Economy:
As expected the FED raised the FF rate by .25% last week. The new range is 4.75% to 5%. Federal Reserve issues FOMC statement
Powell stated that it was not likely the FED will cut rates this year.
Fed's Powell says SVB collapse may slow the economy through tighter credit I believe that is happening now and, depending on the severity and duration, may have up to an economic equivalent impact to a 50 basis point or higher increase in the FF rate.
Yellen added to the angst last Wednesday by remarking that the government was not considering blanket guarantees of all deposits.
Jim Cramer thought her comment, rather than the FED rate hike, was the likely cause of the swift and negative decline in stocks, but her comment IMO was just a clarification of what she had said the previous day.
The FDIC will consider insuring all deposits of smaller banks when the FDIC seizes the bank; the bank failure was due to a deposit run; and was having a contagion effect. That is what I understood Yellen to say last Tuesday.
A blanket increase in FDIC insurance limits will have to be done by Congress and legislation is moving along there but any change is uncertain given the republican control in the House.
The FED also released its summary economic projections last Wednesday: The Fed - March 22, 2023: FOMC Projections materials, accessible version
There was not much change in those projection compared to the ones made last December. Real GDP growth is still predicted to be positive and tepid in 2023-2025.
The .4% real GDP growth projection for 2023 will require one or more negative quarters. The Atlanta Fed is currently estimating 2023 1st quarter real GDP growth at 3.2%. GDPNow - Federal Reserve Bank of Atlanta I am contributing to that number with a new roof.
The Dot Plot is the current FED members' expectations about the future FF rates:
The majority do not expect a rate cut this year and a majority expect only 1 more .25% increase which would take the range to 5%-5.25% which is anticipated now to be the terminal rate. At least a .5% cut is expected by 14 of 18 members. 11 members are currently predicting a cut back to at least 4.25%-5% from the terminal rate.
Notwithstanding the Fed's Dot Plot and rhetoric from Powell and other FED members, the Bond Ghouls do not view any further increase as more probable than not and are predicting a significant cut before year end. Currently, the probability is at 88.2% that the rate will not be raised at the next meeting. The probabilities for one or more cuts later this year have increased significantly over the past month:
December 2023 Probabilities:
Gross, Gundlach Predict Imminent Recession As Rate Hikes Choke Growth A recession late this year is now a more probable than not event IMO. I would attribute the increased odds to the banking crisis rather than a FF rate of 4.75%-5%.
The current economic data is still not consistent with an ongoing recession. The primary inconsistency remains still robust job creation.
And, the decline in mortgage rates may reinvigorate the new homebuilding sector.
Banking Sector Turmoil Is a 'Worldwide Phenomenon,' Says Kenneth Rogoff Rogoff is an internationally recognized scholar of financial crises.
Regional Bank Pain Isn't Over: Fed Official Says A New Systematic Crisis Looms-Benzinga The Fed Official, Scott Rechler, is a one of the NY FED Directors and is a private investor. Scott Rechler - Board of Directors - Federal Reserve Bank of New York - FEDERAL RESERVE BANK of NEW YORK As such, he is not speaking for the FRB NY. He is certainly describing the current carnage in the commercial office sector. The question now is whether that is already overdone or has more pain to endure as he maintains.
Treasury Yield Curve March 2023:
By continuing to increase the FF rate, which is contributing to the fear contagion concerns about U.S. banks, the FED is causing a decline in intermediate and longer term interest rates, thereby narrowing the unrealized losses of bank owned securities. And, except for banks that are in need of replacing withdrawn deposits through brokered CDs, short term CD rates are declining. The FED is unintentionally mitigating two primary NIM related problems with its current monetary policies and rhetoric.
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Allocation Shifts Discussed in this Post:
Treasury Bills: $3,000 in principal amount
CDs: $8,000
Corporate Bonds: None
Common Stock Inflow (no stock sells): +$916.79
Weighted Average Yield-Common Stock Purchases: 8.04%
Stock Fund Inflow: +$91.25 (yield = 7.4%)
REIT Equity Preferred Stock: $83.25 (yield = 9.76%)
2023 Net Outflow from Stocks/Stock Funds: -$32,997.69
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Putin and His Servile Orcs:
Russia rountinly targets high rise apartment buildings with missiles. The intent is to kill as many civilians with families, including children, as possible. This YouTube video shows another attack last week: CCTV records moment Russian missile hits Zaporizhzhia apartments - YouTube'; Ukraine: Russia hits apartments and dorm, killing civilians | AP News Russia is a terrorist state and needs to be classified as one by the U.S.
As War in Ukraine Grinds on, China Helps Refill Russian Drone Supplies - The New York Times China gave Russia IMO a green light to invade Ukraine and has been cooperating with Putin since the invasion started. Putin and Xi met shortly before 2/24/22 and issued a joint statement, dated 2/4/22, asserting that the "friendship between the two States has no limits"; and there are "no forbidden’ areas of cooperation" Putin and Xi Frame a New China-Russia Partnership – The Diplomat In that statement, China and Russia claimed to be democracies.
Xi's "peace" plan would simply allow its ally Russia to consolidate its existing position in eastern Ukraine and then to gain sufficient time to rest its troops and resupply them before attacking Ukraine again and again until Russia absorbs that independent and free nation into the Russian Federation.
Exposing Russia’s most heinous weapon against Ukrainian women | Frontline panel on Ukraine war - YouTube The weapon is rape.
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Trump and His Party:
This link has several deep fake images created by Eliot Higgins using AI. Eliot Higgins on Twitter: "Making pictures of Trump getting arrested while waiting for Trump's arrest The fake images creates an entire story, starting with Don the Con's arrest, trial, imprisonment time, escape through a sewer tunnel and finally making it to McDonalds for his cheeseburger.
No indictment has been returned by the NYC grand jury. Falsification of business records is the alleged crime most often mentioned in the news media. The Manhattan DA's investigation into Trump and the Stormy Daniels hush payment, explained - ABC News That alleged crime appears to be based on the Trump Organization reimbursing Cohen for the $130,000 in hush money paid to the porn star Stormy Daniels and classifying that payment as a corporate legal retainer expense. If the Trump Organization deducted that reimbursement as a legal expense, reducing the amount of NY and NYC state income taxes, then that would be tax fraud. I would assume that a competent lawyer would have already caused the company to reverse any such deduction and then pay the tax and associated penalties and interest, rather than to allow the matter to fester.
Donald, the leading GOP candidate for President in 2024, is, once again, trying to incite his cult members to riot:
Trump Incites Base: 'They Tell Us to Be Peaceful!'
Senator Rand Paul (R-KY) wants the Manhattan D.A. Alvin Bragg imprisoned for presenting evidence to a grand jury:
Rand Paul calls for DA Alvin Bragg to be jailed for ‘disgusting abuse of power’ Paul believes that Bragg needs be arrested and then incarcerated without a trial by jury.
The House GOP Conference Chair Elise Stefanik called the investigation by a county DA “the epitome of the weaponizing of the federal government.” Ms Stefanik is a most confused person suffering from an inordinate amount of brain pollution, a common affliction among Trumpsters. Or, maybe she is just pandering to the Trump cult, hoping to further her rise in his party, by making these kind of asinine and fact free statements that appeal to the republican base.
Republicans in the House are attempting to harass Bragg and to interfere in his investigation of alleged state law crimes as part of their perpetual plan to protect their Dear Leader from due process of law. House Republicans seek testimony from Manhattan DA on Trump hush money probe | The Hill Three republican House Chairmans, all 100% pure Trumpsters, demanded that the state prosecutor turn over to them all documents relating to the Trump investigation and to testify before them. I am unaware of an example where Congress interfered in an ongoing state criminal investigation even before an indictment is returned by a grand jury.
Melania Trump Remains 'Angry' at Donald over Stormy Daniels Drama: Sources; Trump defends 130K reimbursement for Stormy Daniels payment as 'very common among celebrities' - ABC News
Another potential criminal charge, which does not depend on Michael Cohen's testimony at all, who is of course an easy target for Trump's defense lawyers, involves Trump's failure to turn over documents demanded by a grand jury subpoena.
A federal district court judge held that Trump's attorney, Evan Corcoran, will have to produce documents and testify before a grand jury investigating that non-compliance.
Corcoran claimed that the documents and his testimony are protected by the attorney-client privilege.
The U.S. Court of Appeals just affirmed a district court's decision that the government had produced sufficient evidence to establish a crime-fraud exception to that privilege, which is as ominous as it sounds for Trump. Trump attorney to testify Friday in Mar-a-Lago classified documents investigation after losing appeal | CNN Politics The evidence was furnished to the courts under seal.
The issue is not whether the documents were declassified by Trump. The subpoena requested documents that were marked classified and many of those documents were not produced and were later seized pursuant to a court approved search warrant. Whether the documents were properly classified or declassified is not relevant to the crimes being investigated by this grand jury.
One criminal issue is whether there is sufficient evidence that Donald, with the requisite intent, secreted documents marked as classified so they would not be produced in response to the grand jury subpoena, which, if proven to the satisfaction of a jury, would warrant a felony conviction for obstruction of justice.
Michigan GOP Refuses To Back Down After Comparing Gun Reform To The Holocaust
Kari Lake (R-AZ) did not like the decision from Arizona's republican dominated Supreme Court. Kari Lake Responds to Supreme Court Update: 'Burn it to the Ground' I believe she was not referring to burn the Arizona Supreme Court to the ground, but the Maricopa County Election Commission that has 4 out of 5 republican members.
New claim about Iran hostage crisis sabotage may change narrative of Carter presidency - YouTube; Republicans tried to delay release of US hostages to sabotage Carter, ex-aide claims – report-The Guardian Prominent republicans went to several mideast capitals and requested that the following message be delivered to Iran: "Don’t release the hostages before the election. Mr. Reagan will win and give you a better deal." An Untold Story Behind Jimmy Carter’s Presidential Defeat - The New York Times One of the participants, the prominent Texas republican Ben Barnes, decided to confess at 85. The most well known republican who accompanied Barnes was John Connally who reported the details of the trip to Reagan's campaign manager William Casey. Barnes also helped George W. Bush get into the Texas National Guard in 1968, thereby avoiding being drafted into the army. Ex-Lawmaker Is Questioned On Aid to Bush - The New York Times
In one of her more pithy comments, the Trumpster Lauren Boebert (R-CO), who is not likely to vote for a debt limit increase, stated that the federal debt is causing "more suffrage for the American people". I assume that she meant suffering.
Boebert supports the GOP plan to balance the budget in 10 years.
The GOP's promise to balance the budget in 10 years without cutting Medicare, Social Security, defense spending and veterans benefits, was scored by the CBO as requiring the elimination of all other programs, and perhaps that is what Boebert was talking about when referring to the debt. Spending Reductions That Would Balance the Budget in 2033 | Congressional Budget Office; Spending Reductions That Would Balance the Budget in 2033.pdf, see page 4 The republicans need to run in 2024 on this budget promise to eliminate all federal spending other than those specified above, but that would require them to be honest with the voters, so that is not going to happen.
Michael Steele to today’s GOP: ‘What the hell is wrong with you?’ - YouTube Steele previously served as the republican Lt. Governor of Maryland the Chairperson of the Republican National Committee.
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1. Small Ball Buys:
The two most hated stock sectors are currently regional banks and office REITs. The charts in those two sectors are horrific.
I was channel surfing last Wednesday and accidentally turned on Cramer's show on CNBC.
He was talking about the pummeling of Office REIT stocks so I listened for a minute or two since I am dumpster diving in that sector. In his opinion, the substantial stock declines in that sector are justified and will likely get worse even though the current prices are far below the pandemic lows hit in March 2000. He was especially negative on SLG.
A. Added to HIW - Bought 1 at $22.38, 1 at $21.74; 2 at $21.56; 1 at $21; 1 at $20.66; 1 at $19.86:
Quote: Highwoods Properties Inc. (HIW) - An Office REIT
Cost: $148.76
"The Company is a fully integrated office REIT that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa." 2022 Annual Report (Debt discussed starting at page 84)
Properties as of 12/31/22:
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| Annual Report at page 21 |
20 Largest Tenants as of 12/31/22:
Website: Highwoods
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Last Discussed: Item # 6.E. Bought 2 HIW at $27; 3 at $26.88; 1 at $25.66; 1 at $24.84 (10/18/22 Post)
Last Substantive Buy Discussion: Item # 3.B. Bought in Schwab Taxable Account 5 HIW at $34.29; 5 at $33.4 (8/10/22 Post)
Last Sell Discussion: Item # 1.I. Eliminated HIW - Sold 7 at $47.22 (2/3/22 Post)
1 Year Chart: Ongoing Bear Market Trend
Average cost per share: $27.94 (23+ shares)
Dividend: Quarterly at $.50
I am reinvesting the dividend.
Yield at New AC: 7.16%
Last Ex Dividend: 2/17/23
Last Earnings Report (Q/E 12/31/22): Highwoods-4Q-2022-Supplemental-Operating-Statistics.pdf
Occupancy: 91%
Revenues: $211.713M
FFO: $107.561M
FFO per share: $.96
Net Income to FFO Calculation:
I added and subtracted all of the additional information items from FFO and arrived at $57.717M which exceeded the total quarterly dividend paid of $53.755.
Debt as of 12/31/22:
Quote: Clipper Realty, Inc. -Primarily a NYC Apartment REIT with some retail tenants.
Cost: $59.96
Clipper Equity REIT Properties
Properties as of 12/31/22:
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| P.33 Annual Report |
Property Level Debt: I view this as favorable given the interest rates and terms.
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| P.51 Annual Report |
Management: Internal
Last Discussed: Item # 3.A. Added to CLPR - Bought 10 at $6.87 (2/20/23 Post) I discussed the 2022 third quarter report in that post. SEC Filed Press Release
Last Sell Discussion: Item # 2.C. Eliminated CLPR in Schwab Account - Sold 20 at $9.09 (1/7/22 Post)(profit snapshot = $35.84)
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Average cost per share: $6.97 (70+ shares)
Dividend: Quarterly at $.095 per share ($.38 annually)
I am reinvesting the dividend.
Yield at AC: 5.45%
Last Ex Dividend: 3/24/23 (owned all as of)
Last Earnings Report (Q/E 12/31/22): SEC Filing
Revenues: $33M
AFFO = $4.7M
AFFO per share: $.11, up from $.10 in the 2021 4th quarter.
2022 AFFO per share: $.45, up from $.37
2022 Dividend per share: $.38
Net Loss to FFO to AFFO Calculations:
Purchase Restriction: Lot restriction is 5 or 10 shares with each subsequent purchase required to be at the lowest price in the chain.
Maximum Position: 100 shares
C. Added to USB - Bought 1 at $34.25; 1 at $33.39:
Quote: U.S. Bancorp (USB)
USB is a super regional bank holding company.
Cost: $67.64
USB Analyst Estimates | MarketWatch (the 2023 average E.P.S. is at $4.92)
Investor Relations U.S. Bancorp
 |
| Available for Sale Securities |
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| Time Deposits > $250,000 = 2.3% of Total |
Last Discussed: Item # 1.J. Restarted USB - Bought 1 at $37.87; 1 at $35.9; 1 at $35.4.; 1 at $34.8 (10/10/20 Post)
Average cost per share: $35.27 (6 shares)
Dividend: Quarterly at $.48 per share ($1.92 annually), last raised from $.46 effective for the 2022 4th quarter payment.
U.S. Bancorp (USB) Dividend History | Nasdaq
Yield at New AC = 5.44%
Next Ex Dividend: 3/30/23
Last Earnings Report (Q/E 12/31/22): SEC Filing
Revenues: $6.368B
Non-GAAP E.P.S. = $1.2, adjusted for non-recurring items related to an acquisition.
Consensus Non-GAAP E.P.S. at $1.27 per Schwab
Analyst Reports (available to Schwab customers):
Morningstar (3/15/23): 5 stars with a $58 FV estimate
S&P (3/9/23): 3 stars with a 12 month PT of $50.
Given the 12 month $50 PT and the dividend yield, the 3 star rating does not make any sense at the current price. The price was at $45.58 when the analyst published the report on 3/9.
Argus (1/25/23 ): Buy with a $63 PT
D. Added 5 OPBK at $9.25:
Quote: OP Bancorp
Cost: $46.25
This stock is just one of many where I have recently eliminated duplicate taxable account positions and will buy more shares only in 1 taxable account. Shares may be owned in a RI account as well.
OPBK Analyst Estimates | MarketWatch
Investment Category: Regional Bank Basket Strategy
Last Discussed: Item # 3.C. Eliminated OPBK in Schwab Account - Sold 10 at $11.47 (2/27/23 Post) I discussed the last earnings report in that post. SEC Filed Press Release
Average cost per share: $10.5 (105 shares)
Dividend: Quarterly at $.12 per share, last raised from $.10 effective for the 2022 third quarter payment.
OP Bancorp (OPBK) Dividend History | Seeking Alpha
Yield at New AC = 4.57%
Last Ex Dividend: 2/8/23 (owned 100 of 105 as of)
2022 Annual Report at page F-14:
Available-for-Sale Securities: Far too much reliance on long term MBS securities IMO.
Cash was at $82.972M as of 12/31/22 (p. F-2, Annual Report)
Deposits as of 12/31/22 (page 75): 18.9% in time deposits greater than $250,000.
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| Maturities of Time Deposits |
E. Added to NYCB - Bought 10 at $8.36; 10 at $8.09; 10 at $7.85; 3 at $6.07-Vanguard Taxable Account:
FDIC announces agreement to sell Signature Bank assets; FDIC: PR-21-2023 3/19/2023; This Bank Is Buying Signature Bank Assets. Its Stock Is Soaring. | Barron's; The buyer is Flagstar, a wholly owned subsidiary of NYCB. Flagstar acquired $12.9B of Signature's loans at a $2.7B discount, $25B in cash, 40 Signature Bank branches including 29 in the NYC metropolitan area and about $34B of deposits which excludes the crypto related deposits.
The FDIC also received NYCB stock appreciation rights, called an Equity Appreciation Instrument, that could be valued up to $300M:
Forecasted Pro Forma Adjustments: E.P.S. accretion forecasted to increase 20%.
Branch Locations:
Deposits:
NYCB acquired Flagstar Bancorp in December 2022. Press Release (12/1/22)
NYCB merged its operating bank, the New York Community Bank, into Flagstar Bank.
Close of New York Community Bancorp – Flagstar Merger Remains Credit Neutral
Chart: New York Community Bancorp, Inc. (NYCB) Interactive Stock Chart
Last Discussed: Item # 2.A. Added 10 NYCB at $8.53 (12/13/22 Post)
Last Substantive Buy Discussion: Item # 6.C. Added to NYCB - Bought 10 at $8.43 (11/1/22 Post) I discussed the 2022 third quarter report in that post. SEC Filed Press Release
Last Sell Discussion: Item # 2. Sold 100 NYCB in Vanguard Taxable Account at $10.87 (8/23/22 Post)(profit snapshot = $35.15)
Average cost per share: $8.6 (100+ shares)
Dividend: Quarterly at $.17 per share ($.68 annually)
Yield at New AC = 7.91%
Last Ex Dividend: 2/3/23
Last Earnings Report (Q/E 12/31/22): SEC Filed Press Release
GAAP E.P.S. = $.30
Non-GAAP E.P.S. = $.25
Non-GAAP Consensus E.P.S. = $.26 per Schwab
The primary adjustment was to remove a $159M "bargain purchase gain" from GAAP net income and to add back merger related expenses and initial provision for credit losses which apparently is connected to acquired Flagstar loans.
GAAP NIM: 2.28%, down from 2.44% as of 12/31/21
Non-GAAP NIM: 2.24%, down from 2.32% but up from 2.15% in the 2022 third quarter. Non-GAAP NIM excludes prepayment income.
NPL Ratio: .2%
NPA Ratio: .17%
Coverage Ratio: 278.87% (allowance for loan losses as a percentage of nonperforming loans)
Charge off ratio: 0%
Capital Ratios:
Available-for-Sale Securities as of 12/31/22:
Other Sell Discussions: Item # 1.A. Eliminated NYCB in Fidelity Account-Sold 46+ shares at $12.31 (3/10/19 Post); South Gent's Comment Blog # 5: Sold 50 NYCB at $15.58 (11/16/16 Comment); Update For Regional Bank Basket Strategy As Of 10/19/15 - South Gent | Seeking Alpha: Item # 1 Sold 150 NYCB at $18.57 (profit snapshot = $999.66); Item # 2.D. Sold 50 NYB at $14.25 (3/25/13 Post); Item # 7 Sold 50 NYB at $17.51 (7/28/2010 Post)(profit snapshot +$331.03)
NYCB Realized Gains to Date: $1,505.34
Analyst Report:
I have access to only 1 report. The S&P analyst has a 3 star rating and a 12 month PT of $10 which was not raised in response to the Signature Bank deposit and loan acquisitions discussed above. The analyst raised the 2023 E.P.S. estimate by $.02 to $1.21 and the 2024 E.P.S. by $.04 to $1.26. The refusal to increase the PT was due to recession risks and "current elevated risks with the banking sector".
Other broker analyst raised their PTs slightly. MS raised to $10.5 from $10 and kept its equal weight rating. UBS increased its PT to $11.5 from $10 and kept its buy rating.
F. Added to PDM - Bought 5 at $7.03; 5 at $6.52:
Quote: Piedmont Office Realty Trust Inc. Cl A (PDM) - Office REIT
Cost: $67.75
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
5 Year Chart: Major Bear Market Trend
Average cost per share : $10.32 (114+ shares)
Dividend: Quarterly at $.21 per share
I am reinvesting the dividend.
Yield at New AC: 8.14%
Yield at $6.52 = 12.42%
Last Ex Dividend: 2/23/23
Last Discussed: Item # 2.C. Added to PDM- Bought 5 at $8.69; 5 at $7.78 (3/19/23 Post)
Last Substantive Discussion: Item # 3.C. Added 5 PDM at $10.3 (2/20/23 Post) I discussed the last earnings report in that post. SEC Filed Press Release
I do not have access to any analyst reports.
G. Added 5 THQ at $18.25:
Quote: Tekla Healthcare Opportunities Fund Overview - A Leveraged CEF
Cost: $91.25
This fund owns primarily common stocks and bonds issued by healthcare companies. The fund will own some convertible preferred stocks and will write some options against common stock positions.
Leveraged: Yes
Borrowing cost is at a spread to a short term SOFR rate:
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| 2022 Annual Report, F/Y Ending 9/30/22 at page 31 |
Investment Category: Monthly Income Generation.
Sponsor's website: Tekla Capital
SEC Filed Annual Report F/Y Ending 9/30/22
SEC Filing-Holdings as of 12/31/22
Tekla Healthcare Opportunities (THQ) Quote | Morningstar (currently rated 4 stars)
Last Discussed: Item # 3.A. Added 5 THQ at $19.54 (1/30/23 Post)
Data Date of 3/21/23 Trade:
Closing Net Asset Value per share: $20.68
Closing Market Price: $18.29
Discount: -11.56%
Average Discount 5 years: -7.84%
Sourced: THQ - CEF Connect (Click "Pricing Information" Tab)
Dividend: Monthly at $.1125 per share (probable ROC support in 2023)
The only way the fund can fully cover this dividend is through capital gains.
2022 Tax Classifications:
Average cost per share: $19.47 (20 shares)
Yield at AC : 6.93%
Last Ex Dividend: 3/17/23
Sell Discussions: Item # 1.H. Pared THQ in Fidelity Account - Sold 10 at $17.55 and 10 at $17.9 - Highest Cost Lots (5/23/20 Post)(profit snapshot = $23.34); Item # 1.B. Sold Remaining THQ-61+ Shares at $17.5 (9/1/19 Post)(profit snapshot = $60.49); Item # 2.A. Sold 53 THQ at $17.98(7/31/19 Post)(profit snapshot = $44.81); Item # 5 Sold 100 THQ at $17.59-Used Commission Free Trade(7/7/19 Post)(profit snapshot = $79.88 and contains 2017 profit snapshots =$555.56); Item # 2.C. Sold 232+ THQ at 17.59 (7/3/17 Post); Item # 2.D. Sold 118+ THQ at $18.7 in a Roth IRA Account (7/3/17 Post;); Item # 3. Sold 160+ THQ at $17.41 (6/5/17 Post)
I currently own 15+ THQ shares in my Fidelity account, with an average cost at $13.43. That position resulted from selling my highest cost lots.
THQ Realized Gains to Date: $822.13 includes a $33.52 gain on a 50 share lot sold in 2016 and $24.63 from a 6 share lot sold in 2021 which were not discussed.
H. Added 5 SLG.PRI at $16.65:
Quote: SLG-PI
Cost: $83.25
Issuer: SL Green Realty Corp. - An Office REIT
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy, part of the Equity REIT Common and Preferred Stock Basket Strategy
Last Discussed: Item # 4.B. Added 5 SLGPRI at $19.80 (11/29/22 Post)
Average cost per share: $22.17 (35 shares)
Working my way up slowly to 100 shares.
Yield at AC = 7.33%
(.065 x. $25 par value = $1.625 annual dividend per share ÷ $22.17 Total Average cost per share = 7.33%).
Yield at $16.65 = 9.76%
Next Ex Dividend Date: 3/30/23
Security: Equity Preferred Stock
Par Value: $25
Coupon: 6.5%
Dividends: Paid quarterly, non-qualified and cumulative
Stopper Clause: Standard. SLG must eliminate the cash common share dividend, and refrain from using cash to buy back common stock, as a precondition to deferring payment of the preferred dividends.
Credit Ratings: Ba3/B+ (Junk)
SLGPRI Realized Gains to Date: $151.28
I. Added to VNO - Bought 1 at $14.25; 1 at $13.48; 1 at $12.84:
Quote: Vornado Realty Trust (VNO)
Cost: $40.57
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Last Discussed: Item # 7.A. Added to VNO - Bought 1 at $19.53, 4 at $18.76; 1 at $17.5 (3/11/23 Post) I discussed the last earnings report in that post. SEC Filed Press Release and Supplemental
5 Year Chart: Major Ongoing Bear Market Trend
I have no expectation that my small ball position will turn positive this year. As I previously noted, I may not live to see a positive total return, but there is recovery potential.
Dividend: Quarterly at $.375 ($1.5 annually)
I am reinvesting the dividend.
Dividend History: Negative
The quarterly dividend was slashed from $.53 to $.375 effective for the 2023 first quarter payment.
The dividend was cut from $.66 to $.53 effective for 2020 third quarter payment.
Yield at New $22.27 AC per share = 6.77% (assumes no further dividend cuts which is not an assumption that I would make now)
Yield at $12.84: 11.68%
Last Ex Dividend: 1/27/22
J. Added to CFG - Bought 1 at $31.38; 1 at $30.37 - Schwab Taxable Account:
Quote: Citizens Financial Group Inc. (CFG)
Cost: $61.75
CFG Analyst Estimates | MarketWatch (consensus 2023 E.P.S. at $4.97)
Investor Relations – Citizens Bank
Last Discussed: Item # 6.J. Pared CFG in Schwab Taxable Account - Sold 2 at $41.11 (11/8/22 Post) I have now bought back those 2 shares.
Last Buy Discussion: Item # 3.L. Added to CFG in Schwab Account - Bought 3 at $33.89; 2 at $33.29 (10/4/22 Post)
Investment Category: Regional Bank Basket Strategy
Average cost per share this account: $35.24 (17+ shares)
Dividend: Quarterly at $.42 per share ($1.68 annually), last raised from $.39 effective for the 2022 third quarter payment.
Dividend History – Citizens Bank
I am reinvesting the dividend.
Yield at AC = 4.77%
Last Ex Dividend: 1/31/23
Last Earnings Report (Q/E 12/31/22): SEC Filed Press Release
Non-GAAP E.P.S. = $1.32, excludes primary acquisition related expenses.
Non-GAAP E.P.S. = $1.25
Consensus Non-GAAP at
I would describe the 4th quarter results as overall positive.
2022 Annual Report at pp. 98-99:
Owned Securities as of 12/31/22:
K. Started BNL - Bought 10 at $16.29:
Quote: Broadstone Net Lease Inc. (BNL)
52 week range: $14.98-$22.8
Cost: $162.9
Management: Internal
Property portfolio as of 12/31/22: 804 properties, 39.1M rentable square feet, "primarily single-tenant commercial real estate properties that are net leased on a long-term basis"; 97.3% of "leases have contractual rent escalations, with an ABR weighted average minimum increase of 2.0%". Page 5 Annual Report.
Top 20 Tenants as of 12/31/22
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| Page 9, Annual Report |
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| Page 7, Annual Report |
Dividend: Quarterly at $.275 per share ($1.1 annually), last raised from $.27 effective for the 2022 4th quarter payment. The penny rate was at $.25 in 2020.
Broadstone Net Lease, Inc. (BNL) Dividend History | Seeking Alpha
Yield at $16.29: 6.75%
Next Ex Dividend: 3/30/23
Last Earnings Report (Q/E 12/31/22):
SEC Filed Press Release and Supplemental
Portfolio 99.4% leased
AFFO: $65.585M
AFFO per share: $.36, up from $.34 in the 2021 4th quarter.
In BNL's calculation, AFFO is equivalent to cash available for distribution. In triple net leases, tenants are generally responsible for maintenance expenses; and I do not see any adjustment for those expenses. The highest subtraction from FFO is to remove $6.825M in revenues created by the straight line accounting convention. Certain non-cash amortization "expenses" and stock based compensation are added to FFO.
Revenues: $112.135M
GAAP net income included a $10.625 gain from a property sale, which is excluded from the FFO and AFFO calculations. The weighted average cash capitalization rate was 5.8%.
During the quarter, BNL invested $310.3M at a weighted average cash capitalization weight of 6.7%. Seventeen of those properties had a weighted average term of 19.7 years and 94% were industrial based on annualized base rent.
Debt: Fixed rate SU and Variable Rate Credit Facility
 |
| Annual report at pages 53-54 |
Last Stock Offering: August 2022 (13M shares + greenshoe at PO price of $21.35)
SU Debt Ratings: Baa2/BBB
2. FDIC Insured CDs: +$8,000
I have not seen the banks referenced below, other than the Charles Schwab bank, offer CDs through brokerage firms prior to these purchases. Banks are properly using brokers to broaden their FDIC insured deposit base, at least on a short term basis, possibly to replace uninsured deposits that have left.
The Vanguard Federal Money Market Fund has a current 7 day SEC yield of 4.65%, compounded at 4.75%.
A. Bought 2 Hancock Whitney 5.25% CDs Maturing on 12/26/23:
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Issuer: Operating bank owned by the bank holding company Hancock Whitney Corp. (HWC)
Interest paid at maturity.
B. Bought 1 Washington Trust 5.25% CD Maturing on 12/28/23:
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Operating bank owned by the bank holding company Washington Trust Bancorp Inc. (WASH)
Interest paid at maturity.
C. Bought 2 SouthState Bank 5.2% CD Maturing on 7/1/24:
Interest paid monthly.
Moody's has an A3 deposit rating as of 2/2/23.
D. Bought 2 Charles Schwab Bank 5.35% CDs Maturing on 4/5/24:
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Interest paid semiannually.
E. Bought 1 Zions Bancorp 5.25% CD Maturing on 9/29/23:
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Interest paid at maturity.
3. Treasury Bill Auctions: +$3,000 in principal amount
A. Bought 3 Treasury Bills at 3/23/22 Auction:
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Matures on 5/23/23
Interest: $20.53
Investment Rate: 4.504%
