The banking technology vendors Fiserv Inc. and Jack Henry & Associates Inc., which mainly serve small and midsize banks and credit unions, said their revenue from these segments is holding steady and demand is increasing in some key areas.

"For the most part, the smaller institutions tend to be healthier than the midtier and the megabanks," Jeffery Yabuki, Fiserv's president and chief executive officer, said during an conference call Tuesday to discuss his company's fourth-quarter results.

Community banks are still willing to invest in technology that will help them increase their capital or reduce their costs, Mr. Yabuki said.

"Although pressured, we anticipate that technology spending will likely increase in 2009 across the community banking space," he said. "We continue to see demand for products focused on gathering core deposits, managing efficiency, and risk and regulatory — all of which translate to revenue opportunities for us."

Mr. Yabuki said he does not expect "the doomsday scenarios of thousands of closures we've seen bantered about," though there could be as many as several hundred bank failures in the next few years, he said.

But, he said: "Keep in mind that even when closures occur, the processing revenues don't leave the system — they follow the accounts. When it's all said and done, we expect to be about where we are today: even, in terms of net clients won and lost."

About 78% of Fiserv's revenue comes from its smaller clients. The Brookfield, Wis., company's biggest customer provides 5% of its revenue, and the rest of its 50 biggest customers generate about 17% of revenue.

Fiserv said its fourth-quarter revenue dipped 4%, to $1.06 billion, from a year earlier. Its net income dropped 35%, to $62 million.

For the year Fiserv's revenue rose 22%, to $4.74 billion, and its net income rose 30%, to $569 million.

Jeanne Capachin, a research director at the Framingham, Mass., research firm Financial Insights Inc., a unit of International Data Group Inc., said the difference in challenges for big financial companies and small ones "actually is pretty stark."

"The large institutions, they're facing pretty steep declines for IT spending in 2009 … it is much less dramatic for smaller institutions," she said.

Industry forecasts tend to overlook the state of smaller banks, Ms. Capachin said, because "the problem is the large institutions — their spend is so much bigger than the small ones that they mask it."

Fiserv has more big-bank clients than Jack Henry, particularly after its 2007 purchase of CheckFree Corp. and the online banking software vendor Corillian Corp., which CheckFree had acquired that year. These operations mean Fiserv is able to see this difference within its own client base, Ms. Capachin said.

Jack Henry, by contrast, "is almost entirely focused on smaller institutions," she said, so small-bank trends will have a bigger impact on the company.

Smaller financial companies "aren't capital-constrained like the larger institutions," but "because the market's in so much turmoil, they're pausing," and that is what is affecting Jack Henry's sales efforts now.

Jack Henry's revenue for its second quarter, which ended Dec. 31, fell less than 1%, to $190.2 million. Its net income fell 4%, to $28 million.

For the first six months of its fiscal 2009, the company's revenue rose 2%, to $373.3 million, compared with the first half of fiscal 2008. Net income fell 4%, to $50.5 million.

Jack Prim, Jack Henry's CEO, said during a conference call Wednesday to discuss its results that caution among the Monett, Mo., company's clients affected its earnings in the three months that ended Dec. 31.

But "in most cases this caution stems more from uncertainty about the economic environment than from their actual financial performance."

Some of the quarter's bad news actually had a positive side for Jack Henry, Mr. Prim said. For example, the company's revenue was adversely affected because early-termination fees in the quarter were down sharply from a year earlier, and retaining customers is a good development for the company in the long term.

In addition, hardware sales were down because of more banks are moving towards outsourcing, which provides Jack Henry with a healthy recurring revenue stream, Mr. Prim said.

Ms. Capachin said some banks are spending less because of uncertainty about the new political climate.

"With the Obama administration so new, and not knowing what the next bailout is going to be, that's affecting the whole financial services industry," she said.

Reduced lending at smaller financial institutions is affecting their technology spending, though Ms. Capachin said the larger lenders' problems are more pronounced and will prove more persistent.

"If we look at the $10 billion-and-greater financial institutions, what we're projecting, over the next five years, is continued negative growth," Ms. Capachin said.

But in the same time frame, she said, financial companies with assets of $1 billion to $10 billion will return to positive growth after a brief stretch of declining growth.