Preferred stock is a special equity security that has properties of both equity and debt. National Penn Bancshares's preferred stock for the quarter that ended in Dec. 2015 was $0.0 Mil.
The market value of preferred stock needs to be added to the market value of common stocks in the calculation of Enterprise Value. National Penn Bancshares's Enterprise Value for the quarter that ended in Dec. 2015 was $2,562.1 Mil.
In the calculation of book value, the par value of preferred stocks needs to subtracted from total equity. National Penn Bancshares's Book Value per Share for the quarter that ended in Dec. 2015 was $8.28.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
National Penn Bancshares Preferred Stock Calculation
Preferred Stock is a special equity security that has properties of both equity and debt. It is generally considered a hybrid instrument. Preferred stock is senior to common stock, but is subordinate to bonds in terms of claim or rights to their share of the assets of the company.
Preferred stock has priority over common stock in the payment of dividends and any payments received when a company liquidates.
Preferred stock comes in many forms. It can be:
Convertible or Non-Convertible
Cumulative or Non-Cumulative
Voting or Non-Voting
Callable or Non-Callable
Maturity Date or No Maturity Date
A preferred stock without a maturity date is called a perpetual preferred stock. These are relatively rare. A good example of perpetual preferred stock is the many series of Public Storage (PSA) preferred shares that trade on the New York Stock Exchange.
Before investing in preferred stock, it is important to know which of the above groups the stock belongs to. Is it convertible or non-convertible? Are dividends cumulative or non-cumulative?
It is also critical that an investor knows what bonds the company has in front of the preferred stock. Bondholders get paid first. So the decision to buy a preferred stock can be similar to the decision to buy a bond. But, remember, the preferred stock of a company with bonds is junior to those bonds.
Unless a preferred stock is convertible, the upside in a preferred stock investment is more limited than in a common stock investment. If a company doubles its earnings, it is usually under no more obligation to double the dividends paid to preferred shareholders than it is to double the interest paid to its bankers and bondholders.So preferred stock is very different from common stock.
National Penn Bancshares (NAS:NPBC) Preferred Stock Explanation
When a company needs capital but does not wish to issue debt, they may sell preferred stocks to investors.
For instance, during the financial crisis of 2008, Goldman Sachs (GS) issued a combination of preferred stock and common stock options for $5 billion of capital to Warren Buffetts Berkshire Hathaway (BRK.A)(BRK.B). In this deal, Berkshire Hathaway paid $5 billion for 10% cumulative perpetual preferred stock and warrants to buy 43.5 million shares of Goldman Sachs at $115 a share. Goldman Sachs bought back the preferred in 2010. Guess how much money Warren Buffett made in this deal in two years? Read How Much Did Warren Buffetts Berkshire Hathaway (BRK.B) Make on Its Goldman Sachs (GS) Preferred Stock?
1. The market value of Preferred Stocks needs to be added to the market value of common stocks in the calculation of enterprise value.
National Penn Bancshares's Enterprise Value for the quarter that ended in Dec. 2015 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
National Penn Bancshares Preferred Stock Related Terms
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National Penn Bancshares (National Penn Bancshares) Business Description
National Penn Bancshares Inc is a Pennsylvania business corporation incorporated in January 1982. The Company is a registered bank holding company. The Company provides financial services, through its subsidiary National Penn Bank. The Company through its subsidiaries is engaged in activities related to the business of banking. National Penn's financial services affiliates consist of National Penn Wealth Management, N.A., including its National Penn Investors Trust Company division; National Penn Capital Advisors, Inc.; Institutional Advisors, LLC; National Penn Insurance Services Group, Inc., including its Higgins Insurance and Caruso Benefits divisions. Commercial banking is its main business focus. Commercial banking services are provided to small and medium sized businesses with annual gross revenues generally between $1 million and $100 million located in its market areas. offer a wide range of products including short-term loans for seasonal and working capital purposes, term loans secured by real estate and other assets, loans for construction and expansion needs, revolving credit facilities, and a full array of cash management services, including remote deposit capture, disbursement, collection, investment and electronic banking services. Consumer banking offers deposit accounts, which include demand, NOW, money market, other checking and savings accounts, and certificates of deposit. It also offers consumer loan products such as installment loans, home equity loans, residential mortgage loans, education loans and credit cards. In addition, it offers automated teller services, safe deposit and night depository facilities and internet banking services, including on-line bill paying and mobile banking. In addition to generation of fee income through its commercial and consumer banking operations, including mortgage lending the Company has a number of specialized investment and insurance businesses to develop fee income and to serve specific markets. The Company also provides loans directly to consumers within its markets to finance personal residences, automobiles, college tuition, home improvements and other personal needs. The Company also makes indirect loans to customers for the purchase of both new and used vehicles. The majority of residential mortgages is conformed to FNMA and FHLMC underwriting criteria and is sold to secondary market investors. Other residential products such as jumbo mortgages are originated and typically held in its loan portfolio. The Company also provides home equity loans, home equity lines of credit and other consumer loans through its network of retail branch offices and its Private Banking division. The Company is subject to various federal and state statutes applicable to banks chartered in the United States, as well as regulations of the Office of the Comptroller of the Currency.
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