Fiserv Profits Rise 19% in the 4Q/04

WI-based Fiserv reported that processing and services revenues rose 20% in the fourth quarter to $866.1 million. Net income for the quarter rose 19% to $97.5 million. Revenues for financial institution outsourcing, systems and services hit $596.7 million in the fourth quarter compared to $566.1 million for 4Q/03. During the fourth quarter Countrywide Bank chose Fiserv CBS as its new core processing platform and WA-based Columbia Bank chose Fiserv for a technology package including the “PCS Vision” system from Information Technology and electronic funds transfer services from Fiserv EFT. Fiserv closed four acquisitions last year including CheckAGAIN. The Company is currently negotiating a 12-year contract with three Australian banks for electronic check settlement services. For complete details on Fiserv’s fourth quarter results visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

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Q4 Bankruptcy Filings Drop More than 7% Y/Y

Consumer bankruptcy filings during December were flat compared to one-year ago following a sharp decline in the prior month. However, for the fourth quarter, filings were down 7.4%, and for the full year, filings declined nearly 4%. During December, 113,957 consumer Chapter 7 and 11 filings were made, compared to 113,383 for December 2003. During the fourth quarter, there were 364,313 consumer bankruptcy filings, compared to 393,348 for 4Q/03. In the third quarter there were 366,837 consumer bankruptcy filings. Year-to-date bankruptcy filings were 1,552,967. The decline for 2004 is the first drop in consumer bankruptcy filings since 2000.

Monthly Filings Historical
Dec 03: 113,383
Jan 04: 114,737
Feb 04: 124,719
Mar 04: 152,567
Apr 04: 145,543
May 04: 136,509
Jun 04: 127,742
Jul 04: 133,390
Aug 04: 125,783
Sep 04: 127,664
Oct 04: 133,404
Nov 04: 116,952
Dec 04: 113,957
Source: CardData (www.carddata.com)

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Premiums for

Premiums paid for credit card portfolios with less than $5 million in assets rose slightly last year while deals in the $10 million to $20 million bandwidth now command premiums as high as 27%. Smaller portfolios tend to be high quality, home grown, and stable with charge-offs under 2% and with more than four years of seasoning. According to R.K. Hammer Investment Bankers, “micro” portfolios with less than $1 million in assets produced premiums between 5% and 10%. “Mini” portfolios in the $1 million to $5 million range draw a 6% to 16% premium, while “small” portfolios in the $5 million to $10 million bandwidth command premiums ranging from 7% to 17%. “Midi” portfolios in the $15 million to $20 million range pull a 10% to 27% premium. Hammer says that some premiums paid are misleading since many smaller portfolio deals include an earnings-sharing provision based on future activity, which dilutes the effective premium figure at time of sale. Overall, of the 200+ portfolios changing hands last year, premiums ranged from 5% to 41%. The industry average premium for 2004 was 18.75% above book value.

PREMIUM RANGE
SIZE 2003 2004
Micro (<$1MM) 4-9% 5-10% Mini ($1-5MM) 5-15% 6-16% Small ($5-10MM) 8-16% 7-17% Midi ($10-20MM) 11-26% 10-27% Source: R.K. Hammer Investment Bankers

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EasyGreen Cash Card is Launched

FL-based Global Axcess Corp has launched the “EasyGreen Cash Card,” a payroll stored value/prepaid card. Global Axcess’ stored value/prepaid card platform provides a feature-rich, reliable, scalable, and secure solution for small, mid-sized, and large companies. Customers have on-line, real-time access to instantly issue payroll cards, load value, view balance information, transaction history, and manage employee “virtual accounts.” Global Axcess Corp was founded in 2001 with a mission to emerge as one of the nation’s leading network-based electronic commerce and transaction processing companies.

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AmEx and Priceline Launch a Cruise Promotion

American Express and Priceline.com have launched the “Cruise Bonus Days” promotion through February 21st, offering an “American Express Gift Card” worth up to $300 and double “Membership Rewards”. To make a 2005 cruise even more irresistible, major cruise lines are tossing in their own bonuses, which range from shipboard credits to free airfare, upgrades, complimentary wine and additional savings. Customers are not required to book an oceanview stateroom in order to qualify for cruise line-specific bonuses. Priceline.com is a travel service that offers leisure airline tickets, hotel rooms, rental cars, vacation packages and cruises. American Express Company is a diversified worldwide travel, network, and financial services provider founded in 1850.

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SMART System Technologies Names a COO & CTO

NY-based SMART System Technologies has named Michael Richardson as President/COO and Raymond Garcia as CTO. As President and COO, Michael Richardson will be primarily responsible for overseeing the day-to-day operations of the company. Formerly the Chief Technology Officer, Richardson brings over 25 years of experience in a variety of senior management and entrepreneurial positions with leading-edge technology companies to his new role. Richardson is also a former Vice President of Enterprise Technology for InterWorld Corp, which he helped guide from the launch of the company through a successful initial public offering (IPO) in 1999. SMART System Technologies, Inc. (SST) is a leading provider of contactless payment and loyalty solutions.

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AMEX INTL 4Q/04

Card dollar volume on American Express cards outside the U.S. rose nearly 23% in the fourth quarter, compared to a 15% gain for U.S. cards during the same period. The number of non-U.S. cards-in-force at year-end 2004 was 21 million, a 5% gain over the previous year. Card volume outside the U.S. was $32.1 billion for the fourth quarter, and $111.3 billion for the full year. AmEx says Global Network Services volumes rose in excess of 40% in the fourth quarter due to continued strong growth in non-U.S. partner volume and the addition of MBNA-related volumes in the U.S. For the year, GNS volume was up about 30%. During the fourth quarter, AmEx launched its first American Express-branded credit card in China, denominated in both local Chinese
currency and U.S. dollars, through its network relationship with the Industrial and Commercial Bank of China. AmEx also supported the entry of Credomatic into the Mexican marketplace during 4Q/04 with the launch of American Express-branded credit cards in Guadalajara, Mexico, which included a co-branded card with Farmacias Guadalajara, one of Mexico’s largest drug and supermarket retailers. For complete details on American Express fourth quarter performance visit CardData (www.carddata.com).

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NCR’s ATM Revenues Climb 19% in 2004

NCR reported that its Financial Self Service or ATM segment produced record fourth-quarter revenue of $451 million, a 15% gain from the year-ago period. Operating income of $88 million increased 14% from 4Q/03 due to higher volume and expense reductions. For the full year, ATM revenues hit $1.3 billion, a 19% gain over 2003. Retail Store Automation generated $270 million of Q4 revenue, up 15% from the fourth quarter of 2003. Retail Store Automation generated $18 million of operating income in the quarter, an increase of 29% from the prior-year period, due to increased volume, expense reductions and the positive effect of currency fluctuations. NCR’s Teradata Data Warehousing segment reported fourth-quarter revenue of $412 million, up 14%, and operating income of $72 million, up 18%. For complete details on NCR’s fourth quarter results visit CardData ([www.carddata.com][1])

[1]: http://www.carddata.com

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FTC’s Operation No Credit Seized Homes

The FTC announced that it completed its actions against Jubilee Financial Services, a provider of debt negotiation services, including forfeiture of personal residences, and a ban from advertising, marketing, or providing debt negotiation services. The FTC’s original complaint alleged that Jubilee Financial Services, Inc., related company Jabez Financial Group, Inc., and others lured consumers with false promises that consumers who enrolled in their debt negotiation program would be able to pay their debts at a substantially reduced rate and that consumers would stop receiving collection calls from creditors. According to the FTC, consumers who enrolled in the defendants’ program and paid substantial fees continued to receive phone calls and collection letters from creditors because the defendants did not negotiate substantial debt reductions for consumers. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to (Jubilee Financial3-01/26/05) help consumers spot, stop, and avoid them.

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Metris Posts First Profitable Year Since 01

After a wild ride over the past ten years, Metris Companies (Direct Merchants Credit Card Bank) returned to profitability in 2004. The sub-prime issuer squeezed out a $700,000 profit in the fourth quarter, but ended 2004 with a full-year profit of $33.7 million. The weak profit in the fourth quarter was due to financing transactions executed during the quarter coupled with increased marketing expenses. New account originations for the quarter were 208,000 compared to 118,000 in the previous quarter, and 76,000 in 4Q/03. However, gross active accounts declined from 2.5 million one-year ago to 2.2 million at year end 2004. At the end of the fourth quarter, Metris had $6.6 billion in managed credit card loans compared to $8.1 billion at the end of 4Q/03. The managed net charge-off rate for the fourth quarter was 15.5%, compared to 14.6% in the previous quarter, and 21.7% for the fourth quarter of 2003. The managed delinquency rate was 9.1% as of December 31st, compared to 9.7% for the prior quarter, and 11.1% for the fourth quarter of 2003. For complete details on Metris’ fourth quarter results visit CardData ([www.carddata.com][1])

METRIS NET INCOME HISTORICAL
1995: +$ 4.6 million
1996: +$ 20.0 million
1997: +$ 38.0 million
1998: +$ 57.3 million
1999: +$115.4 million
2000: +$195.2 million
2001: +$245.8 million
2002: -$ 1.6 million
2003: -$147.7 million
2004: +$ 33.7 million
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com

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PSCU Adds 3 CA CUs and 26,000 Card Accounts

FL-based PSCU Financial Services has signed three new member-owners from California including San Mateo CU (17,500 card accounts), Santa Ana FCU (5,500 card accounts), and West One FCU (3,000 card accounts). Under the terms of the agreement with San Mateo Credit Union, PSCU Financial Services will service more than 17,500 credit card accounts for the credit union, which has total assets of more than $550 million and more than 56,000 members. PSCU Financial Services is the nation’s largest Credit Union Service Organization (CUSO). As a non-profit cooperative, the company is owned by more than 500 member credit unions nationwide, representing more than 8 million cardholder accounts and more than 225,000 online bill payment subscribers.

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