SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                 --------------

                                    FORM 10-K

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                 --------------

  For the fiscal year ended: December 31, 2002 Commission File Number 000-21685


                       INTELIDATA TECHNOLOGIES CORPORATION

             (Exact name of registrant as specified in its charter)

 DELAWARE                                                            54-1820617
(State of incorporation)                (I.R.S. Employer Identification Number)

             11600 Sunrise Valley Drive, Suite 100, Reston, VA 20191
                    (Address of Principal Executive Offices)
                                 (703) 259-3000
              (Registrant's telephone number, including area code)

          Securities registered pursuant to Section 12(b) of the Act:

 Title of Each Class                   Name of Each Exchange on Which Registered
--------------------                   -----------------------------------------

                                        NONE

          Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock par value $0.001 per share

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 by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ X ].

The  aggregate  market value of the Common Stock held by  non-affiliates  of the
registrant on February 26, 2003, was approximately  $80,467,000.  In determining
this figure,  the Registrant has assumed that all of its directors and executive
officers are affiliates.  Such assumptions should not be deemed to be conclusive
for any other purpose.

The number of shares of the  registrant's  Common Stock  outstanding on February
26, 2003 was 48,986,252.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of InteliData  Technologies  Corporation's Proxy Statement for its 2003
Annual  Stockholder  Meeting are incorporated by reference into Part III of this
Report.

<PAGE>
                       INTELIDATA TECHNOLOGIES CORPORATION

                         2002 ANNUAL REPORT ON FORM 10-K

                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----

PART I
------

Item 1.  Business..............................................................3

Item 2.  Properties............................................................9

Item 3.  Legal Proceedings.....................................................9

Item 4.  Submission of Matters to a Vote of Stockholders.......................9


PART II

Item 5.  Market for Registrant's Common Stock and Related Stockholder
         Matters..............................................................10

Item 6.  Selected Financial Data..............................................11

Item 7.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations................................................12

Item 7a. Quantitative and Qualitative Disclosures about Market Risk...........28

Item 8.  Financial Statements and Supplementary Data..........................29

Item 9.  Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosure.............................................51


PART III

Item 10. Directors and Executive Officers of the Registrant...................51

Item 11. Executive Compensation...............................................51

Item 12. Security Ownership of Certain Beneficial Owners and Management.......51

Item 13. Certain Relationships and Related Transactions.......................52

Item 14. Controls and Procedures .............................................52

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.....52

SIGNATURES ...................................................................55

CERTIFICATIONS ...............................................................56


<PAGE>


PART I
======

ITEM 1.  BUSINESS
-----------------

GENERAL

     InteliData  Technologies   Corporation   ("InteliData"  or  the  "Company")
provides the real-time financial  processing  infrastructure to enable financial
institutions  ("FI's")  to  provide  services  over the  Internet.  The  Company
develops and markets software products and consulting services for the financial
services  industry.  InteliData  also  services  the  emerging  electronic  bill
presentment and payment  ("EBPP") market with the development of its end-to-end,
biller-to-consumer EBPP solutions.

     Our products and services are designed to assist consumers in accessing and
transacting  business  with their  FI's  electronically,  and to assist  FI's in
connecting to and transacting business with third party processors.  The Company
also serves as an Application  Service  Provider  ("ASP") by providing  Internet
hosting and service bureau solutions to FI's, including bankcard issuers.

     On January 11, 2001,  InteliData  acquired Home Account Holdings,  Inc. and
its operating subsidiary,  Home Account Network, Inc., by means of the merger of
one of the  Company's  wholly  owned  subsidiaries  with and into  Home  Account
Holdings, with Home Account Holdings surviving the merger. Home Account Holdings
is now a wholly owned  subsidiary of InteliData.  This acquisition was accounted
for as a purchase.  As a result of the  Company's  acquisition  of Home  Account
Holdings,  InteliData  now offers a suite of  UNIX-based  Internet  banking  and
electronic bill  presentment and payment products and services in an application
services provider environment.

     The  Company's  principal  executive  offices are located at 11600  Sunrise
Valley Drive,  Suite 100,  Reston,  Virginia 20191,  and its telephone number is
(703) 259-3000.

INDUSTRY BACKGROUND

     The Company provides software products and implementation  services to FI's
whose  processes  and  systems  are subject to  regulatory  approvals.  Internet
banking and EBPP are developing marketplaces. FI's are gradually expanding their
Internet  banking  services to permit  customers  not only to access  historical
account  information from remote  locations,  but also to engage in transactions
such as receiving  and/or  paying bills and  transferring  funds.  The Company's
future growth and profitability  will depend, in part, upon consumer  acceptance
of Internet  banking and EBPP  processes and the speed at which such  acceptance
occurs.

     EBPP  has  been  in  existence  for  over a  decade  but  has  not  enjoyed
significant   consumer  adoption  due  to  cost,  service  quality  and  service
availability  factors.  Adoption  has been gaining  momentum as  consumers  have
gravitated  to the  Internet.  Historically,  banks have  outsourced  their bill
payment  services to third party  payment  processors  to execute  bill  payment
transactions initiated by consumers on behalf of the bank.

     Banks who implement  our system are able to use our Least Cost  Routing(TM)
capabilities  to save a potentially  significant  amount on remittance  expense.
Transactions  routed by our Least Cost Routing(TM)  software to multiple payment
processors,  such as Metavante,  Princeton eCom, Online Resources, or MasterCard
RPPS, should result in substantial savings compared to what the market currently
charges for such transactions through other service providers.  To achieve these
savings,  the FI's must utilize a Payment  Warehouse,  a biller  directory and a
Least Cost Routing(TM) gateway, all of which InteliData offers through a license
arrangement or on an ASP environment.

PRODUCTS AND SERVICES

     The  Company's  business  strategy  is to develop  products  and  services,
including  software,  to meet  the  needs  of FI's and  their  customers  in the
Internet banking and EBPP markets.  The Company strives to develop products with
broad appeal that are  easy-to-use,  practical and built around common  industry
standards.  In addition,  the  products  and  services the Company  develops are
designed to support not only Internet access, but also other access methods that
are newly developing. The Company currently supports Wireless access and the new
InteliWorks(TM)  architecture  has been  designed to  accommodate  requests from
customers  to add  additional  channels  of access  such as a  Personal  Digital
Assistant ("PDA").
<page>

     The  Company   offers  its  clients   consulting   services  to  assist  in
implementation,  training and  customization  on a time and materials basis, and
provides  maintenance  and support  services and software  upgrades  pursuant to
agreements that are typically  renewable on an annual basis.  Additionally,  the
Company offers consulting  services regarding the application and feasibility of
implementing  Internet  banking  products within the FI's computer  environment.
InteliData  also serves as an ASP  solution to meet the  anticipated  growth and
demands of  providing  Internet  banking  and EBPP  outsourcing  services to its
customers.

     The Company  currently  offers  products  and services in four major areas:
Internet  Banking,  Interpose(R)  OFX  Gateway,  Card  Solutions(TM),  and  EBPP
Solutions.

Internet Banking
----------------

     InteliData has two Internet banking platforms: Interpose(R) and Canopy(TM).
Interpose(R) is the Company's  Internet banking solution for large banks,  while
Canopy(TM) banking serves the community banking market.  InteliData acquired the
Canopy(TM)  banking  platform  and  customer  base as part of the  Home  Account
acquisition.  The  Canopy(TM)  banking  business was a  significant  revenue and
margin  contributor in 2001 and 2002.  However,  because the Company's focus and
development  resources  going  forward are  expected to be on the large bank and
EBPP markets,  the Company expects the Canopy(TM)  Banking's  contribution to be
less significant during 2003.

     The  Interpose(R)  Transaction  Engine ("ITE") and Interpose(R) Web Banking
("IWB") are the heart of the Company's  Internet banking  software  system.  ITE
runs on the FI's host  computer  system,  providing  real-time  connectivity  to
remote delivery channels. Along with this host connection, ITE provides customer
profiling and control over system security.  Its Advanced  Financial Message Set
gives FI's the functionality to offer a wide range of online financial services.
IWB runs on a Windows  NT Server  environment  and  interfaces  to the FI's host
computer  systems  through  ITE. It provides the FI's end users access to all of
their  financial  transactions  that are  available  under the Internet  banking
product. InteliData's products and services provide for:

     Control - Internet  banking and bill  payment is becoming a critical  touch
     point for retail and  commercial  customers.  InteliData  provides a system
     that puts FI's in control of their  delivery  channels,  customer data, and
     payment systems.

     Flexibility - With rapid  evolution of technology and market  requirements,
     the FI's can have an online  banking  solution  that  allows  them to adapt
     quickly  to new  technology,  new  products,  and  new  service  providers.
     InteliData's  solution is designed to provide the  necessary  room for such
     growth.

     Reliability - InteliData  provides a solid solution that is designed to run
     in today's high-availability environments.

     Scalability  - As the demand for online  banking  and bill  payment  grows,
     transaction  volume and complexity  will grow.  The InteliData  solution is
     designed to allow the addition of capacity without increasing complexity.

Interpose(R) OFX Gateway
------------------------

         The Interpose(R) OFX Gateway allows FI's to support applications and
devices that conform to the Open Financial Exchange ("OFX") message standards.
The Interpose(R) OFX Gateway delivers comprehensive support for the OFX
specification including direct support for customers who use Intuit Quicken(R),
Microsoft Money(R), and other OFX compliant client software.

         The flexible and high performance architecture of the Interpose(R) OFX
Gateway provides an Enterprise Gateway for the delivery of bill payment, bill
presentment, investment, and banking transactions across a variety of delivery
channels including the Internet, Personal Financial Manager desktop
applications, and Wireless devices. Furthermore, the Interpose(R) OFX Gateway
synchronizes information across these delivery channels to give end-users
real-time, consistent information.

     Currently in use at some of the nation's largest FI's, the Interpose(R) OFX
Gateway delivers a proven,  reliable,  and highly scalable solution for managing
the delivery of financial  transaction  information across a variety of consumer
channels.

<page>

Card Solutions(TM)
------------------

InteliData Card Solutions(TM)  provides online credit card solutions for many of
the leading issuers in the credit card industry. The Card Solutions(TM) products
offer bankcard issuers the ability to acquire new credit card accounts using the
Company's  Internet  account  acquisition   product,  to  provide   self-service
functionalities  to current  cardholders  with the Internet  Account  Management
product,  and to market the self-service  functionalities to the cardholder base
using  the  issuer  marketing   program.   The  modular  approach  of  the  Card
Solutions(TM)  platform  provides a base  offering  that enables card issuers to
manage their  customer  relationships  online.  Optional  components,  which are
designed to work with InteliData's basic account management  platform or with an
issuer's  existing  technology,  focus on increasing  customer  penetration  and
improving  portfolio revenue.  The Company's Card  Solutions(TM)  products offer
several modules and programs:

     Internet Account  Acquisition - The InteliData Card Solutions(TM)  Internet
     Account  Acquisition  enables  our  customers  to acquire  new credit  card
     accounts utilizing the Internet by providing a secured platform for hosting
     customized  application  and response  pages.  Through a relationship  with
     First Data Resources,  Internet Account Acquisition utilizes enhanced fraud
     screening,  decisions  applications,  provides an applicable response,  and
     books  approved  applicants on the First Data  Resources  system all within
     sixty seconds, depending upon access capabilities.

     Internet Account  Management - The InteliData Card  Solutions(TM)  Internet
     Account Management is a cost-effective offering that may potentially reduce
     call center  expense by providing the same  functionality  as a call center
     through a less expensive Internet delivery channel.  Internet  Self-Service
     is  designed  in a  modular  approach  for  our  customers  to  choose  the
     functionality they want to provide to the end-users.

     The  base  module  contains   real-time   enrollment,   ensuring  a  secure
     experience.  Once a  cardholder  has  successfully  enrolled,  this  module
     provides  the  cardholder  the ability to view their  credit  card  account
     information,  such as balance,  payment status,  next payment due date, and
     cycle-to-date  transactions.  Additional  modules contain the functionality
     for cardholders to view previous months statement activity and download the
     data to a Personal  Finance  Manager  (PFM),  pay their  credit card bills,
     utilize  a  secure  messaging  process  for  submitting   customer  service
     inquiries,  request a credit line increase,  update address information and
     much more.

     e-Statements - The InteliData  e-Statements module provides the ability for
     cardholders to access an electronic version of their credit card statement,
     as well as the ability to suppress paper statement printing from within the
     InteliData  hosted Web site. The  e-Statements  module  provides  issuers a
     cost-effective and fully compliant  offering.  It also provides issuers the
     necessary  administrative  tools to  manage  bounced  email  notifications,
     manage Statement  Messages,  and turn a cardholder's  paper back on, in the
     event an email notification cannot be delivered.

     Balance   Transfer  -  The  InteliData   Balance   Transfer  module  offers
     cardholders the ability of transferring  balances from other lenders to the
     credit card account  issued by our client.  Online  Balance  Transfer  also
     provides issuers with decisioning  tools that can present a cardholder with
     specific rate offers and other promotional  activities based on an issuer's
     customized and desired criteria.

     e-Alerts - The InteliData  e-Alerts module provides  issuers the ability to
     increase  cardholder  loyalty  by  providing   notification  of  additional
     services,  which  results  in active  cardholders.  InteliData  offers  the
     following e-Alerts to cardholders:

          o    Account Events:
               |X|  Welcome alert upon registration
               |X|  Announcement of new feature alerts
               |X|  Payment is due in a specified number of days
               |X|  Current statement is available
               |X|  Credit limit is reached or exceeded
               |X|  Available credit drops below a specified amount
               |X|  Balance exceeds or drops below a specified number of days
               |X|  Inactive user alert
               |X|  Special occasion events (i.e.,  birthday or anniversary or a
                    car payment.)
<page>
          o    Transaction Events:
               |X|  Payment or credit item posted to the account
               |X|  A debit item exceeding a specified  amount was posted to the
                    account
               |X|  A  specified  number  of  transactions  in one day has  been
                    exceeded
               |X|  The daily dollar amount of transactions  exceeds a specified
                    amount

     Online  Activation  -  Web-based  Card  Activation  allows  cardholders  to
     activate their new and reissued cards in a secure environment.

     Issuer  Marketing  Program -  InteliData  has  created a turnkey  marketing
     program  designed  especially  to help  issuers  promote  Internet  Account
     Management  to their  cardholders.  The  program is  designed  to  increase
     adoption rates in a cost-effective  manner.  The Company currently provides
     two  statement-insert  designs that can be  customized  with the FI's name,
     logo,  and Web site  address.  These  pieces  provide an  incentive to have
     cardholders manage their credit card accounts online,  potentially reducing
     servicing expense and enhancing the impact of the issuer's Web site.

     Account Profile Change -- Account  Management Module - Through  InteliData,
     card  issuers  can  allow  their   cardholders   to  change  their  account
     information online, including address and phone numbers. InteliData enables
     card  issuers  to  authenticate  a  cardholder's  identity  prior to making
     changes.  If the card issuer  chooses a manual  processing  method,  change
     requests are sent to the Customer Service  Representative ("CSR") queue for
     processing.  If the card issuer  chooses an  automated  processing  method,
     change requests are completed real-time at the system of record.

EBPP Solutions
--------------

     InteliData's  Electronic  Bill  Presentment  and  Payment  Products  ("EBPP
Solutions" marketed after the brand name  InteliWorks(TM)) have been designed to
meet the near term and emerging  opportunities in online payments. The Company's
EBPP  products  offer a broad set of  solutions  for  "pay-anyone"  online  bill
payment, as well as the expanding range of online payments, including payment of
electronically  presented  bills and  inter-bank  transfers.  The Company's bill
payment  solutions  give control of payment  warehousing  and routing to the FI,
making bill payment  similar to other forms of electronic  payments (such as ACH
and ATM transactions), while reducing the expense of bill payment.

     InteliWorks(TM)  CSP  -  The  InteliWorks(TM)  Consumer  Services  Provider
("CSP") solution,  which is presently under development,  has been designed from
the ground up to meet the new, emerging,  and unique transaction  processing and
switching needs for consumer side bill  presentment  and payment.  These include
the ability to:

     o    Interface  with multiple EBPP  networks,  remittance  processors,  and
          exchanges,  such as RPPS, Princeton eCom, Metavante,  Online Resources
          and CheckFree
     o    Manage settlement and dispute resolution across multiple networks
     o    Synchronize biller directories across multiple networks
     o    Manage consumer enrollment with billers across multiple networks
     o    Manage   interaction  with  biller  Web  sites  for  detailed  billing
          information
     o    Aggregate summary level bills
     o    Integrate seamlessly to the bank's existing Web site
     o    Manage payment through multiple networks
     o    Consolidate payment on presented bills with "pay-any" bill payment
     o    Provide payment from external  accounts and process  transfers between
          accounts at two different FI's

     The platform  behind the  InteliData  CSP is the Company's  InteliWorks(TM)
online financial processing architecture.  This architecture,  based entirely on
the J2EE standard,  is designed to meet the unique needs of large scale,  online
financial  messaging  and  transaction  processing.  InteliWorks  is designed to
provide:

     o    100% J2EE compliance
     o    Platform portability across multiple OS and database environments
     o    Industrial  strength  reliability  to ensure  accurate  processing  of
          payment transactions
     o    Presentation   User   Interface   independence,   providing   ease  of
          integration  with  bank-designed  user interfaces for Web and wireless
          delivery channels
     o    Scalability to handle large transaction volumes
<page>

     o    Flexible security architecture
     o    Network independence (internal, RPPS, and others)
     o    Native XML  integration  points with "adapters" for IFX, OFX and other
          future messaging standards

     Interpose(R)   Payment  Warehouse  -  The  Interpose(R)  Payment  Warehouse
provides a software  solution to FI's that  automates  bill payment  processing,
while  giving FI's the  benefit of tracking  payment  activity  and  integrating
delivery channels.  The Interpose(R)  Payment Warehouse gives FI's the option of
Least Cost  Routing(TM).  This enables FI's to outsource as much or as little of
the electronic payment volume as they choose. This permits FI's to:

     o    Process "on-us" internal payments at no additional cost
     o    Ensure "good funds" debits to reduce exception item costs
     o    Capitalize on Least Cost Routing(TM) of payments
     o    Create new revenue streams for electronic lockbox operations

     The Interpose(R)  Payment Processor is a comprehensive  payment warehousing
and routing solution  designed to give the FI's control of their electronic bill
payment program. Using Interpose(R), FI's can:

     o    Mix-and-match multiple payment options and processors
     o    Offer  customers  a  variety  of  interface   options--scheduling  and
          modifying payments from the PC, Internet, or telephone
     o    Warehouse  bill payment  information  and mine customer data to expand
          relationships

MARKETING AND DISTRIBUTION

     The Company concentrates its marketing efforts on direct sales of principal
products and services to FI's in the United States,  including bankcard issuers.
Currently,  the Company is  marketing  to large FI's,  generally  with assets in
excess of $3  billion.  In  addition,  the Company  markets to bankcard  issuers
through a processing  arrangement  with First Data  Resources,  a subsidiary  of
First Data Corp. The Company is developing  products and services to assist FI's
who  want to  provide  their  customers  with  the  ability  to  access  certain
information  from  their  accounts  and  to  complete  transactions  with  those
institutions concerning bill payments, loan payments, online transfers and other
transactions from remote locations via personal computers or other devices.

     The Company has established  alliances with major service providers who are
providing  services to our target FI's and who are marketing  our services.  The
Company  currently has  agreements in place with ALLTEL and First Data Resources
for the sales forces of those  companies to market  services using  InteliData's
systems.

     ALLTEL is a leading  provider  of core data  processing  software  to large
banks.  Forty-seven of the top fifty U.S. banks rely on ALLTEL software for loan
processing,  mortgage  processing,  or deposit processing  software and service.
ALLTEL has licensed  InteliData's  Interpose(R)  Payment Warehouse and Interpose
Web Banking  products  and can offer  outsourced  bill  payment  services to its
customers. InteliData receives revenue for the use of the software in the ALLTEL
Data Center.

     First Data Resources is a leading third-party  transaction  processor.  Its
services include a comprehensive  line of card portfolio  management  solutions,
products  and services to more than 1,400  credit,  debit,  stored-value,  smart
cards, commercial,  private label and oil card issuers worldwide.  Under a Joint
Marketing Agreement between the two companies,  First Data markets  InteliData's
Card  Solutions(TM)  to credit card issuers  interested  in utilizing  Web based
tools and services that can help them expand their  portfolio,  increase  market
share and improve profitability.

COMPETITION

     The Company's  products and services face competition from several types of
competitors.  Some FI's have  elected to develop  internally  their own Internet
banking and EBPP solutions, instead of purchasing products and services from the
Company or other  vendors.  FI's may also obtain  similar  products and services
from  other  providers,   including  S-1  Corporation,   Corillian  Corporation,
Financial Fusion, Inc.,  CheckFree  Corporation,  Online Resources  Corporation,
Digital Insight, Inc., Metavante Corporation, and Incurrent Solutions, Inc.

<page>

     The  Company  expects  that  competition  in these  areas will  continue to
increase.  The  Company  believes  that a  principal  competitive  factor in its
markets is the ability to offer an integrated system of various Internet banking
and  EBPP  products  and  services.   Competition  will  be  based  upon  price,
performance,  customer  service and the  effectiveness  of  marketing  and sales
efforts.  The  Company  competes  in its  various  markets  on the  basis of its
relationships  with  strategic  partners,  by  developing  many of the  products
required  for  complete  solutions,  by  leveraging  market  experience,  and by
building reliable products and offering those products at competitive prices.

PRODUCT DEVELOPMENT

     The Company  operates in industries  that are rapidly growing and changing.
In an effort to improve the Company's  position with respect to its competition,
the Company has focused its efforts in the area of product development. In 2002,
2001,  and 2000,  the  Company's  research  and  development  expenditures  were
$8,807,000, $15,729,000, and $14,512,000, respectively. At December 31, 2002 and
2001,  approximately  57 and 97 employees  were engaged in product  development,
respectively.

     The  Company's  product  development  efforts are  focused on software  and
systems for Internet  banking and EBPP. This industry is  characterized by rapid
change.  To keep pace with this  change,  the Company  maintains  an  aggressive
program of new product  development  and  dedicates  considerable  resources  to
research and development to further enhance its existing  products and to create
new  products  and  technologies.  The  Company's  ability to attract and retain
highly skilled research and development  personnel is important to the Company's
continued success.

GOVERNMENT REGULATION

     The  financial  services  market,   which  the  Company  has  targeted  for
marketing,   is  highly   regulated  at  both  the  federal  and  state  levels.
Interpretation, implementation or revision of banking regulations can accelerate
or hinder the ultimate success of the Company and its products.

PATENTS, PROPRIETARY RIGHTS AND LICENSES

     The Company  holds limited  registered  intellectual  property  rights with
respect to its products.  The Company  relies on trade secret laws and licensing
agreements  to establish  and maintain its  proprietary  rights to its products.
Although  the  Company  has  obtained  confidentiality  agreements  from its key
executives  and  engineers  in its product  development  group,  there can be no
assurance that third parties will not independently  develop the same or similar
alternative technology,  obtain unauthorized access to the Company's proprietary
technology or misuse the technology to which the Company has granted access.

     The Company does not believe that its products and services infringe on the
rights  of third  parties.  It is  possible  that  third  parties  could  assert
infringement claims against the Company. There can be no assurance that any such
assertion  will not result in costly  litigation or require the Company to cease
using, or obtain a license to use, intellectual property of such parties.

EMPLOYEES

     At December  31, 2002 and 2001,  the Company had  approximately  89 and 140
employees,  respectively.  The Company has no collective  bargaining  agreements
with its employees.

AVAILABLE INFORMATION

     The Company files annual, quarterly, and current reports, proxy statements,
and other  documents  with the Securities  and Exchange  Commission  (the "SEC")
under the  Securities  Exchange  Act. The public may read and copy any materials
that the Company  files with the SEC at the SEC's Public  Reference  Room at 450
Fifth Street, NW, Washington, DC 20549. The public may obtain information on the
operation  of the Public  Reference  Room by calling the SEC at  1-800-SEC-0330.
Also,  the SEC maintains an Internet  website that contains  reports,  proxy and
information statements,  and other information regarding issuers,  including the
Company,  that file  electronically  with the SEC.  The  public  can  obtain any
documents that the Company files with the SEC at http://www.sec.gov.

     The Company also makes  available free of charge on or through our Internet
website  (http://www.intelidata.com)  our Annual Report on Form 10-K,  Quarterly
Reports  on  Form  10-Q,  Current  Reports  on

<page>

Form 8-K,  and, if  applicable,  amendments  to those reports filed or furnished
pursuant to Section 13(a) of the  Securities  Exchange Act as soon as reasonably
practicable  after the  Company  electronically  files such  material  with,  or
furnishes it to, the SEC.

ITEM 2.  PROPERTIES
-------------------

     The Company's headquarters are located in Reston, Virginia, where it leases
25,200 square feet of office space;  this lease  expires in December  2006.  The
Company  also  leases  11,000  square  feet of  office  space  for  its  product
development facilities in Toledo, Ohio. The Ohio lease expires in January 2004.

     In January  2001,  the Company  acquired Home Account  Holdings,  which had
leased facilities in Emeryville,  California,  Omaha,  Nebraska, and Charleston,
South  Carolina.  In February 2001, the facility in California,  which served as
the headquarters for the pre-merger Home Account Holdings, was shut down and the
Company has  subleased  the 7,200  square feet of space as of August  2002.  The
Nebraska  lease  for  19,000  square  feet of  office  space,  used for  product
development  and customer  service,  expires in March 2003 and is expected to be
renewed at current market rates.  The South Carolina lease for 5,300 square feet
of office  space,  used for  product  development  and  customer  service,  will
terminate in April 2006.

     All of the leasing  arrangements were made with unaffiliated  parties.  The
Company  believes  that its leased  properties  are  sufficient  for its current
operations and for the foreseeable future.

ITEM 3.  LEGAL PROCEEDINGS
--------------------------

     The Company is not currently a party to any material litigation.  From time
to  time,  the  Company  is a party  to  routine  litigation  incidental  to its
business.  Management does not believe that the resolution of any or all of such
routine  litigation  will be likely  to have a  material  adverse  effect on the
Company's financial condition or results of operations.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS
--------------------------------------------------------

         None.

EXECUTIVE OFFICERS OF THE REGISTRANT

     The following table sets forth the names and ages of all executive officers
of the Company and all positions and offices  within the Company  presently held
by such executive officers:

Name                    Age   Position Held
----                    ---   --------------

Alfred S. Dominick, Jr. 57    Chairman, President and Chief Executive Officer
Michael E. Jennings     57    Executive Vice President, Consumer Services
John R. Polchin         39    Vice President, Chief Financial Officer
                               and Treasurer
Albert N. Wergley       55    Vice President, General Counsel and Secretary

Alfred S. Dominick,  Jr. has served as the President and Chief Executive Officer
of the Company  since August 1998 and  Chairman of the Board of Directors  since
August 2002.  Prior to joining  InteliData,  Mr. Dominick served as president of
the Retail  Products  Delivery Group at M&I Data Services.  Prior to joining M&I
Data Services in July 1995, he was Executive  Vice  President of Retail  Banking
and a member of the Executive Committee for Boatmen's Bancshares Corporation for
three years.  Prior to that Mr.  Dominick was an Executive  Vice  President with
Bank One Texas,  since 1989.  Prior to his employment  with Bank One Texas,  Mr.
Dominick was a Senior Vice President with Fleet National Bank.

Michael  E.  Jennings  has  served as the  Executive  Vice  President,  Consumer
Services  since  joining  InteliData  in June  2000.  He is in charge of overall
business  planning and  business  development  activities  for  electronic  bill
presentment and payment,  Internet  banking,  and  operations.  Prior to joining
InteliData, Mr. Jennings served at Bank of America as a Senior Vice President of
Self Service Delivery.  During the eight years prior to joining  InteliData,  he
worked on alternative  delivery  strategies and managing several different areas
of electronic Banking including:  Debit Cards, ATMs, ATM/POS Operations,  PC and
Internet Banking, and EFT switches. Mr. Jennings is a former director of CIRRUS,
Money  Transfer  Systems,  Credit Systems Inc., and was chairman of the American
Banking Association's Retail Payment Systems Committee.

<page>

John R.  Polchin  has served as Vice  President,  Chief  Financial  Officer  and
Treasurer since April 2002. Prior to joining  InteliData,  Mr. Polchin served as
Vice President and Chief Financial  Officer of Orblynx,  Incorporated,  a global
Internet  infrastructure  firm. Prior to that, Mr. Polchin held the positions of
Vice President and Treasurer and Senior Vice President,  Chief Financial Officer
for e.spire Communications,  a publicly traded CLEC. Additionally, he has served
as Vice  President of Finance and  Controller  for Appworx  Corporation,  a West
Coast-based  enterprise  software  concern.  From 1987 to 1994,  he held various
financial positions within UNC Incorporated (acquired by General Electric).  Mr.
Polchin began his career at NCNB Corporation, now Bank of America.

Albert N. Wergley has served as Vice President,  General Counsel,  and Secretary
of the Company since November 1996. From May 1995 to November 1996, he served as
Vice President and General  Counsel of US Order.  From 1986 to 1994, Mr. Wergley
was vice  president  and general  counsel of Verdix  Corporation  (now  Rational
Software Corporation), a manufacturer of software development tools. Previous to
that he was associated with the McLean,  Virginia office of the law firm of Reed
Smith Shaw & McClay and with the law firm of Howrey & Simon in Washington, D.C.

PART II
=======

ITEM 5.        MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
---------------------------------------------------------------
               STOCKHOLDER MATTERS
               -------------------

     The Company's  common stock is traded on the Nasdaq  National  Market under
the symbol  INTD.  The table below sets forth the high and low  quarterly  sales
prices for the common  stock of the Company as reported in  published  financial
sources for each quarter during the last two years:

                                           High                 Low
                                         -------              -------
2002     Fourth Quarter                  $  1.03              $  0.57
         Third Quarter                      1.50                 0.66
         Second Quarter                     2.74                 1.13
         First Quarter                      3.00                 1.50

2001     Fourth Quarter                  $  4.30              $  2.70
         Third Quarter                      5.90                 2.40
         Second Quarter                     6.36                 2.55
         First Quarter                      6.03                 2.25

     On February  26,  2003,  the last  reported  sales price for the  Company's
common  stock was $1.66.  The number of  stockholders  of record at February 26,
2003 was 685, and does not include those  stockholders who hold shares in street
name accounts.

     The Company has never  declared  or paid any cash  dividends  on its common
stock. The Company currently  intends to retain its future earnings,  if any, to
fund the  development  and  growth  of its  business  and,  therefore,  does not
anticipate  paying any cash  dividends  in the  foreseeable  future.  Any future
decision  concerning the payment of dividends on the Company's common stock will
depend  upon  the  results  of  operations,   financial  condition  and  capital
expenditure plans of the Company,  as well as such other factors as the Board of
Directors, in its sole discretion, may consider relevant.


<PAGE>
<table>

ITEM 6.   SELECTED FINANCIAL DATA (in thousands, except per share data)
-----------------------------------------------------------------------

                                                                  Years Ended December 31,

RESULTS OF OPERATIONS:                           2002          2001           2000           1999          1998
----------------------                       -----------   -----------   ------------    -----------     ----------
<S>                                          <C>           <C>           <C>             <C>             <C>

Revenues                                     $    21,495    $    18,296    $    5,101    $    6,493     $    4,683
Cost of revenues                                   8,474          9,010         2,720         1,743            618
Operating expenses                                21,103         39,624        27,699        12,800         11,861
                                             -----------    -----------    ----------    -----------    -----------

Operating loss                                    (8,082)       (30,338)      (25,318)       (8,050)        (7,796)
Other income, net                                   (649)           137        49,726           350            874
Provision (benefit) for income taxes                (137)          (160)          488            --            --
                                             -------------  ------------   -----------   -----------    -----------

Income (loss) from continuing operations          (8,594)       (30,041)       23,920        (7,700)        (6,922)
Income (loss) from discontinued operations           --             --           (262)(1)     5,805        (30,917)
                                             -----------    -----------    -----------   -----------    -----------

Net income (loss)                                 (8,594)       (30,041)       23,658        (1,895)       (37,839)
Preferred stock dividend requirement                 --             --            --         (1,936)(2)         --
                                             -----------    -----------    ----------    -----------    -----------

Net income (loss) attributable to
  common stockholders                        $    (8,594)   $   (30,041)   $   23,658    $   (3,831)    $  (37,839)
                                             ============   ============   ===========   ===========    ===========

Basic earnings per common share

  Income (loss) from continuing operations   $     (0.18)   $    (0.65)    $     0.63    $    (0.29)    $    (0.22)
  Income (loss) from discontinued operations        0.00          0.00          (0.01)         0.18          (0.98)
                                             -----------    ----------     -----------   -----------    -----------
  Net income (loss)                          $     (0.18)   $    (0.65)    $     0.62    $    (0.11)    $    (1.20)
                                             ============   ===========    ==========    ===========    ===========

Diluted earnings per common share

  Income (loss) from continuing operations   $     (0.18)   $    (0.65)    $     0.59    $    (0.29)    $    (0.22)
  Income (loss) from discontinued operations        0.00          0.00          (0.01)         0.18          (0.98)
                                             -----------    ----------     -----------   -----------    -----------
  Net income (loss)                          $     (0.18)   $    (0.65)    $     0.58    $    (0.11)    $    (1.20)
                                             ============   ===========    ===========   ===========    ===========

Weighted-average common shares outstanding

  Basic                                           48,869         45,897        38,237        33,367         31,450
                                             ===========    ===========    ===========   ==========     ===========
  Diluted                                         48,869         45,897        40,843        33,367         31,450
                                             ===========    ===========    ===========   ==========     ===========


                                                                        December 31,

FINANCIAL POSITION:                              2002          2001           2000           1999          1998
-------------------                          -----------   -----------   ------------   -----------     ---------

Cash and cash equivalents                    $     5,674    $    12,026    $   27,255    $    8,496     $    8,050
Total assets                                      44,506         57,710        43,278        11,212          9,137
Long-term debt                                        --             --            --            --             --
Stockholders' equity                              36,454         44,475        33,570         7,087            331

</table>
(1)  During the fiscal  year ended  December  31,  2000,  the  leasing  business
     segment  was   discontinued,   and   accordingly,   has  been  reported  as
     discontinued operations.

(2)  Preferred  stock  dividends  for 1999  include the effects of  accretion of
     discounts  arising  from  the  allocation  of  proceeds  from  issuance  of
     preferred  stock to warrants  and a  beneficial  conversion  feature.  Such
     preferred stock was converted to common stock in late 1999.

<PAGE>

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-----------------------------------------------------------
          CONDITION AND RESULTS OF OPERATIONS
          -----------------------------------

Overview

     InteliData  provides the real-time financial  processing  infrastructure to
enable  FI's to provide  services  to their  customers  over the  Internet.  The
Company develops and markets software  products and consulting  services for the
financial services  industry.  InteliData also services the EBPP market with the
development of its end-to-end, biller-to-consumer EBPP solutions.

     Our products and services are designed to assist consumers in accessing and
transacting  business  with their  FI's  electronically,  and to assist  FI's in
connecting to and transacting business with third party processors.  The Company
also serves as an ASP by providing Internet hosting and service bureau solutions
to FI's, including bankcard issuers.

     On January 11, 2001,  InteliData  acquired Home Account Holdings,  Inc. and
its operating subsidiary,  Home Account Network, Inc., by means of the merger of
one of the  Company's  wholly  owned  subsidiaries  with and into  Home  Account
Holdings, with Home Account Holdings surviving the merger. Home Account Holdings
is now a wholly owned  subsidiary of InteliData.  This acquisition was accounted
for as a purchase.  As a result of the  Company's  acquisition  of Home  Account
Holdings,  InteliData  now offers a suite of  UNIX-based  Internet  banking  and
electronic bill  presentment and payment products and services in an application
services provider environment.

     The Company provides software products and implementation  services to FI's
whose  processes  and  systems  are subject to  regulatory  approvals.  Internet
banking and EBPP are developing marketplaces. FI's are gradually expanding their
Internet  banking  services to permit  customers  not only to access  historical
account  information from remote  locations,  but also to engage in transactions
such as receiving  and/or  paying bills and  transferring  funds.  The Company's
future growth and profitability  will depend, in part, upon consumer  acceptance
of Internet  banking and EBPP  processes and the speed at which such  acceptance
occurs.

     The  Company's  business  strategy  is to develop  products  and  services,
including  software,  to meet  the  needs  of FI's and  their  customers  in the
Internet  banking  markets.  The Company strives to develop  products with broad
appeal  that  are  easy-to-use,  practical  and  built  around  common  industry
standards. The Company has four strategic product lines.

     The Internet  banking  product  line  provides  Internet  access to account
information,   transfer   capability   between   accounts,   and  bill   payment
functionality  and is focused on large  banks,  typically  with  assets  over $3
billion dollars.  While the market for these products is mature,  and the number
of new opportunities is limited, the Company has a customer base, which provided
approximately  67% of total revenues in 2002, and represents an opportunity  for
future  business from both new products as well as organic  growth of their user
base.

     The  Interpose(R)  OFX Gateway product line provides  Quicken and Microsoft
Money users access to their bank account  information  and other  functionality.
This product line  currently has four primary  customers,  CitiBank  USA,  First
Union/Wachovia, Bank of America, and USAA. In addition, Fiserv has licensed this
technology.  This  product  line  contributed  approximately  14% of total  2002
revenues.

     The Company's  Card  Solutions(TM)  product line provides card issuers with
the  opportunity  to offer  their  customers  Internet  access  to  credit  card
information  with  the  functionality  to  perform  a  variety  of  self-service
activities,  apply  for a credit  card or a line  increase,  pay the  bills,  or
receive e-mail orders. The Company has a strategic  relationship with First Data
Resources,  which is marketing the Company's products to their customer base. In
2002, this product line contributed approximately 18% of total revenues.

     The Company's  EBPP  Solutions  product line,  InteliWorks(TM),  provides a
suite of  products  enabling  a bank to connect  to  payment  switches,  such as
MasterCard  RPPS, or payment  processors,  to aggregate  presented  bills and to
warehouse  bill  payments.  As a product  line that is still under  development,
revenue  from this  product  line was less than 1% of total 2002  revenues.  The
Company  does  expect  revenues  for  this  product  line to  increase  in 2003,
beginning primarily in the second half of the year.

<PAGE>

Critical Accounting Policies

     We consider the following  accounting  policies to be the most important to
our  financial  position and results of  operations or are policies that require
the exercise of significant judgment and/or estimates.

     Revenue  Recognition - We consider our revenue  recognition policy critical
to the understanding of our business  operations and results of operations.  The
Company  supplies  Internet  banking and electronic bill presentment and payment
software to FI's. The Company's  revenues  associated with integrated  solutions
that bundle  software  products with  customization,  installation  and training
services are recognized using the percentage of completion method of accounting.

     The Company's bill payment technology software does not require significant
customization. Upon delivery, the Company either recognizes revenue ratably over
the contract  period for  contracts  where vendor  specific  objective  evidence
(VSOE) of fair value for post contract  customer support (PCS) does not exist or
recognizes revenue in full where VSOE of fair value for PCS does exist.

     The Company enters into multiple element  arrangements.  Elements typically
include software,  consulting,  implementation and PCS. PCS contracts  generally
require  the  Company to  provide  technical  support  and  unspecified  readily
available software updates and upgrades to customers. Revenue for these multiple
element  arrangements  is  recognized  when there is  persuasive  evidence of an
arrangement  and  delivery to the customer  has  occurred,  the fee is fixed and
determinable,  and collectibility is considered  probable.  Advance payments are
recorded as deferred  revenue  until the  products  are  shipped,  services  are
delivered and all obligations are met. Currently, the Company does not have VSOE
of fair value for some of the elements within its multiple element arrangements.
Therefore,  all revenue under such arrangements is being recognized ratably over
the  term  of the PCS  contract.  Revenue  from  transactional  services,  which
includes hosting and ASP services, is recognized as transactions are processed.

     Emerging  Issues Task Force Abstract  Issue No. 00-3,  Application of AICPA
Statement  of  Position  97-2 to  Arrangements  that  Include  the  Right to Use
Software Stored on Another Entity's Hardware ("EITF 00-3"), provides guidance in
determining  whether or not the  provisions  of  Statement of Position No. 97-2,
Software  Revenue  Recognition  ("SOP  97-2"),  should  be  applied  to  hosting
arrangements.  The Company has some  contracts  where the customers  operate our
software in an ASP  environment.  The  customer may not take  possession  of the
software without incurring  significant  transition and infrastructure costs, as
well as potential  payments of fees to the Company for the  termination  of such
arrangements.  In cases  where  the  customer  has not  licensed  software  from
InteliData,  the customer must also purchase a license prior to having the right
to use the  software  in its  own  operating  environment,  in  addition  to the
aforementioned fees. In these situations, the Company applies the guidance under
EITF 00-3 and the Staff  Accounting  Bulletin No. 101,  Revenue  Recognition  in
Financial  Statements,  and recognizes the revenue  associated  with the license
and/or implementation fees ratably over the initial term of the contract.

     Additionally,  based on the EITF 00-3 guidance,  the Company concluded that
SOP 97-2  should not be applied to certain of its  contracts  and their  related
revenue  for  license  and  professional  services  were  recognized  under  the
percentage of completion  method.  In addition to our  developing and delivering
the solution, the Company is entitled to transaction fees based on the number of
users and  transactions.  These transaction fees are earned based on the monthly
user counts and as transactions are processed.

     Estimates  at  Completion  -  Revenues  related  to some  of the  Company's
contracts  are  recognized   using  the  percentage  of  completion   method  of
accounting,   which  requires  that  we  make  estimates  and  judgments  as  to
anticipated  project  scope,  timing and costs to  complete  the  projects.  The
completion  of certain  development  efforts  are  critical  for the  Company to
perform on certain  contracts.  Delays in product  implementation or new product
development at customer locations and product defects or errors could affect our
estimates  and  judgments.   Additionally,   we  may   experience   delays  when
implementing our products at customer locations,  and customers may be unable to
implement our products in the time frames and with the functionalities that they
expect or require.  The accuracy of these  estimates and judgments  could affect
our business, operations and financial condition.

     Allowance  for  Doubtful  Accounts -  Determination  of our  allowance  for
doubtful accounts requires  significant  estimates.  Financial  instruments that
potentially  subject  the Company to credit risk  consist  principally  of trade
receivables.  The Company  sells its  products  primarily  to FI's in the United
States.  The Company believes that the concentration of credit risk in its trade
receivables  is  substantially   mitigated  by  the  Company's  on-going  credit
<page>

evaluation  process  and the  financial  position  of the FI's  that are  highly
regulated. The Company does not generally require collateral from customers. The
Company  establishes  an  allowance  for  doubtful  accounts  based upon factors
surrounding the credit risk of specific  customers,  historical trends and other
information.  As of  December  31,  2002,  the  Company's  top  eight  customers
comprised approximately 54% of the net accounts receivable balance.

     A number of factors are considered in establishing the allowance, including
historical collection experience, the macro-economic  environment,  estimates of
forecasted  write-offs,  the aging of the  accounts  receivable  portfolio,  and
others.  If  the  financial  condition  of  our  accounts  receivable  portfolio
deteriorates, additional allowances would be required.

     As part of the Home  Account  acquisition  in 2001,  the  Company  acquired
certain accounts  receivables that were outstanding as of the acquisition  date.
The Company pursued collection efforts,  but ultimately  determined that some of
these  accounts  were  uncollectible.  Such doubtful  accounts  related to these
acquired assets cannot be adjusted as part of the purchase price allocation,  so
the bad debt expense was  recognized  in operations  in 2001.  During 2001,  the
Company  recorded costs  associated with these  particular sets of uncollectible
accounts in the amount of  $1,090,000  and began to write off certain  accounts.
Additionally  in 2002 and 2001, the Company wrote off some  previously  reserved
legacy InteliData  accounts.  During 2002, the Company experienced improved cash
collections  on some  previously  reserved  accounts  and an  account  that  had
previously  been  written off. As a result of these  collection  efforts and the
resulting  cash  receipts,  the Company  reduced its bad debt expense in 2002 by
approximately $340,000 to reflect the positive developments.

     Valuation of Long-Lived  Assets - On an annual basis, we review  long-lived
assets such as  identifiable  intangibles  and goodwill for impairment  whenever
events or changes in circumstances  indicate that the carrying amount may not be
recoverable.  This review  requires  us to make  estimates  of our  undiscounted
future cash flows in order to determine if our  long-lived  assets are impaired.
If the total of the  expected  undiscounted  future  cash flows is less than the
carrying  amount  of the  assets,  we are  required  to  make  estimates  of our
discounted  future cash flows in order to  calculate  a loss for the  difference
between the fair value and  carrying  value of the assets.  We make  significant
assumptions and estimates in this process  regarding matters that are inherently
uncertain,  such as  calculating  remaining  useful lives and assuming  discount
rates.  The resulting  cash flows are computed over an extended  period of time,
which  subjects  those  assumptions  and  estimates to an even larger  degree of
uncertainty.  When known and available, we also use comparable values of similar
businesses in corroborating the results from the discounted cash flows approach.
This  process  involves  making  estimates  about  matters  that are  inherently
uncertain.  Reviews for  impairment  between  annual  reviews may be required if
events occur or circumstances  change that would more likely than not reduce the
fair value of the net carrying  amount.  While we believe that our estimates are
reasonable,  different  assumptions  regarding such cash flows could  materially
affect our valuation.

     Depreciation  of  Fixed  Assets  -  The  Company's  business  requires  our
investment in office and computer  equipment to facilitate  certain research and
development  activities  and to support the operations in serving our customers.
We record these assets that in management's  opinion,  extend the useful life of
the underlying  asset,  at cost and  depreciate the assets over their  estimated
useful lives. We  periodically  reassess the economic life of these elements and
make  adjustments  to  these  useful  lives  using,  among  others,   historical
experience,  capacity  requirements,  and  assessments of new product and market
demands.  When these factors  indicate certain elements may not be useful for as
long as  anticipated,  we depreciate the remaining book value over the remaining
useful life.  Further,  the timing and deployment of any new technologies  could
affect the estimated lives of our assets,  which could have significant  impacts
on results of operations in the future.

     Recent  Accounting   Pronouncements  -  In  December  2002,  the  Financial
Accounting  Standards  Board ("FASB") issued  Statement of Financial  Accounting
Standard  ("SFAS") No. 148,  Accounting for Stock-Based  Compensation-Transition
and  Disclosure-an  amendment of FAS 123 ("SFAS 148"). SFAS 148 amends SFAS 123,
Accounting  for  Stock-Based  Compensation,  to provide  alternative  methods of
transition for an entity that voluntarily changes to the fair value based method
of  accounting  for  stock-based  employee  compensation.  It  also  amends  the
disclosure  provisions  of SFAS 123 to require  prominent  disclosure  about the
effects on reported net income of an entity's  accounting  policy decisions with
respect to stock-based employee  compensation.  SFAS 148 also amends APB Opinion
No. 28, Interim Financial  Reporting,  to require disclosure about those effects
in interim financial  information.  SFAS 148 is effective for annual and interim
periods  beginning  after  December 15, 2002.  As the Company has elected not to
change to the fair value based method of  accounting  for  stock-based  employee
compensation,  SFAS 148 will not have  any  impact  on our  financial  position,
results of operations or cash flows.
<page>

     In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with  Exit  or  Disposal  Activities  (including  Certain  Costs  Incurred  in a
Restructuring)  ("SFAS 146"), which supersedes  Emerging Issues Task Force Issue
No. 94-3,  Liability  Recognition for Certain Employee  Termination Benefits and
Other Costs to Exit an Activity ("EITF 94-3"). SFAS 146 requires  recognition of
a liability  for costs  associated  with an exit or disposal  activity  when the
liability is incurred, rather than when the entity commits to an exit plan under
EITF  94-3.  The  provisions  of SFAS 146 are  effective  for  exit or  disposal
activities that are initiated after  September 30, 2002. The  implementation  of
these  provisions  did not have a material  impact on the financial  position or
results of operations.

Results of Operations - Years Ended December 31, 2002 and 2001

     The following  represents  the results of operations for  InteliData.  Such
information should be read in conjunction with the financial  statements and the
notes  thereto in Part II, Item 8 of this Annual Report on Form 10-K, as well as
the cautionary statements and risk factors in this section.

Revenues

     The Company's  revenues were $21,495,000 in 2002 compared to $18,296,000 in
2001,  an increase of  $3,199,000.  The  increase was a result of an increase in
consulting and services revenues of $3,690,000, offset by a decrease in software
revenue  of  $491,000.  During  2002,  software  revenues  were  $1,299,000  and
consulting,  services,  and termination fees were $20,196,000.  During 2001, the
Company  generated  revenues of $1,790,000  from software sales and  $16,506,000
from consulting, services, and termination fees.

     The decrease in software revenues was primarily due to the timing of system
deliveries  and fewer  software  license  sales.  The  increase  in  consulting,
services,  and termination fees from 2001 to 2002 was primarily due to increases
in the Company's  recurring  revenue from fees  associated  with its application
services provider ("ASP") operations.  The following information  represents the
Company's  revenues in the various product lines for the years ended December 31
(in thousands):

                                     2002              2001           2000
                                   ---------        ---------       ---------
       Internet Banking            $  14,475        $  12,333       $   4,557
       Interpose(R)OFX Gateway         3,039            3,064              --
       Card Solutions(TM)              3,948            2,738              --
       EBPP Solutions                     33              161              --
       Royalties and other                --               --             544
                                   ---------        ---------       ---------

            Total revenues         $  21,495        $  18,296       $   5,101
                                   =========        =========       =========

     As anticipated, the revenue from royalties in 2002 and 2001 were zero after
the discontinuance of the Company's royalty payments from VISA Interactive.

Cost of Revenues and Gross Profit

     The  Company's  cost of revenues  decreased  $536,000 to $8,474,000 in 2002
from $9,010,000 in 2001. The decrease was due to the offsetting of approximately
$254,000 of costs  against a forward  loss accrual that was expensed in previous
periods,  a decrease in  professional  services  costs and a decrease in service
provider costs due to contract renegotiations.

     Overall gross profit  margins  increased to 61% for 2002 from 51% for 2001.
The  increase  in gross  profit  margins  was  attributable  to an  increase  in
recurring  revenue  coupled  with the  decrease in cost of revenues as discussed
above.  The Company  anticipates  that gross profit margins may fluctuate in the
future due to changes in product mix and  distribution,  outsourcing  activities
associated with an ASP business model,  competitive  pricing  pressure,  and the
introduction of new products and changes in volume.


<PAGE>


General and Administrative

     General and administrative  expenses decreased  $1,436,000 to $8,629,000 in
2002 from  $10,065,000 in 2001. The decrease was primarily  attributable  to the
Company's reduction of corporate and administrative  expenses that resulted from
continued evaluation of on-going cost structures and synergies achieved from the
purchase of Home Account. The Company plans to continually assess its operations
to manage its  expenses and  infrastructures  in light of  anticipated  business
levels.

Selling and Marketing

     Selling and marketing expenses  decreased  $6,628,000 to $2,947,000 in 2002
from  $9,575,000 in 2001.  This was primarily  attributable  to decreases in the
number of selling and marketing  employees  and travel and outside  professional
consulting  expenses  related to both  continued  evaluation  of  on-going  cost
structure and synergies achieved from the purchase of Home Account.  The Company
plans  to  continually   assess  its  operations  to  manage  its  expenses  and
infrastructures in light of anticipated business levels.

Research and Development

     Research and development  costs decreased  $6,922,000 to $8,807,000 in 2002
from  $15,729,000  in 2001.  The  decrease  was  primarily  attributable  to the
Company's  expense  reduction  efforts  and the  reduction  of  employees  after
combining the operations of InteliData and Home Account and finding efficiencies
and synergies. The Company incurs research and development expenses primarily in
developing the next generation, open standards-based  InteliWorks(TM) Enterprise
Payment  Solution.  The Company plans to  continually  assess its  operations to
manage its expenses and infrastructures in light of anticipated business levels.

     In 2003, the Company  expects to focus most of its research and development
efforts on its EBPP  Solutions  product  line.  The  Company  plans to  continue
funding  research  and  development  into this  product  to expand the number of
processor interfaces, build a more comprehensive Customer Care tool, expand "pay
any"  capabilities,  complete  development  of external  payments,  and create a
Universal Directory Service. The Internet banking, Interpose(R) OFX Gateway, and
Card  Solutions(TM)  products are  currently in operation at customer  sites and
development  efforts will likely be focused  primarily  on product  upgrades and
product maintenance.

Amortization of Goodwill and Intangibles

     Statement of Financial  Accounting  Standards  No. 142,  Goodwill and Other
Intangible  Assets ("SFAS 142"),  requires the Company to not amortize  goodwill
and certain  intangibles  into  results of  operations,  but instead the Company
would review these assets for  impairment.  The assets would be written down and
impairment  losses would be charged to results of operations only in the periods
in which the recorded  values are  determined to be more than their fair values.
The adoption of this  accounting  standard,  as of January 1, 2002,  reduced the
amortization  expense  associated with goodwill by $3,555,000 to $0 in 2002 from
$3,555,000 in 2001.  The  amortization  of certain  intangibles  continued at an
annualized rate of $720,000. As of January 1, 2002, in accordance with SFAS 142,
the  Company  ceased  recognizing  amortization  expense  on  goodwill  and  the
assembled  workforce  intangible asset, and the assembled  workforce  intangible
asset was combined with goodwill for financial accounting and reporting.

     In  accordance  with SFAS 142, the Company had six months from adoption (up
until June 30, 2002) to complete the initial test for  impairment  as of January
1, 2002,  the  adoption  date of SFAS 142.  In  accordance  with the  transition
provisions  of SFAS  No.  142,  the  Company  conducted  the  first  step of the
impairment tests. The Company assessed the fair value of its only reporting unit
by considering  its projected cash flows,  comparable  company  valuations,  and
recent   purchase   prices  paid  for  entities   within  our  industry.   Given
consideration of these factors, the Company concluded that the fair value of the
reporting  unit exceeded the carrying  amount of its net assets.  The Company is
required to perform reviews for impairment in future periods, at least annually,
that may result in future  periodic  write-downs.  Tests for impairment  between
annual tests may be required if events occur or circumstances  change that would
more likely  than not reduce the fair value of the net  carrying  amount.  As of
December 31, 2002, the Company is not aware of such events or circumstances that
could indicate potential impairment.

<PAGE>

Realized Gains on Sales of Investments

     On January 20, 2000, Home Financial  Network,  Inc.  ("HFN"),  a company in
which  InteliData  held  approximately  a 25%  ownership  interest,  merged with
Sybase, Inc.  ("Sybase").  InteliData  accounted for its investment in HFN using
the equity method. As of the merger date, such  investment's  carrying value was
zero.  In exchange  for its portion of  ownership  in HFN,  InteliData  received
approximately  $5,867,000 in cash and  approximately  1,770,000 shares of Sybase
stock.  The Company also held warrants to purchase HFN common stock.  As part of
the merger  agreement,  such warrants were  converted  into warrants to purchase
Sybase  common  stock.  The Company  received  640,000  "warrant  units" with an
exercise  price of $2.60 per warrant  unit.  Upon exercise of each warrant unit,
the  Company  was  entitled to receive  $1.153448  in cash and 0.34794  share of
Sybase common stock.

     As part of this merger  transaction,  an escrow account was  established to
provide Sybase  indemnity  protection  against  possible claims that might arise
against  HFN.  Approximately  133,000  shares of Sybase  common  stock  owned by
InteliData  were put in escrow,  along with  approximately  $440,000 of cash. In
March 2001, the Company received the escrow payments less approximately $129,000
for  miscellaneous  claims under the escrow provision.  During 2000,  InteliData
recognized a gain of approximately $42,604,000 on this transaction and a gain of
$5,998,000 on the subsequent disposition of some of the Sybase common stock. The
remaining  holdings of Sybase  common stock were sold during 2001 for a net gain
of $507,000.  This net gain  combined  with the loss of $129,000 from the escrow
claims  represent the $378,000  realized gains on sales of  investments  for the
year ended  December 31,  2001.  At December  31,  2001,  the Company  owned all
640,000 warrant units described above.  During June 2002, the Company  exercised
all of its 640,000  warrants units to purchase  Sybase common stock and sold the
resulting  223,000  shares of Sybase  common  stock.  The Company  received  net
proceeds of  approximately  $1,718,000 and recognized a realized loss from sales
of investments of approximately $748,000.

     Prior to January 1, 2001,  the Company  considered its investment in Sybase
common   stock  and   warrants   to   purchase   Sybase   common   stock  to  be
available-for-sale  under the  provisions  of Statement of Financial  Accounting
Standards  No.  115,  Accounting  for  Certain  Investments  in Debt and  Equity
Securities  ("SFAS  115").  Effective  January  1,  2001,  the  Company  adopted
Statement of Financial  Accounting  Standards No. 133, Accounting for Derivative
Instruments and Hedging  Activities ("SFAS 133"),  which establishes  accounting
and reporting standards for derivative instruments and for hedging activities by
requiring  that all  derivatives be recognized in the balance sheet and measured
at fair value.

     In  accordance  with SFAS 115,  the  balance  sheet  included  $210,000  of
unrealized gain on investments (net of taxes), within stockholders' equity as of
December 31, 2001. As of December 31, 2001, the accumulated other  comprehensive
loss  balance  represents  the  changes in the fair  market  value of the Sybase
common stock.  In accordance  with SFAS 133, the change in the fair market value
of the Sybase warrants was recorded in the statement of operations (see below).

     SFAS  133  requires  that all  derivative  financial  instruments,  such as
forward  currency  exchange  contracts,  interest  rate swaps and the  Company's
warrants to purchase Sybase stock, be recognized in the financial statements and
measured at fair value  regardless  of the  purpose or intent for holding  them.
Changes  in the fair  value  of  derivative  financial  instruments  are  either
recognized  periodically  in income or  shareholders'  equity (as a component of
comprehensive  income),  depending  on whether the  derivative  is being used to
hedge  changes in fair  value or cash  flows.  The  Company's  adoption  of this
pronouncement,  effective  January 1, 2001,  did not result in an adjustment for
the  cumulative  effect of an  accounting  change,  because the  carrying  value
reflected the fair value under the previous accounting  guidance.  In accordance
with SFAS 133, the Company recorded an unrealized loss on investment of $866,000
in the statement of operations for the year ended December 31, 2001.

Other Income

     Other income,  primarily investment and interest income, decreased $526,000
to $99,000 in 2002 from  $625,000  in 2001.  The  decrease  is  associated  with
decreased levels of cash and cash equivalents in 2002 as compared to 2001.

<PAGE>

Income Taxes

     The  provisions  (benefit) for income taxes were  $(137,000) and $(160,000)
for the years ended  December  31, 2002 and 2001,  respectively.  The benefit in
2002  represents  a refund of taxes paid in 2000 as a result of tax  legislation
enacted  during 2002.  The benefit in 2001 also  represented a refund related to
2000. At December 31, 2002, the Company had net operating loss carryforwards for
federal income tax purposes of approximately $200 million,  which expire in 2008
through 2022,  general  business tax credits of  approximately  $489,000,  which
expire in 2005 through 2010, and an alternative  minimum tax credit carryforward
of approximately  $60,000, which may be carried forward indefinitely and used to
offset  future  regular  taxable  income.  Approximately  $45 million of the net
operating  losses were incurred by Home Account prior to its  acquisition by the
Company and are subject to annual  limitation  pursuant to Internal Revenue Code
Section 382 as a result of  cumulative  changes in ownership of more than 50% in
2001.

Discontinued Operations

     In 2002 and 2001, the Company did not have any income statement activity in
discontinued operations.

     As of  December  31, 2002 and 2001,  the net  liabilities  of  discontinued
operations of $251,000 and $504,000 relate to the telecommunications  divisions,
respectively.  This relates to the potential  environmental  clean up associated
with InteliData's  former New Milford,  Connecticut  property.  In January 2000,
InteliData sold the New Milford,  Connecticut building, its only remaining asset
in discontinued operations of the telecommunications division. In the context of
this sale,  InteliData  agreed to undertake  limited  remediation of the site in
accordance with applicable state law. The subject site is not a federal or state
Superfund  site and  InteliData  has not been named a  "potentially  responsible
party" at the site.  The  remediation  plan agreed to with the purchaser  allows
InteliData  to  use  engineering   and   institutional   controls  (e.g.,   deed
restrictions) to minimize the extent and costs of the remediation.  Further,  at
the time of the sale of the facility,  InteliData  established a $200,000 escrow
account for certain investigation/remediation costs. As of December 31, 2002 and
2001, this escrow account balance remained at $200,000. Moreover, InteliData has
obtained  environmental  insurance to pay for remediation costs up to $6,600,000
in excess of a retained exposure limit of $600,000.  InteliData has recorded its
estimated  liability  related  to this  matter  and other  costs  related to the
discontinued operations.

     The Company has engaged a legal firm and an  environmental  specialist firm
to  represent  InteliData  regarding  this  matter.  The timing of the  ultimate
resolution  of this matter is estimated to be from three to five years under the
Company's  proposed  compliance plan,  which involves a natural  attenuation and
periodic compliance  monitoring  approach.  Management does not believe that the
resolution  of this matter will be likely to have a material  adverse  effect on
the Company's financial condition or results of operations.

Income (Loss) from  Continuing  and  Discontinued  Operations,  Weighted-Average
Common Shares Outstanding and Basic and Diluted Income (Loss) Per Common Share

     The basic and diluted  weighted-average  common shares  outstanding for the
year ended  December  31, 2002 was  48,869,000,  compared to a basic and diluted
weighted-average  common shares  outstanding  of  45,897,000  for the year ended
December 31, 2001.  The increase  resulted  primarily from the exercise of stock
options,  stock  purchases  under the  Employee  Stock  Purchase  Plan,  and the
issuance of 2,863,000 shares for the private  placements of the Company's common
stock that closed in November and December of 2001.

     Losses from continuing  operations were  $(8,594,000) and $(30,041,000) for
the years ended  December  31, 2002 and 2001,  respectively,  while there was no
gain or loss from  discontinued  operations  in either  period.  Net losses were
$(8,594,000) and $(30,041,000) for 2002 and 2001,  respectively.  As a result of
the  foregoing,  basic and diluted net loss per common share was ($0.18) for the
year ended December 31, 2002 compared to a basic and diluted net loss per common
share of ($0.65) for the year ended December 31, 2001.


<PAGE>


Results of Operations - Years Ended December 31, 2001 and 2000

     The following  represents  the results of operations for  InteliData.  Such
information should be read in conjunction with the financial  statements and the
notes  thereto in Part II, Item 8 of this Annual Report on Form 10-K, as well as
the cautionary statements and risk factors in this section.

Revenues

     The Company's  revenues were  $18,296,000 in 2001 compared to $5,101,000 in
2000,  an increase of  $13,195,000.  The increase was a result of an increase in
software  revenue of  $1,117,000,  an  increase  in  consulting,  services,  and
termination fees of $12,622,000,  all including the addition of the Home Account
operations  starting from January 11, 2001, and offset by the expected cessation
of the royalty  arrangements  relating to the sale of  bill-payment  software to
VISA Interactive.  During 2001, the Company  generated  $1,790,000 from software
sales and $16,506,000 from consulting,  services,  and termination  fees. During
2000,  software revenues were $673,000,  consulting,  services,  and termination
fees were $3,884,000 and royalty arrangements contributed $544,000.

     The increase in software  revenue was due to several  large systems sold in
the beginning of the year, while the systems sold in 2000 occurred in the latter
part of the year.  As a result,  the Company was able to perform on and earn the
revenue  associated  with the 2000 and 2001 sales during  2001.  The increase in
consulting,  services,  and termination fees from 2000 to 2001 was primarily due
to the  addition  of the  Home  Account  operations  and  the  increases  in the
Company's  recurring  revenue  from fees  associated  with its  hosting  and ASP
operations.

     As anticipated, the revenue from royalties was zero due to the cessation of
the  royalty  revenue  stream  from the sale of  bill-payment  software  to VISA
Interactive.  The  difference  of $544,000 for the year is due to the decline in
the revenue stream, as previously  disclosed,  and to the final cessation of the
royalty streams.

Cost of Revenues and Gross Profit

     The Company's cost of revenues  increased  $6,290,000 to $9,010,000 in 2001
from  $2,720,000 in 2000. The increase was primarily due to increased  revenues,
including the addition of the Home Account results.

     Overall gross profit  margins  increased to 51% for 2001 from 47% for 2000.
The increase in gross profit margins was attributable to an increase in software
and recurring revenue,  including the addition of Home Account customers.  Gross
profit  margins  may  fluctuate  in the future due to changes in product mix and
distribution,  outsourcing  activities  associated  with an ASP business  model,
competitive  pricing pressure,  and the introduction of new products and changes
in volume.

General and Administrative

     General and administrative  expenses increased $3,610,000 to $10,065,000 in
2001 from  $6,455,000 in 2000.  The increase was primarily  attributable  to the
result of additional  corporate and administrative  expenses associated with the
purchase of Home Account, including an increase in facilities expense and in bad
debt expense associated with the Home Account  receivables assumed in connection
with the acquisition.

Selling and Marketing

     Selling and marketing expenses  increased  $2,843,000 to $9,575,000 in 2001
from  $6,732,000 in 2000.  This was primarily  attributable  to increases in the
number of selling  and  marketing  employees,  travel and  outside  professional
services,  and the additional  expenses  associated with the sales and marketing
efforts of Home Account.

Research and Development

     Research and development costs increased  $1,217,000 to $15,729,000 in 2001
from  $14,512,000  in 2000.  The  increase  was  primarily  attributable  to the
additional  expenses  associated with the research and development staff of Home
Account, offset by InteliData's significant IWB development efforts in 2000.

<PAGE>

Realized Gains on Sales of Investments

     On January 20, 2000, Home Financial  Network,  Inc.  ("HFN"),  a company in
which  InteliData  held  approximately  a 25%  ownership  interest,  merged with
Sybase, Inc.  ("Sybase").  InteliData  accounted for its investment in HFN using
the equity method. As of the merger date, such  investment's  carrying value was
zero.  In exchange  for its portion of  ownership  in HFN,  InteliData  received
approximately  $5,867,000 in cash and  approximately  1,770,000 shares of Sybase
stock.  The Company also held warrants to purchase HFN common stock.  As part of
the merger  agreement,  such warrants were  converted  into warrants to purchase
Sybase  common  stock.  The Company  received  640,000  "warrant  units" with an
exercise  price of $2.60 per warrant  unit.  Upon exercise of each warrant unit,
the Company is entitled to receive $1.153448 in cash and 0.34794 share of Sybase
common stock.

     As part of this merger  transaction,  an escrow account was  established to
provide Sybase  indemnity  protection  against  possible claims that might arise
against  HFN.  Approximately  133,000  shares of Sybase  common  stock  owned by
InteliData  were put in escrow,  along with  approximately  $440,000 of cash. In
March 2001, the Company received the escrow payments less approximately $129,000
for  miscellaneous  claims under the escrow provision.  During 2000,  InteliData
recognized a gain of approximately $42,604,000 on this transaction and a gain of
$5,998,000 on the subsequent disposition of some of the Sybase common stock. The
remaining  holdings of Sybase  common stock were sold during 2001 for a net gain
of $507,000.  This net gain  combined  with the loss of $129,000 from the escrow
claims  represent  the  $378,000  realized  gains on sales  of  investments.  At
December 31, 2001, the Company owned all 640,000 warrant units described above.

     Prior to January 1, 2001,  the Company  considered its investment in Sybase
common   stock  and   warrants   to   purchase   Sybase   common   stock  to  be
available-for-sale  under the  provisions  of Statement of Financial  Accounting
Standards  No.  115,  Accounting  for  Certain  Investments  in Debt and  Equity
Securities  ("SFAS  115").  Effective  January  1,  2001,  the  Company  adopted
Statement of Financial  Accounting  Standards No. 133, Accounting for Derivative
Instruments and Hedging  Activities ("SFAS 133"),  which establishes  accounting
and reporting standards for derivative instruments and for hedging activities by
requiring  that all  derivatives be recognized in the balance sheet and measured
at fair value.

     In  accordance  with SFAS 115,  the balance  sheets  include  $210,000  and
$494,000 of unrealized gain on investments (net of taxes),  within stockholders'
equity as of December 31, 2001 and 2000, respectively.  As of December 31, 2000,
the unrealized gain on investments  balance represented the increase in the fair
market value of the Sybase holdings from the January 20, 2000 merger transaction
date to the  respective  balance  sheet  date.  As of  December  31,  2001,  the
accumulated other  comprehensive loss balance represents the changes in the fair
market value of the Sybase common stock. In accordance with SFAS 133, the change
in the fair market value of the Sybase warrants was recorded in the statement of
operations (see below).

     SFAS  133  requires  that all  derivative  financial  instruments,  such as
forward  currency  exchange  contracts,  interest  rate swaps and the  Company's
warrants to purchase Sybase stock, be recognized in the financial statements and
measured at fair value  regardless  of the  purpose or intent for holding  them.
Changes  in the fair  value  of  derivative  financial  instruments  are  either
recognized  periodically  in income or  shareholders'  equity (as a component of
comprehensive  income),  depending  on whether the  derivative  is being used to
hedge  changes in fair  value or cash  flows.  The  Company's  adoption  of this
pronouncement,  effective  January 1, 2001,  did not result in an adjustment for
the  cumulative  effect of an  accounting  change,  because the  carrying  value
reflected the fair value under the previous accounting  guidance.  In accordance
with SFAS 133, the Company recorded an unrealized loss on investment of $866,000
in the statement of operations for the year ended December 31, 2001.

Other Income

     Other income,  primarily investment and interest income, decreased $499,000
to $625,000 in 2001 from  $1,124,000 in 2000.  The decrease is  associated  with
decreased levels of cash and cash equivalents in 2001 as compared to 2000.

Income Taxes

     The provision  (benefit)  income taxes were $(160,000) and $488,000 for the
years ended December 31, 2001 and 2000, respectively.  The provision in 2000 was
related to the  alternative  minimum  tax on the gain on the

<page>

Sybase investment, while the benefit in 2001 represented a refund related to the
prior  year.  At  December  31,  2001,   the  Company  had  net  operating  loss
carryforwards  for federal  income tax purposes of  approximately  $193 million,
which expire in 2008 through 2021, general business tax credits of approximately
$489,000,  which expire in 2005 through  2010,  and an  alternative  minimum tax
credit  carryforward  of  approximately  $197,000,  which may be carried forward
indefinitely and used to offset future regular taxable income. Annual use of the
net  operating  loss  carryforwards  of  approximately  $45  million,  which was
incurred  by Home  Account  prior to its  acquisition  by the  Company,  will be
limited  under the Internal  Revenue Code as a result of  cumulative  changes in
ownership of more than 50% in 2001.

Discontinued Operations

     During  2000,  US West  notified  the Company  that US West would no longer
permit  InteliData to include the lease billing on the US West telephone  bills.
As such,  InteliData has discontinued billing its legacy customers for Caller ID
adjunct unit leases in the US West telephone service territory, because the cost
of individually  billing and pursuing collections for the leases would have made
it impractical and  uneconomical  for the Company to continue the lease program.
Accordingly,  the  results  of  operations  from  leasing  activities  have been
reported  as  discontinued  operations.  In 2001,  the  Company did not have any
activity in discontinued operations.  In 2000, the Company experienced a loss of
$262,000 in discontinued operations, net of income taxes.

     As of  December  31, 2001 and 2000,  the net  liabilities  of  discontinued
operations of $504,000 and $755,000 relate to the telecommunications  divisions,
respectively.  This relates to the potential  environmental  clean up associated
with InteliData's  former New Milford,  Connecticut  property.  In January 2000,
InteliData sold the New Milford,  Connecticut building, its only remaining asset
in discontinued operations of the telecommunications division. In the context of
this sale,  InteliData  agreed to undertake  limited  remediation of the site in
accordance with applicable state law. The subject site is not a federal or state
Superfund  site and  InteliData  has not been named a  "potentially  responsible
party" at the site.  The  remediation  plan agreed to with the purchaser  allows
InteliData  to  use  engineering   and   institutional   controls  (e.g.,   deed
restrictions) to minimize the extent and costs of the remediation.  Further,  at
the time of the sale of the facility,  InteliData  established a $200,000 escrow
account for certain  investigation/remediation  costs.  As of December 31, 2001,
this escrow  account  balance  remained at $200,000.  Moreover,  InteliData  has
obtained  environmental  insurance to pay for remediation costs up to $6,600,000
in excess of a retained exposure limit of $600,000.  InteliData has recorded its
estimated  liability  related  to this  matter  and other  costs  related to the
discontinued operations.

     The Company has engaged a legal firm and an  environmental  specialist firm
to  represent  InteliData  regarding  this  matter.  The timing of the  ultimate
resolution  of this matter is estimated to be from three to five years under the
Company's  proposed  compliance plan,  which involves a natural  attenuation and
periodic compliance  monitoring  approach.  Management does not believe that the
resolution  of this matter will be likely to have a material  adverse  effect on
the Company's financial condition or results of operations.

Income (Loss) from  Continuing  and  Discontinued  Operations,  Weighted-Average
Common Shares Outstanding and Basic and Diluted Income (Loss) Per Common Share

     The basic and diluted  weighted-average  common shares  outstanding for the
year  ended   December   31,   2001  was   45,897,000,   compared   to  a  basic
weighted-average   common  shares   outstanding  of  38,237,000  and  a  diluted
weighted-average  common shares  outstanding  of  40,843,000  for the year ended
December 31, 2000.  The increase  resulted  primarily from the exercise of stock
options and warrants,  stock  purchases  under the Employee Stock Purchase Plan,
the granting of certain stock awards,  the issuance of 6,900,000  shares for the
acquisition  of Home Account,  and the issuance of the 2,863,000  shares for the
private placement during 2001.

     Income (loss) from continuing operations were $(30,041,000) and $23,920,000
for the years  ended  December  31,  2001 and 2000,  while the gain  (loss) from
discontinued operations were $0 and $(262,000) for 2001 and 2000,  respectively.
Net  income  (loss)  were  $(30,041,000)  and  $23,658,000  for 2001  and  2000,
respectively.

     As a result of the foregoing,  basic and diluted  earnings per common share
for 2001 was a net loss of $(0.65).  Basic  earnings  per common  share for 2000
were  income  of  $0.63  from  continuing  operations,   loss  of  $(0.01)  from
discontinued  operations,  and net income of $0.62.  Diluted earnings per common
share for 2000 were

<page>

income of $0.59 from continuing  operations,  loss of $(0.01) from  discontinued
operations, and income of $0.58 for net income.

Liquidity and Capital Resources

     During  2002,  the  Company's  cash  and  cash  equivalents   decreased  by
$6,352,000.  At December 31, 2002,  the Company had  $5,674,000 in cash and cash
equivalents,   $2,244,000  of  working  capital  with  no  long-term  debt,  and
$36,454,000 in stockholders' equity.

     The Company's  principal needs for cash in 2002 were for funding  operating
losses. The Company funded decreases in accounts payable of $1,215,000,  accrued
expenses of  $2,183,000,  and deferred  revenue of $1,491,000 for the year ended
December  31,  2002,  which was  partially  offset  by a  decrease  in  accounts
receivable of $2,018,000.

     The  Company's  cash  requirements  for  operating  activities in 2002 were
financed  primarily by cash and cash  equivalents  on hand and the proceeds from
sales of  investments.  Total cash  proceeds from the sale of  investments  were
approximately $1,968,000.

     Net cash provided by investing activities in 2002 was $1,529,000.  This was
a result of the sales of investments as discussed above, offset by the purchases
of property and equipment of $389,000 and the cash paid for the purchase of Home
Account and the related acquisition costs of $50,000.

     Financing activities provided net cash of $45,000 in 2002 from the issuance
of the Company's  common stock through stock option exercises and sales of stock
to employees pursuant to the Employee Stock Purchase Plan.

     Contractual  Obligations  - The decision by the Company to divest itself of
its  telecommunications  business segment created certain financial  obligations
and  uncertainties  for the future.  The Company is required to satisfy  certain
obligations  of the  telecommunications  business  that  will  carry  on  beyond
December  31,  2002.  As of December  31,  2002,  the  Company  had  $251,000 in
remaining liabilities related to the discontinued  operations.  During 2000, the
Company sold the only remaining asset it had in the  discontinued  operations --
the  building  in  New  Milford,  Connecticut.   Liabilities  remaining  in  the
discontinued  operations  represent the Company's estimated liability related to
potential  environmental  clean-up at the New Milford  location and other costs.
The Company is working with its professional  advisors and insurer to manage its
exposure to liability for the potential  environmental clean up. The Company has
hired an  environmental  specialist  firm to perform a study of the damages,  to
prepare a project  plan,  to work with the state  agency,  and to remediate  the
damages.  Additionally,  the Company has acquired insurance to cap the potential
costs and losses at a reasonable  amount.  Such amounts and insurance costs have
been  accrued  for  as of  December  31,  2002.  Management  believes  that  the
combination  of the project plan and the insurance  arrangements  will cause the
resolution of this matter to not have a material adverse effect on the Company's
financial condition or results of operations.

     The  Company  leases   facilities  and  equipment   under   cancelable  and
noncancelable  operating lease  agreements.  Future minimum lease payments under
noncancelable  operating leases with initial or remaining terms in excess of one
year at December 31, 2002, were as follows (in thousands):

            Years Ending December 31,

                  2003                                      $         973
                  2004                                                809
                  2005                                                411
                  2006                                                330
                  2007 and thereafter                                  --
                                                             ------------
                      Total minimum lease payments          $       2,523
                                                            =============

     The Company is not currently a party to any material litigation.  From time
to  time,  the  Company  is a party  to  routine  litigation  incidental  to its
business.  Management does not believe that the resolution of any or all of such
routine  litigation  will be likely  to have a  material  adverse  effect on the
Company's financial condition or results of operations.

<page>

     The  Company  believes  that it  currently  has the  capital  necessary  to
continue  funding its  operations  in 2003.  Continuing  into 2003,  the Company
expects  its  operating  losses to  continue  declining  based on  increases  in
revenues  due to  increases  in the  adoption  rates  and  penetration  rates of
Internet  banking,  Card  Solutions(TM)  and EBPP  Solutions,  and  based on our
periodic  rationalization  of  headcount  and  other  expenses  in  light of our
available capital and anticipated business  projections.  Based on the Company's
current capital levels and its assumptions about future operating  results,  the
Company  believes  that it  will  have  sufficient  resources  to fund  existing
operating  plans.  However,  if actual  results differ  materially  from current
assumptions,  the Company may not have sufficient capital resources and may have
to modify  operating  plans and/or seek  additional  capital  resources.  If the
Company  engages  in  efforts  to  obtain  additional  capital,  it can  make no
assurances  that  these  efforts  will be  successful  or that the terms of such
funding would be beneficial to the common stockholders.

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995

     This Form 10-K filing and the documents  incorporated  by reference  herein
contain  forward-looking  statements  within the  meaning of Section  27A of the
Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the
Securities   Exchange  Act  of  1934,  as  amended  (the  "Exchange  Act"),  the
realization  of which may be  impacted  by the factors  discussed  below.  These
forward-looking  statements  are made pursuant to the safe harbor  provisions of
the Private  Securities  Litigation Reform Act of 1995 (the "Act").  The Company
cautions readers that the following  important  factors,  among others,  in some
cases have affected the Company's actual results,  and could cause the Company's
actual results for 2003 and beyond to differ  materially from those expressed in
any  forward-looking  statements  made by, or on behalf  of,  the  Company.  The
following  list of  factors  should not be  construed  as  exhaustive  or as any
admission regarding the adequacy of disclosures made by the Company prior to the
date hereof or the effectiveness of said Act.  Additionally,  the Company is not
under any obligation (and expressly  disclaims an obligation to) update or alter
its  forward-looking  statements,  whether  as a result  of new  information  or
otherwise. We wish to caution you that such risks and uncertainties include, but
are not limited to:

     o    our ability to continue funding operating losses;
     o    our ability to manage our expenses in line with  anticipated  business
          levels;
     o    our  ability to complete  product  implementations  in  required  time
          frames;
     o    our ability to increase our recurring revenues and profits through our
          ASP business model;
     o    the impact of competitive products,  pricing pressure,  product demand
          and market acceptance risks;
     o    the pace of consumer  acceptance  of home  banking and reliance on our
          bank clients to increase usage of Internet banking by their customers;
     o    the effect of general  economic  conditions on the financial  services
          industries;
     o    mergers and acquisitions;
     o    the risk of integration of our technology;
     o    the  ability of our FI  customers  to  implement  applications  in the
          anticipated   time   frames   or  with   the   anticipated   features,
          functionality or benefits;
     o    our  reliance  on  key   strategic   alliances   and  newly   emerging
          technologies;
     o    our ability to leverage our third-party relationships;
     o    the on-going  viability of the  mainframe  marketplace  and demand for
          traditional mainframe products;
     o    our ability to attract and retain key employees;
     o    the availability of cash for long-term growth;
     o    product obsolescence;
     o    our ability to reduce product costs;
     o    fluctuations in our operating results;
     o    delays in development of highly complex products; and
     o    other  risks  detailed  from  time  to time in our  filings  with  the
          Securities and Exchange Commission.

     In some cases, you can identify forward-looking statements by terms such as
"may,"  "will,"  "should,"  "could,"  "would,"  "expects,"  "intends,"  "plans,"
"anticipates," "believes," "estimates," "projects," "predicts," "potential," and
similar  expressions  intended to  identify  forward-looking  statements.  These
statements reflect our current views with respect to future events and are based
on   assumptions   and   subject  to  risks  and   uncertainties.   Given  these
uncertainties,  you should not place  undue  reliance  on these  forward-looking
statements.  We discuss many of these risks in this prospectus in greater detail
under the heading "Risk Factors." In connection with

<page>

forward-looking  statements  that appear in these  disclosures,  readers  hereby
should carefully consider the factors set forth under "Risk Factors."

RISK FACTORS

Risk Factors Particular to Our Company

     We may require additional  capital,  which we may not be able to obtain, to
be able to fund  future  operating  losses,  working  capital  needs and capital
expenditures.

     The  expansion  and  development  of our  business  may require  additional
capital in the future to fund our operating  losses,  working  capital needs and
capital  expenditures.  The capital  markets are very volatile and we may not be
able to obtain  future  equity or debt  financing in the future on  satisfactory
terms or at all.  Our  failure to generate  sufficient  cash flows from sales of
products  and services or to raise  sufficient  funds may require us to delay or
abandon some or all of our development  and expansion plans or otherwise  forego
market opportunities. Our inability to obtain additional capital on satisfactory
terms may delay or prevent the expansion of our business,  which could cause our
business, operating results and financial condition to suffer.

     We may not be able to manage our expenses in line with anticipated business
levels.

     We continually seek to control our general and administrative  expenses and
assess our operations in managing the continued development of infrastructure to
handle  anticipated  business  levels.  Our inability so to control expenses and
manage our  infrastructure  could  cause our  business,  operating  results  and
financial condition to suffer.

     Rapidly changing  technologies could make our products obsolete,  which may
adversely affect our business, operations and financial condition.

     Our business  activities are concentrated in fields  characterized by rapid
and  significant  technological  advances.  It is possible that our products and
services  will not  remain  competitive  technologically  or that our  products,
processes or services will not continue to be reflective of such  advances.  The
following,  among  other  factors,  may  adversely  affect  our  ability  to  be
technologically competitive:

     o    our competitors may develop other  technologies  that could render our
          products and services noncompetitive or obsolete;
     o    we may be unable to locate,  hire and retain  management and other key
          personnel  with the skills and abilities  required to further  advance
          and develop our  software  products  and  services and to maintain our
          technological competitiveness;
     o    we may be unable to  introduce  new  products or product  enhancements
          that achieve timely market acceptance and meet financial institutions'
          or Internet banking or EBPP customers' needs;
     o    we may encounter unanticipated technical,  marketing or other problems
          or delays  relating to new  products,  features  or  services  that we
          recently introduced or that we may introduce in the future;
     o    we may be  unable  to keep  pace  with our  competitors'  spending  on
          research  and  development  of  new  products   because  most  of  our
          competitors  and  potential  competitors  have  significantly  greater
          financial,  technological and research and development  resources than
          we have;
     o    we may be unable to  develop,  produce  and  market  new  products  as
          cheaply  as our  competitors  and we may  not be  able  to  offer  new
          products to customers at a competitive price; and,
     o    we may be unable to leverage our relationships with third parties.

     An inability to compete  successfully  in an  increasingly  competitive and
crowded  marketplace  could  adversely  affect  our  business,   operations  and
financial condition.

     The market for Internet banking and other  interactive  financial  products
and  services  is  highly  competitive  and  subject  to  rapid  innovation  and
technological  change,  shifting  consumer  preferences and frequent new product
introductions.  A number of corporations,  including S-1 Corporation,  Corillian
Corporation,  Financial Fusion,  Inc., CheckFree  Corporation,  Online Resources
Corporation,   Digital  Insight,  Inc.,  Metavante  Corporation,  and  Incurrent
Solutions,  Inc.,  some of which have greater  resources than us, offer products
and services that compete  directly with the products and services we offer.  We
expect the number of competitors  in the Internet  banking and EBPP products
<page>

and services  industry to expand  greatly as a result of the  popularity  of the
Internet and widespread  ownership of personal computers.  We foresee our future
competitors as including:

     o    banks  that  have  already  developed  (or plan to  develop)  Internet
          banking  and  EBPP  products  for  their  own   customers,   with  the
          possibility  of offering  the products to other banks and other banks'
          customers;
     o    non-banks that may develop Internet banking and EBPP products to offer
          to banks; and,
     o    computer software and data processing  companies that currently offer,
          or will offer  Internet  banking and EBPP services  through the use of
          their broad distribution channels that may be used to bundle competing
          products directly to end-users or purchasers.

     Our operating results fluctuate,  which could have an adverse effect on our
business,  operations and financial  condition.

     Our quarterly operating results have varied  significantly in the past, and
it is likely that they will vary greatly in the future. Some of the factors that
will likely cause our operating results to fluctuate are:

     o    the size and timing of customer orders;
     o    changes in our pricing policies or those of our competitors;
     o    new product introductions or enhancements by our competitors or by us;
     o    delays in the introduction of new products or product  enhancements by
          our competitors or by us;
     o    customer order  deferrals by our customers in anticipation of upgrades
          and new products;
     o    market acceptance of new products;
     o    the  timing  and  nature  of  sales,   marketing,   and  research  and
          development expenses by our competitors or by us; and,
     o    other  changes in operating  expenses,  personnel  changes and general
          economic conditions.

     Additionally,  certain banks and other financial institutions recently have
combined or are  proposing  to  combine,  and we are unable to assess the future
effect that those combinations and other possible  consolidations in the banking
industry will have upon us. No assurance can be given that quarterly  variations
in our  operating  results will not occur in the future,  and  accordingly,  the
results of any one quarter may not be indicative  of the  operating  results for
future quarters.

     Our stock price  fluctuates  significantly  and could adversely  affect our
business, operations and financial condition.

     It is  likely  that  in the  future  our  common  stock  will  continue  to
experience the significant volatility it has experienced in the past. Our common
stock is traded on the Nasdaq National Market. The stock market, particularly in
recent years,  has experienced  volatility  that has been especially  acute with
respect  to  high  technology-based  stocks  such as  ours.  The  volatility  of
technology-based  and  development  stage stocks has often been unrelated to the
operating performance of the companies represented by the stock. Factors such as
announcements of the introduction of new products or services by our competitors
or by us, market  conditions in the banking and other  emerging  growth  company
sectors and rumors  relating  to our  competitors  or us have had a  significant
impact on the market price of our common stock in the past.

     We possess limited patent or registered  intellectual  property rights with
respect to our  technology  and any loss or  infringement  of those rights could
cause us to lose a valuable  competitive  advantage or incur  costly  litigation
expenses that adversely affect our business, operations and financial condition.

         We possess limited patent or registered intellectual property rights
with respect to our technology. We depend, in part, upon our proprietary
technology and know-how to differentiate our products from those of our
competitors and work independently and from time to time with third parties with
respect to the design and engineering of our own products. We also rely on a
combination of contractual provisions, trademarks, and trade secret laws to
protect our proprietary technology. There can be no assurance, however, that we
will be able to protect our technology or successfully develop new technology or
gain access to such technology, that third parties will not be able to develop
similar technology independently or design around our intellectual property
rights, that competitors will not obtain unauthorized access to our proprietary
technology, that third parties will not misuse the technology to which we have
granted them access, or that our contractual or legal remedies will be
sufficient to protect our interests in our proprietary technology. Enforcing or
defending our intellectual property rights could be very expensive. If we cannot
preserve our intellectual property rights, we may be at a competitive
disadvantage.

<page>

     Claims against us for infringement of another party's intellectual property
rights could cause us to incur costly litigation  expenses or impact our ability
to offer products or services to our market.

     The Internet banking  software and services  industry has become an area of
substantial  litigation  concerning  intellectual  property  rights.  Claims  of
infringement  by third parties could have a  significant  adverse  impact on our
business. The expenses associated with defending claims, even if successful, are
often  significant.  In the event that we were found to infringe a third party's
rights, we would be required to enter into a royalty  arrangement to continue to
offer  the  infringing  products  and  services.  If we were  unable  to  obtain
acceptable  royalty  terms,  we would be  forced  to  discontinue  offering  the
infringing  products  and services or modify the products and services to become
non-infringing.  This  could  result  in the  significant  loss of  revenues  or
considerable additional expense.

     Delays in the development of new products or in the  implementation  of new
or existing products at customer locations and defects or errors in the products
we sell could adversely affect our business, operations and financial condition.

     We may experience  delays in the  development of the software and computing
systems  underlying our products and services.  Additionally,  we may experience
delays when implementing our products at customer  locations,  and customers may
be  unable  to  implement   our  products  in  the  time  frames  and  with  the
functionalities  that they expect or require.  There can be no  assurance  that,
despite our testing,  errors will not be found in the  underlying  software,  or
that we will not  experience  development  delays,  resulting  in  delays in the
shipment  of our  products,  the  commercial  release of our  products or in the
market  acceptance of our products,  each of which could have a material adverse
effect on our business, operations and financial condition.

     We are dependent on key personnel,  the loss of whom could adversely affect
our business, operations and financial condition.  Additionally, we will need to
locate,  hire and retain additional  qualified personnel to continue to grow our
business.

     Our  performance  is  substantially  dependent  on the  performance  of our
executive  officers  and key  employees.  We depend on our ability to retain and
motivate high quality personnel,  especially  management and skilled development
teams.  The loss of  services  of any of our  executive  officers  or other  key
employees  could have a material  adverse effect on our business,  operations or
financial condition.

     Our future  success  also  depends on our  continuing  ability to identify,
hire,  train  and  retain  other  highly  qualified   technical  and  managerial
personnel.  Competition  for such  personnel  is  intense,  and  there can be no
assurance  that we will be able to attract,  assimilate  or retain  other highly
qualified  technical and  managerial  personnel in the future.  The inability to
attract and retain the necessary technical and managerial personnel could have a
material adverse effect upon our business, operations or financial condition.

     Certain  provisions of Delaware law, our certificate of  incorporation  and
bylaws make a takeover by a third-party difficult.

     Certain  provisions of Delaware law and of our certificate of incorporation
and bylaws could have the effect of making it more  difficult  for a third party
to acquire, or of discouraging a third party from attempting to acquire, control
of us. These provisions include:

     o    a provision allowing us to issue preferred stock with rights senior to
          those of the common  stock  without any further  vote or action by the
          holders  of common  stock.  The  issuance  of  preferred  stock  could
          decrease the amount of earnings and assets  available for distribution
          to the holders of common  stock or could  adversely  affect the rights
          and  powers,  including  voting  rights,  of the holders of the common
          stock. In certain  circumstances,  such issuance could have the effect
          of decreasing the market price of the common stock;
     o    the  existence  of a stock rights plan that results in the dilution of
          the value of common stock held by a potential acquirer;
     o    the  existence  of a staggered  board of  directors in which there are
          three classes of directors  serving  staggered  three-year  terms, and
          thereby  expanding  the time required to change the  composition  of a
          majority of directors and perhaps  discouraging someone from making an
          acquisition proposal for us;
     o    the bylaws' requirement that stockholders  provide advance notice when
          nominating our directors;

<page>

     o    the  inability  of  stockholders  to convene a  stockholders'  meeting
          without the meeting first being called by the chairman of the board of
          directors  or  the  secretary  at the  request  of a  majority  of the
          directors; and,
     o    the  application  of Delaware law  prohibiting us from entering into a
          business  combination  with the beneficial owner of 15% or more of our
          outstanding  voting stock for a period of three years after the 15% or
          greater  owner first  reached  that level of stock  ownership,  unless
          certain criteria are met.

Risk Factors Associated With Our Industry

     The Internet  banking and EBPP industries are relatively new and developing
markets,  and our success  depends on the acceptance and growing use of Internet
banking and electronic bill presentment and payment.

         Internet banking and EBPP continue to be developing markets. Our future
financial success in the relatively new Internet banking and EBPP marketplace
depends, in part, upon:

     o    consumer  acceptance  of, and  financial  institutions'  support  for,
          Internet banking and EBPP technologies;
     o    continued growth in personal computer sales and the number of personal
          computers with Internet access and continued reductions in the cost of
          personal computers and Internet access;
     o    the  degree  of  financial  institutions'  success  in  marketing  the
          Internet  banking and EBPP products to their customers and the ability
          of these  institutions to implement  applications in anticipated  time
          frames or with anticipated features and functionalities; and,
     o    the  continued  absence of  regulatory  controls and  oversight of the
          Internet and electronic commerce.

     Even  if  this  market  experiences  substantial  growth,  there  can be no
assurance that our products and services will be commercially successful or that
we will benefit from such growth. Therefore, there can be no assurance as to the
timing, introduction, or market acceptance of, or necessary regulatory approvals
for, our products and services.

     Concerns related to system security and consumer  protections could prevent
the  widespread  acceptance  of Internet  banking  and EBPP and could  adversely
affect our business, operations and financial condition.

     The  willingness  of consumers and financial  institutions  to use personal
computer and Internet-based  banking,  bill payment and other financial services
will depend, in part, upon the following factors:

     o    our  ability to protect  consumer  information  relating  to  personal
          computer  and  Internet-based  banking  and other  financial  services
          against the risk of fraud, counterfeit and technology failure;
     o    the  frequency of  interruptions,  delays and  cessation in service to
          financial   institutions  and  individuals   resulting  from  computer
          viruses, break-ins or other problems;
     o    the increase in the cost of our services and products,  as well as the
          cost to up-grade  the  services and products to keep pace with rapidly
          changing  computer  and  Internet  technologies,  may be  increased by
          expenditures  of capital and  resources to reduce  security  breaches,
          break-ins and computer viruses; and,
     o    the erosion of public and  consumer  confidence  in the  security  and
          privacy of Internet banking and EBPP.

     The threat of  increased  government  regulation  of the  Internet  and the
continuing legal uncertainty and potential  liabilities  associated with sharing
personal and financial  information on the Internet could  adversely  affect our
business, operations and financial condition.

     Our products rely on the  cost-effectiveness of, and ease of access to, the
Internet. There are currently few laws or regulations directly applicable to, or
commerce  or  other  communications  on,  the  Internet.  However,  due  to  the
increasing  popularity and use of the Internet, it is possible that new laws and
regulations may be adopted with respect to the Internet, covering issues such as
user privacy,  the collection or processing of personal  information,  copyright
infringement  and the  pricing,  characteristics  and  quality of  products  and
services.  Consumers'  concerns  relating to privacy,  security  and  increasing
regulation  could hinder the use of the Internet and the growth of our business.
The adoption of restrictive  laws or regulations  may increase the cost of doing
business over the Internet. The application to the Internet of existing laws and
regulations  governing such issues as property ownership and personal privacy is
subject to substantial uncertainty. Mandatory privacy and security standards and
protocols  still

<page>

are  being  developed  by  government  agencies,  and we may  incur  significant
expenses  to comply  with any  requirements  that are  ultimately  adopted.  Our
financial  institution  customers  require that our  products and services  will
permit them to operate in compliance with all applicable  laws and  regulations.
We may become  subject to direct  regulation  as the market for our products and
services evolves. Additionally,  current or new government laws and regulations,
or  the  application  of  existing  laws  and  regulations,  may  expose  us  to
significant liabilities or otherwise impair our ability to achieve our strategic
objectives through increased  operating costs or reduced market  acceptance.  If
Internet  use does  not  grow as a  result  of  privacy  or  security  concerns,
increasing  regulation or for other  reasons,  the sale of Internet  banking and
electronic  bill  presentment  and payment  products  would be hindered  and our
business, operations and financial condition would be adversely affected.

ITEM 7a.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
------------------------------------------------------------------------

     The Company currently has no long-term debt and is not currently engaged in
any transactions that involve foreign  currency.  The Company does not engage in
hedging activities.

     As of  December  31,  2001,  the  fair  value of the  Company's  investment
portfolio  was  approximately  $2,917,000,  which  consisted  of  $2,676,000  of
warrants  to  purchase   Sybase  common  stock  and  $241,000  of  fixed  income
securities.  Changes  in the fair  value of the  fixed  income  securities  will
continue  to  be  recognized  in   shareholders'   equity  (as  a  component  of
comprehensive  income). SFAS 133, which the Company adopted effective January 1,
2001, requires that changes in the fair value of the warrants to purchase Sybase
common stock be  recognized  periodically  in income.  During  2002,  all of the
investments  in the warrants to purchase  Sybase common stock were exercised and
the resulting shares were sold. Additionally, the Company's investments in fixed
income  securities  were sold. As of December 31, 2002, the Company did not hold
any investments.

<PAGE>

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-----------------------------------------------------

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                            Page
                                                                            ----
Consolidated Financial Statements

  Consolidated Balance Sheets as of December 31, 2002 and 2001................30

  Consolidated Statements of Operations for the Years Ended
    December 31, 2002, 2001, and 2000.........................................31

  Consolidated Statements of Changes in Stockholders' Equity for the Years Ended
    December 31, 2002, 2001, and 2000.........................................32

  Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2002, 2001 and 2000..........................................33

  Notes to Consolidated Financial Statements for the Years Ended
    December 31, 2002, 2001, and 2000.........................................34

Independent Auditors' Report..................................................50

<PAGE>


                       INTELIDATA TECHNOLOGIES CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2002 AND 2001
                        (in thousands, except share data)

<table>
                                                                                        2002            2001
                                                                                    ------------    -------------
<S>                                                                                <C>              <C>

ASSETS

  CURRENT ASSETS

     Cash and cash equivalents                                                      $      5,674    $     12,026
     Investments                                                                              --           2,917
     Accounts receivable, net                                                              2,974           4,992
     Other receivables                                                                       309             563
     Prepaid expenses and other current assets                                               802             559
                                                                                    ------------    ------------
         Total current assets                                                              9,759          21,057

  NONCURRENT ASSETS
     Property and equipment, net                                                           2,554           3,720
     Goodwill, net                                                                        26,238          22,549
     Intangibles, net                                                                      5,780          10,189
     Other assets                                                                            175             195
                                                                                    ------------    ------------

TOTAL ASSETS                                                                        $     44,506    $     57,710
                                                                                    ============    ============
LIABILITIES AND STOCKHOLDERS' EQUITY
  CURRENT LIABILITIES
     Accounts payable                                                               $      2,081    $      3,346
     Accrued expenses                                                                      3,458           5,357
     Deferred revenues                                                                     1,673           3,164
     Other liabilities                                                                       252             324
     Net liabilities of discontinued operations                                               51             204
                                                                                    ------------    ------------
TOTAL CURRENT LIABILITIES                                                                  7,515          12,395
     Net liabilities of discontinued operations                                              200             300
     Other liabilities                                                                       337             540
                                                                                    ------------    ------------
TOTAL LIABILITIES                                                                          8,052          13,235
                                                                                    ------------    ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
     Preferred stock, $0.001 par value; authorized 5,000,000 shares;
        no shares issued and outstanding                                                      --              --
     Common stock, $0.001 par value; authorized 60,000,000 shares;
        issued 49,797,000 shares in 2002 and 49,725,000 shares in 2001;
        outstanding 48,991,000 shares in 2002 and 48,919,000 shares in 2001                   50              50
     Additional paid-in capital                                                          302,833         303,141
     Treasury stock, at cost:  806,000 shares in 2002 and 2001                            (2,473)         (2,473)
     Deferred compensation                                                                  (304)         (1,395)
     Accumulated other comprehensive income                                                   --             210
     Accumulated deficit                                                                (263,652)       (255,058)
                                                                                    ------------    ------------
TOTAL STOCKHOLDERS' EQUITY                                                                36,454          44,475
                                                                                    ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                          $     44,506    $     57,710
                                                                                    ============    ============

</table>
          See accompanying notes to consolidated financial statements.


<PAGE>


                       INTELIDATA TECHNOLOGIES CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

                      (in thousands, except per share data)

<table>
                                                                                2002            2001               2000
<S>                                                                        <C>               <C>              <C>
                                                                           -----------       -----------      -----------

Revenues

     Software                                                              $   1,289         $  1,790         $     673
     Consulting, services, and termination fees                               20,206           16,506             3,884
     Royalties and other                                                          --               --               544
                                                                           -----------       -----------      -----------
         Total revenues                                                       21,495           18,296             5,101
                                                                           -----------       -----------      -----------

Cost of revenues

     Software                                                                     --                5                --
     Consulting and services                                                   8,474            9,005             2,720
                                                                           -----------       -----------      -----------
         Total cost of revenues                                                8,474            9,010             2,720
                                                                           -----------       -----------      -----------

Gross profit                                                                  13,021            9,286             2,381
Operating expenses
     General and administrative                                                8,629           10,065             6,455
     Selling and marketing                                                     2,947            9,575             6,732
     Research and development                                                  8,807           15,729            14,512
     Amortization of goodwill and intangibles                                    720            4,255                --
                                                                           -----------       -----------      -----------
         Total operating expenses                                             21,103           39,624            27,699
                                                                           -----------       -----------      -----------

Operating loss                                                                (8,082)         (30,338)          (25,318)
Realized gain (loss) on sales of investments                                    (748)             378            48,602
Unrealized gain (loss) on Sybase warrants                                         --             (866)               --
Other income (expenses), net                                                      99              625             1,124
                                                                           -----------       -----------      -----------

Income (loss) before income taxes                                             (8,731)         (30,201)           24,408
Provision (benefit) for income taxes                                            (137)            (160)              488
                                                                           -----------       -----------      -----------

Income (loss) from continuing operations                                      (8,594)         (30,041)           23,920
Discontinued operations, net of income taxes
     Gain (loss) on disposal of Telecommunication Division                        --               --                --
     Income (loss) from operations of Caller ID leasing                           --               --              (262)
                                                                           -----------       -----------      -----------
         Total discontinued operations                                            --               --              (262)
                                                                           -----------       -----------      -----------

Net income (loss) attributable to common stockholders                      $  (8,594)        $(30,041)        $  23,658
                                                                           ===========       ===========      ===========

Basic earnings per common share

     Income (loss) from continuing operations                              $   (0.18)        $  (0.65)        $    0.63
     Income (loss) from discontinued operations                                 0.00             0.00             (0.01)
                                                                           -----------       -----------      -----------
     Net income (loss)                                                     $   (0.18)        $  (0.65)        $    0.62
                                                                           ===========       ===========      ===========
Diluted earnings per common share

     Income (loss) from continuing operations                              $   (0.18)        $  (0.65)        $    0.59
     Income (loss) from discontinued operations                                 0.00             0.00             (0.01)
                                                                           -----------       -----------      -----------
     Net income (loss)                                                     $   (0.18)        $  (0.65)        $    0.58
                                                                           ===========       ===========      ===========

Basic weighted-average common shares outstanding                              48,869           45,897            38,237
                                                                           ===========       ===========      ===========
Diluted weighted-average common shares outstanding                            48,869           45,897            40,843
                                                                           ===========       ===========      ===========

</table>
          See accompanying notes to consolidated financial statements.

<PAGE>



                       INTELIDATA TECHNOLOGIES CORPORATION
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                  YEARS ENDED DECEMBER 31, 2002, 2001, AND 2000
                                 (in thousand)

<TABLE>
                                                                                                                     Accumulated
                                                                           Additional                                   Other
                                  Preferred Stock        Common stock        Paid-in      Treasury      Deferred    Comprehensive
                                  Shares  Amount       Shares     Amount     Capital        Stock     Compensation  Income (Loss)
                                  ------  ------      -------   ---------  ----------    ---------     ------------  -------------

<S>                              <C>     <C>          <C>       <C>        <C>           <C>          <C>            <C>

Balance at January 1, 2000          --    $  --       38,691    $    38    $ 258,133     $  (2,064)    $    (345)    $        --
   Issuance of common stock:
     Exercise of stock options      --       --          258          1          591            --            --              --
     Employee stock purchase plan   --       --           30         --           75            --            --              --
     Exercise of stock warrants     --       --          166         --          228            --            --              --
   Issuance of restricted stock     --       --          206         --        1,401            --        (1,401)             --
   Cancellation of restricted stock --       --          (30)        --         (152)           --           152              --
   Issuance of stock warrants       --       --           --         --          419            --          (419)             --
   Capital contribution             --       --           --         --          857            --            --              --
   Purchase of treasury stock       --       --           --         --           --           (59)           --              --
   Unrealized gains on investments  --       --           --         --           --            --            --             494
   Amortization of deferred
     compensation                   --       --           --         --           --            --           638              --

   Net income                       --       --           --         --           --            --            --              --

   Comprehensive income
                                   ---    -----    ---------    -------    ---------     ---------     ---------     -----------
Balance at December 31, 2000        --       --       39,321    $    39    $ 261,552     $  (2,123)    $  (1,375)    $       494
   Issuance of common stock:
     Acquisition of Home Account    --       --        6,900          7       31,950            --            --              --
     Private placement              --       --        2,863          3        7,228            --            --              --
     Exercise of stock options      --       --          220         --          412            --            --              --
     Employee stock purchase plan   --       --           29         --           66            --            --              --
     Exercise of stock warrants     --       --            3         --           11            --            --              --
   Issuance of restricted stock     --       --          481          1        2,082            --        (2,083)             --
   Cancellation of restricted stock --       --          (92)        --         (509)           --           509              --
   2000 Home Account Incentive Plan --       --           --         --          349            --          (349)             --
   Purchase of treasury stock       --       --           --         --           --          (350)           --              --
   Realized gains on investments
    sold                            --       --           --         --           --            --            --            (284)
   Amortization of deferred
    compensation                    --       --           --         --           --            --         1,903              --

   Net loss                         --       --           --         --           --            --            --              --

   Comprehensive loss              ---    -----    ---------    -------    ---------     ---------     ---------     -----------
Balance at December 31, 2001        --       --       49,725    $    50    $ 303,141     $  (2,473)    $  (1,395)    $       210
                                   ===    =====    =========    =======    =========     =========     =========     ===========
Issuance of common stock:
     Exercise of stock options      --       --           11         --           15            --            --              --
     Employee stock purchase plan   --       --           30         --           30            --            --              --
   Issuance of restricted stock     --       --          139         --          247            --          (247)             --
   Cancellation of restricted stock --       --         (108)        --         (406)           --           406              --
   2000 Home Account Incentive Plan --       --           --         --         (194)           --           194              --
   Realized gains on investments
    sold                            --       --           --         --           --            --            --            (210)
   Amortization of deferred
    compensation                    --       --           --         --           --            --           738              --

   Net loss                         --       --           --         --           --            --            --              --

   Comprehensive loss
                                   ---    -----    ---------    -------    ---------     ---------     ---------     -----------

Balance at December 31, 2002        --    $  --       49,797    $    50    $ 302,833     $  (2,473)    $    (304)    $        --
                                   ===    =====    =========    =======    =========     =========     =========     ===========
<page>


                                          Accumulated  Comprehensive
                                            Deficit    Income (Loss)    Total
                                          -----------  -------------   -------
Balance at January 1, 2000                $(248,675)   $   7,087
   Issuance of common stock:
     Exercise of stock options                   --                   $     592
     Employee stock purchase plan                --                          75
     Exercise of stock warrants                  --                         228
   Issuance of restricted stock                  --                          --
   Cancellation of restricted stock              --                          --
   Issuance of stock warrants                    --                          --
   Capital contribution                          --                         857
   Purchase of treasury stock                    --                         (59)
   Unrealized gains on investments               --    $     494            494
   Amortization of deferred
     compensation                                --                         638

   Net income                                23,658       23,658         23,658
                                                        --------
   Comprehensive income                                $  24,152
                                          ---------    =========      ---------
Balance at December 31, 2000              $(225,017)                  $  33,570
   Issuance of common stock:
     Acquisition of Home Account                 --                      31,957
     Private placement                           --                       7,231
     Exercise of stock options                   --                         412
     Employee stock purchase plan                --                          66
     Exercise of stock warrants                  --                          11
   Issuance of restricted stock                  --                          --
   Cancellation of restricted stock              --                          --
   2000 Home Account Incentive Plan              --                          --
   Purchase of treasury stock                    --                        (350)
   Realized gains on investments
    sold                                         --    $    (284)          (284)
   Amortization of deferred
    compensation                                 --                       1,903
   Net loss                                 (30,041)     (30,041)       (30,041)
                                                       ---------
   Comprehensive loss                                  $ (30,325)
                                          ---------    =========      ---------
Balance at December 31, 2001              $(255,058)                  $  44,475
                                          =========                   =========
Issuance of common stock:
     Exercise of stock options                   --                          15
     Employee stock purchase plan                --                          30
   Issuance of restricted stock                  --                          --
   Cancellation of restricted stock              --                          --
   2000 Home Account Incentive Plan              --                          --
   Realized gains on investments
    sold                                         --    $    (210)          (210)
   Amortization of deferred
    compensation                                 --                         738
   Net loss                                  (8,594)      (8,594)        (8,594)
                                                       ---------
   Comprehensive loss                                  $  (8,804)
                                          ---------    =========     ----------
Balance at December 31, 2002              $(263,652)                 $   36,454
                                          =========                  ==========

</table>
         See accompanying notes to consolidated  financial statements.


<PAGE>





                       INTELIDATA TECHNOLOGIES CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 2002, 2001, AND 2000
                                 (in thousands)
<table>
                                                                     2002             2001              2000
                                                                 -----------       -----------      -----------
Cash flows from operating activities
<S>                                                              <C>               <C>              <C>

     Income (loss) from continuing operations                    $   (8,594)       $  (30,041)      $   23,920
     Adjustments to reconcile income (loss) from continuing operations
     to net cash from operating activities of continuing operations:
      Realized loss (gain) on sales of investments                      748              (378)         (48,602)
      Unrealized loss on Sybase warrants                                 --               866               --
      Amortization of goodwill and intangibles                          720             4,255               --
      Depreciation and amortization                                   1,532             2,061              579
      Deferred income taxes                                              --                --              116
      Deferred compensation expense                                     738             1,903              638
      Net loss (gain) on disposal of property and equipment              23               (60)              --
      Changes in operating assets and liabilities:
        Accounts receivable                                           2,018            (2,192)            (588)
        Prepaid expenses and other current assets                       254              (501)            (182)
        Other assets                                                   (223)               --              (20)
        Accounts payable                                             (1,215)           (2,588)           1,945
        Accrued expenses                                             (2,183)             (771)           2,359
        Deferred revenue                                             (1,491)              971              398
                                                                 -----------       ----------       ----------
         Net cash used in operating activities of
         continuing operations                                       (7,673)          (26,475)         (19,437)
                                                                 ----------        ----------       ----------

     Income (loss) from discontinued operations                          --                --             (262)
     Change in net liabilities of discontinued operations              (253)             (251)           1,629
                                                                 ----------        ----------       ----------
        Net cash provided by (used in) operating activities
        of discontinued operations                                     (253)             (251)           1,367
                                                                 ----------        ----------       ----------

        Net cash used in operating activities                        (7,926)          (26,726)         (18,070)
                                                                 -----------       -----------      -----------

Cash flows from investing activities

     Proceeds from sales of investments                               1,968             6,637           38,700
     Release of cash escrow                                              --               311               --
     Proceeds from disposal of property and equipment                    --               225               --
     Purchases of property and equipment                               (389)             (921)          (3,313)
     Payments on acquisition related costs                              (50)           (1,805)              --
     Cash paid for Home Account common stock                             --              (320)              --
     Purchase of investments                                             --                --             (251)
                                                                 ----------        ----------       -----------
        Net cash provided by investing activities                     1,529             4,127           35,136
                                                                 ----------        ----------       ----------

Cash flows from financing activities

     Proceeds from the issuance of common stock                          45             7,720              895
     Capital contribution                                                --                --              857
     Payments to acquire treasury stock                                  --              (350)             (59)
                                                                 ----------        ----------       -----------
        Net cash provided by financing activities                        45             7,370            1,693
                                                                 ----------        ----------       ----------

Increase (decrease) in cash and cash equivalents                     (6,352)          (15,229)          18,759
Cash and cash equivalents, beginning of year                         12,026            27,255            8,496
                                                                 ----------        ----------       ----------
Cash and cash equivalents, end of year                           $    5,674        $   12,026       $   27,255
                                                                 ==========        ==========       ==========

</table>

 See accompanying notes to consolidated financial statements.

<PAGE>


                       INTELIDATA TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  YEARS ENDED DECEMBER 31, 2002, 2001, AND 2000

(1)      ORGANIZATION

     InteliData  Technologies   Corporation   ("InteliData"  or  the  "Company")
provides the real-time financial  processing  infrastructure to enable financial
institutions  ("FI's")  to  provide  services  over the  Internet.  The  Company
develops and markets software products and consulting services for the financial
services  industry.  InteliData  also  services  the  emerging  electronic  bill
presentment and payment  ("EBPP") market with the development of its end-to-end,
biller-to-consumer EBPP solutions.

     Our products and services are designed to assist consumers in accessing and
transacting  business  with their  FI's  electronically,  and to assist  FI's in
connecting to and transacting business with third party processors.  The Company
also serves as an Application  Service  Provider  ("ASP") by providing  Internet
hosting and service bureau solutions to FI's, including bankcard issuers.

     On January 11, 2001,  InteliData  acquired Home Account Holdings,  Inc. and
its operating subsidiary,  Home Account Network, Inc., by means of the merger of
one of the  Company's  wholly  owned  subsidiaries  with and into  Home  Account
Holdings, with Home Account Holdings surviving the merger. Home Account Holdings
is now a wholly owned  subsidiary of InteliData.  This acquisition was accounted
for as a purchase.  As a result of the  Company's  acquisition  of Home  Account
Holdings,  InteliData  now offers a suite of  UNIX-based  Internet  banking  and
electronic bill  presentment and payment products and services in an application
services provider environment.

     The Company is  incorporated in the State of Delaware and has its corporate
headquarters in Reston,  Virginia. There are operating facilities in Charleston,
South Carolina, Omaha, Nebraska, and Toledo, Ohio.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)   Principles of Consolidation - The  consolidated     financial   statements
include the  accounts of the Company  and its wholly  owned  subsidiaries  after
elimination of all material  inter-company  balances and  transactions.  Certain
reclassifications  have been  made to the prior  year  financial  statements  to
conform to the 2002 financial statement presentation.

(b)   Accounting  Estimates - The  preparation  of     financial   statements in
conformity with accounting principles generally accepted in the United States of
America  requires  management to make estimates and assumptions  that affect the
reported  amounts of assets and liabilities and disclosure of contingent  assets
and liabilities at the date of the financial statements and the reported amounts
of revenues  and  expenses  during the period.  Estimates  include,  but are not
limited to, an allowance for doubtful accounts, a provision for forward loss and
project  plans for the  completion  and  delivery of certain  solutions.  Actual
results could differ from those estimates.

(c)   Revenue Recognition - The Company supplies Internet banking and electronic
bill presentment and payment software to FI's. The Company's revenues associated
with  integrated  solutions that bundle  software  products with  customization,
installation  and  training  services are  recognized  using the  percentage  of
completion  method of accounting based on cost incurred as compared to estimated
costs at completion.

     The Company enters into contracts for its bill payment technology software.
This software does not require  significant  customization.  Upon delivery,  the
Company either recognizes revenue ratably over the contract period for contracts
where vendor specific  objective evidence (VSOE) of fair value for post contract
customer  support (PCS) does not exist or recognizes  revenue in full where VSOE
of fair value for PCS does exist.

     The Company  also  enters  into  multiple  element  arrangements.  Elements
typically include software,  consulting,  implementation  and PCS. PCS contracts
generally  require the  Company to provide  technical  support and  unspecified,
readily available software updates and upgrades to customers.  Revenue for these
multiple element arrangements is recognized when there is persuasive evidence of
an arrangement  and delivery to the customer has occurred,  the fee is fixed and
determinable,  and collectibility is considered  probable.  Advance payments are

<page>

recorded as deferred  revenue  until the  products  are  shipped,  services  are
delivered and all obligations are met. Currently, the Company does not have VSOE
of fair value for some of the elements within its multiple element arrangements.
Therefore,  all revenue under such arrangements is being recognized ratably over
the  term  of the PCS  contract.  Revenue  from  transactional  services,  which
includes hosting and ASP services, is recognized as transactions are processed.

     Emerging  Issues Task Force Abstract  Issue No. 00-3,  Application of AICPA
Statement  of  Position  97-2 to  Arrangements  that  Include  the  Right to Use
Software Stored on Another Entity's Hardware ("EITF 00-3"), provides guidance in
determining  whether or not the  provisions  of  Statement of Position No. 97-2,
Software  Revenue  Recognition  ("SOP  97-2"),  should  be  applied  to  hosting
arrangements.  The Company has some  contracts  where the customers  operate our
software in an ASP  environment.  The  customer may not take  possession  of the
software without incurring  significant  transition and infrastructure costs, as
well as potential  payments of fees to the Company for the  termination  of such
arrangements.  In cases  where  the  customer  has not  licensed  software  from
InteliData,  the customer must also purchase a license prior to having the right
to use the  software  in its  own  operating  environment,  in  addition  to the
aforementioned fees. In these situations, the Company applies the guidance under
EITF 00-3 and the Staff  Accounting  Bulletin No. 101,  Revenue  Recognition  in
Financial  Statements,  and recognizes the revenue  associated  with the license
and/or implementation fees ratably over the initial term of the contract.

     Additionally,  based on the EITF 00-3 guidance,  the Company concluded that
SOP 97-2  should not be applied to certain of its  contracts  and their  related
revenue  for  license  and  professional  services  were  recognized  under  the
percentage of completion  method.  In addition to our  developing and delivering
the solution, the Company is entitled to transaction fees based on the number of
users and  transactions.  These transaction fees are earned based on the monthly
user counts and as transactions are processed.

(d)   Cash  and  Cash  Equivalents -  The  Company considers all non-restricted,
highly liquid investments with original maturities of three months or less to be
cash  equivalents.   Cash  and  cash  equivalents  are  stated  at  cost,  which
approximates their fair market value.

(e)   Investments - The Company reports its investments in marketable securities
as  available-for-sale  with any unrealized holding gains and losses, net of the
related  income tax effect,  excluded  from  earnings and reported as a separate
component  of  stockholders'  equity  until such  gains or losses are  realized.
Dividends and interest  income are  recognized  when earned.  Realized  gains or
losses are included in earnings and are derived  using the  first-in,  first-out
method for determining cost of securities sold.

(f)   Recent  Accounting   Pronouncements  -  In December  2002,   the Financial
Accounting  Standards  Board ("FASB") issued  Statement of Financial  Accounting
Standard  ("SFAS") No. 148,  Accounting for Stock-Based  Compensation-Transition
and  Disclosure-an  amendment of FAS 123 ("SFAS 148"). SFAS 148 amends SFAS 123,
Accounting  for  Stock-Based  Compensation,  to provide  alternative  methods of
transition for an entity that voluntarily changes to the fair value based method
of  accounting  for  stock-based  employee  compensation.  It  also  amends  the
disclosure  provisions  of SFAS 123 to require  prominent  disclosure  about the
effects on reported net income of an entity's  accounting  policy decisions with
respect to stock-based employee  compensation.  SFAS 148 also amends APB Opinion
No. 28, Interim Financial  Reporting,  to require disclosure about those effects
in interim financial  information.  SFAS 148 is effective for annual and interim
periods  beginning  after  December 15, 2002.  As the Company has elected not to
change to the fair value based method of  accounting  for  stock-based  employee
compensation,  SFAS 148 will not have  any  impact  on our  financial  position,
results of operations or cash flows.

     In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with  Exit  or  Disposal  Activities  (including  Certain  Costs  Incurred  in a
Restructuring)  ("SFAS 146"), which supersedes  Emerging Issues Task Force Issue
No. 94-3,  Liability  Recognition for Certain Employee  Termination Benefits and
Other Costs to Exit an Activity ("EITF 94-3"). SFAS 146 requires  recognition of
a liability  for costs  associated  with an exit or disposal  activity  when the
liability is incurred, rather than when the entity commits to an exit plan under
EITF  94-3.  The  provisions  of SFAS 146 are  effective  for  exit or  disposal
activities that are initiated after  September 30, 2002. The  implementation  of
these  provisions  did not have a material  impact on the financial  position or
results of operations.

     In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets ("SFAS 144"), which became effective January 1,
2002.  This  statement  replaces SFAS No. 121,
<page>


Accounting for the Impairment of Long-Lived  Assets and for Long-Lived Assets to
Be Disposed Of, and some provisions of Accounting  Principles  Board Opinion No.
30,  Reporting  the  Effects  of  Disposal  of  a  Segment  of  a  Business  and
Extraordinary,  Unusual and Infrequently Occurring Events and Transactions. SFAS
144  requires  that one  accounting  model be used for  long-lived  assets to be
disposed of by sale, whether previously held and used or newly acquired. It also
broadens the  presentation of  discontinued  operations to include more disposal
transactions.  The Company's  adoption of this  pronouncement on January 1, 2002
did not have a material affect on the Company's financial  position,  results of
operations, or cash flows.

     In June 2001, the FASB issued SFAS No. 141,  Business  Combinations  ("SFAS
141"), and SFAS No. 142, Goodwill and Other Intangible Assets ("SFAS 142"). SFAS
141 requires business combinations initiated after June 30, 2001 to be accounted
for using the  purchase  method of  accounting,  and  broadens  the criteria for
recording intangible assets separate from goodwill. SFAS 142 requires the use of
an amortization and non-amortization  approach to account for purchased goodwill
and certain intangibles. Under a non-amortization approach, goodwill and certain
intangibles  are not to be  amortized  into results of  operations,  but instead
would be reviewed  for  impairment  and  written  down and charged to results of
operations  only in the  periods in which the  recorded  value of  goodwill  and
certain   intangibles  is  more  than  its  fair  value.  The  amortization  and
non-amortization  provisions  of SFAS 142 are to be applied to all  goodwill and
intangible assets acquired after June 30, 2001. The provisions of each statement
that apply to goodwill and intangible assets acquired prior to June 30, 2001 was
adopted by the Company on January 1, 2002.

     Prior to January 1, 2001, the Company considered its investment in warrants
to purchase  common stock of Sybase,  Inc.  ("Sybase") to be  available-for-sale
under the provisions of SFAS No. 115, Accounting for Certain Investments in Debt
and Equity  Securities  ("SFAS  115").  Effective  January 1, 2001,  the Company
adopted  SFAS  No.  133,  Accounting  for  Derivative  Instruments  and  Hedging
Activities ("SFAS 133"),  which establishes  accounting and reporting  standards
for  derivative  instruments  and for hedging  activities by requiring  that all
derivatives  be  recognized  in the  balance  sheet and  measured at fair value.
Effective  January 1, 2001, the Company's  investment in the Sybase warrants was
accounted for in accordance with SFAS 133.

(g)   Property  and  Equipment - Property  and   equipment  is  stated  at cost.
Depreciation  of property and  equipment is calculated  using the  straight-line
method over the estimated useful lives of the assets, which are generally in the
range of three to seven years.

(h)   Net Liabilities of  Discontinued Operations - Under various disposal plans
adopted in 1997,  1998, and 2000,  the Company has completed the  divestiture of
all of its telecommunications, interactive services businesses and the Caller ID
adjunct leasing activities, respectively.

(i)   Deferred  Revenues - Deferred  revenues  represent  unearned  revenues for
services  that have not yet been provided or where  certain  accounting  revenue
recognition criteria have not yet been met.

(j)   Income Taxes - Income taxes are accounted for in accordance with the asset
and liability method. Deferred tax assets and liabilities are recognized for the
future tax  consequences  attributable  to  differences  between  the  financial
statement  carrying  amounts  of  existing  assets  and  liabilities  and  their
respective  tax bases.  Deferred tax assets and  liabilities  are measured using
enacted  tax rates  expected  to apply to  taxable  income in the years in which
those temporary  differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.  Valuation allowances are
established  against  deferred tax assets when it is deemed,  based on available
evidence,  that it is more  likely  than not  that  some  portion  or all of the
deferred tax asset will not be realized.

(k)   Accounting   for   Stock-Based  Compensation -  The  Company  accounts for
employee stock options in accordance  with Accounting  Principles  Board Opinion
No. 25 ("APB 25"),  Accounting for Stock Issued to Employees.  Under APB 25, the
Company recognizes no compensation expense related to employee stock options, as
no options are  granted at a price  below the market  price on the day of grant.
The Company  accounts for stock options  issued to  non-employees  in accordance
with the  provisions of SFAS No. 123 ("SFAS 123"),  Accounting  for  Stock-Based
Compensation.
<page>

     SFAS 123 prescribes the  recognition of  compensation  expense based on the
fair  value of  options  on the grant  date and  allows  companies  to  continue
applying APB 25 if certain pro forma disclosures are made assuming  hypothetical
fair value method application.  The Company has elected to continue to apply the
provisions of APB 25 for options  granted to employees and provide the pro forma
disclosures pursuant to SFAS 123.

(l)   Net Income  (Loss)  Attributable  to Common Stockholders per share - Basic
earnings  (loss) per common  share  ("EPS") is computed  by dividing  net income
(loss) by the basic weighted-average  common shares outstanding during the year.
Diluted EPS  reflects  the  dilutive  effect of stock  options and stock  awards
granted to employees  under  stock-based  compensation  plans,  as well as stock
warrants.  The effects of stock  options and  warrants  were not included in the
loss per share  computations  in 2002 and 2001,  because  they  would  have been
anti-dilutive.

(m)   Fair Value of Financial Instruments - The carrying values of the Company's
financial  instruments such as cash and cash equivalents,  investments in common
stock,   warrants,   and  bonds,  accounts  receivable,   and  accounts  payable
approximate their fair values.

(n)   Concentration of  Credit  Risk - Financial  instruments  that  potentially
subject the Company to credit risk consist principally of trade receivables. The
Company sells its products  primarily to FI's in the United States.  The Company
believes  that the  concentration  of credit  risk in its trade  receivables  is
substantially  mitigated by the Company's on-going credit evaluation process and
the financial  position of the FI's that are highly regulated.  The Company does
not generally  require  collateral  from customers.  The Company  establishes an
allowance for doubtful  accounts based upon factors  surrounding the credit risk
of specific customers,  historical trends and other information.  As of December
31, 2002, the Company's top eight customers  comprised  approximately 54% of the
net accounts receivable balance.

(3)      INVESTMENTS

     On January 20, 2000, Home Financial  Network,  Inc.  ("HFN"),  a company in
which  InteliData  held  approximately  a 25%  ownership  interest,  merged with
Sybase, Inc.  ("Sybase").  InteliData  accounted for its investment in HFN using
the equity method. As of the merger date, such  investment's  carrying value was
zero.  In exchange  for its portion of  ownership  in HFN,  InteliData  received
approximately  $5,867,000 in cash and  approximately  1,770,000 shares of Sybase
stock.  The Company also held warrants to purchase HFN common stock.  As part of
the merger  agreement,  such warrants were  converted  into warrants to purchase
Sybase  common  stock.  The Company  received  640,000  "warrant  units" with an
exercise  price of $2.60 per warrant  unit.  Upon exercise of each warrant unit,
the  Company  was  entitled to receive  $1.153448  in cash and 0.34794  share of
Sybase common stock.

     As part of this merger  transaction,  an escrow account was  established to
provide Sybase  indemnity  protection  against  possible claims that might arise
against  HFN.  Approximately  133,000  shares of Sybase  common  stock  owned by
InteliData  were put in escrow,  along with  approximately  $440,000 of cash. In
March 2001, the Company received the escrow payments less approximately $129,000
for  miscellaneous  claims under the escrow provision.  During 2000,  InteliData
recognized a gain of approximately $42,604,000 on this transaction and a gain of
$5,998,000 on the subsequent disposition of some of the Sybase common stock. The
remaining  holdings of Sybase  common stock were sold during 2001 for a net gain
of $507,000. During June 2002, the Company exercised all of its 640,000 warrants
units to purchase  Sybase common stock and sold the resulting  223,000 shares of
Sybase  common  stock.  The  Company  received  net  proceeds  of  approximately
$1,718,000  and  recognized  a  realized  loss  from  sales  of  investments  of
approximately $748,000.

     Additionally,  the Company  acquired  approximately  $251,000 of marketable
securities  during 2000.  The Company  considers  all of its  investments  to be
available-for-sale  under the  provisions  of Statement of Financial  Accounting
Standards  No.  115,  Accounting  for  Certain  Investments  in Debt and  Equity
Securities, and as such, included within stockholders' equity as of December 31,
2001 is  $10,000  of  unrealized  loss on  investments  (net  of  taxes),  which
represents the decrease in the fair market value of the investment holdings from
the acquisition price to December 31, 2001. As of December 31, 2001, the Company
has sold all of these investments.

     Prior to January 1, 2001, the Company considered its investment in warrants
to purchase  common stock of Sybase,  Inc.  ("Sybase") to be  available-for-sale
under the provisions of SFAS 115. Effective January 1, 2001, the
<page>

Company adopted SFAS 133, which establishes  accounting and reporting  standards
for  derivative  instruments  and for hedging  activities by requiring  that all
derivatives be recognized in the balance sheet and measured at fair value.

     SFAS  133  requires  that all  derivative  financial  instruments,  such as
forward  currency  exchange  contracts,  interest  rate swaps and the  Company's
warrants to purchase Sybase stock, be recognized in the financial statements and
measured at fair value  regardless  of the  purpose or intent for holding  them.
Changes  in the fair  value  of  derivative  financial  instruments  are  either
recognized  periodically  in income or  stockholders'  equity (as a component of
comprehensive  income),  depending  on whether the  derivative  is being used to
hedge changes in fair value or cash flows. The Company's  holdings of the Sybase
warrants are defined as derivatives under this guidance. As discussed in Note 1,
effective January 1, 2001, the Company's  investment in the Sybase warrants were
accounted  for in  accordance  with SFAS 133.  The  Company's  adoption  of this
pronouncement,  effective January 1, 2001, did not have a material effect on the
Company's  financial  statements as of the adoption date. The Company's adoption
of  this  pronouncement,  effective  January  1,  2001,  did  not  result  in an
adjustment  for the  cumulative  effect of an  accounting  change,  because  the
carrying value reflected fair value under the previous accounting  guidance.  In
accordance with SFAS 133, the Company  recorded an unrealized loss on investment
of $866,000 for the year ended December 31, 2001.

     In accordance  with SFAS 115, the balance sheets include $0 and $210,000 of
unrealized gain on investments (net of taxes), within stockholders' equity as of
December  31,  2002  and  2001,  respectively.  As of  December  31,  2001,  the
unrealized  gain on  investments  balance  represented  the increase in the fair
market value of the Sybase holdings from the January 20, 2000 merger transaction
date to the  respective  balance  sheet  date.  As of  December  31,  2001,  the
accumulated other  comprehensive loss balance represents the changes in the fair
market value of the Sybase common stock. In accordance with SFAS 133, the change
in the fair market value of the Sybase warrants was recorded in the statement of
operations.

     As of December 31, 2001,  the warrants to purchase  Sybase common stock had
an  estimated  fair  value of  approximately  $2,676,000.  The fair value of the
warrants   described  above  was  estimated  on  December  31,  2001  using  the
Black-Scholes model using the following:  no dividend yield, expected volatility
of 60%, life of 18 months, and a risk free interest rate of 6.10% per annum.

(4)      PROPERTY AND EQUIPMENT

     Property  and  equipment  consists  of the  following  at  December  31 (in
thousands):

                                                  2002           2001
                                              ----------      ----------
             Building improvements            $      457      $      452
             Office equipment                      6,408           6,113
             Furniture and fixtures                  765             765
                                              ----------      ----------
                                                   7,630           7,330
             Accumulated depreciation             (5,076)         (3,610)
                                              -----------     ----------
                                              $    2,554      $    3,720
                                              ==========      ==========

(5)      ACCRUED EXPENSES AND OTHER LIABILITIES

     Accrued  expenses  and  other  liabilities  consists  of the  following  at
December 31 (in thousands):

                                                  2002            2001
                                              -----------      ----------
             Accrued compensation             $    1,772      $    2,563
             Provision for forward loss              120             549
             Accrued professional fees               635             600
             Accrued insurance                       250             338
             Deferred taxes                          288             292
             Other liabilities                       393           1,015
                                              -----------     ----------
                                              $    3,458      $    5,357
                                              ===========     ==========

     The provision for forward loss represents the future anticipated loss based
on the excess of the current estimates at completion of the total contract costs
over total contract revenues.

<page>


(6)      DISCONTINUED OPERATIONS

     As of December 31, 2002, the net liabilities of discontinued  operations of
$251,000  relate  to  the  telecommunications  divisions.  This  relates  to the
potential  environmental  clean  up  associated  with  InteliData's  former  New
Milford, Connecticut property. In January 2000, InteliData sold the New Milford,
Connecticut building, its only remaining asset in discontinued operations of the
telecommunications  division.  In the context of this sale, InteliData agreed to
undertake  limited  remediation of the site in accordance with applicable  state
law. The subject site is not a federal or state  Superfund  site and  InteliData
has  not  been  named  a  "potentially  responsible  party"  at  the  site.  The
remediation  plan  agreed  to  with  the  purchaser  allows  InteliData  to  use
engineering and institutional controls (e.g., deed restrictions) to minimize the
extent  and costs of the  remediation.  Further,  at the time of the sale of the
facility,   InteliData   established  a  $200,000  escrow  account  for  certain
investigation/remediation  costs.  As of December 31, 2002,  this escrow account
balance remained at $200,000.  Moreover,  InteliData has obtained  environmental
insurance to pay for remediation  costs up to $6,600,000 in excess of a retained
exposure limit of $600,000.  InteliData  estimates its liability related to this
matter and other costs to be approximately $251,000 and has recorded a liability
for that amount.

     The Company has engaged a legal firm and an  environmental  specialist firm
to  represent  InteliData  regarding  this  matter.  The timing of the  ultimate
resolution  of this matter is estimated to be from three to five years under the
Company's  proposed  compliance plan,  which involves a natural  attenuation and
periodic compliance  monitoring  approach.  Management does not believe that the
resolution  of this matter will be likely to have a material  adverse  effect on
the Company's financial condition or results of operations.

     The Company leased Caller ID adjunct units under an agreement with US West,
whereby the Company  leased Caller ID units directly to US West  customers.  The
leasing program enabled  subscribers to pay a monthly fee for the equipment.  In
1996,  US West  ceased  leasing new Caller ID adjunct  units under the  program.
Notwithstanding  the  termination of this program,  previously  existing  leases
remained  in effect.  The number of active  records in the  Company's  installed
lease  base  historically  decreased  at a rate of  approximately  30% per year.
During 2000,  US West  notified the Company that US West would no longer  permit
InteliData to include the lease billing on the US West telephone bills. As such,
InteliData has  discontinued  billing its legacy customers for Caller ID adjunct
unit  leases in the US West  telephone  service  territory,  because the cost of
individually  billing and pursuing collections for the leases would have made it
impractical  and  uneconomical  for the Company to continue  the lease  program.
Accordingly,  the  results  of  operations  from  leasing  activities  have been
reported as discontinued operations.

     During 2002 and 2001,  the Company had no statement of operations  activity
from the discontinued  operations of the telecommunications  division (which was
discontinued  in  1998)  and  the  Caller  ID  leasing  business.   Discontinued
operations  for the year ended  December 31, 2000 consisted of the following (in
thousands):

                                                                          2000
                                                                        -------
 Discontinued Operations of the Caller ID Business
 -------------------------------------------------
 Income (loss) from operations, net of income taxes                     $  (262)
 Gain (loss) on disposal, net of income taxes                                 -
                                                                        -------
 Total discontinued operations                                             (262)
                                                                        -------

 Discontinued Operations of the Telecommunications Division
 ----------------------------------------------------------
 Income (loss) from operations, net of income taxes                           -
 Gain (loss) on disposal, net of income taxes                                 -
                                                                        -------
 Total discontinued operations                                                -
                                                                        -------

 Total Discontinued Operations
 -----------------------------
 Income (loss) from operations, net of income taxes                        (262)
 Gain (loss) on disposal, net of income taxes                                 -
                                                                        -------
 Total discontinued operations                                          $  (262)
                                                                        =======
<page>

     The net revenues and loss from  discontinued  operations for the year ended
December 31, 2000 are as follows (in thousands):


                                                                         2000
                                                                        -------

 Discontinued Operations of the Caller ID Business
 -------------------------------------------------
 Net revenues                                                           $ 1,531
 Cost of revenues                                                           730
 Operating expenses                                                       1,068
                                                                        -------
 Income (loss) from operations                                             (267)
 Provision (benefit) for income taxes                                        (5)
                                                                        -------
 Income (loss) from discontinued operations                                (262)
                                                                        =======
 Discontinued Operations of the Telecommunications Division
 ----------------------------------------------------------
 Net revenues                                                           $     -
 Cost of revenues                                                             -
 Operating expenses                                                           -
                                                                        -------
 Income (loss) from operations                                                -
 Provision (benefit) for income taxes                                         -
                                                                        -------
  Income (loss) from discontinued operations                                  -
                                                                        =======

 Total Discontinued Operations
 -----------------------------
 Net revenues                                                           $ 1,531
 Cost of revenues                                                           730
 Operating expenses                                                       1,068
                                                                        -------
 Income (loss) from operations                                             (267)
 Provision (benefit) for income taxes                                        (5)
                                                                        -------
 Income (loss) from discontinued operations                                (262)
                                                                        =======

     The net  liabilities of  discontinued  operations as of December 31, are as
follows (in thousands):
                                                              2002         2001
                                                              ----         ----

 Other current liabilities                                   $  51        $ 204
 Other noncurrent liabilities                                  200          300
                                                             -----        -----
 Total                                                       $ 251        $ 504
                                                             =====        =====

Summary of Discontinued Operations

     In  2000,  the  Company  experienced  a loss of  $262,000  in  discontinued
operations  of the Caller ID  business,  which was  primarily  the result of the
Company's  write-off  of the  remaining  accounts  receivable.  All of the above
results are net of applicable income taxes.

(7)      STOCKHOLDERS' EQUITY

(a)   Issuance  and  Subsequent  Conversion of Preferred Stock and Warrants - On
July 22, 1999, the Company issued 600 shares of 4% Convertible  Preferred  Stock
and  warrants to purchase  120,000  shares of  InteliData  common  stock.  As of
December 31, 1999, all of the preferred stock was converted into common stock.

     The fair value of these 120,000 warrants,  which expire five years from the
issuance date and have an exercise price of $4.53, was estimated as of the grant
date using the  Black-Scholes  model.  The following  assumptions  were used: no
dividend yield,  expected  volatility of 129%, life of 5 years,  and a risk free
interest  rate  of  4.00%  per  annum.   Accordingly,   the  Company   allocated
approximately  $369,000 to these  warrants and the charge
<page>

was amortized over the period that the preferred  stock was  outstanding.  As of
December 31, 2002 and 2001, 101,500 warrants remained outstanding.

(b)   Stock Options and Awards - The  Company  sponsors several stock option and
award plans that cover  substantially  all employees and members of the board of
directors.  Options  and awards  granted  under such plans  typically  vest over
periods  ranging  from one to five years and  generally  expire in eight and ten
years,  although some grants  provide for vesting in annual  increments or allow
for accelerated vesting based upon reaching performance milestones.

     The Company amortizes the fair value of the stock awards (based on the fair
value of common  stock on the grant  dates  multiplied  by the  number of shares
granted) over the  respective  vesting  periods.  In 2002,  2001,  and 2000, the
Company  recorded  $841,000,   $1,484,000,   and  $578,000,   respectively,   of
compensation expense related to these awards.

     Options  granted  under the plans  allow the  purchase of stock at the fair
value of such common stock at the respective  grant dates.  Because  options are
issued with  exercise  prices equal to the fair value of the common stock on the
grant  dates,  the Company  does not record any  compensation  expense for these
options.

     A summary of stock option  activity for each of the Company's  stock option
plans is as follows:

                                     Exercise Prices
                                     ---------------
                                                                 Number
             Description        Minimum        Maximum         of Options
             -----------        -------        -------     ------------------
         January 1, 2000         $0.69         $20.38          3,173,095
           Granted               $2.59         $19.44            805,700
           Exercised             $0.81         $14.75           (258,011)
           Canceled              $0.97         $12.75           (117,009)
                                                           -------------------
         December 31, 2000       $0.69         $19.44          3,603,775
           Granted               $1.00          $5.90          1,139,834
           Exercised             $0.68          $4.91           (220,000)
           Canceled              $0.81         $18.94           (665,482)
                                                           -------------------
         December 31, 2001       $0.69         $19.44          3,858,127
           Granted               $0.60          $2.35          1,302,000
           Exercised             $1.00          $2.31            (11,825)
           Canceled              $0.80         $10.31           (914,505)
                                                           -------------------
         December 31, 2002       $0.60         $19.44          4,233,797
                                                           ===================

     The Company  applies the intrinsic  value method of  Accounting  Principles
Board Opinion No. 25 and related  interpretations  in  accounting  for its stock
plans. Had  compensation  cost been determined based on the fair value method of
Statement of Financial  Accounting  Standards No. 123, the Company's  results of
operation  would have been as follows (in thousands,  except for per share data)
for the years ended December 31:

                                                 2002           2001      2000
                                             -----------    ----------   -------
   Net income (loss)                         $ (11,858)   $ (35,346)    $ 18,836
   Basic earnings (loss) per common share    $   (0.24)   $   (0.77)    $   0.49
   Diluted earnings (loss) per common share  $   (0.24)   $   (0.77)    $   0.46

     The weighted  average fair value of options granted during 2002,  2001, and
2000 was $0.95,  $3.57,  and $6.85, per share,  respectively.  The fair value of
options  granted  was  estimated  on the date of grant  using the  Black-Scholes
option-pricing  model. For 2002, the following weighted average assumptions were
used: no dividend yield,  expected  volatility of 105%, and a risk free interest
rate of 3.82% per annum. For 2001, the following  weighted  average  assumptions
were used:  no  dividend  yield,  expected  volatility  of 92%,  and a risk free
interest  rate of 4.56% per annum.  For 2000,  the  following  weighted  average
assumptions  were used: no dividend  yield,  expected  volatility of 134%, and a
risk free interest rate of 5.16% per annum.

     The  Company has  options  outstanding  and  exercisable  in varying  price
ranges. The schedule below details the Company's options by price range:
<page>

<table>

                                                        Options Outstanding             Options Exercisable
                                                   --------------------------      --------------------------
                                                                    Weighted                        Weighted
                                                      Weighted       Average                         Average
                       Range of          Number        Average      Exercise       Number of        Exercise
                 Exercise Prices       Of Options       Life         Price          Options          Price
                 ---------------       ----------  ------------   -----------      ---------       ----------
                 <S>                  <C>          <C>            <C>              <C>             <C>
                $  0.000  - 1.000        819,249     6.5 years       $   0.78         197,249      $     1.00
                   1.001  - 1.500      1,989,085     5.4 years           1.22       1,290,085           1.21
                   1.501  - 2.000        369,000     6.9 years           1.79          81,995            1.93
                   2.001  - 2.500         44,000     5.3 years           2.29          33,750            2.27
                   2.501  - 3.000        175,558     5.4 years           2.98         151,470            2.97
                   3.001  - 5.000        481,675     6.3 years           4.19         305,940            4.14
                   5.001  -10.000        333,300     5.4 years           7.16         276,044            7.25
                  10.001  -21.375         21,930     4.2 years          15.80          21,383           15.80
                -----------------   ------------   -----------    -----------     -----------    ------------
                                       4,233,797                                    2,357,916
                                    ============                                  ===========
</table>

(c)   Employee  Stock  Purchase Plan - Under  the  Employee  Stock Purchase Plan
(approved by the Company's  stockholders in 1996),  the Company is authorized to
issue up to 500,000  shares of common stock to its full-time  employees,  nearly
all of who are eligible to participate.  Under the terms of the Plan,  employees
can  choose  each  period  to have up to twenty  percent  of their  annual  base
earnings  withheld to purchase the Company's common stock. The purchase price of
the stock is 85 percent of the lower of its beginning-of-period or end-of-period
market  price.  During the years ended  December  31, 2002,  2001,  and 2000 the
Company  issued  29,868,  28,822,  and  30,318,  shares of stock under the Plan,
respectively.

(d)   Treasury Stock - In 2001 and 2000, the Company paid $41,000 and $59,000 to
acquire  an  additional  15,632  and  9,212  shares  of its  own  common  stock,
respectively.  These  shares were  surrendered  by  employees  of the Company to
satisfy  tax-withholding  obligations  associated  with the  vesting  of certain
restricted  stock awards.  Additionally,  the Company  participated in a program
permitted  by the  Securities  and  Exchange  Commission  and Nasdaq to buy-back
100,000  shares of its common stock  shortly  after the events  surrounding  the
terrorist attacks on September 11, 2001 for a total of $309,000.  As of December
31, 2002 and 2001,  the Company had a total of 806,344 common shares in treasury
at an aggregate cost of $2,473,000.

(e)  Stockholder Rights Plan - In January 1998, the Company's Board of Directors
adopted a Stockholder  Rights Plan.  This plan was amended on May 24, 2000.  The
rights are designed to assure that all the Company's  stockholders  receive fair
and equal treatment in the event of any proposed  takeover of the Company and to
guard against partial tender offers, open market accumulations and other tactics
to gain  control  of the  Company  without  paying  all  stockholders  a control
premium.

     Terms of the Stockholder Rights Plan provide for a dividend distribution of
one right for each  share of common  stock to  holders of record at the close of
business on February 6, 1998.  Shareholders  will be able to exercise the rights
only in the event,  with certain  exceptions,  an acquiring party accumulates 20
percent  or more of the  Company's  voting  stock,  or if a party (an  acquiring
person)  announces an offer to acquire 20 percent or more without prior approval
of the Company's Board of Directors. The rights will expire on January 21, 2008.
Each right  initially  will  entitle the holder to buy one  one-thousandth  of a
share of a new series of preferred stock at a price of $42.50.

     In addition,  upon the occurrence of certain events,  holders of the rights
will be entitled to purchase  either the Company's  common stock or shares in an
acquiring person at half of market value. Further, at any time after a person or
group acquires 20 percent or more of the Company's outstanding voting stock, the
board of directors may, at its option, exchange part or all of the rights (other
than rights held by the acquiring person,  which will become void) for shares of
the Company's  common stock on a one-for-one  basis.  The rights will  therefore
cause substantial dilution to a person or group that acquires 20 percent or more
of the Company's common stock on terms not approved by the board.

(f)   Stock  Warrants - In 2000,  the Company entered into a five-year agreement
with an unrelated  party,  whereby the Company issued warrants to this entity in
exchange for the entity's  becoming a premier  reference  site

<page>

for InteliData's  application  services provider ("ASP") offering.  As a premier
reference  site,  the entity would make its facility  and  personnel  reasonably
accessible  for  InteliData,   InteliData's  potential  clients,  analysts,  and
industry  publication  reporters,  in order to demonstrate  or answer  questions
regarding an ASP environment and  InteliData's  capabilities.  On June 30, 2000,
InteliData issued five-year,  fully-vested  warrants to purchase 50,000 share of
InteliData  common stock at an exercise price of $4.75 per share. The fair value
of these  warrants was  estimated  as of the grant date using the  Black-Scholes
model.  The  following  assumptions  were  used:  no  dividend  yield,  expected
volatility of 143%, life of 2 years,  and a risk free interest rate of 6.44% per
annum.  Accordingly,  the Company  recorded  approximately  $419,000 of deferred
compensation  that is being amortized over the term of this  agreement.  For the
years ended  December 31, 2002 and 2001, the expenses  charged  related to these
warrants were $80,000. As of December 31, 2002, all of these warrants were still
outstanding.

(g)  Private Placement and Warrants - In November and December 2001, the Company
closed private placement sales of an aggregate of 2,862,727 shares of its common
stock for a price of $2.75 per share, and warrants  exercisable for the purchase
of  1,431,364  shares of its common  stock,  at an  exercise  price of $2.75 per
share, resulting in a gross proceeds of approximately $7,872,500.  The placement
agent in the transaction,  Stonegate Securities, received approximately $472,350
in commissions  and warrants  exercisable  for the purchase of 286,273 shares of
InteliData's  common  stock,  at an  exercise  price of $2.75 per  share.  As of
December 31, 2002, all of these warrants were still outstanding.

(8)      EMPLOYEE 401(k) PLAN

     The Company  sponsors a defined  contribution  plan ("Plan") that qualifies
for  tax  treatment   under  Section  401(a)  of  the  Internal   Revenue  Code.
Participation  in the Plan is available to employees who are at least twenty-one
years of age.  Company  contributions  to the Plan are based on a percentage  of
employee contributions.  The Company contributed $118,000, $153,000, and $89,000
in 2002, 2001, and 2000, respectively.  The Company also pays for administrative
expenses incurred by the Plan.

(9)      INCOME TAXES

     A reconciliation of income taxes computed at the statutory federal tax rate
on earnings  (loss) before income taxes (from  continuing  operations) to actual
income taxes for the years ended December 31, is as follows (in thousands):

                                                2002          2001       2000
                                              ---------    ---------   ---------
   Income tax liability (benefit) computed
     at the statutory rate                    $  (3,056)   $ (10,570)  $  8,543
   Other                                         (1,207)       1,264         85
   Change in valuation allowance                  4,126        9,146     (8,140)
                                              ---------    ---------   ---------
        Income taxes                          $    (137)   $    (160)  $    488
                                              =========    =========   =========

     The current  federal income tax benefit of $137,000  represents a refund of
taxes paid in 2002 as a result of tax  legislation  enacted during 2002. The tax
effects of temporary  differences that give rise to significant  portions of the
deferred  tax assets and  liabilities  at  December  31,  2002 and 2001,  are as
follows (in thousands):

                                                          2002         2001
                                                          ----       --------
     Net operating loss carryforwards                  $  70,153     $  67,501
     Basis differences in investments                         --          (936)
     Basis differences in intangibles                     (3,399)       (3,549)
     Accounts receivable                                     112           365
     Property and equipment                                   44          (157)
     General business credit carryforward                    489           489
     Other                                                   767           190
     Alternative minimum tax credit carryforward              60           197
                                                       ---------     ---------
     Total gross deferred tax asset                       68,226        64,100
          Valuation allowance                            (68,226)      (64,100)
                                                       ---------     ---------
              Net deferred tax assets                  $      --     $      --
                                                       =========     =========

     The net  changes  in the total  valuation  allowance  for the  years  ended
December 31, 2002,  2001, and 2000,  were an increase  (decrease) of $4,126,000,
$30,020,000, and $(8,140,000), respectively. A valuation allowance was

<page>

established  for deferred tax assets as of December 31, 2002 and 2001 because it
was deemed,  based on available  evidence,  that it is more likely than not that
all of the deferred tax asset will not be realized.

     At December 31, 2002, the Company had net operating loss  carryforwards for
federal income tax purposes of approximately $200 million,  which expire in 2008
through 2022,  general  business tax credits of  approximately  $489,000,  which
expire in 2005 through 2010, and an alternative  minimum tax credit carryforward
of approximately  $60,000, which may be carried forward indefinitely and used to
offset  future  regular  taxable  income.  Approximately  $45 million of the net
operating  loss were  incurred by Home Account prior to its  acquisition  by the
Company and are  subject to an annual  limitation  pursuant to Internal  Revenue
Code Section 382 as a result of cumulative changes in ownership of more than 50%
in 2001.

 (10)    COMMITMENTS AND CONTINGENCIES

(a)  Leases - The  Company leases facilities and equipment under cancelable and
noncancelable operating lease agreements. The facility leases are for terms from
one to four years. Rent expense was $1,369,000, $1,436,000, and $735,000 for the
years ended December 31, 2002, 2001, and 2000, respectively.

     Future  minimum lease payments under  noncancelable  operating  leases with
initial or remaining  terms in excess of one year at December 31, 2002,  were as
follows (in thousands):

          Years Ending December 31,

                     2003                                      $         973
                     2004                                                809
                     2005                                                411
                     2006                                                330
                     2007 and thereafter                                  --
                                                                ------------
                         Total minimum lease payments          $       2,523
                                                               =============

(b)  Patent  Matters  -  The  Company  does not believe  that its  products  and
services  infringe  on the  rights of third  parties.  From time to time,  third
parties assert infringement claims against InteliData. There can be no assurance
that any such  assertion  will not result in costly  litigation  or require  the
Company to cease  using,  or obtain a license to use,  intellectual  property of
such parties.

(c)  Litigation  -  The Company  is   not  currently  a  party to  any  material
litigation.  From time to time,  the  Company is a party to  routine  litigation
incidental to its business.  Management  does not believe that the resolution of
any or all of such routine  litigation will be likely to have a material adverse
effect on the Company's financial condition or results of operations.

 (11)    VALUATION AND QUALIFYING ACCOUNTS

     The components of significant  valuation and qualifying accounts associated
with accounts  receivable for the years ended December 31, 2002 and 2001 were as
follows (in thousands):

      Balance, January 1, 2001                                 $        718
         Recoveries                                                     150
         Charged to costs and expenses                                1,090
         Write-offs                                                    (914)
                                                               -------------
      Balance, December 31, 2001                                      1,044
         Recoveries                                                     252
         Charged to costs and expenses                                 (340)
         Write-offs                                                    (635)
                                                               -------------
      Balance, December 31, 2002                               $        321
                                                               =============

     As part of the Home  Account  acquisition  in 2001,  the  Company  acquired
certain accounts  receivables that were outstanding as of the acquisition  date.
The Company pursued collection efforts,  but ultimately  determined that some of
these  accounts  were  uncollectible.  Such doubtful  accounts  related to these
acquired assets cannot be

<page>

adjusted as part of the purchase price  allocation,  so the bad debt expense has
been recognized in operations in 2001.  During 2001, the Company  recorded costs
associated with these particular sets of uncollectible accounts in the amount of
$1,090,000 and began to write off some accounts.  Additionally in 2002 and 2001,
the Company  wrote off some  previously  reserved  legacy  InteliData  accounts.
During 2002, the Company experienced improved cash collection on some previously
reserved accounts and an account that had been written off. As a result of these
collection efforts and the resulting cash receipts,  the Company reduced its bad
debt  expense  in  2002  by  approximately  $340,000  to  reflect  the  positive
developments.

(12)     GOODWILL AND OTHER INTANGIBLES

     In June 2001, the Financial  Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141, Business  Combinations ("SFAS 141"), and
SFAS No. 142,  Goodwill  and Other  Intangible  Assets  ("SFAS  142").  SFAS 141
requires business combinations initiated after June 30, 2001 to be accounted for
using the purchase method of accounting, and broadens the criteria for recording
intangible  assets  separate  from  goodwill.  SFAS 142  requires  the use of an
amortization and non-amortization approach to account for purchased goodwill and
certain  intangibles.  Under a non-amortization  approach,  goodwill and certain
intangibles  are not to be  amortized  into results of  operations,  but instead
would be reviewed  for  impairment  and  written  down and charged to results of
operations  only in the  periods in which the  recorded  value of  goodwill  and
certain   intangibles  is  more  than  its  fair  value.  The  amortization  and
non-amortization  provisions  of SFAS 142 are to be applied to all  goodwill and
intangible assets acquired after June 30, 2001. The provisions of each statement
that apply to goodwill and intangible assets acquired prior to June 30, 2001 was
adopted by the Company on January 1, 2002.

     As of January 1, 2002,  in  accordance  with SFAS 142,  the Company  ceased
recognizing  amortization  expense  on  goodwill  and  the  assembled  workforce
intangible asset, and the assembled workforce intangible asset was combined with
goodwill for financial accounting and reporting.  Accordingly,  the goodwill and
intangible asset consist of the following components (in thousands):



      As of December 31, 2002:          Goodwill      Intangible        Total
                                        --------      ----------        -----
          Gross carrying amount       $   29,793      $    7,200       $ 36,993
          Accumulated amortization        (3,555)         (1,420)        (4,975)
                                      -----------     -----------      ---------
          Net                         $   26,238      $    5,780       $ 32,018
                                      ==========      ==========       ========

      As of December 31, 2001:          Goodwill      Intangible        Total
                                        --------      ----------        -----
          Gross carrying amount       $   25,593      $   11,400       $ 36,993
          Accumulated amortization        (3,044)         (1,211)        (4,255)
                                      -----------     ----------       --------
          Net                         $   22,549      $   10,189       $ 32,738
                                      ==========      ==========       ========

     The   estimated   aggregate    amortization    expense   related   to   the
contracts/relationships  intangible  asset for each of the next five years is as
follows (in thousands):

              Year ending December 31:                                 Expense
                                                                       --------
                  2003                                                 $    720
                  2004                                                      720
                  2005                                                      720
                  2006                                                      720
                  2007                                                      720

     In  accordance  with SFAS 142, the Company had six months from adoption (up
until June 30, 2002) to complete the initial test for  impairment  as of January
1, 2002,  the  adoption  date of SFAS 142.  In  accordance  with the  transition
provisions  of SFAS  No.  142,  the  Company  conducted  the  first  step of the
impairment  tests as described above. The Company assessed the fair value of its
only reporting unit by considering its projected cash flows,  comparable company
valuations,  and recent  purchase  prices paid for entities within our industry.
Given consideration of these factors,  the Company concluded that the fair value
of the  reporting  unit  exceeded  the  carrying  amount of its net assets.  The
Company is required to perform  reviews for  impairment  in future  periods,  at
least  annually,  that may  result in  future  periodic  write-downs.  Tests for
impairment between annual tests may be required if events occur or circumstances
change that would more likely than not reduce the fair value of the net carrying

<page>

amount.  As of  December  31,  2002,  the Company is not aware of such events or
circumstances that could indicate potential impairment.

     The adoption of this accounting  standard reduced the amortization  expense
associated  with goodwill by  $3,555,000 to $0 in 2002 from  $3,555,000 in 2001.
The  amortization  of certain  intangibles  continues at an  annualized  rate of
$720,000 for 2002 and 2001.  The following sets forth a  reconciliation  of loss
from continuing operations and earnings per share information for the year ended
December 31, 2002 and 2001, as adjusted for the  non-amortization  provisions of
SFAS 142 (in thousands, except per share data):

<table>
                                                                                   2002               2001
                                                                                -----------      -----------
<S>                                                                             <C>              <C>
     Reported loss from continuing operations                                   $  (8,594)       $  (30,041)
     Add:  Goodwill amortization, net of taxes                                         --             3,555
                                                                                -----------      -----------

     Adjusted loss from continuing operations                                      (8,594)          (26,486)
     Reported income (loss) discontinued operations                                    --                --
                                                                                -----------      -----------

     Adjusted net loss                                                          $  (8,594)       $  (26,486)
                                                                                ===========      ===========

     Basic and diluted loss per common share
         Adjusted loss from continuing operations                               $   (0.18)       $    (0.58)
         Income (loss) from discontinued operations                                  0.00              0.00
                                                                                -----------      -----------
         Adjusted net loss                                                      $   (0.18)       $    (0.58)
                                                                                ===========      ===========

     Basic and diluted weighted-average common shares outstanding                  48,869            45,897
                                                                                ===========      ===========

</table>

(13)     ACQUISITION OF HOME ACCOUNT

     On January 11,  2001,  the Company  acquired  Home Account  Holdings,  Inc.
("Home  Account")  and its operating  subsidiary,  Home Account  Network,  Inc.,
pursuant to an agreement and plan of merger whereby a wholly-owned subsidiary of
the Company merged with and into Home Account,  with Home Account  surviving the
merger as the Company's wholly-owned subsidiary.  This acquisition was accounted
for  as a  purchase.  Following  the  Company's  acquisition  of  Home  Account,
InteliData provides a suite of UNIX-based electronic banking and electronic bill
presentment  and  payment  ("EBPP")  products  and  services  in an  application
services provider ("ASP") environment.

     Pursuant to the merger  agreement,  the Company  purchased Home Account for
approximately  $320,000 in cash and 6,900,000 shares of Company common stock and
the merger was accounted for as a purchase. The purchase price was the result of
an arm's-length  negotiation between the Company and Home Account,  based on the
Company's  evaluation  of the  fair  market  value of Home  Account's  business,
including its  revenues.  The value of the shares issued as part of the purchase
consideration of approximately  $29,011,000 was measured based on the average of
the market price of the issued  common stock a few days before and after January
11,  2001 - the date that the merger  transaction  was agreed to and  announced.
This  amount  coupled  with the  liability  associated  with  the  Home  Account
Incentive Plan of $2,946,000  (see below) resulted in an increase of $31,957,000
in the  accompanying  statement of changes in  stockholders'  equity.  The total
purchase  price of  approximately  $31,186,000  consisted of the  following  (in
thousands):

         Consideration and acquisition costs:
                  Value of shares issued                  $    29,011
                  Cash consideration                              320
                  Acquisition costs                             1,855
                                                          -----------
                                                          $    31,186

     The assets acquired and liabilities assumed were recorded at estimated fair
values as determined by the Company's management based on information  currently
available and on current  assumptions as to future  operations.  The Company has
obtained independent  professional services for the purchase price allocation to
the fair values of the acquired  property,  plant and equipment,  and identified
intangible assets, and their remaining useful lives and has
<page>

completed  its review and  determination  of the fair values of the other assets
acquired  and  liabilities  assumed.  A  summary  of  the  assets  acquired  and
liabilities assumed in the acquisition follows (in thousands):

  Allocation of purchase price:
     Current assets                                                 $     1,562
     Property, plant and equipment                                        1,743
     Intangibles (straight-line amortization, 8 to 10 years)             11,400
     Liabilities assumed and other                                       (4,344)
     Liabilities associated with Home Account Incentive Plan             (2,946)
     Acquisition integration liabilities                                 (1,822)
     Goodwill (straight-line amortization, 8 years)                      25,593
                                                                    ------------
                                                                    $    31,186
                                                                    ------------

     Intangible assets consist of $4,200,000 for assembled  workforce (which has
an   estimated    useful   life   of   eight   years)   and    $7,200,000    for
contracts/relationships  (which  has an  estimated  useful  life of ten  years).
Assembled  workforce  was  determined  based  on  the  number  of  Home  Account
employees, function, compensation,  fringe benefits, recruiting costs, training,
and other factors.  Contracts/relationships  was determined based on the history
of low  attrition,  the  high  cost  of  switching,  market  prices,  forecasted
revenues, evaluation of competitors, and other factors.

     As a  result  of the  acquisition  of  Home  Account,  InteliData  incurred
acquisition  expenses  for  costs to exit  certain  activities  at Home  Account
locations  and to  involuntarily  terminate  employees of the acquired  company.
Generally  accepted   accounting   principles  require  that  these  acquisition
integration  expenses,  which are not  associated  with the generation of future
revenues, have no future economic benefit and which meet certain other criteria,
be reflected as assumed  liabilities  in the allocation of the purchase price to
the  net  assets  acquired.  The  components  of  the  acquisition   integration
liabilities  balance of $1,822,000 included in the purchase price allocation are
approximately  $1,010,000  for lease  costs  for the now  vacated  Home  Account
headquarters  in  Emeryville,  California,  and  $822,000  related to  workforce
reduction.  As of December  31, 2002,  the Company had a remaining  liability of
$589,000  associated  with such lease  costs,  of which  $252,000 is current and
$337,000 is noncurrent.

     The  workforce  reductions  focused  on three key  areas:  1)  streamlining
development  efforts,  2)  eliminating  redundant  administrative  overhead  and
support   activities,   and   3)   restructuring   and   repositioning   of  the
sales/marketing   and  research  and  development   organizations  to  eliminate
redundancies in these activities. As of December 31, 2001, 87 positions had been
terminated  and  approximately  $822,000 had been paid.  No  additional  changes
occurred during the year ended December 31, 2002 and the Company does not expect
future adjustments related to this purchase price allocation.

     The following pro forma financial information presents the combined results
of operations of InteliData Technologies  Corporation and Home Account Holdings,
Inc.  and gives effect to the  acquisition  of Home Account as if it occurred on
January 1, 2000. The pro forma  condensed  combined  financial  information  set
forth below reflects certain adjustments, including among others, adjustments to
reflect  the  amortization  of the  goodwill  associated  with the  acquisition.
However,  pro forma results do not include any anticipated cost savings. The pro
forma condensed combined financial  information for the years ended December 31,
2001  and  2000,  set  forth  below,  neither  purports  to  represent  what the
consolidated  results of operations or financial  condition of InteliData  would
actually have been if the Home Account  acquisition had in fact occurred on such
date nor projects the future  consolidated  results of  operations  or financial
condition of InteliData (in thousands, except for per share data):

                                                         2001           2000
                                                      ---------       ---------
         Revenue                                      $  18,296       $  13,551
         Net (loss) income                              (33,683)          1,345
         Basic net (loss) income per share                (0.73)           0.03
         Diluted net (loss) income per share              (0.73)           0.03

     Pro forma  basic  net  income  (loss)  per  share  was  computed  using the
weighted-average number of shares of common stock outstanding after the issuance
of InteliData's  common stock to acquire the outstanding shares of Home Account.
Pro forma  diluted net income (loss) per share also gives effect to any dilutive
options.  Options and  warrants are excluded  from the  computation  during loss
periods, as their effect is anti-dilutive.

<page>


(14)     HOME ACCOUNT INCENTIVE PLAN

     In 2000,  Home Account  approved the 2000  Incentive  Plan to encourage the
retention  of  certain  officers  of Home  Account  through a change of  control
transaction,  and after such a  transaction  to the extent,  up to one year,  as
desired by the acquirer.  Upon  acquisition of Home Account by an acquirer,  the
2000  Incentive  Plan  provided  for the  granting  to plan  participants  of an
aggregate of 15% of the net amount of the merger consideration allocable to Home
Account's preferred  stockholders after payment of the debt preference and other
expenses  associated  with a transaction.  Under the InteliData and Home Account
merger  transaction,  this  incentive  plan is payable in the form of InteliData
common  stock  and such  payments  are to be made by the  group of  former  Home
Account  preferred  stockholders  (who are collectively  considered a "principal
stockholder").  Two-thirds of the 2000 Incentive Plan  allocation  vested on the
transaction  closing  date  and  represent  a  pre-acquisition  expense  to Home
Account.  In  connection  with the merger  transaction,  the  Company  agreed to
advance  the  participants  funds to pay for their tax  withholding  obligations
associated with the two-thirds  portion.  The original  principal amount of this
receivable  balance was  approximately  $1,116,000.  The shares allocable to the
participants  were  placed in an escrow  account  and are  released  to the Home
Account Stockholders' Representative in accordance with the Merger Consideration
Escrow Agreement.  As of December 31, 2001, the remaining outstanding receivable
balance,  including interest, was approximately $466,000 and is reflected in the
"Other  receivable"  balance.  On February 4, 2002,  the  remaining  outstanding
balance plus additional interest accrued was paid in full.

     The remaining  one-third of the participants'  allocation vested on January
11, 2002 (one year from the  transaction  closing  date).  All forfeited  shares
reverted to the former  preferred  stockholders  of Home Account.  In connection
with the 2000  Incentive  Plan  allocation,  the deferred  compensation  for the
one-third portion became fixed and measurable on April 1, 2002 at $155,000 based
on $1.20 (the closing price of the Company's common stock at April 1, 2002). The
difference  between this amount and the recognized  expense in the prior periods
was recorded as a $183,000  reduction of expense during 2002. For the year ended
December 31, 2001, the Company  recorded  compensation  expense of approximately
$339,000.

(15)     EARNINGS PER SHARE

     Basic  earnings   (loss)  per  share  ("EPS")  are  calculated   using  the
weighted-average  number  of  shares of common  stock  outstanding  during  each
period.  Diluted  EPS  reflect the  dilutive  effect of stock  options and stock
awards granted to employees  under  stock-based  compensation  plans, as well as
stock warrants.  Basic and diluted  earnings per share are calculated as follows
(in thousands, except per share data):
<table>

                                                                                Years Ended December 31,
                                                                         -------------------------------------
                                                                             2002          2001          2000
                                                                         ----------    ----------      --------
<S>                                                                      <C>           <C>             <C>

Basic EPS
Income (loss) from continuing operations                                  $ (8,594)    $ (30,041)      $ 23,920
Weighted-average common shares outstanding                                  48,869        45,897         38,237
                                                                         ----------    ----------      --------
Basic earnings (loss) per share from continuing operations                $  (0.18)    $   (0.65)      $   0.63
                                                                         ==========    ==========      ========
Diluted EPS
Income (loss) from continuing operations                                  $ (8,594)    $ (30,041)      $ 23,920
                                                                         ----------    ----------      --------

Weighted-average common shares outstanding                                  48,869        45,897         38,237
Effect of dilutive securities:
Stock options and awards                                                         -             -          2,551
Stock warrants                                                                   -             -             55
                                                                         ----------    ----------      --------
Weighted-average dilutive common shares outstanding                         48,869        45,897         40,483
                                                                         ----------    ----------      --------
Diluted earnings (loss) per common share
from continuing operations                                                $  (0.18)    $   (0.65)      $   0.59
                                                                         ==========    ==========      ========
</table>
<page>

     Options to purchase  869,000  shares of common stock at a range of $4.25 to
$19.44 were outstanding during 2000, but were not included in the computation of
diluted  earnings per share,  because the options'  exercise prices were greater
than the average market price of the common share.

(16)     UNAUDITED QUARTERLY FINANCIAL DATA

     The  results of the  Company's  quarterly  operations  for the years  ended
December 31, 2002 and 2001 are set forth in the following  table (in  thousands,
except per share data):
<table>

                                                 First        Second          Third         Fourth         Year
<S>                                          <C>           <C>           <C>             <C>           <C>
                                             -----------   -----------   ------------   -----------    ----------
2002
----
Revenues                                     $     4,708    $     5,461    $    6,010    $    5,316     $   21,495
Cost of revenues                                   1,959          2,079         2,376         2,060          8,474
Operating expenses                                 6,066          6,151         5,281         3,605         21,103
                                             -----------    ------------   ----------    ----------     ----------
Operating loss                                    (3,317)        (2,769)       (1,647)         (349)        (8,082)
Other income (expense)                               391         (1,084)           32            12           (649)
Provision (benefit) for income taxes                   -              -             -          (137)          (137)
                                             -----------    -----------    ----------    -----------     ---------
Income (loss) from continuing operations          (2,926)        (3,853)       (1,615)         (200)        (8,594)
Income (loss) from discontinued operations             -              -             -             -              -
                                             -----------    -----------    ----------    -----------     ---------
Net income (loss)                            $    (2,926)   $    (3,853)   $   (1,615)   $     (200)     $  (8,594)
                                             ============   ============   ==========    ===========     =========

Basic and diluted earnings per common share

  Income (loss) from continuing operations   $     (0.06)   $    (0.08)    $    (0.03)   $    (0.00)     $   (0.18)
  Income (loss) from discontinued operations        0.00          0.00           0.00          0.00           0.00
                                             -----------    -----------    ----------    ----------      ---------
  Net income (loss)                          $     (0.06)   $    (0.08)    $    (0.03)   $    (0.00)     $   (0.18)
                                             ============   ===========    ===========   ===========     =========

Weighted-average common shares outstanding

  Basic and diluted                               48,494         48,501        48,815        48,840         48,869
                                             ===========    ===========    ==========    ==========     ==========

2001

Revenues                                     $     3,151    $     4,355    $    5,307    $    5,483     $   18,296
Cost of revenues                                   1,902          2,117         2,421         2,570          9,010
Operating expenses                                11,048         10,908        10,366         7,302         39,624
                                             -----------    ------------   ----------    ----------     ----------
Operating loss                                    (9,799)        (8,670)       (7,480)       (4,389)       (30,338)
Other income (expense)                               522            375        (1,475)          715            137
Provision (benefit) for income taxes                   -              -          (160)            -           (160)
                                             -----------    -----------    -----------   ----------     ----------
Income (loss) from continuing operations          (9,277)        (8,295)       (8,795)       (3,674)       (30,041)
Income (loss) from discontinued operations             -              -            -              -              -
                                             -----------    -----------    -----------   ----------     ----------
Net income (loss)                            $    (9,277)   $    (8,295)   $   (8,795)   $   (3,674)    $  (30,041)
                                             ============   ============   ===========   ==========     ==========

Basic and diluted earnings per common share

  Income (loss) from continuing operations   $     (0.21)   $    (0.18)    $    (0.19)   $    (0.08)    $    (0.65)
  Income (loss) from discontinued operations        0.00          0.00           0.00          0.00           0.00
                                             -----------    -----------    ----------    ----------     ----------
  Net income (loss)                          $     (0.21)   $    (0.18)    $    (0.19)   $    (0.08)    $    (0.65)
                                             ============   ===========    ===========   ==========     ==========

Weighted-average common shares outstanding

  Basic and diluted                               44,580        45,249         45,521        46,866         45,987
                                             ===========    ===========    ==========    ==========     ==========

</table>
                                   * * * * * *

<PAGE>


                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
InteliData Technologies Corporation
Reston, Virginia

     We have audited the accompanying  consolidated balance sheets of InteliData
Technologies  Corporation  and  subsidiaries  (the "Company") as of December 31,
2002 and 2001, and the related consolidated statements of operations, changes in
stockholders'  equity,  and cash flows for each of the three years in the period
ended  December  31,  2002.  These  consolidated  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in the United States of America.  Those standards  require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

     In our opinion,  such consolidated  financial statements present fairly, in
all  material  respects,  the  financial  position  of  InteliData  Technologies
Corporation  and  subsidiaries as of December 31, 2002 and 2001, and the results
of their  operations  and their  cash  flows for each of the three  years in the
period  ended  December 31,  2002,  in  conformity  with  accounting  principles
generally accepted in the United States of America.

     As  discussed  in  Note 2 to the  consolidated  financial  statements,  the
Company adopted  Statement of Financial  Accounting  Standards No. 142, Goodwill
and Other Intangible Assets, effective January 1, 2002.

/s/ Deloitte & Touche LLP

McLean, Virginia
February 21, 2003


<PAGE>


ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
--------------------------------------------------------------
              ACCOUNTING AND FINANCIAL DISCLOSURE
              -----------------------------------

              None.

PART III
========

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
-------------------------------------------------------------

     The Company  incorporates  herein by reference the  information  concerning
directors contained in its Proxy Statement for its 2003 Stockholders' Meeting to
be filed within 120 days after the end of the  Company's  fiscal year (the "2003
Proxy Statement").

     Beneficial  Ownership  Reporting  -  The  Company  incorporates  herein  by
reference the  information  required by Item 405 of Regulation  S-K contained in
its 2003 Proxy Statement.

ITEM 11. EXECUTIVE COMPENSATION
-------------------------------

     The Company  incorporates  herein by reference the  information  concerning
executive compensation contained in the 2003 Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
-----------------------------------------------------------------------

     The Company  incorporates  herein by reference the  information  concerning
security ownership of certain beneficial owners and management  contained in the
2003 Proxy Statement.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
<table>

                                Number of securities        Weighted average
                               issued upon exercise        exercise price of       Number of securities
                               be of outstanding options  outstanding options       remaining available
                                warrants and rights       warrants and rights        forfuture issuance
                               -----------------------   --------------------    ------------------------
<S>                            <C>                       <C>                     <C>
Equity compensation plans
approved by stockholders                3,033,797                $ 2.51                   604,995
Equity compensation plans not
approved by stockhold                   3,069,137                $ 2.24                         -
                               -----------------------   --------------------    ------------------------
Total                                   6,102,934                $ 2.38                   604,995
                               =======================   ====================    ========================
</table>

     The equity  compensation  plans not  approved by  stockholders  consists of
three  groups  of  warrants  that are  described  in Note 7 to the  consolidated
financial  statements  included in this Annual  Report on Form 10-K and the 1998
Chief Executive Officer's Plan.

     The 1998 Chief Executive  Officer's Plan (the "Plan") was adopted to induce
Alfred S.  Dominick,  Jr. to become the  Company's  Chief  Executive  Officer in
August 1998. The Plan provided for the grant of an option to purchase  1,200,000
shares of the  Company's  common  stock at an  exercise  price of $1.22.  Of the
option grant,  200,000 vested in one-third  increments over a three-year  period
from August 1998 to August 2001. Another 500,000 vested based on the achievement
of specified  trading  prices for the  Company's  common  stock.  The  remaining
500,000 will vest subject to Mr.  Dominick's  continued  employment and upon the
earlier of i) the  Company's  common  stock  trading  above $25.00 per share for
sixty consecutive days, or ii) April 15, 2008.

     Additionally,  the Company has no i) individual options, rights or warrants
assumed in any merger, acquisition or consolidation transaction;  ii) securities
available for future issuance under a compensation plan other

<page>

than upon exercise of options,  rights or warrants; and iii) equity compensation
plan that contains a formula for calculating the number of securities  available
for issuance under the plan.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------------------------------------------------------

     The Company  incorporates  herein by reference the  information  concerning
certain  relationships  and  related  transactions  contained  in the 2003 Proxy
Statement.

ITEM 14. CONTROLS AND PROCEDURES
--------------------------------

(a)  EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

     The Company's chief executive  officer and chief financial  officer,  after
evaluating  the  effectiveness  of  the  Company's   "disclosure   controls  and
procedures"  (as defined in the Securities  Exchange Act of 1934 Rules 13a-14(c)
and  15-d-14(c))  as of a date  ("Evaluation  Date")  within 90 days  before the
filing  of this  annual  report  on Form  10-K,  have  concluded  that as of the
Evaluation Date, the Company's  disclosure controls and procedures were adequate
and designed to ensure that material information relating to the Company and its
consolidated  subsidiaries  would be made known to them by others  within  those
entities.

(b)  CHANGE IN INTERNAL CONTROLS

     There were no  significant  changes  in our  internal  controls  or, to our
knowledge,  in other  factors  that could  significantly  affect our  disclosure
controls and procedures subsequent to the Evaluation Date.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
-------------------------------------------------------------------------

(a)  DOCUMENTS FILED AS PART OF THIS REPORT

     1. FINANCIAL STATEMENTS - See Item 8 of this Report

     2. FINANCIAL STATEMENT SCHEDULES - None

     3. EXHIBITS

(b)  REPORTS ON FORM 8-K

     The  Company  filed a Current  Report on Form 8-K with the  Securities  and
Exchange  Commission  on January 23,  2003,  relating to the receipt of a notice
from Nasdaq  dated  January  22,  2003,  that  indicated  the  Company  regained
compliance with Marketplace Rule 4450(a)(5),  which requires listed companies to
maintain a minimum bid price of $1.00 per share or greater.

     The  Company  filed a Current  Report on Form 8-K with the  Securities  and
Exchange  Commission  on October 30,  2002,  relating to the receipt of a notice
from  Nasdaq  dated  October 29,  2002,  that  indicated  the Company was not in
compliance  with Nasdaq's  Marketplace  Rule  4450(a)(5),  because the Company's
common  stock had failed to maintain  the minimum bid price of $1.00  during the
past 30 consecutive trading days. The Company was granted until January 27, 2003
to regain compliance with Marketplace Rule 4450(a)(5).  Compliance with the rule
is determined by the Nasdaq staff,  but generally  requires that the closing bid
price of the  Company's  common  stock be at least  $1.00 for a  minimum  of ten
consecutive trading days.


<PAGE>


(c) EXHIBITS

Exhibit No.                           Description
-----------                           -----------

     3.1  Amended and Restated Certificate of Incorporation, dated June 14, 2002
          (Incorporated  herein by  reference  to Exhibit  3.1 to the  Company's
          Report on Form 10-Q for the quarter ended June 30, 2002).

     3.2  Bylaws of InteliData Technologies Corporation. (Incorporated herein by
          reference  to  Appendix  V to the Joint  Proxy  Statement  /Prospectus
          included  in the  Registration  Statement  on Form S-4 filed  with the
          Commission on August 29, 1996, as amended, File Number 333-11081).

     4.1  Rights  Agreement,  dated as of January 21,  1998,  by and between the
          Company and American Stock Transfer & Trust Company,  as Rights Agent.
          (Incorporated  herein by  reference to the  Registration  Statement on
          Form 8-A filed with the Commission on January 26, 1998).

    4.1.1 Amendment No. 1 dated May 24, 2000 to the Rights  Agreement,  dated as
          of January 21,  1998,  by and between the Company and  American  Stock
          Transfer & Trust  Company,  as Rights Agent.  (Incorporated  herein by
          reference  to  the  Current  Report  on  Form  8-A/A  filed  with  the
          Commission on July 6, 2000).

     4.2  Form of  Subscription  Agreement,  by and  among the  Company  and the
          selling stockholders,  including as Appendix I thereto, a Registration
          Rights Agreement.  (Incorporated  herein by reference to the Company's
          Registration Statement on Form S-3, File Number 333-75146).

     4.3  Form of Warrant Certificate.  (Incorporated herein by reference to the
          Company's Registration Statement on Form S-3, File Number 333-75146).

     10.1 Description  of  InteliData  Technologies   Corporation  Merger  Stock
          Compensation Plan.  (Incorporated herein by reference to the Company's
          Registration Statement on Form S-8, File Number 333-76631).

     10.2 InteliData Technologies Corporation 1996 Incentive Plan. (Incorporated
          herein by reference to the  Company's  Registration  Statement on Form
          S-8, File Number 333-16115).

   10.2.1 Description of Amendment to the 1996 Incentive  Plan.  (Incorporated
          herein by reference to the Company's  Proxy  Statement  filed with the
          Commission on August 6, 1999).

   10.2.2 Description of Amendment to the 1996 Incentive  Plan.  (Incorporated
          herein by reference to the Company's  Proxy  Statement  filed with the
          Commission on April 24, 2000).

   10.2.3 Description of Amendment to the 1996 Incentive  Plan.  (Incorporated
          herein by reference to the Company's  Proxy  Statement  filed with the
          Commission on April 20, 2001).

     10.3 InteliData  Technologies  Corporation  Non-Employee  Directors'  Stock
          Option  Plan.  (Incorporated  herein  by  reference  to the  Company's
          Registration Statement on Form S-8, File Number 333-16117).

     10.4 InteliData  Technologies  Corporation  Employee  Stock  Purchase Plan.
          (Incorporated  herein  by  reference  to  the  Company's  Registration
          Statement on Form S-8, File Number 333-16121).

     10.5 Employment   Agreement   dated  April  5,  1999   between   InteliData
          Technologies  Corporation  and Alfred S. Dominick,  Jr.  (Incorporated
          herein  by  reference  to the  Company's  Report  on Form 10-Q for the
          quarter ended March 31, 1999).

   10.5.1 InteliData  Technologies  Corporation  1998 Chief  Executive Officer's
          Plan. (Incorporated herein by reference to Exhibit 10 to the Company's
          Report on Form 10-K for the year ended December 31, 1999).

  10.5.2  First  Amendment  to    Employment    Agreement   between   InteliData
          Technologies  Corporation and Alfred S. Dominick,  Jr., dated April 5,
          2002  (Incorporated  herein  by  reference  to  Exhibit  10.5.2 to the
          Company's Report on Form 10-Q for the quarter ended June 30, 2002).

<page>

* 10.5.3  Second     Amendment  to  Employment   Agreement  between   InteliData
          Technologies Corporation  and Alfred S.  Dominick,  Jr., dated January
          14, 2003.

     10.6 Employment  and  Non-Competition  Agreement  dated  December  17, 1997
          between  InteliData  Technologies  Corporation  and Albert N. Wergley.
          (Incorporated  herein by  reference  to  Exhibit  10 to the  Company's
          Report on Form 10-K for the year ended December 31, 1997).

   10.6.1 Amendment to the Employment and  Non-Competition  Agreement  between
          InteliData Technologies  Corporation and Albert N. Wergley, dated June
          14,  1999.  (Incorporated  herein by  reference  to  Exhibit 10 to the
          Company's Report on Form 10-K for the year ended December 31, 1999).

     10.7 Employment   and   Non-Competition    Agreement   between   InteliData
          Technologies  Corporation and Michael E. Jennings, dated June 14, 2000
          (Incorporated  herein by  reference  to  Exhibit  10 to the  Company's
          Report on Form 10-Q for the quarter ended September 30, 2000).

     10.8 Employment   and   Non-Competition    Agreement   between   InteliData
          Technologies  Corporation and William F. Gorog, dated November 1, 2000
          (Incorporated  herein by  reference  to  Exhibit  10 to the  Company's
          Report on Form 10-Q for the quarter ended September 30, 2000).

     10.9 Employment   and   Non-Competition    Agreement   between   InteliData
          Technologies  Corporation  and John R.  Polchin,  dated  April 8, 2002
          (Incorporated  herein by  reference  to Exhibit  3.1 to the  Company's
          Report on Form 10-Q for the quarter ended June 30, 2002).

    10.10 Employment   and   Non-Competition    Agreement   between   InteliData
          Technologies  Corporation and Charles A. White, dated January 11, 2001
          (Incorporated  herein by  reference  to  Exhibit  10 to the  Company's
          Report on Form 10-Q for the quarter ended June 30, 2001).

  * 21.1  InteliData Technologies Corporation List of Significant Subsidiaries.

  * 23.1  Consent of Deloitte & Touche LLP.
-------------
   * filed herewith


                                   * * * * * *


<PAGE>



                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) 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.

                        INTELIDATA TECHNOLOGIES CORPORATION

                        By:  /s/ Alfred S. Dominick, Jr.
                             -----------------------------------
                             Alfred S. Dominick, Jr.
                             Chairman, President, and Chief Executive Officer
                             (Principal Executive Officer)

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

<table>

Signature                               Title                                                    Date
---------                               -----                                                    ----
<S>                                    <C>                                                       <C>

/s/ Alfred S. Dominick, Jr.             Chairman, President, and Chief Executive Officer,        March 3, 2003
--------------------------------
Alfred S. Dominick, Jr.

/s/ John R. Polchin                     Vice President, Chief Financial Officer,                 March 3, 2003
-------------------------------
John R. Polchin                         and Treasurer (Principal Financial and
                                        Accounting Officer)


/s/ Neal F. Finnegan                    Director                                                 March 3, 2003
-------------------------------
Neal F. Finnegan

/s/ Patrick F. Graham                   Director                                                 March 3, 2003
-------------------------------
Patrick F. Graham

/s/ John J. McDonnell, Jr.              Director                                                 March 3, 2003
-------------------------------
John J. McDonnell, Jr.

/s/ L. William Seidman                  Director                                                 March 3, 2003
-------------------------------
L. William Seidman

/s/ Norman J. Tice                      Director                                                 March 3, 2003
-------------------------------
Norman J. Tice
</table>

<PAGE>


                            CERTIFICATION PURSUANT TO
               RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Alfred S. Dominick, Jr., Chairman,  President, and Chief Executive Officer of
the registrant, certify that:

1.   I have reviewed this annual report on Form 10-K of InteliData  Technologies
Corporation (the "registrant");

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
our most recent evaluation, to the registrant's auditors and the audit committee
of  registrant's  board of  directors  (or  persons  performing  the  equivalent
functions):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
annual report whether there were significant  changes in internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.

Date:  March 3, 2003                        By:   /s/ Alfred S. Dominick, Jr.
                                                  ---------------------------
                                                  Alfred S. Dominick, Jr.
                                                  Chairman, President, and
                                                  Chief Executive Officer



<PAGE>


                            CERTIFICATION PURSUANT TO
               RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John R. Polchin, Vice-President, Chief Financial Officer and Treasurer of the
registrant, certify that:

1.   I have reviewed this annual report on Form 10-K of InteliData  Technologies
Corporation (the "registrant");

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.   The registrant's other certifying officer and I are responsible
for establishing and maintaining  disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
our most recent evaluation, to the registrant's auditors and the audit committee
of  registrant's  board of  directors  (or  persons  performing  the  equivalent
functions):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
annual report whether there were significant  changes in internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.

Date:  March 3, 2003             By:   /s/ John R. Polchin
                                       -------------------
                                       John R. Polchin
                                       Vice President, Chief Financial Officer
                                       and Treasurer