The Return of Bank Dividends (JPM, WFC, USB, BBT, PNC, BK, STT, GS, BRK-A)

The economy and investment categories may both be normalizing again, but dividend investors will get to start looking at banks again.  Today was D-Day for Dividend Day as the Federal Reserve is freeing up the healthy banks to begin reinstating dividends.  So far we are seeing dividend announcements from the likes of JPMorgan Chase & Co. (NYSE: JPM), U.S. Bancorp (NYSE: USB), Wells Fargo & Company (NYSE: WFC), and BB&T Corp (NYSE: BBT).

JPMorgan Chase & Co. (NYSE: JPM) declared a quarterly dividend of $0.25 per share, up from $0.05 after the banks had to cut payouts during the meltdown.  The company also authorized a new $15 billion multi-year common stock repurchase program, but $8 billion was approved for 2011 alone and tha represents about 175 million shares in today’s dollars.  The share repurchase program replaces the prior $10 billion program that had approximately $3.2 billion of remaining authorization. Jamie Dimon is signaling that more hikes may come later… he have a 30% income payout ratio as his goal.  He also noted that its objectives of maintaining a Basel I Tier 1 Common ratio of at least 9.0% and meeting the Basel III requirements were substantially achieved ahead of time. The new yield is close to 2.2%.

U.S. Bancorp (NYSE: USB) hiked its payout by 150% and will now pay $0.125 per common share per quarter and it approved for repurchase some 50 million shares of common stock.  The new dividend yield is approximately 1.8%.

Wells Fargo & Company (NYSE: WFC) is also targeting a 30% income payout ratio and is hiking the payouts to $0.12 per common share per quarter from $0.05 previously.  Wells Fargo is also increasing its share buyback authority by some 200 million shares of common stock.  Now it won’t just be Warren Buffett increasing the Wells Fargo share buying.  The new payout to Warren Buffett and investors will be roughly a 1.5% dividend yield.

BB&T Corp. (NYSE: BBT) hiked is payout with a $0.01 special dividend and took the rate to $0.16 ahead from $0.15 per share per quarter. This represents a mere 6.7% hike, which is probably not as large of dividend news noted above.

The PNC Financial Services Group, Inc. (NYSE: PNC) hiked its dividend practice but without formality.  It said that “the Board of Governors of the Federal Reserve System accepted its capital plan and did not object to its capital actions, which included recommendations to increase the quarterly common stock dividend in the second quarter of 2011 and to purchase shares under PNC’s existing common stock repurchase program.”  PNC submitted the plan in January and it expects to consider an increase in the common stock dividend at its next meeting on April 7, 2011.

We have noted before that we expect the same sort of dividend hikes from The Bank of New York Mellon Corporation (NYSE: BK) and State Street Corp. (NYSE: STT).  Another big development we expect is a repayment of the 10% preferred shares which Goldman Sachs Group Inc. (NYSE: GS) sold to Warren Buffett at Berkshire Hathaway Inc. (NYSE: BRK-A).

If you want already-high bank yields, we just updated the highest current regional and super-regional banks that were paying common stock dividend yields of 3%, 4%, and higher.

JON C. OGG