§ 6-03-36 — Capital must be maintained - Dividends prohibited under certain conditions

1. No director or officer of an association may permit the impairment of an association's
capital by the payment of dividends or otherwise.
2. Except as provided in subsection 4, no dividend may be paid which exceeds the
following amount:
a. An association's net profits for the period beginning January first of the year for
which the proposed dividends are declared and ending as reported in the most
recent quarter-end call report; plus
b. The association's net profits for the preceding two calendar years as reported in
the year-end call report; less
c. Any required transfers to:
(1) Surplus; and
(2) Funds for the retirement of preferred stock, capital notes, and debentures.
3. For the purpose of this section, "net profits" means the institution's net profits after
taxes prior to extraordinary items less dividends as reported on the call reports.
4. Payment of a dividend which exceeds the calculated amount in subsection 2 may be
made only with prior approval of the commissioner or state banking board.