Not every stress test is a formal weeks-long government extravaganza replete with frenzied news media, congressional comments and terror in the land.

Sometimes just deciding to pay a common-stock dividend can be stressful.

Since the credit crisis struck last year, only seven of the country's largest banking and thrift companies have avoided cutting dividends. Five of them are expecting to keep paying their dividends with relative ease, but two could have trouble covering their dividends, and with each passing quarter, they face this de facto stress test anew.

Those two companies — M&T Bank Corp. and New York Community Bancorp. — have healthy capital levels, but analysts question whether they will earn enough money to comfortably cover their dividends — 70 cents a share for M&T, and 25 cents for New York Community.

M&T's dividend payout ratio, or the percentage of earnings per share paid out as a dividend, is expected to exceed 100% in the second and third quarters of the year.

New York Community is expected to deliver earnings of 26 cents a share this quarter, 27 cents in the third quarter and 27.5 cents in the fourth quarter, according to the average estimate of analysts surveyed by Bloomberg News.

"It's a quarterly stress test that these boards need to go through," said Matthew Kelly, a senior research analyst with Sterne Agee & Leach Inc. "I would argue that this payout ratio being maintained right around 100% … may not be prudent."

These companies are widely considered to be among the healthiest in the U.S. banking industry, since they are profitable and largely free of the credit issues that are plaguing the bulk of their rival lenders.

The same can be said of the other five companies with assets of over $18 billion that have not touched their dividends: Goldman Sachs Group Inc., Northern Trust Corp., Hudson City Bancorp Inc., BOK Financial Corp. and People's United Financial Inc.

The difference is that these companies, People's United excluded, are expected to earn more than enough in the coming quarters to cover their dividends comfortably.

Analysts still give People's United passing marks in its dividend stress test.

Even though its dividend ratio is expected to be over 100% over the next several quarters, analysts say the company's large 19% tangible common equity ratio means it has more than enough capital on hand to cover its dividends until its earnings recover.

The same can not be said of M&T and New York Community. M&T has a TCE ratio of 4.86%, while New York Community has a ratio of 5.8%.

As a result of this, analysts say, directors at M&T and New York Community would be wise to consider slashing their quarterly payouts, especially since the stigma of reducing the dividend has faded as the recession has deepened.

Doing so would also enable them to save capital should the economy continue its downward spiral. M&T paid $78 million of common stock dividends in the first quarter; New York Community paid $86 million.

Gerard Cassidy, an analyst with Royal Bank of Canada's RBC Capital Markets, said M&T in particular might not have a choice but to cut its dividend under pressure from regulators, as it received $600 million from the Treasury Department last year. New York Community received no federal funds.

Though M&T has said it is in no hurry to repay the government, Cassidy said it could follow BB&T Corp.'s lead by temporarily lowering the dividend as part of a common stock offering. BB&T said it temporarily lowered its dividend by 68%, to 15 cents a share.

"Could M&T do that? Possibly," Cassidy said.

The Buffalo company's first-quarter earnings exceeded its dividend by 11 cents a share, as the earnings were pressured by mounting bad commercial loans.

Analysts on average expect M&T to deliver earnings of 56.5 cents in the second quarter, 67.4 cents in the third and 74 cents in the fourth, according to Bloomberg.

So M&T, whose board is scheduled to meet this month, is facing at least one more quarter in which its earnings will not cover the 70-cent dividend, which analysts say may or may not be cause for it to slash the payout.

Collyn Gilbert, an analyst with Stifel Nicolaus & Co., said it is questionable whether M&T should slash its payout, because the company has a sound capital base and is not plagued with the deep credit issues facing the regional banking companies.

That should not be an issue as long as the company's earnings improve this year, she said.

In a call with analysts last month, Rene Jones, M&T's chief financial officer, acknowledged that its most recent payout exceeded earnings, but he said M&T actually earned enough money on an operating basis to cover the dividend, excluding $50 million of one-time expenses and goodwill amortization.

"It's operating earnings that matter," Jones said.

A spokesman for M&T would not discuss the dividend, except to say it is a board matter.

New York Community's board is walking a fine line with its high dividend payout ratio, analysts said.

The Westbury, N.Y., company is known for relatively low chargeoffs as a result of strong underwriting standards and its position as one of the top lenders to New York City landlords, historically sound borrowers.

Still, some analysts question whether the company should consider reeling in the dividend to guard against potential fallout in its multifamily and commercial real estate portfolios, and to shore up capital for potential acquisitions.

"They are just kind of fighting the tide," said Jeff Davis, director of research at Howe Barnes Hoefer & Arnett Inc.

New York Community said Joseph Ficalora, its chief executive, was unavailable for comment, though he has repeatedly touted his company's ability to cover the dividend.

Ficalora said in a call with analysts last month: "Maintaining our dividend at this level is an indication of our confidence in our continued earnings capacity."

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