New Mexico Administrative Code › Title 12 - TRADE, COMMERCE AND BANKING › Chapter 16 - BANKING › Part 21 - AUTHORITY OF STATE BANKS TO ISSUE PREFERRED STOCK › Section 12.16.21.8 - AUTHORITY OF STATE BANKS TO ISSUE PREFERRED STOCK

Current through Register Vol. 35, No. 13, July 16, 2024
A. Subject to the provisions of this
				regulation, any state chartered bank may issue perpetual preferred
				stock.
B. Any state chartered bank
				may, with the prior approval of the director of the financial institutions
				division (director) and by vote of shareholders owning two-thirds of the voting
				stock of such bank, upon not less than five days notice given by registered
				mail or by certified mail pursuant to action taken by its board of directors,
				issue preferred stock of one or more classes, in such amount and with such par
				value, or change the amount or par value of previously authorized preferred
				stock as approved by the director, and make such amendments to its articles of
				incorporation as may be necessary for this purpose; but, in the case of
				preferred stock as approved by the director, and make such amendments to its
				any newly organized bank which has not yet issued common stock, the requirement
				of notice to and vote of shareholders shall not apply. No issue of preferred
				stock shall be valid until the par value of all stock so issued shall be paid
				in and notice thereof, duly acknowledged before a notary public by the
				president, vice president or cashier of the bank, has been transmitted to the
				director and his certificate obtained specifying the amount of such issue of
				preferred stock and his approval, and that the amount has been duly paid in as
				a part of the capital of such bank; which certificate shall be deemed to be
				conclusive evidence that such preferred stock has been duly and validly
				issued.
C. The director in his
				discretion may withhold or grant approval as required by this Sub-Part [now
				part] after considering the factors set forth in Section
				58-1-62
				NMSA 1978 and whether the issue would unduly enrich insiders, contain dividend
				rates or other terms which are inconsistent with safe and sound banking
				practices, and in general whether the bank's actions would be consistent with
				safe and sound banking practices.
D. The holders of such preferred stock shall
				be entitled to receive such cumulative dividends and shall have such voting and
				conversion rights and such control of management, and such stock shall be
				subject to retirement in such manner and upon such conditions, as may be
				provided in the articles of incorporation with the approval of the
				director.
E. If any part of the
				capital of bank consists of preferred stock, the determination of whether or
				not the capital of such bank is impaired and the amount of such impairment
				shall be based upon the par value of its stock even though the amount which the
				holders of such preferred stock shall be entitled to receive in the event of
				retirement or liquidation shall be in excess of the par value of such preferred
				stock. The holders of preferred stock shall be entitled to receive such
				cumulative dividends on the purchase price received by the bank for such stock
				and, in the event of the retirement price, not in excess of such purchase price
				plus all accumulated dividends, as may be provided in the articles of
				incorporation with the approval of the director. If the association is placed
				in voluntary liquidation, or if a conservator or a receiver is appointed
				therefor, no payment shall be made to the holders of common stock until the
				holders of preferred stock shall have been paid in full such amount as may be
				provided in the articles of incorporation with the approval of the director,
				not in excess of such purchase price of such preferred stock plus all
				accumulated dividends.
F. Perpetual
				preferred stock legally issued by any bank shall be treated as capital for the
				purpose of computing the loan limits prescribed in Section
				58-1-24
				NMSA 1978, for determining the amount of money a state bank may borrow for
				temporary purposes as provided in Section
				58-1-28 NMSA
				1978, and for computing the amount that may be invested in banking premises
				under the provisions of Section
				58-1-26
				NMSA 1978.