§ 1134 Bank Shareholder Distributions

• •The bank needs the commissioner’s prior approval to give money back to shareholders.
• •It can do this by redeeming redeemable shares.
• •If the bank wants to reduce its contributed capital, it also needs the shareholders’ approval.

A bank wants to buy back some of its special shares and hand cash to the people who own them.

The bank must first ask the banking commissioner for approval to redeem those shares and give the cash. If the bank also wants to shrink its overall capital, it must get approval from both the shareholders and the commissioner before doing the distribution.