A Case of Self-Dealing on the Banks of the Delaware River
Disclosure: As of this posting, I own significant shares of HCBP and may subsequently either dispose of them or purchase more.
Penn Bancshares, Pennsville, NJ (PEBA) In late 2005, the Fed gave PEBA permission to buy up to 24.89% of Harvest Community Bank
Elmer Bancorp, Elmer, NJ (ELMA), a local bank that’s doing well for which this acquisition would represent a great in-market transaction
Fulton Financial, Lancaster, PA (FULT), also has branch overlap that would make an acquisition like this logical
(as of 12/31/2011)
Michael Williams, Chairman of the Board
Dennis Engle, CEO
Jenny Engle, CEO’s wife
Entire Board of Directors, the 12 joint owners of Wheat Properties LLC
CEO Dennis Engle only owns 1050 shares of stock outright, and was paid $188K in 2011
Engle led shareholders to believe Harvest Community Bank was having a great Q4 2011, when in fact it lost $4.2M pretax, a loss greater than the previous five years' earnings combinedThe Directors as a group own an entity called Wheat Properties LLC, which purchased the branch building in Salem City on October 20, 2000 for $240,000, for which the bank pays $79,925 per year in rent — a nice fat 33% annual return for the Directors.
Google searches for "Wheat Properties" suggest great efforts have taken to keep the entity under the radar, and reveal little, other than:The bank also made payments to JKE Marketing—a company owned by Dennis Engle’s wife Jenny Engle—of $88,020 over the last two years. Is this President’s Message from the bank homepage the sort of thing Jenny Engle is getting $44,000 a year to produce for shareholders, I wonder?