The world's first Internet-only banking institution, Security First Network Bank (SFNB), announced its third-quarter earnings today, proving that it's not cheap to set up financial shop in cyberspace.
The company, which runs an online banking operation as well as a banking software division, posted a net loss of $4.8 million, or 60 cents a share, compared to a net loss of $453,000, or 19 cents a share, in the same quarter last year.
The company attributes the loss mainly to the acquisition and operation of its Security First Technologies software division, which develops and sells secure online software and services to financial institutions that want to provide Internet banking to their customers. The division has just signed contracts to sell its Virtual Banking Manager application to 13 banking companies.
As of October 31, Security First Network's own banking operation had total deposits of $20.1 million and approximately 7,000 customers, according to the earnings statement.
For the nine months ending September 30, the company recorded a net loss of $10.9 million, or $2.14 a share, compared to a net loss of $483,000, or 20 cents a share, for the nine months ending September 30, 1995.