retail operations to M&I Data Services for five more years. M&I, the data processing subsidiary of Marshall & Ilsley Corp. in Milwaukee, will provide deposit and automated teller machine transaction processing, conversion, and application software development services to BankAmerica's 642 branches and 2,644 ATMs outside of California. With the new contract, M&I will for the first time handle operations for 144 BankAmerica branches in Arizona and 82 in Nevada. Those operations are expected to be converted to M&I systems in 1996. M&I already handled processing for BankAmerica's units in Illinois, New Mexico, Oregon, Hawaii, and Texas. The deal, a renewal of a five-year contract signed in 1991 for $17 million, is aimed at keeping costs low and maintaining a consistent product set in regions where the bank has acquired other financial institutions. M&I has helped BankAmerica convert many of its out-of-state acquisitions to common banking software. Neither company disclosed the value of the new contract. "This agreement allows Bank of America to utilize what we perceive as M&I's technological expertise and strong commitment to provide high-quality customer service to support our objective of delivering premium cost- effective financial services to our customers," said Martin Stein, vice chairman of BankAmerica. M&I plans to convert the Arizona and Nevada banks to its Integrated Banking System software, which includes modules for deposits, lending, and customer information files. M&I runs the software in its service bureau in Wisconsin, where it does processing for more than 400 banks. The deal does not affect BankAmerica's nearly 1,000 branches and 3,759 ATMs in California, which it will continue to run in-house. The original deal with M&I converted to common systems a number of failed thrifts the bank acquired across the Southwest during the late 1980s and early 1990s. Since 1991, BankAmerica has made several acquisitions in Arizona and Nevada, including 68-branch Valley Capital Corp. of Las Vegas and 40-branch Pima Federal Savings and Loan of Tucson. "By outsourcing, Bank America's own executives can focus on activities that are core competencies," said Joseph L. Delgadillo, president and chief operating officer of M&I Data Services. "BankAmerica also will use M&I as a development arm that will affect how BankAmerica delivers products in the future."
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