Better deposit rates

Published: 26 April 1999 y., Monday
Internet bank Net.Bank Inc. announced that it posted a $691,000 profit in the first quarter, up from a loss of $151,000 in last year_s quarter, as it continues to add new accounts. The bank, which operates online and has no physical branches, earned 9 cents a share, topping the 2 cents a share loss it posted in last year_s first quarter and matching Wall Street_s expectations, tracking service First Call said. The stock soared $18.50 to $166 in morning trading, extending a rally the company has enjoyed over the last several weeks as Internet investors hungrily snatch up the shares of companies that conduct business online. Another Internet bank stock, TeleBanc Financial Corp., added $5.50 to $101. Online brokers have also seen their stocks surge as a growing number of customers trade securities over the Internet. Net.Bank_s accounts have increased more than 50 percent since the start of this year and now total about 27,000, the bank said. Net.Bank can offer customers better deposit rates since its costs are lower for not having to support branches. It also said transactional deposit accounts now make up more than two-thirds of its total account base. Noninterest expense rose to $2.15 million in the quarter from $1.17 million in the year-ago quarter. The bank completed an upgrade of its online technology platform in the first quarter, it said.
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