Ebank Exits 'Net; Returns to Brick & Mortar Roots

What seemed like a great idea just didn't work. ebank, an Internet-only bank that has operated online since June 1999, has significantly reduced its dependence in cyberspace in favor of the traditional, community bank scenario.

As an online venture, ebank has lost more than $6 million. Initially operating as Commerce Bank in Atlanta, management flocked to the Internet in much the same fashion as online rivals Wingspan and NetBank. Although ebank raised $15 million devoted to the Web venture, a second attempt to raise $45 million just didn't take off.

As a result, the bank has returned to community banking, and hired a new CEO last spring - Jim Box. Previously, monthly losses were around $750,000, but after only a few months, Box cut losses to about $15,000 per month.

The question on everyone's mind is whether Wingspan, NetBank and others will go the same way. The heart of the matter rests with actually 'lending' money versus depositing. Experts agree that depositing money over the Internet is routine, but actually accomplishing the 'lending' function is difficult. All this leads to less assets, and therefore, less income for the bank.

You may like these other stories...

Event Date: May 29, 2014 In this presentation Excel expert David Ringstrom, CPA brings you up to speed on the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both...
No field likes its buzzwords more than technology, and one of today's leading terms is "the cloud." But it's not just a matter of knowing what's fashionable. Accounting professionals who know how to use...
There is a growing trend of accountants moving away from traditional compliance work to more advisory work. Client demand is there, but it is up to the accountants to capitalize on that. What should accountants' roles be...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.