FISERV INC. 10-K Summary: Fiscal Year Ended December 31, 1995
Business Context and Reporting Period
This Form 10-K covers the fiscal year ended December 31, 1995 for Fiserv, Inc., a leading independent provider of data processing products and services to the financial industry. Headquartered in Brookfield, Wisconsin, Fiserv serves banks, credit unions, savings institutions, and mortgage banks nationwide, with international operations in London and Singapore. The company operates through three primary groups: the Savings & Community Bank Group, the Bank & Credit Union Group, and the Industry Products & Services Group. As of January 31, 1996, the aggregate market value of voting stock held by non-affiliates was approximately $1.21 billion, with 44,892,683 shares outstanding.
Key Financial Metrics
Note: Specific financial statement values (Revenue, Net Income, Cash Flow, Debt, and Margins) are incorporated by reference from the 1995 Annual Report to Shareholders (Exhibit 13) and are not explicitly detailed in the text of this Form 10-K filing.
- Revenue & Profit: The filing does not provide specific revenue or net income figures for 1995 in the text provided.
- Cash Flow & Liquidity: Specific cash flow and liquidity metrics are not stated in the text.
- Debt: The company maintains credit agreements and note purchase agreements with various lenders (including First Bank National Association, The Bank of New York, and several insurance companies), but specific debt balances are not listed in the text.
- Assets Under Administration: Subsidiaries First Trust Corporation, Lincoln Trust Company, and The Affinity Group service approximately 331,900 retirement plans and custodial accounts with assets valued at more than $16.8 billion.
- Product Development: Resources applied to product development and maintenance are approximately 10% of company revenues, with about half dedicated to software development.
- Employees: The company employs 8,222 specialists globally.
- Infrastructure: Operations include 66 cities (64 in the U.S.), 128 mainframe computers, and a proprietary national data communication network.
Material Changes and Acquisitions
Fiserv continued its strategy of growth through acquisitions and product development in 1995. Significant acquisitions completed during the year included:
- Information Technology, Inc. (ITI): Acquired in May 1995; a nationwide leader in banking software design and support.
- Lincoln Holdings, Inc.: Acquired in August 1995; expanded retirement planning data processing capabilities.
- Other 1995 Acquisitions: BankLink, Inc. (cash management), SRS, Inc. (data processing), ALLTEL's Document Management Services (item processing), and Financial Information Trust (data processing).
The company noted that while the number of financial institutions in the U.S. has decreased due to consolidation, the total number of customer accounts serviced has not materially reduced, driving continued demand for data processing services.
Outlook, Risks, and Management Commentary
Management Outlook: Management anticipates continued industry consolidation and a shift toward outsourcing as financial institutions seek to reduce costs and enhance product offerings. Fiserv expects the industry to require significant capital and human resources for information systems, favoring providers with economies of scale. The company aims to remain the premier national provider by developing new products, improving cost-effectiveness, and pursuing strategic acquisitions.
Competitive Landscape: The market is highly competitive, with principal competitors including EDS, M&I, Bisys, ALLTEL, ISSC (IBM), and Symitar. Fiserv competes on product quality, reliability, integration, and price, leveraging its independence from hardware vendors and financial institutions as a key advantage.
Risks and Contingencies:
- Regulatory: While not directly regulated as financial institutions, Fiserv's operations are observed by regulators such as the FDIC and Office of the Comptroller of the Currency. Subsidiary trust companies are subject to Colorado Division of Banking regulations.
- Legal: The company is involved in various lawsuits in the normal course of business, but management does not expect these to have a material adverse effect on financial statements.
- Technology & Security: The company relies on trade secrecy and internal security rather than patents for software protection. It maintains disaster recovery contracts and duplicate data tapes to mitigate operational risks.
Investor Verification Checklist
- Verify specific revenue, net income, and cash flow figures in the 1995 Annual Report to Shareholders (Exhibit 13), as these are not detailed in the 10-K text.
- Review the definitive proxy statement (Exhibit 28) for details on executive compensation and security ownership.
- Examine the consolidated financial statements (pages 26-38 of the Annual Report) for debt covenants, liquidity ratios, and specific leverage metrics.
- Confirm the integration status and financial impact of the ITI and Lincoln Holdings acquisitions on the 1996 outlook.
- Assess the competitive positioning against major rivals like EDS and IBM in the context of industry consolidation trends.