BAS September 2022 Presentations

The Allowance for Loan & Lease Losses (ALLL) is a Rainy-Day Fund to Cover Potential Loan Losses

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Loan Charge-Offs Deplete the ALLL

Accounting entries to charge ‐ off a loan:

Account

Debit

Credit

Loan Balance

X

Reduces the loan balance

ALLL

X

Reduces the ALLL balance (since contra ‐ asset)

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