Bank of America Shifts Consumer Processing In House

TSYS expects to continue providing commercial and small business card processing for Bank of America and MBNA, as well as merchant processing for Bank of America, according to the terms of the existing agreements for those services. Bank of America will pay a termination fee related to the deconversion of the consumer portfolio.

In 2005, all relationships with Bank of America and MBNA are expected to generate a combined total of $376.9 million in revenues, or 23.5 percent of total revenues. TSYS projects an annualized loss of approximately $239 million in revenues upon deconversion of the consumer card portfolio that Bank of America plans to move in house, or approximately 14.9 percent of total revenues.

Excluding reimbursable items, TSYS projects an annualized shortfall of approximately $140 million in revenues from the loss of the consumer card portfolio, which is approximately 10.9 percent of TSYS' projected revenues in 2005.

"TSYS has enjoyed relationships with Bank of America and MBNA for many years, and we will continue to provide them merchant and commercial services," says Philip W. Tomlinson, chief executive officer of TSYS. "We are disappointed with the decision to move the consumer portfolio in house, but we will continue to work closely with Bank of America to enhance their success and our future relationship. Looking ahead to 2006, we will convert a record number of accounts to TSYS, with more than 70 million accounts in the pipeline."