Louisiana Revised Statutes 6:263 – Dividends; stock purchased or redeemed; capital surplus required
Terms Used In Louisiana Revised Statutes 6:263
- Articles: means the original articles of incorporation and all amendments thereto including those contained in merger agreements or, if restated, the latest restatement thereof except in those instances in which the context refers expressly to the original articles of incorporation only. See Louisiana Revised Statutes 6:201
- Capital: means the sum of capital stock, surplus, and undivided profits or, as to mutual state banks, as defined by La. See Louisiana Revised Statutes 6:201
- Capital stock: means the sum of the par value of the shares outstanding plus any amounts in excess of par value transferred from surplus to capital stock in respect of such shares less any part of such amounts transferred from capital stock to surplus as permitted by this Chapter. See Louisiana Revised Statutes 6:201
- Issued shares: means outstanding shares. See Louisiana Revised Statutes 6:201
- Shares: means the units into which the stockholders' rights to participate in the control of the state bank, in its profits, or in the distribution of corporate assets are divided. See Louisiana Revised Statutes 6:201
- Surplus: means sums contributed by stockholders in excess of the par value of shares outstanding plus any amounts transferred from undivided profits pursuant to action by the board of directors. See Louisiana Revised Statutes 6:201
A. The board of directors of a state bank may not declare or pay any dividends in cash or property for a period of two years from the issuance of its certificate of authority or as the commissioner may prescribe. Thereafter, the board of directors of a state bank may declare or pay cash or property dividends on shares of its capital stock by complying with the provisions of this Section and the bank’s articles of incorporation and bylaws.
B. A state bank shall not declare or pay cash or property dividends, or purchase or redeem shares of its capital stock unless the bank has unimpaired surplus that equals or exceeds fifty percent of the outstanding capital stock of the bank. The bank’s unimpaired surplus shall not be reduced below fifty percent as a result of the payment of any combination of cash or property dividends, or the purchase or redemption of any shares of its capital stock.
C.(1) Prior approval of the commissioner shall be required if the total of all year-to-date cash or property dividends declared and paid by the state bank and amounts used by the state bank to redeem or purchase shares of its capital stock would exceed the total of the bank’s year-to-date net income combined with its net income from the immediately preceding year, after deducting all of the following:
(a) Amounts paid or accrued for the payments of cash dividends.
(b) The value of all property paid in dividends.
(c) Amounts paid or accrued to redeem or purchase shares of the bank’s capital stock over the calculation period.
(2) Negative net income shall not be rounded to zero in the calculation.
D. A state bank shall not purchase or redeem shares of its capital stock when its combined capital stock and unimpaired surplus accounts are less than, or such purchase or redemption would reduce its combined capital stock and unimpaired surplus accounts below, the aggregate amount payable on liquidation upon any issued shares which have a preferential right to participate in the assets in the event of liquidation and that remain after the purchase or redemption of any shares in connection therewith.
E. Shares of a state bank’s capital stock acquired pursuant to La. Rev. Stat. 6:416(B) shall be canceled and thereby restored to the status of authorized and unissued shares upon the expiration of the period permitted under that Section unless prior to that date the stock had been disposed of by the state bank.
F. Shares of a state bank’s capital stock purchased or redeemed by the bank shall be deemed cancelled and thereby restored to the status of authorized and unissued shares unless the bank’s articles, bylaws, or a resolution of the board of directors provides that such shares may be held as treasury stock following the purchase or redemption thereof.
Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1986, No. 10, §1; Acts 1991, No. 232, §1, eff. July 2, 1991; Acts 1992, No. 231, §1, eff. Sept. 1, 1992; Acts 1997, No. 1003, §1; Acts 2001, No. 915, §1, eff. June 26, 2001; Acts 2003, No. 570, §1, eff. June 27, 2003; Acts 2010, No. 77, §1.