Stock dividends

This time almost no one is questioning the industry's ability to ride out whatever is coming.

The Louisiana-based bank reduced its dividend to a penny, the second reduction it has made this year as it tries to bring down expenses and generate more capital.

Members of the Federal Deposit Insurance Corp. board of directors Tuesday debated Consumer Financial Protection Bureau Director Rohit Chopra's proposal limiting capital distributions system-wide during times of stress, as well as penalties for institutions caught engaging in money laundering.

The Ames-based Ames National Corp. has watched its profits shrink over the past two years amid increased funding costs and stiff competition for deposits.

Toronto-Dominion Bank Chief Executive Bharat Masrani said additional share repurchases would be a possible use of the lender’s excess capital if it doesn’t deploy those funds in a major acquisition.

Nine of the 12 largest banking companies in the U.S. proposed higher quarterly payouts to shareholders. In announcing the actions, the banks touted their strength after more than a year of economic dislocation.

Some of the 23 large banks that participated in last week’s stress tests will be better positioned to reward shareholders than others, since they padded their capital amid the pandemic. Still, all are expected to tread cautiously amid ongoing economic uncertainty.

The Federal Reserve found that under its harshest stress-test scenario, bank capital ratios would decline to 10.6% on average — well above the 4.5% minimum requirement. Restrictions imposed on dividend payments and share repurchases during the economic crisis last year will be lifted after June 30.

The biggest U.S. banks, led by JPMorgan Chase and Bank of America, are expected to pay out $142 billion in capital to shareholders after clearing this year’s stress tests.

For banks that pass this year’s stress tests, the Federal Reserve said it will eliminate the restrictions on dividends and share buybacks while subjecting those institutions instead to the stress capital buffer.