§ 387. Credits to surplus account and undivided profits; dividends to
shareholders. 1. When the net profits of any savings and loan
association have been determined at the close of an accounting period,
if its net worth does not equal ten per centum of its capital, such net
profits shall be credited to its surplus account in such amount as may
be determined by the superintendent of financial services until such net
worth equals ten per centum of its capital. For purposes of this
article, the term "net worth" shall mean the excess of assets at book
value, less allocated reserves, over known liabilities. The balance of
such net profits, together with any amounts remaining from similar
balances for previous accounting periods, shall constitute the undivided
profits of such savings and loan association at the close of such
period. The directors, in addition to the transfers to the surplus
account required by this section, may transfer additional amounts to
surplus account from undivided profits or continue to carry as undivided
profits such sum or sums as they may deem wise. Amounts heretofore
credited to a reserve for bad debts pursuant to chapter three hundred
nine of the laws of nineteen hundred fifty-two shall be transferred to
surplus account.

2. The undivided profits of a savings and loan association at the
close of an accounting period shall be available for dividends. The
directors may declare such dividends pursuant to the provisions of this
paragraph or for any annual, semiannual, quarterly or monthly period
closing on the last day of a calendar month or as provided in paragraph
(bb) of subdivision four of section three hundred seventy-eight of this
chapter. No association shall declare, credit or pay any dividend while
its capital is impaired, or at any time except by a vote of the board of
directors.

Notwithstanding the foregoing, in the event the gross income,
undivided profits, surplus account or net worth of a savings and loan
association shall be, or shall be deemed by the superintendent to be,
increased as a result of any loan, purchase of assets or guaranty by, or
other transaction with, any insuror of the accounts of such savings and
loan association, including a transaction subject to subdivision two of
section three hundred eighty-two-b of this article, the amount of any
such increase in the gross income, undivided profits, surplus account or
net worth of such savings and loans association shall, with the prior
written approval of the superintendent, be available for dividends.

4. Dividends shall be apportioned upon the dues and dividends credited
to members, provided, however, that, except in the case of special
savings shares, no dividend shall be required to be computed and paid
upon any dues credited to a member except from the first day of the
month immediately following the date of receipt of such dues, and
provided further, that no dividend shall be required to be apportioned
on shares having a book value of less than fifty dollars or on savings
shares issued for special purposes which by their terms are to be
withdrawn by the shareholder within one year from the date of their
issuance. Any such association may compute dividends upon dues credited
to a member from the date of actual receipt of such dues. The by-laws of
any such association may provide a schedule of varying rates of
dividends for different classes of shares and different types of shares
within any class.

5. No savings and loan association shall declare any dividends upon
the accumulations on any share for a longer period than that during
which such accumulations have been held; provided, however, that dues
paid upon shares not later than the tenth day of any month, may have
dividends declared thereon from the first day of the month in which such
payment was made; and withdrawals of shares during the last three
business days of any dividend period or, in the event that one of such
last three business days is a Saturday, deposits withdrawn upon one of
the last four business days of any dividend period may receive dividends
apportioned for the full period.