PFNC traded between $15-17 the day VERT started trading, in the $40s. Now that VERT is up to $106, PFNC is at $16, so the market doesn't seem to be building in the increase in VERT from the first day of the IPO to the PFNC stock price.
As a stand-alone bank, PFNC appears reasonably priced at 193% price/book and 13.8x 1999 projected earnings of $1.15 (which don't include any VERT gains).
PFNC has set up a division to lend to start-ups:
<<Increased Emphasis on Lending to the Technology Sector
The Bank's specialty lending division provides customized financial services to Pennsylvania-based companies in the greater Philadelphia area, primarily to companies in the technology, healthcare and insurance industries. The specialty lending division focuses on lending to technology-based companies in the greater Philadelphia geographic area from Princeton, New Jersey to Wilmington, Delaware and west to Harrisburg, Pennsylvania. While the Company seeks relationships with companies that have already received initial venture 14 capital and have reported annual revenues of at least $1.0 million, many of these companies are still in the initial phase of operations and have limited operating histories. Accordingly, because these companies do not have a history of profitable operations and because there is no assurance that such companies will be successful in the long term, such lending involves a higher degree of risk than residential or traditional commercial business lending. However, the Company attempts to minimize these risks by primarily emphasizing depository relationships with companies in their initial start-up phase. The initial lending relationship by the Bank requires a pledge of deposits or qualifying accounts receivable as collateral for the loan. The Bank generally will not make unsecured loans to such companies and intends to limit the aggregate amount of loans to companies in the technology sector to 15% in the aggregate of the Company's total loans outstanding. In addition, the Company has also committed to invest up to $3.3 million in Progress Capital Fund, L.P., a $8.8 million fund managed by a subsidiary of the Company, which commenced operations in late 1997 and provides subordinated debt financing to early-stage Mid-Atlantic based technology companies. See "Business Overview of the Company - Other Activities." Because of the start-up and speculative nature of the companies that the fund targets, such investment involves a higher degree of risk than traditional equity investments. >>
So you can buy a bank at a reasonable price, and get a piece of a Venture Capital fund for free. |
