Investment Managers: Eric Hoffman Kaidi Wang Xiangyuan (Arthur) Zhong Nov. 13 th , 2012

1. Investment Managers:Eric HoffmanKaidi WangXiangyuan (Arthur) ZhongNov. 13th, 2012 Where Traditional Meets Technology……

2. Agenda • Introduction • Macroeconomic Review • Review of Company and its business • Relevant stock market prospect • Financial analysis • Financial Projection • Application of valuation tools • Recommendation

3. Current Position • Current share price = $38.37 • Current holding value = $15,348 • Constitutes 11.74 % of invested holdings(without cash) • Constitutes 4.47% of invested holdings(with cash) • Unrealized gain: $11,748

5. Macroeconomic Review • More than 7,300 commercial banks and savings institutions with up to $30 billion in assets. • Trends (2008 -2011): • Number of commercial banks, savings institutions, and credit unions declined 15%. • Aggregate assets increased at a compound annual rate of 5-6%. Source: 10-K

6. Macroeconomic Review • Trends • No new banks were chartered in 2011 • Revenues decreased for fourth straight year mainly because of low interest rates • Big Banks get bigger • Mergers and Acquisitions • Government dominates consumer credit through big banks • Consumer credit market comprises about $13 trillion in outstanding loans or debt • GDP growth Source: http://blogs.reuters.com/great-debate/2012/03/13/three-disturbing-trends-in-commercial-banking/

7. Major Mergers and Acquisitions Source: http://www.motherjones.com/politics/2010/01/bank-merger-history

8. Forecasted GDP through 2015 Source: http://www.businessinsider.com/fed-gdp-forecast-2012-9

9. Macroeconomic Review Source: 10-K

10. Industry Analysis

11. Review of Jack Henry • Founded in 1976 • Market Cap: 3.35 billion • Banking technology company which provides core processing systems to domestic banks and credit unions • Serves 1500 banks and 700 credit unions

12. JKHY VS. Industry Average Source: www.morningstar.com

13. Business Divisions

14. Business Divisions

15. Revenue Sources

16. Revenue Sources

17. Business Strategy • Organic revenue and earnings growth supplemented by strategic acquisitions Source: Bloomberg

18. Acquisition List

19. SWOT Analysis

20. Competitors Overview • Fidelity National Information (FIS): Offers financial institution core processing, card issuer, and transaction processing services, including the NYCE Network • Financial Solutions • Payment Solutions • International Solutions • Fiserv (FISV): Provide various financial services technology solutions • Payments and Industry Products • Financial Institution Services • Globally focused

21. Competitors Overview • NCR Corporation (NCR) • Offers financial-oriented self service technologies; cash dispensers; software solutions; and consulting services • Provides check and document imaging solutions and support services • Offers various maintenance and support services • Total system services (TSS): Provides electronic payment processing and other services to card-issuing and merchant acquiring institutions • Offers issuer account solutions. • Provides merchant processing and related services. • Globally focused

22. Relevant stock market prospect2007-Present Source: Yahoo Finance

23. Stock Price Comparison 2007-Present Source: Yahoo Finance

24. Financial analysis • Profitability • Margin

25. Financial analysis • Liquidity • Capital Structure • Dividend: $0.46 (1.20%) • Market Capitalization: 3.30B • No public traded corporate bond

26. Financial Analysis => Financial Projection

27. Financial Projection

28. DCF Analysis • Discount Rate: 10.73% • Terminal Growth Rate: 2.5% • Intrinsic Value: $36.44

29. Multiples Analysis • Equal Weight • Trailing P/E • Price/Sales • Price/Book • Multiple Price: $34.57

30. Recommendation

31. Recommendation