October 30, 2008 / 2:08 PM / 11 years ago

U.S. Fed bans dividends at small Wyoming bank

WASHINGTON, Oct 30 (Reuters) - The Federal Reserve Board on Thursday said it has banned State Holding Co., a bank holding company in Thermopolis, Wyoming, from paying dividends or making other payments that reduce capital without Fed consent.

In a written agreement with the Federal Reserve Bank of Kansas City, State Holding, which owns the two-branch Bank of Wyoming, must also refrain from incurring or guaranteeing new debt without the Fed’s approval.

It said any requests by the firm to pay dividends must take into consideration current and projected information on the company’s capital, earnings, cash flow and asset quality. The bank must submit quarterly progress reports to the Kansas City Fed.

Such written agreements are normally made to address concerns that the Fed has about a bank’s condition or operations. The agreement did not name specific deficiencies, only prescriptive actions.

Sixteen U.S. banks this year have failed, compared to three in 2007, according to the Federal Deposit Insurance Corp. The FDIC had 117 troubled institutions on its “watch list” at the end of June. (Reporting by David Lawder; Editing by Tom Hals)

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