Fiserv Inc (
recently signed a contract with Community Bank - Wheaton / Glen
Ellyn. The community bank, a subsidiary of
Community Financial Shares, Inc. (
, chose Fiserv's DNA account processing platform to upgrade its
The community bank serves Wheaton, Glen Ellyn and surrounding
communities in DuPage County, Ill. and has more than 29K
customers. It manages assets worth $355.0 million. The bank
selected DNA due to its closely integrated complementary
solutions, customer friendly approach and strong business
The DNA account processing solution has gained significant
momentum in recent times. Recently, Fiserv won contracts from
three leading credit unions namely Greater Nevada, MIDFLORIDA and
Navigant, which on a combined basis have more than 302K members.
DNA banking platform was the primary reason behind Fiserv's
acquisition of Open Solutions early this year. The acquisition of
the DNA platform is expected to expand Fiserv's customer base
going forward. Most of the DNA contracts are long term in nature,
which is significant. These will add a recurring revenue source
to Fiserv's top line.
Fiserv expects to earn revenue synergies of more than $75.0
million and cost synergies of $50.0 million over the next several
years from the acquisition of Open Solutions. The acquisition is
expected to be significantly accretive to earnings per share
Accretive acquisitions have been a key growth factor for Fiserv
over the years. In the first quarter of 2013, processing and
services revenues increased 7.6% year over year to $966.0
million, of which $65.0 million was derived from acquisitions.
Acquisitions have helped Fiserv expand its foothold in the
financial and payment solutions business through its diversified
product portfolio and continued technology upgrades. The
company's advanced product ranges are likely to further enhance
its revenue streams.
This is evident from the fact that the company signed 90 new
clients, which helped it to expand its total number of clients
for the Mobiliti solution to 1,500 at the end of the first
Client demand for the Popmoney solution continues to remain
strong as Fiserv signed 89 new institutions in the quarter,
bringing the total number of customers to 1,900. During the
quarter, Fiserv signed 78 electronic bill payment clients and 36
debit processing clients.
We believe that various contract wins and accretive acquisitions
will help Fiserv to fight stiff competition from
in the near term.
However, a volatile macroeconomic environment, banking and
financial service consolidation, poor cash flow, tough
competition and increasing industry regulations are the primary
Currently, Fiserv has a Zacks Rank #3 (Hold).
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