Wells Fargo & Company (NYSE: WFC) is now the least pressured of the four money-center banks as far as regulators are concerned. We had known previously that Federal Reserve had approved Wells Fargo’s 2015 capital plan, and now we know what the formal dividend hike will be and when it will be paid — and investors will want to know what this means to them (and to their dividend expectations ahead).

The banking giant announced on Tuesday that its quarterly common stock dividend would rise to $0.375 per share. This is an increase of $0.025 per share, which generates a payout hike of 7% from the prior quarter.

Before considering this as breaking news, investors may want to consider that this dividend hike had been telegraphed in the Comprehensive Capital Annual Review (CCAR) conducted back in March. 24/7 Wall St. gave a bank-by-bank review of which companies were allowed to raise dividends, and here is what was said about Wells Fargo at the time:

Wells Fargo announced that the Fed Board had not objected to its proposed 2015 Capital Plan. In this plan Wells Fargo proposed a dividend rate of $0.375 per share beginning in the second quarter of 2015, effectively a 7% increase over the current rate. The CEO, John Stumpf, released in a statement that the bank will continue with its strong share repurchase activity.

The new dividend payout will be $1.50 per share on an annualized basis. With a $55.30 share price, Wells Fargo will be moving its dividend yield up to 2.71% from 2.53%.

Around this same time last year, we noted that Wells Fargo’s new payout ratio for dividends, the net payout of common stock dividends and share repurchases less issuances, would be set in a range of 55% to 75% rather than a prior payout ratio target of 50% to 65%.

So, what does an expected earnings of $4.15 per share in 2015 and $4.49 per share in 2016 (from Thomson Reuters) translate to now?

If you consider that Wells Fargo has approximately 5.2 billion shares outstanding as of now, this will generate a dividend cost of about $1.95 billion per quarter. Also, the $1.50 per share would translate to about 36% of expected 2015 earnings per share before taking buybacks and other dividends into consideration.

Wells Fargo said:

The dividend is payable June 1, 2015, to stockholders of record on May 8, 2015, as approved today by the Wells Fargo board of directors… This dividend increase for the second quarter of 2015 was part of the company’s 2015 Capital Plan. The Federal Reserve advised Wells Fargo in March 2015 that it had no objection to its 2015 Capital Plan.

ALSO READ: Is IBM Finally Getting Dividends vs. Buybacks Right?

Shares of Wells Fargo were up 0.6% at $55.30 in late-day trading on Tuesday. The banking giant has a 52-week trading range of $46.44 to $56.29, and the stock has a consensus analyst price target of $57.34.

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