Bremen Bancorp, St. Louis, MO (BBIM)

A Case of a Sour Note in a Sad Tale


Like Grimm's Bremen Town Musicians, Bremen Bancorp has clearly outlived its usefulness. If only it would be as wise, and leave the work to fitter hands, too! If this farm can get a premium to book value in a sale, then Shareholders should be able to reap a reasonable harvest and double their money once the animals have gone. Is it too much to hope that Fruend will pick up his instruments and titles and retire happily elsewhere like the original Bremen Town Musicians?

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

Prospective Buyers
Enterprise Financial Services, Clayton, MO (EFSG)
Pulaski Financial Corp, St. Louis, MO (PULB)
Southern Bancshares, St. Louis, MO (private)
Financial Snapshot
as of as of 09/30/2014

Total assets:
$203M
Tangible book value per share:
$95.90
NPAs to assets:
4.06%
Price to book:
52%
Market cap:
$6.4M
Dividend yield:
0%
Trailing 12-month return on assets:
- 4%
Trailing 12-month return on equity:
- 45.7%


Scoundrels
Carl J. Fruend, Chairman, President, CEO
Charles W. Nobe, Treasurer
O. William Wing, Senior Vice President
Red Flags
Notes I find particularly SOUR in this band's song:

  • Marketing Bremen Bank as the "safest bank" around when it's down to 6.5% tangible common equity to assets is sharply off-key.
  • Fumbling with 4% NPAs this far into the Recovery shows this band can't keep the beat.
  • Dissipating 45% of shareholder equity over a five-year period is enough to cause bitter break-up of any band.
Things I find a bit SAD in this band's tale:  

  • Observing a nearly 150-year old institution outlive its usefulness for shear want of taking care of itself is sad.
  • Picturing the other members of the Bremen Bank band having to work under a leader who feels compelled to hoard the three most important titles and roles in the company is sad.
  • Considering the low note on which it will leave 68-year old Carl Fruend's professional legacy if he chooses not to face the music is sad.
Sources
  • Confidential interviews with shareholders