Financial Code section 1151

For purposes of any statute, regulation, or requirement of any governmental official or agency which refers to the capital (including, without limitation, stated capital, paid-in capital, and paid-up capital, but excluding contributed capital), surplus, or undivided profits of a bank, a bank, with the approval of its board, may establish and maintain capital, surplus, and undivided profits accounts and may from time to time allocate and reallocate its shareholders’ equity among such accounts; provided, however:

(a)

That no part of the contributed capital of the bank shall be allocated to the undivided profits account of the bank;

(b)

That the undivided profits account of the bank shall at no time exceed the retained earnings of the bank; and

(c)

That, in case the articles of the bank provide that any of the bank’s shares shall have par value and specify the par value of such shares or in case the bank has determined the par value of any of its shares pursuant to Section 1120, the capital account of the bank shall be not less than the aggregate par value of such shares which are outstanding.

Source: Section 1151, https://leginfo.­legislature.­ca.­gov/faces/codes_displaySection.­xhtml?lawCode=FIN§ionNum=1151.­ (updated Jan. 1, 2012; accessed Oct. 20, 2025).

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Verified:
Oct. 20, 2025

§ 1151's source at ca​.gov