Allowance for Loan and Lease Losses


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Allowance for Loan and Lease Losses

A contra-account on the balance sheet used for offsetting losses on loan and lease assets.
References in periodicals archive ?
It is believed that banks have used earnings management in the past and in the lead up to the 2008 financial crisis by manipulating the allowance for loan and lease losses account on the balance sheet.
MANY INTERESTED PARTIES are concerned about the adequacy of depository institutions' (DIs') allowance for loan and lease losses (ALLL) and the timing of these provisions.
One of the defining regulatory statements on the ALLL, the 2006 Interagency Policy Statement on the Allowance for Loan and Lease Losses states, "The ALLL represents one of the most significant estimates in an institution's financial statements and regulatory reports .
The bank's third-quarter net income of $312,000 was primarily due to a net recovery of the allowance for loan and lease losses of $190,000, gains on sale of investment securities of $239,000, and a reduction of the valuation allowance for deferred tax assets of $300,000, partially offset by core operating losses of $149,000, an allowance for unfunded loan commitments of $238,000, and extraordinary regulatory costs of $30,000.
A banking institution shall account for an ATRR separately from the Allowance for Loan and Lease Losses, and shall deduct the ATRR from "gross loans and leases" to arrive at "net loans and leases.
The bank's second-quarter net income of $239,000 was primarily due to a net recovery of the allowance for loan and lease losses of $78,000, gains on sale of investment securities of $446,000, and a reduction of the valuation allowance for deferred tax assets of $355,000.
For further guidance, institutions should refer to the July 12, 1999, Joint Interagency Letter to Financial Institutions on the allowance for loan losses, as well as the December 1993 Interagency Policy Statement on the Allowance for Loan and Lease Losses.
Tennessee Commerce Bancorp's restatement would increase its allowance for loan and lease losses by up to $16 million - almost doubling its allowance for loan and lease losses.
FFIEC Interagency Policy Statement on the Allowance for Loan and Lease Losses Methodologies and Documentation for Banks and Savings Institutions.
5 million to its allowance for loan and lease losses for the first three months of 2010 compared to $500,000 for the same period in 2009.
In response to an economic environment that continues to be challenging, we significantly increased our allowance for loan and lease losses.
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