<PAGE>

                          SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C.  20549


                                      FORM 10-Q


                   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                        OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended March 31, 1998              Commission File No. 0-22361

                                    NET.B@NK, INC.
                (Exact name of registrant as specified in its charter)


           Georgia                                      58-2224352
----------------------------------          ----------------------------------
    (State of incorporation)                       (I.R.S. Employer
                                                 Identification Number)


     950 North Point Parkway
     Suite 350
     Alpharetta, Georgia                                   30005
----------------------------------          ----------------------------------
    (Address of principal                                (Zip Code)
      executive offices)

     Registrant's telephone number, including area code:      (770) 343-6006
                                                        ----------------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  YES   X          NO          
                                       --------         -------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:

           Class                            Shares Outstanding at May 12, 1998
----------------------------------          ----------------------------------
   Common Stock, par value $.01                        6,145,962 

<PAGE>



                                FINANCIAL INFORMATION

Financial Statements

     The following financial statements are included in this report:

     1.   Consolidated condensed balance sheets as of March 31, 1998 and as of
          December 31, 1997.

     2.   Condensed consolidated statements of operations and comprehensive
          income (unaudited) for the three months ended March 31, 1998 and 1997.

     3.   Statements of shareholders' equity (unaudited) from December 31, 1997
          to March 31, 1998.

     4.   Consolidated condensed statements of cash flows (unaudited) for the
          three months ended March 31, 1998 and 1997.

     5.   Notes to condensed consolidated financial statements as of December
          31, 1997 and the three months ended March 31, 1998 and 1997
          (unaudited).



                                       2


<PAGE>

NET.B@NK, INC.   

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)   
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                             March 31,      December 31,   
                                                1998            1997   
<S>                                        <C>            <C>
ASSETS

CASH AND CASH EQUIVALENTS:   
Cash                                       $  1,447,858      $   250,535
Federal Funds Sold                            8,647,074       28,853,057
                                           ------------      -----------
Total cash and cash equivalents              10,094,932       29,103,592

SECURITIES AVAILABLE FOR SALE - 
  At fair value (amortized cost of 
  $46,304,903 and $18,137,209)               46,332,787       18,054,146

STOCK OF FEDERAL HOME LOAN BANK 
  OF ATLANTA - At cost                          251,500          225,000

LOANS RECEIVABLE - 
  Net of allowance for doubtful   
  accounts of $457,105 and $453,444         104,811,497       44,479,963

ACCRUED INTEREST RECEIVABLE                     898,303          372,237

FURNITURE AND EQUIPMENT - Net                   530,845          388,508

BANK CHARTER                                    340,667          344,167

OTHER ASSETS                                    202,900          252,196
                                           ------------      -----------
                                           $163,463,431      $93,219,809
                                           ------------      -----------
                                           ------------      -----------

LIABILITIES AND SHAREHOLDERS' 
  EQUITY (DEFICIT)   

LIABILITIES:   
Deposits                                   $128,681,669      $58,726,763
Other payables and accrued liabilities          681,301          375,649
                                           ------------      -----------
                                            129,362,970       59,102,412

SHAREHOLDERS' EQUITY:   
Preferred stock, no par (10,000,000 
  shares authorized,none outstanding)   
Common stock, $.01 par (100,000,000 
  shares authorized, 6,145,562 shares 
  issued and outstanding)                        61,456           61,456
Additional paid-in capital                   43,631,314       43,631,314
Unamortized stock plan expense                  (52,125)         (75,689)
Accumulated deficit                          (9,568,068)      (9,416,621)
Accumulated other comprehensive income 
 (loss)                                          27,884          (83,063)
                                           ------------      -----------
Total liabilities and shareholders' equity   34,100,461       34,117,397
                                           ------------      -----------
                                           $163,463,431      $93,219,809
                                           ------------      -----------
                                           ------------      -----------
</TABLE>

See notes to financial statements.   

                                       -3-
<PAGE>

NET.B@NK, INC.   

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED)   
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                  Three Months Ended   
                                                       March 31,   
                                                  1998           1997   
                                                  -------------------
<S>                                             <C>          <C>
INTEREST INCOME:   
Short-term investments                          $  395,003   $      5,775
Investment securities                              453,376   
Loans                                            1,358,235   
                                                ----------   ------------
  Total interest income                          2,206,614          5,775

INTEREST EXPENSE - Deposits                      1,303,628        102,525
                                                ----------   ------------
NET INTEREST INCOME (LOSS)                         902,986        (96,750)

PROVISION FOR LOAN LOSSES                            3,661   
                                                ----------   ------------
NET INTEREST INCOME (LOSS) AFTER   
PROVISION FOR LOAN LOSSES                          899,325        (96,750)

NON-INTEREST INCOME - Service charges and fees     122,495

NON-INTEREST EXPENSES:   
Salaries and benefits                              434,353        524,971
Marketing                                          240,018         60,495
Depreciation and amortization                       40,037          6,879
Outside services                                   191,661         21,277
Other                                               86,872        119,993
Data processing                                     91,226         71,506
Occupancy                                           26,093         29,750
Office expenses                                     47,566   
Travel and entertainment                            15,441          4,404
Amortization of service contract   
 with affiliate                                                   864,000
                                                ----------   ------------
  Total non-interest expenses                    1,173,267      1,703,275
                                                ----------   ------------

NET LOSS                                         $(151,447)   $(1,800,025)
                                                ----------   ------------
                                                ----------   ------------
NET LOSS PER COMMON SHARE - BASIC AND DILUTED       $(0.02)        $(1.44)
                                                ----------   ------------
                                                ----------   ------------
WEIGHTED AVERAGE COMMON   
SHARES OUTSTANDING                               6,143,562      1,249,342
                                                ----------   ------------
                                                ----------   ------------

NET LOSS                                        $ (151,447)  $ (1,800,025)

OTHER COMPRHENSIVE INCOME:   
Unrealized holding gains arising during period     159,073   
Less reclassification adjustment for gains 
 included in net loss                              (48,126)   

  Total other comprehensive income                 110,947              -
                                                ----------   ------------
COMPREHENSIVE LOSS                                $(40,500)   $(1,800,025)
                                                ----------   ------------
                                                ----------   ------------
</TABLE>

See notes to financial statements.   

                                         -4-


<PAGE>

NET.B@NK, INC.   

STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)   
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                   ACCUMULATED
                                                                                                      OTHER
                            PREFERRED            COMMON     ADDITIONAL  UNAMORTIZED               COMPREHENSIVE
                              STOCK    COMMON     STOCK      PAID-IN    STOCK PLAN   ACCUMULATED     INCOME
                             (NO PAR)  SHARES   ($.01 PAR)   CAPITAL      EXPENSE      DEFICIT       (LOSS)        TOTAL

<S>                           <C>     <C>         <C>       <C>           <C>        <C>           <C>          <C>
BALANCE - December 31, 1997   $   -   6,145,562   $61,456   $43,631,314   $(75,689)  $(9,416,621)  $ (83,063)   $34,117,397

Net loss for the three 
 months ended March 31, 1998                                                           (151,447)                   (151,447)
Other comprehensive income:   
 Unrealized holding gains 
  arising during the period   
  ended March 31, 1998                                                                               159,073        159,073
Less reclassification 
 adjustment for gains included   
 in net loss                                                                                         (48,126)       (48,126)
Amortization of stock plan 
 expense                                                                    23,564                                   23,564
                              -----   ---------   -------   -----------   --------   -----------   ---------    -----------
BALANCE - March 31, 1998
 (unaudited)                  $   -   6,145,562   $61,456   $43,631,314   $(52,125)  $(9,568,068)  $  27,884    $34,100,461
                              -----   ---------   -------   -----------   --------   -----------   ---------    -----------
                              -----   ---------   -------   -----------   --------   -----------   ---------    -----------
</TABLE>

See notes to financial statements.   

                                                             -5-
<PAGE>

NET.B@NK, INC.   

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)   
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                       Three Months Ended
                                                            March 31,
                                                       ------------------
                                                     1998              1997
<S>                                             <C>                <C> 
OPERATING ACTIVITIES:   
Net loss                                        $   (151,447)       $(1,800,025)
Adjustments to reconcile net loss to 
 net cash used in operating activities:
  Depreciation                                        36,537              6,879
  Amortization of service contract                                      864,000
  Amortization of stock plan expense                  23,564             40,677
  Amortization of premiums on investment 
   securities and loans                               73,062
  Amortization of premiums on 
   purchased loans                                   152,038
  Amortization of Bank Charter                         3,500
  Provision for loan losses                            3,661
Changes in assets and liabilities which 
 provide (use) cash:
  Accrued interest receivable                       (526,066)
  Other assets                                        49,296           (128,413)
  License agreements - noncurrent                                        16,060
  Payables and accrued liabilities                   305,652            111,150
                                                ------------        -----------
    Net cash used in operating activities            (30,203)          (899,672)

INVESTING ACTIVITIES:   
  Purchases of securities available for sale     (30,443,211)
  Purchase of Federal Home Loan Bank stock           (26,500)
  Principal repayments on mortgage backed 
   securities                                      2,202,455
  Purchase of loans                              (70,683,033)
  Principal payments on loans                     10,195,800
  Capital expenditures                              (178,874)            (8,255)
  Proceeds from return of equipment                                      17,738
                                                ------------        -----------
    Net cash provided by (used in) 
     investing activities                        (88,933,363)             9,483

FINANCING ACTIVITIES:   

  Increase in deposits                            69,954,906
  Advances from affiliate                                               313,401
  Net proceeds from the sale of 
   common stock                                                           2,790
                                                ------------        -----------
     Net cash provided by financing 
      activities                                  69,954,906            316,191
                                                ------------        -----------

NET DECREASE IN CASH AND CASH 
 EQUIVALENTS                                     (19,008,660)          (573,998)

CASH AND CASH EQUIVALENTS:
  Beginning of period                             29,103,592            768,666
                                                ------------        -----------
  End of period                                 $ 10,094,932        $   194,668
                                                ------------        -----------
                                                ------------        -----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
 INFORMATION - Cash paid during the 
 year for interest                              $    808,000        $         -
                                                ------------        -----------
                                                ------------        -----------
</TABLE>

See notes to financial statements.   

                                        -6-

<PAGE>

NET.B@NK, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND THE THREE MONTHS ENDED
MARCH 31, 1998 AND 1997(UNAUDITED)
-------------------------------------------------------------------------------

1.   ORGANIZATION AND BASIS OF PRESENTATION

     Net.B@nk, Inc. (the "Company") is a bank holding company that wholly owns
     the outstanding stock of Atlanta Internet bank ("AIB"), a federally
     chartered savings and loan.  The Company was incorporated February 20, 1996
     for the primary purpose of forming and, ultimately, operating AIB.  As of 
     January 1, 1997, pending regulatory approval and the acquisition of a bank
     charter, the Company was operating as a development stage enterprise under
     an agreement with Carolina First Bank ("CFB") whereby CFB agreed to hold
     and service the deposit accounts generated by the Internet banking
     operations of the Company in exchange for 1,325,000 shares of the Company's
     common stock valued at $3,840,000.  In addition, as of January 1, 1997, the
     Company was  a party to an agreement with First Alliance/Premier
     Bancshares, Inc. ("First Alliance") pursuant to which the Company had
     agreed to purchase the charter of First Alliance's subsidiary, Premier
     Bank, $5 million of loans, $5 million of certificates of deposit, and $2
     million in unimpaired capital for $2,150,000 in cash, 41,406 shares of the
     Company's common stock valued at $125,000, and $75,000 in additional cash
     for reimbursement of direct out-of-pocket expenses. 

     On July 11, 1997, the final regulatory approval from the Office of Thrift
     Supervision was received.  On July 28, 1997, the Company sold 3,500,000
     shares of its common stock to the public in an Initial Public Offering (the
     "Offering").  On July 31, 1997, the Company received approximately $38.4
     million in net proceeds from the Offering and consummated its agreements
     with both First Alliance and CFB.  As a result AIB, a federal savings bank,
     became a wholly owned subsidiary of the Company.  

     In the opinion of management, the unaudited condensed consolidated
     financial statements included herein reflect all adjustments, consisting
     only of normal recurring accruals, which are necessary for the fair
     statement of the results for the interim periods presented.  Certain
     information and footnote disclosures normally included in financial
     statements have been condensed or omitted pursuant to applicable rules and
     regulations of the Securities and Exchange Commission ("SEC"). The
     financial statements included herein should be read in conjunction with the
     financial statements and notes thereto, included in the Company's Form 10-K
     filed with the SEC on March 27, 1998.  The results of operations for the
     interim periods reported herein are not necessarily indicative of results
     to be expected for the full year.  Certain 1997 amounts have been
     reclassified for comparability with 1998 amounts.

                                       -7-

<PAGE>

2.   ACCOUNTING POLICIES

     Reference is made to the accounting policies of the Company described in
     the notes to financial statements contained in the Company's Form 10-K
     filed with the SEC on March 27, 1998.  The Company has followed those
     policies in preparing this report.  In addition, the following accounting
     policies were adopted during the three-month period March 31, 1998: 

     COMPREHENSIVE INCOME - As of January 1, 1998, the Company adopted Statement
     of Financial Accounting Standards ("SFAS") 130, "Reporting Comprehensive
     Income."  SFAS 130 establishes new rules for the reporting and display of
     comprehensive income and its components; however, the adoption of the
     Statement had no impact on the Company's net loss or shareholders' equity. 
     SFAS 130 requires unrealized gains or losses on the Company's
     available-for-sale securities, which prior to adoption were reported
     separately in shareholders' equity, to be included in other comprehensive
     income.

3.   PURCHASE OF LOANS

     During the three month period ended March 31, 1998, the Company purchased
     approximately $71 million in first and second mortgages, home equity lines
     of credit, and construction loans from various banks and lending
     institutions.  The purchases included premiums totaling approximately $4.8
     million.  The respective sellers are servicing $41 million of these loans
     for fees ranging from .05% to 1.25%.  The remaining $30 million in loans is
     being serviced temporarily by the seller and the Company is pursuing a
     servicing agreement with a 3rd party.  Interest rates range from 6% to 16%
     on these loans.

4.   NET LOSS PER COMMON AND COMMON EQUIVALENT SHARE

     In February 1997, SFAS 128, "Earnings Per Share" was issued.  SFAS 128
     establishes standards for computing and presenting earnings per share
     information for entities with publicly held common stock.  In accordance
     with SFAS 128, net loss per share is computed based on the weighted average
     number of common shares outstanding during the period.  All previously
     reported per share amounts have been restated to conform to SFAS 128. 
     Basic and diluted net loss per share are the same since the inclusion of
     common stock equivalent shares of 392,456, outstanding stock options are
     antidilutive.

5.   STOCK OPTIONS

     The Company has a 1996 Stock Incentive Plan (the "Plan") which provides
     that key employees, officers, directors, and consultants of the Company may
     be granted nonqualified and incentive stock options to purchase shares of
     Common Stock of the Company, derivative securities related to the value of
     the Common Stock, or cash awards.  Previously, the Plan limited the total
     number of shares which could be awarded to 397,500.  Effective after
     shareholder approval, which was received at the annual shareholders'
     meeting on April 23, 1998, the Plan was amended to increase the total
     number of shares which may be awarded to 600,000.  These shares have been
     reserved for the Plan.

     During the three-month period ended March 31, 1998, the Company awarded
     23,000 incentive stock options at an exercise price of $11.25 per share on
     January 12, 1998 and 3,000 incentive stock options at an exercise price of
     $16.75 per share on February 12, 1998.  Grant prices approximated fair
     value of the stock at the grant date.

                                       -8-

<PAGE>

6.   IMPACT OF NEW ACCOUNTING STANDARDS

     In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
     131, "Disclosures about Segments of an Enterprise and Related Information,"
     which establishes annual and interim reporting standards for an
     enterprise's business segments and related disclosures about its products,
     services, geographic areas and major customers.  Adoption of this statement
     will not impact the Company's consolidated financial position, results of
     operations or cash flows.  The Company will adopt this statement in its
     financial statements for the year ending December 31, 1998.

     In February 1998, the FASB issued SFAS 132, "Employers' Disclosures about
     Pensions and Other Postretirement Benefits," which standardizes the
     disclosure requirements for pensions and other postretirement benefits to
     the extent practicable, requires additional information on changes in the
     benefit obligations and fair values of plan assets that will facilitate
     financial analysis, and eliminates certain disclosures that are no longer
     useful.  SFAS 132 is effective for fiscal years beginning after December
     15, 1997.  The Statement is not expected to have an effect on the Company's
     financial statements.

                                       -9-

<PAGE>

     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
     OPERATIONS

     GENERAL - The Company is a holding company that wholly owns Atlanta
     Internet Bank ("AIB"), a federally chartered savings and loan.  The Company
     was incorporated as a Georgia corporation on February 20, 1996 for the
     purpose of forming and, ultimately, operating AIB as a wholly owned federal
     savings bank subsidiary.  As of January 1, 1997, pending regulatory
     approval and the acquisition of a bank charter, the Company was operating
     as a development stage enterprise under an agreement with Carolina First
     Bank ("CFB") whereby CFB agreed to hold and service the deposit accounts
     generated by the Internet banking operations of the Company in exchange for
     1,325,000 shares of the Company's common stock valued at $3,840,000.  In
     addition, as of January 1, 1997, the Company was a  party to an agreement
     with First Alliance/Premier Bancshares, Inc. ("First Alliance") pursuant to
     which the Company had agreed to purchase the charter of First Alliance's
     subsidiary, Premier Bank (the "Charter"), and $5 million in loans, $5
     million in certificates of deposit, and $2 million in unimpaired capital
     for $2,150,000 in cash, 41,406 shares of the Company's common stock valued
     at $125,000, and $75,000 in additional cash for reimbursement of direct
     out-of-pocket expenses.  

     On July 11, 1997, the final regulatory approval from the Office of Thrift
     Supervision ("OTS") was received.  On July 28, 1997, the Company sold
     3,500,000 shares of its common stock to the public in an Initial Public
     Offering (the "Offering").  On July 31, 1997, the Company received
     approximately $38.4 million in net proceeds from the Offering and
     consummated its agreements with both First Alliance and CFB.  As a result
     AIB, a federal savings bank,  became a wholly owned subsidiary of the
     Company.  As of March 31, 1998, the Company had 8,416 accounts and
     approximately $129 million in deposits.

     FINANCIAL CONDITION - The Company's assets amounted to $163.5 million at
     March 31, 1998, compared to $93.2 million at December 31, 1997, an increase
     of $70.3 million.  This increase in total assets was due to the receipt of
     approximately $70 million in cash related to customer deposits.  The cash
     was used to purchase $23.2 million in home equity lines of credit, $32.1
     million in second mortgages,  $12.4 million in construction loans, and a $3
     million bank participation loan.  Approximately $30 million in cash was
     used to purchase collateralized mortgage obligations.  

     Total liabilities increased $70.3 million due to the receipt  of
     approximately $70 million in customer deposits as a result of marketing
     programs introduced by the Company in the fourth quarter of 1997 and
     continued through March 31, 1998.  

     Total shareholders' equity decreased approximately $17,000 from December
     31, 1997 to March 31, 1998. The decrease resulted from the net of
     approximately $152,000 in net operating losses for the three months ended
     March 31, 1998, $111,000 in other comprehensive income, and a reduction of
     $24,000 in unamortized stock plan expense.

     LIQUIDITY AND CAPITAL RESOURCES - The Company's liquidity, represented by
     cash and cash equivalents, is a product of its operating, investing, and
     financial activities.  The Company's primary sources of funds are deposits,
     borrowings, amortization, prepayments and maturities of outstanding loans,
     sales of loans, maturities of investment securities and other short-term
     investments, and funds provided from operations.  While scheduled loan
     amortization and maturing investment securities and short-term investments
     are relatively predictable sources of funds, deposit flows and loan
     prepayments are greatly influenced  by general interest rates, economic
     conditions, and competition.  The Company invests excess funds in overnight
     deposits and other short-term interest-earning assets.  The Company can use
     cash generated through the retail deposit market, its traditional funding
     source, to offset the cash utilized in investing activities.  The Company's
     available for sale securities and short term interest-earning assets can
     also be 

                                       -10-

<PAGE>

     used to provide liquidity for lending and other operational requirements.  
     As an additional source of funds, the Company may borrow from the Federal 
     Home Loan Bank of Atlanta or through securities sold under repurchase 
     agreements.

     AIB is required by OTS regulations to maintain tangible capital equal to at
     least 1.5% of adjusted total assets, core capital equal to at least 3.0% of
     adjusted total assets, and total capital equal to at least 8.0% of
     risk-weighted assets.  Additionally, AIB must maintain minimum Tier I,
     core, and risk-based capital ratios of at least 6%, 5%, and 10%,
     respectively.  AIB exceeded such requirements with tangible, core,  total
     capital, and Tier I of 14.87%, 14.87%, 22.05%, and 20.79% respectively, at
     March 31, 1998.

     MARKET RISK

     ASSET AND LIABILITY MANAGEMENT  - The Company's principal business is the
     making of loans, funded by customer deposits and, to the extent necessary,
     other borrowed funds.  Consequently, a significant portion of the Company's
     assets and liabilities are monetary in nature and fluctuations in interest
     rates will affect the Company's future net interest income and cash flows. 
     This interest rate risk is the Company's primary market risk exposure.  The
     Company does not enter into derivative financial instruments such as
     futures, forwards, swaps, and options.  Also, the Company has no market
     risk-sensitive instruments held for trading purposes.  The Company's
     exposure to market risk is reviewed on a regular basis by its management.

     The Company measures interest rate sensitivity as the difference between
     amounts of interest-earning assets and interest-bearing liabilities which
     either reprice or mature within a given period of time.  The difference, or
     the interest rate repricing "gap," provides an indication of the extent to
     which an institution's interest rate spread will be affected by changes in
     interest rates.  A gap is considered positive when the amount of
     interest-rate sensitive assets exceeds the amount of interest-rate
     sensitive liabilities and is considered negative when the amount of
     interest-rate sensitive liabilities exceeds the amount of interest-rate
     sensitive assets.  Generally, during a period of rising interest rates, a
     negative gap within shorter maturities would adversely affect net interest
     income, while a positive gap within shorter maturities would result in an
     increase in net interest income, and during a period of falling interest
     rates, a negative gap within shorter maturities would result in an increase
     in net interest income while a positive gap within shorter maturities would
     have the opposite effect.  

                                       -11-

<PAGE>

     INTEREST RATE SENSITIVITY - The table below shows the interest rate
     sensitivity of the Company's assets and liabilities as of March 31, 1998:

<TABLE>
<CAPTION>
                                                  OVER THREE        OVER ONE        OVER FIVE
                                  LESS THAN     MONTHS THROUGH    YEAR THROUGH      YEARS AND
                                THREE MONTHS       ONE YEAR        FIVE YEARS      INSENSITIVE       TOTAL
<S>                              <C>              <C>             <C>              <C>            <C>
Interest Earning Assets:   
 Cash and cash equivalents       $ 1,390,575                                       $    57,283    $  1,447,858
 Federal fund sold                 8,647,074                                                         8,647,074
 Investment securities             3,399,864      $ 4,470,445                       38,462,478      46,332,787
 Stock of Federal Home   
  Loan Bank of Atlanta                                                                 251,500         251,500
 Loans receivable                 45,310,055       11,120,629     $ 14,214,019      34,166,794     104,811,497
                                 -----------      -----------     ------------     -----------    ------------
    Total interest   
     earning assets               58,747,568       15,591,074       14,214,019      72,938,055     161,490,716
Noninterest earning assets                                                           1,972,715       1,972,715
                                 -----------      -----------     ------------     -----------    ------------
    Total assets                 $58,747,568      $15,591,074     $ 14,214,019     $74,910,770    $163,463,431
                                 -----------      -----------     ------------     -----------    ------------
                                 -----------      -----------     ------------     -----------    ------------
Interest Bearing Liabilities - 
 Interest-bearing deposits       $42,006,031      $82,100,505     $  3,221,186                    $127,327,722
 Interest free deposits                                                            $ 1,353,947      1,353,947
 Other interest free   
  liabilities and equity                                                            34,781,762     34,781,762
                                 -----------      -----------     ------------     -----------    ------------
    Total liabilities   
     and equity                  $42,006,031      $82,100,505     $  3,221,186     $36,135,709    $163,463,431
                                 -----------      -----------     ------------     -----------    ------------
                                 -----------      -----------     ------------     -----------    ------------

Net Interest Rate   
 Sensitivity Gap                 $16,741,537     $(66,509,431)    $ 10,992,833     $38,775,061

Cumulative Gap                    16,741,537      (49,767,894)     (38,775,061)              -

Net Interest Rate   
 Sensitivity Gap as a   
 Percent of Interest   
 Earning Assets                         28.5%          (426.6)%          (77.3)%          51.8%   

Cumulative Gap as a   
 Percent of Cumulative   
 Interest Earning Assets                28.5%           (66.9)%          (43.8)%             -

</TABLE>
                                       -12-

<PAGE>

     RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997

     GENERAL - Net losses for the three months ended March 31, 1998  amounted to
     $151,000, a decrease of $1.6 million when compared to the $1.8 million loss
     for the quarter ended March 31, 1997.  The statement of operations for the
     quarter ended March 31, 1997 reflects the Company's operations before the
     acquisition of the bank charter.  As the charter was not acquired until
     July 31, 1997, the Company had no earning assets.  

     INTEREST INCOME - Interest income for the three months ended March 31, 1998
     was $2.2 million .  No significant amount of interest income was recorded
     for  the three months ended March 31, 1997 as the Company had no
     significant investments or loans at that time.  

     INTEREST EXPENSE - For the quarter ended March 31, 1998, $1.3 million in
     interest expense was recorded as a result of the Company's increase in
     customer deposits.  As the Company did not maintain its own deposit
     accounts until July 31, 1997, $103,000 in interest expense was recorded for
     the quarter ended March 31, 1997 related to the CFB servicing agreement. 
     This interest expense represents the difference between interest expense
     paid to customers and interest income paid to the Company by CFB at
     contractual rates prior to the transfer of customer deposits and was
     included in the Company's operations.  

     NET INTEREST INCOME - Net interest income is determined by the Company's
     interest rate spread (i.e., the difference between the yields earned on its
     interest-earning assets and the rates paid on its interest-bearing
     liabilities) and the relative amounts of interest-earning assets and
     interest-bearing liabilities.  Net interest income was $903,000 for the
     three  months ended March 31, 1998.  As the Company did not have any
     significant investments, loans, or customer deposits during the three
     months ended March 31, 1997, no significant amount of net interest income
     was recorded. 

     PROVISION FOR LOAN LOSSES - The Company recorded a $4,000 provision for
     loan loss for the three months ended March 31, 1998.  In connection with a
     loan purchase of $71 million, the Company assessed the inherent loss in
     such portfolio and determined the embedded loss at purchase date was
     approximately $2 million.  Such loans have been recorded net of the
     allowance.  As the Company had no loans for the three months ended 
     March 31, 1997, a provision was not recorded. The allowance for loan 
     losses is maintained at a level estimated to be adequate to provide for 
     potential losses in the loan portfolio.  Management determines the 
     adequacy of the allowance based upon reviews of individual loans, recent 
     loss experience, current economic conditions, the risk characteristics 
     of the various categories of loans, and other pertinent factors.

     NON-INTEREST INCOME - For  the three month period ended March 31, 1998  the
     Company recorded approximately $123,000 in loan and deposit service charges
     and fees.  As the Company did not have any loans, or customer deposits
     during the three months ended March 31, 1997, no such service fees were
     recorded. No amount of non-interest  income was recorded for the  three
     month period ended March 31, 1997.

     NON-INTEREST EXPENSES - Non-interest expenses decreased approximately
     $500,000 from $1.7 million to $1.2 million for the three months ended March
     31, 1998 as compared with the three months ended March 31, 1997.  The
     primary component of the decrease during the three months ended March 31,
     1998 was  a $864,000 decrease in the amortization of service contract with
     affiliate as the service contract was fully amortized during the second
     quarter of 1997.  The decrease was offset by a $180,000 increase in
     marketing expense related to the Company's marketing campaign initiated in
     the fourth quarter of 1997.

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<PAGE>

     STOCK OPTIONS - The Company has a 1996 Stock Incentive Plan (the "Plan")
     which provides that key employees, officers, directors, and consultants of
     the Company may be granted nonqualified and incentive stock options to
     purchase shares of Common Stock of the Company, derivative securities
     related to the value of the Common Stock, or cash awards.  Previously, the
     Plan limited the total number of shares which could be awarded to 397,500. 
     Effective after shareholder approval, which was received at the annual
     shareholders' meeting on April 23, 1998, the Plan was amended to increase
     the total number of shares which may be awarded to 600,000.  These shares
     have been reserved for the Plan.  

     During the three-month period ended March 31, 1998, the Company awarded
     23,000 incentive stock options at an exercise price of $11.25 per share on
     January 12, 1998 and 3,000 incentive stock options at an exercise price of
     $16.75 per share on February 12, 1998.  Grant prices approximated fair
     value of the stock at the grant date.

     NEW ACCOUNTING PRONOUNCEMENTS - In June 1997, the FASB issued SFAS 131,
     "Disclosures about Segments of an Enterprise and Related Information,"
     which establishes annual and interim reporting standards for an
     enterprise's business segments and related disclosures about its products,
     services, geographic areas and major customers.  Adoption of this statement
     will not impact the Company's consolidated financial position, results of
     operations or cash flows.  The Company will adopt this statement in its
     financial statements for the year ending December 31, 1998.

     In February 1998, the FASB issued SFAS 132, "Employers' Disclosures about
     Pensions and Other Postretirement Benefits," which standardizes the
     disclosure requirements for pensions and other postretirement benefits to
     the extent practicable, requires additional information on changes in the
     benefit obligations and fair values of plan assets that will facilitate
     financial analysis, and eliminates certain disclosures that are no longer
     useful.  SFAS 132 is effective for fiscal years beginning after December
     15, 1997.  The Statement is not expected to have an effect on the Company's
     financial statements.






                                       -14-

<PAGE>


Exhibits and Reports on Form 8-K

     (a)  Exhibits

          27.1 Financial Data Schedule (for SEC use only)


     (b)  No reports on Form 8-K were filed during the quarter for which this
          report is filed.










                                         -15-


<PAGE>

                                      SIGNATURE


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                   NET.B@NK, INC. 


                                   By: /s/ Robert E. Bowers
                                      -----------------------------
                                        Robert E. Bowers 
                                        Chief Financial Officer



Dated: May 14, 1997












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