Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium -- Ignore unavailable to you. Want to Upgrade?

To: KevinMark who wrote (61687)	1/13/2000 1:51:00 AM
From: Frederick Langford	Respond to of 108040

EGRP/TBFC E-marriage January 12, 2000 E-marriage By Anne Granfield NEW YORK. 6:00 PM EST-The long-awaited merger between ETrade (nasdaq: EGRP) and the country's largest internet bank, Telebanc Financial (nasdaq: TBFC), is finally scheduled to close today after passing muster with the Office of Thrift Supervision. The deal allows ETrade to clearly differentiate itself in the crowded e-brokerage arena by bringing the company closer to offering one-stop shopping for financial services over the Internet. Greg Smith, online brokerage analyst at Hambrecht & Quist, says that the closure of the merger removes a frustrating overhang that has weighed on the stock for the last several months, when it was unclear the company would receive regulatory approval. Smith is a fan of the merger, which he says will increase the breadth of ETrade's existing product offerings (discount brokerage and mutual funds) to include FDIC-insured deposits. It will also open the door to tremendous cross-selling opportunities, he believes. ETrade, with revenue for the fiscal year ended Sept. 30, 1999 of $621 million, has over 1.5 million accounts. Telebanc, based in Arlington, Va., is four times the size of all other Internet banks combined, with nearly $4 billion in assets and 100,000 customer accounts as of Sept. 30, 1999. Under the terms of the merger, Telebanc shareholders will get 1.05 shares of ETrade for each share they hold. Telebanc is primarily a wholesale savings bank, which means that while it takes retail deposits, it doesn't yet originate its own loans, but instead purchases them (mostly mortgage related loans) on the secondary market. However, a Telebanc spokeswoman said today that the company is working with ETrade on possible retail loan products going forward. Check-writing and ATM access are not totally new to discount brokers. Charles Schwab (nyse: SCH), for example, offers both to accountholders. But Smith argues, "When you're trying to appeal to a mass audience and get them to change their habits to bank online, you need that FDIC insurance, and that's where this is an important acquisition for ETrade." Since Schwab isn't a bank, its accounts don't enjoy deposit insurance. Smith thinks that existing ETrade accountholders who were considering online banking will logically do so through E*Trade. He has reiterated his 'buy' rating with a target price of $40 (the stock is currently trading around $26), and anticipates "stellar" first quarter earnings to be announced next week based on strong fourth-quarter trading volumes. top This story was published by Forbes Digital Tool (www.forbes.com) on January 12, 2000. forbes.com © 1998 Forbes Inc. Terms, Conditions and Notices