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Revenues Increase 109%, Client Base Increases 73%, Launched Clients Increase 158% Versus Prior Year

MCLEAN, Va., July 28 /BUSINESS WIRE/

Online Resources & Communications Corporation (Nasdaq: ORCC - news), a leading provider of Internet banking services, today reported financial results for the second quarter and the six months ended June 30, 1999.

SECOND QUARTER HIGHLIGHTS

• Revenues for the second quarter of 1999 increased 109% to $2.0 million compared with revenues of $945,000 for the second quarter of 1998.
• Revenues for the first six months of 1999 increased 97% to $3.5 million compared with revenues of $1.8 million for the first six months of 1998.
• Loss from operations was $3.1 million for the second quarter of 1999 compared to $2.5 million for the second quarter of 1998. Loss from operations in the first six months of 1999 was $6.1 million versus $4.8 million in the first six months of 1998.
• Signed 35 financial institution clients during the second quarter, resulting in 373 total financial institution clients as of June 30, 1999 as compared to 215 total financial institution clients as of June 30, 1998.
• Launched 42 financial institution clients during the second quarter. As of June 30, 1999, 191 financial institution clients were launched as compared to 74 institutions launched as of June 30, 1998.
• The number of users grew to 81,000 as of June 30, 1999, compared to 27,000 users at June 30, 1998.
• Major client signings included Guaranty Federal Bank FSB of Dallas, Texas, with $11 billion in assets and The Dime Savings Bank of New York FSB, with $25 billion in assets.
• Reseller network grew to 35 companies with the recent additions of Service Center Corp, Wisconsin Bankers Association and Allfirst Bank. As of June 30, 1998, the reseller network stood at 22.
• The organization was realigned to match the company's ''hub ''strategy and key top management appointments were made: Ray Crosier to EVP & Chief Operating Officer; Alex Seltzer to EVP & Chief Information Officer; and George Northup to EVP & Chief Financial Officer
• In June, the company successfully completed its initial public offering, which raised $40 million net of underwriting commissions, through the sale of 3.1 million shares of common stock at a price of $14.00 per share.
• The company paid off $9.4 million of corporate debt.

Revenues increased 109% to $2.0 million for the second quarter of 1999 compared with revenues of $945,000 for the second quarter of 1998. The increase is primarily attributable to core and support services revenues increasing to $1.5 million in the second quarter of 1999 from $608,000 in the second quarter of 1998, as a result of growth in users.

For the first six months of 1999, revenues increased 97% to $3.5 million compared with revenues of $1.8 million for the same period last year. The increase is primarily attributable to core and support services revenues increasing to $2.6 million in the first six months of 1999 from $1.2 million in the first six months of 1998, as a result of growth in users.

The company reported a loss from operations of $3.1 million, or ($.35) pro forma loss per share for the quarter ended June 30, 1999 compared to a loss from operations of $2.5 million, or ($.39) pro forma loss per share for the same quarter last year. The loss from operations for the first six months of 1999 was $6.1 million, or ($.77) pro forma loss per share, compared to a loss from operations of $4.8 million, or ($.76) pro forma loss per share for the same period in the prior year. Pro forma loss per share for all periods presented is based on the weighted average number of common shares outstanding plus the weighted average of all outstanding convertible preferred stock, as if such convertible preferred stock were converted into common stock at issuance.

''We are extremely pleased with the continued momentum, in every respect, of our business at the close of our first quarter as a public company,'' said Chairman & CEO Matthew P. Lawlor. ''The Internet financial services market for regional and community banks continues to be vastly under-served, and our broad service capabilities address their need to offer customers a comprehensive online banking solution. In the future we intend to continue to expand and activate our client base, increase usage of our services among our clients' customers through co-marketing programs, and continue to expand the content and depth of our offerings. These initiatives, in combination with the power and simplicity of our service, should propel our long-term growth.''

Online Resources & Communications Corporation (http://www.orcc.com) is a leading outsourcer of privately-branded Internet financial services for regional and community banking institutions. The McLean, Virginia-based company has 373 institutional clients nationwide. The company provides consumer billpaying and banking services, and aggregates lending, insurance, securities trading and investment services. Online Resources performs real-time processing through its patented EFT gateway and full customer service for client institutions, giving them a comprehensive ''hub'' solution from a single vendor. Client consumer marketing programs are conducted under the bankonline.com co-brand.

This news release contains statements about future events and expectations, which are ''forward-looking statements.'' Any statement in this release that is not a statement of historical fact may be deemed to be a forward-looking statement. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Specific factors that might cause such a difference include, but are not limited to: the company's history of losses and anticipation of future losses; the company's dependence on the marketing efforts of third parties; the potential fluctuations in the company's operating results; the company's potential need for additional capital; the company's potential inability to expand the company's services and related products in the event of substantial increases in demand for these services and related products; the company's competition; the company's ability to attract and retain skilled personnel; the company's reliance on the company's patents and other intellectual property; the early stage of market adoption of the services it offers; consolidation of the banking and financial services industry; and those risks and uncertainties discussed in filings made by the company with the Securities and Exchange Commission, including those risks and uncertainties contained under the heading ''Risk Factors'' in the company's Registration Statement on Form S-1 as filed with the Securities and Exchange Commission.

• Statements of Operations (Unaudited)
• Consolidated Condensed Balance Sheets