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About Jack Henry & Associates, Inc. (Nasdaq: JKHY)
Jack Henry & Associates, Inc. is a prominent financial technology company that specializes in providing integrated computer systems and technology solutions to financial institutions, including commercial banks, credit unions, and other entities. Headquartered in Monett, Missouri, the company has been a trusted partner to the financial services industry for over 48 years, delivering innovative solutions that enhance operational efficiency, improve customer experiences, and enable institutions to remain competitive in an evolving financial landscape.
Core Business Areas
Jack Henry's core offerings revolve around core processing platforms and a comprehensive suite of complementary services. The company provides three core banking platforms tailored for commercial banks—SilverLake®, CIF 20/20®, and Core Director®—and two platforms for credit unions, Episys® and Cruise®. These platforms enable financial institutions to manage critical operations such as deposit and loan processing, general ledger transactions, and centralized customer information management.
Complementary Solutions
Beyond core processing, Jack Henry offers a broad range of complementary products and services designed to address key operational and strategic needs:
- Business Intelligence and Management Solutions: Tools to enhance data-driven decision-making and operational insights.
- Retail Delivery and Digital Banking Solutions: Platforms like the Banno Digital Platform™ that provide seamless online and mobile banking experiences.
- Payment Processing and EFT Solutions: Comprehensive payment services, including electronic funds transfers and real-time account-to-account money movement.
- Risk Management and Security Solutions: Tools to mitigate operational risks and enhance cybersecurity.
- Item and Document Imaging: Solutions for efficient document management and record-keeping.
- Professional Services and Education: Training and consulting services to help clients maximize the value of their technology investments.
Market Position and Differentiation
Jack Henry primarily serves small and midsize banks and credit unions, providing them with the tools to compete against larger institutions and fintech disruptors. By focusing on openness, collaboration, and user-centricity, the company has cultivated a reputation for delivering scalable and customizable solutions. Its ability to integrate internally developed capabilities with third-party fintech solutions positions it as a flexible and forward-thinking partner for financial institutions.
Industry Context and Challenges
The financial technology industry is characterized by rapid innovation, increasing regulatory demands, and heightened consumer expectations. Jack Henry navigates these challenges through its commitment to continuous innovation and customer-centric service. Its open technology ecosystem allows clients to adapt to changing market conditions, while its robust security and risk management solutions help address regulatory compliance and operational risks.
Client Impact
With a client base of approximately 7,500 financial institutions, Jack Henry's solutions empower banks and credit unions to modernize their operations, enhance customer engagement, and achieve sustainable growth. The company's collaborative approach and emphasis on long-term partnerships have resulted in high client retention and satisfaction.
Conclusion
Jack Henry & Associates stands out as a key player in the financial technology sector, offering a unique combination of core processing platforms, complementary solutions, and a client-focused approach. Its ability to deliver scalable, secure, and innovative technologies has made it an indispensable partner to financial institutions striving to meet the demands of a dynamic and competitive industry.
Jack Henry & Associates announced a 7% increase in its quarterly dividend to $0.46 per share. This cash dividend will be payable on March 25, 2021, to stockholders of record as of March 8, 2021. As of February 10, 2021, there were 76,077,510 shares outstanding. CFO Kevin D. Williams emphasized strong organic growth and cash flows, attributing the dividend increase to the company's commitment to shareholders and confidence in continual growth despite ongoing investments in capital expenditures and R&D.
Autobooks has partnered with Community Bank, N.A. to deliver integrated online banking solutions for small business clients. This collaboration, facilitated by Jack Henry & Associates, allows customers to send digital invoices and accept payments via the Banno Digital Platform. Community Bank aims to enhance its service offerings and increase non-interest fee income through Autobooks' product suite, including digital invoicing and accounting solutions, available within 90 days. Community Bank, N.A. manages over $13 billion in assets and operates more than 235 facilities in several states.
Jack Henry & Associates (NASDAQ: JKHY) announced that BankPlus has selected its SilverLake System core, enhancing operational efficiency and supporting growth. With $4.5 billion in assets, BankPlus will transition from a 30-year partnership with its prior provider to Jack Henry, which aligns with their technology needs and corporate culture. The new system will improve employee user experiences and increase automation through advanced technologies. BankPlus values Jack Henry's open ecosystem, enabling collaboration with fintech partners, facilitating seamless transitions to new technologies.
Jack Henry & Associates (NASDAQ: JKHY) reported a 2% increase in GAAP revenue for the first half of fiscal 2021, reaching $874.2 million, and a consistent operating income of $211.2 million. Non-GAAP adjusted revenue grew 4%, with an EPS of $2.13, up from $2.10 year-over-year. Cash reserves surged 104% to $147.8 million, while debt remained nonexistent. However, revenue from deconversion fees declined significantly, affecting overall growth. The company maintains a full-year revenue guidance of $1.76-$1.77 billion.
Jack Henry & Associates (NASDAQ: JKHY) announces that First State Bank of the Southeast has expanded its partnership, adopting Jack Henry's digital commercial loan solution. This transition aims to automate the previously manual lending process, improving efficiency and borrower experience. With enhanced tracking and mobile capabilities, loan officers can better serve small and mid-sized businesses. The move reflects the bank's commitment to digital solutions, helping clients navigate financial challenges effectively.
Jack Henry & Associates (NASDAQ: JKHY) has announced an expanded partnership with Salesforce (NYSE: CRM) aimed at enhancing customer experiences for financial institutions. By deploying Salesforce solutions such as Sales Cloud and Tableau CRM, Jack Henry will streamline its customer relationship management, improving onboarding and support processes. The implementation is expected to be completed by May 2022. This collaboration aims to provide better service to banks and credit unions, especially in light of evolving customer needs exacerbated by the COVID-19 pandemic.
Jack Henry & Associates, a technology solutions provider for the financial services sector, will host a live Webcast for its Q2 fiscal 2021 earnings call on February 9, 2021, at 7:45 a.m. Central time. The earnings announcement will be released post-market on February 8, 2021. Investors can access the live Webcast via the company's website, with a replay available approximately an hour after the live event. Jack Henry serves around 8,700 clients through its three divisions, focusing on technology solutions and payment processing.
Jack Henry & Associates (NASDAQ: JKHY) has launched Jack Henry Consumer Loans, a digital solution designed to simplify borrower relationships and loan management for banks and credit unions. This cloud-based platform addresses the need for financial institutions to optimize lending processes amidst competitive pressures. First Oklahoma Bank reports significant growth in its consumer loan portfolio, citing the integration of Jack Henry's technology as pivotal for efficiency and borrower experience. The new solution aims to streamline regulatory reporting and reduce operational burdens, enhancing compliance and strategic focus.
Jack Henry & Associates (NASDAQ: JKHY) announces that Craft Bank, the first de novo in the Atlanta perimeter in over a decade, has partnered with them to enhance business banking. Craft Bank aims to combine digital experiences with personal service, featuring faster payments and lending through the Banno Digital Platform. Launching on October 15, Craft Bank noted a significant reliance on Jack Henry's expertise, as 42% of recent de novos are Jack Henry clients. The collaboration focuses on evolving technology, emphasizing security, efficiency, and customer-centric services.
On January 20, 2021, Jack Henry & Associates (NASDAQ: JKHY) announced an increase in the adoption of its EMV contactless cards by financial institutions in response to the COVID-19 pandemic. These cards offer a secure, efficient, and touch-free transaction option, appealing to consumer demand. Notable clients like Commonwealth Bank & Trust Co. and Goldenwest Federal Credit Union have transitioned to Jack Henry for their card programs. A.T. Kearney estimates that 56% of all cards will be contactless by the end of 2022, highlighting a significant market shift towards this technology.
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