A Case of Bad Guys but a Good Buy
Glen Burnie Bancorp's history is sordid. However, GLBZ stock is undervalued and there is a new sheriff in town.
If new CEO John Long can earn a respectable ROA of even 1% in three years, that would equate to $1.50 in earnings per share. Book value would approach $15 and GLBZ could trade in the low $20s, giving shareholders a chance to double their money.
Long is 21 months into his plan. If he is unsuccessful, Chairman Demyan should sell the bank in keeping with the bank's mission statement.
Disclosure: As of this posting, I own shares of GLBZ and may subsequently either dispose of them or purchase more.
Prospective Buyers
| In my perfect world, one of these three banks with cleaner pasts and stronger performance would acquire The Bank of Glen Burnie.
Howard Bancorp, Ellicott City, MD (HBMD)
Old Line Bancshares, Bowie, MD (OLBK)
Southern National Bancorp of Virginia, McLean, VA (SONA)
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Financial Snapshot
†as of 09/30/2016 |
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Scoundrels
| John Demyan, Chairman
F. William Kuethe, Jr, former President and CEO (deceased)
F. W. Kuethe III, Director and VP
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The Skinny
| There's too much to tell about the history of Glen Burnie Bancorp's bad board behavior to fit in a single blog post. But prospective investors should know it, so please, before you go buy GLBZ, see Infographic: Glen Burnie Bancorp (GLBZ). In any event, I believe GLBZ is a good buy today. The Bank of Glen Burnie has six strengths in particular that give me confidence.
*For a sense of the difference that an effective and ethical CEO could make here, see this Infographic: County National Bank (CNBE) about a prior Bank of Glen Burnie CEO.
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Sources
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This is a question. Per the Bank of Glen Burnie’s 2019 proxy, lawyer Stanford Hess has been on the board since 2018. But he was NOT listed in the 2018 proxy. Yet this year’s proxy has him as “continuing in office” until 2021 even though shareholders never voted on him. How can that be? Isn't a new director required to voted on at the first stockholders meeting following appointment?
ReplyDeleteThank you for reading and commenting! A company is permitted to slot in a new director like this in a Director Class that doesn't get voted on in the current term. He will be up for vote the next time his class is voted on.
Deletegood Luck!
Phil
BTW, my concern is that management may be trying to slip something past the shareholders. Google "Stanford Hess billing fraud" to decide whether a new "scoundrel" should be added to the list.
ReplyDeleteAnonymous, you've done good sleuthing! Thank you for bringing this to my attention. Indeed, Scoundrel Demyan has brought in another scoundrel in Attorney Hess:
Deletehttps://www.baltimoresun.com/news/bs-xpm-1995-05-02-1995122069-story.html
Good luck!
I've done a lot more digging and managed to locate GLBZ's Bylaws on Edgar. The URL is https://www.sec.gov/Archives/edgar/data/890066/000095013303003824/w91464exv3w4.htm. Article III Item 4 is very explicit that a new director elected by the Board of Directors "shall hold office until the next Annual Meeting of Stockholders..." Unless he is nominated from the floor and receives sufficient votes at the May 9th meeting he will not be a legitimate director. Are they trying some sort of slight-of-hand? Or, am I missing something?
ReplyDeleteHello Again Anonymous!
DeleteInteresting. This wouldn't be the first time Chairman Demyan pulled a fast one over on shareholders. For some history check out some of the Baltimore Sun articles I have linked in the article.
Good Luck!
Phil