Section 7-1-419. Subordinated securities

   (a) A bank or trust company may issue notes, debentures, or other obligations in the form of "subordinated securities," provided that they:

   (1) Are subordinated in right of payment, in the event of insolvency or liquidation of the bank or trust company, to the prior payment of all deposits of the bank or trust company and of all claims of other creditors of the bank or trust company except the holders of securities on a parity therewith and the holders of securities expressly subordinated thereto;

   (2) Are authorized by the same votes of directors and shareholders as those required for authorization of an increase in capital stock of the bank or trust company under Code Section 7-1-511;

   (3) Contain provisions for amortization, serial maturities, transfers to a sinking fund, allocation of reserves, or other provisions sufficient to pay or to have paid at maturity all amounts due thereon; and

   (4) Are approved by the department prior to the issue thereof.

(b) The aggregate amount of the obligations of a bank or trust company in the form of subordinated securities shall at no time exceed 50 percent of the sum of the unimpaired capital stock, unimpaired paid-in capital, and appropriated retained earnings of the bank or the trust company.

(c) If at or after the payment or retirement of the subordinated securities of a bank or trust company there is or would be a deficiency in the capital stock of the bank or trust company, such fact shall be reported to the department in advance of the payment or retirement. The department may, upon receipt of such report, order a restoration of capital stock or take other appropriate remedial measures under this chapter.

(d) Subordinated securities  shall not be considered in determining the amount of ad valorem taxes payable by the bank or trust company.

Code 1933, § 13-2025.1, enacted by Ga. L. 1965, p. 494, § 1; Ga. L. 1968, p. 1045, §§ 6, 7; Code 1933, § 41A-1910, enacted by Ga. L. 1974, p. 705, § 1.