Tuesday, December 1, 2015

POSTED: Monday, November 30, 2015, 2:19 PM
Meridian has been boosting assets by 10% or more each year -- and boosting profits by $1 million a year (to $5 million last year) since 2009. (Meridian Bank)

Penn Liberty Bank was "the bank to beat – the general consensus based on capital they raised and some names on their board," recalls Chris Annas, chief executive of Malvern-based Meridian Bank, citing my 2006 article on the last Philly bank rush. While low-profit Penn Liberty agreed to be taken out last week for a respectable $101 million (7%/yr return on an illiquid investment),  "Meridian has been the 'we try harder' bank ever since, and we’ve really outperformed them and all the other banks that started around that time, particularly in profitability," Annas told me.

Checing FDIC.gov data, Annas is right: Meridian has been boosting assets by 10% or more each year -- and boosting profits by $1 million a year (to $5 million last year) since 2009. With similar assets, Penn Liberty has been roughly half as profitable as Meridian.

Adds Annas: "Our wave of startup banks from 10-plus years ago -- Continental (sold to Bryn Mawr Trust), Conestoga (sold to Beneficial), Penn Liberty -- is dwindling due to the regulatory assault on community banks. Banks have been saddled with layers of expense and scrutiny that make it difficult to generate returns for investors. The FDIC has literally shut down new bank applications, having only approved two in the country in the last six years (compared to about 30 per year prior to 2009).

POSTED: Friday, November 27, 2015, 4:17 PM

Howard Trauger's $80 million-asset Schuylkill Capital Management has joined $1 billion-asset Carnegie Investment Counsel, a Cleveland-based money manager. Trauger and his partner Scott Inglis will continue to run the business as Carnegie's local output from their Center City offices.

Trauger, who started in securities as a runner with the old Auchincloss firm in 1967 and went on to work in the Girard, First Pennsylvania and Provident trust departments, was a pioneer among the old-guard trust officers who started and ran their own credit analysis-research-portfolio management firms through the bull market of the 1990s and the industry consolidation and dispersion that followed.

He has headed the Financial Analysts of Philadelphia, Philadelphia Securities Association and the Bond Club of Philadelphia. Richard Alt, boss at Carnegie, tells me his firm's expanding office network and centralized administration will support Schuylkill customers and new business.

POSTED: Friday, November 27, 2015, 4:09 PM

"Pennsylvanians are very thirsty for options" that let them buy wine and liquor without going to the nearest government-run State Store, says Ryan O'Connell, a Florida native whose business, NakedWines.com, is a pioneer in delivering wines-by-the-case to drinkers -- who still have to go to the State Store to pick them up.

The service costs $40 a month which can be applied over time toward purchases. O'Connell claims his list prices are "40-60 percent" below retail. His big markets are California and other West Coast states. He says his firm and other small distributors have moved quickly to use the online-ordering powers that larger wine firms have successfully won through lobbying but haven't yet moved in to massively exploit.

O'Connell said his firm has sold nearly a million dollars in wine to Pennsyvanians this year, up from $227,000 in all of 2014. That makes NakedWines "the leaders, in terms of volume. But we expect the industry to catch up very quickly."

POSTED: Friday, November 27, 2015, 3:22 PM

"Our industry needs to consolidate. We were an awkward size," says Jim Smart, cofounder with Richard Devine of Smart, Devine & Co., an "accounting-oriented consulting firm" which includes 17 partners and 63 support staff at offices in Center City and King of Prussia as it plans to combine with 1,400-staff audit-and-tax accounting firm Marcum LLP of Melville, N.Y.

Five years after Smart, Devine opened -- seven years after Smart sold his larger Smart & Co. firm to private-equity investors, who broke it up -- the founders and their partners approved the Marcum deal. (These guys are used to joining forces: Marcum includes Philadelphia's former Margolis & Co.; Smart, Devine included Hanna McGlone and Nihill & Riedley.) 

Jeff Zudeck, boss of Marcum's Bala Cynwyd outpost, will run the combined Philadelphia practice for Marcum. "They have a few industry expertises that locally we didn't have: in higher ed, in insurance, in litigation support service," he told me. "As a larger player we get more visibility." Plus, "we were clearly looking for a Center City presence." 

POSTED: Friday, November 27, 2015, 2:33 PM

At the former eBay Enterprise/GSI Commerce headquarters in King of Prussia -- the company, under new private-equity owners, will be renamed soon -- Michael Graff's Fraud Technology Lab is measuring online ripoffs that drive online-sales losses higher. The idea isn't to scare off buyers, but to show merchants how to cut the risk of loss (and get them to hire the service.).

The busiest days for online fraudsters? New Year's, when digital gift-card fraud jumps to $6 for every $100 ordered, from the usual sub-1 percent; Christmas Eve, when overnight-delivery fraud jumps from the usual 1 in 100 packages to 1 in 20, "as criminals take advantage of procastinators" to steal boxes off porches; and any Wednesday, so deliveries can be timed for Fridays and stolen merchandise enjoyed "over the weekend," Graff says.

Graff has used eBay analytics to map fraud -- and finds it concentrated, not just in entry ports like New York, Seattle, Miami, the Texas border -- but also in the Portland, Ore. and Wilmington, Del. area. Both impose no retail sales taxes, and have attracted busy concentrations of "freight forwarders," warehouse-based middlemen who among their other clients attract criminals, who direct jewelry and electronics purchases through the fraudsters to their mail-drops, then skip on the bills.

POSTED: Wednesday, November 25, 2015, 2:02 PM
Charles Cawley (MBNA Corp. via Bloomberg News)

Charles Michael Cawley was the old-fashioned kind of corporate boss who used his power as if he cared about making an impact on people and the world around him, alongside the usual CEO responsibility to make himself and his shareholders rich; he did that, too.

Cawley, 75, was buried Nov. 21 from a Catholic church in Camden, Maine, the seaside former factory town where he'd spent summers as a kid, and where he had made his giant credit card bank, MBNA America, the region's dominant economic and social force, for a time. Maine was a sideshow to Cawley's larger enterprise; he based MBNA in Delaware, a banker's tax haven, pre-conditioned by the du Pont dynasty to eras of rapid job creation, corporate paternalism and well-polished surfaces, which Cawley delivered as if picking up the slack from "Uncle Dupie's" long decline from the time he moved there in 1981.

He deserves a place alongside John H. Patterson (of NCR), Tom Watson (IBM), AP Giannini (Bank of America) and even Steve Jobs of Apple in the Pantheon of full-throated (Charlie was a baritone, partial to Irish-American standards) practicioners of American corporate sales culture and fortune-building; though he's not likely to rest there, for reasons I'll get to. 

POSTED: Wednesday, November 25, 2015, 11:11 AM
RevZilla Founders, Anthony Bucci (L), Matt Kull, and Nick Auger stand on the main floor of their office space located at 4020 S. 26th St., in Philadelphia, Pa., on Feb. 24, 2015. ((Jessie Fox / Philly.com))

Revzilla, the Navy Yard-based motorcycle-accessories digital retailer that employs 162 at its Navy Yard tech center, store and warehouse, has made Fortune's list of the 20 'best workplaces in retail,' alongside Wegman's and Whole Foods supermarkets, REI outdoor gear, Altoona-based Sheetz convenience stores, and Nordstrom department stores, among others.

The list is based on employees' own ratings on several scales, including 'great challenges' and boss relations, as told to survey firm Great Places to Work.

More objectively, Fortune says Revzilla perks include a 4%-of-salary, 1:1 401(k) match; 70% company-paid healthcare; college tuition reimbursement; free beverages; Septa subsidies; and a weekly catered lunch.

POSTED: Wednesday, November 25, 2015, 9:54 AM

When Penn Liberty Bank's 400 or so Main Line shareholders got a $21.75 cash-and-stock offer from Wilmington-based WSFS Financial Corp. Monday, analysts like Matt Schultheis at Boenning & Scattergood and Joe Gladue at Merion Capital called it a high price and a coup for Penn Liberty founders Pat Ward and Brian Zwaan.

But then again: Seen from the hopes of the mid-2000s, when investors put down $12 for unlisted Penn Liberty shares in hopes of rich future profits, the modest 7% annual return "is not a good return for an investment that was illiquid" all that time, notes Ted Peters, the suburban-Philadelphia banker who skippered Bryn Mawr Trust Corp.'s enlargement-and-survival campaign, and now runs the $15 million Bluestone Financial Institutions Fund of bank stock investments.

It's a far cry from the 600%/7-year returns Peters' former National Bank of the Main Line delivered way back in the boom years, though also a big recovery from recession-year pricing. WSFS is a strong buyer, Peters agreed: "If I were a Penn Liberty shareholder I'd hold onto that stock." Bluestone is up 15% so far this year, as 3 of its 18 bank stocks have been sold at premium prices -- Naugatuck of CT, Cheviot of OH, C1 of FL. (Bluestone is not currently in WSFS.)

About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, 215.854.5194, @PhillyJoeD. Read his blog posts at http://www.philly.com/PhillyDeals and his Inquirer columns at http://www.philly.com/philly/columnists/joseph-distefano/. Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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