86-5

July 1, 1986

RE: ________ – Approval under Financial Code Section 1202 for borrowings to temporarily exceed Shareholders’ Equity.
Dear Mr. ________:
This in response to your letter dated June 30, 1986 and will confirm our telephone conversation of July 1, 1986.
Approval, as required under Financial Code Section 1202, is hereby granted for ________ to temporarily assume liability for the warehousing line of credit currently maintained between the bank’s wholly-owned subsidiary, ________, and ________. This approval is based upon representations in your letter and our understanding of the terms of the sale of ________ by the bank. It is also our understanding that the approximate disbursed balance under the line is $7 million and, that once assumed by the bank, the line will be self-liquidatlng with no new funds advanced.
Very truly yours,
LOUIS CARTER
Superintendent of Banks
By:
CRAIG A. CARLSON
Assistant Deputy Superintendent of Banks
CAC/rdk

June 30, 1986
Mr. Craig Carlson
Re: ________
Dear Craig:
As we discussed, ________ is negotiating the sale of its wholly-owned subsidiary, ________ to ________. (Please keep the identity of the buyer confidential until the transaction is complete.) Pursuant to the terms of the agreement negotiated between the parties, ________ has agreed to assume liability for the warehousing line of credit currently maintained by the mortgage company with ________. As of the date of the expected closing, approximately $7,000,000 in mortgage loans were “in the warehouse” awaiting shipment to various buyers in the secondary mortgage loan markets. ________ and ________ have agreed that the warehousing line will be liquidated as the individual mortgages are sold in the secondary market, and thereafter terminated. It is expected that complete liquidation of the line of credit would occur within approximately 90 days.
The assumption of this warehousing line of credit by ________ technically amounts to a “borrowing” by the Bank which may require the approval of the Superintendent of Banks. We therefore respectfully request your prompt attention to this matter, and you consent to the proposed “borrowing” by ________ as outlined in this letter. Your consent will obviously facilitate the orderly sale of the mortgage company.
Thank you for your cooperation. If you have any questions, please call.
Sincerely yours,