2023 Illinois Compiled Statutes › Chapter 205 - FINANCIAL REGULATION › 205 ILCS 205/ - Savings Bank Act. › Article 5 - Capital

(205 ILCS 205/Art. 5 heading)
ARTICLE 5.  
		Capital
(205 ILCS 205/5001) (from Ch. 17, par. 7305-1)
Sec. 5001. Minimum capital.
(a) A savings bank may be organized to exercise the powers conferred by
this Act with minimum capital, surplus, and reserves for operating expenses
as determined by the Commissioner.   In no case may the Commissioner establish requirements for insured
savings banks at a level less than that required for insurance of accounts.
For any savings bank other than those resulting from conversion from an
existing financial institution to one operating under this Act, the
Commissioner must establish capital requirements no less stringent than
those required of banks chartered under the Illinois Banking Act.
(b) No savings bank may commence business until it has capital as required
by the Federal Deposit Insurance Corporation.
(c) Each depository institution converting to a savings bank, before
declaration of a dividend on its capital stock, must maintain the minimum
capital standards as required by the Federal Deposit Insurance Corporation.
(Source: P.A. 100-201, eff. 8-18-17.)
(205 ILCS 205/5002) (from Ch. 17, par. 7305-2)
Sec. 5002. 
		Types of capital; personal property.
(a) The capital of a stock savings bank shall be represented
by capital stock and noncumulative perpetual preferred stock as
authorized by the articles of incorporation, related paid-in surplus,
retained earnings, and other forms of capital deemed
to be qualifying capital by the insurance corporation providing
insurance of the savings bank's deposits.
(b) The capital of a mutual savings bank shall be represented
by retained earnings and other forms of capital deemed to be
qualifying capital by the insurance corporation providing insurance
of the savings bank's deposits.
(c) All shares and capital accounts shall be personal
property and transferable as provided
in this Act and the bylaws of the savings bank.
(Source: P.A. 86-1213.)
(205 ILCS 205/5003) (from Ch. 17, par. 7305-3)
Sec. 5003. 
		Capital stock; nature. 
		Capital stock shall constitute a secondary reserve out of
which losses shall be paid after all other available reserves have
been exhausted and shall have a par value of $1 each or
a greater amount as the articles of incorporation may prescribe.
The shares shall be:
(1) Nonwithdrawable, except as provided in Section     5005, until all liabilities of the savings bank have been satisfied in full, including payment of the withdrawal value of all deposit accounts.
(2) Entitled to dividends only as provided in Section     5008.
(3) Issued only upon cash payment of not less than     the par value thereof; in connection with a merger, sale of all assets, or conversion; or as stock dividends as provided in Section 5008.
(Source: P.A. 86-1213.)
(205 ILCS 205/5004) (from Ch. 17, par. 7305-4)
Sec. 5004. 
		Capital stock; authorization of issuance. 
		A savings bank may provide for the issuance of capital stock,
either by its original articles of incorporation or by an amendment
thereto in accordance with rules and regulations promulgated by the
Commissioner.
(Source: P.A. 86-1213.)
(205 ILCS 205/5005) (from Ch. 17, par. 7305-5)
Sec. 5005. 
		Retirement or reduction of capital stock.
(a) The board of directors of a savings bank operating with
capital stock may propose an amendment to the articles of
incorporation providing for the retirement of all of the capital
stock and a detailed plan for effectuating the amendment.  The
resulting capital of the savings bank shall be not less than the
minimum initial capital that the savings bank, if it were being
organized, would be required to have by the Commissioner under this
Act.  The proposal shall be submitted to the Commissioner for his
approval.
(b) If the Commissioner approves the proposal, the savings
bank's board of directors may request in writing an appraisal of
the value of the capital stock, and the Commissioner then shall
cause an appraisal to be made at the expense of the savings
bank.
(c) The proposal then shall be submitted to the shareholders
at an annual or special meeting.  It shall be adopted upon
receiving in the affirmative the votes of the holders of two-thirds or
more of the outstanding shares of capital stock.  The proposal
takes effect upon completion of the procedure provided in this Act
for the amendment of articles of incorporation.
(d) A savings bank may amend its articles of incorporation
in accordance with the procedure provided in this Act for those
amendments to reduce its capital stock, but in no event to an
amount that is less than the minimum capital stock that the
savings bank would be required by this Act to issue if it were
newly authorized to issue capital stock.
(Source: P.A. 86-1213.)
(205 ILCS 205/5006) (from Ch. 17, par. 7305-6)
Sec. 5006. 
		Who may hold capital. 
		Capital stock of a savings bank may be held:
(1) By any individual in his own right, regardless of     age or marital status, or by 2 or more individuals.
(2) By a fiduciary when authorized by law.
(3) By a government or governmental instrumentality     when authorized by law.
(4) By any corporation or other person when not     prohibited by law.
(Source: P.A. 86-1213.)
(205 ILCS 205/5007) (from Ch. 17, par. 7305-7)
Sec. 5007. 
		Capital Maintenance.
(a) Each savings bank shall maintain total capital of not
less than 3% of total assets.  This standard is the minimum
acceptable for a savings bank whose overall financial condition is
fundamentally sound and that is well managed.  When the
Commissioner determines that the financial condition or history,
management, or earnings prospects are not adequate, the
Commissioner may determine that a higher minimum capital level is
required for the savings bank.
(b) A savings bank shall maintain total capital necessary to
ensure the continuation of insurance of its deposit accounts by the
insurance corporation.
(c) The board of directors may establish and maintain
special reserves, as they may deem advisable, to provide for losses
or liabilities. Losses may be charged to those reserves as the board
of directors may determine.
(d) Any savings bank with total capital less than 3% of total
assets shall be deemed to be operating in an unsafe and unsound
condition and shall be subject to the imposition of restrictions,
sanctions, or penalties as provided for under this Act.
(Source: P.A. 86-1213.)
(205 ILCS 205/5008) (from Ch. 17, par. 7305-8)
Sec. 5008. 
		Dividends.
(a) Subject to the restrictions set forth in this Section and
the savings bank's bylaws, the board of directors from time to
time may declare dividends on capital stock subject to the
following restrictions:
(1) No dividends may be declared when the total     capital of the savings bank is less than that required by Section 5007 of this Act.
(2) The board of directors may quarterly,     semiannually, or annually declare a dividend on capital stock of so much of the net profits of the savings bank that they shall determine expedient, except that until the paid-in surplus of the savings bank shall equal its capital stock, no dividend shall be declared unless there has been transferred to paid-in surplus not less than 10% of the net profits of the preceding half year in the case of quarterly or semiannual dividends, or not less than 10% of the net profits for the preceding 2 half year periods in the case of annual dividends.  A stock dividend may be declared out of retained earnings at any time.
(b) The written approval of the Commissioner shall be
required by a savings bank having total capital of less than 6% of total
assets before any dividends on capital stock that exceed 50% of the
savings bank's net profits of that year may be declared by
a savings bank in any year.
A savings bank may not declare dividends in excess of the savings bank's
net profits in any year without the approval of the Commissioner.
(c) For the purpose of this Article the term "net profit"
means the remainder of all earnings from current operations
plus actual recoveries on loans, investments, and other assets
after deducting all current expenses, including dividends or
interest on deposit accounts, additions to reserves
as required by the Commissioner, actual losses, accrued dividends
on preferred stock, if any, and all State and federal taxes.
(Source: P.A. 89-74, eff. 6-30-95; 89-320, eff. 1-1-96.)
(205 ILCS 205/5009) (from Ch. 17, par. 7305-9)
Sec. 5009. 
		Loans or discounts on capital stock. 
		A savings bank may not make a loan or discount on the security of
or be the purchaser or holder of the shares of its own capital
stock or preferred stock or on the security of its own debentures
or evidences of its debt that are convertible to capital stock or
are junior or subordinate in rights of payment to deposit or other
liabilities of the savings bank, unless the security or purchase
shall be necessary to prevent loss on a debt previously contracted
in good faith; and the stock or evidence of indebtedness acquired
or purchased shall, within 6 months from the time of its
acquisition, be sold or disposed of at public or private sale.
(Source: P.A. 86-1213.)