Online Resources Corp.

4795 Meadow Wood Lane

Year founded: 1989

Industry: Information Technology

Post 200 Category: Top 125 Companies

Revenue: $42.29 Million

Net Income/Loss: $4.98 Million

Earnings per share: $0.25

Dividend: n/a

Stockholder equity: $36.47 Million

Auditor: Ernst & Young LLP

Stock: ORCC

Assets: $44.62 Million

Market capitalization: $201.07 Million

52-week high: 10.62 2/8/2005

52-week low: 5.65 5/19/2004

Chairman and CEO: Matthew P. Lawlor

President and COO: Raymond T. Crosier

Employees: 335

Local employees: 283

Description: Online Resources is a banking and bill-paying company that provides outsourced Internet banking and credit card services to about 700 financial institutions—mostly small and medium-size banks and credit unions. The company serves more than 3 million consumer end-users and processes over $10 billion in payments annually.

Developments: After a rough patch during the technology crash, Online Resources has been profitable for three consecutive years. Revenue increased 10 percent in 2004 over the previous year, to $42.3 million, and profit was 25 cents per share, up from 17 cents in 2003. Company officials say the growth reflects a change in strategy. Rather than simply signing up more banks as customers, the company is now putting more resources into marketing online services to the retail clients of the banks that already have hired Online Resources. Adoption rates, the share of retail clients who actually use the online services, have risen from 3 percent to 23 percent, said chief executive Matthew P. Lawlor. That translates into profit for Online Resources, which is paid a fee for each customer transaction. The company is predicting 34 percent revenue growth for 2005 and a 26 percent increase in earnings per share. Much of that growth is expected to come from the company's recent efforts to broaden the services it offers from online banking to credit cards and e-commerce payment methods. In December, it completed its first acquisition, the $15 million purchase of Incurrent Solutions Inc., a privately held Parsippany, N.J., firm that specializes in software that allows credit card users to view account information on the Internet. The company has also filed plans with the SEC to offer an additional 4.4 million shares of stock and plans to use the new money to make additional acquisitions. But there are clouds on the horizon. Online Resources officers say they expect to lose two major banking customers this year — Greenpoint Bank and Riggs Bank — because they have been sold to larger banks that don't need Online Resources' services. But Lawlor looks on the bright side: "We've lost all our major clients. There's no single financial institution left that's more than 3 percent of our client base. There's a good defense against bank consolidation, and that's diversification," he said.