BITS Proprietary and Confidential © BITS Regional Value of ECP Bill Walsh Senior Account Executive, SVPCo BITS ECP Forum Birmingham, Alabama January 14, 2003

2 BITS Proprietary and Confidential © BITS Northeast Region – SVPCo ABN AMRO Bankers Trust Bank of NY Chase Citibank Fleet Bank KeyCorp Marine Midland Republic National Summit Bank SVPCo: 12 sites in production Detroit Clearing House: 6 sites in production - multi-lateral Wells Fargo: Bilateral receives in place Southwest Region - SVPCo Chase Frost Bank Wells Fargo Detroit C.H. ECP Background – January 1999

3 BITS Proprietary and Confidential © BITS West Region Bank One (2) KeyCorp (2) Union Bank (2) US Bancorp (2) Wells Fargo (5) South Region Bank of America (4) Bank One BB&T (2) Central Carolina National City PNC Wachovia (8) Midwest Region ABN AMRO (2) Bank of America Bank One (5) Comerica KeyCorp (2) National City (4) US Bancorp Wells Fargo (4) Northeast Region Bank of America Bank of NY (3) Chase Citibank (2) Deutsche Bank Wachovia (3) Fleet Bank (3) HSBC Bank USA (2) KeyCorp Mellon Bank (2) National City PNC Bank (3) Sterling National Southwest Region Bank of America (4) Bank One (2) Chase Frost Bank Wells Fargo 92 Sites in Production - Utilizing ECS Multi- lateral Process ECP Background – December 2002

4 BITS Proprietary and Confidential © BITS ECP Value Overall value to ECS banks estimated at $ million annual for 2002 Each banks business case varies: –Posting decisions (e.g. Statement cycle items) –Interest rates –Rate of return on funds –Fees Similar components

5 BITS Proprietary and Confidential © BITS ECP Process Sending banks transmit files to system –11PM Receiver’s local time Receiving banks post from ECP file –before DDA processing, typically about 1AM Paper cash letter follows ECP and is presentment –2AM to 10AM Paper cash letter is reconciled to the ECP file by the receiving bank Exception Process - various bank platforms Settlement occurs following day

6 BITS Proprietary and Confidential © BITS Major Benefit Components Receiving Bank √Accelerated Posting √Analyzed Accounts √Interest Bearing Accounts √Fee Income (NSF, Uncollected, Credit lines, etc) √Fraud Reduction

7 BITS Proprietary and Confidential © BITS Major Benefit Components Sending Bank √Accelerated Returns √Reduced Clearing Costs √Fraud Reduction Prepare for Future Savings √Transportation √Sorting √Labor

8 BITS Proprietary and Confidential © BITS Major Expense Components Receiving Bank √Software √Installation √Maintenance √Telecom √SVPCo Fees √ECCHO Fees

9 BITS Proprietary and Confidential © BITS Major Expense Components Sending Bank √Telecom √Software (if applicable) √SVPCo Fees (offset by credits) √ECCHO Fees

10 BITS Proprietary and Confidential © BITS Calculating Bank Benefits Receiving Banks: Determine dollars and items to be accelerated √From Inclearings √From ECS Survey √From Clearing House Reports Utilize data to calculate savings Determine dollar mix on Inclearings √Business √Retail

11 BITS Proprietary and Confidential © BITS Sample Data Collection - Dollars $13,778,737 Short Term Site Acceleration

12 BITS Proprietary and Confidential © BITS Short Term Site Acceleration 28,231 Sample Data Collection - Items

13 BITS Proprietary and Confidential © BITS Benefit from Analyzed Accounts Each institution will need to determine percentages to be used as numbers vary based on account mix. Typical Responses A% of dollars debited to analyzed accounts38% B10% CPosting rate of total dollars received85% DInternal rate of return on funds3.8% % of dollars debited to analyzed accounts that remain In excess balance position after accelerated debit Category

14 BITS Proprietary and Confidential © BITS A B C D Accelerated ECP $ 13,778,737 % Analyzed Accounts Debits 38% Subtotal 5,235,920 Less: Analyzed Accounts Above Peg 10% Subtotal 4,712,328 Post Rate 85% Net Accelerated Value 4,005,479 Internal Rate of Return 3.8% Subtotal 152,208 Less Reserves 10% Total ECR Savings - Annual $136,987 Benefit from Analyzed Accounts

15 BITS Proprietary and Confidential © BITS Benefit from Interest Bearing Accounts Determine:

16 BITS Proprietary and Confidential © BITS NSF – Florida Site

17 BITS Proprietary and Confidential © BITS Sample Bank Short Term Benefit Summary (All Sites) ECP Sending GroupAnnual Benefit $ 305,262 $ 773,488 Selected Banks from Survey – Florida $ 210,952 $ 2,050,232 $ 760,530 Selected Banks from Survey – Ohio Selected Banks from Survey - Michigan Fee Income - NSF All Sites Total Annual Benefit

18 BITS Proprietary and Confidential © BITS Business Case Expense Summary One Time Expense Ongoing Expense ExpenseAnnual Transaction Fees$146,956 Rules $18,345 Telecom$12,000 Software Maintenance$25,000 Internal Resources$125,000 Total$327,301 Total Annual Expense$408,301

19 BITS Proprietary and Confidential © BITS Business Case Summary * 1) Assumes 25% Benefit / 25% Transaction Expense 2) Assumes 50% Benefit / 50% Transaction Expense

20 BITS Proprietary and Confidential © BITS Business Case Notes Software license, maintenance, and installation are samples for illustration only and do not represent actual expense. Benefits not quantified –Senders reduced clearing cost –Return Item Benefits Fraud Reduction while not quantified may represent significant savings.

21 BITS Proprietary and Confidential © BITS Business Case Notes Benefits represent short term savings only. Significant benefits will accrue as the industry combines image interchange with ECP. –Sorting –Transportation –Labor

22 BITS Proprietary and Confidential © BITS Overall value is based on number of banks that participate in your region Bank A Bank C Bank D Bank B Birmingham Regional Exchange

23 BITS Proprietary and Confidential © BITS to four......then to six. As the regional exchange grows from two networked participants......linkages grow from one... Expanding bank participation exponentially increases benefits Each bank added to the network increases linkages to all other banks. As participants double, benefits increase approximately sixfold.

24 BITS Proprietary and Confidential © BITS Estimated Annual Benefit BankDeposit Size Benefit

25 BITS Proprietary and Confidential © BITS Summary ECP benefits are easily cost justified in current paper to follow environment. Actual benefits are greater than the benefits quantified in these calculations. Benefits based on current low interest rate cycle. ECP is a pre-requisite for image exchange. –ECP will continue to be utilized for posting Image Exchange will significantly increase benefits.

26 BITS Proprietary and Confidential © BITS For Additional Information Bill Walsh Senior Account Executive SVPCo