Real Banks With Real Dividends! (JPM, MTB, VLY, NYB, HCBK, PBCT, FNFG, AF, NWBI, CFR, UBSI, FMER, PRK, TRMK, HBHC, FNB, BOH, RY, BNS, BMO, CM)

Most investors today believe that none of the banks are paying high-yielding dividends any longer.  While it is true that J.P. Morgan Chase & Co. (NYSE: JPM) is going to reinstate its dividend as soon as it is allowed to by regulators, its paltry 0.4% dividend yield just doesn’t entice income buyers today.  There is also a risk that regulators or politicians will opt to keep the heat on money-center banks to keep reserves aside or to make more loans to businesses rather than using cash to buyback stock or juice up the dividend.

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.

People’s United Financial Inc. (NASDAQ: PBCT) is the bank holding company for People’s United Bank and as of a year ago it operated a network of 300 branches in Connecticut, Vermont, New Hampshire, Maine, Massachusetts, and New York.

• Share price of $13.52 compares to 52-week range of $12.20 to $16.79
• Market Cap is $4.7 billion
• Thomson Reuters sees 2011 at $0.57 EPS and $1.17 billion in revenues
• Dividend of $0.155/quarter generates a yield of 4.6%
• Dividend history during recession was actually raised in 2009

First Niagara Financial Group (NASDAQ: FNFG) is digesting a merger and is the bank holding company of First Niagara Bank.  As of a year ago it operated 171 bank branches in Upstate New York and western Pennsylvania.

• Share price of $15.00 compares to 52-week range of $11.23 to $15.10
• Market Cap is $3.1 billion
• Thomson Reuters sees 2011 at $1.01 EPS and $1.12 billion in revenues
• Dividend of $0.16/quarter generates a yield of 4.3%
• Dividend history during recession was stable at $0.14 and was raised last year and just at the most recent quarter.

Astoria Financial Corporation (NYSE: AF) operates as Astoria Federal Savings and Loan Association and as of a year ago it operated 85 full-service banking offices and is headquartered in Lake Success, New York.

• Share price of $14.81 compares to 52-week range of $11.55 to $17.55
• Market Cap is $1.35 billion
• Thomson Reuters sees 2011 at $ EPS and $ billion in revenues
• Dividend of $0.13 generates a yield of 3.5%
• Dividend history during recession was cut from $0.26 to the $0.13 currently.  This is a dividend hike candidate.

Northwest Bancshares, Inc. (NASDAQ: NWBI) is the holding company for Northwest Savings Bank as of a year ago it operated 171 community-banking offices in Pennsylvania, New York, Ohio, Maryland, and Florida.

• Share price of $12.52 compares to 52-week range of $10.24 to $12.79
• Market Cap is $1.4 billion
• Thomson Reuters sees 2011 at $0.65 EPS and $288.6 million in revenues
• Dividend of $0.10/quarter generates a yield of 3.2%
• Dividend history during recession was stable and was raised in 2010

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 $59.78 compares to 52-week range of $50.04 to $62.59
• Market Cap is $3.65 billion
• Thomson Reuters sees 2011 at $3.53 EPS and $887.98 million in revenues
• Dividend of $0.45 generates a yield of 3.0%
• Dividend history during recession was stable and was raised throughout the recession

United Bankshares Inc. (NASDAQ: UBSI) operated 113 full service offices in West Virginia, Virginia, Maryland, Ohio, and Washington, D.C. as of a year ago.

• Share price of $28.35 compares to 52-week range of $22.09 to $31.99
• Market Cap is $1.25 billion
• Thomson Reuters sees 2011 at $1.67 EPS and $333.7 million in revenues
• Dividend of $0.30 generates a yield of 4.3%
• Dividend history during recession was stable and was raised in 2009

FirstMerit Corporation (NASDAQ: FMER) is based in Akron. Ohio and is the holding company of FirstMerit Bank, N.A. As of a year ago it operated a network of 160 full service banking offices.

• Share price of $17.26 compares to 52-week range of $16.55 to $24.43
• Market Cap is $1.88 billion
• Thomson Reuters sees 2011 at $1.11 EPS and $710.7 million in revenues
• Dividend of $0.16/quarter generates a yield of 3.7%
• Dividend history during recession was stable after a stock split

Park National Corp. (NYSE: PRK) operated 145 financial service offices as of a year ago in 28 Ohio counties, 1 county of Kentucky, 6 Florida counties, and 1 county of Alabama.

• Share price of $68.26 compares to 52-week range of $53.35 to $74.80
• Market Cap is $1.06 billion
• Thomson Reuters sees 2011 at $4.44 EPS and $342.2 million in revenues
• Dividend of $3.76 annually generates a yield of 5.6%
• Dividend history during recession was stable.

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 $24.59 compares to 52-week range of $18.83 to $26.88
• Market Cap is $1.57 billion
• Thomson Reuters sees 2011 at $1.56 EPS and $511.2 million in revenues
• Dividend of $0.92/year generates a yield of 3.8%
• Dividend history during recession was stable and has been static since 2007

Hancock Holding Co. (NASDAQ: HBHC) operates in Mississippi, Louisiana, Florida, and Alabama and as of a year ago it operated approximately 185 banking and financial services offices.

• Share price of $34.30 compares to 52-week range of $26.82 to $43.90
• Market Cap is $1.26 billion
• Thomson Reuters sees 2011 at $1.69 EPS and $696.35 million in revenues
• Dividend of $0.96/year generates a yield of 3.0%
• Dividend history during recession was stable and has been the same since 2006

F.N.B. Corporation (NYSE: FNB) as of a year ago had 224 community banking offices in Pennsylvania and Ohio, and 57 consumer finance offices in Pennsylvania, Ohio, and Tennessee.

• Share price of $10.50 compares to 52-week range of $6.99 to $10.68
• Market Cap is $1.2 billion
• Thomson Reuters sees 2011 at $0.70 EPS and $427.6 million in revenues
• Dividend of $0.48/year generates a yield of 4.6%
• Dividend history during recession was cut from $0.24 to $0.12

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 $47.57 compares to 52-week range of $41.60 to $54.10
• Market Cap is $2.3 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

If you are looking for better rounded banks that emerged strong from the recessions, our neighbors to the north in Canada have their top banks trading with real dividends.  Royal Bank of Canada (NYSE: RY) has a 3.6% yield; The Bank Of Nova Scotia (NYSE: BNS) has a 3.3% yield; Bank of Montreal (NYSE: BMO) has a 4.7% yield and Canadian Imperial Bank of Commerce (NYSE: CM) has a 4.4% yield.

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JON C. OGG