PORTLAND, Ore. (AP) -- Umpqua Holdings Corp., parent of a community bank that operates in the Pacific Northwest, said Tuesday that its board approved a cash dividend of 9 cents, pulling it forward into December to protect its shareholders from a potential jump in taxes.
The Portland, Ore.-based company said the dividend will be paid on Dec. 28 to shareholders of record as of Dec. 14.
Umpqua is the latest company to move up its quarterly payout or issue a special end-of-year payment to protect investors from potentially having to pay higher taxes on dividend income starting in January.
Many companies are reviewing their dividend policies now that it appears investors could soon pay higher taxes. Since 2003 investors have paid a maximum 15 percent on dividend income. But that historically low rate will expire in January unless Congress and President Barack Obama reach a compromise on taxes and government spending.
As it stands, dividends will be taxed as ordinary income in 2013, the same as wages, so rates will go up depending on the taxpayer's income-tax bracket. For the highest earners, the dividend rate would jump to 43.4 percent.
Umpqua shares fell 14 cents to $11.55 in midday trading.