Section 06.05.445. Net undivided profits and dividends.

   (a) A bank may not declare or pay a dividend in an amount greater than its net undivided profits then on hand.
   (b) In determining net profits for the purpose of declaring a dividend, a bank may not include in its calculations
        (1) loan loss reserves and losses in excess of reserves, including loans or other credits upon which interest for a period of six months is due and unpaid, unless the loan or credit is well secured and in the process of collection;
        (2) interest accrued but not collected on loans or other credits upon which the interest due is more than 90 days delinquent;
        (3) interest collected but not earned;
        (4) assets or depreciation that the department has required to be charged off;
        (5) the appreciation of any asset above its actual cost to the bank; and
        (6) any accrued expenses, interest or taxes due from the bank.

Notes

History

(Sec. 3.224 ch 129 SLA 1951; am Sec. 21 ch 230 SLA 1968; am Sec. 76 ch 26 SLA 1993)