Covered, compounding — after a large raise. A 3.56% yield on a 42.6% trailing payout is covered income with a fresh raise behind it: $2.00 a quarter, raised in July 2026 by 18% from $1.70, after Q3 2026 net income of $2.1 billion and adjusted earnings of $5.09 a share. The payout leaves most earnings retained even after the step-up.
Key risk: Commercial credit and rates — nonperforming loans rose 8% in Q3 2026 to $2.2 billion, and accumulated other comprehensive income worsened to negative $6.5 billion on higher rates, so credit or rate pressure would test the new, higher rate.
Changes if: The trailing payout pushes well past 42.6%, or the estimated 9.8% CET1 ratio at Sep. 30, 2026 falls materially while buybacks continue. Coverage and capital, not the yield, are the tripwires here.
- ✓Payout-coverage check: 42.6% trailing — the $8.00 indicated dividend costs well under half of trailing earnings, leaving most earnings retained even after the raise.
- ✓Yield check: 3.56% indicated — $2.00/qtr × 4 at the $224.46 close on Oct. 23, 2026. Real, earned yield from banking earnings, not a special or a return of capital.
- ✓Dividend growth check: The July 2026 raise lifted the quarterly dividend 18%, from $1.70 to $2.00; the board declared that $2.00 rate again on Oct. 2, 2026, payable Nov. 5, 2026.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.