BHB, BMRN, CIZN, HTBK, MATV, NWFL, OFS, OHI, ORAN, RYLD, SNY

Economy: 

The government's estimate for housing starts continues to trend down: 

July Monthly New Construction 

China's consumer and factory data miss expectations in July The economic slowdown in China is being aggravated by the government's aggressive actions on Covid outbreaks. 

NY Fed Empire State Manufacturing Index slumps to -31.3 vs. 8.5 expected

Atlanta Fed Wage Growth: 6.7% in July 2022 

Wage Growth Tracker - Federal Reserve Bank of Atlanta

Atlanta Fed Sticky Price Inflation: +5.2% (annualized) in July: 

Black Line = Flexible; Orange Line = Sticky  

Sticky-Price CPI - Federal Reserve Bank of Atlanta

++++

Trump is the first President to ever plead the 5th.   

Don the Con refused to answer any questions, other one asking for his name, during a deposition in a civil case, invoking his Fifth Amendment right against self-incrimination. The Teflon Don invoked the 5th over 400 times to questions relating to his businesses, property valuations and loans. 

Donald claimed he had no choice: “When your family, your company, and all the people in your orbit have become the targets of an unfounded, politically motivated Witch Hunt supported by lawyers, prosecutors, and the Fake News Media, you have no choice.” Trump takes the Fifth - POLITICO; Donald Trump invokes Fifth Amendment rights, declines to answer questions from NY attorney general 

Trump had a choice. If he is innocent, as he claims, nothing untoward would happen by simply telling the truth.

Donald refused to testify since truthful answers could be used against him in a criminal case while false testimony would subject him to felony perjury charges. The Hobbesian choice of either incriminating or perjuring himself was resolved in the way that other criminals do-invoke the Fifth Amendment. Republicans do not see it that way and have come to Trump's defense since he is after all their Dear Leader and unchallengeable leader of the GOP. 

Historians privately warn Biden: America’s democracy is on the brink - The Washington Post  I would agree. The power of authoritarians has never been stronger IMO.   

'Stunning': Ex-official who investigated Clinton reacts to documents found in Trump's home - CNN Video

18 CFR § 3a.11 - Classification of official information 

Some documents found in a storage room at Trump's resort were designated Top Secret SCI (Sensitive Compartmented Information). This kind of top secret room can only be reviewed in a designated secure location. FBI search of Mar-a-Lago raises critical national security questions: Sources - ABC News

As to the search warrant, Trump now claims that he would have promptly returned the government documents if only he was asked to do so: 

"Truth Social" Posts 8/12/22

 

Timeline: The Justice Department criminal inquiry into Trump taking classified documents to Mar-a-Lago As noted in that article, the effort to secure government documents taken by Trump started in May 2021. After several months of discussions, Trump finally turned over 15 boxes in January 2022. Some news reports claim that this occurred only after Trump was threatened with litigation. The National Archives found classified documents in those boxes and referred the matter to the DOJ for a criminal investigation. The DOJ convened a Grand Jury which has subpoena power. 

Prior to seeking a search warrant, the DOJ tried last April to secure the government records in Trump's possession through a grand jury subpoena.  

 

Trump received subpoena in spring for documents not turned over: Sources -ABC News  Trump Received Subpoena Ahead of F.B.I. Search, republished by MSN.com from Trump received a subpoena from the Justice Department ahead of the F.B.I.’s Mar-a-Lago search. - The New York Times; 

Fox complained the feds should have subpoenaed Trump’s documents before seeking a search warrant. They did. | Media Matters for America;

Trump received subpoena for classified records this spring | Fox News

At least 1 Trump lawyer signed a statement in June 2022 that all documents marked classified had been returned to the government in response to that GJ subpoena. Trump Lawyer Told Justice Dept. That Classified Material Had Been Returned - The New York Times, republished at MSN.Com at Trump Lawyer Told Justice Dept. That Classified Material Had Been Returned 

On June 22, a grand jury subpoena was served requesting video surveillance video of persons entering the storage area where Trump was storing top secret and other classified documents. 

Feds obtained surveillance footage showing boxes being moved after discussions with DOJ: report 

Mar-a-Lago would obviously be a prime target location for hostile foreign espionage services.  

The government received information that Trump had failed to hand over government documents, including those marked classified and top secret, in response to the GJ subpoena. 

The only option left for the government was a search warrant. 

Trump obviously failed to properly respond to that subpoena since boxes of classified and top secret material were seized in August. FBI search at Mar-a-Lago uncovers 27 boxes of government records, some classified | Nightline - YouTube The search warrant citation of an obstruction criminal statute may point to a knowing concealment of those documents in response to the GJ subpoena.  

Trump is now claiming that he fully cooperated with the National Archives and the DOJ.  

Trump Demands FBI Give Back Documents He Rightfully Stole

Fox "news" is already claiming, without an iota of proof of course, that the FBI planted documents during the Mar-A-Lago search. Donald Trump Suggests FBI Agents 'Planting' Evidence at Mar-a-Lago; Fox Host Watters Makes Baseless Claim FBI Planted Mar-a-Lago Evidence

GOP reacts to Trump search with threats and comparisons to ‘Gestapo’ - The Washington Post Senator Rick Scott (R-FL) compared the FBI/DOJ to the Gestapo. 

Senator Scott (R-FL) is no stranger to taking the 5th. 

GOP Comparing FBI to Gestapo Is 'Offensive': Holocaust Museum 

Paul Gosar (R-AZ) tweeted "We must destroy the FBI". Marjorie Taylor Greene called upon Congress to "Defund the FBI".  As Search Shows Trump Had Secret Files, G.O.P. Splits Over Assailing F.B.I. - The New York Times

Newt Gingrich compared the FBI to the Stasi. Newt Gingrich on FIRE: The FBI has Become 'American Stasi' - YouTube

Asked about threats to the FBI, Scalise claims without evidence that agents went ‘rogue’ - The Washington Post Scalise (R-LA) is the House Minority Whip for the GOP. 

The republicans rallying to Trump's defense prove once again that they exist in a fact free zone, where nothing but demagoguery, reality creations and mindless drivel flows from them. Their statements have nothing to do with the truth but an unquenchable thirst for power above all else.  

Citizen Trump may have broken a law that President Trump made a felony - The Washington Post

Trump sought to justify his conduct by claiming that Obama took government documents with him to Chicago and refused to give them back. 

The National Archives replied that it had custody of those documents, and there was no truth in Trump's claims. National Archives rejects Trump's claim that Obama took 33 million pages of records | Daily Mail Online; National Archives counters Trump baseless claims about Obama records - The Washington Post  

Donald claims that he declassified the documents in his possession while he was President. Trump says "it was all declassified" — how declassification usually works - CBS News The process for declassification is well established and would involve the following steps: (1) Usually, the declassification would be memorialized in a document prepared by the White House counsel (2) The President would sign that document; (3) Before the President would declassify a document, other government officials with knowledge of the matters contained in the document would be consulted about the potential dangers to national security resulting from the declassification; and (4) the classification markings would be crossed out with a notation of when the document was declassified by the President. The classified documents seized at Trump's resort still had their classified markings with no indication of being declassified.

And, I have not yet heard anyone supporting Trump's alleged verbal declassification when he was President. He has no authority to declassify the second that Biden was sworn in as President.  

Even if someone was willing to ignore Trump's long history of making false statements, and accept his claim that the documents were declassified by him when he was President, only an ignorant fool would want Donald to make those unilateral decisions without consulting experts first and following the normal declassification process. Trump’s false or misleading claims total 30,573 over 4 years - The Washington Post  

Donald will frequently falsely accuse others of committing the same bad acts that he has committed.  

(e.g. Clinton Foundation/Trump Foundation: President Trump Ordered To Pay $2 Million For Misusing Trump Foundation Funds-NPR; Clintons received no compensation from the Foundation and no funds were misappropriated for their personal use)

This tactic is a tried and true method used by Trump to deflect attention away from his own misconduct. Unfortunately, this tactic works on millions. 

A substantial number of incendiary, fact free and irresponsible comments were made by Fox hosts and guests, and the usual assortment of Trumpster wingnuts, relating to the lawful search warrant issued by a federal magistrate. Those kind of comments have consequences. 

A Trumpster attempted a violent entry into the FBI office in Cincinnati, wearing body armor and firing a nail gun at government employees. He was also armed with an assault rifle. Armed man who was at Capitol on Jan. 6 is fatally shot after firing into an FBI field office in Cincinnati; 

FBI attacker was prolific poster on Trump's Truth Social - The Washington Post Calling Trump's website "Truth Social" is just another example of the pure Orwellian thought that prevails in TrumpWorld.  

Senator Ted Cruz (R-TX) referring to Democrats: “It’s like the old Roman Colosseum where you slam on a breastplate and you grab a battle axe and you go fight the barbarians. As they say in the military world, it is a target-rich environment.” CPAC 2022 Is Rife With Militant Rhetoric About Taking Power - Rolling Stone

Senator Rand Paul (R-KY) has called for repeal of the Espionage Act. Mar-a-Lago FBI Raid: Rand Paul Calls for Repeal of Espionage Act  

Election deniers march toward power in key 2024 battlegrounds - The Washington Post 

Photos: Russia Jets Destroyed in Surprise Attack on Crimea Airfield Russia claims that it was just an accident. 

Russia will of course routinely torture Ukrainian civilians removed by force to "detention" centers. Six Weeks of ‘Hell’: Inside Russia’s Brutal Ukraine Detentions - The New York Times

++++

1. Corporate Bonds and Treasuries: 

Almost all purchases made in Roth IRA accounts are not discussed in this blog. 

Since some readers are interested in inflation protected treasuries, I discuss a TIP purchase in Item # 1.H. 

A. Bought 10 Arizona Public Service 3.35% SU Maturing on 6/15/24 at a Total Cost of 99.845:

Issuer: Arizona Public Service is the largest electric utility serving customers in Arizona and is the principal subsidiary of the S&P 500 component Pinnacle West Capital Corp. (PNW) 

PNW SEC Filings

PNW 10-Q for the Q/E 6/30/22 

PNW SEC Filed Earnings Press Release for the Q/E 6/30/22 

The price shown includes a $1 per bond Schwab commission. The bonds were purchased at 99.745. The accrued interest payment of $165.64 paid to the seller will be included as a deduction in my 2022 schedule using 1 line total ("Accrued Interest Paid to Bond Sellers"). 

I received that sum and a few more days of interest on 6/15/22: 

The seller's 1099 will include the $165.64 amount as interest income.   

This bond can be bought at a lower price now. I may buy 2 more.  

B. Bought 2 Brandywine 4.1% SU Bond Maturing on 10/1/24 at a Total Cost of 98.982: 

Purchased on 7/15/22. Discussed out of time order. 

Issuer: Operating entity for Brandywine Realty (BDN). While BDN guarantees the notes, it has no assets other than its investment in the operating partnership:

BDN SEC Filings

Our Properties | Brandywine Realty Trust

2021 Annual Report

FINRA Page: Bond Detail (prospectus linked)

Credit Ratings: Baa3/BBB- 

YTM at Total Cost = 4.589%

Current Yield at TC = 4.1422%

I have recently restarted a small ball position in the common shares and discussed the most recent purchases in my last post. 

C. Bought 1 Black Hills 3.95% SU Maturing on 1/15/26 at a Total Cost of 98.999:   

Purchased on 7/21/22. Discussed out of time order. 

Issuer: Black Hills Corp. (BKH) - Utility

I have eliminated my position in the common stock. 

BKH Analyst Estimates | MarketWatch

BKH SEC Filings 

FINRA Page: Bond Detail

Credit Ratings: Baa2/BBB+

YTM at Total Cost = 4.263%

Current Yield at TC = 3.99%

I now own 3 bonds including 1 in a RI account. 

D. Bought 1 Jefferies Group 4.5% SU Maturing on 7/22/25 at Par-Fidelity Corporate Notes Program: 

Discussed out of time order. 

Issuer: Wholly owned subsidiary of Jefferies Financial Group (JEF) 

Prospectus 

JEF Analyst Estimates | MarketWatch

JEF SEC Filings 

Bond Detail

Credit Ratings: Baa2/BBB 

E. Bought 2 Mondelez 2.125% SU Maturing on 3/17/24 at a Total Cost of 97.842: 

Purchased 8/3/22. Discussed out of time order.  

Issuer: Mondelez International Inc. Cl A  (MDLZ) 

I now own 6 bonds including 2 in a RI account. 

FINRA Page:  Bond Detail (prospectus not linked)

Prospectus 

Credit Ratings: Baa1/BBB

YTM at Total Cost = 3.509%

Current Yield at TC  = 2.17%

F. Bought 1 Treasury 2.125% Coupon Maturing on 3/31/24 at 98.472: 

Purchased 8/4/22. Discussed out of time order. 

YTM at Total Cost = 3.079%

Current Yield at TC = 2.158%

I now own 5 bonds. 

G. Bought 1 Appalachian Power 3.4% SU Maturing on 6/1/25 at a Total Cost of 99.371: 

Purchased 8/8/22. Discussed out of time order.  

The confirmation says American Electric Power, but the issuer is Appalachian Power, a wholly owned subsidiary of AEP. Generally, a SU bond issued by an operating subsidiary of a utility holding company will have a higher credit rating than its parent. AEP bonds are rated Baa2/BBB+, or 1 notch lower than the Appalachian Power SU bonds. 

AEP 10-Q for the Q/E 6/30/22 Results for Appalachian Power can be found at pages 80-90.  

Finra Page: Bond Detail (prospectus linked)

Credit Ratings: Baa1/A-

YTM at Total Cost = 3.636%

Current Yield = 3.42%

I will likely buy 1 or more bonds when and if the price declines enough to generate a 4% YTM. 

On the day of purchase, the 3 year treasury note closed at a 3.14% yield. 2022 Treasury Yield Curve Rates-U.S. Department of the Treasury 

H. Bought 1 Treasury 2.75% Coupon Maturing on 5/15/25 at 98.757: 

Purchased 8/9/22. Discussed out of time order. 

YTM at Total Cost  = 3.222671%

Current Yield at TC = 2.7846%

I. Bought 2 JP Morgan 2.95% CDs Maturing on 5/12/23:

Quarterly Interest Payments  

Purchased 8/10/22. Discussed out of time order.

J. Bought 1 Treasury 2.875% Coupon Maturing on 11/30/23 at 99.57: 

YTM at Total Cost = 3.215139%

Current Yield at TC =  2.8874% 

I now own 2 bonds. 

K. Bought 1 TIP .125% Coupon Maturing on 4/15/26 at 99.273-Roth IRA Account: 

I now own 2 bonds. 

Real Yield Positive at .325%

While positive, the real yield is meaningless. Note the accrued interest of $.47 for 123 days. Nonetheless, any real yield for a TIP produces a better total return over its term than a IBond purchased today, since the current IBond does not have a coupon but only the CPI inflation accretion to the principal amount. 

The coupon of .125% is applied to the principal amount as adjusted by CPI.  

Inflation Factor = 1.2198  (addition to principal amount arising from CPI since issuance) I have to pay the seller a sum representing this principal accretion. 

Principal Cost 1 Bond = 99.273 = $992.73

If this was a non-inflation protected treasury, the $992.73 would be the full principal amount paid to the seller plus accrued interest. 

Principal Amount Paid to Seller = $1,113.83

Calculation: $992.73 x. Inflation Factor of 1.12198 = $1,113.83  

I will now receive the inflation accretion to the principal amount until the 4/15/26 maturity date which is the only reason to buy this security.

Better or Worse off Compared to Buying a Nominal Treasury Maturing on 4/15/26:  

A nominal treasury maturing on 4/15/26 will have a much higher yield. I could not find a treasury maturing on 4/15 but there is a 2.375% coupon maturing on 4/30/26 that currently has a 3.06% ask yield. 

Breakeven Inflation Rate: This is the annual average CPI that will be required for my TIP purchase to breakeven on a total return basis with the nominal treasury maturing on 4/30/26.  

3.06% - .325% = 2.735%

So I am better off with the TIP if the average annual CPI until maturity is higher than the breakeven inflation rate. The better off is not the result of the TIP coupon so much as the accretion to the principal amount resulting from increases in CPI. 

I do not know what inflation will average from now to 4/30/26, and neither does the seller. My best guess is that it will average more than 2.735%.

The breakeven inflation rate is easier to calculate when the maturity is 5 years since I can just take the yields off the Treasury website. Interest Rate Statistics | U.S. Department of the Treasury

As of 8/15/22 Close- 5 Year Maturity: 

5 Year Nominal Yield = 2.91%

5 Year TIP Real Yield for TIP: .29%

Breakeven Inflation Rate: 2.62%

I will not buy TIPs when the real yield is negative.

5 Year TIP Real Yields

5 Year TIP Breakeven Inflation Rate Chart: Note the recent downtrend. 

On 3/28/22, the breakeven inflation rate was a 3.56%. 

5-Year Breakeven Inflation Rate-St. Louis Fed

2. Bought Back 100 ORAN at $10.36-Schwab Account: 

History this Account: 

Quotes:  

USD: Orange ADR

Euro: Orange (France: Euronext Paris)

Euro to US Dollar Exchange Rate Chart | Xe

ADR Ratio: 1 for 1 

Investment Category: Bond Substitute 

Website: Orange

ORAN SEC Filings (SEC forms for foreign company)

ORAN.PA - Orange SA Key Metrics | Reuters

2021 Annual Report

Last Elimination this account: Item # 2. Eliminated ORAN - Sold 100 at $11.77 (7/6/22 Post) I had just received the semi-annual dividend.

Last Buy Discussion (shares previously sold): Item # 1.I. Added 10 ORAN at $10.48 (12/31/21 Post) 

Currency Impact: When I sold that lot on 6/27/22, the EUR/USD exchange rate was at 105.66 and had fallen to 102.27 when I purchased this 100 share lot. The decline in the Euro would cause the USD priced ADR to underperform the ordinary shares priced in Euros. The most recent top in the EUR/USD was at 122.5 on 1/5/21. Since that date, the Euro has made a series of lower highs and lower lows.  

Dividend: Semi-Annually. 

Orange (ORAN) Dividend History | Nasdaq

The next ex dividend date will be in December. 

For the last dividend that I received from ORAN, France withheld about a 12.8% tax. (see previous snapshot of trade history in this account) 

The $3.11 "fee" paid in connection with the 100 share purchase is also a tax. The tax is applied to purchases only and amounts to .3% of the purchase amount.  ($1,035.5 x. .003% = $3.1065, rounded up to $3.11)  

Last Ex Dividend: 6/3/22

Yield: The yield before taxes will vary with the then current exchange rate. 

For the USD priced shares, the last two dividends totalled $.765 per share. 

Using that number, the yield at $10.36 is 7.38%.   

Last Earnings Report (Semiannual Period Ending 6/30/22): When I last discussed ORAN, this report had not yet been released. This company provides earnings information only on a semiannual basis. I thought the report was sufficiently okay to try yet another dividend harvest trade.  

SEC Filed Financial Report 

SEC Filed Slide Presentation 

Operating Income to Net Income: 

Revenues from Telecom: €21.297B

Revenues from France: €8.827B

Organic Cash Flow: €1.445B

Analyst Reports (available to Schwab customers): One frequent observation made by analysts is the earnings drag from Orange's operations in Spain, where he is spending a lot of money with inadequate returns on capital trying to compete with the incumbent telecommunications company Telefonica.  Orange is strong in France and has growing operations in Africa and the Middle East. Orange also has operations in Belgium, Poland, Luxemburg, Moldava, Romania and Slovakia. ORAN is attempting to merge its Spanish operations with MasMovil, subject to regulatory approval, which may rationalize the competitive market in Spain, at least to some meaningful decree.  ORANGE and MASMOVIL sign an agreement to combine their operations in Spain (7/23/22) 

Morningstar (7/8/22): 4 stars with a FV of US$14.5 and no moat. 

S&P (8/8/22): 4 stars with a 12 month PT of US$12, reduced from $14.  

Goal: Harvest one or two dividend payments and to sell at a 2%+ annualized profit. 

3. Small Ball: 

A. Bought 5 HTBK at $11.8: 

Quote: Heritage Commerce Corp.

"Heritage Commerce Corp, a bank holding company established in October 1997, is the parent company of Heritage Bank of Commerce, established in 1994 and headquartered in San Jose, CA with full-service branches in Danville, Fremont, Gilroy, Hollister, Livermore, Los Altos, Los Gatos, Morgan Hill, Oakland, Palo Alto, Pleasanton, Redwood City, San Francisco, San Jose, San Mateo, San Rafael, Sunnyvale, and Walnut Creek. Heritage Bank of Commerce is an SBA Preferred Lender. Bay View Funding, a subsidiary of Heritage Bank of Commerce, is based in San Jose, CA and provides business-essential working capital factoring financing to various industries throughout the United States."

HTBK SEC Filings

HTBK Analyst Estimates | MarketWatch

10-Q for the Q/E 6/30/22 

2021 Annual Report 

Last Discussed: Item # 1.N. Added to HTBK - Bought 10 at $11.1 (7/2/21 Post) 

Last Substantive Discussion: Item # 1.L. Bought 10 HTBK at $11.52 (6/25/21 Post)

Average cost per share this account: $11.41 (25 shares)

Dividend: Quarterly at $.13 per share ($.52 annually)

Yield at AC = 4.56%

Last Ex Dividend: 8/10/22 (owned all as of)

Last Earnings Report (Q/E 6/30/22): SEC Filed Earnings Press Release 

Comparisons are to the 2021 second quarter. 

E.P.S. = $.24, up from $.15

Consensus at $.23 

NIM = 3.38%, up from 3%

Efficiency Ratio: 52.73%

NPL Ratio: .09%, down from .22%

NPA Ratio: .05%, down from .09%

Charge Off Ratio = Net recovery of $2.9M 

The NPL, NPA, and Charge Off ratios are not consistent with a ongoing recession in the second quarter. 

Coverage Ratio = 1,171.18% (allowance for loan losses to NPLs)

Loan to Deposit Ratio: 66.81%

Non-Interest Bearing Deposits to Total Deposits: 40.02%

ROE = 9.86%

ROTE = 14.06%

ROA = 1.1%

Total Capital Ratio = 14.6%

Tangible Book value per share = $7.04, up from $6.65

B. Added 5 DEA at $18.77: 

Quote: Easterly Government Properties Inc. (DEA) 

DEA SEC Filings

Easterly Government Properties Inc Profile-Reuters

Website: Easterly Government Properties, Inc.

Properties | Easterly Government Properties, Inc.

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

Last Buy Discussions Item # 2.K. Added to DEA - Bought 5 at $18.45 (5/12/22 Post); Item # 4.A. Added to DEA - Bought 10 at $20.4 (2/24/22 Post); Item # 3.B. Added 5 DEA at $20.76-Fidelity Taxable Account (10/8/21 Post)

Average Cost per share this account: $20.08  (70 shares)

Dividend: Quarterly at $.265 per share ($1.06 annually)

DEA Dividend History | Nasdaq

Yield at AC = 5.28%

Last Ex Dividend:  8/10/22  (owned all as of) 

Last Earnings Report (Q/E 6/30/22): SEC Filed Press Release and SEC Filed Supplemental Package 

Adjusted FFO per share: $.33

CAD per share: $.288

CAD - Cash Available for Distribution

A failure to cover the dividend with CAD could lead to a dividend cut. 

DEA is an Office REIT which will generally have significant quarterly outlays for routine maintenance and contractual tenant improvement expenses. Those expenditures are not available to support the dividend and are deducted from FFO when calculating CAD.  

Sell Discussions: Item # 2.M. Pared DEA in Fidelity Taxable Account- Sold 12+ at $23.01 (1/13/22 Post); Item # 3.E. Pared DEA in Fidelity Taxable-Sold 10 at $22.92 (8/20/21 Post); Item # 1.A. Sold 21+ DEA at $28.81 (6/6/20 Post)(profit snapshot = $272.6); Item # 3.A. Sold 10 DEA at $22.39 (11/20/19 Post)(profit snapshot = $47.24); Items 1.A. and 1.B. Sold 10 DEA at $19.81 and Eliminated DEA in Schwab Account at $19.81 (8/24/19 Post)(profit snapshots $74.38); Sold 10 DEA at $21.44-Used Commission Free Trade (5/17/18 Post)(profit snapshot = $22.59); Item 5. A. Sold 50 DEA at $21.59-Used Commission Free Trade (12/11/17 Post)(profit snapshot = $97.85)

DEA Realized Gains to Date: $561.84

Goal: Very modest at dividend + annual realized gains of 2%+ before ROC adjustments to the cost basis. Will consider selling highest cost lots when and if the price exceeds $22. 

C. Added 5 NWFL at $25.05: 

Quote: Norwood Financial Corp.

NWFL SEC Filings

10-Q for the Q/E 6/30/21 

"Norwood Financial Corp is the parent company of Wayne Bank, which operates from fourteen offices throughout Northeastern Pennsylvania and fifteen offices in Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York." 

5 Year Financial Data: 

2021 Annual Report at page 10 

Last Buy Discussion: Item # 2.A. Bought 10 NWFL at $25.5 (11/26/21 Post) 

Investment Category: Regional Bank Basket Strategy

Average cost per share: $25.35 (15 shares)

Dividend: Quarterly at $.28 per share, last raised from $.26 effective for the 2022 first quarter payment. 

Norwood Financial Corp. Dividend History-Nasdaq

Yield at $25.35 = 4.42%

Last Ex Dividend: 7/14/22 (owned 10 shares as of)

Last Earnings Report (Q/E 6/30/22): SEC Filed Press Release 

Comparisons are to the 2021 second quarter: 

E.P.S. = $.84, up from $.70

NIM = 3.49%, up from 3.44%  

NPL Ratio = .04%, down from .28%

NPA Ratio = .05%, down from .24%

Charge off ratio: Net recovery. 

ROA = 1.35%, up from 1.15%

ROE = 15.19%, up from 11.59%

Tangible Book Value per share = $18.02

ROTE = 18.16%, up from 13.63%

D. Pared OFS in Fidelity Taxable - Sold 13.82 at $11.32: 

Quote: OFS Capital Corp- Mini Cap BDC

OFS SEC Filings

2021 Annual Report (risk factor summary starts at page 29 and ends at page 63)

Website: Homepage - OFS Capital

Management: External

Profit Snapshot: $62.43 (8/9/22 sale only)

Average cost per share this account before pare: $4.49

Average cost per share this account after pare: $4.08 (76+ shares)

Snapshot Intraday on 8/9/22 after pare

Dividend: Quarterly at $.29 per share (regular only)

OFS Dividend History | Nasdaq

Recent dividend history has the penny rate moving back up after being slashed from $.34 to $.17 effective for the 2020 second quarter payment.

Yield at New AC of $4.08 this account = 28.43% (assumes continuation of the current dividend rate)

Next Ex Dividend Date: 9/22/22 

5 year Chart: The remaining shares in this account were bought during the pandemic meltdown phase. 

Intraday 8/9/22 Snapshot 

Net asset value per share history:

6/30/22:   $14.57 10/Q for the Q/E 6/30/22 at page 3 

03/31/21:  $11.96 10-Q at page 3 

12/21/20:  $11.85 10-K at page 69 

6/30/20:   $10.10
3/31/20:    $  9.71
12/31/19:   $12.46
9/30/19:    $12.74  
6/30/19:    $12.95   Page 2 10-Q
3/31/19      $13.04   10-Q
12/31/18    $13.10
6/30/18     $13.70
03/31/18   $13.67
12/31/17    $14.12
12/31/16    $14.82
12/31/15    $14.76
12/31/14    $14.24
12/31/13    $14.54

IPO Offering Price at $15 (November 2012) with proceeds after the underwriters' discount at $13.05 Final Prospectus Supplement

Last Earnings Report (Q/E 6/30/22): SEC Filed Press Release 

NII = $6.2M

NII per share = $.47

Adjusted NII per share = $.24 (deducts accrued and unpaid incentive fees "incentive" fees to external management company) 

Net asset value per share = $14.57, down from $15.52 as of 3/31/22, "primarily due to unrealized losses."

As of 6/30/22,  "based on fair value,  93% of the OFS loan portfolio "consisted of floating rate loans and 98% of our loan portfolio consisted of senior secured loans."

Last Buy Discussions: Item # 3.F. Bought 40 OFS with an Average Cost Per share of $4.18 (11/7/20 Post); Item # 2.L. Added 5 OFS at $3.97-Fidelity Taxable (11/28/20 Post); Item # 1.K. Added 3 OFS at $4.5 -Fidelity Taxable (8/8/20 Post); Item # 3.E. Added 5 OFS at $9.66; 5 at $9.2; 5 at $8.7; 5 at $6; 5 at $5.65; 2 at $3.7; 10 at $3.79 (4/11/20 Post)

Last Sell Discussions: Item # 4.B. Pared OFS in Fidelity Account - Sold 15.427 at $12.49 (6/15/22 Post)(profit snapshot = $60.07; contains snapshots of realized gains prior to 2022); Item # 1.H. Pared OFS in Fidelity Account Sold 35 at $10.07- Highest Cost Lots That Could be Sold Profitably (7/22/21 Post)(profit snapshot = $12.44); Item # 4.D. Pared OFS in Fidelity Account - Sold 29+ at $13.06 (4/21/22 Post)(profit snapshot = $69.88); Item # 2.M. Pared OFS in Vanguard Taxable-Sold 20 at $7.2 (12/25/20 Post)(profit snapshot = $56.8); Item # 3.B. Sold 10 OFS at $12.04 (11/30/19 Post)(profit snapshot = $7.04); Item # 4.B. Sold 60 shares at $12 (11/13/19 Post)(profit snapshot = $13.11); Item # 3.A. Sold Highest Cost OFS Lots in Schwab Account - 50 shares at $12.27 and 50 at $12.47 (5/5/19 Post)(profit snapshots = $69.55) 

OFS Realized Gains to Date: $414.55

Most of the gain is unrealized with positions held in several accounts.   

Goal: Any profit on the shares + the dividends.   

E. Added 4 RYLD at $21.21-Fidelity Account:

Quote: Global X Russell 2000 Covered Call ETF (RYLD)

Sponsor's website: Russell 2000 Covered Call ETF

This is a buy-write ETF using the Russell 2000 index. 

Last Discussions: Item # 2.L. Bought 1 RYLD at $20.72-Fidelity Account (6/1/22 Post); Item # 2.I. Bought 5 RYLD at $22.48 - Fidelity Account  (2/10/22 Post)

Average cost per share this account: $22.57 (20 shares)

Dividend: Monthly at a variable rate. 

Nex Ex Dividend: 8/22/22

The yield shown at financial websites include a short term capital gain distribution of $.30656 paid on 1/7/22. 

Last 12 Dividend Payments through August = $2.8053 per share (excludes short term capital gain distribution)

Yield at AC = 12.43%, using the the $2.8053 annual number. 

Goal: Harvest the dividend and sell at any profit. 

F. Added 5 RYLD at $21.2- Schwab Account:

See Item # 2.D. above. 

G. Added 5 SNY at $46.6: 

Quote: Sanofi ADR

Current Position: 10 shares with an AC of $47.75.

I discussed SNY in my last post and nothing further to add here other than the following:  

I mentioned in a comment published on 8/11/22 that SNY was down almost 9%, primarily due to fears about the potential liabilities that may arise from litigation over Zantac, a heartburn drug. GlaxoSmithkline (GSK) and Pfizer (PFE) are also being sued. 

The claim is that Zantac can generate a chemical under certain conditions called Nitrosodimethylamine which is alleged to be a human carcinogen.  

The litigation has been ongoing for some time and is discussed in SNY's 2021 Annual report at page F-81 Annual Report

The sudden fear response was triggered by a Morgan Stanley analyst claiming the damages could possibly total $10.5B to $45B based on settlements for other drugs in the past. 

The litigation section  of major drug company annual reports is generally very long. No one can really assess what will happen in trials or the amount of damages that may ultimately be awarded by juries.  

The first Zantac trial starts later this month. If there is no settlement, it will be years before all of those trials end and the appeals process is exhausted by the losing party at trial. 

Reaction 'excessive' to Sanofi's upcoming litigation: analysts

Another recent development that is pressuring the stock is a hold placed on a trial of SNY's multiple sclerosis. Tolebrutinib clinical trial program update - Sanofi

Maximum Position: 20 shares with each subsequent purchase having to be at the lowest price in the chain. 

H. Bought 14 Shares MATV at Multiple Prices - Schwab Account: 

Quote: Mativ Holdings Inc. (MATV) 

"The Company offers a wide range of critical components and engineered solutions to solve our customers’ most complex challenges. With over 7,500 employees worldwide, we manufacture on four continents and generate sales in more than 100 countries. The Company’s two operating segments, Advanced Technical Materials and Fiber-Based Solutions, target premium applications across diversified and growing end-markets, from filtration to healthcare to sustainable packaging. Our broad portfolio of technologies combines polymers, fibers, and resins to optimize the performance of our customers’ products across multiple stages of the value chain." 

Mativ was created on 7/7/22 through the combination of Neenah Papers and  Schweitzer-Mauduit International. 

MATV Analyst Estimates | MarketWatch

Average Cost per share this account = $20.96

Dividend: Quarterly at $.40

Yield at $20.96 = 7.63%

Next Ex Dividend: 8/18/22

Last Earnings Report (Q/E 6/30/22): SEC Filed Press Release 

The combination of Neenah Papers and Schweitzer-Mauduit International, Inc. was completed on 7/6/22. SWM and Neenah Complete Merger to Become Mativ, a ~$3 Billion Global Leader in Specialty Materials This reports provides information for those companies as separate entities through 6/30/22. 

SWM: Organic revenue growth of 11%; GAAP E.P.S. = $.36; Non-GAAP E.P.S. = $.86)

Neenah Papers: Organic revenue growth of 17%;  GAAP operating income at $17M; "Adjusted EBITDA increased 14% to $36.2 million; price increases more than offset higher input costs":

SWM YTD Non-GAAP Per Share Adjustments: 

I. Bought 10 CIZN at $17.45: 

Quote:  Citizens Holding Co. (CIZN)

"Citizens Holding Company (the “Company”) is a one-bank holding company and the parent company of The Citizens Bank of Philadelphia (the “Bank”), both headquartered in Philadelphia, Mississippi. The Bank currently has twenty-eight banking locations in fourteen counties in East Central, North, and South Mississippi."

The market cap at $17.45 is about $99+M. 

CIZN SEC Filings

Investment Category: Regional Bank Basket Strategy (primarily viewed as a bond substitute) 

Last Elimination: Item # 2.L. Eliminated CIZN -Sold 25 at $19.06 n(4/7/22 Post) 

Dividend: Quarterly at $.24 per share, last raised from $.23 effective for the 2015 4th quarter payment. 

CIZN Dividend History | Nasdaq

Yield at $17.45 = 5.5% 

Last Ex Dividend: 6/15/22

CIZN owns its main office and 26 of its 28 branch offices. 10-K at pp. 25-27. 

Last Earnings Report (Q/E 6/30/22): 10-Q

This is a better than totally lackluster report IMO which is the norm for this bank holding company.  

Comparisons are to the 2021 second quarter. 

E.P.S. = $.45, up from $.34

Net Income = $2.541M

NIM = 2.78%, up from 2.57%. 

NPL Ratio: .84%

Coverage Ratio = 138.47%

Charge off ratio: net recovery of $214K. 

Total Capital Ratio = 13.32% (Holding company level) 

Goal: As with other bond substitutes, the total return goal is harvesting dividend and selling the stock at more than a 2% annualized gain. 

CIZN Realized Gains to Date: $435.89

Almost all of that profit originated from trades made in 2011 and 2015: 

Consider to sell range: $19-$20. 

J. Pared OHI in Fidelity Taxable - Sold Highest Cost 6 Shares at $33.11: 

Quote: Omega Healthcare Investors Inc. (OHI)

OHI SEC Filings

Map of Our Locations (921 facilities; 63 Operators)

Press Releases 2022 – Omega Healthcare Investors, Inc.

2021 Annual Report (risk factor summary starts at page 16 and ends at page 30)

Omega owns nursing homes and senior living facilities. Those are generally the highest risk properties that a REIT can own. Over many years, owners of those facilities have had to deal with a significant number of operator bankruptcies and inability to pay rent when due. 

Profit Snapshot: +$2.72

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

Last Buy Discussions: Item # 2.C. Bought 1 OHI at $26.83; 1 at $26.48; 1 at $25.47 (5/12/22 Post)(discussed the 2022 first quarter report); Item # 2.D. Added to OHI - Bought 2 at $28.57; 2 at $28.1 (12/10/21 Post)

AC per share before pare this account: $29.62

AC per share after pare: $28.44

Dividend: Quarterly at $.67 per share ($2.68 annually)

Dividends – Omega Healthcare Investors, Inc.

Yield at $28.44 = 9.42%

Last Ex Dividend: 7/29/22 (owned all as of)

Last Earnings Report (Q/E 6/30/22): SEC Filed Press Release 

There are a lot of cash flow numbers in this report that include and exclude certain items. The most relevant cash flow number IMO is FAD (Funds Available for Distribution). The issue is whether the dividend is comfortably covered by FAD. 

OHI does not provide a FAD per share number but does show FAD at $172.106M. Dividing that number by 243M weighted average common shares outstanding during the quarter, the FAD per share number is $.708. While the dividend is covered by FAD, I would not describe the cushion as comfortable. 

During the second quarter, OHI repurchased 4.2M shares for $115M. 

OHI sold 13 facilities for $54M in cash, generating a tax profit of $25M. I would assume that $25M profit is after the depreciation adjustment to the tax cost basis and consequently is not a real profit number based on the original cost plus capital improvements.    

Review of the operator update section is important for nursing home REITs. 

Sell Discussions Starting in 2017:  Item # 3.C. Eliminated OHI-Sold 26 at $31.44 (6/25/21 Post)(profit snapshot = $115.71); Item # 1.C. Sold 31 OHI at $30.13 (6/7/18 Post)(profit snapshot = $41.01); Item # 6 Sold 100 OHI at $37.38 - Update For Equity REIT Basket Strategy As Of 8/27/16 - South Gent | Seeking Alpha (profit snapshot = $117.60); Item # 6 Sold 39 Shares at $32.56  (10/5/17 Post)(profit snapshot $63.64); Item #5.A. Sold 107 OHI at $34.55 (7/15/17 Post)(profit snapshot = $211.51); Item 2.A. Sold 52+ OHI at $33.6-Eliminated Position in Roth IRA account  (5/8/17 Post)(profit snapshot = $66.63) 

The largest gain was in 2016:

101+ Shares +$887.91 

This sale was not discussed since I did not publish blogs between September -December 2016. I did mention this transaction in a comment published on 9/7/16. Seeking Alpha

OHI Realized Gains to Date: $1,506.23. 

I view my OHI past trading history as good given the difficulty in generating profits on the shares. 

5 year chart as of 8/12/22: 

K. Eliminated BMRN - Sold 2+ at $94.94: 

Quote: BioMarin Pharmaceutical Inc.

Website: BioMarin Pharmaceutical Inc.

Our Pipeline - BioMarin

BMRN Analyst Estimates | MarketWatch

BMRN SEC Filings

10-Q for the Q/E 6/30/22 

2021 Annual Report 

I would label BMRN a successful, so far, drug company in developing treatments for rare chronic diseases.  

The most recent rally in the stock price is based primarily IMO on increased optimism that Europe will soon approve conditional marketing for Roctavin, a gene therapy for hemophilia A. There is reason for optimism as discussed in this article. BioMarin's hemophilia gene therapy 

BioMarin Receives Positive CHMP Opinion in Europe for Valoctocogene Roxaparvovec Gene Therapy to Treat Adults with Severe Hemophilia A - Jun 24, 2022

As previously discussed, BMRN suffered a major setback when the FDA refused to grant marketing approval back in 2020, wanting more studies.  

Profit Snapshot: $44.18

Last Buy Discussions: Item # 2.K. Added 1 BMRN at $75.68- Fidelity Taxable Account (6/9/22 Post); Item # 2.E. Started BMRN as a Placeholder- Bough 2 at $77.65 in Vanguard Account; 1 at $77.55 (Fidelity); 2 at  $76.95-Schwab Account(6/12/21 Post)

Last Discussed: Item # 2.C. Eliminated BMRN in Vanguard Taxable Account - Sold 4 at $89.25 (7/22/22 Post)(profit snapshots = $47.7) I discussed the 2022 first quarter report in that post. 

Dividend: None and none expected. 

Last Earnings Report (Q/E 6/30/22): 

BMRN's GAAP earnings do not support the current stock price. The hope is that future earnings will.  

GAAP Net Income per share = $.15

Non-GAAP E.P.S.  = $.58

Includes Product Revenues

One reason for the low GAAP E.P.S. is continuing expenditures on R&D which may or may not prove to be rewarding to shareholders. 

Total R&D Expenses 2nd Q: $158.2M

Reconciliation of GAAP to Non-GAAP: The largest addition to GAAP is share compensation, which I am generally unwilling to ignore as an expense item. 

Analyst Reports (available to Schwab customers): 

Morningstar (8/5/22): 4 stars with a FV of $105 and a narrow moat.  

Credit Suisse (8/3/22): Outperform with a 12 month PT of $111, raised from $107 in response to the 2nd quarter earnings report. Raised 2022 non-GAAP E.P.S. estimate to $1.96 from $1.89 based on better than expected revenues from the recently launched Voxzogo ($34M in revenues), a treatment for Achondroplasia. 

S&P (8/14/22): 4 stars with a 12 month PT of $105. Increased 2022 Non-GAAP estimate to $2.16 form $2.11 and reduced the 2023 Non-GAAP E.P.S. estimate to $4.19 from $4.25.   

My impression developed over the years is that the Stock Jocks just accept non-GAAP E.P.S. numbers and consensus forward estimates when assigning a P/E multiple. Ignoring the non-GAAP E.P.S. estimates and using only GAAP numbers would produce a far lower price. 

For BMRN, the stock price will depend on what the EU and FDA ultimately do with Roctavin. Even if the EU approves this gene therapy for marketing, the stock price will likely be slammed when and if the FDA refuses to do so. 

2022 BRMN Trading Profits to Date: $91.88 (6+ shares)

L. Pared BHB in Fidelity Sold 5 of 45 at $30: 

This was part of my highest cost lot. 

BHB "is the parent company of its wholly-owned subsidiary, Bar Harbor Bank & Trust. Founded in 1887, Bar Harbor Bank & Trust . . . provides full-service community banking with office locations in all three Northern New England states of Maine, New Hampshire and Vermont."

The "principal executive office is in a building owned by the Company located at 82 Main Street, Bar Harbor, Maine. The Bank provides full-banking services at 53 locations throughout Maine, New Hampshire and Vermont, of which 33 are owned and 20 are leased." 2021 Annual Report at page 28 

Quote: Bar Harbor Bankshares (BHB)

BHB SEC Filings

Bar Harbor Bankshares Analyst Estimates | MarketWatch

Investment Category: Regional Bank Basket Strategy

Last Buy Discussions: Item # 2. Restarted BHB in Schwab Taxable Account-Bought 5 at $26.6; 5 at $25.55 (9/17/21 Post); Item # 1.D. Added to BHB-Bought 2 at $22.75; 5 at $21.5 (2/20/21 Post); Item # 2.D. Added to BHB-Bought 5 at $17.5; 5 at $14; 2 at $13.8; 2 at $13.5 (5/2/2020 Post)

Profit Snapshot  = $38.58

New Average Cost per share this account: $19 (40 shares)

Snapshot Intraday on 8/15/22 after pare

Dividend: Quarterly at $.26 per share ($1.04 annually)

Yield at $19: 5.4737%

Last Ex Dividend: 8/15/22 (sold on)

Last Earnings Report (Q/E 6/30/22): SEC Filed Press Release and 10-Q for the Q/E 6/30/22 

Comparisons are to the 2021 second quarter. 

E.P.S. = $.70, up from $.60 

NIM = 3.19%, up from 2.79%  

Efficiency Ratio: 59%, down from 63% (down is good)

NPL Ratio  = .21%, down from .54% (")

NPA Ratio = .21%, down from .37% (") 

Charge Off Ratio : Net Recovery of $37K 

ROTE = 15.74%, up from 12.91%

ROA = 1.14% 

11% Annualized Loan Growth

9% Annualized Deposit Growth 

Some Sell Discussions: Item # 3.E. Pared BHB in Fidelity Account - Sold 2 at $31.5 (12/16/21 Post)(profit snapshot = $18.43); Item # 1.I. Pared BHB-Sold 10 at $28.5 and 5 at $30.5-highest cost lots in Fidelity Taxable Account (3/20/21 Post)(profit snapshot = $95.46): Item # 3.A. Pared BHB-Sold 40 at $24.48-highest cost lots in Fidelity taxable account (12/5/20 Post)(profit snapshot = $38.17); Item # 3.B. Eliminated BHB-Sold 54+ Shares at $26.34 (5/18/19 Post)(profit snapshot = $131.1); Item # 1.A. Sold 100 BHB at $30.69-Used Commission Free Trade (7/15/18 Post)(profit snapshot = $1,718.56) ; Item # 1.A. Sold 50 BHB at $30.02 (5/21/18 Post)(profit snapshot = $666.96); Item #3.A. Sold 100 BHB at $29.55 (4/26/18 Post)(profit snapshot = $682.94) ; Item # 1. A. Sold 30 BHB at $29.42 (3/25/18 Post); Sold 100 BHB Update For Regional Bank Basket Strategy As Of 5/6/2016 - South Gent | Seeking Alpha (profit snapshot = $936.96)

BHB Realized Gains to Date: $4,445.1 (my largest gain in my regional bank basket strategy)

I will consider reducing or eliminating my position in the $30-$35 range. I own some shares in other accounts. 

Disclaimer: I am not a financial advisor, but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sale of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals, and situational risks. I can only make that kind of assessment for myself and my family members.