Montana § 32-1-452 Dividends, Surplus, Losses, And Bad Debts

Montana Statutes

§ 32-1-452 — Dividends, Surplus, Losses, And Bad Debts

Montana § 32-1-452

Title 32FINANCIAL INSTITUTIONS

Ch. 1BANKS AND TRUST COMPANIES

Part 4Operation and Regulation

This text of Montana § 32-1-452 (Dividends, Surplus, Losses, And Bad Debts) is published on Counsel Stack Legal Research, covering Montana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Mont. Code Ann. § 32-1-452 (2026).

Text

32-1-452 . Dividends, surplus, losses, and bad debts.

(1)The directors of a bank may, at certain times and in the manner as the bank's bylaws prescribe, declare, and pay dividends to the stockholders of so much of the net undivided profits of the bank as may be appropriated for that purpose, but every bank shall, before declaring any dividend, carry at least 25% of the bank's net earnings for the period covered by the dividend to the bank's surplus, until the surplus is 50% of the bank's paid-up capital stock. The whole or any part of the surplus may at any time be converted into paid-in capital, but the surplus must be restored as provided in this subsection until the surplus amounts to 50% of the aggregate paid-up capital stock. A larger surplus may be created.

(2)A bank must receive p

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32-1-452 . Dividends, surplus, losses, and bad debts. (1) The directors of a bank may, at certain times and in the manner as the bank's bylaws prescribe, declare, and pay dividends to the stockholders of so much of the net undivided profits of the bank as may be appropriated for that purpose, but every bank shall, before declaring any dividend, carry at least 25% of the bank's net earnings for the period covered by the dividend to the bank's surplus, until the surplus is 50% of the bank's paid-up capital stock. The whole or any part of the surplus may at any time be converted into paid-in capital, but the surplus must be restored as provided in this subsection until the surplus amounts to 50% of the aggregate paid-up capital stock. A larger surplus may be created.
(2) A bank must receive prior approval from the department to pay a dividend if:
(a) the bank is rated lower than a 1 or a 2 using the uniform financial institutions rating system adopted by the federal financial institutions examination council; or
(b) the dividend would reduce the tier 1 leverage ratio below 8%, or the bank has a tier 1 leverage ratio below 8% when the dividend is declared.
(3) The department may require a bank to suspend the payment of any or all dividends until all requirements imposed in writing on the bank by the department have been met.
(4) Losses sustained by a bank in excess of the bank's undivided profits may be charged to and paid from the surplus, but the surplus must be restored in the manner provided in subsection (1) in the amount required by this chapter.

Legislative History

En. Sec. 34, Ch. 89, L. 1927; re-en. Sec. 6014.38, R.C.M. 1935; R.C.M. 1947, 5-513; amd. Sec. 31, Ch. 395, L. 1993; amd. Sec. 23, Ch. 75, L. 2019; amd. Sec. 24, Ch. 23, L. 2023.