MONETT, Mo., Nov. 30, 2011 /PRNewswire/ -- Jack Henry & Associates, Inc. (NASDAQ: JKHY), a leading provider of technology solutions and payment processing services primarily for the financial services industry, announced today that the financial institutions using the BusinessManager® accounts receivable financing solution provided by its ProfitStars® division are significantly increasing their return on assets (ROA) while meeting the lending needs of their clients in the oil and gas or "energy play" market. BusinessManager has assisted financial institutions in funding more than $500 million in accounts receivable for the energy play space since 2009.
ROA, a key indicator of a company's profitability, averages 0.88 percent among domestic financial institutions. ProfitStars' clients average 10 percent ROA on business accounts that use BusinessManager and 13 percent for accounts in energy play markets. Consequently, financial institutions can increase their overall ROA with as few as three to five BusinessManager relationships.
Many financial institutions serving the energy play market, which are areas in the U.S. Midwest, Northeast, and Southwest experiencing significant oil and gas industry growth, need alternative financing options to offer quick cash flow to business customers. Hollis, Okla.-based Great Plains National Bank turned to BusinessManager to manage and fund accounts receivable programs for its oil and gas business customers. Today, the bank has 36 businesses that are using the BusinessManager program, making up 18 to 20 percent of its total ROA.
Jeff Waters, senior vice president of Great Plains National Bank, explained, "Financial institutions touching the energy play market are in a high-growth environment. Such rapid expansion causes a cash crunch, and many customers start seeing cash flow issues when they grow. In an oil and gas environment like ours, customers cannot afford to pass on a job for lack of cash flow. Thankfully, with BusinessManager we can ensure that our customers have the cash they need to succeed. The bank, in turn, earns recurring fee income — it's a win-win."
Backed by more than 20 years of experience, BusinessManager is a proven accounts receivable financing program used by hundreds of banks to accomplish two primary goals: assist creditworthy business customers with management and funding of accounts receivable; and earn recurring fee income.
According to David Foss, president of ProfitStars, "Financial institutions in energy play areas have the potential to tap into a significant source of recurring fee income if they are prepared to meet the unique lending needs of these business customers. And providing these business customers with the cash flow they need to grow their businesses creates the ongoing need for manpower, materials, and services and community-wide growth opportunities. BusinessManager bridges the gap between outstanding accounts receivables and cash flow, and empowers financial institutions with a distinct and lucrative lending solution."
ProfitStars maintains a Commercial Lending Online Knowledge Center to educate financial institutions on moving beyond traditional lending strategies, whether they are diversifying their portfolio or expanding their commercial business base by bringing in new deposits, growing earnings, and enhancing asset quality. Found at http://discover.profitstars.com/commerciallending, the microsite creates a central repository of best practices for financial institutions on how to lend efficiently without sacrificing quality or performance. The microsite has now been enhanced with energy-specific content.
About ProfitStars
As a diverse, global division of Jack Henry & Associates, ProfitStars combines JHA's solid technology background with the latest breakthroughs in four performance-boosting solution groups — Financial Performance, Imaging and Payments Processing, Information Security and Risk Management, and Retail Delivery. Explore the power of ProfitStars-enhanced performance at www.profitstars.com.
About Jack Henry & Associates, Inc.
Jack Henry & Associates, Inc.® (NASDAQ: JKHY) is a leading provider of computer systems and electronic payment solutions primarily for financial services organizations. Its technology solutions serve more than 11,300 customers nationwide, and are marketed and supported through four primary brands. Jack Henry Banking™ supports banks ranging from de novo to mid-tier institutions with information processing solutions. Symitar™ is the leading provider of information processing solutions for credit unions of all sizes. ProfitStars provides highly specialized products and services that enable financial institutions of every asset size and charter, and diverse corporate entities to mitigate and control risks, optimize revenue and growth opportunities, and contain costs. iPay Technologies™ operates as a leading electronic bill pay provider supporting banks and credit unions with turnkey, highly configurable retail and small business electronic payment platforms. Additional information is available at www.jackhenry.com.
Statements made in this news release that are not historical facts are forward-looking information. Actual results may differ materially from those projected in any forward-looking information. Specifically, there are a number of important factors that could cause actual results to differ materially from those anticipated by any forward-looking information. Additional information on these and other factors, which could affect the Company's financial results, are included in its Securities and Exchange Commission (SEC) filings on Form 10-K, and potential investors should review these statements. Finally, there may be other factors not mentioned above or included in the Company's SEC filings that may cause actual results to differ materially from any forward-looking information.
SOURCE Jack Henry & Associates
