Headlines:
NetBank Reports Return to Profitability
NetBank Inc.'s second-quarter net income fell 73% from a year earlier, to $2.3 million, but the Alpharetta, Ga., banking company posted a profit for the first time in three quarters.
The report Wednesday showed that NetBank is recovering from some of the problems that prompted warnings to investors last year.
It spent $8 million that year to build its transaction processing division, mostly by buying automated teller machines. But it also spent $2.7 million on the lawsuit it filed in connection with its investment in the now-bankrupt lender Commercial Money Center Inc.
NetBank bought leases from CMC in 1999 and 2000, stopped receiving payments on them in December 2001, and filed its suit in the first quarter of 2002 against the insurers who guaranteed the leases.
That lawsuit (which has not been resolved yet) prompted NetBank to set aside $29 million, before taxes, as a precaution in the fourth quarter, even though it says it is still confident that it will be awarded the $110 million it is owed, plus damages. For the quarter NetBank posted a net loss of $17.7 million.
For the first quarter it reported a loss of $2 million, which it said was tied to an industrywide slump in nonconforming mortgage sales and NetBank's aggressive pricing.
NetBank's chief executive, Douglas Freeman, said on its earnings call Wednesday that company saw "continued pricing pressure within the conforming and non-conforming mortgage channels" and predicted that market conditions would show only "incremental improvement" going forward.
Steve Herbert, the company's chief financial officer, noted during the call that next quarter, "we are expecting somewhat lower volumes and generally neutral margins" on conforming loans.
Mr. Herbert said that the company expects to hit the low end of its per share earnings forecast of between five and 10 cents next quarter.
Alaska USA to Install More Online Kiosks
Alaska USA Federal Credit Union plans to add six to eight online banking kiosks over the next six to eight months, and it hopes to add nonbanking services to all its kiosks.
The Anchorage credit union currently has 42 kiosks - 40 in its branches and two at the Dimond Center mall in Anchorage. Six of the eight new kiosks will be put in branches Alaska USA plans to build. The other two are expected to go into shopping malls.
Only those who have signed up for Alaska USA's online banking service can use the kiosks. Both the kiosks and the service use software from Financial Fusion Inc., a Concord, Mass., unit of Sybase Inc.
Every month 50,000 transactions are conducted through the kiosks, and each kiosk handles between 700 and 3,500.
Alaska USA installed its first kiosks in branches six years ago "to get some of the routine transactions off the teller lines and give our customers a choice," said John Shipe, the credit union's chief information officer. By sending customers to kiosks, "we're not tying up an ATM."
The kiosks allow any online banking functions that do not require a link to a third-party vendor. For example, customers can view check images there, but they cannot make bill payments.
In-branch online banking kiosks are rare, but not unheard of. Bank of America Corp. of Charlotte has 80 kiosks at 46 former FleetBoston Financial Corp. branches in the Northeast; last year the average kiosk drew 2,000 to 2,500 visits a month. Also, PNC Financial Services Group Inc. of Pittsburgh has kiosks on college campuses.
Mr. Shipe said he wants to add services to his kiosks that are not banking-specific, such as letting customers buy event tickets. "We think there's some opportunity out there."
