The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
COPY BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION March 11, 1941 Messrs. W i l l i a m P. Funsten, Supervising Examiner, Federal Deposit Insurance Corporation; R. B. West, Vice President, Federal Reserve Bank of San Francisco; and Irwin D. Wright, Chief National Bank Examiner, San Francisco, C a l i f o r n i a . Gentlemen: As you know, we have maintained that our as$et values f o r bank premises should be our a c q u i s i t i o n cost plus c a p i t a l additions l e s s depreciation allowance f o r ordinary wear and obsolescence from the date of a c q u i s i t i o n . We have c o n s i s t e n t l y maintained that the o v e r - a l l book value of our bank premises i s proper and conservative. In t h i s contention we believe that we have been sustained by current American Appraisal Company valuations. You a l s o know that there has been disagreement on t h i s question. I t i s my understanding that the adjustment committee appointed pursuant to the provisions of Paragraph 5 of the C o m p t r o l l e r s "Requirements" of March 6, 1940, i s not agreed as to the use of the formula set f o r t h i n that paragraph. I understand further that the committee i s prepared t o give favorable consideration to the f o l l o w ing plan, which w i l l be regarded as f u l l y s a t i s f y i n g Requirement 5 and w i l l meet the basic ideas of the committee, and w i l l at the same time be consistent w i t h the p o l i c y we have followed. We w i l l agree to e s t a b l i s h a new cost basis f o r the bank premises l i s t e d i n E x h i b i t "A" hereto attached i n such manner as w i l l r e s u l t i n a charge of approximately $1,000,000 against our p r o f i t s f o r the period ending June 30, 1941* and a s i m i l a r charge i n the t h i r d quarter of 1941* The new cost basis to be established s h a l l be determined from the American Appraisal Company a p p r a i s a l , using the lowest a p p r a i s a l of the American Appraisal Company as to the p a r t i c u l a r properties involved. No adjustment w i l l be made as to properties w i t h respect to which American Appraisal Company1 s most adverse a p p r a i s a l exceeds book value. Please advise us i f t h i s plan has the approval of the committee and i s acceptable as meeting a l l of the requirements of Paragraph 5 of the Comptroller's "Requirements" dated March 6, 1940, so that we may proceed without delay t o carry out the contemplated program. Yours very t r u l y , (signed) R. G. Smith Executive Vice President.
@FedFRASER