Kansas Statutes

Chapter 9: Banks And Banking; Trust Companies

Article 9: Banking Code; Capital Stock And Structure

Statutes:

• 9-901:
• 9-901a: Amount of capital.
• 9-901b:
• 9-902: Par value of stock.
• 9-903: Transfer of stock; report to commissioner.
• 9-904: Reduction of capital stock, when.
• 9-905: Increase of capital stock.
• 9-906: Restoration of impaired capital.
• 9-907: Delinquent stockholders; public or private sale of stock.
• 9-908: Preferred stock.
• 9-909: Preferred stock; rights and immunities of holders of preferred stock.
• 9-910: Dividends from capital stock prohibited; how current dividends paid.
• 9-911: Declarations of dividends.
• 9-912: Surplus account; stock dividends from reduction.

• 9-901:

        History:   L. 1947, ch. 102, § 14; L. 1961, ch. 62, § 1; Repealed, L. 1975, ch. 44, § 43; July 1.

• 9-901a: Amount of capital. (a) For purposes of this section, the capital of a bank or trust company shall be the total of the aggregate par value of its outstanding shares of capital stock, its surplus and its undivided profits.

        (b)   The minimum capital of a bank or trust company in existence on July 1, 1975, shall be $250,000 or such lesser amount as such bank or trust company had on July 1, 1975. With respect to a bank or trust company in existence on July 1, 1975, which thereafter transfers its place of business from one city to another, the minimum capital shall be the amount required by subsection (c).

        (c)   The minimum capital of a bank or trust company organized as a corporation after July 1, 1975, or which thereafter transfers its place of business from one city to another, shall be as follows:

        (1)   For a bank at least $250,000 or at least an amount equal to 8% of its estimated deposits five years after its organization or transfer of place of business, whichever is greater, of which 60% shall be the aggregate par value of its outstanding shares of capital stock, 30% its surplus and 10% its undivided profits;

        (2)   for a trust company at least $250,000 of which 60% shall be the aggregate par value of its outstanding shares of capital stock, 30% its surplus and 10% its undivided profits.

        The state banking board may require that the bank or trust company have capital in excess of the amounts specified in this subsection if the board determines that the amount and character of the anticipated business of the bank or trust company and the safety of the customers so require.

        (d)   The minimum capital of a bank or trust company organized pursuant to subsection (b) of K.S.A. 9-1801, and amendments thereto, shall be determined by the commissioner, provided that the successor bank has obtained deposit insurance from the federal deposit insurance corporation or its successor.

        (e)   Except as may be provided elsewhere in this act, no bank or trust company shall reduce voluntarily its capital stock or surplus below the amounts required by this section.

        History:   L. 1975, ch. 44, § 7; L. 1976, ch. 55, § 1; L. 1986, ch. 55, § 2; L. 1987, ch. 54, § 2; L. 1989, ch. 48, § 15; July 1.

• 9-901b:

        History:   L. 1986, ch. 54, § 1; L. 1988, ch. 58, § 1; expired, Jan. 1, 1995.

• 9-902: Par value of stock. The common and preferred stock of any bank or trust company hereafter created shall be divided into shares of $5 each, or a multiple thereof. All subscriptions to such stock shall be paid in cash and any bank or trust company may change the par value of its shares to conform with this section. When any bank or trust company shall reduce its common capital stock and issue preferred stock in lieu of such reduction, it may reduce the par value of the common stock in the proportion that the total amount of capital stock is reduced, but when the preferred stock is retired the par value of the common shares shall be restored.

        History:   L. 1947, ch. 102, § 15; L. 1965, ch. 74, § 1; L. 1969, ch. 60, § 1; L. 1989, ch. 48, § 16; July 1.

• 9-903: Transfer of stock; report to commissioner. The shares of stock of any bank or trust company shall be deemed personal property and shall be transferred on the books of the bank or trust company in such manner as the bylaws thereof may direct. No transfer of stock shall be valid against the issuing bank or trust company so long as the registered owner thereof shall be liable as principal debtor, surety or otherwise to the bank or trust company on a matured, charged off or forgiven obligation, nor shall any dividend, interest or profit be paid on such stock so long as the registered owner thereof is indebted to the bank or trust company on a matured, charged off or forgiven obligation, but all such dividends or profits shall be retained by the bank or trust company and applied to the discharge of any such obligations. No stock shall be transferred on the books of any bank or trust company when the bank or trust company is in a failing condition, or when its capital stock is impaired, except upon approval of the commissioner. Whenever a transfer of shares of stock of any bank or trust company occurs which results in direct or indirect ownership by a stockholder or an affiliated group of stockholders of 10% or more of the outstanding stock of the bank or trust company, and whenever additional shares of stock of the bank or trust company are transferred to such stockholder or affiliated group of stockholders, the president or other chief executive officer of the bank or trust company shall report such transfer to the commissioner within 10 days after transfer of the shares of stock on the books of the bank or trust company.

        History:   L. 1947, ch. 102, § 16; L. 1975, ch. 44, § 8; L. 1988, ch. 59, § 1; L. 1989, ch. 48, § 17; L. 1996, ch. 175, § 11; Apr. 25.

• 9-904: Reduction of capital stock, when. (a) The capital stock of any bank or trust company may be reduced to the minimum provided by law for a new bank or trust company by resolution adopted by the stockholders representing 2/3 of the voting stock of such bank or trust company, except that no such reduction shall become effective until the commissioner approves the same.

        (b)   With prior approval of the state bank commissioner, a bank or trust company may reduce its capital stock below the minimum amount allowed by subsection (a) by transferring capital stock to its surplus fund. No such reduction shall be approved unless the state bank commissioner finds:

        (1)   The proposed reduction is necessary to provide greater operational flexibility to an adequately capitalized, well-managed institution;

        (2)   the proposed reduction does not result in or is not in furtherance of a reduction in the institution's capital to an amount below 8% of total deposits for a bank or below $250,000 for a trust company;

        (3)   the proposed reduction is not intended to delay, prevent or be in lieu of capital stock impairment or a stockholder's assessment pursuant to K.S.A. 9-906 and amendments thereto; and

        (4)   the proposed reduction poses no significant risk to the financial stability, safety or soundness of the institution.

        (c)   After the commissioner has approved such reduction a certificate signed by the president and cashier of the bank or trust company setting forth the result of such reduction of its capital stock, the names of its stockholders and the amount of stock held by each, shall be filed with the secretary of state and a duplicate shall be filed with the commissioner.

        (d)   Whenever the capital stock of any bank or trust company shall be reduced as herein provided, every stockholder, owner or holder of any stock certificate shall surrender the same for cancellation and shall be entitled to receive a new certificate for such person's proportion of the new stock. No dividends shall be paid to any such stockholder until the old certificate is surrendered.

        History:   L. 1947, ch. 102, § 17; L. 1989, ch. 48, § 18; L. 1996, ch. 175, § 12; L. 2001, ch. 87, § 2; July 1.

• 9-905: Increase of capital stock. The capital stock of any bank or trust company may be increased. The president and cashier shall forward a verified statement to the commissioner showing the amount of the increase, the names and addresses of the subscribers, the amount subscribed by each and that the same has been paid in full to the bank or trust company. The date and amount of such increase also shall be certified to the secretary of state.

        History:   L. 1947, ch. 102, § 18; L. 1989, ch. 48, § 19; July 1.

• 9-906: Restoration of impaired capital. Whenever it shall appear that the capital stock of any bank or trust company is impaired, the commissioner shall notify such bank or trust company to restore the capital stock within 90 days of receipt of such notice. Within 15 days of receipt of such notice, the board of directors of such bank or trust company shall levy an assessment on the common stockholders sufficient to restore the capital stock. Such bank or trust company with its board's approval may reduce its capital stock to the extent of the impairment, if such reduction will not reduce the capital stock below the amount required by this act.

        History:   L. 1947, ch. 102, § 19; L. 1987, ch. 54, § 3; May 7.

• 9-907: Delinquent stockholders; public or private sale of stock. Whenever any stockholder of a bank or trust company or an assignee of such stockholder, fails to pay any assessment on such stockholder's stock when the same is required to be paid, the directors of such bank or trust company may sell the stock of such delinquent stockholder, or so much thereof as shall be necessary, to satisfy the assessment and any expenses incident thereto, within 120 days of the bank or trust company's receipt of impairment notice, to any person paying the highest price therefor, which price shall be not less than the amount due upon such stock with any expense incident thereto, and such sale may be either public or private. If sold at private sale and the price offered by any nonstockholder shall not exceed the highest bid of any stockholder, then such stock shall be sold to the stockholder. If such sale shall be public, then three weeks' notice thereof, published in a newspaper of general circulation in the city or county where the bank or trust company is located, shall be given. The excess, if any, realized upon the sale of the stock shall be paid to the delinquent stockholder unless such stockholder is further indebted to the bank or trust company then it may be retained by the bank or trust company as an offset. If no purchaser can be found for such stock upon the terms herein stated the stock shall be forfeited to the bank or trust company to be disposed of within six months from the date of the public or private sale as the board of directors shall determine.

        History:   L. 1947, ch. 102, § 20; L. 1987, ch. 54, § 4; May 7.

• 9-908: Preferred stock. Any bank or trust company may issue preferred stock of one or more classes in such amounts as shall be approved by the state bank commissioner. The holders of 2/3 in amount of the common stock of such bank or trust company must approve such issuance at a meeting held for that purpose and for which notice by registered mail must be given to each stockholder by mailing such notice at least five days in advance of the date of the meeting. No issue of preferred stock shall be valid until the par value of all stock so issued shall be paid in. With the approval of the state banking board the common stock may be reduced below the requirements contained in K.S.A. 9-901a, and amendments thereto. No preferred stock shall be retired unless the common stock shall be increased in an amount equal to the amount of the preferred stock retired. All preferred stock shall be retired consistent with safety to the depositors.

        History:   L. 1947, ch. 102, § 21; L. 1975, ch. 44, § 9; L. 1989, ch. 48, § 20; L. 2001, ch. 87, § 3; July 1.

• 9-909: Preferred stock; rights and immunities of holders of preferred stock. The holders of preferred stock shall not be liable for assessments to restore any impairment in the capital stock of a bank or trust company.

        No dividends shall be declared or paid on common stock until all cumulative dividends, if any, on the preferred stock shall have been paid, and if the bank or trust company is dissolved or placed in liquidation no payments shall be made to the holders of common stock until the holders of the preferred stock first shall have been paid in full for any sums due upon such preferred stock.

        History:   L. 1947, ch. 102, § 22; L. 1975, ch. 44, § 10; L. 1989, ch. 48, § 21; L. 1993, ch. 14, § 1; July 1.

• 9-910: Dividends from capital stock prohibited; how current dividends paid. No bank or trust company during the time it shall continue in business, shall permit to be withdrawn in the form of dividends, any portion of its capital stock. The current dividends of any bank or trust company shall be paid from undivided profits after deducting losses, to be ascertained by generally accepted accounting principles at the time of making such dividend. Any bank or trust company may reduce its capital stock as provided in this act.

        History:   L. 1947, ch. 102, § 23; L. 1989, ch. 48, § 22; L. 1990, ch. 55, § 1; July 1.

• 9-911: Declarations of dividends. The directors of any bank or trust company may declare dividends from the undivided profits, but before the declaration of any dividend each bank or trust company shall transfer 25% of its net profits since the last preceding dividend to its surplus fund, until the surplus fund shall equal the total capital stock.

        History:   L. 1947, ch. 102, § 24; L. 1989, ch. 48, § 23; July 1.

• 9-912: Surplus account; stock dividends from reduction. Any losses sustained by a bank or trust company in excess of its undivided profits may be charged to its surplus fund. Any bank or trust company, after receiving approval from the commissioner, may declare a stock dividend from its surplus fund, but no such dividend shall reduce the surplus fund to an amount less than 30% of the resulting total capital and any bank or trust company may reduce its surplus with permission of the state bank commissioner.

        History:   L. 1947, ch. 102, § 25; L. 1975, ch. 44, § 11; L. 1989, ch. 48, § 24; L. 2001, ch. 87, § 4; July 1.