SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities and Exchange Act of 1934
For the fiscal year ended December 31, 1995
Commission file no. 0-14948
FISERV, INC.
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(Exact name of Registrant as specified in its charter)
WISCONSIN 39-1506125
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
255 FISERV DRIVE, BROOKFIELD, WISCONSIN 53045
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (414) 879-5000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE
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(Title of Class)
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $.01 Par Value
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(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes(X) No
State the aggregate market value of the voting stock held by non-affiliates of
the registrant as of January 31, 1996: $1,212,102,441
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of January 31, 1996: 44,892,683
DOCUMENTS INCORPORATED BY REFERENCE: List the following documents if
incorporated by reference and the part of the Form 10-K into which the document
is incorporated: (1) Any annual report to security holders; (2) any proxy or
information statement; and (3) any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933.
1995 Annual Report to Shareholders - Parts II, IV
Proxy Statement for March 21, 1996 Meeting - Part III
FISERV, INC. AND SUBSIDIARIES
FORM 10-K
December 31, 1995
PART I Page
Item 1. Business 1
Item 2. Properties 10
Item 3. Legal Proceedings 11
Item 4. Submission of Matters to a Vote of Security Holders 11
PART II
Item 5. Market for the Registrant's Common Equity and
Related Shareholder Matters 11
Item 6. Selected Financial Data 11
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
Item 8. Financial Statements and Supplementary Data 11
Item 9. Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure 11
PART III
Item 10. Directors and Executive Officers of the Registrant 12
Item 11. Executive Compensation 12
Item 12. Security Ownership of Certain Beneficial Owners
and Management 12
Item 13. Certain Relationships and Related Transactions 12
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 12
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PART I
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ITEM 1. BUSINESS
Fiserv was formed on July 31, 1984, through the combination of two major
regional data processing firms located in Milwaukee, Wisconsin, and Tampa,
Florida. These firms--First Data Processing of Milwaukee and Sunshine State
Systems of Tampa--began their operations in 1964 and 1971, respectively, as the
data processing operations of their parent financial institutions.
Historically, operations were expanded by developing a range of services for
these parent organizations as well as other financial institutions.
Since its organization in 1984, the Company has grown through the
continuing development of highly-specialized services and product enhancements,
the addition of new clients and the acquisition of firms complementing the
Fiserv organization.
BUSINESS RESOURCES
Fiserv conducts the following operations nationwide: financial data
processing, software system development, item processing and check imaging,
multiple technology support and related product businesses. In addition, the
Company has business support centers in London, England, and Singapore. The
Fiserv organization, headquartered in Brookfield, Wisconsin, is prepared to meet
the variety of information technology and related product and service needs of
the financial industry.
The SAVINGS & COMMUNITY BANK GROUP provides service bureau processing and
resource management services for savings institutions and community bank clients
and item processing services for all Fiserv clients nationwide. Business units
within the Savings & Community Bank Group are arranged by regional markets as
follows:
Western Region locations: Phoenix, Arizona; Alameda, Fresno, Fullerton,
Sacramento, San Diego, San Leandro and Walnut, California; Seattle, Washington.
Southwest Region locations: Little Rock, Arkansas; Los Angeles,
California; Denver, Colorado; Bowling Green, Kentucky; New Orleans, Louisiana;
Amarillo (Facilities Management site), Beaumont, Dallas, Houston and San
Antonio, Texas.
Midwest Region locations: Minneapolis and St. Paul, Minnesota; Fargo, North
Dakota.
Central Region locations: Chicago, Marion and Pontiac, Illinois; Davenport
and Des Moines, Iowa; Brookfield and Milwaukee, Wisconsin.
Eastern Region locations: Jacksonville, Miami and Tampa, Florida; Atlanta
and Macon, Georgia; Pittsburgh, Pennsylvania; Memphis, Tennessee.
Northeast Region locations: New Haven, Connecticut; Boston and Somerville,
Massachusetts; Piscataway and Princeton, New Jersey; Lake Success, New York;
Cleveland, Ohio.
New York Chase alliance locations: Brooklyn, Rochester and Syracuse, New
York.
The BANK & CREDIT UNION GROUP includes Fiserv sectors and business units
that provide service bureau processing, in-house software systems and strategic
outsourcing for national and international bank, mortgage bank and credit union
clients. The Bank & Credit Union Group includes the following:
CBS Worldwide Sector with business units in Fresno, California; Orlando,
Florida; Arlington Heights, Illinois; London, England; Singapore.
Financial Institutions Outsourcing Sector with business units in Covina and
Fresno, California; Honolulu, Hawaii; Arlington Heights, Illinois; Oklahoma
City, Oklahoma; Philadelphia and Pittsburgh, Pennsylvania.
Credit Union Sector with business units in Titusville, Florida; Chicago,
Illinois; Flint and Troy, Michigan; Minneapolis, Minnesota; Corvallis, Oregon.
Additional business units within the Bank & Credit Union Group include
BankLink cash management services (New York, New York); Data-Link Systems
mortgage banking services (South Bend, Indiana); Outsourcing & Government
Services; Fiserv EFT electronic funds transfer services (Portland, Oregon).
The INDUSTRY PRODUCTS & SERVICES GROUP includes all Fiserv product and
service company businesses marketing to clients within the Fiserv Corporate
Groups, as well as marketing direct to clients within the financial, healthcare,
insurance, retail, telecommunications and related industries.
The Industry Products & Services Group includes Cadre, Inc. disaster
recovery services (Hartford, Connecticut); Communications Design marketing
services (Sacramento, California); DataPro Card Services (Indianapolis,
Indiana); Fiserv Forms & Graphics (Seattle, Washington); Fiserv Human Resource
Information Services (Melville, New York); ImageSoft Technologies (Maitland,
Florida); National Embossing Company card services (Houston, Texas); RECOM
network consulting (Tampa, Florida); Sendero Corporation asset/liability
management and decision support systems (Scottsdale, Arizona).
Fiserv is active in the servicing, administration and record keeping for
Individual Retirement Accounts (IRAs) and business retirement plans. Three
subsidiary companies provide retirement plan processing services--FIRST TRUST
CORPORATION, LINCOLN TRUST COMPANY and THE AFFINITY GROUP, all headquartered in
Denver, Colorado. The Affinity Group also does business in Florida as
Retirement Accounts, Inc. Cumulatively, these Fiserv subsidiaries service
approximately 331,900 retirement plans and custodial accounts with assets valued
at more than $16.8 billion.
INFORMATION TECHNOLOGY, INC. (ITI) is a Fiserv subsidiary company based in
Lincoln, Nebraska. ITI is a nationwide leader in the design, development,
delivery, installation and support of the ITI Premier banking software and
related services. The ITI product serves financial institutions directly
through in-house software licenses, and indirectly through outsourcing providers
using ITI software.
BUSINESS STRATEGY
The market for products and services offered by financial institutions
continues to undergo change. New alternative lending and investment products
are being introduced and implemented by the industry with great frequency; the
distinctions among financial services traditionally offered by savings and loan
associations, banks and credit unions continue to narrow; and financial
institutions diversify and consolidate on an ongoing basis in response to market
pressures, as well as under the auspices of the Federal Deposit Insurance
Corporation (FDIC) and the Credit Union National Association (CUNA).
Although such market changes have led to consolidations which have reduced
the number of financial institutions in the United States, such consolidations
have not resulted in a material reduction of the number of customer accounts
serviced by the financial industry as a whole. New entrants to the once limited
financial services industry have opened new markets for Fiserv services.
To stay competitive in this changing marketplace, financial institutions
are finding they must aggressively meet the growing needs of their customers for
a broad variety of new products and services that are typically transaction-
oriented and fee-based. The growing volume and types of transactions and
accounts have increased the data processing requirements of these institutions.
As a consequence, Fiserv management believes that the financial services
industry has become one of the largest users of data processing products and
services within the United States.
Moreover, Fiserv expects that the industry will continue to require
significant commitments of capital and human resources to the information
systems requirements, to require application of more specialized systems, and to
require development, maintenance and enhancement of applications software.
Fiserv believes that economies of scale in data processing operations are
essential to justify the required level of expenditures and commitment of human
resources.
In response to these market dynamics, the means by which financial
institutions obtain data processing services has changed. Many smaller, local
and regional third-party data processors are leaving the business or
consolidating with larger providers. A number of large financial institutions
previously providing third-party processing services for other institutions have
withdrawn from the business to concentrate on their primary, core businesses.
Similarly, an increasing number of financial institutions that previously
developed their own software systems and maintained their own data processing
operations have outsourced their data processing requirements by licensing their
software from a third party or by contracting with third-party processors to
reduce costs and enhance their products and services. Outsourcing can involve
simply the licensing of software, thereby eliminating the costly technical
expertise within the financial institution, or the utilization of service
bureaus, facilities management or resource management capability. Fiserv
provides all of these options to the financial industry.
To capitalize on these industry trends and to become the premier national
provider of data processing products and services, Fiserv has implemented a
strategy of continuing to develop new products, improving the cost effectiveness
of services provided to clients, aggressively soliciting new clients and making
both opportunistic and strategic acquisitions.
ACQUISITION HISTORY
Founded Acquired Business Service
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1964 July 1984 First Data Processing, Milwaukee, WI Data processing
1971 July 1984 Sunshine State Systems, Tampa, FL Data processing
1966 Nov. 1984 San Antonio, Inc., San Antonio, TX Data processing
1982 Oct. 1985 Sendero Corporation, Scottsdale, AZ Asset/liability management
1962 Oct. 1985 First Trust Corporation, Denver, CO DP for retirement planning
1962 Oct. 1985 First Retirement Marketing, Denver, CO Retirement planning services
1973 Jan. 1986 On-Line, Inc., Seattle, WA Data processing, forms
1966 May 1986 First City Financial Systems, Inc., Beaumont, TX Data processing
1962 Feb. 1987 Pamico, Inc., Milwaukee, WI Specialized forms
1975 Apr. 1987 Midwest Commerce Data Corp., Elkhart, IN Data processing
1969 Apr. 1987 Fidelity Financial Services, Inc., Spokane, WA Data processing
1965 Oct. 1987 Capbanc Computer Corporation, Baton Rouge, LA Data processing
1971 Feb. 1988 Minnesota On-Line Inc., Minneapolis, MN Data processing
1965 May 1988 Citizens Financial Corporation, Cleveland, OH Data processing
1980 May 1988 ZFC Electronic Data Services, Inc., Bowling Green, KY Data processing
1969 June 1988 GESCO Corporation, Fresno, CA Data processing
1967 Nov. 1988 Valley Federal Data Services, Los Angeles, CA Data processing
1984 Dec. 1988 Northeast Savings Data Services, Hartford, CT Data processing
1982 May 1989 Triad Software Network, Ltd., Chicago, IL Data processing
1969 Aug. 1989 Northeast Datacom, Inc., New Haven, CT Data processing
1978 Feb. 1990 Financial Accounting Services Inc., Pittsburgh, PA Data processing
1974 June 1990 Accurate Data On Line, Inc., Titusville, FL Data processing
1982 June 1990 GTE EFT Services Money Network, Fresno, CA EFT networks
1968 July 1990 First Interstate Management, Milwaukee, WI Data processing
1982 Oct. 1990 GTE ATM Networks, Fresno, CA EFT networks
1867 Nov. 1990 Boston Safe Deposit & Trust Co. IP Services, Boston Item processing
1968 Dec. 1990 First Bank, N.A. IP Services, Milwaukee, WI Item processing
1979 Apr. 1991 Citicorp Information Resources, Inc., Stamford, CT Data processing
1980 Apr. 1991 BMS Processing, Inc., Randolph, MA Item processing
1979 May 1991 FHLB of Dallas IP Services, Dallas, TX Item processing
1980 Nov. 1991 FHLB of Chicago IP Services, Chicago, IL Item processing
1977 Feb. 1992 Data Holdings, Inc., Indianapolis, IN Automated card services
1980 Feb. 1992 BMS On-Line Services, Inc. (assets), Randolph, MA Data processing
1982 Mar. 1992 First American Information Services, St. Paul, MN Data processing
1981 July 1992 Cadre, Inc., Avon, CT Disaster recovery
1992 July 1992 Performance Analysis, Inc., Cincinnati, OH Asset/liability management
1986 Oct. 1992 Chase Manhattan Bank, REALM Software, NY Asset/liability management
1984 Dec. 1992 Dakota Data Processing, Inc., Fargo, ND Data processing
1983 Dec. 1992 Banking Group Services, Inc., Somerville, MA Item processing
1968 Feb. 1993 Basis Information Technologies, Atlanta, GA Data processing, EFT
1986 Mar. 1993 IPC Service Corporation (assets), Denver, CO Item processing
1973 May 1993 EDS' FHLB Seattle (assets), Seattle, WA Item processing
1982 June 1993 Datatronix Financial Services, San Diego, CA Item processing
1966 July 1993 Data Line Service, Covina, CA Data processing
1978 Nov. 1993 Financial Processors, Inc., Miami, FL Data processing
1974 Nov. 1993 Financial Data Systems, Jacksonville, FL Item processing
1961 Nov. 1993 Financial Institutions Outsourcing, Pittsburgh, PA Data processing
1972 Nov. 1993 Data-Link Systems, South Bend, IN Mortgage banking services
1985 Apr. 1994 National Embossing Company, Inc., Houston, TX Automated card services
1962 May 1994 Boatmen's Information Systems of Iowa, Des Moines Data processing
1981 Aug. 1994 FHLB of Atlanta IP Services, Atlanta, GA Item processing
1989 Nov. 1994 CBIS Imaging Technology Banking Unit, Maitland, FL Imaging technology
1987 Dec. 1994 RECOM Associates, Inc., Tampa, FL Network integration
1977 Feb. 1995 BankLink, Inc., New York, NY Cash management
1976 May 1995 Information Technology, Inc., Lincoln, NE Software & Services
1957 Aug. 1995 Lincoln Holdings, Inc., Denver, CO DP for retirement planning
1993 Sept. 1995 SRS, Inc., Austin, TX Data processing
1992 Sept. 1995 ALLTEL's Document Management Services, CA, NJ Item processing
1978 Nov. 1995 Financial Information Trust, Des Moines, IA Data processing
SYSTEMS, SERVICES AND PRODUCTS
No matter what a financial institution requires, Fiserv offers a business-
specific solution to satisfy its needs--from data processing to specialized in-
house processing systems to customized outsourcing. Within this dynamic
relationship, Fiserv brings the resources, expertise and technical
specialization that gives an institution the security to focus its efforts on
reaching its strategic business goals.
All Fiserv products and services are designed to help clients meet their
ultimate goal: giving their customers the best possible service quickly,
accurately and completely. Through their relationship with Fiserv, financial
institutions gain the tools to enhance and expand their customer service:
advanced technology, dependable and responsive support, product and system
flexibility, and value for their money.
As a technology partner, Fiserv offers data processing solutions based on
the financial institution's requirements. This broad base of offerings results
in delivery options including service bureau capabilities; in-house software
systems; and strategic technology alliances including facilities and resource
management services. A host of financial information technology products and
services complement these delivery methods: item processing and imaging
technology services; backroom automation software systems; electronic funds
transfer services; plastic cards and other related card management services;
rate risk management systems; self-directed retirement plan processing; network
installation and integration services; human resources outsourcing; disaster
recovery; design and production of business forms and marketing literature; and
delivery and support of leading third-party software and hardware products.
COMPREHENSIVE SERVICE DIMENSION
Fiserv focuses on providing financial data processing systems and related
information management services and products to banks, credit unions, mortgage
banks, savings institutions and other financial intermediaries. This focus
allows the Company to concentrate its advanced technology, industry experience,
research and development on creating and supporting solutions uniquely designed
for the financial industry. Based on market surveys of total clients served,
Fiserv is the nation's leading independent data processing provider for banks,
savings institutions and credit unions with assets over $25 million.
Many financial institutions, including banks, credit unions, mortgage banks
and savings institutions, rely on Fiserv data center service bureau solutions
for their information processing needs. These solutions offer clients a choice
of online systems compatible with their existing equipment. Fiserv data centers
focus on the financial institution's needs within its local business climate,
helping to better serve the customer base and provide quality service at all
points of customer contact.
In-house software systems give clients a service delivery method that
enables them to process their own work. These solutions offer clients a broad
array of service capabilities to respond to emerging market opportunities.
Specific to this Fiserv solution is the option of migrating between in-house or
service bureau delivery approaches without new software conversion. The end
result: a business alliance designed to help financial institutions respond to
their customers while enabling each institution to select its preferred
operating environment.
Strategic technology alliances offer financial institutions the option of
full data processing management by Fiserv personnel on-site; or management of
their systems at a Fiserv data center. Facilities Management brings Fiserv
personnel to the client's site, while Resource Management brings the client's
operations to one of the many Fiserv data processing or computer service centers
throughout the United States. Both solutions are designed to meet the unique
requirements of the client by partnering to minimize operating costs while
allowing each client to maintain control of its software applications.
For institutions seeking to expand or enhance their mortgage banking
capabilities, Fiserv offers a specialized line of mortgage products and
services. The benefits of completely PC WindowsTM-based origination and
secondary marketing solutions and online, real-time loan servicing solutions are
available to help clients effectively meet their mortgage banking needs.
Offering comprehensive item processing (IP) services to more financial
institutions than any other external provider, Fiserv maintains a network of
specialized, regional processing centers in more than 30 cities. In a field
where efficiencies are gained through volume, Fiserv is well positioned to
leverage its resources and technological expertise for the benefit of IP
services clients nationwide. Other item processing services include: proof of
deposit, inclearing, statement rendering, bulkfile, lockbox, item research,
overdraft processing, qualified returns and return items, cash letter deposit,
fine sorting, account reconcilement and adjustments.
A growing trend in check operations is the use of imaging technology.
Fiserv offers a full range of image integration products and services. Included
are image and document management systems for management, storage and
presentation of check and document images.
Fiserv is among the nation's leading third-party providers of electronic
funds transfer (EFT) services, providing transaction authorization,
comprehensive Automated Teller Machine / Point of Sale (ATM / POS) processing
and card management services. Product flexibility and current technology,
coupled with access to all major EFT services networks, helps to keep Fiserv
clients competitive.
As a leading systems integrator, Fiserv creates joint ventures that combine
core competencies in hardware, software, functional application systems,
networks, data management and end-user computing, along with dedicated human
resources. In addition, Fiserv complements its service offerings through
numerous strategic alliances with specialized third-party technology providers.
As a worldwide provider of financial decision-support systems, Fiserv
offers asset/liability management, data warehousing and performance measurement
solutions. Consulting services help to analyze, enhance and expedite the total
financial management process.
Office automation and communication network integration services are
designed to meet specialized information technology needs. Included are
hardware and software installation, maintenance, on-site education and support
for financial institutions.
For cash management services, Fiserv offers a variety of software products
that take into account an institution's particular needs. This portfolio of
cash management solutions includes electronic banking information, reporting and
transaction initiation services.
Fiserv backroom automation systems provide PC-based productivity tools that
deliver the software, service and support necessary to meet the customer service
challenges facing the financial industry. The systems are designed to
streamline backroom operations by reducing time, keystrokes and labor.
A full range of human resource, benefit and payroll information services
are available through Fiserv to help large organizations enhance their personnel
management tasks. Marketing communications and a comprehensive financial
business forms service, including communications needs analysis and complete
project management, provide assistance at all levels of planning and
implementation. Concept, development and design of printed pieces, ranging from
direct mail and collateral material to annual reports, assist clients in
communicating with their customer base. To meet the requirements of examining
agencies, business back-up and disaster recovery planning and services are
important elements in continuous customer service.
First Trust Corporation and Lincoln Trust Company, specialized providers of
account processing, administration and trusteeship of self-directed individual
and business retirement plans, are together the largest provider of their kind
in the nation. Based in Denver, Colorado, these Fiserv companies specifically
assist financial representatives and other financial service intermediaries in
managing information through their proprietary data base technology.
SERVICING THE MARKET
The market for Fiserv data processing services and products has specific
needs and requirements, with strong emphasis placed by clients on software
flexibility, product quality, reliability of service, comprehensiveness and
integration of product line, timely introduction of new products and features,
and cost value. Through its multiple product offerings, the Company
successfully services these market needs for clients ranging in size from start-
ups to some of the largest institutions worldwide.
Fiserv believes that the position it holds as an independent, growth-
oriented company dedicated to its business is an advantage to its clients. The
Company differs from many of the data processing resources currently available
since it isn't a regional or local cooperatively-owned organization, nor a data
processing subsidiary, an affiliate of a financial institution or a hardware
vendor. Due to the economies of scale gained through its broad market presence,
Fiserv offers clients a selection of data processing solutions designed to meet
the specific needs of financial institutions.
The Company believes this independence and primary focus on the financial
industry helps its business development and related Client Service and Product
Support teams remain responsive to the data processing needs of its market, now
and for the future.
"The Client Comes First" is one of the Company's founding principles. It's
a belief backed by a dedication to providing ongoing client service and support-
- -no matter the institution size. The Fiserv Client Support and Account
Management staff is responsible for the day-to-day interface with the operations
of clients.
The Company's commitment of substantial resources to training and technical
support helps keep Fiserv clients first. Fiserv conducts the majority of its
new and ongoing client training in its data centers, where the Company maintains
fully-equipped demonstration and training facilities containing equipment used
in the delivery of Fiserv services. Fiserv also provides local and on-site
training services.
PRODUCT DEVELOPMENT
In order to meet the changing data processing needs of the financial
institutions served by Fiserv, the Company continually develops, maintains and
enhances its systems. Resources applied to product development and maintenance
are believed to be approximately 10% of company revenues, about half of which is
dedicated to software development.
Unique to Fiserv, its network of development and data processing centers
applies the shared expertise of multiple Fiserv teams to design, develop and
maintain specialized processing systems around the leading technology platforms.
The applications of its account processing systems meet the preferences and
diverse requirements of the various international, national, regional or local
market-specific financial service environments of the Company's many clients.
Though all Fiserv centers rely on the Company's nationally developed and
supported software, each center has specialized capabilities that enable them to
offer system application features and functions unique to their client base.
Where the client's requirements warrant, Fiserv purchases software programs from
third parties which are interfaced with existing Fiserv systems. In developing
its products, Fiserv stresses responsiveness to the needs of its clients through
close client contact.
Fiserv provides a dedicated system designed, developed, maintained and
enhanced according to each client's goals for service quality, business
development, asset/liability mix, local-market positioning and other user-
defined parameters.
COMPETITION
The market for data processing services to banks, credit unions and savings
institutions is highly competitive. The Company's principal competitors include
internal data processing departments, data processing affiliates of financial
institutions or large computer hardware manufacturers, independent computer
service firms and processing centers owned and operated as user cooperatives.
Fiserv competitors include EDS, M&I, Bisys, ALLTEL, ISSC (IBM), Symitar and
various regional firms. Certain of these competitors possess substantially
greater financial, sales and marketing resources than the Company. Competition
from in-house data processing and software departments is intensified by the
efforts of computer hardware vendors who encourage the growth of internal data
centers.
Competitive factors for processing services include product quality,
reliability of service, comprehensiveness and integration of product line,
timely introduction of new products and features, and price. The Company
believes that it competes favorably in each of these categories. In addition,
the Company believes that its position as an independent vendor, rather than as
a cooperative, an affiliate of a financial institution or a hardware vendor, is
a competitive advantage.
First Trust and Lincoln Trust compete with a number of large and small
providers of retirement plan administration services.
GOVERNMENT REGULATION
The Company's data processing subsidiaries are not themselves directly
subject to federal or state regulations specifically applicable to financial
institutions such as banks, thrifts and credit unions. As a provider of
services to these entities, however, the data processing operations are observed
from time to time by the Federal Deposit Insurance Corporation, the National
Credit Union Association, the Office of Thrift Supervision, the Office of the
Comptroller of the Currency and various state regulatory authorities. These
regulators make certain recommendations to the Company regarding various aspects
of its data processing operations. Such recommendations are generally
implemented by the Company. In addition, the Company's operations are reviewed
annually by an independent auditor to provide required internal control
evaluations for its clients' auditors and regulators.
As trust companies under Colorado law, First Trust and Lincoln Trust are
subject to the regulations of the Colorado Division of Banking. First Trust and
Lincoln Trust historically have complied with such regulations and, although no
assurance can be given, the Company believes First Trust and Lincoln Trust will
continue to be able to comply with such regulations. Commencing in 1991, First
Trust received approval of its application for Federal Deposit Insurance
Corporation coverage of its customer deposits.
EMPLOYEES
Fiserv employs 8,222 specialists throughout the United States and worldwide
in its information management centers and related product and service companies.
This service support network includes employees with backgrounds in computer
science and the financial industry, often complemented by management and other
direct experience in banks, credit unions, mortgage firms, savings and other
financial institution business environments.
Fiserv employees provide expertise in sales and marketing; account
management and client services; computer operations, network control and
technical support; programming, software development, modification and
maintenance; conversions and client training; and related support services.
Fiserv employees are not represented by a union, and there have been no
work stoppages, strikes or organizational attempts. The service nature of the
Fiserv business makes its employees an important corporate asset, and while the
market for qualified personnel is competitive, the Company does not experience
difficulty with hiring or retaining its staff of top industry professionals. In
assessing companies to acquire, the quality and stability of the prospective
Company's staff are emphasized.
Management attributes its ability to attract and keep quality employees to,
among other things, the Company's growth and dedication to state-of-the-art
software development tools and hardware technologies.
ITEM 2. PROPERTIES
Fiserv currently operates full-service data centers, software system
development centers, and item processing and back-office support centers in 66
cities (64 in the United States): Phoenix and Scottsdale, Arizona; Little Rock,
Arkansas; Alameda, Covina, Fresno, Fullerton, Los Angeles, Sacramento, San
Leandro, San Diego and Walnut, California; Denver, Colorado; Hartford, New Haven
and Stamford, Connecticut; Jacksonville, Maitland, Miami, Orlando, Tampa and
Titusville, Florida; Atlanta and Macon, Georgia; Honolulu, Hawaii; Arlington
Heights, Chicago, Marion and Pontiac, Illinois; Indianapolis and South Bend,
Indiana; Davenport and Des Moines, Iowa; Bowling Green, Kentucky; New Orleans,
Louisiana; Boston and Somerville, Massachusetts; Flint and Troy, Michigan;
Minneapolis and St. Paul, Minnesota; Fargo, North Dakota; Piscataway and
Princeton, New Jersey; Brooklyn, Long Island (Lake Success), Melville, Rochester
and Syracuse, New York; Lincoln, Nebraska; Cleveland, Ohio; Oklahoma City,
Oklahoma; Corvallis and Portland, Oregon; Philadelphia and Pittsburgh,
Pennsylvania; Memphis, Tennessee; Dallas, Beaumont, Houston and San Antonio,
Texas; Seattle, Washington; and Brookfield and Milwaukee, Wisconsin.
International business centers are located in London, England, and Singapore.
The Company owns facilities in Brookfield, Corvallis, Fresno, Hartford, Lincoln
and Titusville; all other buildings in which centers are located are subject to
leases expiring through 1998 and beyond. The Company owns or leases 128
mainframe computers (Data General, Digital, Hewlett Packard, IBM, NCR and
Unisys). In addition, the Company maintains its own national data communication
network consisting of communications processors and leased lines.
Fiserv believes its facilities and equipment are generally well maintained
and are in good operating condition. The Company believes that the computer
equipment it owns and its various facilities are adequate for its present and
foreseeable business. Fiserv periodically upgrades its mainframe capability as
needed. Fiserv contracts with multiple sites to provide processing backup in
the event of a disaster and maintains duplicate tapes of data collected and
software used in its business in locations away from the Company's facilities.
Fiserv regards its software as proprietary and utilizes a combination of
trade secrecy law, internal security practices and employee non-disclosure
agreements for protection. The Company has not patented or registered the
copyrights on its software. The Company believes that legal protection of its
software, while important, is less significant than the knowledge and experience
of the Company's management and personnel and their ability to develop, enhance
and market new products and services. The Company believes that it holds all
proprietary rights necessary for the conduct of its business.
ITEM 3. LEGAL PROCEEDINGS
In the normal course of business, the Company and its subsidiaries are
named as defendants in various lawsuits in which claims are asserted against the
Company. In the opinion of management, the liabilities, if any, which may
ultimately result from such lawsuits are not expected to have a material adverse
effect on the financial statements of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year covered by this report, no
matter was submitted to a vote of security holders of the Company.
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PART II
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Pursuant to Instruction G(2) for Form 10-K, the information required in
ITEMS 5 THROUGH 8 is incorporated by reference from the Company's annual report
to shareholders, included in this Form 10-K - Annual Report as Exhibit 13.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
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PART III
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Pursuant to Instruction G(3) to Form 10-K, the information required in
ITEMS 10 THROUGH 13 is incorporated by reference from the Company's definitive
proxy statement which is expected to be filed pursuant to Regulation 14A on or
before February 27, 1996, and included in this Form 10-K Annual Report as
Exhibit 28.
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PART IV
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ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) Financial Statements:
The consolidated financial statements of the companies as of December 31,
1995 and 1994 and for each of the three years in the period ending December 31,
1995, together with the report thereon of Deloitte & Touche LLP, dated February
2, 1996, appear on pages 26 through 38 of the Company's annual report to
shareholders, Exhibit 13 to this Form 10-K - Annual Report, and are incorporated
herein by reference.
(a) (2) Financial Statement Schedules:
All financial statement schedules are omitted for the reason that they are
either not applicable or not required or because the information required is
contained in the consolidated financial statements or notes thereto.
(b) Reports on Form 8-K:
During 1995, the Company filed two reports on Form 8-K, one dated May 17,
1995, relating to the acquisition of Information Technology, Inc. and the other
dated August 11, 1995, relating to the acquisition of Lincoln Holdings, Inc.
(c) Exhibits:
2.1 Stock Purchase Agreement, dated as of April 6, 1995, by and between
FIserv, Inc. and Information Technology, Inc. (filed as Exhibit 2.1
to the Company's Registration Statement on Form S-3, File No. 33-
58709, and incorporated herein by reference).
3.1 Articles of Incorporation, as amended (filed as Exhibit 3.1 to the
Company's Registration Statement on Form S-4, File No. 33-62870, and
incorporated herein by reference).
3.2 By-laws, (filed as Exhibit 3.2 to the Company's Registration
Statement on Form S-4, File No. 33-62870, and incorporated herein by
reference).
4.1 Credit Agreement dated as of May 17, 1995, by and among Fiserv, Inc.,
the Lenders Party Hereto, First Bank National Association, as Co-
Agent and The Bank of New York, as Agent. (Not being filed herewith,
but will be provided to the Commission upon its request, pursuant to
Item 601(b) (4) (iii) (A) of Regulation S-K.)
4.2 Note Purchase Agreement dated as of March 15, 1991, as amended, among
Fiserv, Inc., Aid Association for Lutherans, Northwestern National
Life Insurance Company, Northern Life Insurance Company and The North
Atlantic Life Insurance Company of America. (Not being filed
herewith, but will be provided to the Commission upon its request,
pursuant to Item 601(b) (4) (iii) (A) of Regulation S-K.)
4.3 Note Purchase Agreement dated as of April 30, 1990, as amended, among
Fiserv, Inc. and Teachers Insurance and Annuity Association of
America. (Not being filed herewith, but will be provided to the
Commission upon its request, pursuant to Item 601(b) (4) (iii) (A) of
Regulation S-K.)
4.4 Note Purchase Agreement dated as of May 17, 1995, as amended, among
FIserv, Inc., Teachers Insurance and Annuity Association of America,
Massachusetts Mutual Life Insurance Company, Aid Association for
Lutherans, Northern Life Insurance Company and Northwestern National
Life Insurance Company. (Not being filed herewith, but will be
provided to the Commission upon its request, pursuant to Item 601(b)
(4) (iii) (A) of Regulation S-K.)
10. Material contracts.
10.1 Stock Purchase Agreement, dated as of December 31, 1992, by and
between Fiserv, Inc. and First Financial Management Corporation, as
amended by Amendment dated as of February 10, 1993, included in the
Company's Current Report on Form 8-K, dated February 10, 1993, and
incorporated herein by reference.
10.2 Stock and Asset Purchase Agreement, dated as of July 30, 1993, as
amended, by and between Mellon Bank Corporation, Mellon Bank, N.A.,
Mellon Financial Services Corporation #1 and Vertical Technologies,
Inc., as Sellers, and Fiserv, Inc., as Purchaser, included in the
Company's Annual Report on Form 10-K, dated February 28, 1994, and
incorporated herein by reference.
11. Computation of Shares Used in Computing Earnings per Share.
13. The 1995 Annual Report to Shareholders.
21. List of Subsidiaries of the Registrant.
23. Manually signed Consent of Independent Auditors.
28. The Company's definitive proxy statement for the 1996 annual meeting
of shareholders to be held on March 21, 1996, to be filed pursuant to
Regulation 14A under the Securities and Exchange Act of 1934.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Dated: February 27, 1996
FISERV, INC.
By /S/ GEORGE D. DALTON
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George D. Dalton
(Chairman of the Board)
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following person on behalf of the registrant and in
the capacities indicated on February 27, 1996.
SIGNATURE CAPACITY
/S/ George D. Dalton
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George D. Dalton Chairman of the Board, Chief Executive Officer
/S/ Leslie M. Muma
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Leslie M. Muma Vice Chairman of the Board, President,
Chief Operating Officer
/S/ Donald F. Dillon
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Donald F. Dillon Vice Chairman of the Board,
President - Information Technology, Inc.
/S/ Kenneth R. Jensen
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Kenneth R. Jensen Senior Executive Vice President, Chief Financial
Officer, Treasurer, Director
/S/ Bruce K. Anderson
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Bruce K. Anderson Director
/S/ Gerald J. Levy
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Gerald J. Levy Director
/S/ L. William Seidman
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L. William Seidman Director
/S/ Thekla R. Shackelford
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Thekla R. Shackelford Director
/S/ Roland D. Sullivan
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Roland D. Sullivan Director