HARRY HUGHES, Governor

195

present Art. 11, § 95 defines "bank" to include
"savings institutions having a capital stock",
that sentence is deleted as obsolete. See
revisor's note to § 4—401 of this article.

In subsection (c) of this section, the phrase
"votes for or assents to the declaration of" the
cash dividend is substituted for "pay" for
clarity.

Also in subsection (c) of this section, the term
"undivided profits" is substituted for the
erroneous reference to "net profits".

3-308. STOCK DIVIDENDS.

(A)   SUFFICIENT SURPLUS REQUIRED.

THE BOARD OF DIRECTORS OF A COMMERCIAL BANK MAY NOT
DECLARE A STOCK DIVIDEND UNLESS:

(1)   ITS REMAINING SURPLUS IS ENOUGH TO TAKE CARE
OF ALL LOSSES; AND

(2)   ITS SURPLUS, AFTER THE INCREASE IN CAPITAL
STOCK, IS EQUAL TO AT LEAST 20 PERCENT OF THE OUTSTANDING
CAPITAL STOCK AS INCREASED.

(B)       TRANSFERS TO SURPLUS.

IF THE SURPLUS OF THE COMMERCIAL BANK, AFTER THE
INCREASE IN CAPITAL STOCK, IS LESS THAN 100 PERCENT OF ITS
CAPITAL STOCK AS INCREASED, THE COMMERCIAL BANK ANNUALLY
SHALL TRANSFER TO SURPLUS AT LEAST 10 PERCENT OF ITS
AVAILABLE NET EARNINGS, AFTER PROVIDING FOR DUE OR ACCRUED
EXPENSES, LOSSES, INTEREST, AND TAXES, UNTIL THE SURPLUS IS
100 PERCENT OF ITS CAPITAL STOCK AS INCREASED.

REVISOR'S NOTE: This section presently appears as the
first two sentences of Art. 11, § 68.

The term "commercial bank", which is defined in §
1—101 of this article, is substituted for the
present references to a "banking institution" to
clarify the inapplicability of this section to
savings banks, which are mutual corporations.

In subsection (b) of this section, the present
reference to a transfer of surplus "at the close
of a fiscal period" is deleted as unnecessary.

The only other changes are in style.

As to the balance of present Art. 11, § 68, see §
3—305 of this subtitle and its revisor's note.

3-309. STOCK LEDGER.