ATLANTA - NetBank Inc. said its third-quarter earnings were 36% lower than a year earlier because of stepped-up marketing expenditures.

The Internet banking company matched the First Call analysts' consensus with net income of $721,000, down from $1.1 million. Net income for the first nine months was up 192%, however, to $7.553 million, compared with the first nine months of 1999.

The boost in third-quarter marketing expenses, to $3.2 million, paid off with 30,000 new accounts, compared with 13,000 accounts gained last year on spending of $2.6 million, said NetBank's chief financial officer, Robert Bowers. Acquisition costs for the respective quarters dropped from $195 to $110 per account, he said.

NetBank decided to increase its spending on marketing after it gained about $1 million in the third quarter by retiring some debt early, Mr. Bowers said.

Compiled by Andrew Roth

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