Online Resources and Communications Corp., a pioneering developer of remote banking software and services, hopes to raise $46 million through an initial public offering of stock.

The McLean, Va., company, long regarded as a likely candidate to join the IPO parade, filed a registration statement with the Securities and Exchange Commission last Monday.

It said it would use proceeds to retire $9.7 million in debt, fund marketing programs, and provide working capital. Further details about the offering's timing were not disclosed.

Gary Craft, an electronic commerce analyst at BancBoston Robertson Stephens in San Francisco, said that amid the glut of Internet-related companies launching IPOs in recent years, many are "still trying to prove themselves to the market."

But he said Online Resources has the makings of a successful business model. He said Matthew P. Lawlor, the chairman and chief executive officer and an ex-banker, invested considerable time and resources in developing an outsourcing service that piggybacked on the automated teller machine network infrastructure.

"My sense is that he has a very viable and workable business model," Mr. Craft said. "It took some time for him to get his message across, but it appears to be working for him."

Formed in 1989, Online Resources sells on-line banking and call center services, mostly to small and midsize banks. The company's proprietary software and services are designed to deliver bank-branded products via screen telephones, personal computers, and the Internet.

Online Resources reported revenues of $4.3 million in 1998, up 51% from the previous year. The net loss increased by about $500,000, to $11.5 million.

Mr. Craft said Online Resources' service is differentiated by its use of ATM networking, and the company obtained a patent on its debiting process. The company is certified with 50 regional and national ATM networks and core data processors.

That is important, Mr. Craft said, because as a bill payments processor, Online Resources "has a real good look at the account balance."

Settling bill payments over ATM debit networks removes problems associated with checks that fail to clear because of insufficient funds.

Bill payment processors are otherwise not assured of "good funds" when consumer accounts are debited, Mr. Craft said. "In the ATM network, you get something that is close to an accurate balance."

Online Resources competes with electronic bill payment processors such as Checkfree Holdings, TransPoint, and M&I Data Services, and with Internet software vendors such as Digital Insight, Edify, and Security First Technologies.

Online's prospectus, citing an International Data Corp. study, said the on-line banking market is expected to grow 316% by 2004, to 25 million U.S. households.

The prospectus also noted that on-line banking is being driven by the largest banks, and Online sees a big opportunity in helping the thousands of regional and community banks to stay competitive.

The company has signed 315 financial institutions, 117 of them operational, including Riggs National Corp., First Virginia Banks Inc., and California Federal Bank. The prospectus said there were 50,332 retail customers using the services, as of Dec. 31.

Richard F. Bowman, vice president, treasurer, and chief financial officer of Falls Church, Va.-based First Virginia Banks, said his company chose Online in late 1996 because its system was easily integrated into the bank's ATM infrastructure.

First Virginia, with $9.4 billion of assets and 390 branches in Virginia, Tennessee, and Maryland, has provided services based on Online's system since the first quarter of 1998. It has signed 5,000 retail accounts, or 1.5% of transaction account customers.

The bank is being deliberate in its approach to the new distribution channel, focusing at first on marketing to its more profitable customers, Mr. Bowman said.

"I think their product is excellent and is one we are very comfortable with," Mr. Bowman said.

Online Resources' IPO will be managed by J.P. Morgan & Co., U.S. Bancorp Piper Jaffray Inc., and Keefe, Bruyette & Woods Inc.

Keefe, an investment firm distinguished by its exclusive focus on banks, made its first banking technology foray in 1995 by managing a private equity offering for Online Resources. Keefe took a position in the software company at that time, and two years later it managed a $20 million private placement with Piper Jaffray.

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