9-904.   Reduction of capital stock, when.(a) The capital stock of any bank or trust company may be reduced to theminimum provided bylaw for a new bank or trust company by resolution adopted by thestockholders representing 2/3 of the voting stock of such bank or trustcompany, except that no suchreduction shall become effective until the commissioner approvesthe same.

      (b)   With prior approval of the state bankcommissioner, a bank or trust company may reduceits capital stock below the minimum amount allowed by subsection (a) bytransferring capital stock to its surplus fund. No such reduction shall beapproved unless the state bank commissioner finds:

      (1)   The proposed reduction is necessary to provide greater operationalflexibility to an adequately capitalized, well-managed institution;

      (2)   the proposed reduction does not result in or is not in furtherance of areduction in the institution's capital to an amount below 8% of total depositsfor a bank or below $250,000 for a trust company;

      (3)   the proposed reduction is not intended to delay, prevent or be in lieuof capital stock impairment or a stockholder's assessment pursuant to K.S.A.9-906 and amendments thereto; and

      (4)   the proposed reduction poses no significant risk to the financialstability, safety or soundness of the institution.

      (c)   After the commissioner has approved suchreduction a certificate signed by thepresident and cashier of the bank or trust company setting forth the result ofsuch reduction of itscapital stock, the names of its stockholders and the amount of stock heldby each, shall be filed with the secretary of state and a duplicate shall befiled with the commissioner.

      (d)   Whenever the capital stock ofany bank or trust company shall be reduced as herein provided, everystockholder, owner orholder of any stock certificate shall surrender the same for cancellationand shall be entitled to receive a new certificate for such person'sproportion of the new stock. No dividends shall be paid to any suchstockholder until the old certificate is surrendered.

      History:   L. 1947, ch. 102, § 17; L. 1989, ch. 48, § 18;L. 1996, ch. 175, § 12;L. 2001, ch. 87, § 2; July 1.