Iowa Code 524.404 – Capital notes and debentures
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1. A state bank, with the prior approval of the superintendent and the affirmative vote of the holders of a majority of the shares entitled to vote, may issue capital notes or debentures. The amounts, maturities, rate of interest, relative rights with other creditors, and other terms and conditions shall be set forth on the face of the capital notes or debentures or in an attendant agreement, and all terms and conditions are subject to the prior approval of the superintendent provided that all such capital notes and debentures shall be subordinated to the rights of other persons to the extent provided for in section 524.1312. The aggregate amount of all capital notes and debentures issued and outstanding pursuant to this section shall not exceed, at any one time, twenty-five percent of the aggregate capital of the state bank.
Terms Used In Iowa Code 524.404
- Aggregate capital: means the sum of capital, surplus, undivided profits, and reserves as of the most recent calculation date. See Iowa Code 524.103
- Bank: means a corporation organized under this chapter, a national bank, a federal savings association, or an out-of-state bank. See Iowa Code 524.103
- Capital: means the sum of the par value of the preferred and common shares of a state bank issued and outstanding. See Iowa Code 524.103
- Shares: means the units into which the proprietary interests in a state bank incorporated as a stock corporation are divided. See Iowa Code 524.103
- state: when applied to the different parts of the United States, includes the District of Columbia and the territories, and the words "United States" may include the said district and territories. See Iowa Code 4.1
- State bank: means any bank incorporated pursuant to the provisions of this chapter after January 1, 1970, and any "state bank" incorporated pursuant to the laws of this state and doing business as such on January 1, 1970, or a bank organized as a mutual corporation under this chapter. See Iowa Code 524.103
- Superintendent: means the superintendent of banking of this state. See Iowa Code 524.103
2. A state bank shall not make any payment of principal on any capital notes or debentures without the prior approval of the superintendent nor shall any payment of principal and interest be made on any such capital or debentures by a state bank when its capital is impaired or which would cause its capital to become impaired. Subject to the provisions of this section a state bank may issue capital notes or debentures with provision for installment or serial payment of capital notes or debentures according to an established schedule which shall be approved by the superintendent prior to issuance.
3. A state bank shall not issue capital notes or debentures within five years after it is originally authorized to do business.