June 7, 1984

Dear Mr. ________:
In response to your letter regarding a possible quasi-reorganization for ________. The findings which must be made before consent of the Superintendent regarding a quasi-reorganization closely parallel those required by Generally Accepted Accounting Principles. Specifically, before the Superintendent grants approval of a quasi-organization, he must make affirmative findings as to the following factors:

The bank has adequate capital given the nature and volume of the bank’s business.

That the problems which caused the past losses and created the capital impairment have been corrected. Evidence of this may include such factors as a change of management or discontinuance of a past practice which resulted in the losses.

That the bank is currently operating on a profitable basis, and will continue to operate profitably in the future.

While the best evidence as to this factor is that the bank is currently operating profitably, we will consider an application based upon reasonable projections of future profitability in the near term.
It is the responsibility of the applicant to provide the information to support a favorable finding on each of the above factors. Based upon the bank’s recent progress, it would appear the bank would be a candidate for a possible quasi-reorganization subject to the injection of additional capital required by regulatory agreements, and the results of the ongoing examination of the bank.
Yours truly,
Superintendent of Banks
Deputy Superintendent of Banks

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