For Immediate Release - New Subsidiary Created
October 21, 2005
F.N.B. Corporation Creates New Subsidiary F.N.B. Capital Corporation, LLC to be based in Pittsburgh
The board of director of F.N.B. Corporation (NYSE – FNB) recently voted to establish a new wholly-owned merchant banking subsidiary. F.N.B. Capital Corporation, LLC will offer subordinated debt, private equity, and other types of financing options for small to medium sized commercial enterprises that need financial assistance beyond the parameters of typical bank commercial loans. The new subsidiary will have offices at 5004 McKnight Road in Pittsburgh.
“The F.N.B. business strategy has always been to create full-service relationships with our customers,” said Stephen J. Gurgovits, President and Chief Executive Officer of F.N.B. Corporation. “In recent years we have had to refer customers with specialized financing needs outside the company. With this new subsidiary, F.N.B. Corporation now covers the full spectrum of financial services – from traditional commercial finance to capital investment. We have rounded out our product mix which, in turn, enhances our relationships with our customers by providing a complete menu of customer solutions along with new sources of revenue for F.N.B. Corporation.”
F.N.B. Capital Corporation is governed by its own board of directors which is chaired by John Rose, principal of McAllen Capital Partners, and a thirty-one-year veteran of banking and merchant banking. Rose is also a member of the F.N.B. Corporation board of directors. Stephen J. Gurgovits, Jr. CPA, CFA, is President and Chief Executive Officer.
“We think Stephen has the training and experience needed to recognize opportunities and package creative financing options that will be of value to our target markets,” noted Rose. “His background in accounting, financial analysis, banking and wealth management will allow him to effectively deliver workable solutions to all relevant parties – bank commercial lending officers, wealth management clients, and capital investors.”
The son of the President and Chief Executive Officer of F.N.B. Corporation, Gurgovits, Jr. was most recently Vice President and Regional Senior Portfolio Manager with F.N.B. subsidiary F.N.B. Investment Advisors, where he managed over $100 million in fixed income and equity investment assets for individual and institutional customers. An honors graduate of The Pennsylvania State University with a Bachelor of Science degree in accounting, he holds a Master’s degree in business administration from the Katz School of Business at the University of Pittsburgh. Prior to joining F.N.B. Corporation in 2002, he was Finance Manager and Controller for the Sports & Exhibition Authority of Pittsburgh and Allegheny County (SEA). At the SEA, Gurgovits provided the financial oversight of over $1 billion for construction projects, including Heinz Field, PNC Park and the new David L. Lawrence Convention Center.
Prior to his employment at SEA, Gurgovits was a supervising senior with the national public accounting firm, KPMG LLP, where he managed financial statement audits, and specialized in financial statement preparation, internal control reviews, and SEC reporting requirements, including annual report disclosures for several publicly traded institutions. He and his wife, Jennifer, are relocating to Cranberry Township, PA.
“I am proud of my son’s accomplishments, and pleased that the Board of Directors has chosen him to lead this new initiative,” noted Gurgovits, Sr.
Many of the traditional merchant banking participants are limited to certain size and styles of transactions. As a result, the middle and micro market companies, especially traditional family-owned manufacturers, are often unable to secure merchant banking capital.
Typical prospective clients would include emerging or maturing companies that need capital for strategic acquisitions within consolidating or expanding industries; financial support for internal growth or market expansion; and/or facilitating intergenerational or management ownership transitions. These transactions could include leveraged buyouts, acquisitions, recapitalizations, dividends, and growth capital. F.N.B. Capital Corporation services provide an additional method for retaining current commercial clients and obtaining new business opportunities.
“Initially I see my most pressing challenge as identifying and attracting opportunities for business,” said Gurgovits, Jr. “I need to work with the commercial lending officers at First National Bank to identify customers who would benefit from F.N.B. Capital Corporation services. I also need to build relationships with small businesses to help them understand the various financing options available to them. And finally, I will work with F.N.B. wealth management clients and other capital financing companies to build a network of investors who will partner with F.N.B. Capital Corporation.”
Under the Gramm-Leach-Bliley Act of 1999, merchant banking activities are permissible for a financial services holding company through a merchant banking subsidiary. However, the barriers to entry favor larger financial services companies. F.N.B. is in a unique position for a financial services company of its size to capture an underserved – but still attractive – market.
“We think that our efficient business model coupled with an outstanding ‘sales force’ of over 60 commercial lending officers in F.N.B.’s geographic footprint of western Pennsylvania and eastern Ohio, offers F.N.B. Capital Corporation a unique opportunity to capture small market deals,” added Gurgovits, Jr. “In addition, our ability to generate proprietary deal flow from current customers of First National Bank should help us attract good partners to participate in middle market opportunities with us.”
“Our customers benefit from the experience and resources of a large financial institution, while gaining the flexibility of a community bank that considers the importance of long term relationships,” he continued.
About F.N.B. Corporation
F.N.B. Corporation, headquartered in Hermitage, PA, has total assets of $5.7 billion. F.N.B. is a leading provider of banking, wealth management, insurance and consumer finance services in western Pennsylvania and eastern Ohio, where it owns and operates First National Bank of Pennsylvania, First National Trust Company, First National Investment Services Company, LLC, F.N.B. Investment Advisors, Inc., First National Insurance Agency, LLC, F.N.B. Capital Corporation, LLC, and Regency Finance Company. It also operates consumer finance offices in Tennessee as well as commercial and mortgage loan production offices in Florida.
Mergent Inc., a leading provider of business and financial information about publicly traded companies, has recognized F.N.B. Corporation as a Dividend Achiever. This annual recognition is based on the Corporation’s outstanding record of increased dividend performance. The Corporation has consistently increased dividend payments for 33 consecutive years.
The common stock of F.N.B. Corporation trades on the New York Stock Exchange under the symbol FNB. Investor information is available on F.N.B.’s website at http://www.fnbcorporation.com
MEDIA CONTACT: Kathryn Lima 724-981-4318 724-301-6984 (cell)