PURPOSE: Senate Bill 331, which was effective September 28, 1983, changed the definition of “unimpaired capital” as it appears in section 362.170, RSMo, by deleting the word “capital” from the phrase “capital reserves.” This rule indicates that state-chartered banks may include the amount in “allowance for possible loan losses,” as reflected in their official report of condition (Call Report), in the calculation of “unimpaired capital” for legal loan limit purposes. This inclusion gives state-chartered banks loan limit parity with national banks.

1. (1) When calculating unimpaired capital for legal loan limit purposes, banks and trust companies, effective September 28, 1983, may add the line designated as allowance for possible loan losses on the bank’s official report of condition (Call Report) to those lines previously permitted: “total equity capital” and “capital notes.”
2. (2) The allowance for possible loan losses will not be considered unimpaired capital for purposes of capital adequacy.

AUTHORITY: sections 361.105, RSMo 1986 and 362.170, RSMo Supp. 1989.* This rule originally filed as 4 CSR 140-2.040. Original rule filed Aug. 15, 1983, effective Nov. 11, 1983. Amended: Filed Aug. 18, 1987, effective Nov. 12, 1987. Moved to 20 CSR 1140-2.040, effective Aug. 28, 2006. *Original authority: 361.105, RSMo 1967; and 362.170, RSMo 1939, amended 1941, 1943, 1945, 1959, 1963, 1967, 1977, 1981, 1983, 1985, 1986, 1989.