221.0323 Bank purchase of its own stock.

(1) In general. A bank may be the holder or purchaser of not more than 10 percent of its capital stock, capital notes or debentures, except as provided in sub. (2).

(2) Debts previously contracted. A bank may be the holder or purchaser of more than 10 percent of its capital stock, capital notes or debentures if the purchase is necessary to prevent loss upon a debt previously contracted in good faith. Stock, notes or debentures purchased under this subsection may not be held by the bank for more than 6 months if the stock, notes or debentures can be sold for the amount of the claim of the bank against the same, and they must be sold for the best price obtainable within one year, or they shall be canceled, and shall then amount to a reduction of the capital stock, capital notes or debentures. If the reduction reduces the capital stock below the minimum required by law, the bank's capital stock must be increased to the amount required by law.

(3) Use as security. A bank may not loan any part of its capital, surplus or deposits on the capital stock, capital notes or debentures of its own bank as collateral security.

(4) Status of treasury shares. Treasury shares are issued shares but not outstanding shares. All shares acquired by a bank after July 1, 1996, constitute treasury shares unless any of the following conditions exists:

(a) The articles of incorporation prohibit treasury shares.

(b) The board of directors, by resolution, cancels the acquired shares, in which event the shares are restored to the status of authorized but unissued shares.

(5) Prohibition in articles of incorporation. If the articles of incorporation prohibit treasury shares, all of its own shares acquired by the bank shall be restored to the status of authorized but unissued shares.

(6) Saving clause. Treasury shares existing on July 1, 1996, remain treasury shares until disposed of, canceled or restored to the status of authorized but unissued shares by action of the board of directors or shareholders.

History: 1995 a. 336.