ECP in Today’s Changing Payments Environment Rodney D. Chard Executive Vice President Whitney National Bank BITS ECP Forum Birmingham, Alabama January 14, 2003

Agenda ECP and Image Exchange Barriers Check Operations Whitney Bank OTC Dollars Distribution by Presentment Method ECP/Image and More Efficient Payments Who Writes Checks and Why Some Fully Electronic Payments Solutions

ECP and Image Exchange Barriers at Regional Banks Regional banks like Whitney typically have: strong centralized processing operations; single integrated check capture and posting systems; low/zero cost clearing arrangements with local banks; only limited reliance on Fed as a source of checks. These elements produce efficient check posting operations. Such regional banks have insufficient out-of-region check volume/value to generate cost/float savings to pay for ECP. Customer acceptance of new fully electronic payment alternatives shortens the life span for ECP/image technology.

Check Operations Whitney Bank

OTC Dollars - Distribution by Presentment Method Where do we send for value checks we take on deposit in our branches? On-us are posted to customers’ accounts = 62% Regional same-day-settlement contracts = 11% Free clearing house exchanges till 8 p.m. = 10% Fed value not really significant = 17% Result is little float and low operating costs.

ECP/Image and More Efficient Payments ECP and Image prolong the life of checks, but produce less efficient payments instruments than: Telecheck’s check electronification at the POS; imaging checks at the lock box; electronic bill pay over the Internet by CheckFree et al; SafeCheck’s model. Unit costs of checks must increase as volumes decline. If banks focus solely upon technology solutions designed to extend the life of checks, others will offer electronic payments. We spend our limited IT resources on electronic payments.

Who Writes Checks and Why People write checks to businesses at P.O.S. People write checks to businesses to pay bills Businesses write checks to pay employees Businesses write checks to other businesses to pay their bills People write checks to each other

Some Fully Electronic Payments Solutions PIN-debit cards at P.O.S. Internet EBPP or EBP to pay bills ACH direct credits or stored value cards for businesses to pay employees Internet EBPP or ACH direct credits to pay B2B bills Direct A2A funds transfers

For Additional Information Rodney D. Chard Executive Vice President L. Andrew McDonald Senior Vice President Whitney National Bank rchard@whitneybank.com amcdonald@whitneybank.com (504) 729-1224 /729-1036