Jan 23, 2013 - core banking software and technology for nearly 50 ... It means you have a technology company ..... phone
DCI 2012 Annual Report
The Blueprint to Better Banking:
has been designing
trust to be more concerned about your
innovative, advanced
success than their stock market returns. It
core banking
means freedom from the chaos of corporate
software and technology for nearly 50
acquisitions. It means you have a core
years. But behind the hardware and
partner that is more responsive, with
award-winning iCore360° software is a
the agility to quickly answer a request or
company designed around something
create solutions from your input that are
more important: people committed to a
more useful and meaningful to you.
uniquely purpose-driven, collaborative and personal relationship focused on you.
It means you have a partner that knows you on a first-name basis and respects you
Technology You Can Depend on... a Relationship You Can Trust. Since 1963, DCI has been an independent company privately-owned by several of our client banks, with customers serving as board members and active user-group leaders. That means you have a real voice with people who truly listen, understand and care about you. It means banker-designed software and services from people you can
with an unwavering commitment to fair, honest business practices and service. It means you have a technology company focused on only one goal: helping you succeed as a banker. We know DCI is only as strong and successful as each customer and that we are all part of the same family, together. That original blueprint designed around people and relationships is what makes DCI unique. Working together, we will continue to lead
Executive Management John H. Jones, president and CEO, with (back row, l-r) senior vice presidents Sencer Tasan, Gerald Rempe, Robert Ross; executive vice president Sarah Fankhauser, and CFO Dennis Queal.
EXECMGT
the way to better banking…by design.
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Message to Shareholders finished 2012 with
to the strong loyalty and personal
pleasantly surprising
relationships we share with our customers.
success, and another prosperous and productive year under our belt, despite an unpredictable economy and bank technology marketplace.
focus on iCore360° development in collaboration with customers, which again proved the tremendous ROI we
A few unexpected bank closures and
gain from our user group process. In
acquisitions held us to our third highest
fact, over 50% of significant iCore360°
revenues ever, at $27.99 million (just
enhancements completed in 2012
behind our best year by only $172
were direct user group requests.
thousand), but they could not dampen the reliable success of our iCore360° developments and customer loyalty.
Customers responded overwhelmingly to the new products and enhanced iCore360° options we made available
Among our new clients in 2012, we again
to them. On average, customers
welcomed two former Kansas customers
activated nearly five new DCI services
back to the DCI family. It is always a
for every one discontinued in 2012.
sweet reward to have former clients return home, but just as rewarding was the 97% overall satisfaction scores and 99% voluntary renewal rate among our current customers. We even renewed several 2013 contracts before the end of the year. These achievements are a testament
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As usual, we continued our laser
Key 2012 initiatives included expanded iCore360° general ledger reporting, accounts payable and an in-depth, certified independent review of every line of iCore360° code as further assurance that it is among the most well-crafted, stable and secure core software available.
Our card services group saw another
and uniqueness to this day: a commitment
increase in transaction volume and
to provide advanced, competitive bank
revenue in 2012, strengthening our
technology, but never by sacrificing
electronic payments position, and strong
our private bank ownership, customer
alliances with new and existing business
collaboration, professional integrity, and
partners produced ancillary product
promise to always put people before profits.
John H. Jones President and CEO
We approach 2013 with optimism,
CBOD
revenues that exceeded 2011 results.
enjoying strong financial health and security, and with pride in knowing that our technology is more competitive than
.
ever, and no other company can match the level of customer care that we provide. 2013 also marks our 50th anniversary milestone, an achievement made even more significant because we have never strayed from the guiding blueprint that founded
R.A. Edwards Chairman of the Board and DCI Client
CBOD
DCI in 1963 and underpins our strength
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2012 Highlights
Customer Care ear in and year out, one
each in 2012, to personally listen to
thing stays true: having
and address any needs. Even personal
the best, award-winning
visits by DCI technical engineers and
core technology means little without professional, caring people to support it.
Personal service from people you know and trust has always been the cornerstone of DCI; it’s our number one priority, and it’s what makes us stand out from the crowd, by design.
senior executives are not uncommon. For example, when DCI client Mountain Pacific Bank in Everett, Washington, decided to go through a due diligence process for core services in 2012, DCI didn’t take it for granted. We mobilized several technicians, engineers and senior management officers, including DCI president John Jones, to
Real People, Real Service
personally visit the bank face-to-face,
Real bank professionals answer our support
listen to their needs, demonstrate our
phones, not an automated system, with live,
solutions and prove that our personal-level
24/7 first-tier support for iCore360° and
commitment is uniquely genuine. As a result,
companion products, 365 days a year.
the bank committed to a 10 year contract
Nearly 80% of support questions are resolved
with DCI. Sandra Waldo, the bank’s senior
during the first call, within minutes, and
vice president of operations commented,
if we do need to return a call, our average
“Everyone at the bank really admires DCI as
response time is still less than six minutes.
a company. As we renew this contract, we
We also believe face-to-face visits are
will become a dedicated and loyal customer.”
important to good customer service.
This kind of personal outreach and
Our customer relationship managers
collaboration is part of our DNA, and
visited every DCI client nearly four times
something we take for granted as simply the right thing to do for our customers.
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DCI Professional Services consultants
These detailed reviews of day-to-day bank
completed a significant increase in the
operations uncover iCore360° features and
number of client mergers, acquisitions and
best practices that can tangibly improve a
operational review requests in 2012, a
bank’s workflow efficiencies,
positive indicator in the strength and
profitability, and
growth of DCI banks, and we expect
regulatory compliance.
the trend to continue in 2013. The operational review services in
Greg Horning
Charlotte Sanders Customer Relationship Manager
CRMGT
Customer Relationship Manager
CRMGT
particular continue to gain popularity.
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Our Education professionals facilitated
DCI also completed improvements to
nearly 400 education classes in 2012 to
the delivery and access of iCore360° user
help customers master iCore360° and
documentation, automatically uploading
grow their business. Several classes were
updates to each bank’s server, and adding
conducted on-site at customer locations,
new context-sensitive intelligence so
and over half were delivered via webinar.
users can instantly access the most
Our increasingly popular DCI University
current help information for a specific
online campus was also updated with new
task or screen item by simply clicking
content, navigation tools and features,
a toolbar icon. These changes make it
making it even easier for customers to learn
even easier for customers to quickly find
online at their own pace.
relevant, up-to-date documentation
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Karen Humiston Support Supervisor, Customer Support
CUSTSUP
without interrupting their workflow.
Our annual conference, Thy Core, Thy Realm, was a royal event in renaissance style, assembling 300 clients, staff, exhibitors and industry experts together to explore the latest DCI offerings and iCore360° training, industry issues and best practices, including IT issues, compliance and the importance of treating everyone with respect.
Proven Satisfaction The results of our annual customer satisfaction survey were also very
participation from our customers, which
Kathy Overacker Senior Documentation Officer
DOCMGT
impressive. First, we received 100%
is rare in almost any industry. But more impressive is that overall satisfaction ratings were maintained or increased from previous years, even with more customers participating in the survey. The results show that DCI customers overwhelmingly are satisfied and intend to continue their relationship with DCI. When it comes to treating customers right, we know that no one can match the level of personal care we provide, and in 2013, we will initiate a new internal program to prove it by quantifying the extent and tangible value of our customer service.
2012 Overall Customer Satisfaction:
97% 7
Research & Development ach year we research the
enhancements, including 445 interface
latest trends in technology
requests, into only two iCore360° update
and banking for ways we can
releases. In addition to several regulatory
improve our iCore360° technologies to
and system performance updates, major
increase productivity, efficiency and
iCore360° projects in 2012 included
competitiveness for our customers.
some of our most significant and popular enhancements to date, such as:
To that end, 2012 was another busy year for DCI development, packing four major new projects and dozens of
Beverly Mendoza
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Senior Programmer/Analyst, GUI Services
Miranda Engelken Programmer, GUI Services
• GL Custom Reports—Arguably the
• Card Disputes— Enhancements
most significant update to iCore360° in
that make it easier for banks to track
2012, this feature was greeted with rave
and report card disputes within
reviews from customers using it to easily
iCore360°, including online electronic
create uniquely-formatted board and
communication with DCI card services
management reports directly from the
professionals.
iCore360° GL, with virtually unlimited combinations of data and formats to replace cumbersome manual reports.
• Accounts Payable—A new online
The Power of Collaboration Every enhancement and new product design we approach is evaluated from a customer viewpoint to ensure that it feels personally
tool for tracking and management of
intuitive, convenient and meaningful to
vendors and bills, directly from the
them. The overwhelming popularity of our
iCore360° menu and General Ledger.
2012 developments is a shining example
• Centralized Statement Access—An enhancement to view and recreate exact mirror copies of any customer statement just as it was delivered to a customer (including logos and item images), directly from the iCore360° menu, for up to seven years of history.
• ACH Positive Pay —An enhancement to
of the value of this approach and the productiveness of our customer-led user group meetings. Each year, these meetings continue to produce invaluable feedback for improving iCore360°, ensuring that our methods, designs and outcomes are built around our customers, resulting in technologies that best fit their priorities and workflows. In fact, since 2002, we have
identify and stop fraudulent electronic
implemented nearly 500 specific user group
payments, in addition to fraudulent
requests – including 55 new enhancements
checks, before they leave the bank.
to iCore360° in 2012 alone.
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2013 Initiatives: • Analytics Dashboard—This highly-
to bank performance with charts and
anticipated and very unique iCore360°
details that instantly adjust onscreen
feature will give bankers an entirely new,
according to the user’s requests.
interactive tool to easily evaluate the bank’s status from multiple viewpoints. From high-level overviews to deeplevel details, the Analytics Dashboard helps bankers easily visualize and react
• GL Interactive Reporting—An interactive, online tool to instantly access and act on any specified data in a custom-designed GL Custom Report, including the ability to dynamically drill-down to the transaction history.
Rich Campbell Senior Programmer/Analyst, Product Management
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• Prepaid Card and Card Disputes— New features to easily offer prepaid cards and online tools to create and submit electronic documents to streamline Visa/MasterCard disputes in real time.
• iCore360° Inbox—A newly designed feature for secure, instant communications between bankers and DCI directly from within iCore360°, including instant messaging and system notifications such as ATM alerts, wire transfer approvals, etc.
• Integrated Platform Research— Investigation into the possibility
“You really do listen to your customers and provide solutions when possible. I know we made the correct decision in continuing our relationship with DCI! Thanks again.” —Ross Maynard Mountain Pacific Bank
of a DCI-designed and integrated iCore360° account origination and management platform.
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Mail Clerk, Backroom
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BKR
Cecilia Wolf
Systems & Operations he network, systems and
To that end, we implemented numerous
operations professionals at DCI
infrastructure upgrades in 2012,
exemplify what it means to
including new production Solaris
be a true bank partner. DCI customers
systems, system-wide WAN optimizers,
place their trust in these individuals
virtualization updates and storage
every day for reliable technology and
upgrades. These upgrades strengthened
expertise that won’t let them down.
iCore360° performance with tangible
This requires constant vigilance and
improvements in responsiveness and
adaptability to exceed industry best
file management for both in-house
practices and regulatory requirements
and service bureau customers. We also
while keeping pace with today’s innovation,
initiated a joint project with Oracle
threats and customer expectations.
to research new database efficiencies and enhanced our Teller and Proof21 systems, improving system database standardization, performance, and support. Our expertise and accomplishments were again recognized even outside the banking industry when one of DCI’s lead engineers was invited to be an expert guest speaker at the TeamQuest Technology Summit to explain how DCI used sophisticated modeling tools to prove how our award-winning IT infrastructure enables us to easily scale iCore360° for multi-billion dollar banks as a part of DCI’s future growth strategy.
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Naturally, system security, disaster recovery and business continuity planning also remained a top priority in 2012. We further expanded the safety and security of DCI systems overall, including new measures for log management, entitlement review, mobile device management, and updated information security and
Braden Irvin
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Lead Technical Engineer
SYSOPS
change management policies.
We implemented new DR/BCP management
For 2013, we plan to further optimize
software, along with detailed updates
our systems with more powerful
to our readiness action plans and drill
processing servers and equipment,
exercises company-wide. Several disaster
phone system redundancies, 4G wireless
recovery tests with varying customers,
technologies for alternate connectivity
scenarios and challenges confirmed our
and sales demonstrations, and new
ability to ensure our corporate preparedness
secure instant messaging company-
and near real-time data recovery window
wide, all of which will further enhance
for our banks in the event of a disaster.
team collaboration and response times.
Sales & Marketing welcomed new
also take the time to customize our
clients in Minnesota
consultations to demonstrate how this
and Kansas in 2012,
DCI difference will produce authentic
including two former Kansas customers
long-term business benefits for any bank,
returning to the DCI family. It is always
and how iCore360° intuitively simplifies
especially gratifying to welcome back
workflows to tangibly improve operational
former customers because it is another
outcomes. As a result, we enter 2013
reminder that our caring relationships and
with one of our most promising lists of
extra efforts don’t go unnoticed and really
potential customers ever, with expansions
do make a difference. In fact, customer
in new eastern territories and bankers
testimonials and referrals continue to
everywhere discovering that DCI really is
be our most effective outreach. But we
different, and a place that feels like home.
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Independent Auditors’ Report The Board of Directors Data Center, Inc.
Report on the Financial Statements We have audited the accompanying financial statements of Data Center, Inc. which comprise the balance sheets as of December 31, 2012 and 2011, and the related statements of income, stockholders’ equity and cash flows for the years then ended and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a reasonable basis for our audit opinion.
Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Data Center, Inc. as of December 31, 2012 and 2011, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
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Allen, Gibbs & Houlik, L.C. January 23, 2013 Wichita, KS
Officers & John H. Jones President and CEO
Sarah E. Fankhauser Executive Vice President
Dennis A. Queal
Senior Vice President, Finance; CFO
Gerald W. Rempe
Directors R.A. Edwards
Chairman of the Board First National Bank, Hutchinson, KS
Douglas M. Briggs
Chairman and CEO First State Bank & Trust Co., Larned, KS
Lloyd A. Davidson
Senior Vice President, Operations
President and Chairman First Bank Kansas, Salina, KS
Robert R. Ross
John H. Jones
Senior Vice President, Systems and Recovery; CTO
Sencer Tasan
Senior Vice President, Network/Technical Services; CSO
President and CEO Data Center, Inc., Hutchinson, KS
Tim C. Kohart
President and CEO Valley State Bank, Syracuse, KS
Wendy H. Dowling Vice President, Sales
Concha J. Duarte
Vice President, Backroom Services
Daren Fankhauser
Vice President, Research and Development
Susan L. Flores
Gary L. Mundhenke
President (Retired) Integrated Solutions Group, Hutchinson, KS
Romolo C. Santarosa
Executive Vice President, COO/CFO First California Bank, Westlake Village, CA
Kathleen Steward
Vice President, Customer/Professional Services
President and CEO Chisholm Trail Financial Corp., Wichita, KS
Mark A. Harris
John M. Sturd
Vice President, Marketing
James D. Kitson
Arkansas City Community President Union State Bank, Arkansas City, KS
Vice President, Operations
Alan R. Kruse
Vice President, Industry Analyst
Jay K. Miller
Vice President, Customer Relationships
Karol J. Sauer
Vice President, Human Resources and Business Continuity Planning
Sandra K. Schmitt
Vice President, Application Development
Amanda M. Smith
Vice President, Human Resources
James H. West III Vice President, Conversions
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