New Mexico Statutes Chapter 58. Financial Institutions and Regulations § 58-10-68. Transfers to loss reserves

A. Every association without permanent capital stock shall accumulate from its earnings a reserve fund for protection against losses. The reserve fund shall be accumulated by setting aside to the fund at each dividend-paying period a sum equal to two percent of its net earnings before dividends until the reserve fund equals not less than five percent of its total savings liability. The reserve fund shall be maintained at this level, and upon any subsequent increase in total savings liability, the association shall make additional accumulations at the rate and times set forth in this section for initial accumulations. For the purposes of this subsection, any accumulation of loss reserves and undivided profits shall be considered to be part of the reserve fund required.

B. Every permanent capital stock association shall maintain a net worth totaling at least five percent of its total savings liability or at the discretion of the supervisor build up its federal insurance reserve, or loss reserve, and net worth accounts pursuant to regulations issued by the supervisor. If the net worth is less than the amounts specified by regulation of the supervisor, no association shall issue savings account or investment certificates except for savings account or investment certificates theretofore issued or in connection with loans, and no association shall receive additional funds on savings accounts or investment certificates, but the association may credit to savings accounts or investment certificates interest earned thereon. No association shall pay any dividends to permanent capital stockholders or distribute any profits to stockholders if its net worth is less than, or by such payment or distribution would be reduced below, the amount specified by regulation of the supervisor.