Now that it has sold its small core processing and teller automation business to another technology vendor, Goldleaf Financial Solutions Inc. plans to step up marketing of its integrated payment processing systems to middle-market banks.
Goldleaf said Tuesday that it has sold its core processing and WinTeller business lines to Integrated Bank Technology Inc. of Cedar Park, Tex., which agreed to provide core, teller, and outsourced item processing to Goldleaf’s clients.
Lynn Boggs, Goldleaf’s president and chief executive, said the sale would enable his Norcross, Ga., company to focus more attention on its check processing and automated clearing house systems, which it will market especially to banking companies with up to $30 billion of assets.
Goldleaf has long offered an ACH system that is used by more than 2,500 community banks, but its acquisition in January of last year of the Atlanta imaging technology vendor Alogent Corp. transformed the company, Mr. Boggs said.
“They brought a big-bank mentality to us,” he said. “They helped us address the $10 billion middle-market accounts.”
Alogent primarily served large domestic banking companies, including JPMorgan Chase & Co., SunTrust Banks Inc., and KeyCorp. Goldleaf is now offering an integrated remote capture system that lets banks decide on the fly how to clear checks from corporate clients and merchants by judging their eligibility for ACH conversion and the relative costs of clearing as ACH files or images, he said.
Two thirds of Goldleaf’s business is in payments, Mr. Boggs said, and it will report around $85 million of full-year revenue when it releases results in mid-March. “We can be very nimble in areas like remote capture. We believe we can be a very clear leader.”
Mr. Boggs would not say how much IBT paid for the units, except to say the price was comparable to their 2008 revenue. Goldleaf said it expected $1.7 million of revenue this year from the units, but he said some sales last year would boost revenue in 2009.
Goldleaf had been in talks with IBT for six to nine months, Mr. Boggs said; IBT initially considered a deal to resell Goldleaf’s software before the two companies agreed on the unit sale.
Mike Golebiowski, the president of IBT, said that over the next six months it plans to tie Goldleaf’s core and teller systems into his company’s Integrated Bank Environment, which incorporates branch and call center, interactive voice response, Internet and mobile banking, and customer relationship management modules.
“The piece that was missing was having our own core solution,” Mr. Golebiowski said. “This essentially completes our product line.”
IBT had more than 145 community bank customers, and gained 49 new ones with the acquisition, he said.
Bob Meara, a senior analyst at Celent, the financial research arm of Marsh & McLennan Cos., had doubts about the appeal of a combined ACH and image system.
“Not too many corporate clients are interested in that detail,” he said. For those with a moderate check volume, ACH conversion doesn’t offer major savings, “and high-dollar checks favor Check 21 clearing, which is faster.”
Other big banking companies, including Wells Fargo & Co. and Fifth Third Bancorp, will handle multiple payment streams for their clients, Mr. Meara said.
The bigger opportunity might be to offer midtier banking companies outsourced item processing, he said. “Tier 2 banks seem to be a very ripe area” for outsourced check clearing. With checks in precipitous decline and infrastructures in need of modernization, “that’s a hard business case to make for a lot of midtier banks.”
