From sec filing:
USABancShares.com, Inc. was the first "dot com" bank holding company in
the country. The decision to include "dot com" in our new name heralded
management's commitment to its vision of evolving into a fully functional
Internet bank dedicated to becoming a leading provider of financial products
and services over the Internet. We believe the financial services industry has
one of the highest degrees of functionality over the Internet. We will strive
to provide the ultimate application for Internet users through our Website,
www.usabancshares.com. To achieve our objective, we have created a dynamic
Internet banking platform that offers our customers a convenient, secure,
cost-efficient and user-friendly medium for financial products and services,
together with an entertaining on-line experience that we believe no other
financial based site provides. We have established and are continuing to pursue
strategic alliances and marketing programs with leading Internet entities to
attract new USABancShares.com customers. We currently offer on-line
interest-bearing checking accounts, statement savings accounts, certificates of
deposit, electronic bill payment services, overdraft protection, ATM and debit
cards, mortgage loans, and credit cards and on-line trading through our
Website. In addition to offering traditional banking products and services, our
site provides users portal applications such as live news feeds and stock
quotes, as well as links to other sites. Our Website also features news and
commentary via usaTV, a streaming media application, which offers customers and
users a unique opportunity to get to know USABancShares.com live over the
Internet.
We are executing our strategy of becoming a leading provider of financial
products and services over the Internet by:
o Pursuing strategic alliances and customer incentive programs. We have
strategic marketing agreements with several leading Internet entities
which provide us access to customers of established Internet companies. We
also have strategic alliances with other Internet entities that provide
hardware and software which give us access to customers at the "point of
sale." Specifically, we have formed strategic alliances with (i) Earthlink
Network, Inc., the seventh largest Internet service provider ("ISP"),
under a two-year agreement by which its subscribers (currently 1.5
million) will have direct access to a co-branded USABancShares.com site
providing both on-line banking and brokerage services; (ii) UltraStar,
Inc. under a one-year agreement by which its brand specific ISP's such as
www.yankees.com, www.orioles.com and www.DavidBowie.com will promote and
offer exclusive online banking and brokerage services by USABancShares.com
and (iii) Webcitizen.com, previously known as Moffett, a regional ISP,
under a one-year agreement by which its current 50,000 customers and any
new customers will have exclusive access to USABancShares.com. We have
also entered into agreements with Systemax, Inc., which gives
USABancShares.com the exclusive right to be on 150,000 desktop interfaces
via a hotlinked icon on computers being shipped during the fourth quarter
of 1999, and Microworkz.com Computer Corporation, which will allow us to
be the exclusive financial service provider via a hotlinked icon on 10,000
units of their latest computer system iToaster, designed exclusively for
Internet users. Under our agreements bounties are generally payable by us
for the first year of point of sale advertising. On September 23, 1999,
EarthLink entered into a merger agreement with MindSpring Enterprises,
Inc. It is anticipated that when, and if, the merger is completed the
combined company will then be the second largest ISP with 3.0 million
customers. These initial costs of our strategic alliances and customer
retention programs will contribute to
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our anticipated losses from operations in 1999 and 2000. Thereafter, we
expect to earn revenues from new customer accounts, although there can be
no assurances that sufficient revenues will be generated. We intend to
continue to actively pursue additional strategic alliances, implement
several innovative customer acquisition and retention programs designed
for new and existing USABancShares.com customers and co-brand these
programs with select USABancShares.com partners.
o Expanding our national marketing campaign. We intend to continue to
expand our brand awareness through our national marketing campaign. This
campaign includes Internet advertising through portals such as Yahoo! and
Excite, television campaigns on networks such as CNBC and MSNBC,
sponsorship of nationally televised special events on networks such as
VH-1, radio advertising such as our spots on the Howard Stern Show, and
newspaper and magazine advertising in national publications such as the
Wall Street Journal, New York Times and Fast Company. The cost of our
marketing efforts will also contribute to our expected losses in 1999 and
2000. As we increase our market share and become a leading provider of
financial products and services during this early stage of Internet
banking, we expect our revenues to increase and to return to profitability
in 2001, although there can be no assurance that we will return to
profitability within such time frame.
o Establishing the USABancShares.com Website as a leading and comprehensive
source for financial services on the Internet. We have created our
Internet banking platforms to allow our customers to choose between
platforms using either Hypertext Mark-up Language, more commonly known as
"HTML," or Macromedia's innovative "Flash" technology. We were certified
to begin offering our Internet banking and brokerage products and services
through the HTML Website on July 15, 1999, and we expect to begin offering
our products and services through the "Flash" Website in the fourth
quarter of 1999. We believe the "Flash" platform will significantly
enhance our customers' experience on our Website and differentiate us from
other Internet banks. Additionally, because our "Flash" platform was
developed in anticipation of the greater bandwidth that is now widely
available, we will be able to deliver our services at the speed expected
by today's on-line user. We believe www.usabancshares.com's unique
audio/visual interface will attract users who demand not only efficient
and convenient financial services, but entertaining content as well. We
intend to attract customers by:
o Offering a broad selection of financial products and services.
o Offering attractive interest rates and low or no fees.
o Building national brand awareness through strategic alliances and
extensive marketing efforts.
o Offering superior service, convenience and ease of access.
o Offering interesting and entertaining content through a real-time
interactive medium.
o Offering advanced security measures.
o Generating sponsorship and advertising revenues. We intend to establish
advertising relationships by offering advertising opportunities to leading
brand marketers and merchants in traffic intensive areas of the
USABancShares.com network. These merchants will receive exposure through
banner advertising combined with promotional offers in exchange for which
we will collect a fee based on various arrangements, such as cost per
click for each new visit to the third-party Website made through our
network, and/or a share of revenues from each sale to USABancShares.com
users.
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o Expanding our Lending Efforts. Since our acquisition of vBank in November
1995, we have pursued an aggressive growth strategy, characterized by
purchases of pools of primarily performing loans at a discount secured by
single-family residential, multi-family residential and commercial
properties. Our net loan portfolio has grown from $7.0 million at December
31, 1995 to $114.7 million at June 30, 1999. On July 31, 1999, we
purchased an $88.3 million loan pool consisting of adjustable-rate
commercial real estate and multi-family residential loans. In addition, on
August 26, 1999, we purchased an $11.0 million loan pool consisting
primarily of adjustable-rate commercial real estate loans. We intend to
increase our originations of commercial real estate and commercial
business loans. We also intend to continue to purchase primarily
performing loan pools. These loans may consist of multi-family residential
loans, commercial property loans and one-to-four family residential
mortgage loans. |
