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Non-interest income consists of TSYS and TDM's revenues as well as a wide variety of fee generating services from the banking operations segment. Non-interest income totaled $739.8 million in 1999, an increase of 27.1% from the previous year and $582.2 million in 1998, an increase of 16.1% from 1997. Revenues from bankcard data processing services offered by TSYS were the largest contributor increasing $124.5 million or 34.1% in 1999, and increasing $29.6 million or 8.8% in 1998 over the previous year. TSYS and TDM's combined revenues represented approximately 76.6% of consolidated non-interest income in 1999 compared to approximately 73.5% in 1998. Banking operations' non-interest income increased $31.3 million or 20.8% in 1999 and $31.4 million or 26.3% in 1998. The increase in banking operations non-interest income in 1999 was led by increases in service charges, fees for trust services, brokerage revenue, and credit card fees. Other operating income for 1999 includes $2.7 million in income earned on bank-owned life insurance (new for 1999) and a $3.5 million increase from gain on sale of a corporate investment. Additionally, the 1999 results include a $6 million gain from the sale of five bank branches in slow-growth markets. The net income impact of the branch sales was an after tax gain of $3.5 million.
TSYS contributed approximately 73.9% of Synovus' total non-interest income in 1999 with the majority of it reported as data processing services income. TSYS' revenues are derived from
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providing bankcard data
processing and related services to banks and other institutions
generally under long-term processing contracts. TSYS' services
are provided through the company's cardholder systems, TS2
and TS1, to financial institutions and other organizations
throughout the United States, Mexico, Canada, Honduras, and the
Caribbean.
Bankcard data processing services revenues are generated
primarily from charges based on the number of accounts billed, transactions and authorizations processed, statements mailed, credit bureau requests, credit cards embossed and mailed, and other processing services for cardholder accounts on file at TSYS. Cardholder accounts on file include active and inactive bank, retail, debit, stored value and commercial card accounts. Due to the expanding use of cards and the increase in the number of cardholder accounts processed by TSYS, as well as increases in the scope of services offered to customers, revenues relating to bankcard data processing services have continued to grow. Processing contracts with large customers, representing a significant portion of TSYS' total revenues, generally provide for discounts on certain services based on the size and activity of customers' portfolios. As a result, bankcard data processing revenues and the related margins are influenced by the customer mix relative to the size of customer card portfolios, as well as the number and activity of individual cardholder accounts processed for each customer.
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