Equifax Hires Allhusen

Thomas F. Chapman, Equifax president and chief executive officer, Thursday announced that James J. Allhusen, 49, will join Equifax Inc. as executive vice president and group executive. Allhusen will be responsible for the strategic and operational leadership of North American Information Services, the company’s largest business unit.

“Jim will provide the leadership to continue our outstanding growth by capitalizing on our position as a premier provider of information and knowledge-based solutions that are changing the shape of global commerce,” Chapman said.  “His management experience, entrepreneurship and competitive drive is critical to our future as the lowest cost, highest quality producer, providing total solutions to our customers.”

Allhusen comes to Equifax with 25 years of marketing and financial services experience, nationally and internationally.  He was most recently with Advanta Corporation, one of the largest bankcard issuers, where he was executive vice president responsible for both the domestic and international card businesses.  Previously he was with Standard Chartered Bank as general manager, with experience working in Asia and the Middle East.  Earlier in his career Allhusen was with Household Bank and BancOhio National Bank.

At Equifax, Allhusen will be leading North American Information Services’ new industry aligned organization responsible for sales, marketing and operations, reporting to Chapman.  Allhusen replaces Equifax veteran, John Rougeou, who retires February 28, 1998.

Allhusen earned a bachelor of arts degree from Colgate University and graduated from the School of Bank Marketing at Colorado University.  He and his wife, Susan, and five children will live in Atlanta.

Equifax is a global leader in providing information, processing, consulting and software solutions that facilitate and enhance buyer-seller transactions worldwide.  The company serves businesses in the banking, finance, retail, credit card, telecommunications/utilities and health care administration industries.  Equifax is changing the shape of global commerce through growth and innovation, driven by technology and people.  It operates in 17 countries with sales in 40 countries.  Founded in 1899 in Atlanta, Equifax today has 10,000 employees around the world.  Revenues for the 12 months ended December 31, 1997, were $1.4 billion.  Visit the company’s Internet web site at .


Wachovia Targets Cardholders

Wachovia said Thursday it has expanded its insurance sales force to its core markets throughout the Carolinas and Georgia. The company also announced that it has launched a comprehensive direct marketing program to sell insurance.

Last year, Wachovia Insurance Services Inc. began offering the life, disability and long-term care insurance products of 10 nationally recognized insurance carriers under a pilot program in Winston-Salem, Greensboro, Charlotte and Raleigh, N.C. The program, which is directed toward individuals and small businesses, recommends insurance solutions in meeting estate planning, business continuation and general insurance needs.

Wachovia Insurance Services is expanding its efforts to serve private banking customers and small businesses in Atlanta, Marietta and Savannah, Ga.; Hilton Head, Greenville/Spartanburg, Columbia and Charleston, S.C.; and adding new North Carolina markets in Hendersonville, Greenville, Wilmington and Southern Pines. Wachovia plans to roll out the program in these markets in the first quarter and to hire 12 additional insurance representatives. In addition, the program will be expanded to Virginia later this year.

Also last year, Wachovia Insurance Services initiated a pilot program to market life insurance products through investment counselors in 10 North Carolina cities. Wachovia is expanding the program to include an additional 130 investment counselors in the Carolinas and Georgia during the first quarter.

“Investment counselors currently sell annuity, mutual fund and fixed- income securities, and the addition of insurance to their portfolio of products and services is a natural fit in meeting the financial needs of customers,” said David L. Holton, head of Wachovia Insurance Services.

“Wachovia’s insurance sales efforts have been well received by our customers, who welcome the opportunity to consolidate their financial services with a single institution that they trust.  We look forward to making insurance available to customers located in these new markets this year.”

The sales force expansion is complemented by the launch of a direct marketing program to deposit and credit card customers. Wachovia expects to expand its offerings to include term life, homeowners, health benefit cards and other ancillary products in addition to its accidental death and dismemberment insurance, credit life insurance and credit disability insurance offerings.  These marketing efforts will generate more than 10 million contacts with customers through the mail or telephone.  Strategic database modeling and segmentation will be used in directing appropriate products to customers.

“Direct marketing of insurance is an important component of Wachovia’s mission to help customers conveniently meet their financial goals,” Holton said.  “1998 promises to be an exciting year for Wachovia Insurance Services as we expand our operations. The successes recognized in our pilot programs confirmed that customers will purchase insurance through Wachovia.”

Wachovia Insurance Services Inc. is a wholly owned subsidiary of Wachovia Bank, N.A., the principal banking subsidiary of Wachovia Corporation (NYSE WB).  Wachovia Corporation, which has dual headquarters in Winston- Salem, N.C., and Atlanta, is the 17th largest bank holding company in the country with assets of $65.4 billion.


First Debit Bureau

Fair, Isaac and Company, Inc. announced today that it has formed a product development and marketing alliance with Deluxe Corporation to develop a series of data-based decision making solutions to help financial services companies and retailers better manage their deposit customer relationships. The efforts will result in the nation’s first “debit bureau” — a data warehouse integrating multiple sources of deposit information and “mined” with a suite of decision support tools developed by Fair, Isaac. In addition to selecting Fair, Isaac as a long-term development partner, Deluxe chose Acxiom Corporation to develop and manage the data warehouse.

Financial institutions and retailers today face unprecedented fraud losses and a growing need for more sophisticated decision support solutions to manage debit and deposit accounts. The Fair, Isaac/Deluxe alliance paves the way for the development of comprehensive solutions to meet these growing demands.

“Fair, Isaac’s sophisticated decisioning technology, coupled with Deluxe’s comprehensive debit data, will provide significant benefits to retailers and bankers alike,” said J. A. (Gus) Blanchard, Deluxe Corporation president, CEO and chairman. “Fair, Isaac was clearly the right choice for Deluxe. It is unique among its competitors as the only company with a proven track record in data analysis, predictive modeling, and complete software solutions as well as the industry expertise necessary to help businesses make effective use of the technology.”

Said Larry Rosenberger, Fair, Isaac president and CEO, “Fair, Isaac is proud to have been selected by Deluxe to help develop the next wave of payment industry decisioning solutions. Deluxe is the recognized standard in debit data and electronic banking services. The Deluxe/Fair, Isaac alliance builds on the time-proven capabilities of both companies and promises to pave the way for many unprecedented advances in deposit account acquisition and management which, in turn, open new markets for Fair, Isaac.”

“The alliance presents a new, innovative approach to the management of the consumer risk-reward proposition,” said Patrick Culhane, executive vice president with Fair, Isaac. “The ‘debit bureau’ will ultimately provide the financial services industry and retailers with long sought-after services, and fits with Fair, Isaac’s vision of helping clients more fully manage customer relationships across the entire client enterprise.”

Since 1956, Fair, Isaac has helped businesses maximize the value of data for strategic decision making. The company pioneered the use of credit scoring in consumer and commercial lending. Today, Fair, Isaac provides data-driven decision making solutions including data management, analytic tools, software and consulting to businesses in financial services, direct marketing, personal lines insurance, retail, and health care. Headquartered in San Rafael, Calif., Fair, Isaac employs more than 1200 people in 16 offices worldwide. For the fiscal year ended September 30, 1997, the company reported revenues of $199 million, a 28 percent increase over the prior year.


CheckFree Tops $50m in Q Rev

CheckFree Holdings Corporation, Inc. announced quarterly revenues of $56.5 million for the second quarter ended December 31, 1997 compared to $38.5 million for the same period in the prior year.  For the six months ended December 31, 1997, the Company reported revenues of $108.6 million, compared to $71.2 million for the same period in the prior year.

Excluding a charge for purchased in-process research and development costs in the quarter related to the acquisition of Advanced Mortgage Technologies, Inc., the Company reported a net loss of $1.1 million for the quarter, or two cents per share, compared to a net loss of $5.3 million or 13 cents per share for the same period in the prior year.  Including the charge for purchased in- process research and development, the Company reported a net loss for the quarter of $1.7 million, or three cents per share, compared to a net loss of $5.3 million, or 13 cents per share for the same period in the prior year.

For the six months ended December 31, 1997, excluding a gain on asset dispositions, exclusivity amortization and a charge for purchased in-process research and development, the Company reported a net loss of $4.4 million, or eight cents per share, compared to a net loss of $13.1 million, or 31 cents per share for the same period in the prior year.  Including the gain, exclusivity amortization and purchased in-process research and development, the Company reported net income on a year to date basis of $8.1 million, or 14 cents per share, compared to a net loss of $13.1 million, or 31 cents per share for the same period in the prior year.

The Company reiterated its comfort with analysts’ projections that it will achieve break-even operating results in the quarter ended March 31, 1998, and profitability in the quarter ending June 30, 1998.

“The financial electronic commerce market is on the verge of unprecedented growth as banks begin to implement their next generation solution,” said Peter J. Kight, chairman and CEO of CheckFree.  “It’s a powerful combination when customers can log into their bank to electronically manage their personal finances.  Today CheckFree’s biller relationships and processing engine are already helping our participating banks offer their customers online banking, bill presentment and bill payment.”

CheckFree currently has agreements with over 290 financial institutions to provide banking and electronic billing and payment processing services.  At December 31, 1997, more than 2.2 million home banking and bill payment subscribers were relying on CheckFree for behind-the-scenes processing, an increase of 70 percent over December 31, 1996, and a 10 percent sequential increase over September 30, 1997.

CheckFree and Integrion Form Strategic Alliance to Expand Electronic

Billing and Payment

The emergence of electronic billing and payment reached a milestone as CheckFree and Integrion formed a 10-year strategic alliance to provide complete electronic banking, billing and payment based on Integrion’s Gold message standard for electronic commerce.  The two companies will work with IBM, Integrion’s primary technology partner, to fully integrate Integrion’s Interactive Financial Services (IFS) banking platform with CheckFree’s electronic billing and payment processing infrastructure.

“Through Integrion, America’s financial institutions have an opportunity to define the way in which financial electronic commerce occurs,” said Kight. “The sooner banks are up and running on IFS, the sooner they will enjoy the cost efficiencies and service enhancements of the combined Integrion and CheckFree alliance and the sooner they will be able to offer value-added services to their customers.”

Within the first half of 1998, IFS will be seamlessly connected with the CheckFree processing engine to ensure that high quality, efficient electronic billing, payment and customer care are provided.  Also in 1998, banks using IFS will be the first to offer their customers fully integrated electronic banking, billing, and payment services developed by CheckFree and Integrion.

As the only company with a proven, in-market tested solution for electronic billing and payment, CheckFree has contracts with 22 of the nation’s largest billers, the largest statement processor and will soon announce the full market launch of some of the largest billers in the world. Combined, these billers represent nearly 400 million billing and payment transactions per month.  With electronic billing, banks and other billers can save from 30-60% over traditional methods of bill delivery.

Genesis Platform Consolidation

The Genesis project consists of three phases which address infrastructure enhancements to improve operating effectiveness for remittance processing, data center costs and electronic banking and bill payment.  To date, the next generation remittance engine has been completed and is in production at high volumes with traffic from many sources including Chase and Key banks.

CheckFree is now more than half way through the second phase of the project — creating a centralized, state-of-the-art data center.  Most recently, the Company completed the consolidation of the Chicago data center into the new ECenter in Atlanta.  In that single cutover, one million accounts were moved 800 miles without a single customer noticing an interruption of service.  By June 30, Columbus and Austin will be moved to the new center.

CheckFree is also right on track for the third component of Genesis, the development of next generation banking and bill payment processing engines.

CheckFree Investment Services Reaches 400,000 Portfolio Milestone

Through the Company’s portfolio management systems, APL and APL WRAP, CheckFree provides portfolio accounting, performance measurement, trading and reporting for more than 215 institutions.  These leading institutions now manage more than 400,000 portfolios representing over $250 billion in assets. The Investment Services division has doubled the number of portfolios on the APL system in three years, a 30 percent annual rate.

Highlights of the quarter ending December 31, 1997

—  December 22, 1997 — CheckFree Holdings Corporation, Inc. is formed         with CheckFree Corporation remaining as the Company’s main operating         subsidiary.

—  December 10, 1997 — American Electric Power signs up for CheckFree         E-Bill to offer electronic billing and payment to its 2.9 million         customers.

—  November 24, 1997 — Chairman and CEO Pete Kight Joins RDS ’97 to         explore “The Role of Banks in Interactive Billing and Payment.”

—  November 17, 1997 — HomeSide Lending brings CheckFree E-Bill to 1.2         million homeowners in the U.S.

—  October 9, 1997 — Chase Manhattan Bank signs with CheckFree to become         the first bank in the U.S. to offer electronic bill presentment         services to its individual and commercial customers.  The service is         expected to be live the first quarter of 1998.  Chase’s credit card         and mortgage units will be among the first billers to go live on the         service.

—  October 6, 1997 — CheckFree acquires leading default management         system from Advanced Mortgage Technology, Inc.  CheckFree is now the         only company that can provide mortgage origination, servicing,         tracking and default management.

CheckFree is a wholly owned subsidiary of CheckFree Holdings Corporation, Inc.  Founded in 1981, CheckFree () is the leading provider of electronic commerce services, software and related products for 2.2 million consumers, 1,000 businesses and 850 financial institutions. CheckFree designs, develops and markets services that enable its customers to make electronic payments and collections, automate paper-based recurring financial transactions and conduct secure transactions on the Internet.

Certain of the Company’s statements in this news release contain forward- looking statements, including the statement regarding analysts projections of break-even and profitability, (4th paragraph), the statement regarding the connection of IFS and CheckFree’s processing systems (9th paragraph) and the statement regarding expected completion of the Genesis project (12th paragraph).  These forward-looking statements involve risks and uncertainties, including without limitation the timely implementation of existing bank processing agreements, the ability of the Company to sell its processing services to additional banks, the acceptance of the Company’s electronic banking and bill payment services by financial institutions, businesses and their customers, the acceptance of the Company’s applications software, services and related products by financial institutions, the impact of competitive services and products, the Company’s ability to efficiently integrate recent acquisitions, including Intuit Services Corporation, Servantis Systems, and Security APL, the effect of any future acquisitions or divestitures, and the timely development and acceptance of new electronic commerce services and products, as well as the various risks inherent in the Company’s business and other risks and uncertainties detailed from time to time in the Company’s periodic reports filed with the Securities and Exchange Commission, including Form 10-K for the year ended June 30, 1997.  One or more of these factors have affected, and could in the future affect, the Company’s business and financial results in future periods and could cause actual results to differ materially from plans and projections.

                 Consolidated Condensed Results of Operations
                    (In thousands, except per share data)

                            Three Months Ended           Six Months Ended
                                December 31,               December 31,
                             1997         1996          1997          1996
     and servicing         $38,436      $ 21,178      $72,946      $ 42,365
    License fees             7,491         8,602       13,295        13,494
    Maintenance fees         6,419         4,766       13,260         8,353
    Other                    4,169         3,959        9,102         6,955
    Total Revenues          56,515        38,505      108,603        71,167
     Cost of processing,
      servicing and
      support               30,788        23,021       60,119        44,824
     Research and
      development            8,729         7,014       16,797        13,968
     Sales, marketing
      and royalties          7,883         6,849       15,310        12,410
      and administrative     5,093         4,560       10,532         9,606
      and amortization       6,074         5,756       13,116        11,316
     In process
      research and
      development              719           —          719           —
      amortization             —           —        2,963           —
       Total Expenses       59,286        47,200      119,556        92,124
    Net gain on
     disposition of assets     —           —       25,369           —
    Income (loss)
     from operations        (2,771)      (8,695)       14,416       (20,957)
    Interest, net              755           511        1,113           882
    Income (loss)
     before income taxes    (2,016)      (8,184)       15,529       (20,075)
    Income tax expense
     (benefit)                (324)      (2,863)        7,450        (7,025)
    Net income (loss)      $(1,692)     $(5,321)       $8,079      $(13,050)
    Basic earnings per share
     Net income (loss)
      per common share      $(0.03)      $(0.13)        $0.15        $(0.31)
     Weighted average
      number of shares      55,028        41,534       54,846        41,582
    Diluted earnings per share
     Net income (loss)
      per common share      $(0.03)      $(0.13)        $0.14        $(0.31)
     Equivalent number
      of shares             55,028        41,534       57,135        41,582

    Supplemental reconciliation
     of net income (loss)
     and income (loss) per share
    Income (loss) before
     income taxes          $(2,016)     $(8,184)      $15,529     $(20,075)
    Exclusivity amortization   —           —        2,963           —
    In process research
     and development           719           —          719           —
    Net gain on
     disposition of assets     —           —      (25,369)          —
     Adjusted loss
     before income taxes    (1,297)      (8,184)       (6,158)      (20,075)
    Income tax benefit        (190)      (2,863)       (1,712)       (7,025)
    Net loss excluding
     exclusivity amortization,
     in process research
     and development and net
     gain on disposition of
     assets                $(1,107)     $(5,321)      $(4,446)     $(13,050)
    Net loss per common
     share, excluding
     exclusivity amortization,
     in process research and
     development and net gain
     on disposition of assets
     (basic and diluted)    $(0.02)      $(0.13)       $(0.08)       $(0.31)

                       Consolidated Condensed Balance Sheets
                       (In thousands, except per share data)

                               December 31,               June 30,
                                    1997                    1997
    Current assets
     Cash, cash equivalents,
      and investments             $61,283                 $36,516
     Accounts receivable, net      40,630                  44,507
     Other current assets           8,875                   5,200
       Total current assets       110,788                  86,223

    Deferred income taxes             913                   3,063
    Property and equipment, net    41,660                  44,027
    Capitalized software and
     intangible assets, net        55,835                  83,540
    Other                           7,034                   6,983
       Total assets             $ 216,230                $223,836

    Current liabilities
     Accounts payable,
      accrued liabilities and
      other                       $28,180                 $40,293
     Deferred revenues             19,174                  26,498
       Total current liabilities   47,354                  66,791
    Long-term obligations –
     less current portion           7,986                   8,401
    Net stockholders’ equity      160,890                 148,644
       Total liabilities and
        stockholders’ equity    $ 216,230                $223,836

SOURCE  CheckFree Holdings Corporation, Inc.


Check Fraud Epidemic

Special Agent Kevin L. Perkins of the Baltimore office of the FBI cautioned members of the Maryland Check Cashers Association at their latest meeting that check counterfeiting has reached epidemic proportions.

More than 60 billion checks a year are presented for payment in the United States, but each day at least 1.2 million worthless checks are accepted for payment.

Brian Satisky, president of the Maryland Check Cashers Association commented that “we are no longer dealing with incidents where a few transactions are perpetrated by individuals.

“As FBI statistics clearly indicate, the volume of check fraud and the magnitude of the dollar losses involved, increased dramatically during the past several years. Clearly, this challenges our industry to work closer with banks and law enforcement agencies to win the battle.”

Check fraud is now a sophisticated criminal enterprise, where professional and organized group efforts account for more than half the fraud. Modern computer technology, with desktop computers, laser scanners and high definition laser printers, obtainable for a total cost of less than $10,000, enables counterfeiters to produce bogus checks that are almost undetectable.

Special Agent Perkins told the check cashers that much of the fraud perpetrated by organized criminal groups is done in the form of checks in small denominations. These checks are produced in bulk and then sold to black market customers at less than 25% of face value.

The combination of new technologies, and organized groups headed by individuals with above-average intelligence and criminal histories, pose a formidable challenge to financial institutions and law enforcement agencies, the FBI agent explained.

“Ironically, when Congress passed an Act in 1988 requiring banks to process checks within a 72-hour period so that depositors would have quicker access to funds they inadvertently did check fraud perpetrators a favor. Now the banks have less time to confirm the legitimacy of these transactions.”

The Maryland Check Cashers Association employes over 150 residents throughout the state and cashes checks with a face value in excess of $500 million annually.

Maryland’s check cashers sell money orders and wire transfers, provide outlets for utility bill payments, offer credit card advances, income tax preparation assistance and notary public service, sell transportation passes and tokens, prepaid telephone cards, and postage stamps.


PNC Photo Cards

PNC Bank said yesterday it is experiencing a three-fold increase in credit card applications from its Southern New Jersey branches after the introduction last month of a photo VISA or MasterCard. The card features both a digitized photo of the customer as well as a digitized signature, with a turnaround time of about 15 days. PNC says research shows such cards have decreased fraud by 30%-60% among selected segments of the population.


Card Sharks

The Federal Trade Commission’s said yesterday that ‘Operation Loan Shark’ has snagged a total of 37 telemarketing firms engaged in fraudulent advance loan schemes including advance fee credit card scams. Yesterday the Illinois Attorney General joined the federal crackdown by announcing a preliminary injunction against four Chicago area residents who allegedly bilked tens of thousands of consumers nationwide by offering a guaranteed VISA or MasterCard for advance fees ranging from $97.50 to $147.50. Illinois Attorney General Jim Ryan alleged the Chicago defendants collected the advance credit card fees by debiting consumers’ checking accounts and then sending then a ‘Consumer Express’ catalog charge card. Once consumers purchased $400 worth of merchandise from the catalog they would qualify to receive a credit card application. The Chicago group operated under several business names including Premier Card Services, Prime Credit Services, Tower Financial, Colonial Financial and Consumer Express.


An Electronic Xmas Kettle

A Salvation Army “electronic kettle,” involving a creative application of wireless credit card technology, resulted in additional donations for The Salvation Army in Pittsburgh over this past holiday season.

During the two weeks before Christmas, PNC Bank of Pittsburgh donated the use of a Hypercom point-of-sale terminal to the Greater Pittsburgh Salvation Army to help with it annual Christmas season fund raising.

“When the Army asked what we could do to make the electronic kettle possible, we were delighted to contribute the wireless credit acceptance equipment and arrange for its use through PNC Merchant Services”, according to Craig T. Campbell, Executive Vice President of  PNC Bank, who is also a member of The Greater Pittsburgh Salvation Army Advisory Board.  The bank provided a Hypercom T7PRC POS terminal and also donated all processing-related expenses.

“We need to reach out to the computer generation,” explained Allegheny County Coordinator Major Donald Hostetler.  “Many of our loyal donors are elderly.  They know from experience that The Salvation Army has done for the community.  However, we need to make special efforts to educate and cultivate the 20- to 30-year-old market who are more acclimated to computer technology.”

The Salvation Army unveiled the electronic kettle at the Fifth Avenue Place Shopping Arcade and publicized its “appearance schedule” throughout the Pittsburgh area during the shopping season.  The T7PRC needs no phone connections and can operate on batteries or a mobile power supply so it can set up virtually anywhere — just the same as a traditional Salvation Army kettle.

“The media were quite taken with the idea,” said Ginny Knor, Divisional PR Director for the Salvation Army.  “We got very good newspaper, radio and TV coverage, all of which was beneficial for all concerned.”

Knor said the combination of the media coverage and the novelty of an electronic kettle roughly doubled the per-hour contributions wherever it was set up.  In addition to enabling credit card donations (which tend to be larger than cash gifts), “we also put a traditional kettle nearby.  Those collections also showed a jump primarily because of the attention the electronic kettle attracted.”  Knor said that throughout the Western Pennsylvania Division of The Salvation Army, contributions were up 11 percent over last year.

The Hypercom T7PRC terminal uses Cellular Digital Packet Data (CDPD) technology, which transmits short bursts or “packets” of data over a cellular telephone network.  The terminal’s 35-key keyboard, 2-by-20 back-lit LCD and integrated printer provide full functionality within a small footprint.  When donors swiped their cards through the terminal, the transaction was routed through PNC’s Merchant Services network and an approval message returned to the terminal within five seconds.  The terminal then printed out a receipt, which the donor could use as proof of the charitable contribution.

The Salvation Army continues to solicit loose change and folding money with the traditional kettles, but sees benefits in the new electronic kettle. “We hope to try it again during National Salvation Army Week in May,” Knor said.

Hypercom Corporation

Hypercom Corporation is a leading supplier of point-of-sale (POS) payment systems, enterprise networking solutions and client/server software.  Phoenix, AZ-based Hypercom markets its products in more than 50 countries worldwide. Hypercom Corporation consists of four divisions Hypercom POS US/Canada, Hypercom International, Hypercom Network Systems and  Hypercom Manufacturing Resources.  Hypercom’s common stock is traded on the New York Stock Exchange under the symbol “HYC”.


More Final 4Q Data

Bankcard Update/CardData released additional figures from its ‘Fourth Quarter 97 Portfolio Survey’ yesterday. The January 31 issue of Bankcard Update will be released Monday with end-of- year/fourth quarter results of more than 300 of the nation’s largest credit card issuers. Among major player data released Thursday

                FOURTH QUARTER 1997 STATS (12-31-97)
          RECV      Q-VOL     YTD-VOL   ACCTS     ACTVS     CIF
Advanta   $11.2b    $1.8b     $ 6.9b    8.4m      4.2m      7.9m
Fst Union $ 6.0b    $1.4b     $ 5.7b    3.9m      2.0m      5.5m
Assoc.    $ 5.8b    $ NR      $ 6.4b    9.3m      3.5m     14.0m
PNC       $ 3.8b    $1.5b     $ 6.4b    4.0m      2.1m      4.4m
Dir Merch $ 3.6b    $1.1b     $ 2.7b    3.0m      2.1m      3.7m
Crestar   $ 1.2b    $0.4b     $ 1.4b    0.9m      0.5m       0.9m
     recv-receivables; vol-volume; accts-accounts; actvs-actives;
cif-cards-in-force     Source CardWeb, Inc.’s Bankcard Update/CardData


DASH ATM Gets Investor

First United Bancshares Inc. has signed a definitive agreement to purchase a one-third interest in the DASH ATM Network. First United joins ARKSYS and Metropolitan National Bank as co-owners of the company. The transaction is expected to close during the first quarter of this year.

DASH provides turnkey ATM network processing and debit card services. The DASH Network, formed in March 1996, currently provides electronic banking services for 21 financial institutions. At this time, the DASH Network consists of 93 ATMs and over 145,000 cardholders.

“The opportunity to expand our services into electronic banking is something we have been considering for quite some time,” said John E. Burns, senior vice president and chief financial officer of First United. “The purchase of an interest in the DASH Network will provide us with a vehicle to increase our fee income and scope of services. Both ARKSYS and Metropolitan enjoy an excellent reputation in their areas of business and we consider them to be quality partners for this venture.”

Lunsford Bridges, president and CEO of Metropolitan National Bank, stated, “The addition of First United as a co-owner of DASH represents a milestone in the development of our growing network. With First United as part of our ownership group, DASH will have even greater resources to support its continued expansion in Arkansas and surrounding states.”

“We are very pleased to welcome one of the region’s largest and most progressive financial institutions to DASH. The combination of market coverage and technological innovation this partnership represents will provide real benefits to our network’s participants,” added Donald B. Hatfield, president and CEO of ARKSYS.

First United, with $1.94 billion in assets, is a multi-bank holding company with ten affiliate banks and a non-bank subsidiary, First United Trust Company, N.A., serving 31 communities in Arkansas, Texas and Louisiana. In addition, First United has signed a definitive agreement to purchase Citizens National Bancshares Inc., a $263 million bank holding company headquartered in Hope, Ark. Citizens National Bancshares owns Citizens National Bank of Hope, Ark. and Texarkana, Ark., as well as Peoples Bank and Loan Company in Lewisville, Ark. Also, First United has signed a definitive agreement to acquire First Republic Bancshares Inc., a $149 million bank holding company with locations in Monroe, West Monroe, Ruston, and Rayville, La. Once these mergers are finalized, First United will have approximately $2.3 billion in assets and will serve 38 communities in Arkansas, Texas and Louisiana.

First United’s stock is listed on the NASDAQ National Market System under the symbol “UNTD.”

Metropolitan National Bank is a privately-owned community bank providing commercial and consumer banking and trust services through 17 branch locations and 22 ATMs in Little Rock, North Little Rock and Benton. With $390 million in total assets, Metropolitan is one of the largest banks in Central Arkansas exclusively under local ownership.

ARKSYS is a privately-held software company headquartered in Little Rock, Ark., USA and is a premier provider of effective payment and financial transaction delivery systems. The company offers comprehensive ATM, POS and debit card packages, EFT network solutions, interactive voice response, smart card consulting, international credit card systems, and Internet and intranet banking offerings for cash management and home banking.

DASH’s home page address is [www.arksys.com/dash.htm][1].

[1]: http://www.arksys.com/dash.htm


Casino Card

MBNA and MS-based Casino America, Inc. rolled out their new ‘Isle of Capri Casino MasterCard’ Wednesday. Cardholders will earn cashback as well as receive discounts at Capri Casino food and beverage outlets. Casino America runs four casinos in MS and LA and has two riverboat casinos operating out LA. The company recently broke ground for a new ‘Isle of Capri’ casino in Colorado.


Beneficial Posts 4Q Loss

Beneficial Corporation reported Wednesday a net loss after special charges of $12.8 million, or $0.25 per share, for the fourth quarter of 1997, compared to earnings of $23.3 million, or $0.39 per share for the fourth quarter of 1996. In accord with the new accounting rule, all earnings per share numbers are now presented on a diluted basis. Fourth quarter 1997 results were reduced by a $27.8 million, or $0.51 per share, net aftertax provision for the planned disposition of the Company’s German consumer banking subsidiary, and by a total of $18.7 million in aftertax ($31.1 million pretax), or $0.34 per share, of special charges. Before all of these charges, core operating fourth quarter diluted earnings per share total $0.60.

The $18.7 million in aftertax charges relate to Beneficial’s overall restructuring and reorganization plan. The charges consist of additions to litigation reserves, writedowns of real estate holdings on Harbour Island and elsewhere that are in the process of being sold, and charges related to the reorganization and restructuring program.

For the full year, net income fell 10% to $253.7 million, from the 1996 record level of $281.0 million. Comparable diluted earnings per share declined 10% to $4.54, from $5.05 in 1996. Excluding the fourth quarter special charges, proforma 1997 core diluted operating earnings would have been $5.39 per share, or 7% growth over 1996 results of $5.05 per share.

Finn M. W. Caspersen, chairman and chief executive officer, commented, “Our results reflect the changes taking place at Beneficial. Although earnings and profitability are not yet at acceptable levels, we are pleased that fourth quarter earnings before the special charges rose from 1996 levels. We are well into the initial stages of the loan office re-engineering effort, and branch personnel are excited about the systems and process improvements that are in development. The effect of these changes will be to enhance receivables growth and reduce costs over time, leading to improved earnings performance.”

Caspersen continued, “Looking forward, incremental costs of the re-engineering effort will burden near-term operating earnings, before benefits of the re-engineering begin to be realized in 1999. At this time, we are assuming only modest revenue enhancement benefits from the re-engineering effort this year. Accordingly, we expect only low single-digit earnings per share growth in 1998 relative to 1997 core diluted operating earnings of $5.39. As the re-engineering efforts are fully implemented, we project earnings per share growth will improve to at least a 12% rate longer term.

“We are also making very good progress on our other strategic initiatives announced last October — namely, the sale of our Canadian and German subsidiaries. With respect to Canada, we are in the final stages of negotiation with one purchaser and expect to announce quite soon a definitive agreement that will produce a large gain in the first quarter of 1998. Similarly, we are progressing on the sale of our German consumer banking subsidiary. The full anticipated loss on the divestiture of Germany has been recorded in fourth quarter results. As previously announced, the proceeds from the sales are being used to fund a 3 million share buyback program, which has just begun. Finally, we are close to a transaction for sale of our large Hamilton Farm parcel of property in New Jersey, but are not yet at closure.

“Our franchise remains extremely valuable as evidenced by the strong auction of our Canadian business. 1998 will be an exciting year for Beneficial Corporation. Management is extremely optimistic about the potential earnings benefits of both the loan office re-engineering effort and the overall restructuring plan. Both should deliver significant value to our shareholders. We will report on our progress on both scores during the year,” Caspersen concluded.

For the fourth quarter, managed receivables grew $743 million, compared with the all-time record growth of $1,228 million in the fourth quarter of 1996, which benefited from particularly rapid receivables growth from one merchant at Beneficial National Bank USA (BNB USA), the Company’s private-label credit card subsidiary. Managed receivables outstanding ended the year at $17.9 billion, representing a gain of $1.1 billion, or 6% for the year, compared to 1996’s record gain of $2.3 billion, or 16%. Excluding Canada and Germany, which are in the process of being sold, managed receivables gained $1.1 billion, or 7%, to end the year at $16.9 billion.

Fourth quarter net chargeoffs increased 19% to $117.4 million from $98.7 million in the fourth quarter of 1996. As an annualized percentage of average owned receivables, net chargeoffs rose to 3.26% from 2.75% a year earlier, and 2.96% in the third quarter of 1997. On the basis of managed receivables outstanding, net chargeoffs rose to 2.73% from 2.37% of receivables in the fourth quarter of 1996, and 2.50% in this year’s third quarter. The increase in the chargeoff rate is due to the continuing higher incidence of consumer bankruptcy in North America, and the expected maturing of BNB USA’s large private-label credit card portfolio.

For the full year, net chargeoffs increased 30% to $412.2 million, from $316.9 million in 1996, and to 2.85% from 2.26% as a percentage of average receivables owned. On a managed receivables basis, net chargeoffs for the full year rose to 2.43% from 2.01% in 1996.

Total owned delinquency at year-end was essentially unchanged from the prior-quarter level. All owned loan and sales finance balances delinquent two months and greater on a contractual basis increased to 4.24% from 3.38% a year earlier, but declined slightly from 4.26% at September 30, 1997. Including securitized receivables, and examining delinquency of all managed receivables, reveals a similar pattern of 4.02% at year-end, compared to 3.20% a year earlier, and 3.94% at September 30, 1997.

At December 31, 1997, the allowance for credit losses was $559.9 million, or 3.73% of outstanding receivables, compared to $498.2 million, or 3.43% of receivables at the end of 1996, and $525.2 million, or 3.75% of receivables at September 30, 1997. Accordingly, during the fourth quarter, $34.7 million was added to the balance of the reserve. At the year-end level the reserve covers 1997 net chargeoffs 1.36 times, a conservative ratio by industry standards.

This press release contains forward-looking statements based on current expectations that involve a number of risks and uncertainties that could cause actual results to differ materially. The potential risks and uncertainties that could cause actual results to differ materially include the ultimate costs of the systems and process improvements referred to above and the degree to which benefits from the systems and process improvements are realized; the results of the refund anticipation loan business; the ultimate successful consummation of the sale of the Canadian and German subsidiaries; continuing competitive and pricing pressures; continuing increases in the incidence of consumer bankruptcy in North America; and the onset of a recession or a similar downturn in the economic cycle in North America resulting in adverse consequence to the economic health of the consumer. Further information on factors that could affect the Company’s financial results are included in the Company’s filings with the Securities and Exchange Commission, including the Quarterly Report on Form 10-Q for the quarter ended September 30, 1997 and the Annual Report on Form 10-K for the year ended December 31, 1997, which will be filed in March.

Beneficial Corporation is a $17 billion, New York Stock Exchange-listed financial services holding company. Subsidiaries of the Company provide financial services through their various consumer-finance, credit-card, banking and insurance operations located throughout the United States, Canada, the United Kingdom, Ireland, and Germany.

                                    FINANCIAL HIGHLIGHTS
                              Three Months          Twelve Months
                            Ended December 31     Ended December 31
(in millions, except                       %                       %
per share amounts)         1997    1996 Change   1997      1996  Change

Net (Loss)/Income (a)     $(12.8)  $23.3   – %  $ 253.7   $ 281.0 (10)%
Diluted (Loss)/Earnings per
  Common Share(a)         $ (.25)  $ .39   – %  $  4.54   $  5.05 (10)%
Dividends per Common
Share                    $  .57   $ .52   10%  $  2.18   $  1.98  10 %
Shareholders` Equity                           $1,772.3  $1,694.8   5 %
Finance Receivables Owned                     $15,030.2 $14,536.2   3 %
Finance Receivables Managed                   $17,942.9 $16,861.0   6 %
Allowance for Credit Losses as a
  Percentage of Owned Finance
  Receivables                                     3.73%   3.43%
Return on Average Equity                         14.42%  17.38 %
Return on Average Assets                          1.49%   1.76%

    (a) 1997 reflects a $27.8 million aftertax ($.51 per share) provision
for loss on disposal of the Company’s German consumer
banking subsidiary and $18.7 million ($.34 per share) of aftertax special
items relating to additional legal reserves, a writedown of
certain real estate investments and costs associated with the Company’s
re-engineering efforts.