posted 10-20-1999 09:56 AM         

ATLANTA, Oct. 20 /PRNewswire/ -- Net.B@nk, Inc. (Nasdaq: NTBK), the holding company for the first profitable Internet-only bank, Net.B@nk (http://www.netbank.com), Member FDIC, announced today earnings for the third quarter of 1999 and that the bank had grown to over one billion dollars in assets. The bank reported total assets of $1.03 billion as of September 30, 1999. The Company also reported an 83% increase in net income for the third quarter of 1999 to $1.124 million (or $.04 per share), compared to $613 thousand (or $.03 per share) for the same quarter a year ago. For the nine-months ended September 30, 1999, the company recorded $2.583 million of net income (or $.09 per share) compared to $691 thousand for the same period last year (or $.04 per share before recording a $3 million tax benefit in June 1998).

Commenting at an institutional investors' conference held today, D.R. Grimes, CEO and Vice-chairman of Net.B@nk, Inc., said, "As of today, the bank has tripled the number of accounts since the first of the year to over 54,000 accounts. This increase represents the growing acceptance by consumers of online banking." Grimes added that the bank is anticipating additional growth this year. The bank has relied primarily upon a targeted Internet advertising campaign for the past two years. However, Grimes noted that the bank has recently begun a nationwide advertising campaign. "In mid-September, we expanded our advertising program to include additional national publications and drive-time radio slots in major cities across the country," he stated. The third quarter results reflected this expansion of the Net.B@nk marketing program with 42 percent of the quarter's non-interest expenses related to marketing and advertising.

The growth in accounts was primarily in checking and money market accounts. Grimes noted that checking account customers realize the full benefits of online banking with the easy transfer of funds between accounts, the ability to pay bills electronically free of charge and the capability to track items clearing their bank accounts daily. Grimes followed up by noting, "Ten percent of our customers are visiting our website every day."

"Net.B@nk is committed to expanding the services that we provide our customers to include an even broader array of lending, banking, brokerage and other financial services," Grimes commented. In September, the bank announced its own home equity product that provides online home equity applicants with approvals within 30 seconds. The bank's consumer lending products already include lines of credit, overdraft protection, credit cards, leasing, and home mortgages. Grimes further noted that the bank had funded over $300 million in first mortgages during the past 12 months.

Summarizing, Grimes stated that the goal of being a comprehensive, full-service bank operating on the Internet would be attained not only by the expansion of internal infrastructure but on the continued focus on additional strategic partnerships, which have enabled the bank to experience unprecedented growth. These partnerships have allowed, and will continue to allow, the bank to offer broad services to its customers at the lowest possible cost. This cost structure has enabled the bank to offer attractive interest rates and a low fee structure including its popular free 3% interest checking account.

Net.B@nk, Inc. (Nasdaq: NTBK), is a financial services company whose sole subsidiary, Net.B@nk, Member FDIC, is the first profitable pure Internet bank in the country, having achieved profitability in the past six successive quarters. With more than 54,000 accounts and customers in all 50 United States and 20 foreign countries, Net.B@nk is the largest FDIC-insured bank operating solely on the Internet. In addition to free checking and money market accounts and certificates of deposits with exceptional interest rates, Net.B@nk offers its customers the ultimate convenience in banking. Products and services include free online account access, free unlimited online bill payment, free checks, free unlimited ATM use, VISA(R) Check Card, VISA(R) and MasterCard(R) credit cards, online brokerage services, mortgage lending, home equity lines and loans, and business equipment leasing services. Net.B@nk is member of the Cirrus, Honor/Star, and AFFN ATM networks. For more information on Net.B@nk, its products and services, visit the web site at http://www.netbank.com, or call 888-256-6932.