[B] USABancShares.com CEO: Mkt taking 2nd look at EarthLink deal -- By Cameron Dueck, Bridge News
New York--Dec 14--USABancShares.com stock is up sharply Tuesday, and Ken Tepper, president and chief executive of the online bank, says the rally is because investors are taking a second look at the bank's co-branding deal with EarthLink announced last week. EarthLink is receiving stock warrants worth 3% of the bank as part of the deal. USABancShares was up 1 5/16, or 17% at 8 7/8 at midday after hitting a session high of 9 3/4. "We've had a pretty good week, with the EarthLink and Yahoo announcements," said Tepper. "I think the market has taken awhile to adjust to it, and many investors didn't realize that EarthLink got about 3% of our company in warrants." Under the terms of the deal announced last week, USABancShares.com will offer EarthLink members 1 year of free EarthLink Sprint Internet access with each new online banking account. USABancShares.com will also be the primary default selection for online banking services at EarthLink throughout the term of the agreement. EarthLink will receive about 150,000 warrants convertible at $12, giving it an approximately 3% stake in the online bank, Tepper said. USABancShares.com will pay EarthLink at a reduced rate for the Internet service its customers will receive. "We think it's one of the first times an Internet company like EarthLink has taken a stake in an FDIC insured bank like ours," Tepper said. "We think it's quite momentous." In September, EarthLink announced its plans to merge with MindSpring, forming one of the largest ISPs in the world, second only to America Online, giving USABancShares.com access to about 3 million customers. USABancShares.com also last week announced a broadcast services deal with Yahoo! Under the agreement, Yahoo is providing Internet broadcasting solutions for USABancShares.com through a co-branded usaTV site on Yahoo! Broadcast. Tepper said online bank valuations have remained behind the rest of the Internet sector. "Online banks are less expensive relative to other Internet companies, but we think banks are a great way to build a network," he said. |
