High-flying Internet banks have attracted a hopeful imitator.
A company that is traded over the counter and which offers an Internet- based service for the construction industry is planning a secondary offering to raise funds for a venture that would help small institutions get into Internet banking.
Three-year-old Consolidated Data Inc. on March 30 completed an agreement to buy Internet banking software from DTEK Corp., a Boise, Idaho, automated teller machine maker, for $10 million in cash and stock.
Consolidated Data is betting that its YourBankOnline.com software will catapult it into the stock-price leagues of Net.Bank Inc., Telebanc Financial Corp., and Security First Technologies, each of which saw their stock prices jump about 150% in the first quarter. Consolidated Data's stock closed at $13.50 Friday, up $5.
"Internet banking is where it's at," said S. Everett Coryell, chief executive officer at Consolidated Data of Mountlake Terrace, Wash. Mr. Coryell also is CEO of the 12-year-old, privately held DTEK.
Mr. Coryell estimated that one million shares would be sold, though that figure is not firm. The company hopes to raise about $10 million and plans to be listed on Nasdaq by June 1.
Intercorp of Seattle, a mergers and acquisitions advisory firm, is advising on the secondary offering, but no underwriter has been appointed.
Beau Jeffrey, president of Intercorp, said he was "not quite ready" to disclose details of the offering. "We're working as hard as we can to move this along," he said.
YourBankOnline.com was developed with help from Sacramento, Calif.-based River City Bank, which tested the Microsoft NT-based software for three years and was the first to adopt it. Robert Wood, senior vice president of technology at the bank, is to join Consolidated Data.
Five banks with about 25,000 users employ the software, Mr. Coryell said. Unnamed banks in Sri Lanka and China are expected to be the first international customers.
Consolidated Data intends to offer the software through a service bureau for credit unions and community banks wanting to offer Internet banking.
"The vision is for it to allow a bank's Web site to become a portal to offer other products," such as home mortgages, insurance, and on-line trading, Mr. Jeffrey said. "It can provide software for community banks to offer on-line banking to their client base so they can look at their consolidated holdings."
Revenue from portal pass-throughs and fees is to be divided between the financial institutions and Consolidated Data.
YourBankOnline.com incorporates document imaging, a central data warehouse, and the option to download data to personal financial management software. "It's got all the bells and whistles," said Mr. Coryell, including bill payment and presentment, real-time stock quotes and execution, as well as traditional checking and savings transactions.
"We do have a few specific things for small banks, like the option to purchase the software for $19,600 or lease it for $1,000 a month," Mr. Coryell said.