WTFCP - Very Undervalued Preferred Stock From Wintrust Financial

2024-07-18 12:30:00 ET

Summary

• Wintrust Financial is a regional bank holding company with a great track record and an investment grade rating from Fitch. It is not rated by S&P or Moody's.
• Wintrust preferred stock (WTFCP) is a reset-rate preferred stock that is likely to be called in 1 year with a “qualified” yield to call of 8.48%.
• Given that the dividend is “qualified” to receive a tax break, WTFCP’s after tax yield to call will destroy the yield to maturity of any one year bond of this.
• If WTFCP is not called in 1 year, its dividend will reset to the 5-year Treasury note yield plus 6.5%.
• At the current 5-year note yield, the yield on WTFCP will reset to a “qualified” 10.80% and not be callable again for 5 years.

Wintrust Financial

Wintrust ( WTFC ) is a very well managed regional bank and has been an excellent performer, far outperforming the typical regional bank. Here is the 2-year chart, which shows how WTFC has performed through a period that included the banking crisis....

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