Maximizing Card Program Performance While Minimizing

Costs Donna McVea, FNBO

Alyssa Arredondo, Datacard

Agenda

Instant Issuance • Maximized Portfolio Performance

• Minimized Operational Expenses • Competitive Advantage

Print on Demand • Cards - Maximized Portfolio Performance

• Card Delivery - Operational Cost Savings

Founded in 1857 -- Six generations of family leadership Largest privately owned bank in U.S. with more than $17 billion in managed assets A top 15 U.S. credit card issuer Ranked 17th on Forbes “America’s Best Banks” list First Bankcard – credit card division of First National Bank

Parent company First National Bank of Omaha Began issuing credit cards in 1953 Currently own more than 4 million credit card accounts with $4 billion+ in loans Partnered with financial institutions and co-brands for more than 40 years

FIRST NATIONAL BANK OF OMAHA

Celebrating more than 150 years of customer success

DATACARD GROUP

Privately held company founded in 1969

Headquarters in Minneapolis, Minnesota

1,300+ employees in 26 worldwide locations

Sales and service in 150+ countries

300+ patents

Secure Issuance of Cards and Credentials

DATACARD AND FIRST BANKCARD

Partners for 40 years

First Bankcard issues cards using Datacard’s:

• High volume issuance equipment

• Desktop systems

• Issuance software

• Card Delivery

• Custom Solutions and Services

Partners for over 30 years

FINANCIAL INSTANT ISSUANCE

Instant issuance puts permanent cards in consumers’ hands immediately

Where? Bank/CU branches (debit/credit) Retail stores (credit) Colleges/Universities (debit) Events (credit) Attended kiosks (credit)

CONVENIENCE FOR CARDHOLDERS

• Attract new cardholders and differentiate your brand in a crowded market • Increase activation rates - cards activated immediately upon issuance • Increase card usage - Educate cardholders to use card versus cash/checks • Increase brand loyalty and top-of-wallet status • Cross sell opportunity for other card products

NEW REVENUE FOR CARD ISSUERS

• Attract new cardholders and differentiate your brand in a crowded market • Increase activation rates — cards activated immediately upon issuance • Increase card usage, brand loyalty and share-of-wallet • In-branch issuance provides ideal opportunity to cross-sell other products and services

SECURITY & SAVINGS FOR CARD ISSUERS

• Instant issuance eliminates potential for cards stolen in the mail process • Printing cards on-demand reduces costs associated with preprinting, delivery and inventory

• Instant issuance eliminates cost of mail packages and postage

INSTANT ISSUANCE TRENDS

Credit and debit

Embossed

Flat

Transition from temporary “vault cards”

Multiple card designs

Multiple sites

EMV (Contact and Contactless)

Mobile instant issuance

IMPROVED

Customer/Member satisfaction above 96% Competitive Differentiation

BOOSTED

Acquisition and Retention Levels (from increased service levels)

SAVED

Delivery delays, lost/stolen card rates Emergency Card Replacement Costs Customer Activation delays

REDUCES

Postage 3rd Party Expedite Fees

Issuance of temp cards

Transaction volume up 32%

Activation rates: 70% to 83%

CASE STUDIES

“SHIFT” AND “LIFT” BENEFIT

“SHIFT” Approximately four additional transactions in first ten days Four transactions @ $0.225* $.90 per year/cardholder* “LIFT” Four additional transactions PER MONTH 12x4 = 48 more transactions @ $.225 $10.80 per year/cardholder*

TRANS PER CARD WITHIN 10 DAYS OF ACCOUNT OPENING

TRANS PER CARD WITHIN 11-45 DAYS OF

ACCOUNT OPENING

0.20

4.0

7.40

11.30

“SHIFT”

“LIFT"

INSTANT MAILED

*ASSUMES DEBIT CARD TRANSACTIONS; HIGHER REVENUE FOR CREDIT

— Michael Ver Schuur at United Heritage CU

VOICE OF THE CUSTOMER

— Val Glytas, SVP and Director

of Retail Payments at Associated Bank

— Frank Snyder, Retail Banking Manager

at Green Bank

“…with immediate issuance and activation, it ultimately increases usage and transaction levels, which helps offset the change in interchange revenue we are all experiencing as a result of the Durbin Amendment.”

“Instant card re-issues, either for a card compromise or lost/stolen, have become much easier, less expensive and more member friendly!”

“Instant Issuance has not only provided customer convenience, but also boosted debit card use significantly. Our employees believe in it because they see results with customers and in the metrics.”

FNBO: BRANCH AND CAMPUS ISSUANCE

Background

• Started instant issuance in Colorado branches • To satisfy customers • Compete with another local bank • Revenue source

• Initially charged $25; now only $5.00 per card • Partnership with Colorado State University

Currently

• Omaha branch: “Branch of the future” • New branches designed to securely house instant issue

equipment and plastics • Equipment in Nebraska, Iowa, Colorado, Kansas, and

Illinois • 11 machines spread out between the states

CAMPUS CARD ISSUANCE

Print on Demand

Instantly issuing

personalized cards

At all home Nebraska

Cornhusker events

And at Creighton Bluejay events

. .

.

.

.

68%

15%

17%

New Lost/Stolen Replacements

Majority of cards issued are new accounts

Branch managers love convenience of immediate

lost/stolen card replacement

FNBO INSTANT ISSUANCE STATISTICS

Scheels Sporting Goods

Instant issuance of Scheels Visa credit cards in one store in Omaha

Looking to add 24 more machines in 10 different states

Using blank white cards and flat personalization

Customers will be able to choose between 13 card designs

Only new accounts issued in store

Replacements/Lost/Stolen issued from FNBO in house personalization facility

RETAIL CARD ISSUANCE

One-to-One Marketing PRINT ON DEMAND

PRINT ON DEMAND SIMPLIFIES ONE-TO-ONE MARKETING

White card and blank paper to fully personalized card and mailing - completely inline

Create more dynamic relationships with cardholders while reducing costs and complexity

LOWER COSTS FOR ISSUER

COSTS ARE ALL IN — SECURITY, SHIPPING, CARD — FOR A MID-SIZE BANK

MEASURABLY FASTER AND OPERATIONALLY ADVANTAGEOUS

WEBSITES PROMOTE UNIQUE CARDS

IMPROVED PORTFOLIO PERFORMANCE METRICS

BBVA Compass Bank

• 3% better account retention • Higher customer engagement

leads to higher cross-sells • $45 incremental yearly revenue

per card based on additional usage and interchange

FNBO

• Higher usage • Higher activation • Lower delinquency rate

Source: BBVA Compass Bank extended case study results using Serverside Technology for debit card program

ON DEMAND COLOR PRINTING – COST OF OWNERSHIP

LOWER MONTHLY COST OF COLOR PRINTING

THANK YOU!