IBAA Bancard announced today a new affiliation with the Virginia Association of Community Banks. With this announcement, the VACB joins 32 state banking organizations that exclusively endorse IBAA Bancard’s merchant program. Forty-two Virginia banks are already participants in IBAA Bancard programs, issuing credit and debit cards at competitive rates.

“Both the VACB and IBAA Bancard provide invaluable service to community banks. I am happy to see them working together to serve the community banks of Virginia,” remarked VACB president and IBAA Bancard Director Ron Miller.

“We are very pleased with the quality service of IBAA Bancard and we recommend them as a credit card and merchant service provider to all of our member banks,” said Patricia Satterfield, the state organization’s executive director. “With Bancard, our members can add a profitable product, maintain their independance and give their customers the best service available.”

“It is a great pleasure to welcome the Virginia Association of Community Banks as the newest addition to the IBAA Bancard family of state associations,” noted IBAA Bancard Chairman Richard Mount.

IBAA Bancard was launched in 1985 by the Independent Bankers Association of America and providers community banks with the opportunity to become independent issuers of Visa and MasterCard credit and debit cards. IBAA Bancard is the only national card program dedicated exclusively to the payment system needs of the nation’s community banks.


First Omni Gets $28 million for Bell Atlantic Cards

Allied Irish Banks, p.l.c. (AIB) (NYSE: AIB; AIBPR; FMBPR) today announced that its wholly-owned US subsidiary, First Maryland Bancorp, has reported earnings of $53.5 million for the three months ended September 30th, 1997, a 58.8% increase on 1996. These results include an after-tax gain of $17.4 million from the sale of bankcard loans. Excluding this gain, earnings for the quarter were $36.1 million reflecting an underlying growth of 10% in the core business of both First Maryland and Dauphin.

During the quarter First Maryland sold $360 million of bankcard loans originated under a co-branding arrangement with Bell Atlantic to Chase Manhattan Corporation. The sale resulted in a pre-tax gain of $28.2 million including attributable allowance for credit losses and costs associated with the sale.

For the nine months period ended September 30th, 1997, First Maryland announced earnings of $123.5 million, representing a 28.2% increase over the comparable period in 1996. Excluding the gain from sale of bankcard loans, earnings for the nine months ended September 30th, 1997 were $106.0 million, an increase of 10.1%.

On July 8, 1997 AIB Group completed its merger with the former Dauphin Deposit Corporation which is now a wholly owned subsidiary of First Maryland Bancorp. The third quarter results include the impact of the acquisition of Dauphin which performed strongly and in line with our expectations.

Highlights of First Maryland’s underlying performance for the third quarter were strong growth in retail lending (+14.5%) and commercial lending (+8.5%) since December 1996; and good growth in deposit service charges (12%) and trust and advisory fees (22%) over the comparative period in 1996.

Commenting on the results, Tom Mulcahy, AIB Group Chief Executive said: “The strong third quarter earnings were attributable to continued growth in our core retail, corporate and trust businesses, while we also made significant progress in the integration of the Dauphin franchise. With the completion of the Dauphin acquisition, we are now positioned to take advantage of our leading market share in the Harrisburg/Baltimore corridor while continuing the process of integrating the Dauphin franchise.”

Asset quality remains strong with non-performing assets of $89.7 million amounting to 0.52% of total assets. Non-performing loans of $72.0 million were covered 244% by total provisions of $175.5 million.

First Maryland Bancorp is the holding company for the First National Bank of Maryland, Dauphin Deposit Bank, The York Bank and First Omni Bank. Headquartered in Baltimore, First Maryland operates 291 branches and nearly 400 ATMs from southern Pennsylvania through Maryland and the District of Columbia and into northern Virginia. First Maryland currently has assets of $17.3 billion.


Consolidated Statements of Condition

September 30 December 31 September 30
1997 1996 1996
(in thousands)
Cash and due from banks $963,763 $842,032 $826,779
Money market investments 101,233 75,260 46,896
Investment securities
available-for-sale 4,320,034 2,552,620 2,801,694
Loans held-for-sale 434,438 150,742 159,885
Loans, net of unearned income of
$175,408, $130,026 and $121,251:
Commercial 2,827,189 1,731,031 1,787,747
Commercial real estate 2,228,170 1,453,244 1,418,975
Residential mortgage 1,045,602 833,045 838,208
Retail 2,509,844 1,380,767 1,340,145
Bankcard 142,510 596,474 468,190
Leases receivable 730,501 438,060 399,495
Foreign 394,473 365,824 362,401
Total loans, net of
unearned income 9,878,289 6,798,445 6,615,161
Allowance for credit losses (175,462) (154,802) (170,529)
Loans, net 9,702,827 6,643,643 6,444,632

Premises and equipment 195,026 106,701 106,254
Due from customers on acceptances 10,987 8,725 9,878
Intangible assets 1,076,027 98,847 107,840
Other assets 459,991 312,454 338,039
Total Assets $17,264,326 $10,791,024 $10,841,897


Domestic deposits:
Noninterest bearing deposits $2,629,276 $2,248,252 $2,224,720
Interest bearing deposits 9,028,348 5,135,616 5,130,774
Interest bearing deposits in
foreign banking office 194,640 113,830 142,896
Total deposits 11,852,264 7,497,698 7,498,390
Federal funds purchased and
securities sold under
repurchase agreements 1,349,423 533,547 609,980
Other borrowed funds, short-term 805,393 821,477 647,236
Bank acceptances outstanding 10,987 8,725 9,878
Accrued taxes and other liabilities 585,150 297,525 309,501
Long-term debt 409,971 229,742 554,729
Guaranteed preferred beneficial
interests in Company’s junior
subordinated debentures 295,758 147,113 –
Total Liabilities 15,308,946 9,535,827 9,629,714

Redeemable preferred stock 7,847 7,700 9,000

Total stockholders’ equity 1,947,533 1,247,497 1,203,183
Total liabilities, redeemable
preferred stock and
stockholders’ equity $17,264,326 $10,791,024 $10,841,897

Consolidated Statements of Income

Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
(in thousands) (in thousands)

Interest and fees on loans $200,495 $130,600 $476,305 $384,869
Interest and dividends on
investment securities
Taxable 66,044 40,341 143,530 125,008
Tax-exempt 5,186 1,572 7,970 4,842
Dividends 1,388 455 2,761 1,035
Interest and fees on loans
held-for-sale 7,554 2,467 11,550 6,571
Interest on money market
investments 2,606 3,054 15,786 11,334
Total interest and
dividend income 283,273 178,489 657,902 533,659

Interest on deposits 96,626 51,736 197,807 152,706
Interest on federal funds
purchased and other
short-term borrowings 31,814 15,330 74,395 54,710
Interest on long-term debt 7,596 9,457 16,668 27,782
Interest on guaranteed preferred
beneficial interests in Company’s
junior subordinated debentures 5,327 – 14,735 –
Total interest expense 141,363 76,523 303,605 235,198

NET INTEREST INCOME 141,910 101,966 354,297 298,461
Provision for credit losses 7,434 2,000 26,634 6,000

PROVISION FOR CREDIT LOSSES 134,476 99,966 327,663 292,461

Gain on sale of bankcard loans 28,155 – 28,155 –
Service charges on
deposit accounts 26,437 20,376 69,978 58,791
Mortgage banking income 18,110 10,904 30,981 22,810
Trust fees 14,330 7,470 31,177 20,920
Servicing income 8,489 7,401 20,515 19,236
Credit Card income 7,385 2,056 12,545 8,262
Securities gains (losses), net (230) (126) 278 175
Other income 16,830 9,303 43,276 29,865
Total non interest income 119,506 57,384 236,905 160,059

Salaries and wages 74,141 47,325 168,005 134,458
Intangible assets
amortization expense 16,218 2,680 20,722 6,018
Other personnel costs 14,835 9,691 37,553 34,664
Equipment costs 11,895 8,103 28,949 24,474
Net occupancy costs 10,550 8,511 26,689 23,683
Other operating expenses 41,624 26,713 88,479 78,206
Total non interest expenses 169,263 103,023 370,397 301,503

INCOME BEFORE INCOME TAXES 84,719 54,327 194,171 151,017
Income tax expense 31,190 20,625 70,715 54,712
NET INCOME $53,529 $33,702 $123,456 $96,305


Concord EFS Up 60%

Concord EFS Inc. and subsidiaries (NASDAQ/OTC: CEFT) (the company) reported third quarter earnings per share of $0.18, up 50% from the same quarter of the prior year.

Other third quarter results include revenue of $64,716,208, up 47%, and net income of $11,422,497, up 60%.

For the nine months ended Sept. 30, 1997, the company reported earnings per share of $0.47, up 52%, revenue of $168,519,856, up 42%, and net income of $29,485,734, up 63%, when compared to the same nine month period of the prior year.

“The quarter was highlighted by the accelerated growth in the bankcard processing business. The company continues to execute its plan in rolling out new merchant locations in the supermarket, retail and oil & gas niches if the business,” said Dan Palmer, chairman and CEO. Palmer added, “The company also continues to benefit from changes in the manner in which consumers pay for goods and services from the traditional checks and cash to credit and debit card transactions.”

The digested performance is:

Quarter Quarter Nine Months Nine Months
Ended Ended Ended Ended
9/30/97 9/30/96 9/30/97 9/30/96

Revenue $ 64,716,208 $ 44,051,002 $168,519,856 $118,803,414

Operating Income 14,600,040 10,157,783 38,110,119 25,914,483

Net Income 11,422,497 7,148,529 29,485,734 18,079,339

Earnings Per
Share $ 0.18 $ 0.12 $ 0.47 $ 0.31


Citibank Oscillates

It was an up/down quarter for Citibank as its card portfolio ROA dropped to 1.82% from 3.55% a year ago. Global card net income dropped 39% compared to 3Q-96, from $241 million to $147 million. Card earnings were affected by a number of factors including a $95 million restructuring charge, a 3% decline in U.S. card accounts and a 5.58% chargeoff rate (based on average loans) for the U.S. portion. At the end of the third quarter Citibank’s YTD U.S. card volume totaled $74.9 billion. Citi’s worldwide card account base is 36 million with 24.3 million U.S. accounts. Citi continues to be active overseas as it now has 22 million cards-in-force (including Diners Club) in Latin America, Asia and Europe.



VISA and MasterCard’s Bankruptcy Issues Council took off the gloves yesterday by attacking the National Bankruptcy Review Commission’s bankruptcy reform proposals. BIC said the BRC is bitterly divided on consumer bankruptcy issues as four of nine commissioners have signed a 70-page, sharply-worded dissent. BIC said the BRC has wasted nearly $2 million of taxpayer dollars over three years and has yet to agree on a consensus framework for overhauling bankruptcy laws. BIC says the BRC has produced nothing but a mishmash of smaller measures, mostly on 5-4 votes. BIC has said it’s up to Congress to develop meaningful reform.


MasterCard Completes E-Commerce Tests

MasterCard First Company to Introduce SET Pilots in Every Region of world with Banamex’s SET implementation in Latin America

MasterCard International announced today that it has successfully completed the testing phase of its secure electronic commerce initiative and is now focusing on global commercialization to meet the demand for a reliable, safe and convenient way to buy and sell on the Internet.

The announcement was made at a meeting of MasterCard’s Electronic Commerce Advisory Group, which was attended by representatives of more than 30 MasterCard member financial institutions from around the globe.

During the meeting, Banamex, a leading Mexican bank with 50% of the international credit card acquiring business in that country, announced its plan to tap MasterCard’s global experience to create an online travel shopping mall. The new site will demonstrate ways to conduct business profitably and safely on the Internet, allowing Banamex and its merchant partners to reach out to an international customer base. Travel agents, tour companies, airlines, hotels, resorts and car rental companies will participate in the Banamex Internet site, which is expected to see its first transaction in December of this year.

MasterCard’s electronic commerce pilots today span every region of the world. MasterCard is involved in 67 electronic commerce pilots in 32 countries. These pilots involve nearly innovative 90 members that represent more than 90% of MasterCard’s volume.

“Today, electronic commerce is poised to go mainstream,” said Steve Mott. “The successful coordination of MasterCard implementations around the globe has set the stage for a global wave of electronic commerce as we move from the pilots into commercialization.”

The Banamex program will use the most recent version of the SET Secure Electronic Transaction* protocol, 1.0, creating a secure and convenient way for consumers to book travel services online.

“With more than $6 billion in international tourism receipts coming into Mexico in 1996, the potential for international travel sales is enormous,” said Marco Antonio Giardiello, of Banamex. “We believe there is an incredible opportunity to connect Mexican retailers with a global customer base reliably and safely with a secure Internet site.”

The market for electronic commerce in Latin America is expected to grow dramatically over the next several years, mirroring global estimates for electronic commerce. For example, in 1996 visitors to Cancun booked 4000 hotel rooms online — without any coordinated effort to promote online reservations. With a secure electronic commerce initiative and the marketing support surrounding the Banamex effort, that number could grow exponentially.

Global Innovation

In addition to Banamex, MasterCard supports the efforts of innovative members around the globe that are working on the leading edge of electronic commerce:

— In July 1997, the Swiss financial association Telekurs and Europay implemented an electronic commerce program using SET 1.0 software and are conducting transactions.

— In South Africa, Boland Bank has been using SET 1.0 software since July 1997.

— In Japan, Fuji Bank and UC Card are conducting the world’s largest SET-based program, involving more than 100,000 cardholders. These partners are looking even farther ahead, demonstrating the potential of PIN-based debit cards for Internet transactions because consumer demand in Japan calls for this type of payment vehicle for Internet commerce.

Combined, these initiatives have seeded the market and created a ground swell of support from members, merchants, technology vendors and consumers. MasterCard views its role as providing leadership and direction to the constantly evolving, fluid environment known as electronic commerce.

Three-phase strategy

The business case for electronic commerce rests on the need for a secure, convenient, cost-effective and reliable infrastructure which seamlessly connects buyers and sellers together in a global marketplace. “Building this business case requires three distinct yet connected phases to be successful: creating the technological capability, making electronic commerce commercially viable, and expanding the options and services available to online participants,” said Jerry McElhatton, executive vice president of MasterCard International and president of Global Technology and Operations. “We’ve been successful in helping banks and merchants understand how they can profit from the new opportunities available to them in the online world, and have placed strong emphasis on creating an open, industry standard that will facilitate global electronic commerce.”

Phase 1. The focus of MasterCard’s efforts during the first phase of its three-phase strategy was the creation – with Visa International and a wide range of industry-leading companies – of the SET Secure Electronic Transaction* protocol.

Phase 2. In the second phase of its electronic commerce plan, which MasterCard announced today at its Electronic Commerce Advisory Group meeting, MasterCard is creating a global, commercially viable network of merchants, financial institutions and cardholders. MasterCard’s role in this move toward commercialization include:

— Assisting its members in seamlessly transitioning to SET 1.0 software implementations when those systems are production-ready.

— MasterCard will conduct merchant promotions and consumer education campaigns to raise awareness of online commerce.

— MasterCard will begin linking the programs of its members to create a coordinated, cohesive program that will allow financial institutions, cardholders and merchants around the globe to conduct electronic commerce in the virtual marketplace.

Phase 3. MasterCard’s global reach and technological strengths offer the ability to build alliances that deliver electronic commerce solutions that meet market needs. In addition to promoting SET as the best available solution available today to create a global electronic commerce marketplace, in the third phase of MasterCard’s electronic commerce plan, it will:

— Create an even broader electronic commerce platform – one that uses cutting edge technologies (to make electronic commerce better faster, more cost effective).

— Introduce new payment systems and vehicles (chip, debit, electronic cash, web television, screen phones, etc.)

— Develop on solutions that tap the enormous potential of Mondex chip technology for payments over the Internet.

MasterCard International, a payments company with one of the world’s most recognized brands, is dedicated to helping more than 23,000 financial institutions around the world offer consumers a variety of payment options. MasterCard remains focused on helping shape the future of money by expanding acceptance of its global brands (MasterCardr, Maestror, Mondex(tm) and Cirrusr, the world’s largest ATM network) and maintaining reliable, secure networks facilitating global value exchange. MasterCard has 400 million credit and debit cards that are accepted at more than 14 million merchant, cash and ATM locations worldwide. In 1996, gross dollar volume generated exceeded $550 billion. MasterCard can be reached through its World Wide Web site at .


Hypercom Tests Dual Terminal in NYC

Now that the long-awaited Visa Cash/Mondex interoperability pilot program is underway on New York’s Upper West Side, one point of sale (POS) terminal manufacturer, Hypercom Inc., is also testing merchant acceptance of an integrated terminal system that accepts both smart card and credit card transactions.

The Visa Cash/Mondex test is being sponsored/conducted under the joint auspices of MasterCard, Visa, Chase Manhattan and Citibank, and involves approximately 500 merchants on the upper west side of Manhattan in an area west of Central Park from West 60th to West 96th Streets.

“This pilot is as much a test of consumer and merchant acceptance of smart card technology as it is the interoperability of the two electronic cash systems,” said Howard Mandelbaum, Director of Smart Card Technology for Hypercom Inc., the world’s largest independent provider of payment transaction technologies. “For the participating merchants who already accept credit cards, the Hypercom terminal means they are not forced to contend with two different machines taking up valuable counter space.”

The Hypercom solution consists of a T7P integrated POS terminal and printer and the S7SC-Quad SIM Smart Card PIN pad, and is the only terminal in the test able to process both smart card and credit card transactions. Because the printer is integral to the unit, it is able to generate duplicate customer/merchant receipts of each transaction. It is compatible with the latest release of the Europay, MasterCard, Visa (EMV) specification and recently passed Type Approval testing by Mondex International. The terminal incorporates a captive IC card reader that prevents the card from being removed by the consumer during the transaction to avoid an inadvertent corruption of the data in the card’s EEPROM memory.

Hypercom terminals are deployed through NOVUS® Services.

During the Visa Cash/Mondex test, Chase Manhattan and Citibank are each issuing approximately 25,000 Smart Cards which participants can use as “electronic wallets.” Value can be transferred into the cards from local Chase Manhattan or CitiBank ATM machines (which have been modified to accept smart cards for the test).

Under the Mondex system, value can then be transferred from the cardholder’s card directly to the merchant’s card through the merchant’s POS Smart Card terminal. At the end of the day, the value that has accumulated in the merchant’s card can be transferred to the merchant’s bank account.

Hypercom Inc.

Hypercom Inc. is a leading supplier of point-of-sale (POS) hardware, software and network payment automation products. For more than a decade, Hypercom has been providing solutions for delivering and processing financial transactions which enable end users to easily add evolving payment applications and expand their POS networks. Headquartered in Phoenix, AZ, Hypercom markets its products in more than 50 countries via 65 global distributors. John Marshal is St. VP of Sales and Marketing for Hypercom.


NOVUS Services, a business unit of Morgan Stanley, Dean Witter, Discover & Co., operates the Discover® Card, the NOVUS® Network and a growing number of new card brands accepted at all NOVUS Network locations.

NOVUS Network

The NOVUS Network, the third largest credit card network in the United States, consists of merchant and cash access locations that accept the Discover Card and other NOVUS Card brands.


Banc One Passes 40 Million Cards

BANC ONE CORPORATION, Columbus, Ohio (NYSE: ONE) reported earnings for the 1997 third quarter and nine months of $433.2 million ($0.73 per common share) and $830.9 million ($1.40 per common share), respectively. This compares with $412.8 million ($0.69 per common share) and $1.231 billion ($2.04 per common share) in the same year-ago periods.

Adjusting for the impact of the 1997 first quarter announced accounting adjustment by First USA related to the recognition of securitization gains, third quarter operating earnings would have been a record $480.2 million, up 16 percent, or $0.81 per common share, up 17 percent, from the year-ago quarter. On the same basis, and excluding the 1997 second quarter charges related to the acquisition of First USA and other strategic initiatives, nine month operating earnings would have been a record $1.3 billion, up 6 percent, or $2.21 per common share, up 8 percent, from the same prior-year period.

John B. McCoy, Chairman and Chief Executive Officer of BANC ONE CORPORATION, said, “This was a spectacular quarter for BANC ONE. Not only did we produce strong earnings, but the operating ratios improved in most areas. We have established great momentum and energy in loan growth, particularly in the credit card business under First USA’s management. We are also very much encouraged by the decline in credit losses. We expect continued strong performance for the remainder of 1997 and throughout 1998. We are also pleased with the announcement that was made on October 20 that First Commerce in Louisiana plans to join BANC ONE in early 1998.”

Earnings strength was fueled by continued strong managed loan growth, a wider managed net interest margin, and strong revenue growth which was partially offset by higher expenses associated primarily with business development.

Average managed loans and leases increased during the 1997 third quarter at an annualized rate of 13 percent. Managed loans include the total of on- balance sheet loans, loans sold with servicing retained excluding securitized mortgages, and loans held for sale. Average managed consumer loans, excluding credit cards, increased at an 11 percent annualized rate.

During the 1997 third quarter, average managed credit card loans increased at an annualized rate of 27 percent with a record 2.3 million new credit card accounts opened, exceeding the previous record of 2.2 million set last quarter. At September 30, 1997, managed credit cards totaled $38.9 billion, up $2.8 billion from the end of the prior quarter with Cardmembers totaling 40.4 million, up 2.6 million.

The managed net interest margin in the 1997 third quarter increased to 6.35 percent from 6.25 percent in the second quarter. This resulted from a combination of factors, but primarily was attributable to a better earning asset mix reflecting the planned sale of low-margin investment securities and generation of higher-margin consumer and credit card loans.

Noninterest income totaled $1.1 billion, up $272.4 million from the 1997 second quarter reflecting growth in a number of fee income businesses, but primarily credit card servicing income and venture capital gains.

Noninterest expense totaled $1.5 billion, up $148.4 million from the second quarter after excluding the second quarter’s one-time charges primarily reflecting higher business growth and development costs.

Net charge-offs during the 1997 third quarter totaled $289.4 million representing 1.34 percent of average loans and leases, down from $293.8 million or 1.42 percent in the second quarter. Net charge-offs on managed credit card loans declined to 5.78 percent during the 1997 third quarter from 6.22 percent in the prior quarter. Managed credit card delinquencies over 90 days declined to 2.02 percent at September 30, 1997 from 2.11 percent at June 30, 1997.

Nonperforming assets at September 30, 1997 represented 0.58 percent of period-end loans and leases, little changed from the 0.53 percent level at the end of the second quarter. The September 30, 1997 allowance for loan and lease losses, expressed as a percent of period-end loans and leases, was unchanged at 1.62 percent.

Capital levels remained strong. The September 30, 1997 total equity to assets ratio was 8.92 percent, up 39 basis points from June 30, 1997, with the tangible common equity to tangible assets ratio at 7.92 percent, up 40 basis points.

BANC ONE CORPORATION had total managed assets of $142.9 billion, total assets of $113.1 billion, and common equity of $9.9 billion at September 30, 1997. BANC ONE operates banking centers in 12 states. BANC ONE also owns several additional corporations that engage in a full range of financial services. Information about BANC ONE’s financial results and its products and services can be accessed on the Internet at: ; through InvestQuest at: ; or through Fax-on-demand at: 614-844-3860.


First USA Paymentech Sued By Shareholders

On October 17, 1997, a securities class action lawsuit was filed in the United States District Court for the Northern District of Texas, Civil Action No. 3-97-CV2563-P, on behalf of all persons who purchased or otherwise acquired the common stock of First USA Paymentech, Inc. (NYSE: PTI, “Paymentech” or the “Company”) between April 15, 1997 and September 24, 1997, inclusive (the “Class Period”).

The complaint alleges the Paymentech and certain officers and directors of the Company during the relevant time period violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, by, among other things, misrepresenting material information concerning the Company’s revenues, earnings, net worth and prospects for growth.

In particular, the complaint alleges that Paymentech failed to disclose that at all relevant times the Company was experiencing a dramatic slowdown in sales due to its acquisition by a new majority owner, Banc One Corporation (“Banc One”) and that Company’s acquisition activity also slowed dramatically for the same reason. Banc One effectively became a majority owner of Paymentech when it agreed to acquire Paymentech’s then-majority owner First USA, Inc., in January 1997. The complaint also charges defendants with artifically inflating the Company’s reported financial results for its fourth fiscal quarter of 1997, the period ending June 30, 1997, by failing to timely write-down obsolete inventory and impaired asstes. The Company’s declining earnings, slowing growth and inflated net worth were effectively hidden from the market until September 24, 1997, when the Company admitted that it had materially overstated its asset value and earnings for the fourth quarter of 1997, that it would be revising and restarting those results, and that it would not meet analysts’ expectations for the first quarter of fiscal 1998. Because of the issuance of a series of false and misleading statements concerning Paymentech’s business and defendants’ concealment of matters regarding the deteriorating business of the Company, the price of Paymentech common stock was artifically inflated during the Class Period. During the time when certain material information was concealed from investors, officers of Paymentech sold large blocks of Paymentech stock at artifically inflated prices.

Plaintiff seeds to recover damages on behalf of class members and is represented in this action by the New York law firm of Wolf Popper LLP and the Texas law firm of Puls & Chambers, L.L.P. Wolf Popper has extensive experience representing shareholders in class actions and has successfully recovered billions of dollars for defrauded investors and shareholders. Its reputation and expertise in shareholder and other class action litigation has been repeatedly recognized by the courts.


U.S. Bancorp & 3GI Smart Card Partnership

Smart Card Integrator to Work with Corporate Payment Systems Division to Develop Multi- Application Systems for Public and Private Enterprises

U.S.Bancorp, Corporate Payment Systems division and 3-G International, Inc., Springfield, VA today announced an agreement to jointly develop and market multi-application smart card systems.

As the largest and most experienced issuer of Visa(R) corporate and purchasing cards, U.S. Bancorp plays a key role in official government purchase cards as the sole contractor for the highly successful International Merchant Purchase Authorization Card (I.M.P.A.C.(R)) program. 3GI is the leading smart card integrator and software development company in North America. The company has six years experience in designing and building multi-function smart card systems for the Federal Government, having contracts with the General Services Administration (GSA), Housing and Urban Development (HUD), the State Department, Department of Defense (DoD), and for smart card security at the 1997 presidential inauguration. Within one DoD project, the MARC Program, 3GI has issued well over 100,000 multi- application smart cards.

“This is a natural progression of our leadership role in the arena of travel, purchasing and government payment systems,” said Steven M. Putney, President, Corporate Payment Systems. “Our intent is to offer our customers cutting edge smart card technology in totally secure, multi-application systems.

“We’re particularly pleased to have 3GI as our partner in this venture, because they have designed and implemented some of the world’s most advanced smart card projects. This partnership extends not only to the Federal Government, but also to several projects in the commercial market.”

Indicators point to the Federal Government taking the lead in implementing smart card technology in the United States. The DoD is already testing smart cards for mobility and readiness processing, as well as identification. 3GI helped launch these projects and other tests that include stored value cards, emergency medical documentation, food service and prison management. Smart Card testing is expected to include government purchasing and travel cards, and expanded use of the existing fleet fuel card system.

“Our partnership with U.S. Bancorp is a direct result of our many successes in building large-scale smart card systems,” said Thomas L. Gregg, President, 3G International, Inc. “We have developed flexible PC and terminal software and leading edge development tools which allow a single card to support multiple applications very securely. Our software also solves many of the card interoperability problems in the smart card industry today. Through our partnership with U.S. Bancorp and the work we are doing jointly with Visa, 3GI is one of the few companies combining chip-based payment functions with non-financial applications on the same card. Our partnership with U.S. Bancorp for these projects is really a natural for both companies.”

Minneapolis-based U.S. Bancorp (NYSE:USB), is the result of a merger between First Bank System, Inc. of Minneapolis and U.S. Bancorp, formerly headquartered in Portland, Oregon. With $72 billion in assets, USB is the 14th largest bank holding company in the nation, operating more than 1,000 banking offices in 17 states: Minnesota, Oregon, Washington, Colorado, California, Idaho, Nebraska, North Dakota, Nevada, South Dakota, Montana, Iowa, Illinois, Utah, Wisconsin, Kansas and Wyoming. The company provides comprehensive banking, trust, investment and payment systems products and services to consumers, businesses and institutions. It operates a network of 4,500 ATMs throughout the U.S. and 24-hour, seven days a week telephone customer services centers. The company is the largest provider of Visa corporate travel and purchasing cards in the world and one of the largest providers of corporate trust services in the U.S.

3-G International is headquartered in Springfield, VA. The company has offices in Williamsburg, VA, Honolulu, HI, and Chengdu, PRC, and currently provides smart card solutions for health care, network access, physical access security, payments, transportation and specialized government applications.


60,000 Gemplus Cards for Univ of Toronto

Gemplus Corporation (Gemplus) today announced that it will supply 60,000 Gemplus microprocessor smart cards for the University of Toronto’s closed system that is being developed by CyberMark. The cards will be used for patron identification in the library network, cashless payment of library fees and food services, and card-based control and payment for photocopiers, computers, and laser printers.

The University of Toronto system brings the total number of cards supplied by Gemplus to closed systems to more than 1 million.

CyberMark provides consulting, integration, card issuance, and application development services for higher education, corporate campuses, government entities, stadiums, and resorts.

In addition to the cards it will be supplying to CyberMark for the University of Toronto, Gemplus has supplied more than 120,000 smart cards to other universities in North America. This list includes other CyberMark clients such as Florida State University, Villanova, Skidmore College, Ohio Dominican College, and Guilford College as well as other vendors’ clients including Eastern Washington University, University of Pembroke, and Kansas State University.

In the retail market, Gemplus has supplied more than 150,000 cards for loyalty and/ or stored value applications.

In the government arena, Gemplus has supplied close to 200,000 smart cards for closed systems at Fort Knox, Parris Island, the USS Yorktown, Hickam Air Force Base, GSA Headquarters, West Point, the Air Force Academy, and for the MARC (multi-technology automated reader card) program, a personnel prototype system being evaluated by the Department of Defense. Additionally, it is providing approximately 100,000 smart cards to closed systems being developed for the various sports stadium projects, and 400,000 cards for coin laundry systems.

Gemplus uses the Federal Registry’s definition of a closed system as “any environment in which system access is controlled by persons who are responsible for the content of electronic records that are on the system.”

“Closed systems are really a microcosm of the anticipated widespread use of smart card technology in society at large,” said Charles Cagliostro, Gemplus’ director of emerging markets. “Gemplus and its partners have been pioneers in developing these multi-application systems, and have a wealth of experience in quickly deploying turnkey smart card solutions. These systems give Gemplus the ability to plan products which have the hooks necessary for open system multi-application cards.”

“Closed systems are where it’s at in today’s smart card industry,” said Bill Norwood, chip card visionary and vice president of CyberMark. “We have implemented the CyberMark smart card solution at six institutions in the past year, and we have two more already scheduled for the spring. The power of the smart card is its multi-applicational potential, and closed systems have immediate multi-applicational needs.”

About Gemplus Corporation

Gemplus Corporation is the North American subsidiary of Gemplus Group (Gemplus), the world’s leading producer of magnetic stripe and smart cards. Gemplus manufactures and sells memory cards, microprocessor cards (both contact and contactless), magnetic stripe cards, as well as electronic tags. It also designs and markets software, terminals and systems; and provides personalization, consultancy and training services to offer its customers comprehensive solutions.

In 1996, Gemplus’ total sales were $440 million. By the end of 1997, the company will have a production capacity of 900 million plastic and smart cards.

Gemplus sells its products worldwide for such applications as public and cellular telephony, financial transactions, loyalty, transportation, education, healthcare, gaming, identity, access control, pay TV, security for computer networks and electronic commerce. Information about Gemplus’ products and services can be found on the World Wide Web at: .

About CyberMark

CyberMark provides card technology consulting, integration, mass issuance, and application development services for higher education, corporate campuses, government entities, stadiums, resorts, and gaming facilities. More than one million individuals utilize CyberMark cards at installations ranging from 1,000 to 60,000 card holders. For information, visit or call (850) 561-1055.


Neuristics Hies BONY Credit Risk Manager

Neuristics Corporation, providers of advanced decision-support tools for consumer lenders, announced today that Anton Blumberg, formerly a Bank of New York executive, has joined Neuristics as vice president, according to Richard B. Leavy, Neuristics CEO.

“Anton brings to us deep knowledge of credit risk management and loss-control strategy and operations, as well as his experience in developing and utilizing advanced decision-support tools for a leading consumer lending institution,” said Leavy. “His background will assist us in further aligning our products with the needs of our lending-institution clients.”

“The most profitable lenders already recognize that their operations increasingly rely on the use of rigorous analytical tools to manage the lifecycle of accounts – from acquisition through ongoing risk and profitability management to collections, ” said Blumberg. “I am convinced that Neuristics’ decision support tools offer the most highly focused and sophisticated approach to ensuring lender profitability, and I am pleased to be part of this exceptional team.”

Before coming to Neuristics, Anton Blumberg was vice president of the Risk Services Group of the Bank of New York (Delaware). There, he was responsible for all aspects of the bank’s risk containment strategies, including developing, testing, and implementing advanced data mining and data interpretation statistical technologies. He also served as co-chairman of the First Data Resources Client Risk Advisory Group, where he oversaw the formation and implementation of FDR’s strategies and decision support tools on behalf of the company’s client base.

Prior to joining The Bank of New York, Anton Blumberg was vice president of portfolio risk management at First USA Bank, where he co-directed the design and installation of the industry’s first neural fraud-scoring model. Earlier, Blumberg was employed by Mellon Bank as a credit operations manager and credit policy analyst. He holds a BS in finance from Drexel University.

About Neuristics

Neuristics Corporation develops and markets intelligent decision-support tools that enable consumer lenders to uncover new opportunities for profit and to reduce risk and overhead in acquisitions and relationship management. Neuristics clients include major banks, financial transaction processors, and a third of the top 25 credit card issuers. Founded in 1993, Neuristics is a privately held firm based in Baltimore, Maryland.