Honor Technologies Inc., the Florida-based automated teller machine network, announced last week it would widen its territory through acquisitions from NationsBank Corp.

Honor is buying three relatively small electronic funds transfer networks that operate in midwestern and western states where Honor has little or no coverage.

The networks are Express of Little Rock, Ark.; Via of Wichita, Kan.; and BankMate New Mexico, Albuquerque. Honor and NationsBank did not disclose financial terms and said the deal would close by yearend.

Taken together, the three networks would add two million transactions in monthly switch volume for Honor, which processes 54 million a month.

The deal came on the heels of Honor's announcement in July of its agreement to buy BankMate, the St. Louis network that MasterCard International owns. BankMate's monthly transaction volume is five million.

The acquisitions would place Honor second nationwide in switch transaction volume, trailing MAC, the network owned by Electronic Payment Services Inc. of Wilmington, Del., and moving ahead of Star System of San Diego. Honor already has more ATMs than any other network.

Honor's expansion path has been unique among the largest regional networks. In January it completed mergers with Alert of Birmingham, Ala., and Most of Reston, Va. The only other major network purchase this year was Houston-based Pulse EFT Association's acquisition of Gulfnet of Slidell, La., in May.

Paul Schmelzer, executive vice president at Honor, said his company, based in Maitland, Fla., sees geographical expansion as the key to its growth.

"We think there is significant market opportunity available in moving our territory to the west," he said.

NationsBank, which holds an equity stake in Honor, inherited the three small networks in its purchase last January of Boatmen's Bancshares, St. Louis. The sale of Express, Via, and BankMate New Mexico was anticipated by industry observers and hinted at by Honor in recent months.

"We really had to make a strategic decision whether to form a switch- business strategy and continue to invest in it, or whether it made more sense to sell it," said Michael Jennings, senior vice president of business development and ATM networks at Charlotte, N.C.-based NationsBank.

"It was a pretty logical progression of events, given Honor's acquisition of BankMate," said Alan P. Pohlman, executive vice president of Carmody & Bloom Inc., an electronic funds transfer consulting firm based in Ridgewood, N.J. "These networks have been on the block for a while. When you think about who might be interested in them, Honor is certainly the logical choice."

As Honor edges further into Pulse and Star territory, future network bidding patterns are unclear, Mr. Pohlman said.

Among the smaller midwestern networks there is less overlap in bank ownership, Mr. Pohlman said, adding that any deal must "stand on the processing merits and the brand merits."

Mr. Schmelzer said Honor is already calling on the 150 financial institutions that will join its 1,870 members as a result of the NationsBank acquisitions. Honor hopes to harvest some revenues on the processing side by selling noncore services such as ATM-terminal driving, Visa check and MasterMoney debit card processing, and card production services.

Mr. Schmelzer said his "preliminary conversations" in those markets indicate there is "significant opportunity for us with our service set."

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