That income really came down in the quarter, to $15.9 million. That just covers the quarterly dividend of about $15.2 million. The interest rate spread declined 19 bps sequentially, to just 1.56%, and that’s the key mover (higher funding costs) for the decline in earnings, but rising labor costs also contributed.
They repurchased ~362,000 shares in the quarter, on top of the 315,000 in the December quarter, a sizable uptick in repurchases for them, though not what it has been in years past. In the latest quarter, repurchases totaled about 0.7% of publicly traded stock. That’s almost enough shares retired for them to fund what I expect to be the forward dividend without having to pay any more in abosolute terms.
We’ll get a vote in early July on the go-forward dividend, and it will be interesting to see what they do. They’ll want to increase it, of course, and likely will end up doing what they did before and edge it up a cent per year. So I’m calling $1.14 here.
I have some puts on USB, PNC and 5% long position on KRE (regional bank index etf), the index is heavily shorted something like 90%, so any sign of stabilization will push the index up. Of course I own the big banks like C, WFC, BAC.