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BROOKFIELD, Wis. – Data processing is the largest technology investment credit unions make, and no one company has a bigger slice of the credit union DP market than Fiserv. The good news for credit unions is the company appears to be very strong based on its year-end financials. Fiserv, which is the parent company of six credit union data processing companies that together have approximately 1,200 credit union clients, posted record 2002 earnings. As of year-end 2002, revenues were $2,277.6 million, an 18% increase from $1,927.0 million in 2001. Net income per share diluted in 2002 was $1.36 per share, compared to $1.07 per share in 2001. While Fiserv is booming, not all the firms in its space are doing well. Fiserv President/CEO Les Muma says recurring revenue is the reason. “Companies that are struggling are the pure software companies. We only get about 5% of our revenue from software, and we’re so diversified. We’re in credit unions, banks, thrifts, trusts, insurance. It takes a lot of things to go bad over a large area to really get to us,” Muma told Credit Union Times. “We also have brilliant management,” he quipped. Muma took over the top spot at Fiserv in 1999 from the venerable George Dalton, who has since started Call_Solutions, a call center firm that has followed in Fiserv’s acquisitive footsteps. Dalton and Muma co-founded Fiserv. Muma, just 58, said he’s truly enjoying his job, and isn’t going any where any time soon. “Going into my fourth year, I absolutely love what I’m doing. I’m not going to work (here) until I’m 72 or 73 like George, but I’m only 58. We have a nice management structure here. When I get to the point where I’m ready to retire, they won’t miss me much,” said Muma. A historically acquisitive company, Fiserv completed five acquisitions last year, adding $210 million in revenue and 1,100 new employees. Fiserv even made a deal with one of its biggest competitors, EDS, acquiring EDS’ Consumer Network Services, one of the nation’s largest EFT processors and ATM operators. Muma said people shouldn’t have the perception that Fiserv is acquiring companies to snuff them out as competition or to just merely add to its client base. “The key is to be very, very careful. We only buy companies that we understand. We’re very thorough with our due diligence and we don’t buy companies that don’t add to our earnings. If the price is too high and it doesn’t add to our earnings we’ll pass.” All totaled, Fiserv has made 114 acquisitions in its history. “For every one we’ve acquired, we’ve looked at hundreds. We’ve probably looked at 3,000 companies. We’re not always right. We’ve had a couple that have given us trouble, but they are very few,” he said. The four primary industry groups Fiserv serves are Financial Institutions, Insurance, Securities, and Trust Services. Credit unions, as a client segment, are important said Muma because they are loyal, automated, and innovative. “Credit unions, compared to banks and thrifts tend to automate earlier. They were first on the Net, first on telephone banking. They take you places and they make money for you as they take you places. And if you take care of the credit unions, their loyalty is fierce,” he said. [email protected]

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