First of America Bank Corp. has landed a five-year contract to manage $400 million in monthly cash flow from 1,480 post offices in Illinois and Indiana.
Officials said the contract, which features options for three years of extensions, is the second-largest of its kind. More specific financial terms were not disclosed.
The U.S. Postal Service has been consolidating its cash management relationships in recent months. It does business with about 5,000 banks but plans to whittle that number to about 1,000.
As part of the consolidation, about two dozen "relationship banks" will handle the vast majority of its corporate banking.
Nationwide, the Postal Service collects about $500 million a day through thousands of post offices.
First of America, a Kalamazoo, Mich., banking company which is being acquired by Cleveland's National City Corp., already supplies cash management services to 500 post offices in Indiana, Illinois, and Michigan. It is bidding on a contract for all of Michigan's post offices.
Richard K. McCord, senior vice president of First of America, said the pending acquisition will not affect the Illinois and Indiana deals.
Once the acquisition is completed, the merged bank should be better positioned to win Postal Service contracts in Ohio, Pennsylvania, and Kentucky, he said.