(a) Amount of subscription. The total subscription of a member bank
(other than a mutual savings bank) shall equal 6 percent of its capital
and surplus as shown on its most recent Call Report. After a member
bank files a Call Report, the appropriate Reserve Bank will adjust
the member bank’s Reserve Bank capital stock subscription to
equal 6 percent of the member bank’s capital and surplus.
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(b) Mutual savings banks. The total subscription of a member bank that is a mutual savings
bank shall equal six-tenths of 1 percent of its total deposit liabilities
as shown on its most recent Call Report. After a member bank that
is a mutual savings bank files a Call Report, the appropriate Reserve
Bank will adjust the member bank’s Reserve Bank capital stock
subscription to equal six-tenths of 1 percent of the member bank’s
total deposit liabilities. If a mutual savings bank has a deposit
with the appropriate Reserve Bank in lieu of Reserve Bank capital
stock, its deposit obligation shall be adjusted in a like manner.
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(c) Payment for subscriptions.
(1) When a Reserve Bank issues
capital stock to a member bank (or accepts a deposit in lieu thereof),
the member bank shall pay the Reserve Bank—
(i) One-half
of the subscription amount; and
(ii) Accrued dividends equal to the
paid-in subscription amount in paragraph (c)(1)(i) of this section
multiplied by—
(A) In the case of a bank with total consolidated
assets of more than $12,517,000,000, an annual rate equal to the lesser
of the high yield of the 10-year Treasury note auctioned at the last
auction held prior to the date of the last dividend payment and 6
percent, adjusted to reflect the period from the last dividend payment
date to the subscription date according to the dividend proration
basis.
(B) In the case
of a bank with total consolidated assets of $12,517,000,000 or less,
6 percent, adjusted to reflect the period from the last dividend payment
date to the subscription date according to the dividend proration
basis.
(2) A Reserve Bank shall obtain settlement
for the payment described in paragraph (c)(1) of this section by debit
to an account on the Reserve Bank’s books or other form of settlement
to which the Reserve Bank agrees.
(3) Upon payment (and in the case of a
national banks in organization or state nonmember bank converting
into a national bank, upon authorization or approval by the Comptroller
of the Currency), the Reserve Bank shall issue the appropriate number
of shares by crediting the bank with the appropriate number of shares
on its books. In the case of a mutual savings bank not authorized
to purchase Reserve Bank stock, the Reserve Bank will accept the deposit
or addition to the deposit in place of issuing shares. The remaining
half of the subscription or additional subscription (including subscriptions
for deposits or additions to deposits) shall be subject to call by
the Board.
(4) If the
dividend rate applied at the next scheduled dividend payment date
is based on a different annual rate than the rate used to compute
the amount of the accrued dividend payment pursuant to paragraph (c)(1)(ii)
of this section, the amount of the dividends paid at the next scheduled
dividend payment date should be adjusted accordingly. The amount of
the adjustment should equal the difference between—
(i) The
accrued dividend payment pursuant paragraph (c)(1)(ii) of this section,
and
(ii) The result
of multiplying the subscription amount paid pursuant to paragraph
(c)(1)(i) of this section by the dividend rate applied at the next
scheduled dividend payment, adjusted to reflect the period from the
last dividend payment date to the subscription date according to the
dividend proration basis.
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(d) Payment for cancellations.
(1) When a Reserve Bank cancels
Reserve Bank capital stock of a member bank, or (in the case of involuntary
termination of membership) upon the effective date of cancellation
specified in section 209.3(c)(3), the Reserve Bank shall—
(i) Reduce the bank’s shareholding on the Reserve Bank’s
books by the number of shares required to be canceled and shall pay
the paid-in subscription of the canceled stock; and
(ii) Pay accrued dividends equal to
the paid-in subscription of the canceled stock in paragraph (d)(1)(i)
of this section multiplied by—
(A) In the case of a bank
with total consolidated assets of more than $12,517,000,000, an annual
rate equal to the lesser of the high yield of the 10-year Treasury
note auctioned at the last auction held prior to the date of cancellation
and 6 percent, adjusted to reflect the period from the last dividend
payment date to the cancellation date according to the dividend proration
basis; or
(B) In the case
of a bank with total consolidated assets of $12,517,000,000 or less,
6 percent, adjusted to reflect the period from the last dividend payment
date to the cancellation date according to the dividend proration
basis.
(2) The sum of the payments under paragraph
(d)(1) of this section cannot exceed the book value of the stock.
5(3) In the case of any cancellation of Reserve Bank stock under this
Part, the Reserve Bank may first apply such sum to any liability of the
bank to the Reserve Bank and pay over the remainder to the bank (or
receiver or conservator, as appropriate).
(e) Dividend.
(1) After all necessary expenses of a Reserve
Bank have been paid or provided for, the stockholders of a Reserve
Bank shall be entitled to receive a dividend on paid-in capital stock
of—
(i) in the case of a bank with total
consolidated assets of more than $12,517,000,000, the lesser of the
annual rate equal to the high yield of the 10-year Treasury note auctioned
at the last auction held prior to the payment of such dividend and
an annual rate of 6 percent, or
(ii) in the case of a bank with total
consolidated assets of $12,517,000,000 or less, an annual rate of
6 percent.
(2) The dividend pursuant to paragraph (e)(1) of this section will
be adjusted to reflect the period from the last dividend payment date
to the current dividend payment date according to the dividend proration
basis.
(3) The entitlement
to dividends under paragraph (e)(1) of this section shall be cumulative.
(f) Annual adjustment
to total consolidated assets. The dollar amounts for total consolidated
assets specified in paragraphs (c), (d), and (e) of this section and
sections 209.2 and 209.3 shall be adjusted annually to reflect the
change in the Gross Domestic Product Price Index, published by the
Bureau of Economic Analysis.
