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BB&T Corporation Message Board

  • jim56442 jim56442 Jul 13, 2004 11:15 AM Flag

    Does this look right

    to someone with upper management in banking or loan experience charge offs?

    The following two statements are part of the earnings releases.

    "Loans and leases ended June at $67 billion, up 22 percent from a year earlier and 6 percent from the first quarter."

    "set aside $64 million for bad loans, up 4 percent."

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    • Yes, just means that their "required reserves" were $64.0 million. The 4% increase means that went up 4.0% . I just saw your post, didn't see it in print. I am guessing this was compared to last year's number or last quarter's number. A 4.0% increase is nothing really as long as they are correctly identifying their problems. Believe me, the regulators scrutinize the reserve number. The IRS wants it low so the bank isn't sheltering income by over-reserving or aggressively expensing their problems. The OCC or other regulators want it high so that they have a cushion in case problems loans start cropping up.

      CEOs and Bank Presidents have made careers on managing the reserve number depending on the situation they faced.

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