Interview with Net.B@nk (NTBK) CEO D.R. Grimes
April 7, 1999
CNBC/Dow Jones Business Video : Net.B@nk (NTBK) CEO D.R. Grimes on Q1 growth numbers - 04/06/99
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CNBC- MARKET WATCH<BR> INTERVIEW WITH NET.B@NK (NTBK) CEO D.R. GRIMES< BR> APRIL 6, 1999<BR>
SUMMARY: Grimes explains the benefits of Internet banking. Grimes comments on analysts' expectations of growth for the company.
Bob: Net.B@nk closed yesterday's trading up nearly 34%, on news that it opened a record 8,000 accounts in the first quarter, well ahead of its goal of 2,000 accounts per month. Joining us to discuss what's ahead for his company is the CEO of Net.B@nk, D.R. Grimes, who comes to us live from Raleigh, North Carolina. Thank you, sir, for joining us. Why are investors so enthusiastic about your company?
I think that when we, yesterday, released the growth numbers for the first quarter and people could see that we actually could grow by the kind of numbers that we said we would combined with the fact that we'd been profitable for the last 10 months now, people recognize that this is the way that banking is going to be done in the future.
Bob: Tell me why that's the case. What can I get from Internet banking that I can't get from my brick and mortar local branch?
Well, the most important issue here is that over half of the expenses in a traditional bank are spent in that branch system. We don't have any of those expenses. So, when you have a checking account with Net.B@nk, it's a 3% checking account with no service charge, unlimited checking, unlimited on-line bill payment and on-line access. We buy your checks for you and there's no minimum balance. You can't match that deal anywhere with a traditional brick and mortar branch.
Bob: But if I want to get cash, where do I go?
Well, you get an ATM card or you can have a debit card, if you prefer.
Bob: There are charges for those?
Net.B@nk never charges for that. It depends on the particular ATM that you use. And if you use your debit card, you can use it wherever Visa is accepted and frequently people get cash back from a grocery store or drugstore.
Bob: Tell me this, sir, Amazon, for instance, has had a great deal of success spending a lot of money on advertising to get more and more eyeballs. Is that what's going on now in on-line banking? Are you trying to get as many people in as possible and then worry about profit later, even though you are making a profit now?
Well, that is not the case, but we intend to continue to make a profit. We intend to grow as rapidly as we can while we sustaining that profitability that we established last year. So, I think that it's a similar situation, but it's different in that profits will continue to be part of our mission and the goal of our company.
Bob: Yeah, very quickly, sir, what kind of growth do you expect profit-wise?
Well, the analyst expectations this year are for about 100% earnings per share growth and about 90% next year. And we have no reason to doubt that.
Bob: All right. Good luck, sir. Thank you for joining us. We've been speaking with D.R. Grimes, the CEO of Net.B@nk, live from Raleigh, North Carolina.
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