Monday, August 25, 2014

Update for Regional Bank, REIT and Lottery Ticket Basket Strategies/UBSI, NBTB, BDGE, BHB/Added to BHB at $26.34 and to UBCP at $8.08/Sold 100 CZNE at $19.52/Bought as LTs: 400 NZEOF at $.7, 30 QLGC at $8.92, 40 RAS at $7.63, and 40 OGZPY at $7.07/Sold as an LT 150 RSHYY at $1.94

Last Friday's Relevant Closing Prices for this Particular Post:

KRE: 38.96 +0.08 (+0.21%) : SPDR S&P Regional Banking ETF
VNQ: $76.75 -0.62 (-0.80%) : Vanguard REIT ETF
IWM: $115.21 +0.01 (+0.01%) : iShares Russell 2000 ETF
IWC: $72.82 +0.11 (+0.15%) : iShares Microcap ETF
TLT: $117.29 +0.65 (+0.56%) : iShares 20 Year Treasury Bond ETF
PFF: $39.87 0.00 ( iShares US Preferred Stock ETF
ROOF: $26.67 -0.13 (-0.49%) : IQ US Real Estate Small Cap ETF
SPY: $199.19 -0.31 (-0.16%) : SPDR S&P 500

The regional bank, REIT and lottery ticket basket strategies are updated on the last Monday of each month. The price shown in the following tables will be from last Friday.

Last Update: Update for Lottery Ticket, REIT and Regional Bank Basket Strategies/Sold 101+ BRKL at $9.53/Bought 50 LARK at $19.76, 100 SUSQ at $10.15, 50 UVSP at $18.8/Bought 50 ODP at $5.09 as a LT/CBU, BHLB, FFBC, WASH, FNLC, FMER, FISI, TRST, CCNE, HBAN, BPFH, NYCB, NPBC, WTBA, FNB, MBVT, UBCP

I frequently use a basket approach, particularly with industry sectors, that will vary in size as to the number of components. The focus will be on the total return of the basket, rather than individual components. Some of the advantages to this approach include diversification and risk mitigation. I am not concerned about a few mishaps provided other components are doing better than I anticipated when I made the initial purchase. As noted previously, I have been surprised by some of best and worst performers in the regional bank basket.

1. Update of Lottery Ticket Basket Strategy 

The Lottery Ticket Basket Strategy uses a deep contrarian value strategy, appropriately characterized as catching a "falling knife". A common criteria for the stocks contained in this basket is a smashed stock price at the time of purchase and an ugly looking chart, though I may occasionally buy one who does not fit those common criteria. Any technical analyst would most likely have a sell rating on the stock.

See 2004 Study by the Brandes Institute: "Falling Knives Around the World" 

Selections are made primarily on statistical criteria including price to book, price to sales, forward P/E, cash per share and/or free cash flow. I spend anywhere from thirty minutes to an hour researching a potential purchase prior to purchase.

For many selections, I may be pessimistic about the firm's future, but not as pessimistic as the market. I will also occasionally see a ray of light at the end of a dark tunnel. Since I expect failures, which are inevitable and unavoidable in this kind of approach, I limit my exposure to $300 per stock plus any prior trading profits. 

After experiencing some success with this strategy, I now have a requirement that my total investment in all LT holdings can not exceed my total realized gains for this basket strategy. My total exposure is substantially below my net realized gain number, so I currently have a lot of available capacity to expand this basket under this particular risk control rule.

The name of the strategy aptly describes the risk. It is somewhat analogous in many cases to playing a hand of blackjack for the purchase amount knowing that the card count favors the house. It is a form of entertainment and an alternative to a casino visit.

Based on the results to date, this strategy is far more likely to produce positive results even with the LB's skill at the tables. The primary purpose of the LT strategy is to entertain Right Brain, let it swing for the fences with up to $300, and to keep the Nit Wit from interfering with Left Brain's management of Headknocker's portfolio.

Snapshots of realized gains can be found at the end of the Gateway Post on this topic: Stocks, Bonds & Politics: Lottery Ticket Strategy: New Gateway Post

There was one deletion since the last update. There were several additions discussed below.

Net Realized Gains: $14,068.09 

Click to Enlarge: 

Lottery Ticket Basket as of 8/22/14
Unrealized Gains over 30%:

AMOT +147.2%
AMOT reasserted its mojo and took a commanding lead over RFMD. AMOT reported second quarter E.P.S. of $.29, up from $.09 in the 2013 second quarter. Allied Motion Reports Record Results for the Quarter Ended June 30, 2014 AMOT Closing Price 8/14/14: AMOT: $15.24 +$3.10 (+25.54%)

RFMD +121.2%
FCE/A +72.56%
Possibly, Forest City is setting up for a long term break out. Hard to say. FCE-A Interactive Chart

AWCMY +58.99%
ING +49.98%
FCF +44.33%
ZAGG +34.05%
ZAGG is a new addition and rose after a better than expected earnings report. ZAGG Inc Reports Second Quarter 2014 Revenue of $50.2 Million, GAAP EPS $0.03

Iridium Communications almost made the cut for a snapshot at +29.8%.

A. Bought 30 QLGC at $8.92 (see Disclaimer): 

Snapshot of Trade: 

2014 Bought 30 QLGC at $8.92
I previously bought this stock as part of the LT basket strategy: Sold LT Basket: 30 QLGC at $11.7 (8/26/13 Post)-Bought 30 QLGC at $8.83.

QLGC was one of many Nasdaq bubble stocks in the 1999-2000 period, as I noted when I first purchased 30 shares as an LT. Asinine does not describe the insanity when the stock price hit a 290 P/E. QLGC Interactive Chart The share price went from $2 in 1998 to $78 in February 2000, adjusted for four 2 for 1 stock splits, and then quickly turned on a dime and plunged to $11 by March 2001. Since the investors sobered up, the stock has been moving mostly in a $10 to $20 range since 2001.

On the day of my purchase, QLGC fell some after being downgraded by Barclays to equal weight from overweight, with the target price reduced to $13 from $10. TheStreet This downgrade occurred after the stock had already experienced a sharp decline from $12.97 in early April 2014: QLGC Interactive Chart At the time of my purchase, the shares were trading below the 50 and 200 day SMA lines, which is standard for LT selections. I am focusing on falling knives, as noted above, and the chart will almost never say buy me.

Closing Price for Monday 8/4/2014: QLGC: $8.94 -0.18 (-1.97%)-Bought 30 QLGC at $8.83 (12/2012 Post)

This purchase was made without any meaningful understanding of QLogic's products and was based on statistical criteria, including the following:

QLGC Key Statistics at a $8.94 Price
Forward P/E F/Y 3/30/16: 9.22
P.E.G. 5 Year Estimate: .47
P/S Ratio: 1.71
P/B Ratio: 1.14
Cash Per share: $2.85
Total Debt: Zero

SEC Filed Earnings Press Release for Q/E 6/29/14

Form 10-Q for Q/E 6/29/14 (page 1 balance sheet: cash at $60.882M and marketable securities at $189.532M)

Last SEC Filed Annual Report: 10-K

Company Website: QLogic

QLogic Profile Page at Reuters

QLogic Key Developments Page at Reuters

Closing Price Last Friday: QLGC: $8.90 -0.11 (-1.22%)

B. Bought 40 Gazprom at $7.065 (see Disclaimer): I bought the ADS shares traded on the pink sheet exchange. Gazprom OAO (OGZPY). As a reminder, I will not go to a Russian website to read an earnings report, so I have not actually read Gazprom's recently release second quarter report.

1 ADS=2 Ordinary Shares

Snapshot of Trade: 

Gazprom is a major oil and natural gas producer. It operates Russian's Unified Gas System. Gazprom has been in the news lately in its collection dispute with the Ukraine. A story in Bloomberg noted that the brokerage firm VTB predicts Gazprom may cut its dividend by up to 44% due to that collection problem. First half profits declined 38% to $4.3B or RUB155B.

Earnings Call Transcript | Seeking Alpha

Gazprom supplies natural gas to Western Europe with pipelines running through the Ukraine, which creates other significant risks other than the Ukrainian collection issue. Gazprom reported a loss shortly after my purchase based on $5B in uncollected debts. Reuters

Gazprom OAO (GAZP.MM) Key Developments Page at Reuters

Assuming some satisfactory outcome for the current crisis involving Russia and the Ukraine, which is questionable, the major long term problem with Gazprom is its home country, a lawless state run according to the whims of a former KGB colonel. If Russia had an independent judiciary and a free press, which is not the case now or for the foreseeable future, Gazprom's stock would probably be priced four or five times higher than its current quote.

There are multiple reasons for classifying this purchase as a Lotto.

Bloomberg calculates the P/E based on estimated 2014 earnings at 2.65, based on the 8/14/14 close of USD$7.27. That number might not be updated with Gazprom's second quarter results. The estimated P.E.G. ratio was then .7383. The indicated dividend yield at that price was 5.47% with the ex-dividend occurring on 7/15/14. The dividend is paid annually. As mentioned above, I would reasonably anticipate a significant dividend reduction next year.

When I started to write this section on 8/14/14, the ordinary shares closed at RUB131.41 or RUB262.82 per ADS share: GAZP.ME: 131.41 +0.41 (+0.31%) That translated into USD$7.2948 on 8/14/14. Currency Converter

Closing Price Last Friday: OGZPY: $7.45 -0.14 (-1.78%)

C. Bought 400 NZEOF at $.7 (see Disclaimer): I bought the ordinary shares for New Zealand Oil and Gas traded on the U.S. pink sheet exchange and priced in USDs. New Zealand Oil & Gas Ltd. (NZEOF)

Snapshot of Trade:

New Zealand Oil and Gas Ltd (NZO.NZ) Profile Page at Reuters

New Zealand Oil and Gas Ltd (NZO.NZ) Key Developments Page at Reuters.

Company Website: New Zealand Oil & Gas.

The company is paying a dividend, but the amount is erratic. Two semi-annual payments of NZ3cents per share were made in 2013. One NZ three cent per share payment was made earlier in 2014. New Zealand Oil & Gas dividends Assuming a continuation of an annual NZ 6 cents per share, and the same conversion rate prevailing on 8/14 (of course it fluctuates), then the dividend yield with those assumptions before the NZ withholding tax would be about 7.14% at a total cost of USD$.7.

This purchase was based primarily on the information contained in this Seeking Alpha article. I left a comment.

Last Quarterly Report: (cash balance as of 6/30/14 at NZ$135.1M)

Closing Price Last Friday: NZEOF: $0.6850 -0.0050 (-0.72%)

D. Bought 40 RAS at $7.63 (see Disclaimer): I discussed RAIT Financial in my last weekly, published last Saturday, in connection with the purchase of RAIT's senior exchange traded bond RFT. Item # 5 Bought Roth IRA: 50 RFT at $24.28

As noted in that discussion, RAS had a near death experience during the Near Depression period, as reflected in the stock price chart. Adjusted for a 1 for 3 split, the share price went from a 2007 high near $103 to $2.5 in February 2009. RAS Interactive Chart A picture can be worth a book of words.

When I see that kind of action, I will characterize any purchase as a Lotto only.

Snapshot of Trade:

RAIT Financial Trust (RAS) Profile Page at Reuters

RAIT Financial Trust (RAS) Key Developments Page at Reuters

Company Website: RAIT Financial Trust

The company is currently increasing its quarterly dividend after slashing it from a 2007 high of $2.52 to a low of $.06 by 2011. So, it would be fair to say that this is not a dividend growth story, even though RAIT has increased the quarterly rate from $.06 to $.18 for the last payment. Dividend History-RAIT Website

For the 2014 second quarter, RAIT reported a 41.2% increase in CAD to $.24 per share. SEC Filed Press Release

As of August 4, 2014, RAIT owned 7,269,719 million shares of IRT, an apartment REIT. Page 32 Form 10-Q

I currently own 150 shares of Independence Realty Trust (IRT)

Bought 50 IRT at $8.17-Roth IRA/ Bought:  100 IRT at $8.87 (1/28/14 Post)

Closing Price Last Friday: RAS: $8.06 -0.01 (-0.12%)

E. Sold 150 RSHYY at $1.936 (see Disclaimer)

Snapshot of Trade:

Snapshot of Profit:

2014 Sold 150 RSHYY +$44.09 
While admittedly $44.09 does not sound like much now, it does represent an 18.5% return on my investment in about 4 months. I also received a paltry dividend.

RB, who runs the LT strategy, does not need a reason to buy or to sell. To the extent that it might have had a reason, it may have had something to do with the latest developments in the Ukraine. NATO claimed that Russia moved its artillery units into Ukraine. NYT I was glad to see those trucks return to Russia. And, maybe Merkel can sweet Vlad into being nice for a change.

2. Update for REIT Common and Preferred Stock Basket:

This basket is starting to contract, primarily though preferred stock deletions under the current trading guidelines. The first publication of this basket was made on 3/5/14: Stocks, Bonds & Politics: Equity REIT Common and Preferred Stock Table as of 3/5/14

I am using a blended strategy of including both common and preferred stocks. I am not likely to add back preferred stocks until there is another meaningful correction in their prices.

Since my last update, I have bought and sold the following securities:

Sold Taxable Account: 30 DLR at $64.06, 30 EPR at $55.22-Ongoing Stock Allocation Reduction (8/9/14 Post)

Added 200 NWH_UN:CA at C$10.16/ Bought Roth IRA:  100 LXP at $10.64

I have included in the table a 100 share purchase of ARCP which has not yet been discussed.

Click to Enlarge:

REIT Basket as of 8/22/14
While it is too early to tell, I thought that it was noteworthy that VNQ declined by .8% last Friday as TLT rose .56%.

3. Update for Regional Bank Basket Strategy:

This strategy is explained in my Gateway Post on this topic:

Snapshots of realized gains and losses can be found at the end of that post.

The dividend yield showed in this table is calculated by Yahoo Finance based on last Friday's close. My dividend yield for each position will be different based on my total cost numbers. In most cases, with FNFG and VLY being notable exceptions, my dividend yield will be higher.

Dividend Yields 5% or higher: Based on Total Cost
NYCB: 8.44%
UBSI: 7.66%
WASH: 7.56%
CZNC: 5.39%
FNLC: 5.38%
CBU: 5.15%
TRST: 5.1%
CCNE: 5.%

I am not tracking reinvested dividends in the following table. The unrealized gains per holding do not include reinvested dividends.

Over the life of this basket strategy, I anticipate that the dividends will provide 40% to 50% of the total return. I am generally keeping my total exposure between $40,000 to $50,000.

After a number of adds, I am now over my minimum $40,000 allocation after a bout of profit taking last year.

SPDR S&P Regional Banking ETF (KRE) Total Returns: 47.5% in 2013

I have not been impressed with several of the recent earnings reports from regional banks. Some of the banks discussed below have decent 2014 second quarter reports. While net interest margin has not contracted much, it is yet to show any expansion either for most banks. Chart: Net Interest Margin for all U.S. Banks - St. Louis Fed

One ETF will own several of the small cap regional banks and REITs that I own now or have owned in the past: PSCF | S&P SmallCap Financials Portfolio

In 2013, my dividend total from this basket totaled $1,932,93, up from $1,896.25 in 2012 and $1,660.57 in 2011. I will have to increase my current exposure in order to exceed the 2013 amount this year, given my light exposure for the first four months which was several thousand below the "minimum" level.    

Regional bank stocks are in a funk this year as interest rates started to go back down. One of the regional bank ETFs, KRE, closed at $40.61 on 12/31/13 and at $38.97 last Friday, but has closed as low as $36.84 this year (2/3/14). SPDR S&P Regional Banking ETF ETF Chart That ETF had worked its way back over its 50 and 200 SMA lines when I published the last update but has since fallen below those lines again. The KRE price is very close to its 50, 100 and 200 day SMA lines which have converged.

KRE SMAs as of Friday 8/22/14:
50 Day: $39.22
100 Day: $39.15
200 Day: $39.41

Without some negative event next week, I would anticipate a crossover to the upside for all of those lines.

The abnormally low rates benefited banks some when deposit yields were repriced down, but even 5 year bank CDs taken out in 2008 at higher rates have now matured, and the positive impact of that repricing is no longer present to any meaningful degree. 

Instead, the decline in rates for loans simply compresses net interest margin. When rates were rising last year, regional bank stocks were in an uptrend based on the common belief that higher intermediate and long rates would be a net positive for them, particularly when short terms were likely to remain near zero through mid-2015 and then rise slowly and modestly in 2016-2017. The rate spike starting last May impacted intermediate and long term rates. Short term rates remained anchored by ZIRP. 

I have used the downdraft in prices this year to add positions to my basket after selling into last year's strength.  

Realized Gains 2010 to Date: $16,204.75  (snapshots in Gateway Post)
Dividends Received 2010 through 2013=$6,623.72

Click to Enlarge:

Regional Bank Basket as of 8/22/14

Comparison Data From the St. Louis Fed:
Net Interest Margin for all U.S. Banks
Net Interest Margin for U.S. Banks with average assets under $1B
Net Interest Margin for U.S. Banks with average assets between $1B and $15B
Return on Average Equity for all U.S. Banks   (abbreviated to "ROE")
Return on Average Assets for all U.S. Banks (abbreviated to "ROA")
Nonperforming Loans (past due 90+ days plus nonaccrual) to Total Loans for all U.S. Banks (abbreviated to "NPL ratio")
Charge-Off Rate On All Loans, All Commercial Banks
Assets at Banks whose ALLL exceeds their Nonperforming Loans (I prefer a coverage ratio of  over 100% at the time of my initial purchase)(ALLL=Allowance for loan losses)

A. Bridge Bancorp (BDGE):
Bridge Bancorp reported core net income, which excludes securities gains and acquisition related expenses, of $4.5M or $.39 per share.

Net Interest Margin: 3.36%
Core Efficiency Ratio: 60.45% (prefer under 60%, but this is fine)
ROA: .8% ( prefer over 1%)
ROE: 9.84%
Core Return on Equity: 10.32% (excludes merger expenses & branch restructuring/securities gains)

The NPL and NPA ratios are excellent:

The coverage ratio of 716.8% is comforting.

The capital ratios are okay as of 6/30/14:

After selling my higher cost shares profitably, I currently own 109+ shares at an average cost of $19.05 per share (see snapshot at Item # 4  Pared BDGE Selling Highest Cost 56 Shares at $24.71) I have quit reinvesting the dividend, even though I can acquire shares at a 5% discount through a dividend reinvestment program.

I took this snapshot intra-day on 7/28/14 to show that the shares were then responding positively to this report, even though the market was trending down:

2014 BDGE Postition Intra-Day Price 7/29/14
Item # 1 BOUGHT 50 BDGE AT $18 (October 2011)Item # 4 Bought Back 50 BDGE at $19.65 (August 2012).

Some of the small fractional dividends resulting from pairing the overall position.

If the $1.92 consensus E.P.S. estimate proves prescient, BDGE Analyst Estimates, then BDGE is worth a hold. I can not say that the current price is justified by the $1.36 estimate for 2014. BDGE Analyst Estimates

Closing Price Last Friday: BDGE: $24.71 0.00 (0.00%)

B. NBT Bancorp (NBTB): NBT Bancorp reported second quarter core net income of $19.1M or $.43 per share, better than the consensus estimate of $.41. Core net income excludes the $11.2M net gain resulting from NBTB's sale of its ownership interest in Springstone, LLC and $2.9M in prepayment penalties associated with long term debt refinancing which is a positive longer term.

The capital ratios are okay as of 6/30/14:

I currently own 50 shares: Item # 2 Bought: 50 NBTB at $22.76 (2/17/14 Post)

Closing Price In Response to Earnings Report (7/29/14):  NBTB: $23.67 +0.68 (+2.96%)

2014 Consensus E.P.S.: $1.71
2015= $1.81
NBTB Analyst Estimates

The stock price recently broke its 50, 100 and 200 day SMA lines to the upside. NBTB Interactive Chart

Closing Price Last Friday: NBTB: $24.20 +0.11 (+0.46%)

At that price, and assuming the consensus estimate for 2015 is spot on, the forward P/E is about 13.37.

 NBT Bancorp Inc. (NBTB) Dividend Date & History -

C. United Bankshares (UBSI): United Bankshares reported second quarter net income of $33.2M or $.48 per share, up from $.44 in the 2013 second quarter.

Efficiency Ratio: 47.69%

The capital ratios are okay as of 6/30/14:

Closing Price In Response to Earnings Report (7/29/14): UBSI: $32.64 +1.32 (+4.21%)

United Bankshares, Inc. (UBSI) Dividend Date & History - (currently at a quarterly penny rate of $.32 per share)

I bought in 2009 and continue to own a 50 share lot: Bought 50 of UBSI at $16.56

At the current $.32 quarterly dividend rate, the yield is about 7.73% at a total cost of $16.56 per share and growing.

Closing Price Last Friday: UBSI: $32.70 -0.11 (-0.34%)

D. Bar Harbor Bankshares (BHB): Bar Harbor Bankshares reported net income of $3.9M for the second quarter or $.65 per share, up from $.54 in the year ago quarter. The estimate, generated by just one analyst, was for $.57.

The capital ratios are good.

BHB underwent a 3 for 2 stock split after I bought my 50 shares. Bought 50 BHB at $30 (2/10/12 Post).  Prior to rounding that lot up to 100 shares as discussed in the next item, I owned 75 shares as a result of that split with a total average cost per share of $20.11

BHB Key Statistics

Closing Price Last Friday: BHB: $26.95 -0.12 (-0.44%)

E.  Added 25 BHB at $26.34 (see Disclaimer): This was an average up. After receiving 25 shares in a stock split, I decided to round up to a 100 share lot. The numbers for the second quarter were good. The quarterly dividend rate is currently $.223 per share, up from $.1733 per share in 2009. NYSE Assuming a total cost per share of $26.34, and a continuation of that rate, the dividend yield would be about 3.39%.

Bar Harbor Bankshares Increases Quarterly Cash Dividend

Bar Harbor Bankshares Continues Its Stock Repurchase Plan

Bar Harbor Bankshares (BHB) is a bank holding company that owns the Bar Harbor Bank & Trust which has 15 branches on or near Maine's coast.

Branch Map:  Bar Harbor Bank & Trust

Snapshot of Trade:

2014 BHB Bought 25 at $26.34
BHB is a small bank and there is frequently a large bid/ask spread. On the day of my purchase (8/4/14), the shares traded in a $26.02 to $27 range and closed at $26.59, down $.1 for the day. My purchase at $26.34 or $.35 per share below the prior close or just enough of a downdraft to compensate me for the $7.95 commission on that 25 share odd lot.

Position Snapshot as of 8/4/14:

BHB 100 Shares Average Cost Per Share=$21.74
The last ex dividend date was on 8/13/14. I am not reinvesting the dividend.

BHB Interactive Chart

BHB navigated the recent Near Depression period well:

E.P.S. (unadjusted for 2014 stock split) / Non-Performing Loans to Total Loans (NPL ratio)
2007: $2.36 / .36%
2008: $2.63 / .7%
2009: $3.19 / 1.35%
2010: $2.65 / 1.95%

Any NPL ratio below 2% during that period would be excellent in my opinion. And, the dividend was raised every year during 2007-2010.

Source: Page 38, 2012 Annual Report: 10-K

Closing Price Last Friday: BHB: $26.95 -0.12 (-0.44%)

F. Sold 100 CZNC at $19.52- In A Satellite Taxable Account (see Disclaimer):

Snapshot of Trade:

CZNC Recent History:

Dividends: $77 (only 1 quarterly dividend on entire 100 shares; 4 quarterly dividends on first 50 share lot bought in 2013)

Snapshot of Profit:

2014 CZNC 100 Shares +$48.5 
Item # 7 Bought Taxable Account:  50 CZNC at $18.5 (5/17/14 Post); Item # 3 Bought 50 CZNC at $19.15 (June 2013 Post)

Total Return=$125.5

I had more success with an earlier 100 share purchase: Sold 100 CZNC at $16.53 (September 2011)(snapshot of realized gain $517.61)-Bought 50 CZNC at $11.77Added 50 CZNC at $10.46

While the dividend yield is good, I was not pleased with the last earnings report: SEC Filed Press Release E.P.S. for the 2014 second quarter was $.33, down from $.4 in the 2013 second quarter. NPAs grew to 1.44% from .8%.

Closing Price Last Friday: CZNC: $19.55 -0.03 (-0.15%)

G. Added 50 of UBCP at $8.08-In A Satellite Taxable Account (see Disclaimer)

Snapshot of Trade:

United Bancorp Inc.  (UBCP) is a bank holding company with a market capitalization of around $39M at the $8.08 per share price. Generally, the bid/ask spread is large and trading is sparse. On the day of my purchase, the spread shrank to $8.04B/$8.08A when I placed my order so I just entered a limit order to buy 50 at the ask price. My 50 share lot was part of the 1,841 share total.

UBCP operates through The Citizens Bank  and The Community Bank with 20 branches in Ohio.

As noted in my last update, UBCP had a good earnings report for the second quarter, relatively speaking for it and regional banks in general. E.P.S. rose to $.14 compared to $.1 a year ago. United Bancorp, Inc. Reports Quarterly Earnings up 40% ROA and ROE are well below average however:

The low ROA and ROE will keep my investment in this bank low and I will trade the position some.

I previously sold a 50 share lot for a small profit. Sold 50 UBCP at $10.05-Bought 50 UBCP at $8.49 With this last 50 share lot purchase, I have bought back those shares at almost 20% below my last sale's price.

I have been reinvesting the dividends paid by the remaining 100 share lot, which have purchased over 22 shares. With 172+ UBCP shares now, I will continue to reinvest the dividend and then look for an opportunity to sell my highest cost lot profitably. The highest cost 50 share lot was bought at $8.13 (October 2010). Bought: 50 UBCP @ $8.13

The current quarterly dividend is $.08 per share, which was recently raised from $.07.  United Bancorp, Inc. (UBCP) Dividend Date & HistoryUnited Bancorp, Inc. Declares its Third Quarter Regular Cash Dividend Payment Assuming a continuation of the $.32 annual penny rate, the dividend yield is about 3.96%.

Closing Price Last Friday: UBCP: $8.04 -0.01 (-0.13%) 

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