(a) No Hawaii stock financial institution shall declare or pay any dividends or make any other capital distribution to its shareholders except pursuant to its articles of incorporation, this section, and § 414-111; provided that if § 414-111 is inconsistent with this section, the provisions of this section shall control.
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Terms Used In Hawaii Revised Statutes 412:3-403

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Capital: means :

    (1) The aggregate par value or other amount received and allocated to the issued and outstanding capital stock of a financial institution; or

    (2) The total amount of a credit union's outstanding and unimpaired membership shares or share accounts. See Hawaii Revised Statutes 412:1-109

  • Capital stock: means the units of interest, whether or not having a par value, common or preferred, legally issued by a financial institution or other corporation, which represents a fractional ownership interest in the institution or corporation. See Hawaii Revised Statutes 412:1-109
  • Commissioner: means the commissioner of financial institutions of this State. See Hawaii Revised Statutes 412:1-109
  • Company: means any corporation, partnership, trust (business or otherwise), association, joint venture, pool syndicate, unincorporated organization, or any form of business entity not specifically listed herein and, unless specifically excluded, a financial institution; provided that "company" does not mean any trust existing on July 1, 1993, which under its terms must terminate within twenty-five years, or not later than twenty-one years and ten months after the death of individuals living on the effective date of the trust. See Hawaii Revised Statutes 412:1-109
  • Control: means , unless the context clearly requires otherwise, directly or indirectly, solely or through another person or transaction, or in concert with another:

    (1) Owning or having the power to vote twenty-five per cent or more of any class of voting securities;

    (2) Owning or having the power to exercise twenty-five per cent or more of the votes of a mutual association, credit union, or other entity whose voting rights are not determined by voting securities;

    (3) Owning or having the power to vote ten per cent or more of any class of voting securities if:

    (A) the issuer of that class of securities has issued any class of securities under section 12 of the Securities Exchange Act of 1934, as amended; or

    (B) immediately after the acquisition, no other person will own a greater percentage of that class of voting securities;

    (4) Having the power to elect by any means a majority of the directors; or

    (5) Having the power to exercise a dominant influence over management, if so determined by the commissioner after notice and a hearing. See Hawaii Revised Statutes 412:1-109

  • Financial institution: means a Hawaii financial institution, and unless the context indicates otherwise, a federal financial institution or foreign financial institution. See Hawaii Revised Statutes 412:1-109
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • Hawaii financial institution: means :

    (1) A corporation or credit union that holds a charter or license under this chapter or under prior Hawaii law, authorizing it to accept deposits, to make loans in excess of the rates permitted in chapter 478, or to engage in the business of a trust company; or

    (2) A resulting bank as defined in article 12,

    and includes a corporation or credit union existing and chartered as a Hawaii financial institution or licensed to transact business in this State on July 1, 1993. See Hawaii Revised Statutes 412:1-109

  • Loans and extensions of credit: includes a contractual commitment to advance funds. See Hawaii Revised Statutes 412:1-109
  • Paid-in capital: means the amount of capital actually received by the financial institution for its capital stock, membership shares or share accounts, as the case may be. See Hawaii Revised Statutes 412:1-109
  • Retained earnings: means the net income of a financial institution earned since its inception which has not been distributed to its shareholders or transferred or allocated to capital stock or surplus or, as the case may be, the accumulated deficits of the financial institution. See Hawaii Revised Statutes 412:1-109
  • Stock financial institution: means a financial institution that issues shares of capital stock as evidence of fractional ownership in the institution. See Hawaii Revised Statutes 412:1-109
  • surplus: includes retained earnings, whether or not transferred or allocated to surplus. See Hawaii Revised Statutes 412:1-109
(b) In this section, “capital distribution” means:

(1) A distribution of cash or other property by any Hawaii stock financial institution to its owners made on account of that ownership, but excluding any dividends consisting only of shares of the capital stock of the financial institution or rights to purchase such shares;
(2) A payment by any stock financial institution to repurchase, redeem, retire, or otherwise acquire any of its shares or other ownership interest, including any extensions of credit to finance an affiliated company‘s acquisition of those shares or interests; or
(3) A transaction that the commissioner determines, by order or rule, to be in substance a distribution of capital to the owners of the financial institution.
(c) A Hawaii stock financial institution shall not make any capital distribution in an amount greater than its retained earnings then on hand or if after such capital distribution the financial institution shall not have the minimum paid-in capital and surplus required by this chapter. For purposes of this section the amount of retained earnings on hand, capital and surplus shall be determined in accordance with generally accepted accounting principles, except that:

(1) All loans and extensions of credit on which interest has been delinquent for one year or more, or upon which a final judgment has been unsatisfied for more than one year and interest has been delinquent for one year or more, unless and to the extent the same are well secured or in the process of collection shall have been charged down;
(2) All assets which the commissioner may have required to be charged down pursuant to § 412:3-109, shall have been charged down; and
(3) Any loss sustained or charge made by a Hawaii financial institution as provided in this subsection shall be netted first against any reserve established therefor, then charged to retained earnings, then to surplus, and then to capital.
(d) Before making any capital distribution, each Hawaii stock financial institution, except for a nondepository financial services loan company, shall, until its capital and surplus equal at least one hundred thirty-three per cent of its initial minimum capital and surplus required under section 412:3-209, transfer to surplus from its retained earnings at least twenty-five per cent of its net profits from the preceding fiscal year.

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