $0.83 in the fourth quarter
of 2000 to $0.92 in 2001, an increase of 11%. On the same basis, return on
common shareholders’ equity before goodwill was 13.6% for the fourth quarter
of 2001 compared to 13.9% for the same period in 2000.

For the year ended October 31, 2001, the Bank reported net income before
goodwill of $94.8 million compared to $83.7 million in 2000. Core earnings,
excluding the 2000 and 2001 special items described below, increased from
$73.7 million in 2000 to $95.0 million in the current year. On the same basis,
diluted earnings per share increased from $2.95 in 2000 to $3.56 in 2001, an
increase of 21%, while return on common shareholders’ equity increased to
13.8% in 2001 from 12.7% in 2000.

Special items affecting 2001 results, as reported in previous quarters:

– An income tax charge of $12.1 million ($0.53 per share)
principally reflecting the reduction of future income tax assets
resulting from Federal and Provincial corporate income tax rate
reductions.

– A gain of $10.9 million ($10.9 million after taxes or $0.48 per
share) related to the reinsurance of a block of credit insurance
premiums.

– A dilution gain of $12.4 million ($12.4 million after income
taxes or $0.54 per share) arising from the initial public
offering (IPO) of 6.4 million treasury common shares of B2B
Trust.

– The constitution of a provision of $17.5 million ($11.4 million
after income taxes or $0.50 per share) related to the
restructuring of the Bank’s operations aimed at improving growth
and efficiency as explained in the third quarter results.

The impact of these special items on 2001 net income is almost neutral,
namely a net charge of $0.2 million ($0.01 diluted per share) resulting in
diluted earnings per share excluding special items of $3.56.

For 2000, there was one special item which had a significant impact on
earnings that was announced during the year. The 2000 net income included net
reductions of income taxes from statutory rates in the amount of
$16.0 million, composed principally of tax benefits previously not recorded of
which $10.0 million or $0.50 per common share was recognized during the fourth
quarter of 2000 as announced in a press release in September 2000.

The core results of the Bank can be better analysed excluding the special
items mentioned above, especially in the case of income tax expense. Excluding
the impact of special items, the provision for income taxes was $53.0 million
in 2001 compared to $41.1 million in 2000, representing an effective tax rate
of 35.3% in 2001 compared to 35.8% in 2000. The effective tax rate before
excluding special items was 38.3% in 2001 compared to 27.2% in 2000.

Please refer to enclosed Table 2 summarizing the impact of 2001 and 2000
special items on net income.

FINANCIAL REVIEW

The improvement of the Bank’s core profitability in 2001, when compared
to 2000, is largely explained by the following factors:

– Total revenue, excluding the $10.9 million reinsurance gain and
$12.4 million dilution gain, grew 24% to $607.5 million in 2001 from
$490.7 million in 2000 due to the integration of the Scotiabank
branches, asset growth in the lines of business and improved loan
and deposit mix. Net interest income reached 2.13% of average assets
in 2001 compared to 1.95% in 2000. Core non-interest income grew
from $211.8 million in 2000 to $242.3 million in 2001 due
essentially to higher loan and deposit fee income in retail and
commercial operations and higher treasury and financial markets
revenue.

– The provision for credit losses was $35.0 million in 2001 compared
to $25.0 million in 2000, principally related to loan portfolio
growth and the economic slowdown.

– Non-interest expenses, excluding the $17.5 million restructuring
provision, increased from $350.9 million to $422.5 million,
representing an increase of 20% over 2000 including the additional
costs related to the integrated Scotiabank branches, increases in
performance incentives and the cost of post-employment benefits. The
efficiency ratio (expenses including goodwill divided by revenues)
improved from 71.9% in 2000 to 70.5% in 2001, (71.9% and 70.3%
excluding special items).

– Excluding the effect of special items in both 2001 and 2000, the
effective tax rate was 35.3% compared to 35.8% last year.

TOTAL REVENUE was $630.8 million in 2001 compared to $490.7 million in
2000, for an increase of 29%, reflecting the Quebec Scotiabank branches
acquisition, the reinsurance gain, the dilution gain resulting from the B2B
Trust IPO, improved loan and deposit margins and internal growth. The Bank’s
net interest income increased 31% from $278.9 million to $365.2 million as a
result of 19% growth in average assets and an improvement from 1.95% to 2.13%
in interest margins due to continued improvement in the loan and deposit mix.
Non-interest income was $265.6 million in 2001 compared to $211.8 million in
2000. The increase is attributable to the reinsurance and dilution gains,
higher lending and deposit fee income associated with additional volumes and
increased treasury and financial markets revenue.

THE PROVISION FOR CREDIT LOSSES was $35.0 million in 2001 or 0.20% of
average assets versus $25.0 million or 0.17% in 2000. This increase of
$10.0 million is principally due to growth in the loan portfolios resulting
from acquisitions, volume increases in the personal and commercial loan
portfolios and an increase in the level of impaired commercial loans. Gross
impaired loans totalled $159.6 million at October 31, 2001, and represent an
increase of $37.5 million from October 31, 2000. Total provisions increased by
$17.8 million from $115.7 million in October 2000 to $133.5 million at October
31, 2001. Net impaired loans were $26.1 million or 0.2% of total loans and
bankers’ acceptances at the end of year compared to $6.4 million and 0.1% at
October 31, 2000. The Bank’s general provision was $85.0 million at
October 31, 2001 compared to $80.0 million at October 31, 2000.

NON-INTEREST EXPENSES were $440.0 million during 2001 compared to
$350.9 million in 2000. During 2001, the Bank constituted a provision of
$17.5 million for restructuring two important sectors of the Bank: Retail
Banking, which will take measures to further improve its efficiency and
generate increased growth an_ Wealth Management, a sector which will be given
increased strategic emphasis. The provision also includes charges for certain
corporate activities associated with changes in the Bank Act and corporate
structures. Without this provision, expenses increased by 20% year over year,
essentially as a result of the Scotiabank branches integration, which included
additional costs of $5.0 million incurred during the integration period
relating to the temporary servicing agreement with Scotiabank, increases in
performance related compensation costs and the cost of employee future
benefits resulting from the prospective implementation of the new accounting
standard applicable in 2001. The efficiency ratio improved from 71.9% in 2000
to 70.5% in 2001 (70.3% excluding special items).

INCOME TAX EXPENSE for the year 2001 was $59.0 million, which includes a
special charge of $12.1 million essentially related to the impact of the
Federal and Provincial corporate income tax rate reductions on future income
tax assets. The expense for the year 2000 was $31.1 million and included net
reductions of income taxes from statutory rates in the amount of
$16.0 million, composed principally of income tax benefits not previously
recorded, of which $10.0 million or $0.50 diluted per common share was
recognized during the fourth quarter of 2000. Excluding the impact of the
special items described above, the charge was $53.0 million in 2001 compared
to $41.1 million in 2000 representing an effective tax rate of 35.3% during
2001 compared to 35.8% in 2000.

BALANCE SHEET ASSETS stood at $17.7 billion at October 31, 2001 compared
to $14.7 billion at year-end 2000, for an increase of $3.0 billion or 20%,
after securitization of over $0.5 billion of mortgage loans during the period.
During the year, the Bank completed securitizations of residential mortgages
in the amount of $314 million and commercial mortgages in the amount of
$200 million. Total loans, excluding treasury loans and before securitization,
increased by $2.4 billion, of which $1.8 billion is the result of the
Scotiabank branches acquisition. The growth generated by the Bank’s lines of
business during the year amounted to $0.6 billion compared to $1.1 billion in
2000, $154 million of which were personal loans ($428 million in 2000),
$194 million were commercial loans ($405 million in 2000) and $300 million
were residential mortgages ($218 million in 2000). We observe that loan growth
slowed during the year, associated with the economic slowdown and increased
consumer and business prudence in spending and investments. Total personal
deposits grew by $1.1 billion during the period, including the deposits that
were part of the acquired Scotiabank branches, from $10.1 billion in 2000 to
$11.2 billion in 2001. Personal deposits represent 77% of total deposits of
$14.5 billion at October 31, 2001 compared to 82% at October 31, 2000. The
Bank maintained its leadership in the Independent Financial Advisor market.
The Bank, through its B2B Trust-Agency Banking line of business, continues to
grow its deposit base, reaching an average of $4.8 billion in 2001. The
deposit base in Retail Banking operations averaged $7.7 billion in 2001
compared to $6.3 billion in 2000.

ASSETS UNDER ADMINISTRATION stood at $13.1 billion at October 31, 2001
compared to $14.2 billion at year-end 2000. There was a slight increase in
mutual fund assets offset by decreases in the market value of self-directed
plans, trust assets and brokerage client assets.

TOTAL CAPITAL of the Bank, comprised of common shareholders’ equity,
preferred shares, non-controlling interest and debentures, reached
$1,222 million at October 31, 2001 compared to $1,009 million at October 31,
2000, an increase of $213 million over the year. The BIS Tier 1 and Total
capital ratios increased to 8.1% and 12.4%, respectively, from 7.7% and 11.3%
a year ago. The total asset to BIS capital leverage ratio improved to 15.2
compared to 15.7 at October 31, 2000. The Bank also monitors the common equity
to risk-weighted assets ratio. This ratio was 7.0% at October 31, 2001, up
from 6.0% at October 31, 2000.

During the year, the Bank issued 2.7 million common shares at an average
price of $24.76 for proceeds of $67.2 million. The Bank completed a public
offering of 2.5 million common shares at a price of $25.40 per share for net
proceeds of $60.8 million and the Bank also issued 214,000 shares under its
stock option plan. There were 22,868,000 shares outstanding as at October 31,
2001 and the Bank’s book value per common share was $27.08, an increase of
$2.18 since October 31, 2000.

In July 2001, B2B Trust completed its IPO and issued 6,394,000 shares at
$9 per share for total net proceeds of $53.1 million; as a result, a dilution
gain of $12.4 million and non-controlling interest of $40.6 million were
recorded by the Bank in 2001. The Bank holds a 74.3%-interest in B2B Trust at
October 31, 2001 and its non-controlling interest has increased to
$42.7 million as at October 31, 2001.

During the year, the Bank also completed the public offerings of
$150 million of 6.50% Series 9 Subordinated Debentures due in 2011 in two
tranches, $100 million on November 1, 2000 and $50 million on June 1, 2001 for
total net proceeds of $146.8 million. In July 2001, the Bank redeemed its
10.25% Subordinated Debentures Series 1 in the amount of $42.2 million on
their due date. In August 2001, the Bank redeemed all of its 7.40%
Subordinated Debentures Series 4, due in 2003 in the amount of $29.6 million.
In October 2001, the Bank redeemed its 10.75% Subordinated Debentures Series 2
in the amount of $25 million on their due date. As a result of these
transactions, the Bank increased total debentures by a net amount of
$53.2 million and reduced the weighted average interest cost of its debentures
by 87 basis points, from 7.61% at October 31, 2000 to 6.74% at October 31,
2001. Subordinated Debentures in the amount of $400.0 million were outstanding
as at October 31, 2001 compared to $346.8 million a year ago.

After year end, in November 2001, the Bank redeemed its 8.75% Non-
Cumulative Class A Preferred Shares Series 6 in the amount of $60 million and
completed a public offering of 4 million 6.0% Non-Cumulative Class A Preferred
Shares Series 9 at a price of $25 per share for an aggregate amount of
$100 million. The Bank increased total preferred shares by $40 million to
$200.4 million and reduced the weighted average dividend on its preferred
shares by 124 basis points, from a weighted average dividend of 8.12% at
October 31, 2000 to 6.88% at October 31, 2001 on a pro-forma basis. As a
result, the Bank’s pro-forma BIS Tier I and Total capital ratios as at
October 31, 2001, after giving effect to these preferred share transactions
would have been 8.5% and 13.0% respectively.

DIVIDEND

——–

At its last meeting, the Board of Directors increased its quarterly
dividend on the Bank’s common shares to $0.29 payable on February 1, 2002 to
shareholders of record on January 2, 2002. This represents an increase of
$0.02 or 7% over the dividend declared previously. This increase brings the
quarterly dividend from $0.27 or 29% of diluted earnings per common share
before goodwill to $0.29 or 32% of diluted earnings before goodwill, which is
within the Bank’s dividend policy of a payout between 30 to 40%.

SEGMENTED INFORMATION

For the year 2001, net income contributions were 35% from Retail Banking,
30% from B2B Trust & Agency Banking and 35% from Commercial and Corporate
Banking. The net income contributions were 23%, 36% and 41% respectively in
2000.

RETAIL BANKING

– Net income was $29.8 million in 2001 versus $16.2 million in 2000
and its efficiency ratio was 80.4% and 85.0% respectively. The
completed integration of the 43 Quebec Scotiabank branches in mid
2001 has generated the expected synergies, with almost a 5%
improvement in the efficiency ratio.

– The Retail Banking residential mortgage portfolio grew by $1.1 billion
or 17% during the year, while the personal loan po_tfolio grew by
$0.6 billion or 40%. The growth results from the addition of loans
acquired from Scotiabank and due to increases in point-of-sale
financing associated with the increase in the number of retailers
including those resulting from the Bombardier Capital alliance.
Portfolio growth has slowed since new incoming business is
constant, while loan maturities have increased during the year. We
also observed that growth slowed toward the end of the year,
associated with more consumer prudence in spending and investments
and seasonal factors.

– On November 1, 2000, the Bank completed the acquisition of 43 Quebec
Scotiabank branches located outside the Greater Montreal area
comprising 165,000 customers and assets, principally loan portfolios
and deposits of $1.9 billion and $1.2 billion, respectively.

– The Retail Banking Sector continued to implement its SAVA (Services
Sales Added, Value Added) program aimed at increasing growth and
improving efficiency.

– The Bank is a leader in point-of-sale financing across Canada, with
approximately 6,000 point-of-sale financing centres meeting retail
consumer financing needs of our clients.

B2B TRUST & AGENCY BANKING

– This line of business is composed of B2B Trust, a federally
chartered regulated financial institution, subsidiary of the Bank,
that supplies generic and complementary banking and financial
products to independent financial advisors, non-bank financial
institutions and retailers across Canada; and the Agency Banking
division, which distributes residential mortgages, term deposits,
Visa cards, banking packages and other products.

– The contribution to net income of this sector increased to
$26.0 million in 2001 from $24.8 million in 2000. The 2001 net
contribution was negatively affected by two factors: the
$1.1 million impact resulting principally from the Ontario corporate
income tax rate reduction and $2.0 million of B2B Trust net income
attributable to non-controlling interest.

– B2B Trust increased its profitability in 2001 and its net income was
$20.5 million or $0.99 per share compared to $15.7 million or
$0.85 per share in 2000. Its return on shareholders’ equity was 14.2%
and its efficiency ratio was 47.8% in 2001 compared to 11.2% and 55.7%
in 2000. The 2001 financial results include a $1.1 million net charge
reflecting the reduction of future income tax assets resulting from
the reduction of the Ontario corporate income tax rates. Excluding
this special item, B2B Trust’s net income was $21.6 million or $1.05
per common share in 2001 compared to $15.7 million or $0.85 per common
share in 2000 and return on shareholders’ equity was 15.0% in 2001.
B2B Trust completed its IPO of common shares in 2001. A total of
6.4 million common shares were issued at $9 per share for net proceeds
of $53.1 million. Its Tier I and Total capital ratios reached 13.3%
and 18.2% respectively as at October 31, 2001.

– Partnership agreements signed in 2001 that will generate growth in
2002:

– AIC Limited (AIC) selected B2B Trust as the exclusive supplier of a
private-branded investment loan program involving a variety of loan
products distributed through a network of registered
representatives selling AIC products to complement their mutual
funds offering. In June 2001, the investment loan program was
launched throughout Canada.

– In June 2001, B2B Trust announced the signing of a letter of intent
with Cartier Partners Financial Group Inc., the largest independent
financial planning network in Canada with more than 3,500 advisors,
representatives and brokers. The agreement provides that B2B Trust
will offer a chequing account under Cartier Partners’ brand name to
individuals with assets in the Cartier Money Market Fund. It also
calls for B2B Trust to develop and supply investment loans and RRSP
loans to Cartier Partners.

– In June 2001, B2B Trust launched the Advisor’s Choice, a line of
banking products and services for distribution exclusively by
independent financial advisors, longstanding partners of the Agency
Banking division of the Bank since 1995, now part of B2B Trust. The
line features a high-yield savings account, chequing account with
banking package, line of credit, debit card, Internet transactional
site and telebanking service.

– In August 2001, B2B Trust announced the signing of an agreement
with Charles Schwab Canada regarding the development and supply of
banking and financial products. The integrated online brokerage,
advisory and portfolio management firm launched these products to
its Canadian customers under the SchwabOne brand name in October
2001.

– In October 2001, B2B Trust, Laurentian Bank and Canada Post
announced that they are bringing B2B Trust’s innovative banking
technology to 50 postal outlets across Canada as a pilot project,
with the possibility of additional outlets in the future.
Independent financial advisors and banking customers can now make
and authenticate deposits and change bank card personal
identification numbers at selected postal outlets.

– During 2001, B2B Trust also signed letters of intent to provide
financial products and services to The Canadian Association of
Mutual Insurance Companies (CAMIC) and to Capital Teraxis.

COMMERCIAL AND CORPORATE BANKING

– Net income increased to $30.5 million in 2001 from $28.4 million in
2000 and the efficiency ratio was 34.2% in 2001 versus 31.9% in 2000.

– The loan portfolio grew by 8.8%, before the securitization of
$200.2 million during 2001 and fee income grew by 34.4% during the
year. The Commercial and Corporate Banking sector increased its
profitability due to strong growth in fee income partially offset by
an increase in the provision for credit losses.

– On January 30, 2001, $200.2 million of commercial mortgage loans were
sold to Merrill Lynch Capital Canada Inc., for the first commercial
mortgage backed securities issue involving a Canadian bank.

– On May 1, 2001, the Bank announced that it would offer its Commercial
and Corporate customers a new service for filing and paying taxes to
government agencies through its Website. The service is provided under
an agreement with BCE Emergis through its wholly owned subsidiary Can-
Act Payment Services Inc.

– On June 28, 2001, the Bank and Textron Financial Canada entered into
an alliance whereby Textron Financial Canada will offer its financial
products and services to the Bank’s customers across Canada. In turn,
the Bank will offer its complete range of Commercial banking products
and services to customers of Textron Financial Canada.

– Over the past several years, Commercial Banking has entered into
alliances whereby its partners offer complementary financial products
and services to Bank clients, while at the same time allowing for
business development opportunities for the Bank with the clients of
its partners.

OTHER SECTORS

– The net contribution of other activities decreased to $4.4 million in
2001 from $12.3 million in 2000. The 2001 results reflect the
$12.4 million dilution gain, the $17.5 million ($11.4 million after
taxes) restructuring provision and increased contributions from
brokerage operations and Treasury and Financial Markets. The 2000
results included the $10 million special income tax gain explained
previously.

– T_e Brokerage subsidiary, Laurentian Bank Securities (LBS),
contributed $0.5 million to the Bank’s net income in 2001 compared to
$0.7 million in 2000. It presently manages total assets of
$1.9 billion, including its own assets of $1.0 billion and its
customers’ portfolios of $0.9 billion.

– On July 10, 2001, LBS, E(*)TRADE Canada and CollectiveBid Systems Inc.
entered into an agreement whereby LBS will provide quotes of its bond
inventory to the E(*)TRADE Canada bond center in online transactions
and orders of related securities.

– In 2000, BLC-Edmond de Rothschild Asset Management Inc. (BLC-EdR)
launched a new family of load mutual funds in Canada with an
international focus and entered into portfolio management activities.
At the end of 2001, total assets under administration of this
subsidiary were approximately $1.1 billion.

– On October 15, 2001, the Bank and BLC-EdR signed an agreement
regarding the reorganization of the IRIS and R Funds. The R and IRIS
fund families will be combined under the R Funds banner with BLC-EdR
as the manager. The effective date of the transaction is December 31,
2001.

TECHNOLOGY

Significant events in the Information Technology sector of the Bank
during the year:

– In November 2000, the Bank announced a five-year agreement with First
Data Corp. (FDC) for credit card processing activities. This follows a
letter of intent signed in April 2000.

– In May 2001, the Bank announced that it is now offering webdox(TM)
electronic bill presentment service to its Internet customers.

– In June 2001, the Bank completed the outsourcing of its technology
development activities to CGI. Under the ten-year agreement involving
150 employees and valued at $300 million, the Bank will continue to
oversee all aspects of systems architecture, technological
orientations, information security as well as service agreement
management.

– In June 2001, the Bank received the 2001 Octas award from the
Fédération de l’informatique du Québec (FIQ) in the Business Solutions
category for B2B Trust and its unique technology infrastructure that
allows independent financial advisors, non-banking financial
institutions and retailers to market products and services
traditionally offered by banks.

– In August 2001, the Bank received the Award for Excellence for the
same project, namely the technological development of B2B Trust, from
the Canadian Information Productivity Awards (CIPA). In November 2001,
the Bank received the Award of Excellence for the best technological
solution in the Large Enterprises category for the project. The CIPA
is the largest business awards program in Canada in the field of
information management.

– In August 2001, the Bank was ranked second of fourteen financial
institution Websites evaluated in Canada in a survey by Gomez, a North
American firm that ranks Internet sites in all sectors, for overall
customer usability. The Bank received high marks for its on-site
resources for customer service over the telephone and through e-mail.
It also was lauded for top-notch services and information for savers
and borrowers. The Bank’s Website had been ranked third overall in the
previous survey.

Founded in 1846, Laurentian Bank ranks seventh among Canadian Schedule I
banks, with assets in excess of $17 billion. The bank offers highly
competitive products and superior personalized service to meet the banking and
financial needs of individuals and small and medium-sized businesses, and
independent financial advisors.

Details

Gasper SST Solution

Gasper Corporation, the world leader in SST management software, announced the availability to their customers of their Gasper Index, a new service metric and measurement index that will allow for an unbiased comparison between Self-Service networks. The new system is expected to improve the overall quality of Self-Service terminals by helping industry leaders more accurately assess their performance.

“This program will ultimately allow Gasper Users to identify how their ATM network is performing in comparison to peer networks via a standardized set of reports,” said Phil Spofford, Vice President of Fleet Financial and the President of the Gasper Users’ Group. “I see this as an invaluable tool in establishing realistic goals and availability expectations.” The index provides monthly reports that highlight average ATM network availability among participating customers. By allowing institutions to compare their own services with competitors in a completely anonymous fashion, they can easily rate their own services against those of the industry as a whole. The index is part of Gasper Corporation’s Self-Service Management solution, which monitors, manages, and automates ATM devices and networks. Working with a customer base of over 170,000 ATMs worldwide, the Index is a comprehensive indicator of ATM performance in the industry. Currently, Gasper Corporation’s customer base includes approximately two thirds of the top SST deployers. All Gasper Index participants receive a ranking based upon their availability scores for the month. While the report indicates the number of participating institutions and the total number of ATMs included, all statistical data is presented in an anonymous fashion; participants are not identified by name in the Index.

Gasper Index will be available for demonstration in booth # 210 at the BAI Retail Delivery Conference and Expo in Anaheim, CA from December 12-14, 2001. For more information about Gasper Corporation, please visit [http://www.gasper-corp.com][1]

About Gasper Corporation

Gasper Corporation, a wholly-owned, independent subsidiary of NCR, is a leading provider of Self-Service management software. Gasper offers comprehensive solutions that are specifically tailored to solve Self-Service management problems. The company’s solutions monitor Self-Service Terminals (SSTs) and manage the entire SST support process to maximize SST availability, profitability and customer satisfaction for SST networks worldwide. Headquartered in Dayton, Ohio, the company’s solutions are used to manage more than 170,000 SSTs worldwide. Visit the Gasper Corporation web site at [http://www.gasper-corp.com][2].

[1]: http://www.gasper-corp.com/
[2]: http://www.gasper-corp.com/

Details

Gulf South Agreement

NOVA Information Systems announced an alliance with Whitney National Bank to provide payment-processing services to the bank’s merchant customers throughout Louisiana, Alabama, Florida, Mississippi and Texas.

The alliance between NOVA, the nation’s third largest payment processor, and New Orleans-based Whitney National Bank, whose annual merchant charge volume is $500 million, will begin immediately. In the next year, Whitney, a banking industry leader in the Gulf South, plans to expand the alliance to include additional NOVA products and services designed to meet the business needs of Whitney’s customers.

“Working with NOVA provides a wealth of opportunities for the Whitney and our clients,” said Greg Johnson, vice president, credit card department at the Whitney. “Utilizing NOVA’s merchant-processing experience will allow us to grow our commercial base by offering clients first-rate processing products and services.”

Whitney’s alliance with NOVA allows it to offer a broader range of merchant products and services to its commercial customers. “We are truly excited to be associated with Whitney National Bank,” said Pamela Joseph, Senior Executive vice president of business development at NOVA. “We are confident that our alliance will help strengthen the Whitney’s offerings by providing them with a better, further reaching set of merchant-processing tools.”

Atlanta-based NOVA Information Systems manages and transports payment and other business information on behalf of retailers, community banks and regional financial institutions. NOVA specializes in providing integrated credit and debit card payment processing services, related software application products and value-added services to more than 650,000 merchant locations in the United States. For more information on the company, visit [www.NOVAinfo.com][1].

New Orleans-based Whitney National Bank (Nasdaq:WTNY), with assets in excess of $6.7 billion, is the oldest continuously operating bank in New Orleans and a banking industry leader in the Gulf South. The bank offers a wide variety of consumer, commercial, trust and investment banking products and services. Founded in 1883, the Whitney has 130 branch locations in Louisiana, Alabama, Florida, Mississippi and Texas. For more information regarding Whitney Bank, visit [www.whitneybank.com][2] or call 877-611-9448.

[1]: http://www.novainfo.com/
[2]: http://www.whitneybank.com/

Details