We provide one of the first investigation on the impact of the degree of total leverage to the dividend policy of bank. We use a large sample of US bank holding companies from 2000:Q1 to 2017:Q4 to shed light our research question. Our empirical analysis provides consistent evidence that banks with high degree of total leverage (i.e. banks with a relatively high fixed-to-variables costs) are less likely to pay dividends, and they spend a lower fraction of incomes to pay back shareholders, suggesting a higher conservatism in dividend policy of banks subject to high degree of total leverage. The evidence remains unchanged with alternative econometric approaches, alternative measures of dividend policy and degree of total leverage. We further document that this higher conservatism is strengthened for a sample of banks with low franchise value during the financial crises. Our result suggests that the conservatism in dividend policy of banks with high degree of total leverage seems to be related to the precautionary motives aimed at preserving corporate resources under financial distress. Our study contributes to the literature of cost structure and dividend policy by pointing out that the impacts of the degree of fixed-to-variable expenses to dividend policy are extended to the case of banks.

Abstract
1. Introduction
2. Hypothesis Development
3. Data and Research Methods
    3.1. Sample
    3.2. Variables
    3.3. Summary Statistics
4. Results
    4.1. Decision to Pay and DTL
    4.2. Dividend Payout and DTL
5. Dividend Policy and Bank Opacity
6. Robustness Checks
    6.1. Alternative measures of dividends
    6.2. Alternative Measures of DTL
7. Discussion
8. Conclusions
References

• Dung Viet TRAN(International School of Business, Banking University Ho Chi Minh City) Corresponding Author