N.Y. Banking Law § 112: Dividends; payable from net profits; restrictions

§ 112. Dividends; payable from net profits; restrictions. 1. The

directors of a bank or trust company may annually, semi-annually or

quarterly, but not more frequently unless authorized by the

superintendent by regulation or otherwise, declare such dividends as

they deem judicious to be paid from net profits. No dividend shall be

declared, credited or paid so long as there is any impairment of capital

stock. No bank or trust company having outstanding preferred stock

shall, except as otherwise authorized by the superintendent, declare

dividends upon common stock for any period other than a period for which

dividends are declared upon preferred stock.

2. The approval of the superintendent shall be required if the total

of all dividends declared by a bank or trust company in any calendar

year shall exceed the total of its net profits for that year combined

with its retained net profits of the preceding two years, less any

required transfer to surplus or a fund for the retirement of any

preferred stock.

3. For the purposes of this section, the term "net profits" shall mean

the remainder of all earnings from current operations plus actual

recoveries on loans and investments and other assets, after deducting

from the total thereof all current operating expenses, actual losses,

accrued dividends on preferred stock, if any, and all federal and state

taxes.