Ennis, Inc. · NYSE:EBF
Ennis — Investor Presentation (March 2006)
65 slides from Ennis's investor presentation, March 2006
Slide 1: Check 21 Presentation to Distributors
internal documents. to be at Tony Scarselletta E S “Le General Finanéial Supply
Slide 2: Presentation Overview
Presentation Overview • Exploding the Myth of Decreased Opportunity • Internal Documents…Still the “Bread and Butter” • The Continuing Image Revolution • What Is All the Commotion Over Check 21? • Don’t Write Off Loan Coupon Books • Thinking Outside the Bank…Cash Management
Slide 3: Exploding the Myth of Decreased Opportunity
Exploding the Myth of Decreased Opportunity
Slide 4: The Effects of Mergers and Acquisitions
The Effects of Mergers and Acquisitions • At its peak, prior to deregulation, the Federal Reserve reports there were 14,373 bank charters in the United States in 1984. • As of the end of 2003, due to over two decades of mergers and acquisitions, bank charters have fallen to 7,676. • Five mergers too
Slide 5: The Other Side of the Merger/Acquisition Story
The Other Side of the Merger/Acquisition Story • In the last ten years, there have been 1,345 new community bank start-ups in the U.S. That figure represents nearly 18% of the total bank population in the country. • In 1999, there were 239 new community bank start-ups, and in three of the last six y
Slide 6: Why So Many Start-ups?
Why So Many Start-ups? • Better customer service -“There is still a percentage of the population that wants to be able to look a decision-maker in the eye and say, ‘I want to talk to you about my business.’” (a long-time banker quoted in the San Diego Business Journal) • A profitable venture - Commu
Slide 7: The Bottom Line: Bank Start-ups are Good News for the Alert Distributor
The Bottom Line: Bank Start-ups are Good News for the Alert Distributor!
Slide 8: Internal Documents…Still the “Bread and Butter”
Internal Documents…Still the “Bread and Butter”
Slide 9: Cash Tickets
Cash Tickets I’m typing in a text box • Variable Information: MICR Code Line Teller Number Auxiliary Line
Slide 10: Cash Tickets: Function, Features, Order Habits
Cash Tickets Function: Audit control for all cash received (in) and disbursed (out) Unique Features Order Habits • Generally personalized by teller • On demand and by branch • Quick turn is expected • Ship direct to individual • Ordering can be locations centralized or direct from • 1-part most comm
Slide 11: General Ledgers - Debits/Credits
General Ledgers - Debits/Credits • Variable Information: MICR Code Line Account Name/Number
Slide 12: General Ledgers-Debits/Credits: Function, Features, Order Habits
General Ledgers-Debits/Credits Function: Used to debit or credit various G/L accounts internally or customer accounts Unique Features Order Habits • May be “generic” - not specific to • On demand any account • Quick turn is expected • May be “pre-qualified” - printed • Ordering can be centralized or
Slide 13: Counter Forms
Counter Forms • Variable Information: MICR Code Line
Slide 14: Counter Forms: Function, Features, Order Habits
Counter Forms Function: Generic deposits and withdrawals for savings and checking accounts for customer use Unique features Order habits • “Generic” - not customer specific, • Large quantities at one time may be branch specific, but most • Distribution from warehouse to commonly one version for all
Slide 15: Process Control Documents
Process Control Documents • Variable Information: MICR Code Line Auxiliary Line
Slide 16: Process Control Documents: Function, Features, Ordering Habits
Process Control Documents Function: Used to establish boundaries and to identify work in the sorter/operations area Unique features Ordering habits • Variety of applications and names - batch • Large quantity at one time - headers, block headers, account quarterly runs are common dividers, & tracers
Slide 17: Teller Receipts
Teller Receipts • Variable Information: None (normally “generic”)
Slide 18: Teller Receipts: Function, Features, Order Habits
Teller Receipts Function: Provide customers a record of transactions Unique Features Order Habits • Usually generic for all branches - • Large quantities at one time contains corporate name only • Distribution from warehouse • Imprinted in teller machine showing to branches transaction date, amount
Slide 19: Notices
Notices • Variable Information: MICR Code Line
Slide 20: Notices: Function, Features, Order Habits
Notices Function: To advise customers about account status (overdraft, deposit correction, extra charges or credits to an account, etc.) Unique Features Order Habits • Each form is specific to the situation • May be ordered on demand if • Typically multi-part forms with one personalized copy sent to
Slide 21: Official Checks
Official Checks • Variable Information: MICR Code Line
Slide 22: Official Checks: Function, Features, Order Habits
Official Checks Function: Checks issued by F.I. for funds disbursement (expense checks) or to present guaranteed funds for consumers (money orders, cashier’s checks) Unique Features Order Habits • May be personalized to F.I. locations • Commonly printed on demand • Security features are of value to
Slide 23: The Continuing Image Revolution
The Continuing Image Revolution
Slide 24: What is Image Processing?
What is Image Processing? • As opposed to traditional labor-intensive proof methods, image technology allows “invisible operators” to do the financial institution’s data entry work through the scanning of documents and the capture of vital information electronically. • By definition then, image proc
Slide 25: Benefits of Image Capture
Benefits of Image Capture • Reduction of data entry personnel • Reduction of paper handling • Improved productivity through fewer processing areas • Accessibility of documents • Ability to research account information • Digital transfer of information • Better customer service • Additional service o
Slide 26: Image Technology
Image Technology • Image capture involves scanning a document (in a reader/sorter equipped with a high-resolution “camera”) to convert light and dark points on the document into a binary image, to either be recognized or “drop out.”
Slide 27: “Drop Out” / “Recognized” Areas
“Drop Out” / “Recognized” Areas • “Drop Out” Areas - Background “drops out” of image, leaving only vital information. - Hand-printed constraint boxes “drop out” to help recognition. - Non-vital features “drop out” to aid legibility and reduce file size. • Recognized Areas - Vital features such as sy
Slide 28: How “Drop Out” Is Accomplished
How “Drop Out” Is Accomplished • Print Contrast Signal (PCS) is critical in ensuring “drop out”. • Scanned documents go through “thresholding” process. • Images are seen as either black or white (binary).
Slide 29: What is PCS?
What is PCS? • Simply stated, PCS is the contrast of the printed areas on the document with the background of the document. • Print Contrast Signal is derived from a formula containing two reflectance readings. PCS = Paper Reflectance - Ink Reflectance / Paper Reflectance • The PCS result is indicat
Slide 30: PCS Requirements
PCS Requirements • Internal Documents - Drop-Out <.25 PCS - Recognized >.60 PCS • Checks - Drop-Out <.30 PCS - Recognized >.60 PCS
Slide 31: Basic Image Formats
Basic Image Formats • Universal Format • Document ID Format
Slide 32: Universal Format Features
Universal Format Features • Systems are generally MICR-driven. • “Universal” or Unisys CAR boxes are used. • Asterisks may precede Account Number and Tran Code fields. • Dollar sign and solid decimal point indicate Amount field. • Software vendors include: - Unisys - AT&T (Lucent Technologies) - Ban
Slide 33: Universal Format Document
Universal Format Document DEBIT GENERAL LEDGER INITIALS DATE GLP ACCOUNT NAME. AMOUNT DESCRIPTION / REMARKS ACCOUNT NUMBER * $ APPBY_ ° EFF DATE Hicdg,Sob?aqay
Slide 34: Document ID Format Features
Document ID Format Features • Systems are driven by Document ID numbers on the form. • Document ID numbers are in the same relative position (X-Y coordinates) on all forms. • “Doc ID” style CAR boxes are used. • No asterisks precede Account Number and Tran Code fields. • A Dollar sign and reversed d
Slide 35: Document ID Format Document
Document ID Format Document CREDIT GENERAL LEDGER INITIALS DATE es ACCOUNT NAME EFF DATE APP BY DESCRIPTION } REMARKS AMOUNT ACCOUNT NUMBER 0000 WL23LS5B 789
Slide 36: What Is All the Commotion Over Check 21?
What Is All the Commotion Over Check 21?
Slide 37: Why Check 21?
Why Check 21? • Necessitated by September 11, 2001 terrorist attacks when airline traffic was grounded for days, halting the delivery of paper checks for processing between banks.
Slide 38: The Legislation
The Legislation • The House legislation was known as “Check Clearing for the 21st Century Act”. • The Senate legislation was known as the “Check Truncation Act”. • The final version, “The Check Clearing for the 21st Century Act,” was signed into law October 28, 2003. • The legislation becomes effect
Slide 39: What Is Check 21?
What Is Check 21? • “Check 21” encourages check truncation (the replacement of a paper check with a digital image) earlier in the processing cycle by removing the need to transport the check itself. • The bank of first deposit will be allowed to transfer the digital image of the check to the check p
Slide 40: The Substitute Check (IRD)
The Substitute Check (IRD) • Specifications for the substitute check (IRD) are outlined in ANSI specification X9.90. • The substitute check carries the same legal weight of the original paper document. • The substitute check will contain the following: - All information on the front and the back of
Slide 41: Check Processing Flow
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Slide 42: Check Processing Flow: Electronic Check Collection
Check Processing Flow Electronic Check Collection @> O58 == we Check Bank of Ebaronie Intermediary Echoes First Image Image fang Deposit »WANDOP |OUJS\U! OE Cc Su > U DQ O] S
Slide 43: Check Processing Flow: Substitute Check Collection
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Slide 44: Benefits to Banks
Benefits to Banks • In spite of its high implementation costs, estimated at around $10 billion over the next three to five years, the benefits of Check 21 are numerous. - Check 21 will allow financial institutions to process checks faster, theoretically within minutes, thus reducing account holder f
Slide 45: Impact on the Banking Industry
Impact on the Banking Industry • Industry experts predict the nation’s top 25 banks to be fully image-enabled by 2006. • Mid-sized banks, with assets of $5 billion or more, will follow suit by 2008. • Half of all small banks, with assets of $100 million or less, will be image-enabled by 2008.
Slide 46: The Check 21 Opportunity
The Check 21 Opportunity • Image Conversions • Substitute Check (IRD) Supplies and Related Items • Check Redesign
Slide 47: Image Conversions
Image Conversions • The implementation of check truncation will logically be followed by the digital capture of internal documents providing numerous opportunities: - Redesign of virtually every teller line and back room document being used by the institution. - Image statement envelopes (6 x 9 and
Slide 48: Substitute Check (IRD) Supplies and Related Items
Substitute Check (IRD) Supplies and Related Items • The introduction of the substitute check will also provide opportunities: - IRD paper stock (return item and non-return item). - MICR toner used in laser printers to print IRD’s. - Substitute Check claim notices. - Check 21 Brochures (disclosure an
Slide 49: Check Redesign
Check Redesign • A recent study of major financial institutions by an image provider revealed that only 30% of today’s business checks were image-ready: - Amount areas varied widely. - Backgrounds were typically too dark. (pantographs, step-and-repeats, voids, etc.) - “Drop Out” boxes were rarely us
Slide 50: ANSI X9.7
ANSI X9.7 • Addresses all aspects of image readiness • Introduces new standards for vital areas on negotiable documents: - Date - Pay To - Amount - Legal Amount - Signature Area
Slide 51: Security In Redesign
Security In Redesign • Business checks should be redesigned to include security features: - Visible and invisible fibers - Chemically reactive papers - Toner grip papers - Thermochromic (heat sensitive) inks - Bleed-through MICR - Other security enhancing features
Slide 52: Don’t Write Off Loan Coupons
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Slide 53: Why Loan Coupon Books Remain Viable
Why Loan Coupon Books Remain Viable • Loan Coupon Books are typically less expensive to generate than laser-generated monthly remittance forms. • Less postage is required because Loan Coupon Books generally contain a supply of between 12 and 36 monthly coupons.
Slide 54: Coupon Book Prospects
Coupon Book Prospects • Small to medium-sized banks - Mortgage loans - Installment loans - Christmas Club accounts - Vacation Club accounts • Credit Unions - Various loans and accounts • Property Management Companies - Lease/Rent agreements - Association dues notices
Slide 55: Who in the Bank Purchases Loan Coupon Books?
Who in the Bank Purchases Loan Coupon Books? •Purchasing Manager - Normally the primary contact •Loan Servicing Manager •Data Processing Manager
Slide 56: The Competition
The Competition •NCP Solutions - Set-up fee is charged - Report fee is charged - Slow processing time (up to 2 weeks) •Allison Payment Systems - Set-up fee is charged - Slow processing time •American Coupon Company - Set-up fee is charged •Bank-A-Count Corporation •A variety of smaller direct seller
Slide 57: The Typical Program
The Typical Program • Pricing depends on the number of coupon books produced monthly. • Coupon books contain between 12 and 36 (sometimes more) monthly remittance coupons. • Optional coupons may include change of address forms, labels, and a variety of marketing pieces. • Data files are normally sen
Slide 58: Thinking Outside the Bank…Cash Management
Thinking Outside the Bank…Cash Management
Slide 59: The Prospect “Pool”
The Prospect “Pool” • Your prospects include a variety of multi- location retailers: - Convenience store chains - Department store chains - Auto parts chains - Clothing store chains - Restaurant/Fast food chains - Video rental chains - Hair salon chains - Plus many other types of retail chains
Slide 60: Cash Management Products
Cash Management Products • Business Deposit Tickets - Imprinted and MICR-encoded for multiple locations • Endorsement Stamps - To make check routing accurate and efficient • Deposit Bags - Tamper-evident for maximum security - Sequential numbered for verification purposes - Sometimes bar coded for f
Slide 61: Deposit Tickets
Deposit Tickets • Tickets may be a standard format, or in the case of many larger retailers, a customized format. • Tickets will be imprinted with the individual retail branch location, address, etc. • MICR-encoding will generally include the store number in the auxiliary field, as well as, in some
Slide 62: Endorsement Stamps
Endorsement Stamps • Self-inking stamps are the most common. • Stamps includes bank of first deposit and the business account number.
Slide 63: Deposit Bags
Deposit Bags • Because of the lack of security in typical canvas bags, today all twelve Federal Reserve Districts mandate the use of plastic security bags by banks when shipping currency to and from the Reserve. • Plastic deposit bags provide clearly recognizable signals that the integrity of the ba
Slide 64: Types of Deposit Bags
Types of Deposit Bags • Single Pouch Bag - Used when the entire contents of the bag are going to be opened and processed by the branch at the same time. • Vertical Two-Pocket Bag - Used when the deposit is made to a branch by the customer and the branch wants to post-verify the deposit, or forward t
Slide 65: Thank you
thank you. IA 800.759.4374 * VA 800.333.6167 * www.generalfinancialsupply.com