Patriot Bank Corp. in Pottstown, Pa., has sold the controlling interest in an Internet banking referral site on which it began working just three months ago.

A "few friendly investors" paid $5.4 million last week for 175,000 shares of common stock in the site, BankZip.com, said Joseph W. Major, chief executive officer of the banking company. He declined to identify the investors.

Patriot retains the remaining 1,000 shares, as well as three seats on the site's board of directors. It also has the right to buy five million shares at nominal cost if the company goes public.

The BankZip.com Web site is expected to be up and running late next month. It is meant to help small banks compete on the Internet. The site would refer users to local banks that offer Internet banking; BankZip.com would collect fees from participating banks.

Patriot, which has $1.1 billion of assets, gave up control to protect itself from the substantial losses that can occur when organizing and marketing an Internet start-up, Mr. Major said.

"BankZip.com is going to lose enough money over the next couple years," he said. "The only real choice was whether to go out and spin the company off as a separate entity altogether."

Patriot has invested $5 million in the venture. That expense will appear in the banking company's fourth-quarter results but will not affect subsequent earnings, Mr. Major said.

High start-up costs have forced a number of banks to bail out of e-business plans. In November, for example, Melville, N.Y.-based North Fork Bancorp, which has $11 billion of assets, scuttled plans for an on-line bank for that very reason.

Bigger banks have also found it difficult to succeed on-line. Though $264 billion-asset Bank One Corp. has said its Internet start-up, WingspanBank.com, will keep flying, some analysts have said it will crash because of high costs.

Patriot's chance to buy those five million shares may come this year, Mr. Major said. "Obviously, if it's a $10 IPO and we can acquire them for $1 it would be a big, significant gain," he said.

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