AMKBY, AROW, BHK, CFG, CLPR, CVBF, ICMB, ONB, OPBK, STBA, UBFO

Economy: 

I mentioned in my 3/25/23 Post that the Atlanta Fed's GDP Model estimated 2023 1st quarter real GDP growth at 3.2%. As of 4/5/23, the estimate was 1.5%. GDPNow - Federal Reserve Bank of Atlanta

ADP® March Employment Report ADP estimated that private payrolls increased by 145,000 last month, down from 261K in February. The consensus estimate was for 210,000. ADP March 2023 

The BLS reported that the economy added 236,000 jobs last month. "The change in total nonfarm payroll employment for January was revised down by 32,000, from +504,000 to +472,000, and the change for February was revised up by 15,000, from +311,000 to +326,000. With these revisions, employment in January and February combined is 17,000 lower than previously reported." 

The annual hour wage growth slowed to 4.2% from 4.6% through February. 

The unemployment rate fell .1 to 3.5%. The labor participation rate continued to trend up and was reported at 62.6%. Employment Situation Summary - 2023 M03 Results

The U-6 number declined .1% to 6.7%. Table A-15. Alternative measures of labor underutilization - 2023 M03 Results

Overall, the March jobs data discussed above is not consistent with an economy in recession. 

The report increased the odds that the FED will hike the FF rate by .25% in May. CME FedWatch Tool - CME Group I now view that as the more probable than not outcome unless there is more turmoil in the banking sector and a meaningful decline between now and then in the inflation numbers. 

Job Numbers starting in 2013: 

Bureau of Labor Statistics Data

Oil: OPEC+ just made the Fed's job more complicated. Here's what they did (last week, OPEC announced at 1.16M barrel per day cut in production)

The March ISM Manufacturing Index declined to 46.3%, the lowest level since May 2020. The new orders component declined to 44.3% from 47% in February.  

There are storm clouds ahead for the economy, JPMorgan Chase CEO says | CNN Business

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Allocation Shifts Discussed in this Post: 

Treasury Bills: $4,000 in principal amount

Purchased SNOXX Treasury MM Fund: +$2,000

(I have been dumping some proceeds into this MM fund. As previously noted, my Schwab sweep account pays almost nothing. A short term work around is to use sweep account funds to buy the Schwab Treasury Obligation MM (SNOXX) that had a 7 day SEC yield as of 4.52% as of 4/2/23. If I need money to fund a trade, I can sell shares in SNOXX and transfer the proceeds back into my sweep account, but the credit will occur on the following day provided the order is entered before 3:00 P.M. CST.)   

CDs: $2,000

Corporate Bonds: $7,000 in principal amount 

Common Stocks: +$1,209.87 (third consecutive week of no sales)

Weighted Average Yield Common Stock Buys:   5.29%

(The yield calculation excludes both the cost of the 10 AMKBY shares and the variable rate annual dividends paid by AMKBY, since the last payment of $3.09 per share was unusually large and will be far lower in 2023)  

2023 Net Outflow Common Stocks/Stock Funds: -$30,867.52

Leveraged CEF Bond Fund: +$109.2 

Tennessee Municipal Bonds: -$5,000

Consisting of the proceeds from an early redemption of Wilson County 3.2% GO maturing in 2032:   

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Jamie Dimon Comments on Banking Crisis: 

JPMorgan's Jamie Dimon says banking crisis is not over yet

How 2018 Regulatory Rollbacks Set the Stage for the Silicon Valley Bank Collapse, and How to Change Course - Roosevelt Institute Jamie Dimon correctly noted that the 2018 changes did not contribute to the SVB and Signature Bank failures. Why? The stress tests have never examined the scenario, involving a substantial run on uninsured deposits, that resulted in those bank failures. It is clear that the U.S. regulators failed to adequately monitor those banks under existing law. 

On a more positive note, U.S. banks are borrowing less from the FED than a few weeks ago. Federal Reserve Balance Sheet: Factors Affecting Reserve Balances - H.4.1 - March 30, 2023; Bank Borrowing From the Fed Falls Again. It's a Positive Sign. | Barron's

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Putin and His Servile Orcs: 

Finland joins NATO This was a direct response to Russia's invasion of Ukraine. Citizens of free countries know that NATO exists solely to deter Russian invasions. In case anyone needed to be reminded of what an undeterred Russia will do, the Ukraine invasion, and the accompanying widespread Russian war crimes and crimes against humanity committed by Russian Orcs, have at least served as a much needed reminder. 

Intel officer for Putin defects. Hear what he revealed about Putin in new interview - YouTube

North Korean Workers Toil in Russia and China, Despite Sanctions - The New York Times The Orcs are paying their salaries to the North Korea regime. 

With no independent judiciary; no free media; an authoritarian Orwellian state that only lies to its citizens and punishes dissent severely; over 200,000 soldiers dead or wounded in Ukraine; a declining GDP; and a real GDP lower than South Korea before the invasion started, notwithstanding abundant natural resources, one may wonder why Putin is supported by so many Russians. He has massively and obviously failed as a leader.  

Putin's lap dog, Sergei Lavrov, stated that Russia will agree to a cease fire in Ukraine only when there is a "new world order". Russian Foreign Minister Lavrov: Peace talks must focus on creating a 'new world order' | DW News - YouTube In Putin's new world order, Putin and Xi will bring their version of democracy to the world and displace the "hegemony" of the U.S. led western democracies who resist Russia's imperialistic ambitions.    

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Trump and His Party: 

READ: Trump indictment and statement of facts related to hush money payment | CNN Politics 

The counts involve alleged felony violations of N.Y. Penal Law §175.1: 

 

On a scale of 1 to 10, with 10 being a slam dunk conviction, I would grade this indictment as a 5, but that is based on the tax fraud angle as the other crime rather than the unlawful campaign contribution approach.  

It is 100% certain IMO that fraudulent business records were generated that characterized the payoffs as legal expenses. Documents supporting that conclusion, including the checks, have been publicly available for some time and were included as exhibits in Cohen's prior testimony.  

A felony conviction depends on sufficient proof that Trump caused the creation of (or created himself) the false records with the "intent to commit another crime or to aid or conceal the commission thereof". 

The clearest case would be creating a false business record to reduce the amount of state income taxes. In the last sentence in the following paragraph, there is a brief reference to that possible crime:

I have no opinion whether that crime is completed with the mere creation of a false business record with the intent to reduce state taxes or requires the filing of a tax return that deducts the payoffs as legal expenses. I would be interested in hearing what NY lawyers familiar with this statute have to say. Analysis: A Surprise Accusation Bolsters a Risky Case Against Trump - The New York Times I do not view the potential fraudulent tax angle as a "surprise" and have discussed it as an obvious issue in prior posts and comments. 

The primary alleged other crime is the characterization of the payoffs as illegal campaign contributions to influence the outcome of the 2016 election. 

Mar-a-Lago evidence suggests possible Trump obstruction, people familiar say - The Washington Post Prior to reading this article, I was already aware of evidence that Trump may have caused non-compliance with a grand jury subpoena demanding the production of documents marked as classified. 

Excerpt from 11th Circuit Court Opinion: 

Opinion.pdf For an obstruction of justice felony charge, it is not relevant whether Trump declassified the documents. The request was not for classified documents but documents "bearing classification markings".  

The clearest evidence so far IMO was that documents so marked were found during the August 22 FBI raid including those found in Trump's office (which included 43 empty folders marked as classified). 

There were also several reports that a Trump employee moved documents from the storage room to his residence after receiving the subpoena. A video of that removal is in the government's possession and was acquired using a subpoena. Trump employee tells FBI that Trump directed boxes to be moved at Mar-a-Lago after subpoena served; 'We Fact-Checked': Marjorie Taylor Greene (R-GA) Caught Lying in '60 Minutes' Interview 

I view a possible criminal charge for obstruction to be the most serious one and, based on what is known now, the most likely one to succeed. Timeline of the Trump Documents Inquiry; Top-Secret Documents at Trump’s Mar-a-Lago: What We Know; FBI search of Mar-a-Lago - Wikipedia 

The recent pace of witnesses appearing before the grand jury, including a Trump lawyer compelled to testify due to the crime/fraud exception to the attorney client privilege, suggests that an indictment within 4 months is probable. Judge approves ‘crime fraud exception’ in special counsel probe of Trump classified documents; Appeals court rules against Trump attorney, ordering him to comply with subpoena in classified documents case - CBS News; Trump attorney Evan Corcoran testifies before federal grand jury in documents probe - CBS News (3/24/23)

Washington Post: DOJ has new evidence of potential obstruction in Trump Mar-a-Lago documents case | CNN Politics

Fact check: Trump delivers barrage of false claims in first post-indictment address; PolitiFact | Fact-checking Trump’s post-indictment speech at Mar-a-Lago   

Senator Lindsey Graham (R-SC) Gets Emotional Begging Fox "News" Viewers To Donate To Donald Trump 

‘Wow’: Lesley Stahl Left Nearly Speechless By Marjorie Taylor Greene’s Remark on Biden and Pedophiles

Supreme Court Justice  Clarence Thomas (R) accepted several luxury trips paid for by GOP mega donor, ProPublica report finds; Clarence Thomas Secretly Accepted Luxury Trips From GOP Donor Harlan Crow- ProPublica (the gifts do not appear in the Justice's financial disclosures). There is no hope that republicans in Congress will even reprimand Thomas for his ethical lapses, an approach that started with his confirmation hearing. October 11, 1991: Anita Hill Full Opening Statement (C-SPAN) - YouTube Thomas claimed that he was merely following the advice of unnamed "colleagues and others in the judiciary” when failing to report the lavish gifts that he received from a republican megadonor. Justice Thomas Says He Was Advised Lavish Gifts Didn’t Need to Be Reported - The New York Times 

Tennessee's Republican-led House expels 2 Black Democratic lawmakers over gun reform protest, fails in bid to oust a third | CNN; 

'Undemocratic': Tennessee legislature expels 2 Black lawmakers over gun violence protest - ABC News; 

Tennessee House expels Black Democrats after gun-control protests - The Washington Post 

The protest occurred a few days after a deranged young adult, using a lawfully purchased assault rifle, murdered 3 nine year old children and 3 adults in a Nashville school. 'Nightmare': 6 killed in 'calculated' mass shooting at Nashville school - ABC News; 2023 Covenant School shooting - Wikipedia; Tennessee Capitol protest: Here's what did and did not happen March 30

The anti-democracy party is strong in Tennessee and growing in strength, with a super majority in both the state House and Senate, along with a far right Trumpster republican as governor. A two-thirds vote is required for expulsion. With a super majority, the republicans can do whatever they want. 

The effort to expel an elected white woman legislator, who participated in the gun reform protest, failed by one vote. 

Tennessee State House speaker Cameron Sexton (R) compares gun protest to January 6 ‘insurrection,’ 

Statement by Cameron Sexton: 

Jones & Jackson were the 2 young black men expelled by the republicans

This was the first expulsion in Tennessee's history for a breach of House rules on decorum. 

While exercising their First Amendment rights, including free speech and right to petition the government for redress of grievances, Jones and Jackson used a small bull horn that amplified their speech some for the benefit of protestors lawfully seated in the gallery. I am trying to determine whether the House Speaker cut off their microphones before they resorted to the bull horn. 

The best option for the republican party would have been to just ignore the relatively minor violations of decorum rules and move on in the mundane, lackluster day in the State House. Just look at the agenda that day. It is not like the legislators were voting to install the next President of the U.S.   

Tennessee lawmakers' removal part of a GOP effort to tamp down dissent - The Washington Post

The republicans were unable to do anything sensible however, having been imbued with Trump's strong authoritarian tendencies, and consequently removed 2 duly elected black representatives for their protest about gun violence occurring shortly after the murder of three 9 year old white children by an assailant using an assault rifle.  

And, based on the two expulsions of black representatives and many other acts, a legitimate and good faith charge of racism can be made against the Tennessee republican legislators and governor. Little or no effort is made to hide their racism and racist actions.   

Last year, as previously discussed in detail, the anti-democracy party decided that Nashville would no longer be allowed to elect a Democrat congressman, implementing a racial and political gerrymander that carved Nashville into 3 sections and then joined each section with heavily republican rural areas and small towns where Trumpster voters will generally range from 70-80% of the total.  

The clearly racist component was to effectively disenfranchise Nashville's African-Americans, close to 26% of the total voters in that large city. 

The incumbent Democrat Jim Cooper, who represented the entire Davidson County/Nashville area, won 100% of the vote in 2020 but retired after the republican gerrymander since there was no way he could be reelected. Nashville, a Democrat stronghold, is now represented by three extreme reactionaries that make Trump look good. 

Governor Bill Lee (R-TN) won't move Tennessee's Nathan Bedford Forrest confederate bust from State Capital Rotund (1/3/2019) Nathan Bedford Forrest was a confederate general who was a co-founder of the Ku Klux Klan and bore responsibility for the massacre of unarmed black union soldiers who had surrendered at Fort Pillow. After two years of negative nationwide publicity, the Tennessee republicans decided to move the bust out of the state capitol rotunda. 

Desi Lydic Foxsplains Trump's Indictment | The Daily Show - YouTube

Help These "Conservatives" Heartbroken By Trump's Indictment | The Daily Show - YouTube

As Sean Hannity reportedly told Fox "news" staffers, Trump is "bat shit crazy". I will not disagree with his observation that Donald suffers from several serious mental illnesses. 

Donald's main challenger for the 2024 GOP nomination for President is Ron DeSantis who is neither crazy nor stupid. DeSantis graduated from Yale University and Harvard Law School. 

Being smart, DeSantis knows that he has to out crazy Donald when appealing to the core republican voters, something that is incredibly difficult to do. 

I am not going to quote every statement DeSantis has made that supports that opinion but only the most recent one: 

DeSantis: “They want the Fed to control a digital dollar Guess what’ll happen? They’re going to try to impose an ESG agenda through that. You go and use too much gas, they’re going to stop it. They’re not going to honor the transaction because you’ve already bought more than what they think. You wanna go buy a rifle, they’re going to say no, you have too many, too many of those, you can’t do it. So it’s ceding the power of our financial freedom to a central bank which does not have our interest at heart.”

Sourced Governor Ron DeSantis Speaks at Pennsylvania Leadership Conference | C-SPAN.org (4/1/23)

So the Fed is involved in a nefarious scheme to take away republican owned AK-47s and other military grade assault rifles so that it can impose an ESG agenda, or something like that.  

A Trump appointed Judge, Matthew Kacsmaryk, ruled yesterday that the FDA did not have the authority to approve an abortion pill. Texas judge Suspends FDA approval of abortion pill - POLITICO The drug, mifepristone, was approved by the FDA in 2000 and has been prescribed since then. Abortion pill access in jeopardy after judges issue conflicting rulings: NPR

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1. Small Ball Purchases: 

With the significant decline in interest rates, and the substantial stock price declines in several industry sectors, dividend paying stocks have in several sectors have become more attractive to me. However, given my concerns about the growing threat of a recession this year, and my overall risk management approach governed by my financial objectives, I am only doing small ball buys.  

A. Added to AROW - Bought 5 at $24.5- Fidelity Taxable Account: 

Quote: Arrow Financial Corp.  (AROW)

Cost: $122.5

Arrow Financial is one of the stocks where I have eliminated duplicate taxable account positions and will only buy more shares in 1 account. 

AROW SEC Filings

AROW Analyst Estimates | MarketWatch

Investment Category: Regional Bank Basket Strategy

Last Discussed: Item # 2.K. Eliminated AROW in Schwab Taxable Account - Sold 10 at $32.7 and Item # 2.L. Eliminated AROW in Vanguard Taxable Account-Sold 5 at $33.15 (2/5/23 Post)(profit snapshots = $121.87). I discussed the last earnings report in that post. SEC Filed Press Release

New Average cost per share: $27.5 (20 shares)

Dividend: Quarterly at $.27 per share ($1.08 annually)

Share Dividends: Arrow has paid stock dividends in the past

Arrow Financial Corporation Declares Stock Dividend (9/1/22); Arrow Financial Corporation Declares Stock Dividend (8/26/21); Arrow Financial Corporation Declares Stock Dividend (8/27/20) For those receiving the stock (3 shares for 100 owned), keeping the dividend at the same penny rate is in effect a 3% increase.

Since I did not own enough shares to receive 1 share, the stock dividend was paid in cash.  To receive 1 share, I would need to own 30. 

Yield at New AC = 3.93%

Last Ex Dividend: 3/2/23 (owned 15 as of)

Annual Report: In a filing dated 3/16/23, Arrow notified the SEC that it would not be able to file its annual report on time.  SEC Filing  The company stated that it did not expect any material changes to previously reported results. The company that it expected to file within the 15 day extension period. Subsequent to that filing, AROW notified the SEC that it would not be able to file the Annual Report within that 15 day extension period. SEC Filing 

The reason for the late filing is given in another document and generally relate to a failure to design and implement effective risk management practices: 

SEC Filing 

In buying 5 shares, I am relying on the representation that the company does not anticipate any material change to reported results. 

Prior to this hiccup, I viewed AROW to be a competently managed small bank, but now I am not so sure. 

AROW Realized Gains to Date: $869.56

Most of the gain originated from a 2018 sale: Item # 1. Sold 52+ AROW at $37.5 (7/2/18 Post)(profit snapshot = $661.34)

Maximum Position: 100 Shares

Purchase Restriction: 5 share lots with each subsequent purchase required to be at the lowest price in the chain. 

B. Restarted ONB - Bought 10 at $14.23-Schwab Account: 

Recent Trading History this Account: 

I will limit my purchases to this account. Previously I owned this stock in more than 1 taxable account. 

Cost: $142.3

Quote: Old National Bancorp (ONB)

ONB Analyst Estimates

ONB SEC Filings

Last Discussed:  Item # 6.L. Eliminated ONB - Sold 10 at $19.72 in Fidelity Taxable Account and 10 at $19.7 in Schwab Account (11/8/22 Post)(profit snapshots = $77.59)

Last Buy Discussion: Item # 1.A. Bought 10 ONB at $15.97 (9/3/2021 Post)

Dividend: Quarterly at $.14 ($.56 annually), last raised from $.13 effective for the 2020 first quarter payment.  

Old National Bancorp (ONB) Dividend History | Seeking Alpha

The dividend payout ratio is too low. 

Dividend History: Rated by me as extremely unfavorable given the low rate of growth after a dividend slash in 2009 (quarterly per share cut from $.23 to $.07)  I will not live to see a return to the 2008 quarterly payout of $.23)  

Yield at $14.23 = 3.94%

Last Ex Dividend: 2/28/23

Last Earnings Report (Q/E 12/31/22): SEC Filing

Comparisons are to the 2021 4th quarter.  

Net Income: $196.701M

E.P.S. = $.67, up from $.34

Non-GAAP E.P.S.  = $.56

There was a $90.673M pre tax gain from selling a business included in GAAP net income "as well as pre-tax charges of $26.8 million for property optimization and $20.3 million related to the February 15, 2022 merger with First Midwest. Excluding these transactions and realized debt securities losses from the current quarter, adjusted net income was $164.3 million, or $0.56 per diluted common share."

"On November 18, 2022, Old National Bank, a wholly-owned subsidiary of Old National Bancorp, completed its previously announced transaction with UMB Bank, n.a. (“UMB”), pursuant to which UMB acquired Old National Bank’s business of acting as a qualified custodian for, and administering, health savings accounts, which totaled $382 million. Upon completion, Old National Bank recorded a pre-tax gain of $90.7 million that is recorded in noninterest income." 

At least those funds could be invested in higher yielding income generating securities compared to the bank's vintage holdings. 

NIM: 3.85%, up from 2.77%

Efficiency Ratio: 49.1%, adjusted to 47.5%

NPL Ratio: .81%

Coverage Ratio: 132%

Charge off ratio: .05% 

Tangible Book Value per share: $9.42

Banking Centers: 263

2022 Annual Report 

Owned Securities: 

Page 90, Annual Report

Trading in Owned Securities/Net Loss of $88K

"Investment securities pledged to secure public and other funds had a carrying value of $6.1 billion at December 31, 2022 and $2.7 billion at December 31, 2021."

"At December 31, 2022, Old National had a concentration of investment securities issued by Indiana and its political subdivisions. The only aggregate market value of the Company’s investment securities greater than 10% of shareholders’ equity were issued by Indiana and its political subdivisions totaling $628.6 million, which represented 12.3% of shareholders’ equity. Of the bonds issued by Indiana, 99.7% are rated “BBB+” or better, and the remaining 0.3% generally represent pre-refunded positions."

Mortgage Back Security Portfolio: 

Weighted Average Yield = 2.48% AFS; 2.81% HTM

Deposits: $35B

Page 51 Annual Report

% non-interest bearing: 34.1%

"The aggregate amount of time deposits in denominations that met or exceeded the FDIC insurance limit of $250,000 totaled $793.4 million at December 31, 2022 and $252.8 million at December 31, 2021"  Total time deposits stood at $3.013+B as of 12/31/22 (page 111 annual report)

Other Sell Discussions: Item # 1.H. Eliminated ONB-Sold 15 at $17.87 (2/13/21 Post); Item # 1 Sold 100 ONB at $13 (8/22/12 Post); Item # 1 Sold 50 ONB at $14.12 (7/16/13 Post); Item # 6 Sold 50 ONB at $13.05-Update For Regional Bank Basket Strategy As Of 6/6/16 - South Gent | Seeking Alpha; Item 2.A. Eliminated ONB-Sold 50 Shares at $18.55 (2/27/17 Post)(largest single gain at $312.97 bought at $12.25); Item # 4.A. Sold 10 ONB at $19.66 (7/29/18)

ONB Realized Gains to date: $943.37

C. Added to AMKBY - Bought 10 at $8.65: 

Working my way up to 100 shares. This is likely to be a long term hold for me. 

Cost: $86.50

Quotes: 

USD: A.P. Moeller-Maersk A/S ADR

DKK: MAERSK.B (Denmark)

Danish Krone to US Dollar Exchange Rate Chart | Xe

ADR Ratio: 1 ADR = .005 Ordinary

AP Moeller Maersk A/S -Reuters Profile

Investor Relations - A.P. Møller - Mærsk A/S

As of 4/3/23, the TTM P/E was at 1.08. A. P. Moller Maersk PE Ratio

Last Discussed: tem # 4.I. Added to AMKBY - Bought 5 at $8.73 (10/11/22 Post) I discussed the 2022 second quarter report in that post.  

Last Elimination: Item # 2.I. Eliminated AMKBY - Sold 25 at $16.98 (1/7/22 Post)

Dividends: Variable and paid annually.  A.P. Møller - Mærsk A/S (AMKBY) Dividend History | Seeking Alpha The amount depends on the profit earning in the prior year. Based on forecasts for 2023, the 2024 annual dividend will be substantially below both of these numbers:  

2022 Annual Dividend: US$1.85

2023 Annual Dividend: US$3.09

Last Ex Dividend: 3/29/23 (owned 50 shares as of). I bought the 10 share lot after the $3.09 per share ex dividend date. I owned 10 shares on the 3/16/2022 ex dividend date. 

Average cost per share: $12.37 (60 shares) 

The shares have been under pressure due to declines in container shipping rates and shipping volumes. Maersk books $30.9bn profit in 2022, expects at least 84% drop in 2023 | Seatrade Maritime The business is highly cyclical. 

Maersk Average Freight Rates (started to decline in the 2022 third quarter): 

The result has been that the shares have been unable to recoup the price declines caused by the last 2 annual dividend payments totalling US$4.94 per ADR share. 

Last Earnings Report (Q/E 12/31/22): AP Moller Maersk Q4 2022 Investor Presentation.pdf 

Net Profit: $4.95B, down from $6.09B 

Revenues: $17.82B, down from $18.506B

Free Cash Flow: $6.5B

Only the "logistics and services" segment experienced Y-O-Y growth in revenues but that was due to acquisitions:

2022 Net Profit: $29.3B; revenues at $81.5M; free cash flow at $27.1B 

Maersk Q4 earnings 2022: CNBC Summary 

D. Restarted CVBF - Bought 10 at $16-Schwab Taxable Account: 

History this Account: 

Quote: CVB Financial Corp.  (CVBF)

Cost: $160

"CVB Financial Corp. (“CVBF”) is the holding company for Citizens Business Bank. CVBF is one of the 10 largest bank holding companies headquartered in California with over $16 billion in total assets" The headquarters is in Ontario, CA. The operating subsidiary, Citizens Business Bank, operates 65 financial centers. Locations - Citizens Business Bank

CVBF SEC Filings

Last Discussed: Item # 4.A. Eliminated CVBF - Sold 15 at $25.7; 5 at $25.66  (12/27/22 Post)(profit snapshots = $129.6) I would attribute the price decline to the Silicon Valley Bank and Signature Bank failures, and CVBF's significant unrealized loss in owned securities. Unlike those banks, CVBF has a sizeable weighting in non-interest bearing deposits which are probably insured. CVBF's 2022 4th quarter earnings report was good, as discussed below. 

Dividend: Quarterly at $.20 per share, last raised from $.19 effective for the 2022 4th quarter payment. 

CVBF Dividend History

Yield at $16: 5%

Last Ex Dividend: 4/4/23 (bought on the ex dividend date)

Last Earnings Report (Q/E 12/31/22): SEC Filing 

Comparisons are to the 2021 4th quarter. 

Net Income: $66.2M

E.P.S. = $.42, up from $.35

NIM: 3.69%, up from 2.79%

Efficiency ratio: 36.41%, down from 41.8% (down is good)

ROTE: 23.65%, up from 13.89%

Average Yield on Investment Securities: 2.36%, up from 1.51%

NPA Ratio: .03%

Charge off ratio: Zero

Coverage Ratio: 1726.51% (existing allowance for loan losses to NPLs)

Tangible Book Value per share: $8.3, down from $10.27, largely due to unrealized losses in the investment portfolio.  

Total Capital Ratio: 14.4% 

2022 Annual Report 

Investment Securities: My grade on interest rate risk management is C, which is about average for this category. The common problem among banks was an inability to adjust duration risk in 2021 to the 100% likelihood that interest rates would have to rise substantially to reduce the then already existing problematic inflation.

Total Unrealized Net Loss as of 12/31/22 = $898.8M

Maturities, Page 99 Annual Report 

"At December 31, 2022 and 2021, investment securities having a carrying value of approximately $2.90 billion and $2.18 billion, respectively, were pledged to secure public deposits, short and long-term borrowings, and for other purposes as required or permitted by law." In addition to public entities requiring collateral for deposits, the FHLB requires collateral for its loans to banks.

Deposits: $12.8365+B, of which 63.6% were non-interest bearing which is the highest percentage that I have seen so far.  

E. Added to ICMB - Bought 5 at $3.73: 

Quote: Investcorp Credit Management BDC Inc. Overview 

Cost: $28.65

ICMB may be the smallest publicly traded BDC. The market capitalization at $3.73 is about $52.3M.  

Investment Category: Lottery Ticket Basket

ICMB SEC Filings 

Annual Report for the F/Y Ending 6/30/22 (Risk factor summary starts at page 32 and ends at page 70)

10-Q for the Second F/Q Ending 12/31/22 (summary terms of investments starts at page 5)

Management: External

Website: Investcorp Credit Management BDC, Inc.

Many of the problems originated with loans initially made by the prior external advisor that were later written down. The current advisor took over on 8/30/2019. 10-Q at page 13 

Net Asset Value per share history: 

12/31/22: $6.36

12/31/21: $7.09

12/31/20: $7.84

9/30/19:  $10.19

8/30/19 Change in Management 

2014: Initial IPO at $15, SEC Filing The company was then called CM Finance. 

Annual average total return starting 1/1/15 through 4/6/23: +.12%; DRIP Returns Calculator | Dividend Channel

With this kind of history, the stock price will trade at a large discount to net asset value per share. Investors will assume that assets will continue to be incinerated and consequently will discount their current claimed values when setting a buy price. Using the $6.36 NAV per share as of 12/31/22, and the purchase price of $3.73, the discount is 41.35%

Average cost per share: $4.98 (107+ shares)

Dividend: Quarterly at $.13 per share

Investcorp Credit Management BDC, Inc. (ICMB) Dividend History | Seeking Alpha

The last payment was for $.15, which included a 2 cent per share special dividend. 

I am reinvesting the dividend.

Yield at AC: 10.44% (regular dividend only)  

Last Ex Dividend: 3/9/23

Last Earnings Report (Q/E 12/31/22): Investcorp Credit Management BDC, Inc. Announces Financial Results for the Quarter Ended December 31, 2022, and Quarterly and Supplemental Distributions

Net Investment Income per share: $.16, up from $.15.

99.5% of loans are at floating rates. 

Weighted Average Yield of Debt Investments (using amortized cost) = 10.73%

Portfolio Companies: 37

"At December 31, 2022, our investment portfolio of $228.6 million (at fair value) consisted of debt and equity investments in 37 portfolio companies, of which 91.19% were first lien investments, 0% were second lien investments, and 8.81% were in equities, warrants and other positions."

ICMB Asset Quality Assessments: 

Pages 43-44 10-Q

This tiny BDC has experienced an unacceptable number of loan wipeouts. When reviewing the last financial report, the largest loss noted therein was a $17.51+M loan to American Teleconferencing Services, made in 2016, that has been written down to zero. 

The value of  loans made to two affiliates have been written down by $13.045+M. 

As defined in the 1940 SEC Act, a "Company is deemed to be an “Affiliated Person” of this portfolio company because it owns 5% or more, up to 25% (inclusive), of the portfolio company’s outstanding voting securities (“non-controlled affiliate”). As defined in the 1940 Act, the Company is deemed to be both an “affiliated person” and “control” a portfolio company if it owns more than 25% of the portfolio company’s outstanding voting securities or has the power to exercise control over the management or policies of such portfolio company (including through a management agreement). As of December 31, 2022, the Company had no “Control Investments.”

A lot of the damage from bad loans is already reflected in the last reported net asset value per share. An improvement in the share price is not dependent IMO on the current dividend yield or the discount to net asset value per share, but on a long term improvement in operating results that substantially lowers the discount to net asset value per share buyers are willing to accept.   

F. Added to OPBK - Bought 5 at $8.9; 5 at $8.65: 

Quote: OP Bancorp

Cost: $87.75

Investment category: Regional Bank Basket Strategy

OPBK Analyst Estimates | MarketWatch

OPBK SEC Filings

New Average cost per share:  $10.35 (115 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 = 4.64%

Last Ex Dividend: 2/8/23 (owned 100 as of)

Last Discussed: Item # 1.D. Added 5 OPBK at $9.25 (3/25/23 Post) 

Last Substantive Discussion: 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 and have nothing further to add here. SEC Filed Press Release

G. Added to CLPR - Bought 10 at $5.38; 10 at 5.16: 

Quote: Clipper Realty, Inc. - Primarily a NYC Apartment REIT

Cost: $105.4 

Clipper Equity REIT Properties

CLPR SEC Filings

2022 Annual Report

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

New Average Cost per share: $6.58 (91+ shares)

Dividend: Quarterly at $.095 per share ($.38 annually)

I am reinvesting the dividend. 

Yield at New AC = 5.775%

Last Ex Dividend: 3/24/23

Last Discussed:  Item # 1.B. Added to CLPR - Bought 2 at $6.34; 8 at $5.91 ( Post) I discussed the last earnings report in that recent post and have nothing further to add here. SEC Filing

Maximum Position: 200 shares 

Purchase Restriction: 5 or 10 share lots with each subsequent purchase required to be at the lowest price in the chain. 

H. Added to CFG- Bought 1 at $30.23; 2 at $29.7; 5 at $28.9; 2 at $28.54:

Quote: Citizens Financial Group Inc.  (CFG)

Cost: $291.21

CFG Analyst Estimates | MarketWatch (2023 consensus currently at $4.84)

CFG SEC Filings

Investor Relations – Citizens Bank

New Average Cost per share: $32.98 (27 shares)

Dividend: Quarterly at $.42, last raised from $.39 effective for the 2022 third quarter payment.  

Yield at New AC = 5.09%

Last Ex Dividend: 1/30/23

TTM P/E - Using  $29.07 Closing Price on 4/6/23 = 7.1

Last Discussed: Item # 1.J. Added to CFG - Bought 1 at $31.88; 1 at $30.37 (3/25/23 Post) I summarized the last earnings report in that post. SEC Filed Press Release I also provided deposit and owned security information in that post which was excerpted from the 2022 Annual Report. 

I. Added to STBA - Bought 1 at $32.13, 1 at $31.08; 3 at $30.35: 

Quote: S&T Bancorp Inc. (STBA)

Cost: $154.71

Investment Category: Regional Bank Basket Strategy

STBA Analyst Estimates | MarketWatch

New Average cost per share: $33.03

Dividend: Quarterly at $.32 per share

S&T Bancorp, Inc. (STBA) Dividend History | Seeking Alpha

Yield at New AC = 3.875%

Last Ex Dividend: 2/9/23

Last Discussed: Item # 3.A. Started STBA - Bought 5 at $35.2 (2/5/23 Post) I discussed the last earnings report, which I viewed favorably. SEC Filed Press Release I did not discuss the deposit and owned security information in that post which was included in the 2022 Annual Report filed on 2/24/23. The connection between uninsured deposits and unrealized losses in owned securities became an issue in March 2023. 

2022 Annual Report 

Owned Securities: 

Page 43 Annual Report

Net unrealized loss as of 12/31/22: $102.3M. 

Deposits: 

Non-Interest Bearing 35.8% of the total 

CDs $250,000 or more: 3% of the total (CDs at 250K need to be excluded when providing this information)

J. Added to BHK - Bought 10 at $10.92: 

Quote: BlackRock Core Bond Trust Overview - Leveraged CEF Bond Fund

The fund is classified as an investment grade bond fund. Some junk is allowed to be owned for that classification. 

Credit Quality as of 2/28/23

Sponsor's Website: Core Bond Trust | BHK

Number of Holdings as of 2/28/23: 1,677

Effective Duration as of 2/28/23: 9.65 years (as a rule of thumb, and excluding credit risk related issues, the total value of BHK's bond holding can be expected to move up or down 9.65% based on a 1% change in interest rates; Duration Definition and Its Use in Fixed Income Investing; Brush Up on Bonds: Interest Rate Hikes and Duration | FINRA.org) The rise in interest rates last year had a major adverse impact on net asset value per share. NAV per share was reported at $15.47 as of 12/31/21 with a closing market price that day of $16.51, creating a premium of 6.72%. As of 1/3/23, net asset value per share was reported at $11.01, with a closing market price of $10.6 that day, creating a discount to net asset value per share of 3.72%. 

Update For Closed End Fund Basket Strategy As Of 8/14/15 - South Gent | Seeking Alpha (Scroll to "General Risk Discussion for Leveraged Closed End Bond Funds)

SEC Filings 

2022 Annual Report (Holdings list starts at page 18)

Leverage: Substantial at 41+% as of 2/28/23 (with the improvement in bond prices over the past 30 days, I would expect that this percentage has fallen). 

I have mostly stayed away from this highly leveraged bond fund since I last eliminated my position back in 2019. Item # 3.A. Sold 100 BHK at $12.74 (1/20/19 Post)(profit snapshot = $63) 

The shares were trashed last year as the bonds owned by the fund went down in value and the cost of leverage rose substantially. As a result, the share price plunged and my interest increased a tad from non-existent to barely existent.  I am adding based on the hope that bonds will continue going up in value and that short term borrowing cost will go down by year end. 

New Average cost per share: $11.65 (48+ shares)

Dividend: Monthly at $.0745 with some ROC support. 

I am reinvesting the dividend. 

Yield at AC = 7.67%

Next Ex Dividend: 4/13/23

Data Date of 4/6/23 Purchase: 

Closing Net Asset Value per share: $11.38

Closing Market Price: $10.83

Discount: -4.83%

Average 3 year discount: -2.07%

Sourced: BHK BlackRock Core Bond, closed-end fund CEF Connect

Prior Sell Discussions: 

Item # 1 Sold Remaining BHK at $13.07 Update For CEF Basket Strategy As Of 3/21/16 - South Gent | Seeking Alpha (profit snapshot = $28.17)

Item # 4 Sold 200 of 300 BHK at Update For CEF Basket Strategy As Of 2/26/16 - South Gent | Seeking Alpha (profit snapshot = $47.43)

Pared Interest Rate Risk Exposure In Roth IRA: Sold 300 ACG At $7.81 And 200 BHK At $13.86 - South Gent | Seeking Alpha (profit snapshot = $99.55)

Item # 1 Sold 200 BHK at $13.86-Taxable Account-Completes BHK Transition to Roth IRA (1/14/15 Post)(profit snapshot = $75.23)-Item # 1 Bought 200 BHK at $13.4 (8/23/14 Post) 

Sold All of the Bond CEF BHK at $14.058 (2/21/12 Post)(profit snapshot = $68.3)

Total BHK Trading Profits: $381.68

K. Added 5 UBFO at $6.17: 

Quote: United Security Bancshares (UBFO)

Cost: $30.85

Investment Category: Regional Bank Basket Strategy

SEC Filings 

New AC per share: $6.25

Dividend: Quarterly at $.11 per share 

Yield at New AC = 7.04%

Last Ex Dividend: 4/5/23 (owned 10 as of)

My initial purchase, also my first ever, was discussed in my last post. Item # 1.D. Started UBFO - Bought 10 at $6.29 (4/1/23 Post). I summarized the last earnings report in that post. SEC Filing

Given the dividend yield and TTM P/E, I will not require much of a decline before buying more in 5 or 10 share lots.  

2. Corporate Bonds: +$7,000 in principal amount

A. Bought 2 W.P. Carey 4.6% SU Maturing on 4/1/24 at a Total Cost of 99.233: 

Issuer: W. P. Carey Inc. (WPC) 

2022 Annual Report 

SEC Filed Report for the Q/E 12/31/22 

I own the stock in 5 accounts including 2 RI accounts. Eventually, I intend to eliminate positions in 2 out of the 3 taxable accounts. 

FINRA Page: Bond Detail

Credit Ratings: Baa1/BBB+

YTM at Total Cost: 5.408%

Current Yield at TC = 4.6356%  

I now own 4. 

B. Bought 2 Marsh & McLennan Companies 3.875% SU Maturing on 3/15/24 at a Total Cost of 98.845: 

Issuer: Marsh & McLennan Cos. (MMC) 

MMC Analyst Estimates | MarketWatch

MMC SEC Filings 

SEC Filed Earnings Press Release for the Q/E 12/31/22 ("For the year 2022, revenue was $20.7 billion, an increase of 5% compared with 2021, or 9% on an underlying basis. Operating income was $4.3 billion, and adjusted operating income rose 11% to $4.8 billion. Net income attributable to the Company was $3.0 billion. Earnings per share decreased 1% to $6.04. Adjusted earnings per share increased 11% to $6.85 compared with $6.17 in 2021.")

FINRA Page: Bond Detail (prospectus linked)

Credit Ratings: Baa1/A-

YTM at Total Cost: 5.144% 

Current Yield at TC:  3.92%

I currently own 2 MMC 4.05% SU bonds that mature on 10/15/23. I am reinvesting the proceeds in advance into this 3/15/24 maturity SU. This is based on a concern that interest rates will continue to decline before the 10/15/23 maturity. 

C. Bought 1 Toronto Dominion 5.25% SU Maturing on 1/31/24 at a Total Cost of 99.85: 

Issuer: Toronto-Dominion Bank (TD) 

TD Analyst Estimates | MarketWatch

Finra Page: Bond Detail

Credit Ratings: A1/A

Credit Ratings

YTM at Total Cost: 5.39%

Current yield at TC = 5.2579%

Interest paid quarterly. 

D. Bought 2 Capital One 3.9% SU Bonds Maturing on 1/29/24 at a Total Cost of 98.704: 

Issuer: Capital One Financial Corp. (COF) 

COF  Analyst Estimates | MarketWatch

COF SEC Filings 

In anticipation that interest may continue to decline, I am replacing now the 2 Capital One SU bonds that I own which mature on 5/11/23.  

Finra Page: Bond Detail (prospectus linked)

Credit Ratings: Baa1/BBB

YTM at Total Cost: 5.57%

Current Yield at Total Cost: 3.95%

3. CD-FDIC Insured: 

A. Bought 2 Goldman Sachs Bank 5% CDs Maturing on 4/11/24: 

Interest Paid Monthly

4. Treasury Bills: 

Purchases were sourced from my Schwab sweep account.  

A. Bought 2 Treasury Bills at 4/5/23 Auction: 

Matures on 8/8/23 

119 Day Bill

Interest: $31.4

Investment Rate: 4.906%

B. Bought 2 Treasury Bills at the 4/6/23 Auction: 

Mature on 6/6/23 

56 Day Bill

Interest: $14.47

Investment Rate: 4.762% 

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.