Mitek Systems Inc. said it added two large banks to its roster of clients using its mobile check-deposit technology during the quarter ended March 31, as its market share in the category continues to grow.
The San Diego vendor on May 6 said it added Bank of America Corp. and Capital One Financial Services Corp. through its distribution relationship with NCR Corp., a maker of automated teller machines and other financial technology. The news follows Mitek’s announcement in February that it added as a direct client JPMorgan Chase & Co. in December. JPMorgan Chase had previously been using internally developed software to offer mobile check deposit to its clients.
“We see the momentum increasing, particularly as banks want to engage new customers and provide better services to existing customers,” James DeBello, Mitek president and chief executive, said in a May 6 interview. “It’s a revenue driver.”
A spokesman for Bank of America declined to comment on the announcement and said the bank has no specific time frame for when it would make mobile check deposit available to customers.
A spokesperson for Capital One confirmed that it will use Mitek’s technology but did not say when it will be made available to consumers.
In total, Mitek and its distributors signed 26 new banks for the service during its second fiscal quarter, bringing the number of financial institutions using it to 40.
Mitek’s revenue for the quarter rose 89% from a year earlier to $2.9 million. The company’s profit soared to $570,000, or 2 cents per diluted share, from $7,000, or 0 cents per diluted share.
“They’re really hitting on all cylinders right now,” says Ryan Worch, a managing director with the Bethesda, Md., investment firm Worch Capital LLC, which owns Mitek shares. “Right now it’s more or less of an … execution and implementation strategy here on out.”
Worch says adding Bank of America and Capital One is further validation of Mitek’s technology, which is licensed by dozens of other vendors that market the software to their own bank and credit union clients. Mitek also said that Diebold Inc. has agreed to distribute its technology.
Five of the top 10 U.S. banks are using Mitek’s technology, DeBello said. In addition to Chase, BofA and Capital One, U.S. Bancorp also uses the software through the Minneapolis bank’s relationship with vendor Fidelity National Information Services Inc., DeBello said. He would not name the fifth one.
While the number of banks and credit unions that have actually made mobile check deposit available to their customers is still small, analysts expect a large number to do so this year to compete with big banks.
Mitek also is making a push to gain more exposure to the investment community. It announced that it recently completed a private placement of its common stock to institutional investors, which generated $15 million in gross proceeds for the company.
The sale helps Mitek, which is traded over the counter, overcome a net equity requirement for getting listed on the Nasdaq Capital Market.
The company plans to file to be listed on the exchange this week, DeBello said.
George Sutton, a senior research analyst who follows Mitek for Craig-Hallum Capital Group LLC in Minneapolis, says getting listed could garner wider analyst coverage and potentially improve the company’s image among clients, as well.
