Mitek Systems Inc. said Bank of America Corp. and Capital One Financial Corp. joined the roster of big-bank clients for its mobile check deposit technology in its fiscal second quarter.
The San Diego vendor said Monday that it added the two banks through its distribution relationship with NCR Corp., a maker of automated teller machines and other financial technology. Mitek announced in February that last year it had enrolled JPMorgan Chase & Co. as a direct client. JPMorgan Chase had previously been using internally developed software to offer mobile check deposit to its clients.
"We see the momentum increasing, particularly as banks want to engage new customers and provide better services to existing customers. It's a revenue driver," Mitek President and Chief Executive James B. DeBello said in an interview Monday.
A spokesman for Bank of America did not comment except to say that the Charlotte, N.C., banking company has not decided when it would make mobile check deposit available to customers.
A spokeswoman for Capital One confirmed that the McLean, Va., bank will use Mitek's technology, but she did not say when it will be made available.
Mitek and its distributors signed 26 new banks for the service in its second fiscal quarter, which ended March 31. That brought the number of financial institutions using it to 40.
Mitek's revenue in the quarter rose 89% from a year earlier, to $2.9 million. The company's profit rose to $570,000, or 2 cents per diluted share, from $7,000, or 0 cents per diluted share.
"They're really hitting on all cylinders right now," said Ryan Worch, a managing director with the Bethesda, Md., investment firm Worch Capital LLC, which owns Mitek shares. "Right now it's more or less of an … execution and implementation strategy here on out."
Worch said adding Bank of America and Capital One is validation of Mitek's technology, which is licensed by dozens of other vendors that market the software to their own bank and credit union clients. Mitek also announced that Diebold Inc. has agreed to distribute its technology.
Five of the top 10 U.S. banks are using Mitek's technology, DeBello said. In addition to JPMorgan Chase, B of A and Capital One, U.S. Bancorp of Minneapolis also uses the software through its relationship with the vendor Fidelity National Information Services Inc., DeBello said. He would not name the fifth bank.
Although the number of banks and credit unions that have made mobile check deposit available to customers is still small, analysts expect a large number to do so this year to compete with big banks.
Mitek is also trying to gain more exposure to the investment community. It announced that it recently completed a private placement of its common stock to institutional investors, which generated $15 million in gross proceeds for the company. The sale helps Mitek, which is traded over the counter, overcome a net equity requirement for getting listed on the Nasdaq Capital Market.
The company plans to file to be listed on the exchange this week, DeBello said.
George Sutton, a senior research analyst who follows Mitek for Craig-Hallum Capital Group LLC in Minneapolis, said getting listed could garner wider analyst coverage for Mitek and could improve its image among clients as well.
