48.09 DIVIDENDS; SURPLUS.
Subdivision 1. Creation of surplus fund.
At the end of each dividend period, after
deducting all necessary expenses, losses, amounts receivable more than one year overdue and
not well secured, interest, and taxes due or levied, all of the remaining net profits for the period
shall be set aside as a surplus fund, if the surplus fund of the banking institution is not then equal
to one-fifth of the capital stock. If the surplus fund is more than one-fifth of the capital stock,
ten percent of the remaining net profits for the period shall be set aside as a surplus fund until it
equals 50 percent of the capital stock. The directors may then declare a dividend of so much of
the remainder as they may think expedient, subject to the commissioner's approval. When in any
way impaired the surplus fund shall be raised to this percentage in like manner.
Subd. 2. Undeclared net profits, prior dividend periods.
Any amount of remaining
net profits qualifying for dividend declaration in subdivision 1 and not declared at the end of
each annual dividend period may be subject to dividend declaration under the requirements of
subdivision 1 during any of the three subsequent annual dividend periods.
Subd. 3. Qualified subchapter S subsidiary.
A bank that has met the eligibility requirements
under title I, subtitle C of the Small Business Job Protection Act of 1996 or related state of
Minnesota tax law may apply to the commissioner for approval of a plan and agreement for a
distribution of earnings to the shareholder(s) of the bank on a basis other than a dividend under
subdivisions 1 and 2. Approval of a plan of distribution under this subdivision may be rescinded
by the commissioner upon 90-day prior notice to the bank. Failure to comply with this notice or
qualification of a distribution under subdivisions 1 and 2 is considered a violation subject to the
commissioner's action under section
History: (7671) RL s 2987; 1939 c 38 s 1; 1957 c 601 s 9; 1993 c 257 s 16; 1996 c 414
art 1 s 12; 1997 c 157 s 21