Magazine article American Banker

Sanchez to Buy Small Processing Firm

Magazine article American Banker

Sanchez to Buy Small Processing Firm

Article excerpt

Sanchez Computer Associates Inc. announced a deal last week that would put it on the growing list of core banking software providers that offer outsourcing services to banks.

The Malvern, Pa., company said it has agreed to buy Artech Financial Services Inc., which Citizens National Bank of Evans City, Pa., spun off last year. Terms were not disclosed.

Artech, a 25-employee data processor based in Pittsburgh, runs Sanchez software on behalf of five community banks in the Pennsylvania area, including Citizens.

"Sanchez has doubled the market it is going after," said Charles Wittmann, an analyst at Wheat First Union.

Outsourcing would give Sanchez a more stable source of recurring revenues, he added.

The company reported fourth-quarter revenues of $12.3 million, up 39% from the 1997 quarter. Quarterly net income was $2.4 million, up 58%. Its earnings of 19 cents per share were 2 cents higher than Wheat First had expected.

Sanchez's stock price fell last week $1.375, closing Friday at $26.50.

The company introduced its Profile/Anyware software in 1996, positioning it as flexible client/server software that could support the telephone- or Internet-based segments of larger banks. The Dutch banking and insurance conglomerate ING Groep NV, for example, uses the software to run its branchless bank in Canada, ING Direct. Other users include Citigroup, Sumitomo Bank Ltd., and Bankers Trust Co.

Sanchez's outsourcing option would let banks support the creation of Internet banking units without large up-front investments. …

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