Security First Technologies' decision last week to sell its two- year- old bank subsidiary is a sign that Internet banking is moving past its first stage of development.

By putting the $48 million-asset Security First Network Bank-the pioneering institution known as the "all-Internet bank"-on the block, Security First is indicating it no longer needs a captive company in order to showcase its wares, bank officials and observers said.

"Internet banking was the dawning of a new era to some extent in 1995 and 1996, but I feel it's more established now," said Eric Hartz, president of Security First Network Bank.

Security First Technologies executives said the sale of the bank would help the Atlanta-based company focus its financial resources on its software business.

The company's main package, Virtual Financial Manager, lets banks offer banking services over the Internet. Six banks currently use the software, and about 50 are in various stages of installing it-many of them through service bureau arrangements with Fiserv Inc. or M&I Data Services Inc.

Security First has about $28 million in capital, and the sale of the bank will free 35% or more of that for the software business.

In addition, the company should get $10 million to $30 million from the bank's sale. Security First Network Bank's book value is about $10 million.

"We did not have the capital or the management focus for both" the software and banking businesses, said Robert Stockwell, chief financial officer of Security First.

All sale inquiries are in an exploratory stage. Mr. Stockwell said information packages have been sent to top banks, brokerage firms, and insurance companies, and Security First has received 14 responses.

Security First's shares rose slightly last week on news of the pending sale. The stock was trading at $8.875 at midday Friday, down 12.5 cents for the week.

Like many companies with fortunes linked to the Internet, Security First had great initial success in the stock market. When first listed on Nasdaq, its shares traded as high as $45.

But since then, investor optimism has been tempered by the lack of earnings from Internet ventures, and Security First stock has suffered.

The company's third-quarter earnings report last week was slightly stronger than expected. Security First lost $5.8 million in the quarter, or 64 cents a share. Neeraj K. Vohra, analyst at Friedman, Billings, Ramsey & Co., (which managed Security First's initial public offering) had estimated a 67-cent loss.

Observers said the company is expected to burn cash at a rate of about $5 million a month for the foreseeable future.

In August, Citicorp, Barnett Banks Inc., Huntington Bancshares, Principal Financial Group, Synovus Financial Corp., and Wachovia Corp., gave Security First an equity infusion totaling $14 million of investments in its software and stock.

To help support its new focus, Security First agreed last week to acquire Solutions By Design Inc., an Atlanta-based consulting firm.

Solutions By Design specializes in Internet consulting and has annual revenues of about $7 million.

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