Hi-Tech Names Signature Exec CEO

The Hi-Tech Group — a privately-held, provider of direct response merchandise and club services has announced the appointment of Alan F. Portelli as President and Chief Executive Officer.

Mr. Portelli had previously served as Executive Vice President of Finance and Admininstration of The Signature Group, Mr. Portelli was the Chief Financial Officer and also had primary responsibility for acquisitions, data base marketing and the Dining à la Card business unit, as well as other administrative duties. Prior to joining The Signature Group in 1989 as Senior Vice President/Finance, Mr. Portelli had been employed by Montgomery Ward for eleven years, where he held positions of increasing responsibility in finance and planning and analysis. He served as an audit supervisor with Touche Ross & Co. before joining Montgomery Ward.

Mr. Portelli earned a Bachelor of Science degree (1969) and a Master of Science degree (1970) in Accounting from the University of Illinois in Champaign. He earned his CPA certification in 1969 and was born in Chicago Heights, Illinois. Mr. Portelli currently resides in Naperville.

For more than 30 years, The Hi-Tech Group has grown its business in the direct response marketing of merchandise and travel and motor clubs, as well as providing telemarketing services and specialized data processing. Headquartered in Chicago, Illinois, The Hi-Tech Group is the leading direct response provider of specialized merchandise for the oil industry. With four locations in Chicagoland, The Hi-Tech Group has annual sales through credit card issuers in excess of $100 million.


Sluggish Third Quarter

As CardWeb, Inc.’s ‘CardData’ third quarter portfolio survey continues, it appears that many issuers realized little, if any, growth in card loans and an actual decline in the number of active accounts since the second quarter. An analysis of nine issuers with receivables in excess of $1 billion, representing about 10% of the industry, shows a 3Q/97 contraction in receivables of 1.4% versus a gain of 2.7% for 3Q/96. Active accounts slipped 1.5% compared to a 1.1% gain last year. CardData’s quarterly portfolio surveys covering receivables, volume, gross accounts, active accounts and cards-in-force, are published in Bankcard Update.

Household $16.0b $16.6 -3.9% 7.3m 7.5m -2.7%
Wells Fargo $7.4b $7.4b +0.1% 3.7m 3.8m -2.6%
Wachovia $5.4b $5.4 +1.2% 2.1m 2.1m +1.0%
Bank NY $4.2b $4.1b +0.8% 1.8m 1.8m -2.9%
USAA FSB $3.6b $3.5b +1.6% 1.7m 1.6m +1.5%
Travelers $1.2b $1.2b NC 0.5m 0.5m +1.4%
Norwest $1.2b $1.2b +1.6% 0.7m 0.7m +0.7%
Crestar $1.1b $1.2b -5.1% 0.5m 0.5m -6.5%
Mercantile $1.1b $1.1b -4.7% 0.5m 0.5m -6.7%
3Q RECV: $41,095,287,528 3Q ACTIVES: 18,767,298
2Q RECV: $41,675,997,994 2Q ACTIVES: 19,059,690
CHANGE: -1.39% -1.5%
Source: CardData/Bankcard Update


Calif Bankruptcy Down

Bankruptcy filings declined slightly in California during the third quarter, ending a three-year series of increases, a public records information service reported.

Third-quarter filings totaled 50,650, up 13.4 percent from 44,565 for the same period last year, and down 5.5 percent from 53,624 for this year’s second quarter, according to CDB Infotek.

Bankruptcy filings in the state followed a nationwide trend of increases and rose consistently from quarter to quarter starting in fourth-quarter 1993 with 26,625, eventually doubling in volume by this year’s second quarter.

“One reason for the increase of the past few years is that declaring bankruptcy doesn’t have the negative impact on personal finances that it use to. That shift in underlying factors may be playing itself out now,” said Rick Rozar, CDB president and CEO.

CDB Infotek, a ChoicePoint company, provides on-line access to public records nationwide. In addition to bankruptcy information, the company provides access to court records, real estate records, business filings and more. The numbers above include Chapter 7 and Chapter 13 bankruptcy filings, the vast majority of which are personal.

Chapter 11 bankruptcy filings totaled 349 during the third quarter, down 15.9 percent from 415 for both the previous quarter and for last year’s third quarter. Chapter 11 filings are business reorganizations.

Residents of Riverside and San Bernardino counties declared bankruptcy at the highest rate, relative to population. Marin County residents had the lowest rate, CDB reported.

Number of Chapter 7 & Chapter 13
bankruptcy filings in California

County/Region 2nd Qtr 3rd Qtr Percent
1997 1997 Change

Los Angeles 16,836 15,990 -5.0%
Orange 4,582 4,231 -7.7%
San Diego 4,739 4,512 -4.8%
Riverside 3,119 2,979 -4.5%
San Bernardino 3,597 3,476 -3.4%
Ventura 1,324 1,188 -10.3%
Southern California Total(a) 34,353 32,540 -5.3%

Alameda 1,870 1,745 -6.7%
Contra Costa 1,402 1,342 -4.3%
Marin 227 198 -12.8%
Napa 109 111 1.8%
San Francisco 803 732 -8.8%
San Mateo 757 696 -8.1%
Santa Clara 1,801 1,805 0.2%
Solano 728 709 -2.6%
Sonoma 552 491 -11.1%
Bay Area Total 8,249 7,829 -5.1%

El Dorado 222 219 -1.4%
Fresno 963 909 -5.6%
Kern 994 875 -12.0%
Placer 365 316 -13.4%
Sacramento 2,339 2,185 -6.6%
San Joaquin 785 751 -4.3%
Stanislaus 734 662 -9.8%
Tulare 420 413 -1.7%
Yolo 168 161 -4.2%
Central Valley Total(a) 7,587 7,110 -6.3%

Monterey 657 642 -2.3%
San Luis Obispo 343 336 -2.0%
Santa Barbara 508 424 -16.5%
Santa Cruz 203 179 -11.8%
Central Coast Total(a) 1,711 1,581 -7.6%

Northern California Total(a) 1,155 1,057 -8.5%
Sierra/Foothills Total(a) 569 533 -6.3%

Statewide 53,624 50,650 -5.5%

(a) includes additional counties


Cyberflex 2.0 Core Released

VISA has endorsed Java as the most flexible, secure and economical technology for its members. The ‘Open Platform’ will first focus on fundamental banking applications such as credit/debit and stored value. Future applications will include loyalty programs, home banking, and telecommunications services. Schlumberger also announced Friday the release of its second Java card product ‘Cyberflex 2.0 Core’. Schlumberger says the new card implements functionalities required for multiple applications and increases the amount of rewritable memory by more than 20%.


Open Java Card

Following Friday’s announcement of the release of ‘Java Card API 2.0’, Schlumberger said today it has been selected by VISA International to develop a new generation of multiple-application smart cards based on Java. VISA has endorsed Java as the most flexible, secure and economical technology for its members. The ‘Open Platform’ will first focus on fundamental banking applications such as credit/debit and stored value. Future applications will include loyalty programs, home banking, and telecommunications services. Schlumberger also announced Friday the release of its second Java card product ‘Cyberflex 2.0 Core’. Schlumberger says the new card implements functionalities required for multiple applications and increases the amount of rewritable memory by more than 20%.


Internet Banking for Community Banks

SPARAK Financial Systems and nFront today announced a licensing agreement that will allow community banks throughout the United States to offer secure financial services on the Internet. SPARAK, a Fargo, North Dakota-based core processing provider for community banks, will incorporate nFront’s flagship product, nHome(tm), as its Internet banking solution. Under the agreement, SPARAK will outsource Internet data processing to nFront’s data center in Athens, Georgia.

This agreement enables SPARAK to offer its 210 community bank customers full-service Internet banking, allowing their customers to open new accounts, apply for loans, view account balances and history, transfer funds, pay bills electronically, view personal information on record at the bank, generate reports based on customer activity, download Active Statements into personal financial management software, interact with customer representatives via e-mail, and have access to a bank that is open 24 hours a day, 365 days a year.

“SPARAK is committed to delivering the latest technology to our customers, and we believe that Internet banking is an extremely valuable tool for community banks,” said Steve Anderson, Director of Marketing and co-Founder of SPARAK. “We selected nFront as our solution because of their Internet banking product and their knowledge of the banking industry. While there are a number of companies in the market talking Internet banking, nFront is delivering. By combining our skills, we will have the best solution for our customers.”

Tripp Rackley, President of nFront, said, “SPARAK will jointly market nHome on the national level while providing their customers a completely secure and customizable Internet banking solution. nFront is looking forward to a long prosperous relationship with SPARAK and working with their team of professionals.”

The first of SPARAK’s community banks to take advantage of the nHome offering is Bank of Versailles. Located in Versailles, Missouri, the bank has an asset size of $140 million and three branches. Bank of Versailles considers itself a “niche” bank that mostly targets retirees living near the Lake of the Ozarks region.

“We try to utilize technology whenever available so as to operate more efficiently,” said David Baumgartener, Executive Vice President of Bank of Versailles. “We hope to maximize our employee productivity by allowing our customers to access their accounts via the Internet.”

“We have had a good relationship with SPARAK and feel that their partnership with nFront provides us with an opportunity to expand our market at a fairly low cost and without having to add staff,” continued Baumgartener.

SPARAK was formed in 1984. The company began as a software house providing in-house software development and support to banks using NCR computers. Today SPARAK develops and markets the top rated SPARAK 3000(r) Software System (along with computer and proof hardware manufactured by NCR and others) to community banks across the United States.

SPARAK 3000(r) is a complete account processing system that includes a unique customer CIF database linking all banking modules to include DDA, Savings, C/Ds, Loans and G/L.

nFront provides full service Internet banking solutions for community banks with nHome, its premier Internet Banking software. From opening accounts to paying bills or transferring funds, nHome supports all the functionality of traditional brick and mortar branches and gives community banks the opportunity to do customer specific marketing. In addition, customers will have unlimited banking hours and more personalized service in a secure banking environment. nHome supports the highest level of data encryption available today and runs on the Windows NT operating system. nFront is also a Microsoft Solution Provider. Founded in 1996, nFront owns the registration rights of the www.banking.com domain name.


Wachovia Opens New CC Center

Wachovia Bank Card Services today announced plans to open a credit card customer service center in Chesapeake, Va.

The center will be located in the Crossways facility at 1400 Crossways Boulevard, currently occupied by some Central Fidelity operational functions. The credit card center is expected to employ more than 100 by the end of 1998 and initially will occupy approximately one-fourth of the 50,000-square-foot building. Assuming consummation of its mergers with Central Fidelity Banks Inc. and Jefferson Bankshares Inc., Wachovia Bank Card Services expects to begin operations in Chesapeake in the first quarter of 1998.

“The decision to establish this center is indicative of the growth of our credit card function and the need for additional capacity for providing customer service to our credit card customers,” said Wachovia Chief Executive L.M. Baker Jr. “We are pleased to be able to locate the center in Chesapeake where we will be able to provide continuing employment opportunities for some employees of Central Fidelity and Jefferson.”

Wachovia expects to receive all required approvals and to complete mergers with Central Fidelity and Jefferson by year-end, and to merge their subsidiary banks into Wachovia Bank, N.A., effective March 20, 1998.

Wachovia Bank Card Services is a subsidiary of Wachovia Corporation (NYSE: WB), an interstate banking company with dual headquarters in Atlanta and Winston-Salem, N.C. Wachovia is the 20th largest bank holding company in the U.S. with assets totaling $48.5 billion. Upon completion of its mergers with Central Fidelity, Jefferson and 1st United Bancorp of Boca Raton, Fla., Wachovia will be the 17th largest bank holding company in the country with assets exceeding $60 billion. U.S. Banker magazine recently rated Wachovia Corporation the No. 1 banking organization in the U.S. for 1996 among banking organizations with assets of more than $25 billion.


Sears Card Concerns

Sears’ card loans rose to $27 billion for the third quarter compared to $25 billion for third quarter 1996 but the company is very concerned about adverse industry trends as it heads into the fourth quarter. The company said yesterday: “Sears continues to experience an increase in the rate of delinquencies and charge-offs while a number of other credit card issuers have recently reported a flattening in their charge-off rates. If our delinquency and uncollectible accounts could have a significant adverse effect on the company’s overall operating results in future periods. We are taking steps to mitigate the effect of these trends on earnings, and are assessing their expected magnitude and duration.”


Hypercom/NOVUS Deal

Hypercom Inc., the world’s largest independent supplier of point-of-sale (POS) hardware, software and network payment automation products, has signed as agreement with NOVUS Services, the third largest credit card network in the U.S., to deploy and service Hypercom terminals.

“The agreement is an important piece of our overall strategic plan aimed at keeping NOVUS Services on the leading edge of service and Convenience for our customers,” noted Ken Williams, director, link Services for NOVUS Network.

For Hypercom Inc., which is steadily gaining market share as a global supplier of POS technology, “the agreement with NOVUS Services marks another milestone in our respective expansion efforts,” said Al Irato, President and CEO of Hypercom.

NOVUS Services

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.

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 Marshall is Senior VP of Sales and Marketing for Hypercom. Hypercom’s Internet address is [www.hypercom.com][1]

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


GGP & VISA Expand Agreement

![][1] General Growth Properties (NYSE: GGP), one of the nation’s leading shopping center companies, today announced it has entered into a new marketing partnership with Pepsi-Cola Company and an expanded multi-year, multi-program marketing partnership with Visa U.S.A.

“These innovative Pepsi and Visa U.S.A marketing partnerships not only will result in greater value for our customers, increase mall traffic and build business for all involved parties, but significantly benefit local communities and other national causes,” said John Bucksbaum, GGP’s executive vice president. “They are ‘first-of-their-kind,’ in-mall initiatives that make sense for all three companies.”

In addition to placing Pepsi vendors in key GGP shopping malls across the country, this new agreement allows both Pepsi and GGP to combine forces on national and local marketing and promotional campaigns. To officially kick off the partnership, Pepsi will support GGP’s “Natural Santa Experience” and a food court sales promotion this holiday season. GGP’s naturally-bearded santas will present over two million Christmas cups to children. The association offers enhanced opportunities for Pepsi bottlers and GGP malls to develop local marketing campaigns. The agreement also includes the new “one for the road” initiative where Pepsi vending machines will be placed at GGP mall exits.

“We are very proud of our association with GGP,” said Mairead Martinez, director, New Business, Pepsi-Cola Company. “In our never-ending efforts to connect with consumers in a meaningful way, this agreement further enables us to reach our consumers not only where they live, but also, where they spend leisure time and shop.”

GGP Partnership Initiative with Visa U.S.A Significantly Expanding

The expanded partnership with Visa U.S.A. will add six custom-designed programs that each organization will cross-promote. The first mall program, the NFL Ultimate Week of Football, began on September 1, when GGP shoppers who used their Visa cards(R) began receiving a chance to win mall gift certificates and a grand prize of a trip to Super Bowl XXXII, and the 1998 Pro Bowl. This holiday season, GGP also will be continuing a free holiday gift wrapping service for Visa card users, as well as supporting Visa’s national “Read Me a Story” children’s literacy initiative.

“Visa is excited to continue our relationship with General Growth Properties through this new multi-year partnership,” said Bruce McElhinney, senior vice president of retail marketing at Visa U.S.A. “This marketing alliance is a win-win situation. GGP will benefit from promotions that incorporate other Visa relationships such as the NFL and the Olympics, while Visa will be able to effectively market to GGP’s broad range of customers.”

In September, GGP, along with several additional mall developers, introduced a new, co-branded “Mall VIP” Visa card targeted at frequent shoppers. Shoppers using this Visa card at participating malls are rebated two percent of the value of their purchases in the form of mall gift certificates, while non-mall purchases earn a one percent rebate.

Initially a seasonal program, GGP is now entering the third year of its free holiday gift wrapping service for shoppers using their Visa cards at GGP shopping centers. “The impact of this program last year was impressive,” said Charlie Graves, GGP’s vice president of Consumer Marketing. “GGP wrapped more than $25 million worth of gifts, while Visa converted 37 percent of the program participants to using their Visa card. It was a win-win situation for everyone involved, especially our customers. This year’s gift wrap program will benefit local charities.”

“These partnerships build business by successfully uniting brand marketing initiatives with GGP’s core assets and will reward our mall customers with added value,” added Graves. With more than one billion customer visits annually, Graves predicts more companies will follow the lead of Pepsi and Visa U.S.A.

Graves’ newly created Consumer Marketing department at General Growth is charged with forging additional partnerships in the future. He envisions America’s brands embracing this new medium for face-to-face communication.

The Partners

General Growth Properties is one of the oldest, largest and most experienced shopping center owners, developers and managers in the United States. It currently has ownership interests in, or management responsibilities for, more than 119 shopping malls in 37 states, encompassing approximately 92 million square feet. This includes a mall recently opened in Waterbury, Conn., and another scheduled to open in July, 1998, in Coralville (Iowa City), Iowa. For more information, visit the company website at [http://www.generalgrowth.com.][2]

Pepsi-Cola Company, based in Somers, New York, is a division of PepsiCo Inc. (NYSE: PEP).

Visa is the preferred payment brand and the largest consumer 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 trillion worth of purchases of goods and services in a fiscal year. Visa’s nearly 600 million cards are accepted at more than 14 million worldwide locations, including 370,000 ATMs in the Visa/PLUS Global ATM Network. Visa’s Internet address is [http://www.visa.com.][3]

[1]: /graphic/visa/visalogo.gif
[2]: http://www.generalgrowth.com
[3]: http://www.visa.com


Capital One’s NIM Tops 9.0%

Cap One realized a remarkable quarter as earnings hit $49 million compared to $39 million last quarter and $38 million in the third quarter 1996. During the third quarter, the Company added 868,000 net new consumer accounts, bringing the total to 10.7 million, or a 32 percent annualized growth. Managed consumer loans increased by $736 million to $13.5 billion in outstanding receivables. The managed net interest margin increased to 9.05 percent in the third quarter of 1997 from 8.30 percent in the second quarter of 1997 and 8.35 percent in the comparable period of 1996. This increase principally reflects growth in the Company’s higher-yielding loans, the impact of repricing $700 million in introductory rate credit card loans during the quarter and scheduled increases in fees. The managed net charge-off rate increased to 6.66 percent in the third quarter of 1997, compared with 6.38 percent in the previous quarter. This increase reflects the continued aging of the portfolio and the effect of increases in industry losses. Delinquency rates increased slightly to 6.36 percent as of September 30, compared with 6.33 percent as of June 30.


RSA Used in Gemplus’ Advanced Card

RSA Data Security, Inc., a wholly owned subsidiary of Security Dynamics Technologies, Inc. (Nasdaq: SDTI), today announced that its cryptographic technology is providing the underlying security in Gemplus Corporation’s recently announced GPK4000 smart card.

Gemplus’ smart card features an advanced cryptographic co-processor and is the first public key smart card to combine digital signature, on-board key generation and electronic payment with multi-application functionality. The GPK4000’s cryptographic functionality includes 1024-bit RSA-based digital signature at sub-second speed and 4Kbytes of application memory.

The new GPK4000 card was designed with a number of advanced security features, including an on-board key generation mechanism that ensures the private component of the public key pair that performs the digital signature is never seen outside the card, and also can store industry-standard X.509 certificates in memory.

“Gemplus is a worldwide leader in the design and production of smart cards,” said Jim Bidzos, president of RSA Data Security. “The company’s selection of RSA encryption technology for its advanced GPK4000 product demonstrates once again that RSA’s encryption technology is the product of choice for consumer and corporate electronic commerce applications. Our cryptography provides a strong solution to assure the privacy, authentication and integrity of smart card enabled electronic transactions.”

“In developing the GPK4000 card for the electronic commerce market, we wanted to be sure we incorporated the most advanced security technology,” said Dominique Trempont, president of Gemplus Americas. “With RSA, we know we have the most trusted encryption available to support the card’s authentication, digital signature, and privacy features.”

The Gemplus announcement follows by only one month another major win for RSA in the smart card segment of the security market. In September, RSA announced that Visa International plans to conduct a market trial of RSA public-key encrypted smart cards in the United Kingdom and Japan. The Visa trial will use a Philips Semiconductors P83C858 cryptocontroller chip which features embedded RSA public-key cryptography.

As announced earlier this year, Gemplus’ smart card technology will also be used as part of Security Dynamics’ Enterprise Security Services (ESS) framework. RSA and Security Dynamics plan to use Gemplus technology to provide SecurID smart cards for network security applications such as user authentication and secure, electronic storage of user identification.

Gemplus Corporation

Gemplus is the world’s leading producer of magnetic stripe and smart cards. It 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 Group’s 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: [http://www.gemplus.com.][1]

RSA Data Security, Inc.

RSA Data Security, Inc., a wholly owned subsidiary of Security Dynamics Technologies, Inc., is the world’s brand name for cryptography, with more than 80 million copies of RSA encryption and authentication technologies installed and in use worldwide. RSA technologies are part of existing and proposed standards for the Internet and World Wide Web, CCITT, ISO, ANSI, IEEE, and business, financial and electronic commerce networks around the globe. RSA develops and markets platform-independent developer’s kits and end-user products and provides comprehensive cryptographic consulting services.

Founded in 1982 by the inventors of the RSA Public Key Cryptosystem, the company is headquartered in Redwood City, Calif. Information about RSA can be found at: [http://www.rsa.com.][2]

SecurID is a registered trademark of Security Dynamics Technologies, Inc. All other product and brand names are trademarks or registered trademarks of their respective corporations.

This press release contains forward-looking statements relating to (i) the planned market trial by VISA International of RSA public-key encrypted smart cards in the United Kingdom and Japan and (ii) the planned use by Security Dynamics and RSA of Gemplus technology to provide SecurID smart cards for network security applications, and such statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are delays in product development, undetected software errors or bugs, competitive pressures, technical difficulties, market acceptance of Gemplus smart cards and Security Dynamics’ ESS framework, changes in customer requirements, general economic conditions and the risk factors detailed from time to time in Security Dynamics’ periodic reports and registration statements filed with the Securities and Exchange Commission, including without limitation Security Dynamics’ Registration Statement on Form S-3, as amended (File No. 333-35035), filed on September 5, 1997.

[1]: http://www.gemplus.com
[2]: http://www.rsa.com