Talk.com signed a strategic marketing agreement with First USA yesterday. Under terms of the agreement Talk.com will market low-cost, long distance services to First USA’s 65 million cardholders. The telecom services will be promoted via online and direct mail. First USA will offer automatic billing of Talk.com services to First USA-issued credit cards. Talk.com says Tuesday’s pact is the largest marketing deal it has struck. The company also has a relationship with AOL.Details
December same-store sales climbed 5.8% over December 1998, according to data compiled by TeleCheck Services. The Northeast region led the nation, followed by the Southwest, the Midwest, the Mid-Atlantic, and the Southeast and West (tied). The Northeast’s sales jumped 6.2%, with Massachusetts up 6.4% and New York up 6.2%.The ‘TeleCheck Retail Index’ is based on a year-over-year, same-store comparison of the dollar volume of checks written by consumers at more than 27,000 of TeleCheck’s 210,000 subscribing locations.Details
Thanks to softening charge-offs, lower consumer bankruptcies and rising income yield the average pre-tax, return-on-assets for credit card portfolios last year is projected to settle out at 3.1%. CA-based R.K. Hammer Investment Bankers reported this week that its 1999 earnings model also shows that 74% of card income was derived from interest revenue while 26% came from fee income. Hammer says its study also confirms that platinum credit cards continue to deliver the highest ROA of any credit card product. Last year standard cards produced a 2.1% ROA; gold cards a 2.9% ROA; and platinum cards a 3.4% ROA. Over the course of the 1990s card profits have followed a roller coaster pattern even tough operating expenses have consistently declined.
U.S. Bank Credit Card Profitability Historical
(VISA, MasterCard, and Discover)
YEAR INC OX CO COF ROA
1989 21.3% 5.5% 3.8% 7.9% 4.1%
1990 20.9% 5.1% 4.3% 7.8% 3.7%
1991 20.5% 4.8% 4.7% 7.6% 3.4%
1992 19.4% 4.9% 4.9% 6.5% 3.1%
1993 18.6% 4.7% 4.6% 6.0% 3.3%
1994 18.5% 4.5% 4.4% 5.7% 3.9%
1995 18.0% 4.2% 4.1% 6.1% 3.6%
1996 17.9% 4.3% 4.2% 6.1% 3.3%
1997 17.4% 4.3% 4.6% 5.9% 2.6%
1998 17.3% 4.4% 4.7% 5.7% 2.5%
1999 17.9% 4.5% 4.4% 5.9% 3.1%
INC-total income; OX-operating expense; CO-charge-offs;
COF-cost-of-funds; ROA-net pre-tax return-on-assets
Source: R.K. Hammer Investment Bankers
Reston, VA-based CyberMark says the University of Arizona’s ‘CatCard Team’ has been named a winner of Arizona’s ‘1999 Governor’s Spirit of Excellence Recognition’. The ‘CatCard’ is a smart card solution based on CyberMark technology being implemented by the University of Arizona.Details
U.S. card volume is growing between six and seven times faster than growth in outstandings according to data released this morning by CardData. U.S. Card volume for 1999 is expected to total more than $1.1 trillion, an increase of nearly 18% over the previous year. Meanwhile U.S. card receivables should come in around $467 billion for year-end 1999 compared to $454 billion for 1998, for a 2.8% annual gain. Over the course of the 1990s the growth patterns have shifted dramatically according to CardData. Ten years ago, card volume was growing about 14% annually while receivables were expanding by nearly 18% annually.
U.S. Volume & Receivables Payment Card Historical
($ billions for VISA, MasterCard, Discover, American Express)
YEAR VOL RECV
1989 $296.3 $146.6
1990 $338.4 $172.6
1991 $361.0 $188.8
1992 $403.1 $201.8
1993 $476.7 $213.8
1994 $584.8 $285.5
1995 $701.2 $358.1
1996 $798.3 $411.6
1997 $885.2 $443.7
1998 $974.9 $454.3
1999 $1,148.0 $467.0 (projected)
Source: CardData (www.carddata.com)
NYCE reported Tuesday that its network set an all-time one-day volume record on Dec. 24. The network handled more than three million ATM transactions and more than 1.4 million POS transactions on the busiest shopping day of 1999. Significant NYCE Network volumes were also reached on Dec. 31, as consumers rang in the New Year by using their ATM cards more than 2.7 million times. NYCE says Y2K was glitch-free over the first weekend of 2000.Details
Charge-offs among credit card-backed securities slid upwards by 21 basis points last month. Delinquency also inched up by 7 basis points during December, according to data released this morning by Fitch IBCA. Charge-offs, among $211 billion in credit card-backed bonds, increased to 5.49% for the most recent collection period compared to 1999’s lowest level of 5.21%. However the figure is well below the 6.27% reported one year ago. Meanwhile 60+ day delinquency drifted upwards in December to 3.26%, exactly where it stood one year ago. Monthly payment rates continue to be well above 1998 levels.
CREDIT CARD SECURITIZATION PERFORMANCE
Period CO GY MP DL SP
Dec99 5.49% 19.17% 16.05% 3.26% 6.05%
Nov99 5.28% 19.63% 16.29% 3.19% 6.10%
Oct99 5.21% 18.78% 16.84% 3.10% 5.89%
Sep99 5.58% 19.62% 16.99% 3.00% 5.81%
Aug99 5.55% 19.04% 16.56% 2.96% 5.80%
Jul99 5.75% 18.86% 16.44% 2.95% 5.63%
Jun99 5.95% 19.71% 16.36% 3.03% 6.04%
May99 5.91% 18.65% 15.96% 3.02% 5.64%
Apr99 5.94% 20.24% 16.87% 3.14% 5.92%
Mar99 6.05% 19.49% 15.44% 3.25% 5.69%
Feb99 6.10% 19.23% 15.82% 3.28% 5.37%
Jan99 6.00% 19.57% 15.62% 3.15% 5.34%
CO-chargeoffs; GY-gross yield; MP-monthly payment rate; DL- 60+ day
delinquency rate; SP-3-month excess spread
Source: Fitch IBCA Credit Card Index
Every year, 170 million NFL fans cheer on their favorite football teams. For the second consecutive year, Visa U.S.A. and the Pro Football Hall of Fame are recognizing 31 of these face-painting, costume-wearing, shrine-building, season ticket-holding NFL fans.
On January 18, 2000, these devoted fans will be honored in a special ceremony at the “Visa Hall of Fans”, a fan-only exhibit at the Pro Football Hall of Fame.
The Visa Hall of Fans is the first and only exhibit in sports that recognizes and honors specific fans for their contributions and dedication to the sport they love — professional football. On hand for the fan ceremony in Canton will be Pro Football Hall of Fame quarterback and NFL legend Roger Staubach, this year’s Visa Hall of Fans spokesperson and master of ceremonies.
“NFL teams and players rely and thrive on fan support,” said Roger Staubach, Hall of Fame quarterback for the Dallas Cowboys. “The avid fans we selected for the Visa Hall of Fans are dedicated to their teams and are integral to players’ morale. They are truly part of the `team family’. It’s wonderful that Visa and the Pro Football Hall of Fame created the Visa Hall of Fans program to recognize the contributions fans make to the sport.”
Visa and the Pro Football Hall of Fame conducted a nationwide search for the most dedicated fan from each of the 31 NFL teams. Selected by a panel of judges from the Hall of Fame, the NFL and Visa, these ultimate fans are among the most loyal, knowledgeable and enthusiastic in pro football.
The “Visa Hall of Fans” exhibit showcases the honorees through individual panels featuring the fans’ names, photographs and short testimonials. The exhibit also includes famous fan mementos, a plaque with the names of previous Visa Hall of Fans honorees and a film of the league’s most dedicated and sometimes outrageous fans.
“Every year thousands of pro football fans travel to Canton, Ohio to visit the Pro Football Hall of Fame where the memories and achievements of the game’s heroes are preserved,” said John Bankert, the Hall’s executive director. “For our visitors, the Visa Hall of Fans exhibit creates a direct link to their experiences. Fans realize that their team dedication and enthusiasm could earn them recognition in the Hall of Fame, next their heroes. Together with Visa, we have created a home for the unsung heroes — the fans.”
“Visa Hall Of Fans” Honorees Score Big For Home Teams The “Visa Hall of Fans” honorees have spent decades following their favorite teams, resulting in some fascinating stories:
— Wayne “The Violator” Mabry has been following the Oakland Raiders since 1970. For the past nine seasons, “The Violator” has been attending home games and intimidating opposing teams and fans by dressing in full “warrior” gear, complete with spikes on his shoulder pads; dramatic, zebra-striped face paint; armored forearm bands; and a sword.
— Terry Musolf, an Indianapolis Colts fan for the past 42 years, has spent more than 10,000 hours of research keeping statistics on every Colts player since 1957. Terry works closely with the Colts organization to restore their statistical history records, and has a library of information so vast, he willed it to the team.
— Zema “Chief Zee” Williams has attended Washington Redskins games dressed in Indian garb since 1978. “Chief Zee” can be easily spotted getting the crowd excited, including bringing a hog to games in honor of the Redskins’ offensive line. During the past 21 seasons, “The Chief” has also donated time to charitable programs for children and the elderly, earning him the official “Chief Zee Day” on November 7, 1985 in Washington, D.C.
A complete list of the 1999-2000 “Visa Hall of Fans” honorees is featured at the end of this release.
The 1999-2000 Visa Hall of Fans honorees join the ranks of past honorees that include Tim “Barrelman” McKernan (Denver Broncos), Mike “Boss Hogette” Torbert (Washington Redskins) and Monte “Arrowman” Short (Kansas City Chiefs).
“The `Visa Hall of Fans’ exhibit brings the passion and excitement of the NFL closer to fans,” said George Perry, Director, Event and Sponsorship Marketing, Visa U.S.A. “The program best represents Visa’s efforts to reward NFL fans for their dedication to the sport. We applaud their loyalty to their teams and the NFL.”
The “Visa Hall of Fans” search is just one component of Visa’s integrated marketing program to support its NFL sponsorship. In its fifth year as the preferred payment card of the NFL, Visa is proving to fans that “It’s everywhere NFL fans want to be.” In addition to the fan search, Visa’s NFL program includes a title sponsorship of the nationally televised “Visa Halftime Report” on FOX; NFL-themed national advertising; Member-supported national consumer promotions; direct mail; retail and online marketing.
Established in 1963, the Pro Football Hall of Fame is the ultimate honoring place for the legends of the sport. From Sammy Baugh to Walter Payton, each inductee is synonymous with dedication, team leadership and athletic excellence. The “Visa Hall of Fans” exhibit brings the best players and fans together.
Visa is the leading card brand and the largest payment system worldwide. It plays a pivotal role in advancing new payment products and technologies to benefit its 21,000 member financial institutions, their cardholders, and the global economy. Visa is the only consumer payment system to facilitate $1.4 trillion worth of purchases of goods and services in a fiscal year. Visa’s more than 600 million cards are accepted at more than 17 million worldwide locations, including more than 500,000 ATMs in the Visa/PLUS Global ATM Network. Visa’s Internet address is [www.visa.com].
The 1999-2000 honorees for the “Visa Hall of Fans” are:
Arizona Cardinals Russell Boles (a.k.a. “EndZonie”)
Atlanta Falcons Cheryl Ballard
Baltimore Ravens Matt Andrews
Buffalo Bills Valerie Pawluk
Carolina Panthers Rhett Vandiver
Chicago Bears Rob Federighi
Cincinnati Bengals James Bruning
(a.k.a. “Bengal Jim”)
Cleveland Browns Ronald Tedeschi
Dallas Cowboys Marion Dillon
(a.k.a. “Cowboy Mom”)
Denver Broncos Ellen Lewine-Jones
Detroit Lions Peter Cucinella
Green Bay Packers John O’Neill (a.k.a. “St. Vince”)
Indianapolis Colts Terry Musolf
Jacksonville Jaguars David Kanaszka
Kansas City Chiefs Michael Rodriguez Jr.
Miami Dolphins John Mazzanoble (a.k.a. “FinHead”)
Minnesota Vikings John Velek
New England Patriots Mark Feigenbaum
New Orleans Saints Marie Knutson
New York Giants Jeffrey Borer
New York Jets Don Schaeffer
Oakland Raiders Wayne Mabry (a.k.a. “Violator”)
Philadelphia Eagles Richard Prinz
Pittsburgh Steelers Marky Billson
San Diego Chargers Joseph Parker
San Francisco 49ers Martin Jacobs
Seattle Seahawks Michael Houston
St. Louis Rams Lance Goldberg (a.k.a. “Big Seed”)
Tampa Bay Buccaneers Melody Figurski
Tennessee Oilers Edward Gifford
Washington Redskins Zema Williams (a.k.a. “Chief Zee”)
US Airways announced this week that miles earned in its ‘Dividend Miles’ program will not expire so long as the cardmember has account activity during a 36-month period. Qualifying account activity includes miles earned for US Airways flights, miles earned by ‘Dividend Miles VISA’ card usage, mileage earned through any of US Airways’ partner or any miles redeemed through the program. US Airways also extended the ‘Preferred’ member benefit period from 12 months to 14 months. As of March 1, the program will have three frequent flyer levels with new names. ‘Silver Preferred’ for 25,000 mile flyers; ‘Gold Preferred’ for 50,000 miles flyers; and ‘Chairman’s Preferred’ for 100,000 mile flyers.Details
The ACE Cash Express, Inc. Board of Directors announced Monday the promotion of Jay B. Shipowitz to President and Chief Operating Officer. Mr. Shipowitz has also been elected to the Board of Directors of the nation’s largest check-cashing chain and a significant provider of retail financial services. Mr. Shipowitz had been Senior Vice President and Chief Financial Officer since joining the company in May of 1997.
In related moves, R.E. “Ed” McCarty was promoted to Executive Vice President, Operations from Senior Vice President and will remain President of the ACE Franchise Group. Also promoted was Debra A. Bradford to Senior Vice President and Chief Financial Officer from Vice President, Finance. The promotions are effective immediately.
In making the announcement Donald H. Neustadt, Chief Executive Officer said, “Naming Jay, President and COO, is a great way for ACE to start the New Year. He has demonstrated the kind of innovation and leadership ACE will need to meet the challenges of a dynamic marketplace. Jay was instrumental in redefining the Company’s capital structure, securing long term agreements with several key vendors, expanding ACE’s service offerings and creating the loan program affiliation with a national bank using debit card technology.”
“ACE has established an outstanding record and I welcome the challenge to build on this legacy of success,” stated Mr. Shipowitz. “I am excited about the promotions of Ed McCarty and Debra Bradford that recognize their contributions to our enviable history of growth and I look forward to working with them and all of ACE’s associates, partners and franchise owners in executing the exciting initiatives already underway.”
ACE Cash Express, Inc. is headquartered in Irving, Texas and is the largest owner, operator and franchiser of check-cashing stores in the United States. Founded in 1968, the company currently has a network of 965 stores, consisting of 819 company owned stores and 146 franchised stores in 29 states and the District of Columbia. ACE offers a broad range of financial and check cashing services and is one of the largest providers of MoneyGram wire transfers. In addition, ACE offers money orders, small consumer loans, bill payment services, and prepaid local and long distance telecommunication services. The company’s website is found at [http://www.acecashexpress.com].
Average premiums paid to acquire bank credit card portfolios rose sharply last year, according to data released Monday by R.K. Hammer Investment Bankers. The average gross premium above book value for 1999 came in at 16.42% compared to 13.12% for 1998. However the range is fairly wide. Just before the holidays Wachovia acquired the $2 billion Partners First portfolio for a premium of 8.3% while Associates announced last week it is paying a 25% premium to acquire the $1.3 billion KeyCorp portfolio. Hammer says portfolio prices were lifted last year by improving credit quality. Indeed consumer bankruptcies and credit card chargeoffs declined during 1999 while delinquencies moderated. The portfolio study is based on 21 card transactions with $19.2 billion in receivables, and excludes small deals, sub-prime sales and mergers-of-equals. Hammer specializes in card portfolio valuations, fairness opinions and buy/sell/hold decisions.
PERFORMING PORTFOLIOS SALES
1995 1996 1997 1998 1999
Avg Weighted Premium: 20.7% 17.7% 13.2% 13.1% 16.4%
Avg Cost-Per-Acquired Acct: $207 $176 $133 $116 $152
Avg Earnings Multiple*: 5.7x 5.4x 5.1x 5.2x 5.3x
*premium divided by the operating return on assets
Source: RK Hammer Investment Bankers (Thousand Oaks, CA)