Twenty people, banking on the idea that folks in Princeton want to deal with a small community bank, have each chipped in from $100,000 to $1 million to start a new bank, to be called the Bank of Princeton. They easily raised a total of $6.5 million, $500,000 more than the state-mandated minimum for a new bank.
"We do have a lot of money behind it, because people think it is going to work," says Stephen Distler, board chairman. "Our research shows that there hasn’t been any community bank formed by people in this community in 50 years. People still like a small town bank, where the president would know their name."
The embryo bank is scheduled to open a 12-person downtown office early next year at 21 Chambers Street (between the parking garage and Masala Grill), but the headquarters will be the former Mike’s Tavern on Bayard Lane. That may seem like an odd location until you realize that Distler is the landlord who had tried to give the community something it didn’t have – a jazz club – at that location.
Distler’s efforts were stymied by neighborhood opposition, but he says he still wants to contribute to the community. "I have every intention of doing more than one thing beneficial to the town," says Distler.
The Bank of Princeton troika, including CEO Peter M. Crowley and board member Ross Wishnick, will soon begin to hold public information sessions to invite minimum investments of $10,000. They aim to raise an additional $18.5 million for a maximum of $25 million.
Wishnick, a 1974 graduate of Tufts, is a private investor. A residential developer in a family firm that pioneered in building retirement communities, he was a founding director of a successful community bank, First Washington Bank, which grew from $3 million to just under $500 million in 15 years. (Based in Windsor, First Washington now has 16 branches, 115 employees, and nearly $600 million in total assets). Wishnick also helped found the New Jersey chapter of the Community Associations Institute.
Distler, also a Class of 1974 alumnus of Tufts, has a Wall Street background, most recently as managing director at Warburg Pincus, and he chairs the fundraising campaign for the relocation of the University Medical Center at Princeton. He also chairs the non-partisan think tank, the Center for Policy Research of New Jersey.
Crowley went to the College of Holy Cross in Worcester, Massachusetts, and has an MBA from Temple. He has 25 years banking experience, most recently as senior vice president at Bank of America and also at PNC and Midlantic banks. and Citibank; he also worked at Union Carbide Corporation.
The trio’s efforts raised certain bankers’ eyebrows because they exceeded the $6 million initial state requirement from just 20 sets of deep pockets. New banks typically don’t raise that much while flying under the radar of public announcements. Sometimes they raise only the 25 percent ($1.5 million) of the $6 million required by the state before announcing themselves to the public.
For instance, First Choice Bank, another would-be community bank in Mercer County, had raised only $1.75 million when it began holding public investor meetings last July. Currently First Choice has pledges of more than $10 million and hopes to get closer to its maximum of $20 million before the October 15 deadline. (CEO Randy Hanks will make his final presentation to prospective investors on Thursday, September 21, at 6 p.m. at the Trenton Country Club. To attend, call 609-462-2684.)
Small banks are a popular choice for investors who look for capital growth, says James Hyman, CEO of the seven-year-old Hopewell Valley Community Bank (HVCB). Since its launch, stock in HVCB has more than doubled – almost tripled – in value. The selling price has risen 179 percent, which means that a $10,000 investment is worth $27,886 now. HVCB now has about 60 employees in five locations, with a sixth branch opening in Ringoes this month.
The rule of thumb, say investment experts, is that stock for banks that have gone public will trade at 2.5 book value and 20 to 25 times earnings. "People who exit the investment will have a very solid return," says Distler. "We intend to build steadily and carefully."
In previous decades, stockholders in Trenton Savings Bank quadrupled their money in two years, and Carnegie Bank’s shareholders more than tripled their investment in four years.
The bank’s youth may be an asset when it comes to buying technology, because it won’t be stuck with legacy systems, says Wishnick. To a community known for its tech savvy, it will offer the expected – a website with 24/7 customer service and online bill payment. Its up to date phone system can be converted to Voice over IP (Internet phones). Wishnick is enthusiastic about the possibility of offering "remote capture," the ability to deposit checks by scanning them into a special phone.
Technology will add to the personal touch, says Distler. Phones will be answered "by a real person," and photos of depositors may be available on the bank’s internal computer system so that tellers will, as Distler says, "treat them with the appropriate respect."
Not only can the 10 board members and 10 additional founders be expected to withdraw their monies from the large banks to swell the coffers of the new enterprise, but they are also eager to contribute their expertise. "The backgrounds of the board members allow them to help me as we go forward," says Crowley. "They all bring a very different set of resources."
The board includes include Andrew Chon (formerly of Lucent and Samsung), Richard Gillespie (founder of the ad agency by that name), John Horvath and Dennis Maculsky of the CPA firm Horvath & Giacin, Janet Lasley of Lasley Brahaney Architecture and Construction, J. Scott Needham of Princeton Air Conditioning, attorney Robert N. Ridolfi, and Jeffrey Sands (managing member of Hilton Realty).
Also on the board are James Riley, an insurance executive with Marsh Inc; Eric Steinfeldt, a civil engineer; Henry Opatut, a residential developer; Casey K. Min, the head of an organic home improvement product firm; entrepreneur Emmett J. Lescroart; W. Andrew Krusen, a merchant banker; Kevin Kenyon, a residential mortgage broker; Bumsung Han, an electronic product distributor; and Gregg Chaplin, a chemical importer.
Though the bank’s focus will be, at first, Princeton, it is already eying other locations. For information, call 609-462-6717.
Top Of PageCrime Watch
Four animal rights activists have been sent to prison for up to six years for threatening and harassing employees of Huntington Life Sciences in East Millstone. Two other members of the militant animal rights group (Stop Hunting Animal Cruelty or SHAC), including 29-year-old Darius Fullmer of Hamilton Township, were scheduled to be sentenced on September 19 in the court of U.S. District Judge Anne E. Thompson.
The judge also ordered the individuals and the group to pay $1 million in restitution. Parole is not available in the federal system, and the defendants must go to prison within 30 days. This case was the first jury trial under the new Animal Enterprise Protection Act.
Top Of PageMcGraw-Hill Builds
The McGraw-Hill Companies (MHP), 148 Princeton-Hightstown Road, Hightstown 08520-1450; 609-426-5000; fax, 609-426-5170. www.mcgraw-hill.com
McGraw-Hill announced on September 18 that it will take an existing 180,000 square-foot warehouse to create a $100 million data center on its Princeton-Hightstown Road campus for its financial, educational, and business information products. The data center will operate with five megawatts of power for computing capacity, be energy efficient, and include a backup power system.
Founded in 1888, the company owns such brands as Standard & Poor’s and Business Week. The Princeton-Hightstown Road campus currently has a data center, and its employees will move to the new site early in 2008. Overall, the campus has about 1,000 workers in 900,000 square feet of facilities.
CEO Harold McGraw III said, in a press release, "This significant investment reflects our ongoing strategy to use advanced technology for building revenue, reducing costs and creating shared business support platforms that will increase the pace of product development, improve quality and customer service, and enhance back-office business support operations."
Top Of PagePharma and Biotech Moves
Cerno Bioscience, 11 Deer Park Drive, Suite 102-F, Monmouth Junction 08852; 732-355-0688. www.cernobioscience.com
Cerno Bioscience, a privately funded company that applies modern mathematical techniques to mass spectrometry, has opened in Monmouth Junction.
VIA Pharmaceuticals, 101 College Road, Princeton ; 609-734-9111. www.viapharmaceuticals.com
Via Pharmaceuticals, a drug development company headquartered in San Francisco, moved recently to 101 College Road. Focused on compounds that target inflammation in the blood vessel wall, VIA acquires and develops anti-inflammatory drugs for non-cardiovascular indications, such as asthma or arthritis.
Taiho Pharma U.S.A. Inc., 210 Carnegie Center, Princeton 08540; 609-750-5300; fax, 609-750-7450. Masayuki Kobayashi, president. www.taiho.co.jp
After five years Taiho Pharma plans to expand at the Carnegie Center in February. An Otsuka company, it has therapies for oncology, urology, and immunology.
PharmaNet (PDGI), 504 Carnegie Center, Princeton 08540-6242; 609-951-6800; fax, 609-514-0390. Jeffrey McMullen, president and CEO. www.pharmanet.net
When SFBC International bought PharmaNet two years ago, Jeffrey McMullen managed to retain the well-known PharmaNet name, partly because McMullen was named CEO of the combined firms.
Now the PharmaNet name will also prevail at Nasdaq. Formerly traded under the SFCC symbol, the company will begin using the symbol PDGI.
Hein Besselaar, who started what is now Covance more than 25 years ago, organized PharmaNet with some of his former colleagues (U.S. 1, July 3, 1996).
AustarPharma LLC, 300 Columbus Circle, Unit F, Edison 08837; 732-225-8850; fax, 732-225-8828. Yuqing Guo, scientist.
AustarPharma, which focuses primarily on drug delivery technology research, new drug development, and generic drug development, moved from 1 Deer Park Drive, in Monmouth Junction, to Edison. Its current staff is about 15.