Weiss Ratings’ Portfolio of High Dividend Bank Stocks

Even with the recent Federal Reserve posturing about potential tightening of monetary policy, letting up on “quantitative easing” and returning to more normalized interest rates, the average U.S. treasury and savings rate yields are still near historical lows.  Investors seeking higher income on cash can turn to investing in well-rated banking industry stocks for some very attractive yields — much higher than the 1.97 percent average yield of the current S&P 500.

For comparison, the historical average dividend yield of the S&P 500 since 1932 is 4.44 percent; more than double what it is today.  And, looking at the chart below you can see that while the current S&P 500 yield is just below 2 percent, it still falls short of the average yield of publicly traded banks. 

It should be noted that while banks are increasing their dividend rates, yields have been falling due to the run up in recent bank stock prices. However banks with high-paying dividends should certainly be a consideration for investors, especially when compared to other investment vehicles such as low saving, money market and certificate of deposit rates.

Average Investment Rate/Yield 

Of the 1,145 publicly traded banks yielding an average of 1.99 percent, we have identified those with above-average returns, good market liquidity and solid financial strength for investor consideration

There are 308 banks that have a dividend yield of at least 3 percent as of May 15, 2013, down significantly by 59 banks from April 2013. And of those higher yield banks, 102 have at least $1 billion or more in assets. From the 102, we found 57 banks with average one-month daily volume greater than 25,000 shares and 25 had a Weiss Financial Strength Rating of B- (Good) or higher, as of Q4 2012 data.

New to the list this month are:  Guaranty Bancorp (GBNK) of Denver, Colorado and Republic Bancorp, Inc. (RBCAA) of Louisville, Kentucky.  Falling off the list this month were M&T Bank Corp. (MTB) of Buffalo, New York; Fifth Third Bancorp (FITB) of Cincinnati, Ohio; 1st Source Corp. (SRCE) of South Bend, Indiana; First Financial Bankshares, Inc. (FFIN) of Abilene, Texas; Lakeland Financial Corp. (LKFN) of Warsaw, Indiana; Washington Banking Company (WBCO) of Oak Harbor, Washington; Rockville Financial, Inc. (RCKB) of Vernon Rockville, Connecticut and Independent Bank Corp. (INDB) of Rockland, Massachusetts.  The primary reasons for the additions and subtractions are fluctuating stock prices, increasing or decreasing dividend yields, changes in the one-month trading volume and Weiss Financial Strength Rating upgrades or downgrades.

Weiss Ratings’ Portfolio of High Dividend Bank Stocks

Institution Name1 City State Ticker Dividend
Yield (%)

5/15/13
Weiss Financial Strength Ratings2
First Financial Bancorp. Cincinnati
OH
FFBC
6.13%        B-
Guaranty Bancorp Denver
CO
GBNK
4.74%        B-
TrustCo Bank Corp NY Glenville
NY
TRST
4.71%        B
United Bankshares, Inc. Charleston
WV
UBSI
4.66%        B
Oritani Financial Corp. Township of Washington
NJ
ORIT
4.44%        B
National Penn Bancshares, Inc. Boyertown
PA
NPBC
3.96%        A-
Northwest Bancshares, Inc. Warren
PA
NWBI
3.82%        B+
City Holding Company Charleston
WV
CHCO
3.71%        B
Community Bank System, Inc. De Witt
NY
CBU
3.68%        B+
Southside Bancshares, Inc. Tyler
TX
SBSI
3.66%        B
Trustmark Corporation Jackson
MS
TRMK
3.61%        B
Bank of Hawaii Corporation Honolulu
HI
BOH
3.59%        B-
First Busey Corporation Champaign
IL
BUSE
3.56%        B-
Washington Trust Bancorp, Inc. Westerly
RI
WASH
3.55%        B-
Sterling Financial Corporation Spokane
WA
STSA
3.50%        B
Westamerica Bancorporation San Rafael
CA
WABC
3.32%        B-
Simmons First National Corp. Pine Bluff
AR
SFNC
3.29%        B
BankUnited, Inc. Miami Lakes
FL
BKU
3.29%        B-
Westfield Financial, Inc. Westfield
MA
WFD
3.19%        A-
Cullen/Frost Bankers, Inc. San Antonio
TX
CFR
3.17%        B-
Republic Bancorp, Inc. Louisville
KY
RBCAA
3.15%        B+
Pacific Continental Corp. Eugene
OR
PCBK
3.14%        A-
Sterling Bancorp New York
NY
STL
3.11%        B-
Wells Fargo & Company San Francisco
CA
WFC
3.05%        B-
CVB Financial Corp. Ontario
CA
CVBF
3.00%        B+

1 Name of publicly traded holding company which may be different from operating subsidiary.
2
Weiss Financial Strength Rating (based on 12/31/12 data) is for the operating subsidiaries
   of the holding company shown in Column 1.

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