What is interesting is that you are not currently hamstrung at all in finding real banks with real dividend yields.  After all, what if the government delays its decision?  We recently ran a feature showing the highest yielding banks of all regions and all segments which had a 3.0% yield or higher, a market cap of $1 billion, and then which had earnings power to assure that these steady payout can continue.  If we carve these out by region from our screen of more than fifteen winners, these are five of the top payers by region are M&T Bank Corp. (NYSE: MTB), New York Community Bancorp Inc (NYSE: NYB), Cullen/Frost Bankers, Inc. (NYSE: CFR), Bank of Hawaii Corporation (NYSE: BOH), and Trustmark Corporation (NASDAQ: TRMK).

M&T Bank Corp. (NYSE: MTB) is based in Buffalo, NY and is the holding company for M&T Bank.  As of a year ago it had 793 banking offices in New York, Pennsylvania, Maryland, Delaware, New Jersey, Virginia, West Virginia, and the District of Columbia, as well as a branch in George Town, Cayman Islands. The company is in the process of acquiring another.

• Share price of $87.58 compares to 52-week range of $72.03 to $96.15
• Market Cap is $10.5 billion
• Thomson Reuters sees 2011 at $6.12 EPS and $3.77 billion in revenues
• Dividend of $2.80/year generates a yield of 3.2%
• Dividend history during recession was unchanged

New York Community Bancorp Inc (NYSE: NYB) is the bank holding company for York Community Bank and New York Commercial Bank and as of a year ago it had 241 community bank branches and 35 commercial bank branches throughout New York.

• Share price of $17.60 compares to 52-week range of $14.40 to $19.33
• Market Cap is $7.7 billion
• Thomson Reuters sees 2011 at $1.33 EPS and $1.25 billion in revenues
• Dividend of $1.00 per year generates a yield of 5.6%
• Dividend history during recession was unchanged at $0.25 per quarter since 2004.

Cullen/Frost Bankers, Inc. (NYSE: CFR) operates as Frost Bank and as of a year ago it had 110 financial centers in the Austin, Corpus Christi, Dallas, Fort Worth, Houston, Rio Grande Valley, and San Antonio regions of Texas.

• Share price of $57.60 compares to 52-week range of $50.04 to $62.59
• Market Cap is $3.5 billion
• Thomson Reuters sees 2011 at $3.52 EPS and $886.4 million in revenues
• Dividend of $1.80/year generates a yield of 3.1%
• Dividend history during recession was stable and was raised throughout the recession.

Bank of Hawaii Corporation (NYSE: BOH) was surprising to see considering the Hawaiian economy of the recession. It is the holding company for Bank of Hawaii and as of a year ago it operated 71 Hawaii branch locations and 12 branches in the Pacific Islands.

• Share price of $46.60 compares to 52-week range of $42.59 to $54.10
• Market Cap is $2.25 billion
• Thomson Reuters sees 2011 at $2.96 EPS and $585.56 million in revenues
• Dividend of $1.80/year generates a yield of 3.8%
• Dividend history during recession was stable and raised during 2008

Trustmark Corporation (NASDAQ: TRMK) is the bank holding company for Trustmark National Bank in Florida, Mississippi, Tennessee, and Texas and as of a year ago it operated 140 full-service branches and 17 limited-service branches.

• Share price of $22.27 compares to 52-week range of $18.83 to $26.88
• Market Cap is $1.42 billion
• Thomson Reuters sees 2011 at $1.56 EPS and $511.21 million in revenues
• Dividend of $0.92/year generates a yield of about 4.0%
• Dividend history during recession was stable and has been static since 2007

You can bookmark our site for the DAILY DIVIDEND AT 11:00 AM EST each day, although it technically at 11:01 AM EST.

JON C. OGG

We wanted to take a look at “all those other banks” out there that might have avoided the trouble that the big money center banks got into.  The screen pointed to M&T Bank Corp. (NYSE: MTB), Valley National Bancorp (NYSE: VLY), New York Community Bancorp Inc (NYSE: NYB), Hudson City Bancorp, Inc. (NASDAQ: HCBK), People’s United Financial Inc. (NASDAQ: PBCT), First Niagara Financial Group (NASDAQ: FNFG), Astoria Financial Corporation (NYSE: AF), Northwest Bancshares, Inc. (NASDAQ: NWBI), Cullen/Frost Bankers, Inc. (NYSE: CFR), United Bankshares Inc. (NASDAQ: UBSI), FirstMerit Corporation (NASDAQ: FMER), Park National Corp. (NYSE: PRK), Trustmark Corporation (NASDAQ: TRMK), Hancock Holding Co. (NASDAQ: HBHC), F.N.B. Corporation (NYSE: FNB) and Bank of Hawaii Corporation (NYSE: BOH).  In Canada there is Royal Bank of Canada (NYSE: RY), The Bank Of Nova Scotia (NYSE: BNS), Bank of Montreal (NYSE: BMO), and Canadian Imperial Bank of Commerce (NYSE: CM).It turns out that there are still many banks around the country that do pay higher dividends at above-market yields.

Our screen boiled down to a simple process.  We took a 3.0% Yield hurdle because that is what was implied as a future yield by JPMorgan this week if you use forward earning projections.  To avoid the micro-regional risks and to avoid the “so small no one cares if they fail” we also made a market cap hurdle of $1.0 billion.  After this we took a look at forward earnings expectations and also looked in the past to see what happened to their common stock dividends during the Great Recession when bank failure risks were systematic.

M&T Bank Corp. (NYSE: MTB) is based in Buffalo, NY and is the holding company for M&T Bank.  As of a year ago it had 793 banking offices in New York, Pennsylvania, Maryland, Delaware, New Jersey, Virginia, West Virginia, and the District of Columbia, as well as a branch in George Town, Cayman Islands. The company is in the process of acquiring another.

• Share price of $89.85 compares to 52-week range of $72.03 to $96.15
• Market Cap is $10.76 billion
• Thomson Reuters sees 2011 at $6.12 EPS and $3.77 billion in revenues
• Dividend of $0.70/quarter generates a yield of 3.2%
• Dividend history during recession was unchanged

Valley National Bancorp (NYSE: VLY) is the bank holding company for Valley National Bank and it had 197 full-service banking branches a year ago located throughout New Jersey and New York.

• Share price of $13.51 compares to 52-week range of $12.33 to $16.19
• Market Cap is $2.2 billion
• Thomson Reuters sees 2011 at $0.84 EPS and $550.98 million in revenues
• Dividend of $0.18/quarter generates a yield of about 5.3%
• Dividend history during recession was not effectively interrupted at all and it continued to pay a 5% stock dividend.

New York Community Bancorp Inc (NYSE: NYB) is the bank holding company for York Community Bank and New York Commercial Bank and as of a year ago it had 241 community bank branches and 35 commercial bank branches throughout New York.

• Share price of $18.92 compares to 52-week range of $14.40 to $19.33
• Market Cap is $8.24 billion
• Thomson Reuters sees 2011 at $1.33 EPS and $1.25 billion in revenues
• Dividend of $0.25/quarter generates a yield of 5.4%
• Dividend history during recession was unchanged at $0.25 per quarter since 2004.

Hudson City Bancorp, Inc. (NASDAQ: HCBK) is the bank holding company for Hudson City Savings Bank and as of a year ago it had 95 branches located in 17 counties throughout the State of New Jersey.

• Share price of $11.40 compares to 52-week range of $10.80 to $14.75
• Market Cap is $5.6 billion
• Thomson Reuters sees 2011 at $0.77 EPS and $966.6 million in revenues
• Dividend of $0.15/quarter generates a yield of 5.3%
• Dividend history during recession was actually raised during 2009 when others were eliminating or cutting the dividend.  The dividend has been this rate since mid-2009.

Sterling shares are higher and they have risen despite many changes there in the last 18 months.  Less than three months ago shares were actually trading under $5.50.  Shares were just at $6.80 on Monday before reports were out that Sterling may now be in play.  A 4% gain this morning has shares at $7.78, a high since 2009.  This week’s volume has been elevated with more than 1 million shares a day and an average volume being closer to 1.5 million shares versus about 900,000 shares a day under normal trading circumstances.

The WSJ chimed in this morning with a $825 million value, which would come close to $8.00 per share.  It was back in November that TAC Capital LLC, an investment firm which makes equity, private equity and hedge fund investments, submitted a proposal to nominate directors for election at the 2011 annual shareholder meeting.  Sterling’s announcement of the proposal was that it would review the proposal.

Cullen/Frost has a current market capitalization of about $3.71 billion, while Sterling now sits just under $800 million after the recent gains.  Sterling’s most recent press release indicates total assets of roughly $5.0 billion.  The bank holding company also noted that it operates 56 banking offices in the greater metro areas of Houston, San Antonio, Dallas and Ft. Worth, Texas.

Investors do need to be aware of price and value here.  There may be some additional value to unlock, but the value is not likely limitless.  Sterling listed its most recent book value per common share as of September 30, 2010 at $6.15 per share.  It also said that its tangible capital ratio was 9.13% and further noted that all regulatory capital ratios were “in excess of those considered to be well-capitalized.”

Sterling’s somewhat lengthy acquisition list is available on its site.  The question of how high this can fetch boils down to whether or not other regional banking players would want to get into what is currently considered an auction process for Sterling.  The local banks tend to make the most logical sense, but other regional players may want to consider it also.

Sterling has two other trailing securities in warrants and preferred shares under SBIBW and SBIBN.  As with all stories regarding M&A, until an announcement is made they need to be considered as rumors.

JON C. OGG

Ansys (ANSS) Cut to Neutral from Overweight at JPMorgan.
Cabot (CBT) Cut to Underweight at JPMorgan.
Consolidated Edison (ED) Cut to Neutral at Credit Suisse.
Cullen/Frost Bankers (CFR) Cut to Underperform at Oppenheimer.
Duke Energy (DUK) Cut to Neutral at Credit Suisse.
Eli Lilly (LLY) Cut to Underperform at Leerink Swann.
Estee Lauder (EL) Cut to Sell at UBS.
General Growth Properties (GGP) Cut to Market Perform at Wachovia.
Headwater (HW) Cut to Hold at Canaccord Adams.
Intuitive Surgical (ISRG) Cut to Market Perform at Leerink Swann.
Omniture (OMTR) Cut to Hold at Citigroup.
Royal Bank of Scotland (RBS) Cut to Market Perform at Bernstein.

JON C. OGG

On November 14, BancorpSouth, Inc. (NYSE: BXS) announced that it wouldnot apply for TARP funds as it is a well-capitalized and strongperforming institution with high quality assets.  The company said itsbalance sheet was highlighted by total risk-based capital of 11.82% atSeptember 30, 2008, far above minimum regulatory standards.BancorpSouth, Inc., is a financial holding company headquartered inTupelo, Mississippi, with approximately $13.3 billion in assets whichoperates approximately 300 commercial banking, mortgage, insurance,trust and broker/dealer locations in Alabama, Arkansas, Florida,Louisiana, Mississippi, Missouri, Tennessee and Texas.

At the end of October, Cullen/Frost Bankers, Inc. (NYSE: CFR) in Texasannounced it will not apply for funds available through the TARP ansthat it will not seek federal CPP funds.  The bank said at the timethat it is well capitalized "now and for the foreseeable future withsufficient capital to grow our business and take advantage ofacquisition opportunities."

On November 14, First Commonwealth Financial Corporation (NYSE: FCF)announced that it would not apply for TARP funds since it recentlyraised over $100 million through a public offering of common stock.First Commonwealth Financial Corporation is a $6.2 billion bank holdingcompany headquartered in Indiana, Pennsylvania with 113 retail branchoffices.

On November 17, Hudson City Bancorp, Inc. (Nasdaq: HCBK) announced thatit did not participate in the TARP as it has not been seriouslyaffected by conditions in the marketplace. The company said that whileit is not immune from economic conditions, its average loan-to-valueratio of 61% at time of origination has protected the bank fromsignificant levels of loan losses.  It has also accepted more mortgageapplications during the first nine months of 2008 than it did in all of2007 and it originated $4.01 billion of mortgage loans.  It alsopurchased $2.55 billion of loans through September 30, 2008 as comparedto $3.06 billion for the same period in 2007. It grew deposits by $2.14billion during the first nine months of 2008 and it had an equity toassets ratio of 9.2% and a total risk based capital ratio of 21.9% atSeptember 30, 2008.

On November 17, Prosperity Bancshares, Inc. (Nasdaq: PRSP) announcedits decision not to apply for TARP funds.  Prosperity said it wasconsidered well capitalized under regulatory guidelines and should beable to continue building its business and take advantage ofopportunities.  Prosperity Bancshares is a $10.5 billion Houston, Texasbased regional financial holding company with approximately 170branches throughout Texas.

On November 17, Westfield Financial, Inc. (NASDAQ: WFD) announced thatit decided not to seek TARP funds as its ratio of Tier 1 capital torisk weighted assets was 44.04% and the ratio of Tier 1 capital tototal adjusted assets was 25.65%. Both of these ratios are above theminimums of 6.00% and 5.00%, respectively, to be considered wellcapitalized under prompt corrective action requirements.  WestfieldBank is headquartered in Westfield, Massachusetts and operates through11 banking offices.

Jon C. Ogg
November 28, 2008