Fed bans dividends at Illinois, South Carolina banks

The Federal Reserve Board said on Tuesday it had ordered two small bank holding companies, Northern States Financial Corp and Tidelands Bancshares Inc to refrain from paying dividends or otherwise reducing capital. The Fed said in written agreements the firms need prior written approval from their respective Federal Reserve banks to declare dividends or make other distributions of capital.
The Fed said Northern States, based in Waukegan, Illinois, and Tidelands, based in Mount Pleasant, South Carolina, both must submit a written plan to maintain sufficient capital on a consolidated basis. The capital plans must consider the banks' risk profiles, the adequacy of the allowance for loan and lease losses, current and projected asset growth and projected earnings, among other considerations, the Fed said in the agreements.