Society for Savings Bancorp, parent of a Connecticut thrift on an aggressive restructuring campaign, said it will turn over its data processing to an outside company.
Starting Saturday, Fiserv Inc. of Milwaukee will run the Society operations and will move them early next year into its Hartford data center, which serves one other local thrift - Northeast Savings.
Society's approximately 50 data processing workers will leave its payroll and be offered positions with the IBM-main-frame-based center that Fiserv took over from Northeast Savings in 1989.
Society and Fiserv did not disclose the size of the outsourcing contract, but said it is "multimillion dollar [and] long term."
Biggest Recent Contract
With 220,000 accounts in 19 branches, Society's operation is one of the largest to be handed over to an independent processor in recent months. Society has $2.7 billion in assets, down from $3.6 billion in June 1991.
Many experts in bank data processing foresee a decline in big outsourcing contracts like those for Continental Bank Corp., First Fidelity Bancorp., and some other sizable regional banks over the last three years.
More typical of recent deals was an announcement last week that Belmont (Ohio) National Bank, with $193 million in assets and seven branches, had signed a multi-year agreement with Electronic Data Systems Corp. of Plano, Tex.
On the Mend
Like many of the larger institutions that have turned to outsourcing, including EDS client First Fidelity, Society is on the mend from the recession and real estate-related losses.
Its second-quarter net income jumped to $2.2 million, from $1 million in 1991, and it meets capital requirements.
Society also reported its first quarterly reduction of nonperforming assets, net of chargeoffs, since the second quarter of 1989.
Will Stay Independent
The Hartford thrift ended a search for a buyer in June and plotted an independent course. Its stock Thursday afternoon was up 12.5 cents, to $13.25.
"The difficult strategic restructuring steps that began in late 1990 are beginning to produce results," said Lawrence Connell, president and chief executive officer since late 1991.
The outsourcing decision is an outgrowth of the corporate streamlining efforts, said Bryan Bowerman, executive vice president for lending and operations. He said the move will result in immediate cost savings without employee layoffs.
Nor will Society have to convert existing software from various vendors, including M&I Data Services and Stockholder Systems Inc.