First Resource Bank, Exton, PA (FRSB)

A Case of Doing Pennsylvania Proud

First Resource is my kind of bank. It offers good old fashioned, treat-your-customer-right community banking, and is unfollowed by any Wall Street analyst.

If you know any Pennsylvanians who'd appreciate an opportunity to double their money by investing locally, spread the word! I'd love to see them move their Wells Fargo or Bank of America accounts to First Resource Bank, buy some FRSB stock, and come along for the ride.

In three years, FRSB should be earning over $1.00 per share, reach book value of $10, and trade at $15.

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

Prospective Buyers Acquiring First Resource Bank would vault any of these local competitors up to a solid third place in marketshare, behind Bank of America (BAC) and BB&T (BBT).
Isn't that what we want — more of America's community banks competing powerfully against the Too Big To Fail banks?

Bryn Mawr Bank Corp, Bryn Mawr, PA (BMTC)
DNB Financial Corp, Downington, PA (DNBF)
Fulton Financial Corpo, Lancaster, PA (FULT)

Financial Snapshot

Total assets:
Tangible book value per share:   
NPAs to assets:
Price to book:
Market cap:
Dividend yield:
Trailing 12-month ROA:
Trailing 12-month ROE:

*Redeemed $2.6M 09/15/2011


James Griffin, Chairman
Glenn Marshall, President and CEO
Lauren Ranalli, Executive VP, Secretary, and CFO

Gold Stars

Great People - I first learned about First Resource Bank from the proprietor of Honesdale's Hotel Wayne, who is also a top-notch bank investor. He introduced me to Glenn Marshall, who started the bank in 2004, built it from nothing, and manages it with transparency and integrity.

Great Market - Both branches of First Resource Bank are in Chester County, which is one of the best banking markets in the State of Pennsylvania. It has the state's highest median household income ($86K) and benefits from both a low unemployment rate (3.4%) and proximity to Philadelphia.

Great Banking - First Resource Bank runs lean on equity, is a low-cost provider, and consistently keeps expenses close to 2.5% of assets. I also appreciate that the board and management are heavily invested in FRSB, owning nearly 25% of the stock.

Great Opportunity - FRSB has lots of room to grow. Within five miles of the bank's two branches lie $5B in deposits. In the wake of the mergers of National Penn Bank (NPBC) and Susquehanna Bank (SUSQ) into BB&T (BBT), First Resource has an opportunity to pick up talent and customers, as well.


  • Confidential interviews with management and shareholders

UPDATE: Northeast Community Bancorp, White Plains, NY (NECB)

It's time Management at Northeast Community Bancorp stop hoarding the company's shares.

Since my August 2012 review, NECB has managed to accrue some value and bank operations have improved upon Jose Collazo's ascendance in leadership.

Still, Management has failed to feed the bank's shareholders a square meal now for over 11 years, even though they could easily double NECB's value just by converting the rest of the stock to full public ownership.

As I explain below, even if they don't, NECB is too cheap to ignore.

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

Prospective Buyers

Dime Community Bancshares, Brooklyn, NY (DCOM)
PCSB Financial Corp, Yorktown Heights, NY (PCSB)
Webster Financial Corp, Waterbury, CT (WBS)

Financial Snapshot
as of 09/30/2017

(estimates based on Call Report)

Total assets:
Tangible book value per share:   
NPAs to assets:
Price to book:
Market cap:
Dividend yield:
Trailing 12-month ROA:
Trailing 12-month ROE:

Mostly Scoundrels
One Luminary

Kenneth Martinek, Chairman and CEO
Kenneth H. Thomas, Director
Diane B. Cavanaugh, Director

Jose Collazo, President and COO

The Skinny

Given where recent conversions trade in the market, the NECB value proposition is better than ever.

Were NECB to fully convert at book value, minority shareholders would obtain $18.83 per share. NECB is trading at about half that value today,  right where it converted in 2006.

Even if the bank opts not to fully convert, Northeast Community shareholders can be glad to have stayed at the table. The dinner may be late, but it won't be too shabby compared to what's available in the neighborhood.

For example, consider another similarly-sized New York Mutual Holding Company that recently effected a partial conversion like NECB's — PDL Community Bancorp (PDLB).

PDLB has a $275M market cap and assets about the same as NECB's at $813M, but were PDL to sell the rest of its shares at book value, its minority shareholders would obtain only $16.20 a share. PDLB is trading at 92% of that value today.

Meanwhile, NECB is trading at half PDLB's market cap, while earning twice the money as PDLB.


  • Confidential interviews with shareholders and analysts