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


  1. I happened to have talked to the bank a few weeks ago, what a coincidence! Here are some points that I don't like so much about the bank. 1. The deposit cost is at .75% and mgmt indicates the local market rate is similar. I am not sure if the deposit base is attractive to acquirers, though the bank does have a solid demand deposit base. 2. The mgmt doesn't have a solid plan for reaching 1% ROA in the next 1-2 years, at lease he did not articulate well. 3. The loan growth in the local market is fairly slow because the economy was hit hard in the crisis. 4. Mgmt mentioned making acquisitions but I'm not sure they have experience. The last M&A deal was a branch deal 9 years ago. I think the return depends on how much an acquirer likes this bank.

    1. Hello Yuanxi!

      I appreciate the feedback. I think DBCP would be attractive due to the high % of dd's. I'm not bothered that they are paying market rates for cd's. I think they are so close to 1% ROA that they'll get there. I'm most impressed with their Board and Mr. Lehman's influence. I don't think there is much for them to acquire, especially with their low currency.

      Good Luck!

  2. Thoughts on word that DBCP is buying LBBB?

    1. Thanks for commenting and reading Axster! Sorry so tardy to reply. I like this deal as a shareholder of both $LBBB and $DBCP. There will be expense saves, it preserves the DTA, will use the DTA up faster, and is another example of one plus one being greater than 2.
      Good Luck,

  3. Good Morning, I have been a community bank investor for 20+ years, I just found your website. I love it. I am invested in many of the shares you have reviewed including this one DBCP. I am curious to know your thoughts on DLMV and CROL. I am in Wisconsin, there are 2 privatley traded banks that are discussing going public in the coming year, Ill keep you informed as it happens. Again, great site! Just what I was looking for.

    1. Dear lizcor68,
      Thank you for the note. Sorry for late response. Having participated in both capital raises at DLMV I know it well. the stock is still fairly cheap and I think prospects are still good from here. I own a bit of CROL as well. I like their Board, it is still cheap to book in spite of the run it has had recently but needs to make more money to justify independence. Please keep in touch. a faster way to reach me is @