Bank technology firm Fiserv Inc. has announced that it has signed a letter of intent to acquire the check-processing business of the Federal Home Loan Bank of Atlanta.
Under the agreement, Fiserv will provide check processing and related services to approximately 100 financial institutions throughout the Southeast. Terms were not disclosed.
Milwaukee-based Fiserv's deal is the latest in string of acquisitions and outsourcing agreements with the Federal Home Loan Bank System whose clients are primarily thrifts. Home Loan Banks provide low-cost financing and other correspondent banking services to these institutions.
Many of the 12 Federal Home Loan Banks have decided to exit or outsource many technologybased services.
Fiserv officials said they have previously signed agreements with the Home Loan Banks of Chicago, Seattle, Dallas, and Des Moines.
"Fiserv has built a strong client base in the Southeast, supported by our full-service data processing centers in Georgia and Florida," said George D. Dalton, chairman and chief executive officer of Fiserv.
"We have experienced significant growth in our client base throughout Georgia and the Southeast recently, and... the resources we'll gain through our agreement with FHLB Atlanta will enhance our ability to serve these financial institutions. while expanding the products and services available to former FHLB clients through the Fiserv network," he said.
Fiserv officials said they recently opened a new operations center in Macon, Ca., to provide support for its center in Atlanta. The company could gain another data center in the Georgia capital when its acquisition of AT&T's Data Services business is completed, they added.
With the Atlanta Home Loan Bank business, Fiserv centers in Georgia will be serving over 200 financial institutions.
"The Fiserv expertise in item processing and other financial data processing services, combined with their strong commitment to client service and dedication to the market, are important benefits to our customers," said Robert E. Showfety, president and chief executive officer of FHLB Atlanta.
Fiserv officials said they are now the nation's largest check processing outsourcing company, processing more than 1.75 billion checks annually.
Fiserv's common stock closed at $21.50 per share Friday, down 50 cents for the week.
In other news affecting bank technology companies, Fiserv rival Bisys Group Inc. reported fiscal 1994 fourth quarter net earnings of $3.9 million, or 25 cents a share, compared to $3.3 million, or 21 cents a share, in the 1993 period.
Revenues increased 64% to $39.4 million, up from $24 million.
For the fiscal year ended June 30, Bisys reported net earnings of $13.8 million, or 86 cents a share, compared to a net earnings of $17 million, or $1.16 a share, for fiscal 1993.
Last fiscal year's net earnings included $13.7 million or 93 cents a share cumulative effect of a change in accounting for income taxes as well as a nonrecurring charge of $9,138,000 before the effect of income taxes.
Revenues Climb 55%
Bisys' fiscal year revenues grew to $136.7 million, up 55% over fiscal year 1993 revenues of $88.3 million.
Operating results - revenues minus certain operating costs which exclude interest, amortization of intangible assets and nonrecurring charges - were $6.9 million in the fiscal fourth quarter of this year, compared to $5 million for the year-earlier period, representing an 39% inCrease.
Bisys' common stock closed at $20.125 a share Friday, down 75 cents for the week.
Deal with AST
Banking hardware and software firm Banctec Inc. announced last week that its service division, BSC, has signed an agreement with AST Research Inc. to become an additional provider of maintenance services for its line of personal computers. AST, the world's fifth-largest computer manufacturer, sells both business and retail products.
BSC will focus on providing support services, complementing the services provided by AST's channel partners. Under the terms of the agreement, BSC will help satisfy AST's one-year on-site repair warranty.
Trading of Banctec's stock ended Friday at $20 a common share, down 25 cents for the week.