79-5

January 31, 1979

Re: Opinion Request

Dear M ________:

0n January 16 and on January 29 you requested a letter confirming the formula to be used in calculating lending limits for the purposes of Financial Code Section 1220, et seq. In those sections, the term shareholders equity includes both contributed capital and retained earnings. The effect is to increase the base for the banks’ lending limits.

I hope this confirming letter will be of help to you.

Very truly yours,

JACK L. TUAFER
Superintendent of Banks

By

JUDITH NELSON Counsel

MJN/ibm