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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Regular Session, 2010 ENROLLED
SENATE BILL NO. 484
BY SENATOR DUPLESSIS
AN ACT1
To amend and reenact R.S. 6:263, relative to capital, surplus, and dividends of state banks;2
to provide relative to state bank dividends and stock purchased or redeemed; to3
require capital surplus; and to provide for related matters.4
Be it enacted by the Legislature of Louisiana:5
Section 1. R.S. 6:263 is hereby amended and reenacted to read as follows: 6
ยง263. Cash dividends Dividends; stock repurchase purchased or redemption7
redeemed; capital surplus required8
A. The board of directors of a state bank may not declare or pay any9
dividends in cash dividends or property for a period of two years from the issuance10
of its certificate of authority or for such shorter period as the commissioner may11
prescribe. Thereafter, the board of directors of any a state bank may quarterly,12
semiannually, or annually declare or pay cash or property dividends on shares of13
its capital stock by complying with the provisions of this Section and the bank's14
articles of incorporation and bylaws.15
B. No A state bank shall not declare or pay cash or property dividends16
may be declared or paid, or purchase or redeem shares of its capital stock unless17
the bank has unimpaired surplus equal to that equals or exceeds fifty percent of the18
outstanding capital stock of the bank. The bank's unimpaired surplus shall not be19
reduced below fifty percent by as a result of the payment of any combination of20
cash dividend or property dividends, or the purchase or redemption of any21
shares of its capital stock.22
C. A state bank may purchase or redeem its own stock if after such purchase23
or redemption the bank is in compliance with applicable statutory and regulatory24
capital requirements, and its remaining unimpaired surplus equals or exceeds fifty25
percent of the outstanding capital stock of the state bank remaining after such26
purchase or redemption, provided that:27
ACT No. 77 SB NO. 484 ENROLLED
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words in boldface type and underscored are additions.
(1) Prior approval of the commissioner shall be required if the total of all1
year-to-date cash or property dividends declared and paid by the state bank and2
amounts used to redeem or repurchase by the state bank's stock during any one year3
bank to redeem or purchase shares of its capital stock would exceed the total of4
the bank's year-to-date net profits of that year income combined with the its net5
profits income from the immediately preceding year. For the purposes of this6
Section, "net profits" is defined as the remainder of all earnings from current7
operations and other assets, after deducting from the total thereof all current8
operating expenses, paid and accrued cash dividends on preferred stock, if any, all9
federal and state taxes, cash dividends on common stock paid or accrued, and all of10
the following:11
(a) Amounts paid or accrued to redeem or repurchase stock for the payments12
of cash dividends.13
(b) The value of all property paid in dividends.14
(c) Amounts paid or accrued to redeem or purchase shares of the bank's15
capital stock over the calculation period.16
(2) Negative net profits income shall not be rounded to zero in the17
calculation.18
(2) D. A state bank shall not purchase or redeem shares of its capital stock19
when its combined capital stock and unimpaired surplus is accounts are less than,20
or such purchase or redemption would reduce its combined capital stock and21
unimpaired surplus accounts below, the aggregate amount payable on liquidation22
upon any issued shares which have a preferential right to participate in the assets in23
the event of liquidation and that remain after the purchase of or redemption and24
cancellation of any shares in connection therewith.25
(3) Stock which has been redeemed or repurchased must be accounted for26
under the par method of accounting.27
(4) Stock purchased or redeemed is E. Shares of a state bank's capital stock28
acquired pursuant to R.S. 6:416(B) shall be canceled and thereby restored to the29
status of authorized and unissued shares, unless the articles provide otherwise, except30 SB NO. 484 ENROLLED
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
that stock of the state bank acquired pursuant to R.S. 6:416(B) shall be canceled1
upon the expiration of the period permitted under that Section unless prior to that2
date the stock had been disposed of by the state bank.3
(5) The redemption or repurchase of a state bank's own stock or the stock of4
its parent company may not be effected for the sole purpose of speculation or to5
evade any applicable requirements of federal or state law. Such acquisitions must6
comply with all applicable federal and state securities laws.7
F. Shares of a state bank's capital stock purchased or redeemed by the8
bank shall be deemed cancelled and thereby restored to the status of authorized9
and unissued shares unless the bank's articles, bylaws, or a resolution of the10
board of directors provides that such shares may be held as treasury stock11
following the purchase or redemption thereof.12
PRESIDENT OF THE SENATE
SPEAKER OF THE HOUSE OF REPRESENTATIVES
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: