UPDATE 1-Amcore suspends quarterly dividend

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Nov 21 (Reuters) - Amcore Financial Inc (AMFI.O) temporarily suspended its quarterly dividend, effective immediately, as the bank holding company seeks to conserve capital amid a tumultuous financial market.

The company had previously paid a quarterly dividend of 18.5 cents a share, of which 5 cents was in cash and the rest in stock.

"Although we remain well-capitalized, increasing uncertainties in the economy require that we proceed cautiously and conservatively to manage capital," Chief Executive William McManaman said.

Amcore joins a host of U.S. regional banks which have suspended dividends to preserve cash in what is being called the worst of times in the financial market.

The company has been striving to reduce its exposure to commercial real estate and return to profitability.

In October, Amcore reported its third straight quarterly loss, which was wider than expected, hurt by a surge in bad loan provisions and non-performing assets.

Shares of the company closed at $3.06 Friday on Nasdaq. They have shed 87 percent since January. (Reporting by Sweta Singh in Bangalore; Editing by Deepak Kannan)