NYCE, the dominant automated teller machine network in the Northeast and fifth-largest nationally, announced a merger agreement Monday with Magic Line of Michigan.
The combined network, the latest resulting from a series of consolidation moves in recent years, would link 2,370 financial institutions, 179,000 point of sale locations, and 31,125 ATMs in 15 states and Puerto Rico.
Terms of the agreement, expected to close in mid-1999, were not disclosed. Of 12 director seats, each assigned to one of the combined network's principal financial institutions, NYCE owners led by Chase Manhattan Corp., Citigroup, and Fleet Financial Group would occupy eight.
Executives said the merged company, to carry NYCE Corp.'s name and be based at its Woodcliff Lake, N.J., headquarters, will have first-year revenue of $100 million.
Dennis Lynch, president and chief executive officer of NYCE Corp., would retain his titles. John Bascom, president and CEO of Magic Line Inc. in Dearborn, Mich., would report to Mr. Lynch as executive vice president of NYCE and president of its Midwest operation.
"This is a natural byproduct of the very rapid bank consolidation," Mr. Lynch said.
Consolidation among owner banks also influenced the rapid growth through regional acquisitions of Honor Technologies Inc. of Maitland, Fla.
Honor in September set a new standard by signing a cross-country deal with Star System Inc. of San Diego. That transaction is expected to close in the first quarter, creating an 80,000-ATM behemoth paralleling the merger this year of lead banks NationsBank Corp. and BankAmerica Corp.
Mr. Bascom said Magic Line evaluated several alternatives and "it became clear that a merger with NYCE met all the criteria we were looking for. We felt it was important to be on the leading edge of the curve of creating an inter-regional model."
Eventually, Mr. Lynch said, "there will be several national-like entities that will really be the providers of deposit access for financial services."
NYCE and Magic Line services overlap in such areas as ATM processing and remote banking. With greater economies of scale, Mr. Lynch said, the new company will have a "broader reach into banking households."
Executives said they expected "minimal job loss." Mr. Lynch said NYCE has added 100 employees in each of the past two years, bringing its total to 350.
Magic Line has faced competition from a distant invader-the MAC network based in Wilmington, Del., which signed up 50 Michigan institutions with 535 ATMs this year. MAC's parent, Electronic Payment Services Inc., recently agreed to be acquired by Concord EFS Inc., a Memphis transaction processor.
Bank One Corp. of Chicago, one of Electronic Payment Services' current owners, is also a Magic Line owner and is now set to become a principal NYCE owner, along with Magic Line allies Comerica Inc., Michigan Credit Union League, and Michigan National Bank.
Stephen S. Cole, president and chief executive officer of Chicago-based Cash Station Inc., said he welcomed a new competitor in the Midwest.
"For us, it's steady as she goes," he said. "We've been able to grow market share in Illinois, Michigan, and Indiana in the last few years, and we'll continue to do so."