SECTIONS 660-663 - California Statutes

FINANCIAL CODE

SECTION 660-663

660. In determining for purposes of this division whether the
shareholders' equity of a bank or of a proposed bank is adequate, the
commissioner shall consider:
(a) The nature and volume of the business of the bank;
(b) The amount, nature, quality, and liquidity of the assets of
the bank;
(c) The amount and nature of the liabilities (including, but not
limited to, any capital notes or debentures and any contingent
liabilities) of the bank;
(d) The amount and nature of the fixed charges of the bank;
(e) The history of, and prospects for, the bank to earn and retain
income;
(f) The quality of the operations of the bank;
(g) The quality of the management of the bank;
(h) The nature and quality of the ownership of the bank; and
(i) Such other factors as are in the opinion of the commissioner
relevant.

661. For purposes of any statute, regulation, or requirement of any
governmental official or agency which refers to the capital
(including, without limitation, stated capital, paid-in capital, and
paid-up capital, but excluding contributed capital), surplus, or
undivided profits of a bank, a bank, with the approval of its board,
may establish and maintain capital, surplus, and undivided profits
accounts and may from time to time allocate and reallocate its
shareholders' equity among such accounts; provided, however:
(a) That no part of the contributed capital of the bank shall be
allocated to the undivided profits account of the bank;
(b) That the undivided profits account of the bank shall at no
time exceed the retained earnings of the bank; and
(c) That, in case the articles of the bank provide that any of the
bank's shares shall have par value and specify the par value of such
shares or in case the bank has determined the par value of any of
its shares pursuant to Section 620, the capital account of the bank
shall be not less than the aggregate par value of such shares which
are outstanding.

663. A bank which has deficit retained earnings may, with the prior
approval of its outstanding shares and of the commissioner, readjust
its accounts in a quasi-reorganization. Such readjustment may
include, without limitation, eliminating such deficit retained
earnings.