NetBank Reports Twelfth Consecutive Profitable Quarter and Continued Strong Account Growth

Assets Surpass $2 Billion Mark and Operating Income Exceeds Consensus

Estimate as Bank Announces Two Strategic Acquisitions



Apr 24, 2001, 01:00 ET from NetBank, Inc.

    ATLANTA, April 24 /PRNewswire Interactive News Release/ --
 NetBank, Inc. (Nasdaq: NTBK), the holding company for the world's leading and
 first profitable independent Internet bank, NetBank(R)
 (http://www.netbank.com), Member FDIC and Equal Housing Lender, announced its
 twelfth consecutive profitable quarter of operations.  The company indicated
 that total assets had grown to more than $2.0 billion as of March 31, 2001, an
 increase of $160 million since December 31, 2000.  Operating net income for
 the first quarter of 2001 increased to $797,000 (or $.03 per share), compared
 with $101,000 (or $.00 per share) for the same quarter a year ago.  The
 consensus operating net income estimate for the quarter was $.02 per share.
 First quarter results of the previous year included an extraordinary gain of
 $4.5 million, net of taxes, related to the early retirement of debt.
     "This quarter represents several important milestones for NetBank," said
 D.R. Grimes, NetBank Vice Chairman and CEO.  "We have achieved three
 consecutive years of profitability, surpassed $2 billion in assets, and made
 two very important acquisitions.  NetBank continues to demonstrate that the
 Internet banking business model can be profitable when properly executed.
 More importantly, as a company, we are exemplifying the discipline that is
 required to be a successful business, whether operating on the Internet or
 not."
     Grimes further noted that NetBank is extremely well positioned to grow
 core profitability.  "We have more than 200,000 accounts today compared with
 82,000 accounts a year ago," said Grimes.  "Eighty percent of these accounts
 are checking and money market accounts, which have lower attrition rates.
 These customers visit our Web site multiple times a week and provide us with
 greater cross-sell opportunities."
     The bank maintained the lower account acquisition costs it achieved in the
 past three quarters through the success of its affinity marketing partnerships
 and targeted online advertising.  Acquisition costs for net new accounts in
 the first quarter of 2001 averaged $112.  This figure does not reflect the
 accounts NetBank agreed to acquire from CompuBank in March since a per-account
 cost will not be available until after the transition of accounts is completed
 in the second quarter.  "The acquisition of CompuBank's accounts represents a
 great value for us," Grimes said.  "We gain a sizeable number of experienced,
 online banking customers at a lower cost than acquiring accounts through
 traditional advertising."
     Non-interest income continued to rise, increasing to $2.7 million in the
 first quarter from $341,000 in the same period a year earlier.  The increase
 resulted primarily from new banking fees introduced over the past several
 months and income from product partnerships with other companies, such as the
 bank's brokerage offering through AmeriVest and insurance services through
 Insurance.com.  The new fees are designed mostly to offset operational costs
 the bank incurs with paper-based transactions and to encourage customers to
 use online applications or self-service features, such as online bill payment
 or online check images.  The bank's recent acquisition of Market Street
 Mortgage, scheduled to close in the second quarter, will provide the bank with
 greater opportunity to earn non-interest income through a share in origination
 and other lending fees as well as earn higher net interest margins on loans.
     Market Street Mortgage, which currently ranks among the top 40 largest
 mortgage originators in the country, has concentrated on serving the
 first-time homebuyer and new home markets.  The acquisition of this mortgage
 company will benefit NetBank with immediate access to mortgage loans for its
 investment portfolio.  These loans will not include the customary premiums
 paid by the bank on the purchase of residential loan pools.  Loans comprise
 70% of NetBank's $2 billion quarter-end balance sheet.  More than 80% of these
 loans are related to single-family residential properties.  Grimes noted that
 the company seeks only high-credit-quality loans.  This strategy is reflected
 in the bank's low past-due rate on loans.  Only 0.47% of loans were past due
 30 days or more on March 31, 2001, while the bank's quarter-end financials
 included an allowance for loan losses of 1.13%.
     "We are extremely pleased with the results of the first quarter," Grimes
 said.  "With the groundwork we laid last year and our recent acquisitions, we
 have a lot of momentum as we work toward increasing individual account
 profitability, overall company profitability, and shareholder value."
     A conference call with management is scheduled for Tuesday, April 24, at
 4 p.m. (ET).  Interested parties may listen to the call by dialing
 1-888-942-8511 (outside the U.S., 1-312-470-7421).  When asked, callers should
 identify the conference leader as D.R. Grimes and the pass code as NetBank.
 Questions for management may be submitted via E-mail to
 investorrelations@netbank.com until 2:30 p.m. (ET) on Tuesday.  Management
 will attempt to answer as many questions as time allows.  A replay of the call
 will be available for one week and can be heard by dialing 1-888-568-0349.
 
     About NetBank(R)
     NETBANK, Inc. (Nasdaq: NTBK) (http://www.netbank.com), is a financial
 services company that has recorded 12 consecutive quarters of profitability to
 date.  Its wholly owned subsidiary, NetBank, Member FDIC, was the first
 profitable pure Internet bank in the country.  With more than $2.0 billion in
 assets and customers in all 50 states and 20 foreign countries, NetBank was
 recognized as the best online bank by readers of Worth magazine in its 2000
 "Readers' Choice Awards" survey and as a Money.com pick for "Best Online
 Banks."  With its low-cost, branchless business model, NetBank is able to
 reward its customers with high interest rates on deposits with low- or no-fee
 banking services.  Products and services include free online account access,
 free checking, free unlimited online bill payment and presentment, free
 unlimited ATM use, VISA(R) Check Card, VISA(R) credit card, online brokerage
 services, mortgage lending, home equity lines and loans, insurance, IRAs,
 online safe deposit boxes, and business equipment leasing services.  NetBank
 is a member of the AFFN, Cirrus, Honor/Star, MAC and NYCE ATM networks.  For
 more information on NetBank, its products and services, visit the Web site at
 http://www.netbank.com, or call 1-888-BKONWEB (256-6932).
 
     "Safe Harbor" Statement under the Private Securities Litigation Reform Act
 of 1995: Information in this press release about the bank's being positioned
 to grow core profitability; checking and money market accounts representing
 better cross-sell opportunities; and the acquisition of Market Street Mortgage
 leading to higher income loans and greater non-interest income for the bank
 are "forward-looking statements" involving risks and uncertainties that could
 cause actual results to differ materially.  Risks include checking and money
 market account customers not taking advantage of the bank's other products and
 lending activity through Market Street Mortgage not producing significant
 high-quality loans or fee income.  The bank has no obligation to update any
 forward-looking statements.  For a discussion of additional risks and
 uncertainties facing NetBank, see "Risk Factors" in the Company's SEC filings.
 
                                 NetBank, Inc.
 
                   For Quarters Ended March 31, 2001 and 2000
                      (In thousands except per share data)
 
                                                       For the Quarter Ended
                                                              March 31,
                                                         2001           2000
 
     Interest income                                  $35,901        $23,714
     Interest expense                                (25,127)       (14,766)
     Net interest income                               10,774          8,948
 
     Noninterest income                                 2,708            341
     Noninterest expense:
      Salaries and Benefits                           (1,934)        (1,677)
      Marketing costs                                 (1,683)        (2,837)
      Customer Service                                (4,787)        (2,026)
      Data Processing                                 (1,389)          (586)
      Depreciation and amortization                   (1,087)          (515)
      Office expenses                                   (322)          (104)
      Occupancy                                         (182)          (186)
      Travel and Entertainment                          (109)          (111)
      Other                                             (658)          (912)
         Total noninterest expense                   (12,151)        (8,954)
 
     Provision for loan loss                             (43)          (182)
 
     Income before income taxes
      and extraordinary gain                            1,288            153
     Income tax expense                                 (491)           (52)
     Income before extraordinary gain                     797            101
 
     Extraordinary gain on early
      extinguishment of debt, net of tax                   --          4,521
 
     Net Income                                          $797         $4,622
 
     Income before extraordinary gain per share
      - basic                                           $0.03            $--
      - diluted                                         $0.03             $-
 
     Net Income per share
      - basic                                           $0.03          $0.16
      - diluted                                         $0.03          $0.15
 
     Weighted average shares outstanding
      - basic                                          28,878         29,569
      - diluted                                        29,429         30,568
 
     Book value per share                               $8.73          $8.34
     Shares outstanding end of period                  28,623         30,008
 
     Securities and investments                      $480,831       $413,429
     Loans, net of allowance                       $1,352,128       $948,307
     Total assets                                  $2,002,428     $1,411,774
 
     Deposits                                      $1,165,593       $725,113
     Shareholder equity                              $249,961       $250,273
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X19473612
 
 

SOURCE NetBank, Inc.
    ATLANTA, April 24 /PRNewswire Interactive News Release/ --
 NetBank, Inc. (Nasdaq: NTBK), the holding company for the world's leading and
 first profitable independent Internet bank, NetBank(R)
 (http://www.netbank.com), Member FDIC and Equal Housing Lender, announced its
 twelfth consecutive profitable quarter of operations.  The company indicated
 that total assets had grown to more than $2.0 billion as of March 31, 2001, an
 increase of $160 million since December 31, 2000.  Operating net income for
 the first quarter of 2001 increased to $797,000 (or $.03 per share), compared
 with $101,000 (or $.00 per share) for the same quarter a year ago.  The
 consensus operating net income estimate for the quarter was $.02 per share.
 First quarter results of the previous year included an extraordinary gain of
 $4.5 million, net of taxes, related to the early retirement of debt.
     "This quarter represents several important milestones for NetBank," said
 D.R. Grimes, NetBank Vice Chairman and CEO.  "We have achieved three
 consecutive years of profitability, surpassed $2 billion in assets, and made
 two very important acquisitions.  NetBank continues to demonstrate that the
 Internet banking business model can be profitable when properly executed.
 More importantly, as a company, we are exemplifying the discipline that is
 required to be a successful business, whether operating on the Internet or
 not."
     Grimes further noted that NetBank is extremely well positioned to grow
 core profitability.  "We have more than 200,000 accounts today compared with
 82,000 accounts a year ago," said Grimes.  "Eighty percent of these accounts
 are checking and money market accounts, which have lower attrition rates.
 These customers visit our Web site multiple times a week and provide us with
 greater cross-sell opportunities."
     The bank maintained the lower account acquisition costs it achieved in the
 past three quarters through the success of its affinity marketing partnerships
 and targeted online advertising.  Acquisition costs for net new accounts in
 the first quarter of 2001 averaged $112.  This figure does not reflect the
 accounts NetBank agreed to acquire from CompuBank in March since a per-account
 cost will not be available until after the transition of accounts is completed
 in the second quarter.  "The acquisition of CompuBank's accounts represents a
 great value for us," Grimes said.  "We gain a sizeable number of experienced,
 online banking customers at a lower cost than acquiring accounts through
 traditional advertising."
     Non-interest income continued to rise, increasing to $2.7 million in the
 first quarter from $341,000 in the same period a year earlier.  The increase
 resulted primarily from new banking fees introduced over the past several
 months and income from product partnerships with other companies, such as the
 bank's brokerage offering through AmeriVest and insurance services through
 Insurance.com.  The new fees are designed mostly to offset operational costs
 the bank incurs with paper-based transactions and to encourage customers to
 use online applications or self-service features, such as online bill payment
 or online check images.  The bank's recent acquisition of Market Street
 Mortgage, scheduled to close in the second quarter, will provide the bank with
 greater opportunity to earn non-interest income through a share in origination
 and other lending fees as well as earn higher net interest margins on loans.
     Market Street Mortgage, which currently ranks among the top 40 largest
 mortgage originators in the country, has concentrated on serving the
 first-time homebuyer and new home markets.  The acquisition of this mortgage
 company will benefit NetBank with immediate access to mortgage loans for its
 investment portfolio.  These loans will not include the customary premiums
 paid by the bank on the purchase of residential loan pools.  Loans comprise
 70% of NetBank's $2 billion quarter-end balance sheet.  More than 80% of these
 loans are related to single-family residential properties.  Grimes noted that
 the company seeks only high-credit-quality loans.  This strategy is reflected
 in the bank's low past-due rate on loans.  Only 0.47% of loans were past due
 30 days or more on March 31, 2001, while the bank's quarter-end financials
 included an allowance for loan losses of 1.13%.
     "We are extremely pleased with the results of the first quarter," Grimes
 said.  "With the groundwork we laid last year and our recent acquisitions, we
 have a lot of momentum as we work toward increasing individual account
 profitability, overall company profitability, and shareholder value."
     A conference call with management is scheduled for Tuesday, April 24, at
 4 p.m. (ET).  Interested parties may listen to the call by dialing
 1-888-942-8511 (outside the U.S., 1-312-470-7421).  When asked, callers should
 identify the conference leader as D.R. Grimes and the pass code as NetBank.
 Questions for management may be submitted via E-mail to
 investorrelations@netbank.com until 2:30 p.m. (ET) on Tuesday.  Management
 will attempt to answer as many questions as time allows.  A replay of the call
 will be available for one week and can be heard by dialing 1-888-568-0349.
 
     About NetBank(R)
     NETBANK, Inc. (Nasdaq: NTBK) (http://www.netbank.com), is a financial
 services company that has recorded 12 consecutive quarters of profitability to
 date.  Its wholly owned subsidiary, NetBank, Member FDIC, was the first
 profitable pure Internet bank in the country.  With more than $2.0 billion in
 assets and customers in all 50 states and 20 foreign countries, NetBank was
 recognized as the best online bank by readers of Worth magazine in its 2000
 "Readers' Choice Awards" survey and as a Money.com pick for "Best Online
 Banks."  With its low-cost, branchless business model, NetBank is able to
 reward its customers with high interest rates on deposits with low- or no-fee
 banking services.  Products and services include free online account access,
 free checking, free unlimited online bill payment and presentment, free
 unlimited ATM use, VISA(R) Check Card, VISA(R) credit card, online brokerage
 services, mortgage lending, home equity lines and loans, insurance, IRAs,
 online safe deposit boxes, and business equipment leasing services.  NetBank
 is a member of the AFFN, Cirrus, Honor/Star, MAC and NYCE ATM networks.  For
 more information on NetBank, its products and services, visit the Web site at
 http://www.netbank.com, or call 1-888-BKONWEB (256-6932).
 
     "Safe Harbor" Statement under the Private Securities Litigation Reform Act
 of 1995: Information in this press release about the bank's being positioned
 to grow core profitability; checking and money market accounts representing
 better cross-sell opportunities; and the acquisition of Market Street Mortgage
 leading to higher income loans and greater non-interest income for the bank
 are "forward-looking statements" involving risks and uncertainties that could
 cause actual results to differ materially.  Risks include checking and money
 market account customers not taking advantage of the bank's other products and
 lending activity through Market Street Mortgage not producing significant
 high-quality loans or fee income.  The bank has no obligation to update any
 forward-looking statements.  For a discussion of additional risks and
 uncertainties facing NetBank, see "Risk Factors" in the Company's SEC filings.
 
                                 NetBank, Inc.
 
                   For Quarters Ended March 31, 2001 and 2000
                      (In thousands except per share data)
 
                                                       For the Quarter Ended
                                                              March 31,
                                                         2001           2000
 
     Interest income                                  $35,901        $23,714
     Interest expense                                (25,127)       (14,766)
     Net interest income                               10,774          8,948
 
     Noninterest income                                 2,708            341
     Noninterest expense:
      Salaries and Benefits                           (1,934)        (1,677)
      Marketing costs                                 (1,683)        (2,837)
      Customer Service                                (4,787)        (2,026)
      Data Processing                                 (1,389)          (586)
      Depreciation and amortization                   (1,087)          (515)
      Office expenses                                   (322)          (104)
      Occupancy                                         (182)          (186)
      Travel and Entertainment                          (109)          (111)
      Other                                             (658)          (912)
         Total noninterest expense                   (12,151)        (8,954)
 
     Provision for loan loss                             (43)          (182)
 
     Income before income taxes
      and extraordinary gain                            1,288            153
     Income tax expense                                 (491)           (52)
     Income before extraordinary gain                     797            101
 
     Extraordinary gain on early
      extinguishment of debt, net of tax                   --          4,521
 
     Net Income                                          $797         $4,622
 
     Income before extraordinary gain per share
      - basic                                           $0.03            $--
      - diluted                                         $0.03             $-
 
     Net Income per share
      - basic                                           $0.03          $0.16
      - diluted                                         $0.03          $0.15
 
     Weighted average shares outstanding
      - basic                                          28,878         29,569
      - diluted                                        29,429         30,568
 
     Book value per share                               $8.73          $8.34
     Shares outstanding end of period                  28,623         30,008
 
     Securities and investments                      $480,831       $413,429
     Loans, net of allowance                       $1,352,128       $948,307
     Total assets                                  $2,002,428     $1,411,774
 
     Deposits                                      $1,165,593       $725,113
     Shareholder equity                              $249,961       $250,273
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X19473612
 
 SOURCE  NetBank, Inc.