Title 51A, BANKS AND BANKING

The incorporators shall collect an amount equal to not less than ten percent of the subscription price of each share of stock subscribed for at the time such subscriptions are issued. If the application is disapproved by the director or commission, that portion of the moneys so c…

The incorporators may call for the payment of subscriptions in full upon receipt of the notice that the articles of incorporation have been approved. The director shall issue a certificate of authority whenever it shall appear to him that the capital stock of such bank has been f…

The provisions of §§ 51A-3-7 to 51A-3-14 , inclusive, insofar as they are by their terms applicable, govern applications for branch banks and detached drive - in facilities. Source: SL 1969, ch 11 , § 3.18; SL 1981, ch 346 , § 24; SL 1988, ch 377 , § 68; SDCL, § 51-17-20.

The director may approve the issuance of preferred stock, capital notes, debentures or other bank securities after approval of the majority of the stockholders. The terms of issue shall set forth the voting rights available thereon and the rank or priority, if any, of depositor o…

No dividends may be declared or paid on the capital stock of any bank which has outstanding capital notes or debentures, or if preferred stock has been issued without prior written approval of the director unless: (1) In the case of an issue of capital notes or debentures, the su…

For the purposes of this chapter, dividends are any distribution of funds made by the bank to a shareholder from current or accumulated earnings except for fees or salaries. Source: SL 1998, ch 279 , § 1.

Dividends to stockholders may be declared from net profits by the board of directors of a bank not more than once in each calendar quarter provided that all provisions of this title relating to the maintenance of capital accounts have been complied with. The minutes of such a mee…

The approval of the director is required before a dividend is declared if the total of all dividends, including the proposed dividend, declared by the directors of a bank in any calendar year exceeds the total of its net profits of that year to date combined with its retained net…

For a bank organized as a corporation, the articles of incorporation of a bank shall state, and for a bank organized as a limited liability company, the articles of organization of a bank shall state: (1) That the corporation or limited liability company is formed for the purpose…

Dividends paid to any stockholder of a bank, which shall in any way impair or diminish the capital, may be recovered from any stockholder receiving the same unless the capital impairment be subsequently made good. The directors of any bank, who pay a dividend when the bank is ins…

Net profits shall be equal to the net income or loss as reported by a bank in its reports of condition and income. In computing its net profits under this section, a bank may not add its provision for loan and lease losses to, nor deduct net charge offs from, its reported net inc…

A bank may amend its articles of incorporation in the manner provided under §§ 47-1A-101 to 47-1A-863.3 , inclusive, §§ 47-1A-1001 to 47-1A-1021 , inclusive, and §§ 47-1A-1201 to 47-1A-1202.6 , inclusive, upon amendment certified by its president, except that prior approval of th…

Within one year prior to the expiration of the period for which it was incorporated a bank may, with the approval of at least a majority of the capital stock of such corporation, extend its corporate existence for an additional period, not to exceed twenty years, by amending its …

All transfers of shares of bank stock in excess of five percent of the voting stock of a bank or of its parent holding company shall be immediately reported to the director. The transfer of such shares is not valid against a bank until recorded in the transfer books, but none may…

For the purposes of application approval under § 51A-2-16 , a change of control created by the acquisition of shares in satisfaction of a debt previously contracted in good faith or through testate or intestate succession, bona fide gift, or trust distribution does not require an…

Any bank has a lien upon the shares of any stockholder of the bank or any stockholder of the parent bank holding company who is indebted to it, and for such purpose, in addition to stock duly recorded, the bank may enforce its lien against stock actually owned by the debtor but n…

No bank may make any purchase money loans or discounts on the security of the shares of its own capital stock, or on the shares of its parent holding company, nor be the purchaser or holder of any such shares unless such security or purchase is necessary to prevent loss upon a de…

While any indebtedness under § 51A-3-26 exists, all dividends, interest, or profits on such stock, if any, shall be credited by the bank on such indebtedness in the event the bank has exercised its rights to acquire or purchase the stock. The lien hereby created in favor of the b…

The incorporators shall be any number of natural persons, residents of this state, eighteen years of age or older, not less than five in number. Source: SL 1891, ch 27 , § 1; RCivC 1903, § 847; SL 1909, ch 222 , art 2, § 1; SL 1911, ch 255 , § 1; SL 1915, ch 102 , art 2, § 2; SL …

Every bank shall adopt a code of bylaws before being authorized to commence business. Bylaws, as well as all amendments or additions thereto, so adopted shall be effective only after they have been approved by the director. After their adoption and approval they shall be spread a…

A bank may indemnify by purchase of insurance or otherwise any current or former officer, director, employee or agent, his heirs, personal representatives and successors in interest in the same manner and to the same extent as a business corporation may indemnify, pursuant to the…

The board of directors of every bank shall consist of not less than five nor more than twenty - five members. At all times, at least three - fourths of the directors shall be citizens of the United States. With the exception of the president or the chief executive officer, the di…

Any director may be removed by the stockholders at any regular or special meeting, except that no director may be removed unless the votes cast against a motion for his removal are less than the total number of shares outstanding, divided by the number of authorized directors, bu…

The board of directors shall hold regular meetings at times prescribed in the bylaws of the bank. At no time may the bylaws provide for fewer meetings than the minimum number permitted by rule promulgated by the commission pursuant to chapter 1-26 . Any director of the bank or th…

The officers of every bank shall be elected by the board of directors at the board meeting held in January of each year. The president or chief executive officer shall be appointed by the elected board members to the board of directors. The officers shall hold office for one year…

Within ten days after the election or appointment of any officer, the board of directors shall cause to be forwarded to the director the name or names of such officer or officers together with such other information as may be required by the commission. If the director shall refu…

The directors of a bank shall direct and require good and sufficient fidelity bonds on all active officers and employees, whether or not they draw salaries or compensation, which bonds shall provide for indemnity to such bank on account of any losses sustained by it as a result o…

The directors of a bank shall also direct and require suitable insurance protection to the bank against robbery, burglary, theft and other insurable hazards to which the bank may be exposed in the operation of its business on the premises or elsewhere. Source: SL 1969, ch 11 , § …

The directors of a bank shall be responsible for prescribing at least once in each year the amount or penal sum of such bonds or policies and the sureties or underwriters thereon, after giving due and careful consideration to all known elements and factors constituting such risk …

The total capital of each newly organized bank shall be in an amount as the director determines adequate provided that the total capital required be at least six percent of the total projected assets of the bank during its first three years of operation. Source: SL 1909, ch 222 ,…

For a bank organized as a corporation, the original issue of bank stock, and for a bank organized as a limited liability company, the original issue of members' equity, shall be sold at a price of not less than twenty percent in excess of its par value and paid for in full in law…

One - tenth of the net profit for any dividend period shall be carried to the surplus fund until such fund shall amount to twenty percent of the capital stock or members' equity. Any losses sustained in excess of undivided profits may be charged to the surplus account, but no div…

Any application filed pursuant to § 51A-2-16 shall be delivered to the director and contain any information the director may require. The application shall be accompanied by an application fee in an amount set by the commission. In addition to the application fee, the applicant s…

The director shall notify the incorporators of his acceptance for filing of an application. If the application and accompanying documents required in § 51A-3-7 do not conform to the requirements of this title, or the rules of the commission, the director shall return the applicat…

In ruling upon any bank application required in § 51A-2-16 , the director or the commission, as the case may be, shall consider the following conditions: (1) The financial history and condition of the applicant; (2) The adequacy of the applicant's financial structure; (3) The fut…