Bank Tech Stocks Post Small Gain On Strength of Market's Late Rally

Bank technology stocks ended up slightly, as the stock market rallied Friday after a week where investors fretted about the decline in the dollar.

The currency markets, and in turn, bonds were roiled by the ongoing financial crisis in Mexico. Foreign exchange traders sold dollars in favor of the Japanese yen and German mark after the U.S. government pledged to support the Mexican peso last week.

Check printer Deluxe Corp. said last week that its fourth-quarter earnings would be about 10% below the current range of analyst estimates of 52 cents to 54 cents per share.

In the fourth quarter of 1993, St. Paul-based Deluxe earned 61 cents per share.

Analysts attributed the shortfall mostly to Deluxe's new businesses, which have not performed as well as the company had hoped.

The company has been diversifying away from its core business of check printing for banks due to industry consolidation and the growing trend of consumers buying discounted checks directly from printers.

"They're investing in growth vehicles for the future," said Goldman Sachs analyst Lisa Fontenenlli in an interview with Reuters. "They haven't quite got the revenue stream."

"Deluxe is a company in the throes of transition by their own admission," Cleary Gull analyst Martin McDevitt said, adding that he expects the company's businesses will fare better in 1995.

Deluxe officials also reported they had completed the previously announced acquisition of Financial Alliance Processing Services, a credit- and debit-processing company headquartered in Louisville, Kentucky.

The firm's common stock closed at $27 per share Friday, up 37.5 cents for the week.

Also on the acquisition front, bank-data processor and investment- products servicer Bisys Group Inc. and Concord Holding Corp. announced Friday that they had been given antitrust clearance by the Justice Department for their previously announced merger transaction.

The merger, contingent upon approval from both Bisys and Concord shareholders, is expected to close in February, Bisys officials said.

Little Falls, N.J.-based Bisys' common stock closed at $21.50 per share Friday, down 6.25 cents for the week.

Bear Stearns & Co. said last week it has initiated coverage of bank outsourcing firm Affiliated Computer Services Inc., giving the Dallas-based firm an "attractive" rating.

The brokerage firm was the lead underwriter for Affiliated's initial public offering in September of 2 million shares priced at $16 each.

Bear Stearns analyst Charlotte Walker said she estimated the company would earn $1.32 per share in fiscal 1995, ending in June, and $1.51 a share in 1996.

Affiliated's common stock closed at $23.75 dollars a share Friday, up $3.25 for the week.

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