Comerica Inc., the Dallas-based bank that posted annual profits throughout the financial crisis, became the first of the largest U.S. lenders to raise its dividend, doubling the payout to 10 cents. The stock climbed.
The dividend is payable Jan. 1 to shareholders of record on Dec. 15, the company said today in a statement. Comerica also authorized the repurchase of up to 7 percent of shares outstanding, sending the stock higher by as much as 3.4 percent in extended trading after closing at $36.74 on the New York Stock Exchange.
“You will see a number of the stronger banks increase their dividends over the next quarter,” Jennifer Thompson, an analyst at New York-based Portales Partners LLC, said in an interview. She assigns a “hold” rating to shares of Comerica, which ranks among the 20 biggest U.S. commercial lenders by assets. “The regulators have put rules in place and now it will be a matter of making individual decisions for each bank.”
Investors and analysts have used quarterly conference calls to press banking executives about the timing of dividend increases. Federal Reserve Governor Daniel Tarullo said Nov. 12 that banks seeking to raise payouts will be required to undergo a stress test showing they would have sufficient capital for two years.
JPMorgan Chase & Co., Wells Fargo & Co., U.S. Bancorp, PNC Financial Services Group Inc. and BB&T Corp. may be next to announce higher dividends, Thompson said.
Comerica’s buyback plan may include as many as 12,576,281 shares, and the bank also may repurchase warrants covering 11,479,592 shares, according to the statement.