Netzee Inc., a vendor of Internet banking software to community banks, will help sell online brokerage capabilities to them from Toronto-Dominion Bank's discount broker, TD Waterhouse.

Atlanta-based Netzee has 500 community bank customers that offer online banking. Netzee and TD Waterhouse will start by asking those banks if they would like to add brokerage services to their Internet menu.

The companies said community banks want to compete with larger institutions by offering online brokerage but often lack the ability to develop such a service themselves.

Jeffery Baker, an analyst at SunTrust Equitable Securities, said adding online brokerage services will enable community banks to transform their Web sites into financial portals. The deal will help TD Waterhouse, which has 3.3 million customers for its mutual funds and brokerage businesses, expand its distribution network.

Netzee will benefit because "TD Waterhouse will pay Netzee their customer acquisition costs to get end-users signed up," Mr. Baker said. "This is revenue that just drops to [Netzee's] bottom line."

Netzee, which was spun off from Intercept Group Inc. last year, raised over $61 million in its initial public offering in November. The company's stock, which reached a high of $31 on Feb. 23, has been sliding since March 6, when a deal was announced between two of its competitors, S1 Corp. and Q-Up Systems Inc. Even so, Mr. Baker rates Netzee's stock a "strong buy" and views the current price per share as an opportunity to get in cheap.

Netzee's revenue in the quarter that ended Dec. 31 was $1.4 million, and its net loss for the quarter was $18.9 million. Mr. Baker said he expects the company to bring in $20 million of revenue in the same quarter of this year.

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