The total common dividend payout to available earnings is only 11%. Post 100% conversion, assuming the dividend remains 5 cents, the payout will rise to 14%, after calculating the increase in shares and the pref div available to common. 14%, IMO, is too low for a healthy growing bank. I would expect around a 25% payout, or 9 cent quarterly. Now, if the outstanding preferred is redeemed with borrowed money, say $12 million at 5%, a 5 cent dividend pays out only 11%. A 25% payout would be a 10.5 cent dividend, similar to what other banks such as this are paying. Make it so, No 1.
Dividend announcement should come at the annual shareholder meeting next week. I crunched some numbers and can envision a 40% increase from .05/q to .07/q.
This would yield 2.56% based on the current share price and would equate to a 21% payout when looking at net income for both the latest Q and the latest four Qs.
Of course, whatever the board and Mr. Schwartz decides to do is fine with me. In Schwartz I trust!