Updated with stock price action

NEW YORK ( TheStreet) -- A recurrent theme among banks is the Federal Reserve stress tests and plans to return capital to shareholders in 2012.

Almost all banks declared confidently at a recent Goldman Sachs Financial Services Conference in New York that they will pass the stress tests, and many reiterated their intention to increase dividends and buybacks to shareholders as a reward for having suffered through a terrible year for bank stocks in 2011. .

Still, some analysts remain concerned that the Fed would rein in the ability of banks to increase dividends substantially as the regulator would like the banks to maintain additional buffers against an uncertain economic environment.

Analysts at KBW expect the pace of capital deployment to slow in 2012. "In our view, large-cap banks may want to increase dividends to a higher level but it may be difficult due to Basel III requirements and Federal Reserve stress tests," they wrote in a note last week. "While banks may not necessarily cut dividends, we believe that higher hurdles set by the Fed for capital deployment may make it less compelling to own the stock of financial companies due to uncertain capital deployment over a multi-year period."

KBW expects banks that are not being stress tested- that is those with total assets less than $50 billion- to be able to raise dividend payouts with fewer restrictions.

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Goldman Sachs analysts on the other hand are more bullish. Even with capital continuing to build, the analysts expect banks in a position to return capital to reach a payout ratio of 50% in 2012. They expect majority of the increased capital returns to come in the form of buybacks, with dividend increases expected to be more nominal. American Express ( AXP), Wells Fargo ( WFC), State Street ( STT) and U.S. Bancorp ( USB) are best positioned, according to Goldman.

Among the big four banks, investors also have great expectations from Citigroup ( C) which has been promising to boost dividends starting in 2012. Buckingham Research analyst Jim Mitchell expects the bank's dividend to rocket 15-fold in 2012 .

Here's a roundup of some of the comments from the biggest banks at the conference last week.

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