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Banking industry

First Commerce Corporation Increases Dividend and Payout Ratio

Strategic Insights

— 1 min read

First Commerce Corporation, a financial institution, has declared a 17% increase in its quarterly cash dividend on common stock, raising the yield to 4.4%. The increased dividend is payable on January 2, 1996, to holders of record on December 15, 1995. This move reflects the company's confidence in its earnings power and growth prospects, as stated by the Board of Directors. The Board also approved a new dividend policy, aiming to maintain a payout level of 40% to 50% of operating income, excluding nonrecurring items.

Key Takeaways:

  • First Commerce Corporation declared a 17% increase in its cash dividend on common stock, from 30 cents to 35 cents per share.
  • The increased dividend raises the yield to 4.4% based on the recent closing price of $32.00.
  • The Board of Directors approved a new dividend policy, aiming to maintain a payout level of 40% to 50% of operating income, excluding nonrecurring items.
  • The payout level is expected to increase from the previous range of 30% to 40% of ongoing earnings.
  • As of September 30, 1995, First Commerce Corporation's leverage ratio was 8.33%, tier 1 capital was 13.75%, and total capital was 16.67%.
  • The company's confidence in its earnings power and growth prospects drove the increase in dividend and payout ratio.

Statistics:

  • 17% increase in cash dividend on common stock.
  • 35 cents per share dividend on common stock.
  • 4.4% yield based on recent closing price of $32.00.
  • 40% to 50% payout level of operating income, excluding nonrecurring items.
  • 8.33% leverage ratio as of September 30, 1995.
  • 13.75% tier 1 capital as of September 30, 1995.
  • 16.67% total capital as of September 30, 1995.

Sources:

  • First Commerce Corporation (NASDAQ-FCOM), "First Commerce Corporation Declares Cash Dividend."
  • Business Wire, "First Commerce Corporation Declares Cash Dividend."

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