AOD, CPF, EQR, FFHPRF:CA, FHB, FNLC, FSCO, GLW, NLOP, NSA, RITM, STBA,

Economy: 

Powell suggested that rate increases are likely over in the current cycle, but the FED was in no hurry to cut rates since it did not want to be blindsided by inflation roaring back. Fed meeting today: Live updates on January Fed rate decision I was not expecting a cut in March. 

It needs to be remembered that CPI had increased by  8.5% for the 12 month period ending in March 2022 when the FED decided to abandon ZIRP with a 25 basis point increase in the federal funds rate. 

Consumer Price Index-March 2022

Fed Policy Statement Excerpt March 2022: 

I was commenting before this action that the FED was so far behind the curve in fighting inflation that it would need a telescope to see the curve. 

As I have stated previously, I do not view a 25 basis cut in the FF range to be likely prior to the June meeting. Assuming inflation remains subdued, I am expecting a 25 basis point cut either at that meeting or at the May meeting but not at both

Yesterday, the CME FedWatch tool had the probability of a 50 basis point on or before the June meeting at 86.4%. 

CME FedWatch Tool - CME Group

That may happen based on a deterioration in economic data and more trouble in the office property market and banks writing down even more loans that are secured by those properties.  

The BLS reported earlier today that the economy added 353,000 jobs in January. The consensus estimate was 185,000. The unemployment rate remained unchanged at 3.7%. Employment Situation Summary - 2024 M01 Results 

The job gains for the prior two months were revised up: "The change in total nonfarm payroll employment for November was revised up by 9,000, from +173,000 to +182,000, and the change for December was revised up by 117,000, from +216,000 to +333,000. With these revisions, employment in November and December combined is 126,000 higher than previously reported."  

The average hourly wage increased 19 cents or .6% to $34.55. Wage growth over the past 12 months was at 4.5%. The average work week decreased by .2 hour. 

Jobs Data 2014 to Date: 

Bureau of Labor Statistics Data

This kind of economic data makes a FED rate cut less likely before the June meeting IMO.  The bond ghouls are reacting negatively to this jobs report. 

+++++

Allocation Shifts Discussed in this Post: 

Treasury Bills Purchased at Auction: $15,000 in principal amount

I intend on buying $10,000 at the next 3 month treasury bill auction using proceeds from maturing securities received in my Schwab account. 

Corporate Bonds: None, unlikely to buy given the decline in yields and a substantial overweighting that is only being slowed rolled off.  

Purchased MM Fund: $2,000 in SNOXX

Orders to buy SNOXX in my Schwab account have to be placed before the market closes in order to buy shares effective for the next business day. This treasury MM fund has a current SEC Yield of 5.03% compared to .45% paid by the Schwab sweep account that was used to fund this purchase.  

Individual Common Stocks: -$2,946.69

(Consisting of $4,007.56 in proceeds minus $1,060.87 in purchases)

Most of the proceeds were realized from continuing to reduce my regional bank stock allocation. The purchases were equity REIT stocks. 

Stock CEF: +$397.5

Outflow Stocks/Stock Funds (discussed in this post): -$2,549.19

Leveraged Balanced CEF: +$90.47

Leveraged Senior Loan/Junk Bond CEF: +$289  

Canadian Reset Equity Preferred Stock: - C$1,789 (profit = +C$552)

U.S. Equity Preferred Stock: - $315.5 (gain of +$53.31)

2024 Net Outflow Stocks/Stock Funds: -$10,928.2

+++++

Trump and His Anti-Democracy Party: 

RealClearPolitics-Election-2024 Republican Presidential Nomination

RealClearPolitics - Election 2024 - General Election: Trump vs. Biden

Democracy on Trial (full documentary) | FRONTLINE - YouTube

Trump has been endorsed by 31 Republican Senators and 130 House republicans so far. Donald is the Republican Party. There can be no dispute on that point anymore. 

Trump’s PACs Spent Roughly $50 Million on Legal Expenses in 2023 - The New York Times Money donated to Trump's PACs are used to pay his legal bills and a few others that he has swept into his vortex of legal troubles, a common fate awaiting for anyone willing to work for him. The exact amount turned out to be over $55M based on filings with the FEC. Trump spent more than $55 million in donor money on legal fees last year, filings show - The Washington Post I discussed Trump using donor money to pay his legal bills in this YT video:Trump PACs Paying His Legal Fees - YouTube  

The Nonsensical Impeachment of Alejandro Mayorkas - The Atlantic ("The impeachment is based on differences in border policy, rather than any misconduct. Even as they move it forward, House Republicans are avoiding legislation on the matter, working to snuff out a bill that would actually affect the border.")  There is no factual or legal justification for this GOP election year stunt. It is just disgusting and proves that the House republicans are totally unfit to govern. 

Is Congress Really Going to Abandon Ukraine Now? - The Atlantic Anne Applebaum offers this chilling assessment: "But an even deeper, broader shock wave would be triggered by the growing realization that the United States is not just an unreliable ally, but an unserious ally. A silly ally."  

In that article, Anne highlighted some statements made by Russia's former President and Prime Minister Dmitry Medvedev that establish that Russia has set its sights on absorbing Poland and the Baltic countries. Ex Russian PM Dmitry Medvedev claims Baltic countries belong to Russia and that Poland is Temporarily Occupied-Euronews This is why NATO exists - too deter the imperialistic ambitions of a totalitarian Orwellian state.  

A video making the rounds online depicts Trump as a Messiah-like figure : NPR; 'God Made Trump' Video  - YouTube  

Trump admits to trying to tank border deal to prevent a Biden win - YouTube; Donald Trump brags about his efforts to scuttle bipartisan border deal - The Washington Post It does look now that Trump has been successful in preventing a bipartisan deal on immigration. 

The Oklahoma GOP has censored its republican James Lankford for working on a compromise immigration bill. Oklahoma GOP votes to condemn Sen. Lankford for role in bipartisan border talks; GOP Senator Reveals the Sick Truth About the Trump-MAGA Border Scam This highlights the GOP's immersion into a Trump Personality Cult.  

The republicans in the House are advancing the impeachment of the Homeland Secretary as part of their 2024 campaign strategy which includes tanking any possible compromise on the immigration issue. House Republicans move closer to rare move of impeaching DHS Secretary Mayorkas 

Representative Ralph Norman (R-SC) stands by his 2021 email to Trump's Chief of Staff requesting that Donald declare martial law and overturn the election. Video: Ralph Norman defends 2021 text to Trump urging martial law Just 3 days before Biden was inaugurated, Norman texted Mark Meadows that "our LAST HOPE is invoking Marshall Law!! PLEASE URGE TO PRESIDENT TO DO SO" He does regret misspelling martial. 

At least 34 republican members of Congress texted Meadows urging the declaration of martial law rather than to allow Biden to become President. Republican Rep. Has No Regrets About That “Marshall Law” Text | The New Republic

Can Trump get his donors to pay $83.3 million awarded to E. Jean Carroll? - YouTube  

Trump Is a Combination of Every Threat We Have Ever Faced in Our History | The New Republic 

Elise Stefanik (R-NY) caught deleting statement calling for January 6 rioters to be prosecuted Stefanik has done a 100% pure mind meld with Donald and wants to call them "hostages" now. Liz Cheney requested that Stefanik "explain how and why she morphed into a total crackpot". 

Trump’s $50 Million Mystery Debt Looks Like ‘Tax Evasion’

Right-wing media targets Taylor Swift with Super Bowl conspiracy theory ahead of the Super Bowl 

“Would have to be an idiot”: Legal experts torch Trump lawyer’s “bogus motion” after Carroll ruling Ms. Habba wrote a letter to Judge Kaplan claiming that the jury verdict against Donald had to be thrown out because the Judge had an undisclosed conflict of interest with Carroll's attorney Roberta Kaplan who is unrelated to the Judge. Habba cited a New York Post article. 

Prior to Judge Kaplan being appointed to the bench in 1994, he was a partner in the gigantic law firm Paul, Weiss, Rifkind, Wharton & Garrison.  Carroll's attorney was a young associate in that firm for about two years. The judge has been serving as a Federal District Court judge for 30 years. They did not even work together on any cases. 

Habba was quoted by the New York Post, one of Murdoch's rags, that situation was "insane and so incestrous". Trump to use judge's 'conflict' in $83.3M jury verdict She accused the judge of committing an ethics violation.  

Even if they had worked together on a case 30 years ago, there would not provide any basis for the Judge's recusal. It is commonplace for district court judges to have work with or against attorneys prior to being appointed to the bench who later appear before the Judge. Attorneys who clerked for a Judge frequently appear before them and this is not a conflict.  

Ms. Habba graduated from Widener University law school. I never heard of it prior to looking at her bio. I checked the U.S. News ranking which has that law school currently at #159 out of 196 which is an improvement from the #175 prior ranking. 2023-2024 Best Law Schools - US News Rankings

As explained in my video, Trump has indicated that he intends to appeal the $83.3M verdict in favor of E. Jean Carroll but will have to post an appeal bond in that amount as a precondition. Trump Appeal Bonds- Carroll Jury Verdicts - YouTube

'People better believe it' when Trump threatens to get out of NATO, says John Bolton - YouTube NATO has deterred Russia's imperialistic ambitions.  

'Trump will lash out, ignore it': Man who prosecuted Trump University - YouTube

Ex-Trump Org CFO in talks to plead guilty to perjury charge tied to civil fraud investigation 

Roberta Kaplan says Trump threw papers across table at Mar-a-Lago deposition because his legal team agreed to feed her lunch Just another example of Trump failing to mature.  

++++

Putin and His Orwellian State of Misery: 

Losses ∙ Russia ∙ WarSpotting — documented material losses in Russo-Ukrainian war

‘There was no promise not to enlarge NATO’ - Harvard Law School Putin and his FM Lavrov routinely lie about this non-existent promise. The purpose is to justify Russia's invasion of Ukraine. De-bunking Russian disinformation on NATO

Russia boasts it is beating sanctions, but its longer-term prospects are bleak | CNN Business I do believe that Putin is more delusionary than Trump who is off the charts on that personality characteristic. Putin claims that Russia's economy is doing better than the U.S. The Russian economy is receiving a boost from increased production of weapons, financed with borrowed money, that are then destroyed in Ukraine. That policy makes the long term prospects for Russia's economy far worse when the outlook was already bad.  

Ukrainian Medic Tortured By Russians Credited With Saving Lives Of Other Prisoners - YouTube

Vladimir Putin pulls strange faces during meeting with close ally Aleksandr Lukashenko - YouTube

Starving Russian soldier surrenders to Ukraine's Slavic Brigade after brutal battle near Kupyansk - YouTube

Ukraine sinks $70M Russian warship Ivanovets in the Black Sea using boat drones - YouTube Russia's Black Sea Navy is unquestionably being defeated by a country with no Navy. The War in Ukraine has demonstrated that relatively low cost drones and missiles can destroy very high cost ships, tanks and other military equipment. 

Crimea hit with ’Storm Shadow’ missiles as Russian cities burn in sabotage attacks - YouTube It probably never occurred to Russia's incompetent and delusional dictator for life that Ukrainians who are loyal to their country can pass themselves off as Russians inside Russia and are consequently capable of conducting sabotage operations.  

++++

1. Canadian Reset Equity Preferred Stocks: 

I just had two Canadian reset equity preferred stocks reset their coupons for five years at spreads to the 5 year Canadian bond yield on 1/30/24. I discussed those resets in a YT video: Canadian Reset Equity Preferred Stocks - YouTube

Those two equity preferred stocks are ENBPRP:CA issued by Enbridge and PPLPRC:CA issued by Pembina Pipeline. Both preferred stocks have a C$25 par value and pay quarterly cumulative dividends. 

Both have coupons that reset every five years at spreads to the five year Canadian Government bond. The five year reset occurred last Wednesday (1/31/24). The 5 year bond closed at 3.418% that day.  

These preferred stocks can not be called for five years since the issuers did not exercise their call right on the reset date. If and when exercised, the call would be at the C$25 par value + the accrued and unpaid dividend.  

ENBPRP:CA Coupon at 5.988% paid on a C$25 par value

Excerpt from Press Release

I own 500 shares of ENBPRP:CA with an average cost per share at C$16.05: 

Price as of 11/31/24 Close/Unrealized gain then at C$1,300

Current yield at my AC per share = 9.3271% (.05988% coupon x $25 par value = C$1.497 dividend per share ÷ C$16.05 cost per share = 9.3271%)

Annual Dividends for 500 shares: C$748.5

Last Buy Discussions: Item # 2.A. Added to ENBPRP:CA - Bought 100 at C$16.2 (11/15/22 Post); Item # 3.A. Added to ENB.PRP:CA Bought 50 at C$11.98 and 50 at C$11.76 (6/13/20 Post); Item # 3.A. Added to ENB.PRP:CA-Bought 50 at C$16.47 (2/16/20 Post); Item # 2.A. Bought 50 ENB.PRP:CA at C$15.68 (11/27/19 Post)

Sell Discussions: Item # 1.A. Sold 100 out of 400 ENBPRP:CA at C$20.20 (12/31/21 Post)(profit snapshot = C$368); Item # 4.A. Sold 200 ENBPRP at C$19.91 (3/25/17 Post)(profit snapshot = C$963, contains a snapshot of a prior realized gain of US$1,458.25 converted by Fidelity into USDs from CADs.)  

PPLPRC:CA: Reset Coupon at 6.019% Paid on a C$25 par value 

Excerpt from Press Release

I own 400 shares of PPLPRC:CA with an average cost per share of C$16.75. 

Price as of 1/31/24 Close/Unrealized Gain then at C$1,160 

New Current Yield at constant C$16.75 cost: 8.983% (.06019% x. $25 par value = C$1.50475 annual dividend per share ÷ C$16.75 average cost per share = 8.9836%)  

Annual Dividends: C$601.9

Last Buy Discussions:  Item # 1.A. Added 100 PPLPRC at C$16.8 (6/24/23 Post); Item # 2.B. Bought 100 PPLPRC at C$15.88 (3/7/20 Post); Item # 1. Bought 50 PPLPRC at C$15.8  (7/3/19 Post); Item # 1.B. Bought 50 PPLPRC at C$17.23 (5/25/19 Post); Item # 1.A. Bought 100 PPL.PR.C. at C$17.7 (3/23/19 Post)

Sell Discussion: Item # 2.B. Sold 100 PPLPRC:CA at C$21.64 (6/1/17 Post)(profit snapshot = C$496)

A. Sold 100 FFHPRF:CA at C$17.9 (C$1 IB Commission): 

Quote: FFH-PF.TO 

Proceeds: C$1,789

Profit Snapshot = C$552

Last Discussed: Item # 1 Bought 100 FFHPRF at C$12.36 Update For Exchange Traded Bond And Preferred Stock Basket Strategy As Of April 1, 2016 - South Gent | Seeking Alpha

Placement in the Capital Structure: Equity Preferred Stock

Issuer: Fairfax Financial Holdings Ltd. (Canada: Toronto)

Par Value: C$25

Coupon: 2.16% spread to the 3 month Canadian treasury bill

Prospectus Excerpt 

Canada 3 Month Treasury-CNBC; Canada 3 Month Bill Yield - Chart 

Resets Quarterly 

Dividends: Paid Quarterly and cumulative.   

Last Ex Dividend: 12/14/23 (owned as of)

With the next significant move in the 3 month Canadian T Bill likely to be down in yield, I decided that I would prefer having the C$552 profit now rather than the dividend flow. 

If I assumed a 5% 3 month Canadian treasury bill for an entire year, the coupon would be 7.16% paid on a C$25 par value. For 100 shares that would amount to C$179 for 1 year.  

2. Small Ball Buys: 

A. Added 50 AOD at $7.95: 

Quote: abrdn Total Dynamic Dividend Fund Overview - Stock CEF

Cost: $397.5

Investment Category: Monthly Income Generation

Sponsor's website: abrdn Total Dynamic Dividend Fund, Inc.

AOD SEC Filings

AOD SEC Filed Annual Report for the the period ending 10/31/23

abrdn Total Dynamic Dividend (AOD) Portfolio | Morningstar List top 25 holdings. 

Leveraged: See page 32 of Annual Report. Borrowing is at a spread to a short term rate. The amount borrowed as of 10/31/23 was $49.051+M with the total assets owned by the fund then valued at $938.422+M or about 5.22%.  

Last Discussed: Item # 6.D. Added to AOD - Bought 10 at $7.92 (1/20/24 Post) 

Average cost per share: $7.95 (212+ shares)

Snapshot Intraday on 1/26/24 after add

Dividend: Monthly at $.0575 per share ($.69 annually)

ROC supported. 

AOD Stock Dividend History & Date

Yield at $7.95: 8.68%

Last Ex Dividend: 1/23/24

Data Date of 1/26/24 Trade: 

Closing Net Asset Value per share: $9.49

Closing Market Price: $7.99

Discount: -15.81%

Average 3 Year Discount: -11.67%

Sourced: AOD - CEF Connect

B. Added to THQ - Bought 5 at $18.09: 

Quote: Tekla Healthcare Opportunities Fund Overview - A Leverage Balanced CEF

Investment Category: Monthly Income Generation 

THQ SEC Filings

THQ SEC FILED Semiannual Report for the period ending 9/30/23

Tekla Healthcare Opportunities (THQ) Portfolio | Morningstar (lists top 25 holdings)

New Average Cost per share: $15.87 (30+ shares)

Snapshot Intraday on 1/26/24 after add

Dividend: Monthly at $.1125 per share ($1.35 annually), with ROC support. 

THQ Dividend History | Seeking Alpha

Yield at AC  = 8.51%

Last Ex Dividend: 1/23/24

Data Date of 1/26/24 Trade: 

Closing Net Asset Value per share: $21.42

Closing Market Value per share: $18.1

Discount: -15.5%

Average 3 year Discount: -7.51%

Sourced: THQ  - CEF Connect

THQ Realized Gains to Date: $898.53

Last Discussed: Item #2 Eliminated Duplicate Position in THQ - Sold 69+ at $18.87 (1/20/2024 Post)(profit snapshot = $76.4) I have nothing further to add here.  

C. Started NSA - Bought 5 at $38.41; 5 at $37.95; 5 at $37.35: 

Quote: National Storage Affiliates Trust (NSA) - Internally Managed Storage REIT 

Cost: $568.55

This is my first purchase. 

"The Company owned 934 consolidated self storage properties in 39 states and Puerto Rico with approximately 59.5 million rentable square feet in approximately 463,000 storage units as of September 30, 2023 . . . As of September 30, 2023, the Company also managed through its property management platform an additional portfolio of 185 properties owned by the Company's unconsolidated real estate ventures. These properties contain approximately 13.5 million rentable square feet, configured in approximately 111,000 storage units and located across 21 states. The Company owns a 25% equity interest in each of its unconsolidated real estate ventures." 10-Q at page 13 

NSA SEC Filings 

Average cost per share: $37.9 (15 shares)

Dividend: Quarterly at $.56 per share ($2.24 annually), last raised from $.55 effective for the 2023 second quarter. 

Yield at $37.9: 5.91%

Last Ex Dividend: 12/14/23 

Last Earnings Report (Q/E 9/30/23): SEC Filing 

Core FFO per share: $.67

Net Income to Core FFO Reconciliation: 

Same Store Occupancy: 88.5%

Repurchased 6,360,994 shares for about $213.4M

Debt is listed at page 14.

Borrowing costs have increased. On 10/5/23, "NSA issued $65.0 million of 6.46% senior unsecured notes due October 5, 2026, $100.0 million of 6.55% senior unsecured notes due October 5, 2028, $35.0 million of 6.66% senior unsecured notes due October 5, 2030 and $50.0 million of 6.73% senior unsecured notes due October 5, 2033 in a private placement with institutional investors. The Company used the proceeds to repay outstanding amounts on its revolving line of credit and for general corporate purposes".

D. Added to EQR - Bought 1 at $59.82; 1 at $59.55; 1 at $59.2; 1 at $58.75: 

Quote: Equity Residential (EQR) - Apartment REIT 

Cost = $237.32

Component of the S&P 500 

Website: Home | EquityApartments.com

Corporate Profile | Equity Residential

EQR SEC Filings

10-Q for the Q/E 9/30/23

SU Bonds of Operating subsidiary rated at A/3/A-. Credit Ratings | Equity Residential

Dividend: Quarterly at $.6625 per share ($2.65 annually), last raised from $.625 effective for the 2023 second quarter payment. 

Dividends | Equity Residential

New AC per share: $59.88

Yield at New AC: 4.43%, rounded up. 

Last Ex Dividend: 12/29/23

Last Discussed: Item # 3.A. Started EQR - Bought 2 at $60.97 (12/23/23 Post) I discussed the 2023 third quarter report in that post. SEC Filing

Investor Presentation November 2023.pdf 

Last Earnings Report (Q/E 1231/23): SEC Filing 

E.P.S. $.82, up from $.42 in the 2022 4th Q. 

Normalized FFO per share: $1, up from $.94

Revenues: $2.873+B, up from $2.735+B

Physical Occupancy: 95.8%

Number of Apartments: 77,676

"During the fourth quarter of 2023, the Company sold three properties located in our West Coast markets (San Francisco, Seattle and Los Angeles), consisting of 499 apartment units, for an aggregate sale price of approximately $184.5 million at a weighted average Disposition Yield of 5.8%, generating an Unlevered IRR of 14.4%. The average age of the properties sold in the fourth quarter of 2023 was approximately 40 years. During the full year of 2023, the Company sold 11 properties, consisting of 912 apartment units, for an aggregate sale price of approximately $379.9 million at a weighted average Disposition Yield of 5.5%, generating an Unlevered IRR of 11.4%. The average age of the properties sold in 2023 was approximately 30 years."

"Subsequent to the end of the fourth quarter of 2023, the Company sold a property in each of the Boston and Orange County markets, consisting of a total of 404 apartment units, for an aggregate sale price of approximately $189.0 million at a weighted average Disposition Yield of 5.6%. The average age of the properties sold subsequent to the end of the fourth quarter of 2023 was approximately 41 years."

E. Started FSCO - Bought 50 at $5.78: 

Quote:  FS Credit Opportunities Corp. Overview - Leveraged CEF

Cost: $289

Investment Category: Monthly Income Generation 

Sponsor's website: FSCO-FS Investments

FSCO SEC Filings 

SEC Filing - Investments as of 9/30/23 

SEC Filed Shareholder Semiannual Report for the period ending 6/30/23 

Insofar as the portfolio owns senior secured loans made to private companies, this CEF is similar to a BDC including FS KKR Capital (FSK) that has the same external manager. Most of the loans are at spreads to short term rates. FSCO also owns senior secured bonds, subordinated debt and asset backed finance.  Both the BDC and this CEF use leverage and both can trade at discounts to the last reported net asset value per share. The NAV for the CEF is reported each business day and is consequently more current than the quarterly reports filed by BDCs that have that information.   

Portfolio Information as of 9/30/23: 

Dividend: Monthly at $.057 ($.684 annually), last raised from $.04945 effective for the July 2023 payment. With the rise in short term rates, the fund earns more net income that allowed it to raise the dividend payment rate. A cut in the dividend would naturally follow when short term rates decline sufficiently that NII per share no longer covers the current monthly dividend. 

FSCO Dividend History | Nasdaq

Yield at $5.78: 11.83%

Last Ex Dividend: 1/23/24

Data Date of 1/29/24 Trade: 

Closing Net Asset Value per share: $6.95

Closing Market Price: $5.76 

Discount: -17.23%

Source: FSCO - CEF Connect 

I own some FSK shares. 

Last FSK Discussion: Item # 4.B. Eliminated FSK in 1 of 3 Taxable Accounts - Sold 12 at $20.35 (9/16/23 Post) 

F. Added To CLPR - Bought 50 at $5.1: 

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

Cost: $255

CLPR SEC Filings

2022 Annual Report

Website: Clipper Realty

Properties — Clipper Realty

Management: Internal 

Investment Strategy: Equity REIT Common and Preferred Stock Basket Strategy

New Average cost per share: $5.62 (241+ shares)

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

I am reinvesting the dividend. 

Clipper Realty Inc. (CLPR) Stock Dividend History & Date

Yield at $5.62: 6.76%

Yield at $5.1: 7.45%

Last Ex Dividend: 11/13/23 (owned 172+ as of)

Last Discussed: Item # 1.F. Added to CLPR Bought 10 at $4.45 (11/25/23 Post) 

I discussed the last earnings report in this post: Item # 1.A. Added to CLPR - Bought 10 at $4.77; 10 at $4.6; 10 at  $4.53-Fidelity Account (11/4/23 Post); SEC Filed Press Release; 10-Q for the Q/E 9/30/23

Recent price weakness may be related to a NY law on rent controlled or stabilized apartments. Landlords challenge New York’s longstanding rent-stabilization regime - SCOTUSblog 

Clipper owns a 58 building Flatbush apartment complex, constructed in 1950 with 2490 units,which is subject to rent stabilization. The 59 contiguous six-story buildings fill up about 21 acres along Foster Avenue between Nostrand and Brooklyn Avenues in Brooklyn. 

Last year, Clipper entered into an agreement whereby it will receive a 40 year abatement of property taxes in exchange "committed to a three-year capital improvement plan at the property, maintenance of rents within current categories based on area median income, a set aside of vacant units for formerly homeless households, and an increase in pay rates of non-union employees at the property to prevailing wage guidelines. The three-year capital improvement commitment could amount to approximately $27 million and follows improvements over the last three years of about the same amount. This transaction is expected to be accretive to our AFFO and FFO" Clipper Realty Inc. Reaches Agreement with New York City on 40-Year Real Property Tax Exemption for Flatbush Gardens Property The company has to reserve up to 250 apartments for the homeless as vacancies arise. Clipper bought this apartment complex in 2005 for $138M. In 2020, Clipper refinanced the property with a $329M mortgage. Clipper Equity’s Flatbush Gardens Lands $329M Refi - Multi-Housing News The mortgage is at 3.125% and matures in 2032, 10-Q at page 14 I am aware that the company was attempting to market the property last year, asking $425M according to a report.  

3. Small Ball Sells: 

As discussed in my last post, I have a negative reaction to most regional bank stock reports. My response is to reduce risk by reducing my allocation.  

A. Eliminated STBA - Sold 30 at $34.49: 

Quote: S&T Bancorp Inc. (STBA)

Proceeds: 1,034.82

STBA Analyst Estimates | MarketWatch

STBA SEC Filings

Investment Category: Regional Bank Basket Strategy

Profit Snapshot: Net of +$164.93

Last Discussed: Item # 1.B. Added to STBA - Bought 5 at $25.95; 3 at $24.91 (10/28/23 Post)(discussed 2023 third quarter report, SEC Filed Earnings Press Release); Item # 1.K. Added to STBA - Bought 2 at $26.45 (4/29/23 Post)

Dividend: Quarterly at $.32 per share, last raised from $.32 effective for the 2023 4th quarter payment. 

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

Next Ex Dividend: 2/7/24

Last Earnings Report (Q/E 12/31/23):   

SEC Filed Earnings Press Release 

Comparisons are to the 2022 4th quarter. 

E.P.S. = $.96, down from $1.03

NIM: 3.92%, down from 4.33%

Efficiency Ratio: 54.12%, up from 48.73% (up is a negative)

ROTE: 17%, down from 20.36%

ROA: 1.55%, down from 1.78%

NPL Ratio: .3%, up from .27%

Charge off ratio: .19%, up from .05%

Tangible Book Value per share: $23.72, up from $20.69

Even though NIM and E.P.S. declined Y-O-Y, the percentage was lower than many other regional banks that I follow. I will consider restarting a position at less than $30. 

B. Eliminated GLW - Sold 19+ at $33.4: 

Quote: Corning Inc.  (GLW)

Proceeds: $640.55  

GLW Analyst Estimates | MarketWatch

GLW SEC Filings

GLW Profile: Reuters

Profit Snapshot: +$79.74

Last Discussed: Item # 2.E. Added to GLW - Bought 2 at $27.62; 1 at  $27.47; 2 at $27; 1 at $25.63 (11/11/23 Post)(discussed 2023 3rd quarter report, SEC Filed Earnings Press Release); Item 3 1.F. Added to GLW - Bought 1 at $30.11, 1 at $29.79; 1 at $29.54; 1 at $28.7; 2 at at $27.98 (10/14/23 Post)

Dividend: Quarterly at $.28 per share ($1.12 annually), last raised from $.27 effective for the 2023 first quarter payment. 

Corning-Dividends

Last Ex Dividend: 11/16/23

Last Earnings Report (Q/E 12/31/23): The stock closed at $33.3, up $2.15, in response to this this earnings report. I thought that was overdone so I sold into the rally. 

SEC Filed Earnings Press Release 

Revenues: $2.994B, down 12% from $3.406B in the 2022 quarter and down 6% from the 2023 third quarter.  

GAAP E.P.S. = Loss of $.05

Non-GAAP E.P.S. = $.39, down from 17% from the $.47 in the 2022 4th quarter. 

"The difference between GAAP and core EPS primarily reflected constant currency adjustments, translated earnings contract gains, and translation losses on Japanese-yen-denominated debt, as well as restructuring and asset write-off charges."

GAAP to Non-GAAP Reconciliation:  

Adjusted free cash flow = $487M

2023 Adjusted free cash flow: $800M

Adjusted Free Cash Flow

I suspect the rally was triggered by this statement: "Management expects first-quarter core sales of approximately $3.1 billion and core EPS in the range of $0.32 to $0.38 and anticipates the first quarter to be the low quarter of the year."

Consider to Repurchase: Starting with a 5 to 10 share purchase at below $28. 

C. Eliminated TRST - Sold 41+ at $30.33:

Quote: Trustco Bank Corp.  (TRST)

Proceeds: $1,257.49

TRST SEC Filings

Investment category: Regional Bank Basket Strategy

Profit Snapshot: Net of +$31.36

Last Discussed: Item # 1.F. Added to TRST - Bought 4 at $27.13 (12/2/23 Post) 

Dividend: Quarterly at $.36 per share ($1.44 annually)

TRST Stock Dividend History & Date

Last Ex Dividend: 11/30/23 (owned all as of) 

Last Earnings Report (Q/E 12/30/23): 

SEC Filed Earnings Press Release 

Comparisons are to the 2022 4th quarter. 

E.P.S. $.52, down from $1.1

NIM 2.6%, down from 3.34%

Efficiency Ratio: 60.16%, up from 48.75% (up is a negative)

NPL Ratio: .35%, down from .37%

Coverage Ratio: 270% (allowance for credit losses to nonperforming loans) 

ROA = .64%, down from 1.38%

ROE: 6.21%, down from 13.91%

"Average loans were up $309.9 million or 6.6% in the fourth quarter 2023 over the same period in 2022.  Average residential loans, our primary lending focus, were up $192.2 million, or 4.6%, in the fourth quarter 2023 over the same period in 2022.  Average commercial loans and home equity lines of credit also increased $50.5 million, or 22.6%, and $61.8 million, or 22.2%, respectively, in the fourth quarter 2023 over the same period in 2022."

Average rate for securities held for sale: 2.39%, up from 2.25%

Tangible Book Value per share: $33.89, up from $31.54

I previously eliminated my duplicate positions: Item # 2.C. Eliminated TRST in 2 Taxable Accounts - Sold 5 at $36.84; 5 at $37.02 (3/11/23 Post)(profit snapshot = $41.28); Item # 3.A. Eliminated TRST in Schwab Taxable Account - Sold 20 at $38 (12/13/22 Post)(profit snapshot = $129.8)

Other Sell Discussions: There was a 1 for 5 reverse stock split in 2021 that explains the lower prices. TRST Split History The prices referenced in the following links are not adjusted for that reverse split. 

Item # 3.G. Eliminated TRST-Sold 15+ in Schwab Taxable at $7.45 and 40+ in Fidelity Taxable at $7.44 (5/14/21 Post)(profit snapshots = $111); Item # 1.D. Pared TRST-Sold 10 at $6.72 (1/9/21 Post); Item # 3.A. Eliminated TRST Sold 56+ at $8.8 (11/27/19 Post)(profit snapshot = $68.51); Item # 2.B. Sold 125 TRST at $8.6  (11/2/19 Post); Item # 2 Sold 100 TRST at $6.69 Update For Regional Bank Basket Strategy As Of 7/26/16-South Gent | Seeking Alpha; Item # 1 Sold 315+ TRST at $6.92 (1/11/15 Post)(largest gain to date = $549.47); Sold 50 TRST at $7.29 (11/25/13 Post); Sold 308 TRST at $6.64 (10/28/13 Post)(profit snapshot = $238.38)(on a reverse split adjusted basis, the sales price was $33.2)

Current Position: None

Consider to Repurchase: Assuming no material deterioration in the financial metrics from the last earnings report, my consider to repurchase price is less than $25 and that would be for an initial 5 or 10 share buy. 

TRST Realized Gains to Date: $1,456.66

D. Pared FHB - Sold 7+ at $22.34: 

Quote: First Hawaiian Inc. (FHB)

Proceeds: $164.37

FHB SEC Filings

FHB Analyst Estimates | MarketWatch

Investment Category: Regional Bank Basket Strategy

Profit Snapshot: $33.31

Last Discussed: Item # 2.L. Added to FHB in Schwab Account - Bought 1 at $15.86; 1 at $15.48 (5/20/23 Post) 

Average Cost per share after pare: $15.25 (25+ shares)

Snapshot Intraday on 1/26/24 after pare

The AC was reduced from $15.83 per share.

I am no longer reinvesting the dividend. 

Dividend: Quarterly at $.26 per share ($1.04 annually), last raised from $.24 effective for the 2019 first quarter payment. 

FHB Dividend History | Nasdaq

I do not anticipate a dividend increase in either 2024 or 2025. 

Yield at New AC = 6.82%

Last Ex Dividend: 11/17/23

Last Earnings Report (Q/E 12/31/23): 

SEC Filed Earnings Press Release 

Comparisons are to the 2022 4th quarter. 

GAAP E.P.S. = $.37, down from $.62

GAAP net income includes several items including a $40M loss realized from selling low yielding securities, a $16.3M special assessment by the FDIC, a $5.3M provision for credit losses and a $40.8M from selling 120,104 VISA shares. 

NIM: 2.81%, down from 3.15% 

Efficiency Ratio: 67.28% (impacted by special items), up from 51.47%.

NPL Ratio: .13%

Tangible Book Value per share: $11.68, up from $10. 

Sell Discussions: Item # 5.D. Pared FHB in Schwab Account - Sold 10 at $27.14 (1/16/23 Post)(profit snapshot = $46.05); Item # 2.F. Eliminated FHB in Vanguard Account - Sold 8 at $26.99 (2/5/23 Post)(profit snapshot = $26.9); Item # 4.C. Pared FHB in Fidelity Taxable Account - Sold 5+ at $26.355 (1/10/23 Post)(profit snapshot = $18.33); Item # 3.B Pared FHB in Fidelity Taxable Account - Sold Highest Cost 11 Shares at $29.21 (3/17/22 Post)(profit snapshot = $78.07); Item # 2.D. Sold 5 FHB in Fidelity Account at $29.86 and Item # 2.E. Pared FHB in Schwab Account-Sold 5 at $29.86 (11/5/21 Post)(profit snapshots = $31.19 and $30.76); Item # 3.H. Pared FHB in Fidelity Account- Sold 12.468 at $29.06 (7/9/21 Post)(profit snapshot = $51.22); Item # 1.P. Pared FHB in Fidelity Taxable-Sold 5.891 at $30.47 (3/20/21 Post) (profit snapshot = $26.28); Item #1.B. Continued Paring FHB in my Fidelity Taxable Account- Sold 5 at $28.61 and Item # 1.C. Pared FHB in Schwab Account - Sold 55 at $28.62, 6 at $29.9 (3/13/21 Post)(profit snapshots = $79.88); Item 1.A. Pared FHB in Schwab Account: Sold 40 at $29.65;  5 at $30.81 and Item #1.B. Pared 10 FHB in Fidelity Account at $29.65 and 10 at $30.02 (2/12/20 Post)(profit snapshots = $61.04); Item # 1.A. Sold 10 FHB at $30.76 (6/21/18 Post)(profit snapshot = $17.55, includes another profit snapshot of $40.11, for a 100 share lot held for 6 days). 

FHB Realized Gains to Date: $769.98

E. Eliminated Duplicate FNLC Position - Sold 10 at $24.75: 

Quote: First Bancorp Inc. (FNLC)

Proceeds: $247.5

FNLC SEC Filings 

Investment Category: Regional Bank Basket Strategy

Profit Snapshot: $49.5

Last Discussed: Item # 1.P. Added to FNLC - Bought 5 at $19.4(9/26/2020 Post); Item # 1.I. Restarted FNLC-Bought 5 at $20.2 (9/19/20 Post)

Dividend: Quarterly at $.35, last raised from $.34 effective for the 2023 third quarter payment. 

Last Ex Dividend: 1/5/24 (owned as of)

Last Earnings Report (Q/E 12/31/23): 

SEC Filed Press Release 

Comparisons are to the 2023 4th quarter. 

Diluted E.P.S. $.61, down from $.84

NIM: 2.34%, down from 3.09%

Efficiency Ratio: 54.08%, up from 48.83%

ROE: 11.35%, down from 16.15%

ROTE: 13.08%, down from 18.71%

All of the preceding number are major negatives. 

NPL Ratio: .1% (excellent)

NPA Ratio: .07% (excellent)

Tangible book value per share: $19.12, up from $17.93

FNLC Realized Gains to Date: $1,192.66

The largest annual gain was in 2016 at $670.94 (two 50 share lots). 

F. Eliminated Duplicate Position in CPF - Sold 22+ at $20.95: 

Quote: Central Pacific Financial Corp.

Proceeds: $481.32

CPF SEC Filings

Investment Category: Regional Bank Basket Strategy

Profit Snapshot: Net of $53.27

Dividend: Quarterly at $.26 per share, last raised from $.25 effective for the 2022 first quarter payment. 

CPF Dividend History | Nasdaq

Last Ex Dividend: 11/29/24

Next Ex Dividend: 2/28/24

Last Earnings Report (Q/E 12/31/23):  

SEC Filed Press Release

Comparisons are to the 2022 4th quarter. 

GAAP E.P.S. $.55, down from $.74

"During the quarter, the Company completed a $30.0 million investment portfolio restructuring designed to increase prospective earnings and net interest margin. The Company sold available-for-sale debt securities with a book value of $30.0 million, weighted average yield of 3.3%, weighted average duration of 3.4 years, and recognized a loss of $1.9 million. Proceeds from the sale were used to purchase $28.3 million in debt securities with a weighted average yield of 5.7% and a weighted average duration of 2.5 years. The Company estimates the earn-back period to be approximately 2.8 years."

GAAP net income included a 1 time gain pre-tax gain of $5.1M realized from selling an office property and  $1.6M of income from bank owned life insurance. So operating income was worse than the $.55 per share reported which was one trigger for reducing my position. 

NIM 2.84%, down from 3.17%

Efficiency Ratio: 64.12%, up from 59.56% (up is a negative)

NPA Ratio: .09% (excellent)

Charge off ratio: .41%, up from .12% 

ROE: 12.55%, down from 18.3%  

The report had some positives and was not bad enough overall to eliminate my entire position.  

G. Sold 12+ RITM at $11: 

Quote: Rithm Capital Corp. (RITM)

I classify RITM as a hybrid REIT. 

Proceeds: $132.49 

I sold all shares that were purchased with dividends at greater than $10 per share. This is another risk reduction technique. 

Website: Rithm | Home

RITM SEC Filings

Profit Snapshot: +$7.4

Last Discussed: Item # 1.L. Added to RITM - Bought 5 at $9.18 (11/4/23 Post) I discussed the last earnings report in that post. SEC Filed Press Release 

New Average cost per share: $10.47 (155+ shares)

Snapshot Intraday on 1/26/24 after pare

Dividend: Quarterly at $.25 per share  

Rithm Capital Corp. (RITM) Stock Dividend History & Date

Yield at $10.47: 9.55%

Last Ex Dividend: 12/28/23

H. Eliminated NLOP - Sold 2 Shares at $24.76: 

Quote: Net Lease Office Properties (NLOP) 

Proceeds: $49.02

This shares were received in my IB account as part of a spin off from W. P. Carey Inc. (WPC). I own 30 WPC shares in that account. 

Profit Snapshot:   +$12.92

NLOP SEC Filings

W. P. Carey Announces Completion of Spin-Off of Net Lease Office Properties ("Under the terms of the Spin-Off, W. P. Carey stockholders received one NLOP common share for every 15 shares of W. P. Carey common stock held as of the record date of October 19, 2023")

4. Treasury Auction Purchases: 

A. Purchased 15 Treasury Bills at the 1/29/24 Auction: 

91 Day Bill

Matures on 5/2/24

Interest: $197.55

Investment Rate: 5.368%

B. Bought 5 Treasury Bills at 1/31/24 Auction: 

119 Day Bill

Matures on 6/2/24: 

Interest: $85.12 

Investment rate: 5.327%

5. U.S. Equity Preferred Stock: 

A. Eliminated WSBCP - Sold 15 at $24.59: 

Quote: WesBanco Inc. 6.75% Perpetual Preferred Series A Stock

This is a fixed-to-floating rate preferred stock. As with other U.S. fixed-to-floating rate preferred stocks, WSBCP may be called by the issuer at par value + accrued and unpaid dividends after the fixed coupon period ends. 

Issuer: WesBanco Inc. (WSBC) - A Bank Holding Company 

WSBC SEC Filings

WSBC Dividend History | Seeking Alpha

I discussed eliminating my common stock position in my last post. Item # 2.F. Eliminated WSBC - Sold 10 at $30.72 (1/26/24 Post)(profit snapshot = $55.52). I discussed the 2024 4th quarter report in that post. SEC Filed Press Release

Profit Snapshot: +$53.51

Discussed at Item # 2.K. Bought 10 WSBCP at $22.75 (5/6/23 Post) 

Last Ex Dividend: 2/2/23

Prospectus

Dividends: Paid Quarterly, qualified and non-cumulative. 

Dividend Rates: 

Fixed Coupon: 6.75% to 11/15/25 to but excluding 11/15/25 

Floating Rate: Then, if not redeemed, at a 6.557% spread to the five year U.S. treasury note, resetting every 5 years. I would not make a prediction now on what the 5 year treasury yield will be in November 2025. My best guess is that it will be sufficiently high enough that this issuer will not want to pay that spread to the five year treasury note yield. 

A coupon in excess of the current 6.85% fixed rate would occur with a 5 year treasury yield greater than .193%.  

I am keeping a position in a Roth IRA account.  

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.