(a) In addition to the minimum capital required by this chapter for a capital stock association to commence business, the subscribers to the capital stock of the association shall pay an additional amount for their stock equal to not less than fifty percent (50%) of the par or stated value of the stock subscribed, which additional amount shall be credited to the paid-in surplus account and may be used for organization and operating expenses, including interest to the holders of deposit accounts. The minimum capital and surplus may be used for the reserves required by this chapter and as permitted by the commissioner.
lawyer at desk

Ask a legal question, get an answer ASAP!
Click here to chat with a lawyer about your rights.

Terms Used In Tennessee Code 45-3-112

  • Association: means a capital stock or mutual savings and loan association. See Tennessee Code 45-3-104
  • Commissioner: means the commissioner of financial institutions. See Tennessee Code 45-3-104
  • Deposit: means a deposit of money, bonds or other things of value, creating a debtor-creditor relationship. See Tennessee Code 45-1-103
  • Interest: means that part of the net income, retained earnings, or surplus of an association that is payable to or credited to holders of deposit accounts. See Tennessee Code 45-3-104
  • Net worth: means the aggregate of all loan contracts of an association, plus the aggregate value of all other assets of the association, less the aggregate amount of deposit accounts of depositors, including interest credited to the accounts, and less any other liabilities of the association. See Tennessee Code 45-3-104
  • operating: means that:
    (A) A charter has been issued to a bank by the United States comptroller of the currency or a certificate of authority has been issued by the commissioner. See Tennessee Code 45-1-103
  • Surplus: means the aggregate amount of the undistributed net income of an association held as undivided profits or unallocated reserves for general corporate purposes, and any paid-in surplus or initial undivided profits held by an association. See Tennessee Code 45-3-104
(b) The capital, paid-in surplus, retained earnings, and other net worth accounts of an association, or any combination of the net worth accounts, may, by action of the association and subject to approval of the commissioner, be specifically earmarked as an insurance reserve account to be used solely for absorbing losses.
  Previous section
Next section  
 Part 1 Contents