TO: ALL TENNESSEE STATE
CHARTERED BANKS AND SAVINGS BANKS
SUBJECT: Initial Investment Required by T.C.A. Section 45-2-201
Supercedes Bulletin No. B-95-1
DATE: March 18, 2004
T.C.A. Section 45-2-201(c) provides that "Each
incorporator shall subscribe and pay in full in cash for common stock in
an amount not less than one percent (1%) of the minimum capital structure
of the bank or such amount as shall be determined by the
commissioner".
Incorporators shall subscribe and pay in full for at
least one percent (1%) of the minimum capital structure as proposed by the
incorporators and substantiated by financial projections, unless the
Commissioner determines otherwise. For example, if the incorporators issue
an offering circular proposing a minimum offering of $7 million and a
maximum offering of $9 million, the incorporators would subscribe and pay
for 1% of the $7 million or $70,000. However, in the event a DeNovo Bank
is formed as a branch incorporation pursuant to T.C.A. Section
45-2-614(c), and a bank holding company will own 100% of the stock of the
bank immediately upon incorporation, the Commissioner may determine that
the incorporators are not required to subscribe to, or pay for, any stock.
Any other exceptions to the requirement to subscribe to 1% of the bank’s
minimum capital will be determined on a case-by-case basis, upon a showing
of good cause.
If you have questions regarding this Bulletin, please contact Program
Administrator for Applications Curtis F. Faulkner at 615/741-4791
