Headlines:
Earnings Report Lifts Deluxe Shares Online Resources, Corillian Widen Pact Authentium Offers Online Security Tool Fiserv to Process for Innovative Bank An Ariz. CU to Use Bharosa Applications Cape Ann Savings Touts Trust Software
Earnings Report Lifts Deluxe Shares
Shares of Deluxe Corp. bounced last week after the nation's largest check printer reduced its dividend by 37.5% and announced a plan to cut at least $150 million in costs by the end of 2008.
On Thursday the Shoreview, Minn., vendor reported better second-quarter results than it had forecast in June. Its shares climbed 24% Thursday and Friday, to $17.05 a share, and was holding those gains as of midday Monday. In the days before the earnings report the stock had fallen as low as $12.98.
Deluxe said it lost $2 million, or 5 cents a share, compared with a profit of $42 million, or 82 cents a share, in the same period last year. Overall revenue dropped 7%, to $403 million. Revenue fell in its primary check-printing businesses but rose in its small-business services unit.
In June, Deluxe said it would take a second-quarter impairment charge of $45 million, or 57 cents a share, after abandoning a computer upgrade project that had suffered delays and cost overruns. At the time the company said the charge would cause it to lose 9 to 11 cents for the quarter.
"We are disappointed with our second-quarter results and, more specifically, having to take an impairment charge," Lee Schram, who became Deluxe's chief executive officer in May, said in a press release Thursday. "We have a strong sense of urgency and have riveted our employees around significantly improving our financial performance."
He told analysts that Deluxe planned to make some capital investments this year but still reduce costs by $150 million over the next two and a half years.
Its board declared a quarterly dividend of 25 cents a share, payable Sept. 5 to shareholders of record at the close of business Aug. 21. The first-quarter dividend was 40 cents.
Deluxe said it expects third-quarter earnings of 41 to 45 cents a share, on revenue of $395 million to $405 million. For the full year, it projected earnings of $1.41 to $1.51 a share, on revenue of $1.63 billion to $1.65 billion. In June it had projected full-year earnings of $1.37 to $1.47 a share.
Online Resources, Corillian Widen Pact
The online banking vendors Corillian Corp. and Online Resources Corp. have expanded a referral deal that began between Corillian and Princeton eCom Corp., an online bill payment provider that Online Resources bought last month.
Corillian had been referring customers to Princeton eCom for more than four years. Under the multiyear expansion, announced Monday, Corillian also will resell bill payment and customer care services from Online Resources.
Corillian, of Hillsboro, Ore., sells online banking software, primarily to large institutions. Online Resources, of Chantilly, Va., provides a hosted online banking service, primarily to small institutions.
Authentium Offers Online Security Tool
Authentium Inc. of West Palm Beach, Fla., started marketing an online banking security product Monday to both banks and Internet service providers.
The software, VirtualATM, can be activated at the start of online banking sessions and disables most other programs running on the user's computer for the duration of the session.
"Your computer essentially becomes a dummy terminal that does one thing," said Corey O'Donnell, Authentium's vice president of marketing.
This approach disables keylogging viruses, chat programs, and any other software that could put a user's online banking credentials at risk, Mr. O'Donnell said.
The current version works only with Microsoft's Internet Explorer browser. Authentium is in talks with some banks and Internet service providers but has not signed any of them up for the software, Mr. O'Donnell said.
Fiserv to Process for Innovative Bank
Innovative Bank in Oakland, Calif., plans to use a change in core processing outsourcers as an opportunity to boost its efficiency and streamline vendor relations.
The $204 million-asset unit of Innovative Bancorp. plans to move its loan and deposit accounting in October from two vendors to a data center operated by Fiserv Inc.'s Information Technology Inc.
William C. Demmin, the chief financial officer of the bank and its parent, said his company wanted a better-integrated system to handle its growing portfolio of Small Business Administration loans.
"We're going to go from five vendors to basically one," he said. "This will greatly improve our overall productivity and enable us to focus on banking, which is our goal."
Innovative Bank's current core processing system, hosted by Fidelity National Information Services Inc. of Jacksonville, Fla., is "an adequate system for our primary core, but it doesn't do SBA loans," Mr. Demmin said.
Since entering the SBA business in 2001, Innovative has become one of the nation's top five participants in the SBA Express program by number of loans, he said.
Though the loans make up a fairly small part of Innovative's $150 million commercial loan portfolio, each loan requires technical assistance by the bank's staff and separate processing on the secondary accounting system. Mr. Demmin said the process causes a variety of "reconciliation problems."
In addition, Innovative uses separate vendors for online business banking, item processing and statement production, and individual retirement account processing.
After reviewing several major core processing providers, Innovative signed a contract with Fiserv to handle all those functions, Mr. Demmin said. "Fortunately, most of our contracts were coming due this year."
An Ariz. CU to Use Bharosa Applications
Bharosa Inc. said Desert Schools Federal Credit Union of Phoenix is installing two of its online banking security applications.
The Santa Clara, Calif., vendor announced the deal last week. The $2.7 billion-asset credit union plans to use Tracker, a fraud-detection tool, and Authenticator, a graphical keypad that lets users enter a password or personal identification number without using the keyboard.
The vendor said Monday that Silicon Valley Bank, a unit of the $5.1 billion-asset SVB Financial Group of Santa Clara, has been using the two applications since February, along with Slider, a version of Authenticator that lets users assign their PINs to a symbol, then slide a row of symbols back and forth so that the user-selected symbol is under the proper digit of the user's PIN.
Cape Ann Savings Touts Trust Software
Cape Ann Savings Bank of Gloucester, Mass., has virtually eliminated trading errors in its trust division by automating its trade execution, an executive says.
E. Gail Ramos, a vice president and the senior trust officer at the $346 million mutual savings bank, said it has been using an investment automation module from AccuTech Systems Corp. of Muncie, Ind., for two or three months as it builds more rollover business to help clients manage the investable assets in self-directed individual retirement accounts.
The module is a component of the AccuTrust Gold software, which Cape Ann Savings has used for four years, she said in an interview last week.
Since it started using AccuTrust Gold, the thrift has increased its assets under management by about 40%, to $227 million, and has cut its trust department staff in half, to one full-time and one part-time staff member, Ms. Ramos said.
Ray Unger, the president of AccuTech, said 350 community banks, private trust companies, and others in the United States and Canada are using the software.
