UPDATE: Embassy Bancorp, Bethlehem, PA (EMYB)

Clearly, the bankers in charge at Embassy still know how to pack a punch. As I predicted in my 2013 review, CEO David Lobach and his colleagues have succeeded in doubling the bank's value. In fact, they've done better than I predicted, accomplishing this growth "organically" versus sale of the bank. EMYB is up 120%, and assets are up 50%.

I see no reason why this team can't grow EMYB another 50% over the next four years. If I'm right, Embassy's stock could trade for $30 on its own by 2021, giving investors another chance to double their money.

Lobach is 67 and has certainly earned the right to cash in on his 500% change in control provision any time he likes. I'd be just as happy to see him keep running at full steam ahead for another four years, first. Either way, he's done right by the bank, its customers, its shareholders, and his own family.

Disclosure: As of this posting, I own shares of EMYB and may subsequently either dispose of them or purchase more.

Prospective Buyers

The M&A scene in Embassy's back yard is so hot that two of the institutions I had listed as prospective buyers in May 2013 have since been acquired, themselves — First Niagara Financial Group, Buffalo, NY (FNFG) and National Penn Bancshares, Boyertown, PA (NPBC).

Fulton Financial Corp, Lancaster, PA (FULT)
Provident Financial Services, Iselin, NJ (PFS)

Financial Snapshot
as of 03/31/2017
Total assets:$963M
Tangible book value per share:$10.15
NPAs to assets:0.66%
Price to book:145%
Market cap:$110M
Dividend yield:0.9%
Trailing 12-month return on assets:0.83%
Trailing 12-month return on equity:10%


David Lobach, Jr, Chairman, President, CEO
Judith Hunsicker, Senior Executive VP, Secretary, CFO, COO
James R. Bartholomew, Executive VP

Gold Stars

I still love how efficient and committed Embassy is! In some ways the bank is operating even more efficiently now than it was four years ago, especially considering that its peer group is now comprised of only the strongest players.
    Employees per branch.
    • In 2013, Embassy Bank had just 70 employees across 7 branches and was operating 30% to 90% more efficiently than its peers.
    • Today, Embassy has just 83 employees across 8 branches, and is now operating 30% to 100% more efficiently than its peers.
    Assets per employee.
    • In 2013, Embassy Bank had whopping $9.2M in assets per employee and was operating 50% to 100% more efficiently than its peers.
    • Today, Embassy has $11.6M in assets per employee and is still operating 30% to 60% more efficiently than its peers.
    Insider ownership.
    • In 2013, insiders owned an impressive 32% of EMYB stock worth $15M and Embassy Bank managers and directors were 3x to 20x as invested in their bank's success as their peers in other banks.
    • Today, insiders own 27% of EMYB stock worth $30M, and Embassy managers and directors are still 3x to 4x as invested as their industry peers.


    • Confidential interviews with shareholders and analysts

    Delmar Bancorp, Salisbury, MD (DBCP)

    A Case of Bordering on a New Frontier

    DBCP is priced too low. Delmar Bancorp's performance has crossed over into new territory and the stock doesn't reflect it, yet. Other banks of similar profitability trade at 150% of book or better.

    NPAs less TDRs are 1.2%, ROE is approaching 10%, and book value has grown 22% since 2013. At this rate, book value will surpass $7 in three years, and DBCP could easily trade at $11.

    Disclosure: As of this posting, I own shares of DBCP and may subsequently either dispose of them or purchase more.

    Prospective Buyers

    The Bank of Delmarva holds 12% of the Salisbury, MD and Seaford, DE markets, is the only bank in Delmar, MD and Dagsboro, DE, and shares territory with these three banks:

    Fulton Financial, Lancaster, PA (FULT)
    WSFS Financial, Wilmington, DE (WSFS)
    Xenith Bancshares, Richmond, VA (XBKS)

    Financial Snapshot
    as of 12/31/2016

    Total assets:
    Tangible book value per share:
    NPAs to assets:
    Price to book:
    Market cap:
    Dividend yield:
    Trailing 12-month return on assets:
    Trailing 12-month return on equity:
    *Redeemed $9M 1/29/2013

    The Crew

    Jeffrey F. Turner, Chairman
    Edward M. Thomas, President and CEO
    John Breda, Chief Credit Officer, successor CEO

    The Skinny

    Six ways that Delmar Bancorp is on a border*
    1. Bank of Delmarva branches literally straddle the Delaware - Maryland border
    2. Delmar Bancorp is on the border between privately held and public (DBCP doesn't trade much, and one investor — Ken Lehman — controls 41% of the shares)
    3. The company is borderline too small for brokerage firm analysts to follow it (None do)
    4. The Bank of Delmarva is about to cross a border into the prestigious top 25% of U.S. banks earning 1% on assets and 10% on equity
    5. The bank is at a management border, too, as CEO Ed Thomas retires in June and John Breda prepares to take the helm
    6. Delmar's Board is at a strategic border where the "sell or stay the course" question tends to arise
    * All of which are way better than the borderline between survival and failure on which Delmar was teetering in 2011, with a Texas ratio near 120% and NPAs well over 10% of assets.


    • Confidential interviews with shareholders and analysts

    5-Year Anniversary Portfolio Performance Assessment

    Happy Anniversary, Timyan Bank Alert!

    It's hard to believe five years have passed since I launched the Timyan Bank Alert.  The publication serves a wide range of purposes in my life: it helps me hone my art, make money, help others make money, and connect personally with those of you who share my passion for community banks. And I really like how it establishes an historical record of the stories behind these bank stocks.

    If you had invested $100 in each stock when I reviewed it here, your $4300 investment would be worth $9159 today. If you only invested in HCBP, I apologize...

    Disclosure: As of this posting, I own shares of all the bank stocks reviewed in the Timyan Bank Alert that still exist (or the stocks of their acquiring banks) and may subsequently either dispose of them or purchase more. For full disclosure, please note, I personally own many other bank stocks that are not represented in the Timyan Bank Alert portfolio or record.

    The average running return rate for the Timyan Bank Alert portfolio so far is 113%.

    Over the past five years, I've reviewed 43 bank stocks.

    Four have undeperformed against the market. (The first two stocks I reviewed turned out to be the least auspicious.)
    • HCBP essentially lost everything when it was seized by the FDIC
    • CDBK merged into Parkway, is currently down 8%, but still looks promising to me
    • CNAF is running "flat" at 1%
    • BKUT is up an un-thrilling 7%

    Nineteen have doubled their value or better, as shown in the table below.
    • FMFC and SBFC increased 5-fold, but are now in acquiring company stock
    • CITZ and CWBC quadrupled, CITZ via acquisition and CWBC on its own
    • BHWBCPBO, and CMTB have tripled, BHWB on its own

    My "median" performer gained 89% — BBIM, which was acquired for cash.

    1st ReviewSymbolReturnPrice ThenPrice Now*

    * April 2017 price, where the stock exists, or its value in acquiring stock