Banking, finance, and taxes
Bank by Bank Dividend and Buyback Hike Approvals After Fed Review
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Wednesday’s big announcement is that the Federal Reserve did not object to the capital plans for some 25 of the 30 banks under review which were participating in the Comprehensive Capital Analysis and Review (CCAR).
These banks included the following: Ally Financial Inc.; American Express Company; Bank of America Corporation; The Bank of New York Mellon Corporation; BB&T Corporation; BBVA Compass Bancshares, Inc.; BMO Financial Corp.; Capital One Financial Corporation; Comerica Incorporated; Discover Financial Services; Fifth Third Bancorp; The Goldman Sachs Group, Inc.; Huntington Bancshares Incorporated; JP Morgan Chase & Co.; Keycorp; M&T Bank Corporation; Morgan Stanley; Northern Trust Corporation; The PNC Financial Services Group, Inc.; Regions Financial Corporation; State Street Corporation; SunTrust Banks, Inc.; U.S. Bancorp; UnionBanCal Corporation; and Wells Fargo & Company.
Bank of America Corporation and The Goldman Sachs Group, Inc., met minimum capital requirements after submitting adjusted capital actions.
24/7 Wall St. has taken the bits and pieces of all bank announcements that were announced from the public U.S. banks to show what levels of dividend hikes and buybacks have been announced by each. This was more than 15 of the banks under approval on Wednesday.
American Express Company (NYSE: AXP) plans to increase its quarterly dividend by 13% to 26 cents per share beginning with the second quarter 2014 dividend declaration and plans to repurchase up to $4.4 billion of common shares during 2014 and up to an additional $1.0 billion in the first quarter of 2015.
Bank of America Corp. (NYSE: BAC) intends to increase its quarterly common stock dividend to $0.05 per share, beginning in the second quarter of 2014. Also, the Board of Directors authorized a new $4.0 billion common stock repurchase program. This authorization, which covers both common stock and warrants, replaces the prior year’s common stock repurchase program that expires on March 31, 2014. The Federal Reserve Board did not object to the company’s capital plan. BofA also announced a settlement with the FHFA to pay about $9.5 billion to be released from all securities law and fraud claims tied to that agency.
The Bank of New York Mellon Corporation (NYSE: BK) announced that the Federal Reserve did not object to the 2014 capital plan. Its board has approved the repurchase of up to $1.74 billion of its common stock and it will declare a 13 percent increase to BNY Mellon’s quarterly common stock dividend in the second quarter of 2014, which the board of directors is expected to consider at its April meeting.
READ ALSO: Citi and Four Other Banks Rejected for Dividend and Buyback Hikes
Capital One Financial Corporation (NYSE: COF) expects to maintain its quarterly dividend of $0.30 per share, but its Board of Directors has authorized the repurchase of up to $2.5 billion of shares of the company’s common stock through the end of the first quarter of 2015.
Fifth Third Bancorp (NASDAQ: FITB) plans to increase its quarterly common stock dividend to $0.13, and to repurchase common shares in an amount up to $669 million. The bank also said that its plan included an additional ability to repurchase shares in the amount of any after-tax gains from the sale of Vantiv, Inc. stock, if realized.
The Goldman Sachs Group, Inc. (NYSE: GS) today announced that the Federal Reserve did not object to Goldman Sachs’ revised 2014 capital plan. CEO Lloyd Blankfein said, “Our capital plan provides flexibility to manage our capital resources dynamically and return excess capital to our shareholders.” Unfortunately, we do not yet know what that means.
Huntington Bancshares Incorporated (NASDAQ: HBAN) was approved for a 20% increase in the dividend per common share to $0.06, starting in the fourth quarter of 2014, and the potential repurchase of up to $250 million of common stock through the first quarter of 2015. Huntington’s proposed capital actions represent an 11% increase in the capital return relative to the dividends paid during the four quarters covered by last year’s plan and the recently completed $227 million share repurchase program.
JPMorgan Chase & Co. (NYSE:JPM) intends to increase the quarterly common stock dividend to $0.40 per share, effective the second quarter of 2014. The Board has also authorized a common equity repurchase program to repurchase $6.5 billion of common equity between April 1, 2014, and March 31, 2015. This authorization includes shares repurchased to offset issuances under the firm’s equity-based compensation plans. The Federal Reserve Board informed the Firm that it does not object to the Firm’s proposed 2014 capital distribution plan.
KeyCorp (NYSE: KEY) was approved for a common share repurchase program of up to $542 million , as well as raising its quarterly common share dividend from $0.055 per share up to $0.065 per share. KeyCorp said that its board will consider the potential dividend increase in May.
Morgan Stanley (NYSE: MS) announced that its approved capital plan included a share repurchase of up to $1 billion of common stock and a doubling of the stock dividend to $0.10 per share from the current $0.05 per share.
Northern Trust Corporation (NASDAQ: NTRS) received no objections from the Federal Reserve to the proposed capital actions. It plans to increase its quarterly common stock dividend to $0.33 per share from $0.31 per share and to repurchase up to $425 million of its common stock.
PNC Financial Services Group, Inc. (NYSE: PNC) announced that the Federal Reserve accepted its capital plan, which included a recommendation to increase the quarterly common stock dividend in the second quarter of 2014. The capital plan also included share repurchase programs of up to $1.5 billion for the four quarter period beginning in the second quarter of 2014 under PNC’s existing common stock repurchase authorization. These programs include repurchases of up to $200 million related to employee benefit plans.
Regions Financial Corporation (NYSE: RF) received fed approval to raise its quarterly common dividend to $0.05 per share and potentially the repurchase of up to $350 million in common shares. These proposed capital actions are subject to approval by its board. The timing and amount of any repurchases will be subject to the completion of certain other capital actions, as well as other factors, such as general market conditions.
State Street Corporation (NYSE: STT) has approved a new common stock purchase program authorizing the repurchase of up to $1.7 billion of its common stock through March 31, 2015. Additionally, the 2014 capital plan includes a proposed dividend rate of $0.30 per share from $0.26 per quarter.
SunTrust Banks, Inc. (NYSE: STI) announced that its plan was approved. This is a doubling of the dividend from $0.10 per share to $0.20 per share, beginning in the second quarter of 2014. It was also approved to repurchase up to $450 million of its common stock.
U.S. Bancorp (NYSE: USB) said that it will recommend in June that its board of directors approve an increase to the annual dividend rate beginning with the second quarter dividend payable in July 2014 – to a gain of 6.5% to $0.245 per common share for the quarter, equivalent to $0.98 per common share. Additionally, the board of directors has approved a one-year authorization to repurchase up to $2.3 billion of its outstanding stock to replace the current authorization.
Wells Fargo & Company (NYSE: WFC) said that its 2014 Capital Plan includes a proposed dividend rate of $0.35 per share for the second quarter of 2014, a 16.7% increase over the current rate of $0.30 per share. The plan also includes a proposed increase in common stock repurchase activity for 2014 – up to 350 million additional shares in its authority to repurchase its common stock.
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