Total System Services Inc.'s net income rose in the second quarter by 24.4%, to $68 million, from a year earlier as it prepares for a strong pipeline of new accounts.
The Columbus, Ga., processor's revenue rose 3.4%, to $462.7 million in the second quarter from the same period a year earlier. The company's pipeline "exceeds 100 million accounts," including the return of Bank of America Corp.'s consumer card business, Philip W. Tomlinson, TSYS' chairman and chief executive, said on an earnings conference call July 24.
Last week, TSYS announced that B of A, which withdrew its consumer card processing business in 2006 after it bought MBNA Corp., plans to transition its consumer accounts back to TSYS by mid-2014. TSYS continued to handle B of A's commercial card accounts.
"We believe that their decision to transition the consumer business back to TSYS after six years says a lot about our ability to build strong and long relationships," Tomlinson said on the call.
Bank of America said it is returning to TSYS so that it can retire its aging MBNA technology. Following B of A's return, Tomlinson projects that TSYS' share of the U.S. Visa and MasterCard credit card market would be in the range of 40%. He estimates its share of the commercial card market is in the range of 80%.
TSYS' earnings in the second quarter benefited from increases in the number of transactions processed, increases in the dollar volume processed, and an expected nonrecurring tax benefit, it said in the release. TSYS has also been focusing on cost controls, the company said.