New Mexico § 58-1-29 - Issuance of capital debentures or notes

§ 58-1-29. Issuance of capital debentures or notes

A. After obtaining approval of the commissioner [director of the financial institutions

division of the regulation and licensing department] and the approval of the stockholders

owning two-thirds of the issued and outstanding shares of stock of the bank entitled

to vote, a bank may issue and sell its capital debentures or notes. Capital debentures or notes may be converted into shares of common or preferred

stock in accordance with the provisions of the debentures or notes and under any terms

or conditions prescribed or approved by the commissioner [director]. The principal amount of any capital debentures or notes outstanding at any time

shall not exceed an amount equal to the sum of one hundred percent of the banks' [bank's]

unimpaired paid-in capital stock and fifty percent of its unimpaired surplus fund. B. Capital debentures or notes are an unsecured indebtedness of the bank and are subordinate

to the claims of depositors and all other creditors of the bank, regardless of whether

the claims of the depositors or other creditors arose before or after the issuance

of the capital debentures or notes. In the event of liquidation of the bank, all depositors and other creditors of the

bank are entitled to be paid in full before any payment is made of principal or interest

on the outstanding capital debentures or notes. After payment to depositors and creditors, capital debentures or notes shall be

paid pro rata regardless of the date of their issuance. No payment of the principal of outstanding capital debentures or notes shall be

made unless, after the payment, the aggregate of the capital, surplus, undivided profits

and capital debentures or notes then outstanding is equal to the aggregate of the

foregoing items immediately after the original issue of the capital debentures or

notes. Convertible debentures or notes may be issued without offering them to the existing

stockholders of the bank if it is so provided in the articles of incorporation of

the bank on its organization, or by later amendment to these articles. C. The amounts of outstanding capital debentures or notes legally issued by any bank

shall be treated as capital for the purpose of computing the loan limits prescribed

in Section 58-1-24 NMSA 1978 and for determining the amount of money a state bank may borrow for temporary purposes

as provided in Section 58-1-28 NMSA 1978 , and for computing the amount that may be invested in banking premises under the

provisions of Section 58-1-26 NMSA 1978 .