M&I to Help BankAmerica In Integrating New Units

BankAmerica Corp. has signed a $17 million, five-year deal with M&I Data Services Inc. to help the bank convert some of its acquisitions to common banking software.

While the deal does not cover Bank of America units related to its planned merger with Security Pacific Corp., M&I will also perform processing for many of the institutions the banking giant has already purchased.

Flexible Arrangement

The terms of the agreement could be expanded, however, if the bank continues with aggressive expansion plans, M&I officials said.

"Our agreement is to provide Bank of America with a conversion vehicle for their out-of-state acquisitions," said Joseph L. Delgadillo, senior vice president, financial services group, of M&I Data Services. The company is a subsidiary of the $7.4-billion asset Marshall & Ilsley Corp., based in Milwaukee.

Bank of America "could certainly do this conversion itself. But we've proven we can convert institutions in a pretty economical manner," Mr. Delgadillo added.

In June, M&I completed the first of its conversions under its current contract with Bank of America. The vendor took over the processing for two banks acquired in New Mexico, Albuquerque Federal Savings Bank and Sandia Savings Bank.

Prior Relationship

Four other banks will be converted in the next six to nine months, Mr. Delgadillo said, but he declined to name them.

Before the new deal was signed, M&I did processing for several of the giant bank's subsidiaries -- Bank of America Nevada, Bank of America New Mexico, and Bank of America State Bank in California.

The arrangement between the vendor and the bank is flexible, allowing for the possibility that new banks will be added. "The size and time frame of the contract depends on their acquisition strategy," Mr. Delgadillo said.

Under the agreement, M&I will convert the systems running in banks acquired by Bank of America to M&I's Integrated Banking System software. The software, which runs on mainframe computers from International Business Machines Corp., includes modules for deposits, lending, and customer information files. The company uses the software in its service bureau environment, which does processing for about 400 banks.

M&I will handle the BankAmerica processing in its data center in Milwaukee. However, once the acquired banks are using the M&I software, Bank of America will gradually take over their operation, Mr. Delgadillo added. Bank of America will probably handle these operations separately from those of the parent company and Security Pacific units.

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