Innovative Income Investor | Innovative Income Investor

I Dip In for a Little Heartland Financial Fixed-Rate Reset Preferred

This morning I took a nibble on the Dubuque, Iowa community bank Heartland Financial (HTLF) 7% fixed rate reset preferred shares (HTLFP).

HTLF is a $20 billion in assets regional/community banker which appears to be generally well managed, although net income was off a bit in the quarter ending 9/30/2022–primarily because their salaries and benefit cost jumped quite a bit from last year. Of course they have the typical losses on investment portfolios, as most banks and insurance company’s have had during this credit tightening cycle.

The fixed rate reset issue (HTLFP) has traded strongly since issuance in 2020 spending much of the time in the $26-$27/share area, but now is down to around $25.

The issue has a 1st optional redemption date on 7/15/2025—and the great thing is that the reset is at 6.675% plus the 5 year treasury (now 3.85%)–all things being equal this probably means the issue will be redeemed on 7/15/2025 or alternatively the coupon moves to over 10%.

Of course I don’t make recommendations, but I find this a good time (around $25) to lock in a decent 7% yield.

Thank You for All Donations

I want to thank those that have donated to the website account. It is truly gratifying to see that lots of folks find the site worthy of a donation.

Also thanks to those that have had a ‘glitch’ when trying to donate and all those that have the desire to donate, but are do not want to use the Paypal processing.

I will look into glitches and see what I can find out–this is new to me so I don’t have much experience troubleshooting.. For those wanting to donate, but don’t care for Paypal I will be in contact in the next couple of days with other potential options.

Note that I will keep the Donation note at or near the top of the page for a few days and then let it go away–maybe reviving on monthly or quarterly in the future.

Donation Capabilities Now Active

After a year or two of considering adding ‘donation’ capabilities I have now launched the donation page.

Donations are an alternative to advertising supported websites–which is what the old ‘Yield Hunter‘ website was, or to subscription based websites. Neither of these models are very attractive to me. Advertising takes up too much ‘real estate’ on the web page, while subscription limits the amount of participation in the commenting section and this is key (in my mind) to providing a needed exchange of ideas.

I have received a few donations already—I received one in the snail mail from a very generous individual and others from folks who somehow found my donation page before I announced it. I am hopeful that we will have strong participation in donations so that I can make some needed updates and expansions of the website. I have no idea at all if a ‘donation’ page can generate much money, but I guess we will find out.

The donation page has the capabilities to accept ‘one time donations’ or to accept monthly ‘recurring’ donations which seems to be a good option.

Note that the only information I receive is a name and a email address. Processing is through Paypal (and of course they take a processing fee).

Thanks in advance for everyone’s support–we have a great community of contributors.

Ready to Wrap Up This Week

Well yesterday was wild in equities–the S&P500 moved lower virtually all day hitting a low of 3764 before reversing and clawing back some of the losses, closing at 3822 which was a loss of almost 1.5% on the day. Futures are up 1/3rd% at this moment and with thin trading volume expected today there is no telling where we end up. Markets will be closed on Monday.

The 10 year treasury yields didn’t move too much much at all yesterday–closed at 3.67% and now is at 3.70%. With the personal consumption expenditure (PCE) price index due in 5 minutes we’ll see what happens–we could see lots of movement.

Yesterday I didn’t do any investing — no buying or selling — maybe this morning I will buy, but not feeling any pressure at all to do anything. Today I have to run out and buy 1, yes 1, Christmas present–around our house the grand kids make out well while the rest of us do without.