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The end of PCBT

PBCT Now it is official. After a few delays, the MTB bank took over the PBCT bank. The PBCT bank was my darling and stock I started buying in the early days of my account rebuilding process. Little by little I was buying a few shares here and there until I reach 100 shares. Then I started trading options around that position.

PBCT was a dividend aristocrat with 29 years of consecutive dividend increases and a decent yield of around 4%. And I got in at $10 a share. It is now all over. End. Finished.

The MTB bank acquired PBCT and I had a dilemma but not for long. I was thinking, should I keep the MTB and hold the investment? Or should I get rid of it? At first, I didn’t know what the conversion from the PBCT stock to MTB stock would look like and I didn’t have time to research it. I was thinking, that after the merger is done, I would be better off.

But then I learned the details.

The MTB is not on a dividend aristocrats list.

With 100 shares of PBCT, I was receiving $73 annual dividends. But after the conversion at the rate of 0.118, I ended up with 11 shares of MTB, and with a dividend payout of $4.8 per share I ended up with $53 annual dividends. A clear dividend cut.

I no longer owned 100 shares so trading covered calls were out of the question, moreover, my existing calls were in the money (the broker hasn’t adjusted the options as of yet) so I couldn’t trade it anymore. And I received a margin call because the call was no longer covered.

My decision to say goodbye to PBCT and MTB was clear. I closed the position and moved on.

What did you do?
 





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