CO-OP Network and Service Centers Corp. to Combine Organizations; Agreement Between Leading Credit Union Organizations Continues Industry Trend Toward Consolidation.

Business Editors

ONTARIO, Calif.--(BUSINESS WIRE)--Jan. 23, 2002

CO-OP Network(SM), the nation's largest credit union ATM/EFT (electronic funds transfer) network, and Michigan-based Service Centers Corporation (SCC), which serves nearly 350 credit unions, have signed a letter of intent that will ultimately merge the two organizations. The agreement, pending final May approval by each company's board of directors and shareholders, strengthens CO-OP Network's position as the country's No. 4 financial services network behind bank-owned Star, NYCE and PULSE.(a)

CO-OP Network, based in Ontario, Calif., has a credit union/ATM presence in 49 states and Canada, and currently serves more than 10 million credit union cardholders. SCC, based in Southfield, Mich., has a presence in 12 states and Washington, D.C., and serves nearly 4 million members. When the agreement is approved, it will be the sixth regional credit union network merger for CO-OP Network in less than three years and will swell its membership to more than 1,150 credit unions and 11 million cardholders with access to over 12,000 surcharge-free ATMs throughout North America.

"By developing business relationships with partners like SCC, we've been able to broaden credit union representation on a national scale," says CO-OP Network President and CEO Robert Rose. "CO-OP Network has built a financial services infrastructure that simplifies life for local and regional credit unions by providing one connection for coast-to-coast surcharge-free ATMs, deposit taking ATMs and more."

SCC membership is currently served through a combination of the organization's Credit Union Family Service Centers(SM) shared branching network, which creates extended branch offices for the participating credit unions, and SC24(SM), the nation's 14th largest regional EFT network. After the merger, the shared branching network -- and the ATMs owned and deployed as part of it -- will continue to operate as a separate line of business within the new organizational structure. SC24 ATMs and cards will be re-branded with CO-OP Network logos.

"We're extremely excited at the strength of such a merger and the significant synergies it should create and bring to our participating credit unions and to the credit union community nationally," says SCC President/CEO Daniel J. Balagna. "We've seen unprecedented consolidation across the general EFT industry in just the last two years, resulting in credit unions having less ownership and policymaking roles in the larger payment systems arena for services considered vital to their ongoing success. A business combination between SCC and CO-OP Network creates a significantly stronger position for credit unions within the EFT industry, from both a value and service perspective."

Rose and Balagna will continue their current roles as president/CEO of their respective business units. They will report to a newly-formed board representing a combination of SCC and CO-OP Network, known as CU Cooperative Systems, Inc.

Service Centers Corp., which pioneered the nation's first shared branching network more than 25 years ago, is a national credit union service organization exclusively owned by several hundred credit unions with collective assets of nearly $20 billion. SCC is an equal partner in Credit Union Service Centers Network, Inc., the national shared branching network organization.

CO-OP Network (www.co-opnetwork.org) was established in 1981 to fill a need among credit unions seeking their own reliable, nationwide ATM network. Since March 1999, CO-OP Network's regional EFT network merger-acquisitions have included CU Access (Oregon/Washington), CU Link (Colorado/Wyoming), Quantum (Michigan), CU Services (Tennessee) and Midwest ATM Co. (Missouri/Kansas), expanding the Network to more than 800 member credit unions and 12,000 ATMs in the U.S., Canada, Washington, D.C. and Puerto Rico. CO-OP Network is wholly-owned by its credit union shareholders and provides volume discounts on products and services.

(a) EFT network rankings, listed by ATM transaction volume, from Thomson Financial Media's EFT Data Book 2002.