Kevin Williams – CFO and Treasurer Jack Prim – CEO Tony Wormington – President

John Kraft – D.A. Davidson Dave Koning [ph] – Baird Jon Maietta – Needham and Company Gil Luria – Wedbush Tim Fox – Deutsche Bank Brett Huff – Stephens Karl Poehls – Fiduciary Management

Good day, everyone, and welcome to the Jack Henry & Associates second quarter 2010 conference call. As a reminder today’s conference is being recorded. At this time I’d like to turn the presentation over to Mr. Kevin Williams. Please go ahead, sir.

Thank you, Michelle. Good morning and welcome to the Jack Henry & Associates second quarter fiscal 2010 earnings call. Statements and response to the questions made in this conversation which are forward-looking or deal with expectations about the future, by any statements about the future these are subject to a number of factors which could cause actual results to differ materially from those we anticipate. Such factors are disclosed in our recent SEC filings. There could also be other factors not included that potentially cause results to differ materially. Good morning, again. We are pleased to host call this morning to provide a Company update and report on our financial results for our second fiscal quarter ended December 31, 2009. With me this morning I have Jack Prim, our CEO, Tony Wormington, President, will each provide some opening comments regarding the state of the Company, our recently closed acquisitions and our quarterly financial performance. Then, after our opening comments, we’ll then open the call up for Q&A. With that, I’ll now turn the call over to Jack Prim, CEO.

Gentlemen, good morning. The general trends in our business remain unchanged compared to the last several quarters. Our customer spending continues to be refining and likely will continue to be until improvement in the economy is reflected in their individual markets and ultimately in their individual financial performance. In addition to the general restraint on discretionary spending, hardware and software licenses were likely further impacted by the continued trend from in-house to out source processing. As discussed previously this trend is positive for the long-term and is reflective in the continued growth in the recurring revenue and the outsourcing backlog growth. The integration of the recent Pemco and Goldleaf acquisitions continues to be very well. Much of the operational integration is complete and all sales, marketing, accounting and human resources functions should be complete by the end of the current quarter. Some integration at Pemco related to the technology platform will continue in the June quarter with some possibly being completed shortly thereafter. The expected call synergies and earnings per share contribution from these acquisitions are attracting in line with our previous projections. Those acquisitions contributed nicely in the quarter allowing us to show an 11% increase in total revenue, even though the organic revenue declined by 1%. While the Pemco revenue tends to be more recurring in nature, Goldleaf has several nice software successes in the quarter related to the Alogent product line in larger financial institutions. The nature of these implementations is such that revenue needs to be recognized on more of a percentage of completion bases than all up front. This is a contributing factor reflected in the growth in the software backlog of 23% even though year-over-year software revenue was down 23% and sequentially up only 5%. We continue to see positive earnings impacts resulting from our cost control initiatives with a 14% improvement in operating income even with the inclusion of the one-time expenses from the Goldleaf and Pemco acquisitions. We will continue to closely manage expenses and balance the needs of the employees, shareholders and customers in this challenging economic environment. Now I’ll turn it over to Tony for the more insight on business.

Thanks, Jack. Our support in services revenue grew 19% for the quarter compared to the prior year quarter, a large part of this increase was related to recent acquisitions. However, organically, support and service still grew 5% compared to prior year quarter and 4% sequentially. Our EFT business continues to experience very nice growth in transaction volumes. As a reminder, our EFT revenues consisted of ATM and debit card processing, bill payments and processing, merchant capture and Check 21 image exchange. Our ATM and debit card processing volumes increased 14.3% over the prior year quarter and 3.4% sequentially. Bill payment transaction volumes increased 15.3% over the prior year quarter and 3.7% sequentially. Merchant related transaction volumes increased 51.8% over the prior year quarter and 14.8% sequentially. Financial institutions contracted to utilize our enterprise payment solutions increased 886, or an increase of 6.2% over the prior year quarter. Financial institution merchants installed and utilizing our enterprise payments solution increased to 22,166, representing a 31.9% increase over the prior year quarter. The enterprise payments statistics for merchant-related transaction volumes, financial institutions contracted and their respected merchants do not include volumes for our recent Goldleaf acquisition. What this acquisition has been part of Jack Henry & Associates for over a year, we’ll have comparative data and we will adjust our statistics at that time. Now, I turn it over to Kevin for further look at the numbers.

Thanks, Tony. Again, as Jack mentioned, our total revenue increased 11% for the quarter compared to the same quarter a year ago. Organic revenue actually declined by approximately 1%, but did grow 3% sequentially compared to September total revenue. The acquisitions contributed 12% total revenue growth for the quarter by contributing approximately $23 million in revenue for the quarter. And again, Goldleaf closed on October 1st and Pemco closed on November 1st, so they both were right on schedule where we thought they’d be for the quarter. Our license revenue continues to be a challenge, as Jack mentioned. We did close very nice deals, which had a significant impact on our backlog on December 31st, and this revenue will be recognized in the future over some period of quarters as we actually deliver and install the software. For the services revenue increased by 19% this quarter over same quarter a year ago. Organic revenue for the services, as Tony mentioned was up 5% compared to a year ago and 4% sequentially. And the acquisition contributed to approximately $21 million in support and services for the quarter or 14% of the revenue growth in that line of revenue. The break down of support and services, as you all know, we break that into four categories, our implementation, our EFT, OutLink data process and in-house maintenance. Implementation for the quarter increased 13% from a year ago and is up 3% year-to-date. Our electronic payments is up 51% for the quarter and up 29% year-to-date. OutLink increased 11% for the quarter and 9% year-to-date and in-house maintenance increased 7% for the quarter and 4% year-to-date. Again, those are total revenue numbers. Our organic growth for the quarter for these same line items again backing out the two recent acquisitions. Implementation increased 1% year-over-year or 10% sequentially compared to September quarter. Electronic payments increased 11% year-over-year, again, this organic, and up 2% sequentially. OutLink, which is our, again, our data processing increased 11% year-over-year and was up 9% sequentially from September quarter. And I will tell you there were virtually no early termination fees during the quarter or year and actually year-to-date was down from the prior year. So this is all true organic growth. In-house maintenance organically was flat year-over-year and was up 3% sequentially. Our harbor revenue, like license sales, continues to be a challenge and again experienced significant declines for the quarter compared to the prior year and down slightly sequentially with a very little hardware sold within the two acquisitions. So most of that was just basic Jack Henry organic. Our recurring revenue experienced growth of 19% reported compared to prior year and 18% sequentially. Organic growth in our recurring revenue was 6% year-over-year and 4% sequentially compared to September. To cover on our gross margins, overall, consolidated gross margins improved 43% for the quarter compared to 41% in the same quarter year ago. Our license margins increased to 91% from 86%. Important service to margins improved 40% compared to 38% a year ago. And harbor margins decreased to 27% from 30% a year ago. To break it down into our two reporting segments, our Banking segment gross margins improved to 43% from 40% a year ago second quarter. And our Credit Union segment margins decreased to 38% from 43% year ago, primarily due to lower software sales this quarter compared to a year ago. In the Banking segment, the license margins, we saw an increase to 90% from 82%, primarily due to a smaller amount of third-party software sold in the banking segment during the quarter. Our support and services margins for the Banking segment increased to 42% from 38% for the quarter, due primarily to lower personnel and travel costs and our harbor margins decreased to 28% from 30% this quarter from a year ago due primarily to sales mix and vendor rebates. In the Credit Union segment, license margins were 93% for the quarter compared to 95% a year ago. The margins were pretty stable within the Credit Union segment, however, license sales were down compared to year ago. And also, there was a fewer third-party sales this quarter. Support and service margins decreased to 34% from 35% and harbor margins decreased to 24% from 28%, again, due to sales mix. Our total operating expenses increased 17% from the quarter and as a percentage of total revenue increased slightly from 19$ to 20% for the current quarter of prior year. However, included in the operating expenses are one-time transaction costs related to the acquisition of approximately $1.6 million. Considering these one-time costs, operating expenses will remain level at 19% of revenue for the quarter compared to the prior year. Our operating margin remained level at about 22% for the quarter. Net result was increased operating income of 14% for the quarter compared to the prior year. Organically, excluding the impact of the acquisitions and the one-time acquisition costs, our operating income increased 13% year-over-year and 12% sequentially. The effective tax rate for the quarter was 36.5% compared to 32.1% last year and in the last year we had 12 months of R&D credit in the December quarter when Congress renewed the R&D credit. This will most likely represent approximately the 36.5%, our effective tax rate for the year, again, unless Congress reinstates the R&D credit which expired in December. At this time, I would suggest to use a 36.5% to 37% rate for modeling, as there could be some small increases due to change in state rates, that should be our effective tax rate unless the President gets his new budget bill passed, which, because in that, the R&D credit is proposed to be reinstated and made permanent, which would be a good thing. Our EBITDA increased approximately 13% to $65.2 million from $57.9 million a year ago quarter. Depreciation and amortization of $17.8 million this quarter compared to $16.1 million last quarter. As for guidance, obviously, as Jack mentioned, we continued to face some tough economic challenges that are challenging at best, which just adds to the complexity of forecasting in the remainder of the year. As for the acquisitions we closed in December quarter, they are both tracking right on plan and should contribute the previously guided $75 million in revenue for the fiscal year and combined should contribute the $0.05 to $0.08 EPS for the fiscal year as we’ve guided on previous earnings call. Therefore, with somewhat cautious approach, based on the second quarter results, current backlogs and sales pipelines, we continue to be comfortable that we’ll have a low single-digit organic revenue growth for the fiscal year with leverage of that to the mid-to-high single-digit operating income growth for the fiscal year organically and then later the acquisitions on top of that to get to a high single-digit, top line growth with operating income in the low-to-mid double-digit growth for the year. This concludes our opening comments and we’re now ready to take questions. Michelle, will you please open the line up for questions?

Of course, sir. (Operator instructions). We’ll take our first question from John Kraft with DA Davidson. John Kraft – D.A. Davidson: Good morning, gentlemen. Kevin, you just mentioned that the one-time acquisition costs were 1.6 million in the quarter. I think you said that it’s going to take another quarter or two to fully integrate. Do you have an idea or estimate of what the cost might be in upcoming quarters?

John, those one-time costs were truly for lawyers, bankers and that sort of thing. The integration costs that we have going on now are just the normal use of internal resources, I think as Jack alluded to, all their accounting systems should currently be on our back office, PeopleSoft solution now. All of the employees were on RHR benefits effective January 1. So now it’s just integrating the ongoing technology of the PTSI acquisition, which, as Jack said, will take through the end of this fiscal year to get that all done and then the Goldleaf and some of the other things, the order been, the business units have been tied by that between the different GMs, and now it’s just ongoing, normal day-to-day getting the efficiencies done. John Kraft – D.A. Davidson: Okay, that’s helpful. And Tony, moving to the fastest organic growth pieces of the puzzle here, the metrics you gave from the remote deposit side of things were organic, I guess, I’m wondering whether, just orders of magnitude, whether Goldleaf’s contribution will accelerate what you’re seeing organically are those a little bit slower than what you’re seeing?

I expect that they’ll be in line with what we’ve got today. The numbers that we had were not broken out the way that we tracked them within our statistics. So we’re needing to have those on board for a year before we begin giving comparative data, but I expect them to be in line with what we’re seeing today. There’re a number of merchants are just slightly less per institution than we have, but I would expect them to be pretty much in line with what we’re doing today.

In terms of total volumes are roughly 30% of the volumes we were running pre-acquisition. John Kraft – D.A. Davidson: Right.

From a growth standpoint I’d think the growth will track somewhat higher. John Kraft – D.A. Davidson: Okay, thank you, that’s helpful. And I guess just to follow on to that product line, there’s obviously a pretty big delta between the growth you’re seeing in the number of FIs that you’ve signed versus the number of merchants that they’re by signing. Is that partly due to some particular marketing efforts or efforts on your part or is that simply what the FIs are pitching these days?

If you’re referring to the margins that are being signed up on a quarterly basis, the number of merchants that are being signed up are really the efforts of the FI. And we don’t have a program specifically per se that is driving additional merchants to sign up other than education and training. We’ve done with the financial institutions to do market, sell their services to their merchants. I think that’s more a display of what we’re seeing generally, in the marketplace, for merchants desire to have remote deposit capture solution.

There’s also a component of that as well that has to do with our remarketing efforts through non-financial institutions. As we mentioned before, Pitney Bowes, for example, being one of the commercial entities that remarkets as part of their solution we talk about other providers of core accounting systems for various, in other industries, like city county government, utilities, faith-based organizations that embed some of our payment process and capability into their software. Merchant acquirers who need to electronify in addition to credit and debit card transactions ability to help their merchants be able to electronify checks as well. So there’s certainly some growth that’s coming in the form of additional merchants through non-financial institution margin as well. John Kraft – D.A. Davidson: Got you, that’s right. Thanks. That’s all I have.

Thanks, John.

Our next question comes from Dave Koning [ph] with Baird. Dave Koning – Baird: Hey, guys, nice job.

Thanks, Dave. Dave Koning – Baird: I guess, first of all, a quick question on the gross margin in support and services, it was the highest you’ve ever had, it seems like there’s a permanent mix shift towards more EFTs with Pemco and Goldleaf. Is it fair to say that 40% now is kind of the baseline and it might be able to grow from here just as payments continue to grow faster than the rest of the business?

Dave, obviously, you have a lot of moving parts within the support and services, we’re very pleased with the margins, we do continue to focus on leveraging the infrastructure. We’ve done a very good job of controlling costs. Our fringe load was down for the last couple quarters compared to year ago, because better than expected healthcare we’d like to think that’s part of the wellness initiative put in place, so there’s just a number of things in there. And I don’t know that I’m willing to stand and waive the flag and say 40% of the baseline. I’d like to hope that we can keep it there and is there potentially room for improvement as the payments continue to come at a large percentage of the business? Absolutely did. I think that’s a long-term goal, not something you’re going to see this type of pick-up on a quarterly basis. Dave Koning – Baird: Okay, good, that’s helpful. And then another thing, it was about a year ago that you mentioned the slight wage adjustments that had been helping the margins a little bit. I don’t know the second anniversary pretty soon here, but what’s the impact, how are you looking at that going forward? And how should that impact margins, I guess, over the next several quarters?

It’s Jack. We have announced to our employees that we’re going to restore their salaries to the previous level, effective March 1st. However, along the way, we’ve been doing some other cost reduction initiatives, some of it in the form of healthcare, cost pass-throughs, some of it, surgical type of adjustments that we made in certain areas of the business. So, our expectation would be that the March quarter, from the standpoint of types of cost reductions that you saw in the September and December quarters will be comparable to what you’ve seen in these quarters and frankly that with some of the other changes that we’ve made, we expect very little increase in that area, even in the June and going forward quarters. Dave Koning – Baird: Okay, great, and then just finally, license tends to follow a pattern. I think the last five years, Q3 is always down from Q2 for license revenues and the Q4 is usually a big increase again. Is there anything that’s changed now that would make Q3 up sequentially? I know you signed quite a bit and now Goldleaf coming on too. But anything really changed that dynamic much?

We’ve seen very good growth in the software backlog, which is different. And you’re right, David, anything is changing, it is just been our ability to predict what is going to happen with discretionary items like license fees and hardware. So, I doubt whether we’ll follow the typical patterns that we’ve seen, the Q3 down and Q4 up, frankly is anybody’s guess right now. We did not expect to see the kind of fall-off in Q2 compared to the pretty miserable Q2, a year ago. If you take hardware, probably a dozen individual line items of hardware related things that we track, every single one of them was down. I don’t think a single line item was up. Whether it’s sorter, servers, processors, scanners, you name it, every line item is down. I think some of that is just financial institutions, trying to squeeze the last possible mileage out of the existing equipment. I think some of it is it would affect the hardware and software would be the continued trend from in-house to an outsourcing preference. On some of the hardware, you certainly would believe that there’s some pent-up need that if your server infrastructure needs to be the place, and milking it sooner or later, you’re going to have to send the money there. I think hardware is going to bounce around, license fees, the nature, as I mentioned, we have some nice wins with the Alogent product, and it’s the large financial institutions which certainly helped the backlog. Those implementations tend to be a little more customized in these larger financial institutions, so, we don’t recognize the revenue upfront like we traditionally do with a packaged product that we roll out. We’ve to recognize that on a more of a percentage of completion bases now. There’s good news on that, it’s license fees, it’s high margin and it’s somewhat more predictable in the sense that it’s going to roll out over the next 12 months instead of being a big pop in the December quarter and then you’re back to a strange comparable again. The bad news is, you don’t get it all in the December quarter, when you might have been nice to have had. So, again, it’s a rambling answer to your question, but I think the ability for us at this point to accurately forecast what’s going to happen in any given quarter with hardware and software is just considerably different than it used to. Dave Koning – Baird: That’s great, thank you.

Thanks, Dave..

Our next question comes from Jon Maietta with Needham and Company. Jon Maietta – Needham and Company: Hi, thanks very much. Jack, when you’re speaking with prospects, do you get the sense that coming out of this downturn that folks are looking at outsourcing even more so than they were, maybe a year ago versus (inaudible).

I don’t know, Jon that I think they’re looking at it more. We had a pretty strong move in that direction last year. We continue to see solid interest, we’ve seen growing interest from Credit Union, and so I think I would say we’re just continuing to, to see solid interest. I don’t know that it’s anymore than what we’ve seen in recent years. Jon Maietta – Needham and Company: Okay. And then, Kevin, taking into consideration the puts and takes with one-time expenses, wages coming back, would you expect G&A roughly to be down sequentially next quarter? Or should we think of it as being flattish or....

G&A should be down next quarter. Probably, $1.5 million or a little more. Jon Maietta – Needham and Company: Got you. Okay, guys, thanks very much.

You bet.

We’ll take our next question from Gil Luria with Wedbush. Gil Luria – Wedbush: Thank you, good morning.

Morning, Gil.

Good morning. Gil Luria – Wedbush: Jack, you started by saying that the trends you’ve seen from your customers have not changed over the last few quarters. What is it that’s particularly weighing on them right now? We talked about FDIC fees last year. Those certainly haven’t go down lower, but they also are now constrained in how much overdraft fees they can charge, interest rates on credit cards, the ability to get good deals out there. What are the particular topics that you’re hearing from them when still keeping them from spending as they did before the crisis?

Yes, Gil, I think it’s all of that. I think there’s certainly a concern about potential loss fee income in the forms of overdraft and interchange fees. I think that is even though there is somewhat less shell shock related to special assessments those are still pretty big numbers. And that’s just the ones that they know about right now and depending on what happens with bank failures, there’s still the opportunity for that to go up. So I think those things are still there. I would say that I think the biggest issue impacting our customers at this point and impacting their confidence and willingness to spend is unemployment. A year ago the issues seemed like they were going to be confined to a dozen very large financial institutions on Wall Street that were involved with exotic securities and other things, which our customers weren’t involved with, but I think the reality is that 10%, plus unemployment affects everybody, everywhere. And when your customers unemployed, obviously, it’s pretty hard for them to make a car payment or house payment and so non-accruals increased, charge-offs increase and I think, of course, there’s commercial real estate, which I don’t know how to handicap that in terms of what kind of exposures there. Just like with the current situation, there’s going to be certain areas and certain institutions that have more exposure than others. But I think that the biggest overhanging impact is that our customers need to see start to change is the overall economic conditions specifically and unemployment. Gil Luria – Wedbush: Got it. And, Kevin, just in terms of how you’re accounting for the acquisition, did you put both of them all in support and services?

No, let me back up. Pemco, which is basically a credit card transaction processing unit is basically all within the payment line. Because they don’t sell software, they don’t sell hardware. It’s truly a services that’s 99.5%, probably within the payment line, if not all of it. Goldleaf, on the other hand, they’re going to hit all three lines. They’ve got a little dab at software, they do sell projects., as Jack mentioned, (inaudible) nice deals that impact of the in-house backlog and so there will be a little bit of software going forward. Obviously, they have some maintenance on some of their products that they deliver for some of their in-house products such as Alogent and other things. They got some transaction process which fall on to the payment, further more deposit capture products, and then they also do resell some, some hardware in some instances as well. So, Goldleaf probably eventually hit all three lines. Pemco is basically all in payments. Gil Luria – Wedbush: Got it. And then the last thing, you had Goldleaf for the whole quarter, you only have Pemco for two months, what should we assume for the Pemco monthly run rate to add to get the full run rate for the two acquisitions?

They will add $25 million to $26 million a quarter for the next two quarters combined. Gil Luria – Wedbush: Thank you very much.

Thanks.

(Operator instructions). We’ll take our next question from Tim Fox with Deutsche Bank. Tim Fox – Deutsche Bank: Hi, thanks, good morning.

Morning, Tim. Tim Fox – Deutsche Bank: Looking at the support and service line, obviously, organically, you saw some nice uptick on EFT and the OutLink business. Implementation and maintenance however are lagging a bit. Any sense of what that may look like over the ensuing quarters here, obviously, implementation being driven by some of the license sales that came through, but what should we be thinking around for implementation and maintenance throughout the rest of the year?

I think, Tim, implementation, obviously, you’re right, it kind of trails the software sales the big part, however, there is implementation involved in just about everything we do, including OutLink and path forward and everything else. There’re some implementation services related. Probably one of the biggest things in implementation is the M&A activity for convert mergers when our customers were buying banks and doing things like that. So implementation is going to fast around a little bit, we hope that’s flat for the year. As far as the in-house maintenance, it should be up slightly for the year organically. As you can see the deferred revenue was up nicely, part of that was attributed to Goldleaf, but the deferred revenue was even up at the end of the first quarter compared to the prior year, so, organically, in-house maintenance should be up a little bit and it should track pretty much for the rest of the year in total where we ended up the quarter. Tim Fox – Deutsche Bank: Got it. Okay, that’s helpful. And my second question is kind of two-part competitive question. Your volumes, Tony was talking about, Bill Pay in particular, I believe it was up 15.3% year-over-year, pretty impressive growth relative to some of your competitors. I’m wondering if you could talk about why you think you’re seeing a better uptake around Bill Pay than some of the larger providers of that service.

I would tell you that if you look at our Bill Pay trend, what we’ve seen is those percentages are declining somewhat, if you look at them, although we’re up 15% this particular quarter over the prior year quarter, the numbers we have seen in the past were even larger than that. Were up 3.7% sequentially, which bodes well, but part of that probably is the large numbers with some of our competitors versus size of our Bill Pay volumes at this point. We’re seeing good increases and continue to see good increases. Will they continue to be at this level? I suspect they will not. They will continue to trend down slightly in percentages just because of the size of the Bill Pay business as it continues to grow. But we did see an increase sequentially in this particular quarter, which we hadn’t seen as large a sequential increase in prior quarters. So part of that, I also would tell you I think it’s just based on consumer confidence and spending beginning to happening a little more than it had in the prior couple of quarters that we’ve seen with the economic situation that we have out there.

The other thing I’d say, Tim, I think if you look at our average customer, the historical adoption rate has been lower than some of the bigger banks have experienced. So I think with the economy and different things that Tony mentioned I think that we’re seeing a pickup in adoption rate with some of our regional and suburban banks, customers, opting to do that rather than stick a 44 cent stamp on an envelope and write a check. Tim Fox – Deutsche Bank: Yes, this is much about customer exposure than it is necessarily overall secular trends.

I would think so, yeah. Tim Fox – Deutsche Bank: And lastly, one of your competitors was speaking about a new entrance into the Credit Union, large Credit Union space from a core banking perspective. Can you talk a little about that whether you’ve seen that competitive pressure at this point? Where you stand relative to that product?

Tim, we certainly have seen in the press releases and heard about it. I think may have recently signed their first U.S. customer for that product, but don’t know that we have a whole lot to add, don’t know we run into it a lot competitively, it seems to us that their initial emphasis with that project is approaching their customer base to get some initial implementation. So don’t know we have a lot of light we can shed on that. We do have the largest presence in credit union of any single platform. We have the larger presence in larger credit unions, anyway you want to define large, and so we feel very good about our position in the marketplace and certainly expect to continue to see a strong competition from a variety of sources. Tim Fox – Deutsche Bank: Thank you.

We’ll take our next question from Brett Huff with Stephens. Brett Huff – Stephens: Good morning, thanks for taking my call.

Good morning, Bret. Brett Huff – Stephens: Two quick questions. One is, can you give us a sense of where the smaller banks and the medium-sized banks that you serve and credit unions are on the real estate for residential, but more importantly, on commercial? Was there any change in what you’re hearing from them on that or if that’s impacting your buying decisions. And then the second question is unrelated, can you just remind us of the penetration into your core basis of the various ancillary services that you sell now, that is Bill Pay and some EFT and RDC that kind of thing, just the sense of what anymore in on cross selling to those? Thanks.

Bret, from a residential mortgage impact, in the (inaudible) space, five or six space that have been most impacted is in this environment, I think, certainly, our customers, like everybody’s customers in those areas have struggled, I don’t know that it’s getting a lot worse. As unemployment stays at these levels, if it stays at these levels for an extended period of time, it’s logical to assume that there’ll be more defaults and potentially more foreclosures and issues that our customers have to deal with. But I think that the worst of the residential issues are at least on the table and hopefully declining somewhat. The commercial piece is a little harder for us to pin down. That’s going to depend more on an individual primarily bank and to some extent credit unions approach to the markets. Most of the banks we talk to and ask the question, don’t seem to be overall concerned with their real estate exposure, they tend to do more owner-occupied lending and less of the strip mall financing, those kind of things. There’s exceptions for that, of course. And I think it’s likely that the bigger the bank, the more likely they are to have some exposure to the commercial real estate. So when you get into the $5 billion to $10 billion range, the odds are that they may have gone a little farther appeal and probably done a lot more of that. But I just don’t have a good way of estimating that on the basis at large. But, our gut feel at this point is that it’s not a huge exposure, but there’s as with anything, there’s the ripple effect. What we’re seeing largely right now is the ripple effect of what happened a year ago, which is now driving 10%-plus on employment. If there’s enough commercial real estate failures that take place out there, even if it’s not in our bank’s portfolio, the resulting impact of that again has potential ripple effects that continue to impact the economy and employment, things of that nature. So our feeling is that, for the most part, as a general statement, we think the individual portfolios are probably not that much at risk, but doesn’t mean there isn’t some real potential there. Brett Huff – Stephens: Okay, thanks. And then on the penetration question, kind of take the ancillary services that you guys are most focused on, what is the penetration rate approximately into your core base?

Are you referring primarily to the payment space, Bret? Brett Huff – Stephens: Yes, it seems like those are the ones that you all are focused on and having the most success growing, I think the question before you, your uptick rates and some of the products have been better than sort of the market average. So I assume that because driven by that cross sale and the banks further aren’t as far along on that secular trend of uptake. I’m just trying to understand what aiming we are in each of those payment space, again, it can be broad, and it doesn’t have to be specific to the product.

In the Bill Pay space we got roughly 1100 of our core customers using that. We only sell Bill Pay to our core customers. So somewhere about half of our core customers are using our Bill Pay product. How many of them out there are using somebody else’s or don’t even have a Bill Pay yet we don’t know that for sure. As far as the ATM debit, which again we primarily sell that just to our core customers, roughly in the neighborhood of 700 of our core customers using our ATM debit switch. Now, as far as the PTSR, the Pemco credit card transactions, I don’t remember how many of our core customers use that, I was thinking –

It’s primarily focused on credit unions only, probably 50 or 60 of some of our customers that use it. But, a couple of comments I would make is that the ATM debit card adoption or sales of late on the banking side in particular have been stronger than what we have seen in some recent quarters, takes a while to get that implemented and begin to convert that so I think there’s still some good growth opportunity there. Again, the Pemco offerings give us some additional exposure outside of our core customer base for both debit card and credit card transactions routing as well as the fact that now having the credit card capability, probably makes some of the sales to credit unions of our debit card options even better. Because we can now, from a single platform, deliver both credit and debit card transaction processing routing. So if my point would be we’re seeing better sales in recent quarters than what we’ve seen in recent past on the banking side got the reason to believe that the Pemco acquisition will improve our win rates both inside the base and outside on the credit union side.

And as far as remote deposit capture, as Tony mentioned, we got 885 or so FIs that are using our remote deposit capture that is our pretty good (inaudible) does not include Golf Leaf. The vast majority of those are our core customers. I will tell you some of our largest RDC customers are other core competitors, customers, but the vast majority of those are our core customers using our RDC. So there’s some runway left there, but I would tell you most of the RDC opportunity now is upgrades and replacement cycles, the second-time buyers, because most of the banks have something, we believe out there. We think there’s still some runway there and really the opportunity there is, is selling to merchants through the other channels and then continuing to leverage the customers that came through the Goldleaf acquisition. So those are the three primary components in our payment business and kind of where we’re at. Brett Huff – Stephens: Okay, thank you. That’s all I have. I appreciate it.

Thanks, Bret.

We’ll take our next question from Karl Poehls with Fiduciary Management. Karl Poehls – Fiduciary Management: Hi, guys, nice quarter.

Thank you. Karl Poehls – Fiduciary Management: I just, quick question on the Goldleaf acquisition, could you address the net operating loss and will you be able to use it and what value or impact will you see going forward?

Are you talking about the NOL that came through the acquisition? Karl Poehls – Fiduciary Management: Right.

We planned to utilize that as we go forward, obviously that depends a lot on how much we can use each year based on operations from that organization to move forward and then also there are some 382 IRS limitations that also impact how much we can use that. But we do expect to get the utilization of majority of that, however, I’d tell you, just remind you that that has no impact on our effective tax rate, that’s truly just a cash EPS impact, because that was actually in deferred taxes through the purchase price allocation. Karl Poehls – Fiduciary Management: Okay, but it shouldn’t reduce ultimately reduce the cost of that acquisition, is that correct?

Ultimately reduce the cost – Karl Poehls – Fiduciary Management: I guess I figured the value of that was maybe $5 million to $10 million. Have you put a value on that –

There’s a little value, obviously, there’s a value in place on it through purchase price allocation that is sitting in deferred taxes. The offset of that would be most likely in goodwill. Ultimately it does not reduce the purchase price, we will get the benefit as it flushes out the balance sheet as we utilize the NOL because we actually use the deferred tax asset. Karl Poehls – Fiduciary Management: Right. Okay. Yes, I guess I was referring to the economic benefit. Thanks.

You bet.

And at this point, gentlemen, we have no further questions.

Thank you, Michelle. First of all, I’d like to let everybody know the dates of our upcoming Annual Analyst Day, which will be held on May 10th and 11th The event will be held again in Dallas, Texas this year and we’ll kick it off as we have in the last few years with a mini tech fair and dinner on Monday evening for those would like to come in Monday evening, which during that event we’ll highlight some of our newer other products. And then starting Tuesday morning, you’ll have the opportunity to hear from most of our operational GMs and all of our national sales managers, just in years past. The Tuesday event should conclude about 2:00 P.M. that afternoon. So please schedule accordingly, and get this on your calendars. A registration link will be sent out in the near future. To summarize the call, again, we want to thank you for joining us today to review our second quarter 2010 results. The acquisitions we closed last quarter are tracking with our expectations and should continue to improve in their commitment as we complete the integration activities. We’re very pleased with the efforts of all of our associates to help control costs during the current economic environment. And, our executives, managers and all of our associates continue to focus on what is best for our customers and our shareholders. And thank you all again for joining us.

And that does conclude today’s presentation. Thank you for your participation.