---
title: O.C.G.A. § 7-1-419. Subordinated securities.
collection: code
id: 7-1-419
cite_as: O.C.G.A. § 7-1-419 (2025)
canonical_url: https://georgiacommons.org/code/7-1-419
md_url: https://georgiacommons.org/code/7-1-419.md
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date: 2025
status: active
corpus_version: 2025-supplement-89aa39ab3c68
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publisher: Georgia Commons, an independent project of Georgia Civic Data. Not the State of Georgia. Not legal advice.
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current_through: Including Acts of the 2025 Regular Session of the General Assembly
heading_path: BANKING AND FINANCE / FINANCIAL INSTITUTIONS / BANKS AND TRUST COMPANIES / FINANCIAL STRUCTURE
---

# O.C.G.A. § 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 as those required for authorization of an increase in capital stock or any instrument convertible into capital stock of the bank or trust company;

(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;

(4) Furnish disclosures to investors of the risks associated with the subordinated securities prior to investment; and

(5) Include notice that, if the bank or trust company becomes subject to a regulatory action, then the bank or trust company may be prohibited from paying or retiring the subordinated securities.

(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 and unimpaired paid-in capital of the bank or the trust company.

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

## History

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; Ga. L. 2017, p. 193, § 11/HB 143; Ga. L. 2019, p. 828, § 12/HB 185; Ga. L. 2024, p. 354, § 1-6/HB 876, effective July 1, 2024.

## Cross References

Order of payment of liabilities of financial institution which is liquidated or dissolved and whose assets are insufficient to pay in full all liabilities, § 7-1-202.

## Administrative Rules and Regulations

Borrowed Money, Official Compilation of the Rules and Regulations of the State of Georgia, Rules of Department of Banking and Finance, Banks, Rule 80-1-9-.01 et seq.

## Amendments

The 2024 amendment, effective July 1, 2024, deleted former subsection (c), which read: “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.” and redesignated former subsection (d) as present subsection (c).