A spinoff by the community bank software provider Intercept Group Inc. raised a record amount of capital in its debut last week as a publicly traded Internet stock.

Netzee Inc. raised $63 million Nov. 9, selling 4.5 million shares at $14 each. The deal netted more than any other Internet banking software developer has realized in going to market this year.

Digital Insight, a Calabasas, Calif., company, raised $52.5 million in its October initial public offering. In June, Online Resources and Communications Corp. of McLean, Va., raised $43 million, and nFront Inc. of Atlanta $39 million.

When private placement deals are included -- notably the $27 million recently raised by Corillian Corp. and $15 million by Q-Up Systems Inc. -- corporate finance activity in the Internet banking software market in 1999 amounts to about $240 million, according to Charles Wittmann, an analyst at First Union Capital Markets.

He said he expects a shakeout within six months. "There is a lot of public money in the sector, so there will be some winners and losers," he said. "You have a lot of people out there that have to get some return on those investments."

Netzee's stock rose 6% the day of its debut, to $14.8125. It traded midday Friday at $14.6875. The company sold 23% of its 19.4 million shares outstanding, giving it a market capitalization of $285 million. Through the first six months of 1999, Netzee had revenues of $2.1 million and a net loss of $22 million.

Intercept, which provides core data processing and electronic funds transfer services to 1,300 community banks, retained 39% of Netzee. It will market and distribute Netzee's Internet and telephone banking services.

Netzee's IPO was designed to "unlock the value" in the subsidiary and let it pursue market opportunities as it sees fit, said Scott Meyerhoff, chief financial officer at Intercept in Norcross, Ga.

Intercept created Netzee, which has 288 bank customers, through a series of acquisitions this year. In March, it bought Direct Access Interactive Inc., a Memphis Internet banking vendor to 130 banks. In August, it announced a $20 million cash deal for SBS Corp., an Intercept competitor with 1,000 community bank customers and 135 users of an Internet banking service.

In July, Intercept said it would buy the Internet banking operations of Bankers Bank of Atlanta, which is owned by 244 community financial institutions, and Independent Bankers Bank of Dallas, with 423 bank owners.

Intercept's stock lost $2.125 last Tuesday, the day of the IPO, dropping to $14. It traded midday Friday at $16.125.

"When companies spin off or take subsidiary companies public, investors get concerned, wondering if all the value went down to the new company," Mr. Meyerhoff said.

Intercept recently reported better-than-expected third-quarter earnings of $1.4 million on revenues of $13.7 million. "If anything, the notion of us having gone ahead and spun off all of our most valuable assets is false,'' Mr. Meyerhoff said.

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