Jan. 29 (Bloomberg) -- Lehman Brothers Holdings Inc., the fourth-biggest U.S. securities firm by market value, boosted the dividend on its stock by 13 percent, extending a 12-year streak of increases after posting smaller mortgage losses than rivals.

The dividend will rise to 68 cents a share on an annual basis from 60 cents currently, New York-based Lehman said today in a statement. The first quarterly installment at the higher rate is payable Feb. 22 to shareholders of record as of Feb. 15, Lehman said.

Lehman and Goldman Sachs Group Inc. were the only major Wall Street firms to increase earnings last year, as Merrill Lynch & Co., Morgan Stanley and Bear Stearns Cos. took multibillion-dollar fourth-quarter writedowns on mortgages and bonds. Merrill, Morgan Stanley and Bear Stearns refrained from raising their shareholder payouts this year for the first time since early this decade.

Citigroup Inc., the largest U.S. bank by assets, announced a 41 percent cut in its dividend on Jan. 15, after reporting $18.1 billion of mortgage-related writedowns in the fourth quarter.

Lehman has increased its dividend every year since 1996, according to data compiled by Bloomberg.

Separately, the firm disclosed that the Internal Revenue Service ``recently'' began an examination of the firm's taxes from 2001 through 2005. The audit is in its ``initial stages'' and the IRS hasn't proposed any adjustments, Lehman said in a filing today with the U.S. Securities and Exchange Commission.

To contact the reporter on this story: Bradley Keoun in New York at bkeoun@bloomberg.net.

Last Updated: January 29, 2008 19:25 EST