NYCE and Yankee 24, two of the Northeast's largest electronic banking networks, have announced an equity division among their member institutions that will follow the expected approval of the merger between the two companies.
NYCE, operated by the New York Switch Corp. in Hackensack, N.J., and Yankee 24, operated by the NENI Corp. in Wallingford, Conn., agreed to merge in February.
The post-merger network, operating under the name Infinet Payment Services Inc., will have 130 owners. Eleven will be Class A stockholders entitled to appoint an executive to Infinet's board of directors.
Two Directors for Others
The remaining institutions will be Class B stockholders. This group will be represented on the board by at least two elected directors.
Infinct's tiered ownership structure reflects an effort to retain characteristics of both Yankee 24 and NYCE in Infinet.
Yankee 24 is a not-for-profit network that is equally owned by all members. NYCE is a forprofit company owned by seven large financial institutions. During merger talks that spanned several years, Richard P. Yanak, president of Yankee 24, repeatedly said that representation of small banks on the board would be a precondition.
Mr. Yanak, who will be president and chief executive officer of Infinet, could not be reached for comment on the equity division.
However, he said at the time of the merger announcement that he is confident the interests of Yankee 24 member institutions will be well represented.
"Infinet will combine two of the most respected names in branded electronic payment services, supported by broad-based industry ownership," he said.
Filed in Three Fed Districts
The public statement on Infinet's structure comes just as the New York Switch and NENI have filed for federal approval of the formation oflnfinet with the Federal Reserve Banks of Boston, New York, and Philadelphia.
Observers expect that the regional fed banks will approve the formation of Infinet in the next 60 to 90 days.
Infinet will comprise 70,000 point of sale terminals and 15,000 automated teller machines in 42 states. It will have about 1,400 member financial institutions.