Sec. 5008. Dividends.

318 words·~1 min read·/il/chapter-205/act-205/5008·

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)Subject to the restrictions set forth in this Section and the savings bank's bylaws, the board of directors from time to time may declare dividends on capital stock subject to the following restrictions:

(1)No dividends may be declared when the total capital of the savings bank is less than

that required by Section 5007 of this Act.

(2)The board of directors may quarterly, semiannually, or annually declare a dividend

on capital stock of so much of the net profits of the savings bank that they shall determine expedient, except that until the paid-in surplus of the savings bank shall equal its capital stock, no dividend shall be declared unless there has been transferred to paid-in surplus not less than 10% of the net profits of the preceding half year in the case of quarterly or semiannual dividends, or not less than 10% of the net profits for the preceding 2 half year periods in the case of annual dividends. A stock dividend may be declared out of retained earnings at any time.

(b)The written approval of the Commissioner shall be required by a savings bank having total capital of less than 6% of total assets before any dividends on capital stock that exceed 50% of the savings bank's net profits of that year may be declared by a savings bank in any year. A savings bank may not declare dividends in excess of the savings bank's net profits in any year without the approval of the Commissioner.

(c)For the purpose of this Article the term "net profit" means the remainder of all earnings from current operations plus actual recoveries on loans, investments, and other assets after deducting all current expenses, including dividends or interest on deposit accounts, additions to reserves as required by the Commissioner, actual losses, accrued dividends on preferred stock, if any, and all State and federal taxes.