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FEDERAL HOME LOAN BANK OF NEW YORK SELLS ITEM PROCESSING BUSINESS TO SYSTEMATICS

 FEDERAL HOME LOAN BANK OF NEW YORK SELLS ITEM PROCESSING
 BUSINESS TO SYSTEMATICS
 NEW YORK, May 21 /PRNewswire/ -- The Federal Home Loan Bank of New York (FHLBNY) and Systematics Financial Services, Inc. announced jointly that the bank has agreed to sell its item processing business to Systematics. Brian Dittenhafer, president of the Federal Home Loan Bank of New York, said that the board of directors of the bank approved the terms of the sale at its meeting earlier today.
 Systematics will purchase FHLBNY's item processing business located in Piscataway, N.J., assimilate the staff and purchase the related equipment. The location currently processes over 122 million checks annually for 125 financial institutions in New York, New Jersey and Puerto Rico. Systematics plans to expand the market area, client base and services offered to customers.
 Steven A. Carns, Systematics president and chief operating officer, said, "The purchase of FHLBNY's item processing business fits with our strategic plans to offer to our clients a complete range of information services. We will leverage the backroom operations to give our clients the economic advantage of large volume. We anticipate expanding this business to handle a wide variety of documents and services for many businesses."
 In the summer of 1991, Systematics purchased the item processing business of FHLB of San Francisco which, as the largest Home Loan Bank, processed 150 million checks annually for 190 institutions. Systematics currently processes 2.5 billion checks annually for institutions around the country and the addition of the New Jersey facility gives it strategic locations on both coasts.
 "We are selling an important component of our correspondent banking services but will continue to retain some important activities," Dittenhafer said. "For example, we will continue as the settlement bank and will work with Systematics as partners in business development. The entire transaction should be transparent to our existing customers."
 In explaining the motivation behind the sale, Dittenhafer said, "We entered this business in 1981 and built it into a success. By so doing, we provided competition in an area where little had existed and thereby performed a vital service both to our customers and to those financial institutions who chose not to deal with us. After all, everyone benefited from the competition. Now, after well more than a decade of mounting success, bank management and the board of directors decided that technology and events in this field were moving fast -- too fast for the response time of a government-sponsored enterprise. We felt the private sector could better manage this business and, ultimately, better serve the financial community in our district. We look forward to working with Systematics."
 Systematics, with clients in 46 states and 26 countries outside the U.S., provides information processing management, services and advanced application software for the financial and telecommunications industries. The company is a subsidiary of ALLTEL Corporation, one of the nation's leading independent telephone companies, with subsidiaries or investments in companies that provide cellular telephone, long- distance and information services, communications products and other related services.
 The Federal Home Loan Bank of New York provides low-cost financing and other banking services to stockholding institutions in support of affordable housing for Americans in New York, New Jersey, Puerto Rico and the U.S. Virgin Islands.
 -0- 5/21/92
 /CONTACT: Eugene J. Sherman of Federal Home Loan Bank of New York, 212-912-4605, or Doris Krain of Systematics Information Services, 501-220-5204/ CO: Federal Home Loan Bank of New York; Systematics Financial Services,
 Inc. ST: New York, New Jersey IN: FIN SU:


SM-OS -- NY060 -- 2941 05/21/92 14:30 EDT
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Publication:PR Newswire
Date:May 21, 1992
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