ISSUANCE OF STOCK TO DIRECTORS AND INVESTORS DOES NOT RESULT IN OWNERSHIP CHANGE.

UIL Number(s) 0382.00-00

                                             Date: July 18, 1991

This letter is in response to your representative's letter dated February 28, 1991, requesting rulings on the federal income tax consequences of a completed transaction. Additional information was submitted in letters dated April 23, May 16, and July 12, 1991. The information submitted for consideration is summarized below.

Company is a State X corporation principally engaged in the commercial banking business. As part of the process of organizing Company, a shares of b par value were issued to the Directors of Company on December 29, 1987. These shares remain outstanding.

On February 29, 1988, Company issued c shares of common stock (approximately 99% of the outstanding stock) to approximately d investors and commenced operations. Prior to the issuance of common stock to investors, Company engaged in no transactions, had no income and incurred minimal organizational expenses.

As of December 31, 1988, Company had a net operating loss which was entirely attributable to the period commencing on February 29, 1988.

Company has made the following representations in connection with this ruling request:

(a) Company is a "loss corporation" for the tax year ending on December 31, 1988, within the meaning of section 382(k)(1) of the Code.

(b) The issuance of shares to the Directors on December 29, 1987, and the issuance of common stock to d investors on February 29, 1988, were integrated parts of a plan to for Company.

Based on the information submitted and the representations set forth above, the service holds as follows:

No ownership change, within the meaning of section 382(g) of the Code, occurred with respect to Company as a result of the issuance of c shares of common stock to d investors on February 29, 1988, subsequent to the issuance of the shares to the Directors on December 29, 1987, because the issuances to Directors and investors were parts of an integrated plan to form Company and the issuances were done with an expedition consistent with the orderly formation of Company.

No opinion is expressed about the federal income tax treatment of the completed transaction under other provisions of the Code and regulations or about the tax treatment of any conditions existing at the time of, or effects resulting from, the transaction that are not specifically covered by the above rulings.

Temporary or final regulations pertaining to the issue addressed in this ruling letter have not yet been adopted. Therefore, this ruling letter may be modified or revoked if temporary or final regulations as adopted are inconsistent with the conclusion herein. See section 11.04 of Rev. Proc. 91-1, 1991-1 I.R.B. 30. However, if the criteria in section 11.05 of Rev. Proc. 91-1 are satisfied, a ruling is not revoked or modified retroactively except in rare or unusual circumstances.

This ruling is directed only to the taxpayer who requested it. Section 6110(j)(3) of the Code provides that it may not be used or cited as precedent.

A copy of this letter should be attached to the original federal income tax returns of the taxpayers involved for the taxable year in which the transaction covered by this ruling letter was consummated.

Pursuant to the power of attorney on file in this office, copies of this letter have been sent to your authorized representatives.

                                   Sincerely yours,