Acquisition of own stock. a. Except as otherwise provided in this section, no bank or capital stock savings bank shall purchase or otherwise acquire shares of its own capital stock, except as a result of a merger or to prevent or minimize loss upon a debt previously contracted in good faith; shares of stock so purchased or acquired shall, not later than one year after the date of purchase or acquisition, be sold or be paid as a stock dividend, or be disposed of in part by sale and in part by payment of a stock dividend, as the board of directors may determine. The commissioner may, prior or subsequent to the expiration of the one year period or prior or subsequent to the expiration of any extended period, extend or further extend the time within which the actions required by this subsection may be done.

b. A bank or capital stock savings bank may, with the approval of the commissioner, provide in its original or amended certificate of incorporation for the acquisition, through purchase, of shares of its own capital stock. Shares so purchased or shares which the bank or capital stock savings bank may otherwise be authorized to issue may, with the approval of the commissioner, be sold by the bank or capital stock savings bank to those of the bank’s or capital stock savings bank’s stockholders who pay therefor with cash dividends declared by the bank or capital stock savings bank on its capital stock. These shares may, with the approval of the commissioner, be purchased by the bank or capital stock savings bank for such other uses and purposes, not contrary to law or sound banking principles, and for such consideration as the board of directors may from time to time determine. All shares acquired pursuant to this subsection shall be designated as “treasury stock,” and, so long as they remain the property of the bank or capital stock savings bank, they shall not constitute capital stock for the purposes of P.L. 1948, c. 67 (C. 17:9A-1 et seq.).

L. 1948, c. 67, p. 349, s. 212. Amended by L. 1952, c. 144, p. 501, s. 2; L. 1985, c. 528, s. 11, eff. Jan. 21, 1986.