Telebanc Financial Corp. announced second-quarter earnings of $3.5 million, compared with $179,000 a year earlier.

Mitchell H. Caplan, president and chief executive officer of the bank holding company, said the increase was due to "record growth in deposits and assets" at Telebank, the company's direct banking unit.

Telebank reported $3.2 billion of assets and $1.6 billion of deposits as of June 30. It said it gained $277 million of deposits in the quarter.

Web site visits increased 189% from the first-quarter total, resulting in a 153% increase in account openings through the Web site and a 75% increase in customer queries.

The company has projected that its advertising costs would exceed $20 million this year, nearly double its 1998 marketing investment. It said it plans to increase radio advertising and begin a nationwide television campaign. Telebank is also doing targeted marketing through Internet channels. Its integrated marketing campaign with Yahoo Inc., for example, includes personal account viewing from My Yahoo and Yahoo Finance Web pages.

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