Bank of America Will Make Dividend Announcement on March 26

Two Wednesdays from now is the most important day of the year for Bank of America (NYSE: BAC  ) and its shareholders. Mark it on your calendar.

According to a press release from the Federal Reserve, March 26 is the day the nation's largest banks learn whether their dividend requests for 2014 have been approved or denied.

The significance of a dividend hike for Bank of America can't be overstated. Above all, it would serve as a stamp of approval on the progress CEO Brian Moynihan and his team have accomplished since the financial crisis.

Beyond this, a higher dividend would communicate to the market Bank of America is once again a solid and robust financial institution.

The net result of such affirmation would be twofold. First, long-term shareholders will be rewarded for their loyalty with larger quarterly checks. And second, the hallo effect of approval could very well boost the bank's underlying share price.

How big will these impacts be? Some analysts predict that Bank of America could double its quarterly payout. Others believe the payout could be quadrupled. And, of course, it could stay the same if Bank of America didn't seek or wasn't given the go-ahead.

I see the latter outcome as unlikely, but I've been surprised before. Either way, however, every Bank of America shareholder would do themselves a favor by marking March 26 on their calendar and hoping for the best.

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  • Report this Comment On March 12, 2014, at 1:34 PM, Tallen00001 wrote:

    A quadruple will raise the stock to $20 a share. A .25 a share increase will raise the stock to about $80 a share and if Buffett purchases his options the stock jump to about $ 150.00 a share by year end.

  • Report this Comment On March 12, 2014, at 1:36 PM, Tallen00001 wrote:

    Why would Buffett, a supposedly smart investor, wait to make such an extreme profit? That blindness is the only thing keeping this stock low.

  • Report this Comment On March 12, 2014, at 4:46 PM, hew wrote:

    Could it be that a smaller increase in dividend, ie. lower stock price rise, is planned, due to stock dilution with a Buffett option move. Take a larger stock buy back until the option price is less of a interuption?

  • Report this Comment On March 12, 2014, at 4:57 PM, hew wrote:

    Exercising options only makes sense when the dividends exceed the interest he is already getting ( 7.5% on $5 billion).

  • Report this Comment On March 12, 2014, at 6:06 PM, dbtheonly wrote:

    Given that BAC pays 4 cents per year; a double or even quadruple is hardly enough to retire on.

  • Report this Comment On March 12, 2014, at 7:16 PM, Rifleman3006 wrote:

    The quarterly dividend needs to go to nickel to make a difference. Tallen's comments above make no sense. They can afford a nickel per quarter and will disappoint unless we get that.

  • Report this Comment On March 13, 2014, at 12:38 AM, savior wrote:

    Should be way up there since it's so hard to get them to refinance those who have a mortgage with them at high interest rates….they want you to totally go thru the whole process, buy points etc. not like when I had a mortgage with WELLS FARGO that when rates fell by 1% they sent forms to you to sign and have notorized and your mortgage dropped to a new level……I'd reconsider if your getting a mortgage at Bank of America….just saying!!!

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John Maxfield

John is The Motley Fool's senior banking specialist. If you're interested in banking and/or finance, you should follow him on Twitter.

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