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Embassy Bancorp, Inc. Message Board

  • functor3d functor3d Feb 20, 2013 9:40 AM Flag


    Greetings, Sam.

    I think you mentioned in one of your posts that you own some RGBM. I also have a few shares; a small position. It's attractive on the basis of 2012 earnings and TBV, but my concern is the rapidly shrinking deposit
    base, and a decent chunk of deposits is brokered. Just wanted to hear your thoughts.


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    • functor: I regard RGBM as a dicey proposition. The loan is among my concerns. At some point for me it will be a source of funds. That is not say you can't make money on RGBM at these levels, I just find other banks more compelling.

    • Mr. Functor,

      RGBM was not supposed be discussed in open forum because it's so thinly traded. But since I let loose my lips...

      It's dicey. The parent holding company pledged the bank's stock for some small loans which was originally for $1.26 million, then reduced to half during default The loan was purchased by on ex-director but funding of which came from d=some insiders. The extension of that loan expired in November 2012. But there is no news as to what has been done about it. Certainly RGBM is in no position to redeem it and default can cause the bank to switch hand and leaving common shareholders nothing. There is so many insiders involved in owning that loan, a law suit would certainly arise if that were to happen.
      Regardless, the loan holder will exact a huge price out of RGBM.
      With that, valuation purely based on book value can be misleading JMO.

      Good luck,


      • 2 Replies to sambordulac
      • Dear Sam,

        Thank you for this info! All I had access to for RGBM were their reports with regulators and very short annual reports for shareholders (2-3 pages of basic fin data) for a few years, ending around 2007, on
        their website.
        My main concern was vanishing deposits; this loan is an additional negative. I have around 0.5% of my money in RGBM; the best I can do is forget about it for a few years, it seems.

        Can I bother you with questions about some more liquid banks?


      • Should have said, "With that, valuation based on traditional measures can be misleading JMO."

        I own some shares, I think Mr. Rob does too. We bought it before we found out about this small loan.
        I do not follow it closely,

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