J. MILLARD TAWES, GOVERNOR                               221

161CC. EXAMINATIONS.

(a)  Right to make. The Director shall examine, or cause an ex-
amination to be made into, the affairs of every association subject
to the provisions of this sub-title at least once every three (3) years,
and at such other times as the Director may deem necessary. If an
association is not audited at least once every three (3) years in a
manner satisfactory to the Director, the examination of such asso-
ciation may include an audit. IF ANY SUCH AUDIT IS MADE, IT
SHALL BE PERFORMED BY ONE OR MORE CERTIFIED PUB-
LIC ACCOUNTANTS. The Director, the Deputy Director, or his ex-
aminer shall have free access to all books and papers of an association
which relate to its business, and books and papers kept by any officer,
agent, or employee, relating to or upon which any record of its busi-
ness is kept.

(b)  Federal examinations. The Director in lieu of such examina-
tion and audit may accept an examination and audit made or accepted
by a federal home loan bank, the Federal Home Loan Bank Board,
or by the Federal Savings and Loan Insurance Corporation.

161DD. 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 estab-

lished.

(2) ADDITIONAL ALLOCATIONS THEN MAY BE MADE
TO SUCH SPECIAL RESERVES AS THE BOARD OF DIREC-
TORS MAY ESTABLISH OR MAY HAVE ESTABLISHED.

(3)  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.

161EE. 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