Security First Network Bank's initial public offering a year ago was as spectacular as that of any trendy Internet company. Its share price more than doubled, to $45, within an hour of the opening.

That was as high as it ever got.

Reality set in as losses ate away at the more than $48 million of capital it raised. In this year's first quarter, the Atlanta-based Internet bank lost $5.9 million, or 71 cents a share.

The stock price is down in the $8 range.

Security First's trend resembles that of other Internet-oriented IPOs such as Cybercash Inc., First Virtual Holdings Inc., and Open Market Inc. The sentiment is that new modes of banking and electronic payments will take a while to pan out.

"We had the initial frenzy, and now I get the sense that we are at the 'show me' stage," said Mark Wolfenberger, analyst at Deutsche Morgan Grenfell.

He was skeptical of many firms' prospects in home banking and Internet commerce. Even if volumes do start to take off, "it's unclear if any of these niche technologies will be winners," he said. "At the end of the day, consumers are more comfortable using the plastic forms of payments."

Security First officials attributed most of the first-quarter loss- almost nine times the $683,000 of red ink a year earlier-to Security First Technologies, the subsidiary that develops the Internet banking system and markets it to other institutions.

The $5.9 million loss would have been $7.4 million but for a gain on the sale of Security First's banking operation in Pineville, Ky. On the bright side, Security First Technologies has signed 21 financial institutions this year, bringing the total to 34, and it projects 55 to 75 by yearend.

But revenues come slowly.

"Security First went into this market as the pioneer but underwent a learning curve from the perspective of a pricing model," said Gary Craft, analyst at Robertson, Stephens & Co., San Francisco. "They need to balance the long-term recurring revenue buildup with revenues to pay for the lights."

Security First was spun off from Cardinal Bancshares of Lexington, Ky., in May 1996. Major shareholders include Huntington Bancshares, Wachovia Corp., Area Bancshares, and Synovus Financial Corp.

Security First Network Bank, a showcase for the technology, has 11,000 account holders, $40 million of deposits, and $109 million of assets.

The real payoff would come from selling what the company calls its S1 solution: Four customers have licensed the software, while 30 opted for an outsourcing service.

Aside from the general revenue weakness, Security First is dependent for growth on the institutions it sells to, said Robert Stockwell, chief financial officer: "We get paid when their customers use the product, so we are somewhat at their mercy."

Security First had counted on significant short-term revenues from licensing software, which can yield up to $1.2 million per bank sale.

It came as a surprise, the CFO said, that most customers have gone the outsourcing route. That yields only $100,000 to $150,000 per installation. Meanwhile, the company is spending little on marketing its own banking operation, devoting most of its resources to S1.

The current dearth of revenues will be "far outweighed by the longer- term annuity stream of earnings generated at the data center as consumers begin to use the product," said Security First co-founder and chief executive officer James S. Mahan 3d.

Mr. Craft at Robertson Stephens said he expects to see pricing adjustments designed to boost up-front revenues.

"We are always looking at a number of alternatives that would ensure this company's cash flows and capital position," Mr. Stockwell said.

"The estimates on the street today would indicate that we have sufficient funds to carry us through," Mr. Stockwell said, adding that the bank has more than $33 million in capital and $28 million in cash for software development.

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