U.S. Bancorp said Friday that its board approved a plan to increase its quarterly dividend by 150 percent and buy back up to 50 million of its shares.

The Minneapolis-based bank holding company, which operates U.S. Bank, has raised its quarterly dividend from 5 cents per share to 12.5 cents per share-or 50 cents per share on an annualized basis.

U.S. Bancorp slashed its quarterly dividend from 42.5 cents per share to 5 cents per share in March 2009 in an attempt to preserve capital amid the financial crisis-but the Federal Reserve on Friday gave the go-ahead for some large banks to boost their stock dividends.

“Raising the dividend has been a top priority for me personally, our board of directors, and senior management team for more than a year,” U.S. Bancorp Chairman, President, and CEO Richard K. Davis said in a statement. “Our shareholders deserve to be rewarded for the support, confidence and patience they have shown over the past few years, as our company, and our industry, have confronted and adapted to regulatory and legislative changes and an uncertain, but recovering, economy.”

Banks are permitted to increase dividends if they pass the Federal Reserve's so-called “stress tests,” which assess their capital positions.

U.S. Bancorp's new quarterly dividend will be payable on April 15 to all shareholders of record at the close of business on March 31.

In addition to U.S. Bancorp's increase in quarterly dividend, San Francisco-based Wells Fargo & Company-Minnesota's largest bank by deposits-announced that its board has approved a special dividend of 7 cents per share, a move that will boost its first-quarter dividend to 12 cents.

Other banks that just announced dividend increases include J.P. Morgan Chase & Company and American Express, Inc.

U.S. Bancorp is Minnesota's largest bank holding company based on assets, which totaled $308 billion as of December 31, 2010. U.S. Bank is the fifth-largest commercial bank in the United States.