A national bank may, with the consent of the Comptroller of the Currency and by vote of the stockholders owning two-thirds of the shares, increase its capital stock to any sum approved by the Comptroller. Any bank contemplating such increase should advise with the Comptroller beforehand. The proposition must be formally submitted to the stockholders at a special meeting, at which shareholders who cannot attend may be represented by proxy provided that such proxy is not an officer, director, or employee of the bank. No increase of the capital stock is valid until the whole amount is paid in cash and the fact of payment certified to by the Comptroller, and until his certificate of approval is issued. Merely a portion of the increase will not be approved by him. If any assets of another bank are to be taken over in connection with the increase, an examination to determine their character and value is required, and no assets may be purchased that do not conform to law or that have unsatisfactory value.

By common law the holder of the original stock has the right to subscribe for and demand from the corporation such proportion of the new stock issued as the number of shares already owned by him bears to the whole number of shares before the increase. This right must be exercised, however, within a reasonable time. If the stock of the bank is worth more than par and the new stock is being issued at par, the shareholder who does not wish to use his right to subscribe to the new shares but wishes to protect his equity may sell to other parties his right to subscribe.

Stock dividends may not be declared, but the surplus above 20 per cent of the capital and the undivided profits may be declared as dividends, and the shareholders may then use their dividend checks to buy extra shares. To facilitate these operations authority may be obtained from the shareholders in advance of the issuance of the dividend checks to credit to the new stock the dividend upon subscriptions.