26 LAWS OF MARYLAND [CH. 1

16ODD. APPORTIONMENT OF PROFITS.

The board of directors of any association shall apportion the profits
of the association, at least annually and as much more often as the
by-laws may prescribe; and each apportionment shall be made in
accordance with the following procedure:

(1) A proper allocation first shall be made to the general reserve
fund.

(2) Additional allocations then may be made to such special re-
serves as the board of directors may establish or may have established.

(S) Dividends then may be declared on all free share accounts in
accordance with the provisions of this Article and the by-laws of
the association.

(4) The residue of such profits may be held as ⁽⁽undivided profits"
subject to use in the same manner as profits generally.

160EE. RESERVES.

(a) Minimum allocation. Each association shall maintain a general
reserve fund which shall be used solely for the purpose of absorbing
losses and to which the board of directors shall allocate such portion
of the association's profits as the board may determine; except that
whenever the total amount of such reserve is less than six per cent
(6%) of the aggregate withdrawal value of the association's free
share accounts, the allocation to such reserve upon each apportion-
ment of profits shall be not less than ten per cent (10%) of the profits
being apportioned) or such lesser portion as will increase such reserve
to the required total amount.

(b) Special reserves. The board of directors may establish and
maintain such special reserves as they may deem advisable to which
charges may be made as the board of directors may determine.

16 OF F. DIVIDENDS.

(a) Determined by board of directors; restrictions. Subject to the
restrictions set forth in this Article and the association's by-laws,
the board of directors from time to time may determine the rate and
amount of dividends to be paid on free share accounts. However,
the declaration of dividends on free share accounts shall be subject
to the following restrictions: (1) If the total amount of the general
reserve fund is less than that required in Section 160EE of this
Article, no dividends shall be declared until the allocation provided by
said Section has first been made; (2) Dividends shall not be paid at
any time or under any circumstances from capital or unearned sur-
plus.

(b) Small accounts. A dividend need not be allocated to any free
share account which has a withdrawal value of less than twenty-five
dollars ($25. 00) on the record date with respect to which the dividend
is paid.

(e) Resolution governing dividends. The board of directors shall
determine by resolution the method of calculating the amount of any
dividend on free share accounts, and the date on which the same is
to be declared or credited.