Magazine article American Banker

Struggling Systems Integrator Pins Hopes on Web

Magazine article American Banker

Struggling Systems Integrator Pins Hopes on Web

Article excerpt

Atlantic Data Services Inc., a systems integrator for banks, is looking to the Internet for a post-year-2000 boost.

The Quincy, Mass.-based company has specialized recently in preparing its clients' systems for year-2000 complications. It knew that this part of its business -- which contributed 64% of its revenue in the April-June quarter -- would eventually dry up. But it was stung by a series of events in the last 12 months that have dramatically reduced its revenues, income, and stock price.

The result is that Atlantic Data, which has been public for 18 months, is probably at a low point in its 20-year existence.

"The last year has been difficult in banking and for those associated with banking," said Robert W. Howe, chairman and chief executive officer.

"I think the business is improving," he added. "Banks are starting to understand what their (business) models will look like, and they'll certainly start spending more on electronic commerce, Internet banking, and customer relationship management.

"And I do not see any slowdown in acquisitions going forward, so the future to us looks very good."

Atlantic Data works primarily for merging banks. Its clients include Zions Bancorp., Fleet Financial Group, and Fifth Third Bancorp. The company's 235 technology consultants are working on projects at 25 banks, all of which have more than $10 billion of assets.

Atlantic went public in March 1998 at the height of the year-2000 spending boom, raising about $25 million in a $14-per-share offering. The stock appreciated steadily through most of 1998 and reached its high of $25 on Nov. 2.

Mr. Howe said things started to unravel in September 1998 as bank prices started to slide because of Russian loan defaults, hedge fund bailouts, a slowing in the merger pace, and reduced spending on information technology.

Those cost-containment efforts hurt companies like Atlantic Data. …

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