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loan loss reserve

The portion of a bank's cash or cash equivalents holdings set aside to cover estimated potential losses in its loan portfolio. When loans are repaid, this reserve shrinks accordingly, and when loans are made, it increases. In the event of defaulted loans, repossessed collateral is liquidated and credited to the loan loss reserve.

Related information about loan loss reserve:
  1. Loan Loss Reserves Definition & Example | InvestingAnswers
    This $100,000 estimate is Bank XYZ's loan loss reserve, and it records this reserve as a negative number on the asset portion of its balance sheet. If and when ...
     
  2. A Loan Loss Reserve Primer: Beyond Simplistic Ratios - Seeking ...
    Mar 29, 2009 ... First, the loan loss reserve (or allowance for loan losses) is a contra-asset account on a bank's balance sheet that is netted against gross loans.
     
  3. Loan Loss Reserves: Definition from Answers.com
    How are loan loss provision and loan loss reserve recorded? Read answer. ... Is a Loan Loss Reserve part of Required Bank reserve? Definition of loan loss ...
     
  4. The Loan Loss Reserve And The Loan Loss Provision: What Are ...
    May 4, 2011 ... Banks are in the business of using the funds provided by depositors to make loans and invest in securities. Lending entails assuming the risk ...
     
  5. Loan-Loss Reserve - Financial Dictionary - The Free Dictionary
    Extra funds from sales, or another source, set aside in order to pay off bad debt if and when it arises. The allowance helps a company ward off any potential cash ...
     
  6. Loan Loss Reserves - Federal Reserve Bank of Richmond
    bank to analyze its loan loss reserve needs more precisely. On financial reports, however, general and specific reserves are summed and reported simply as ...
     
  7. Loan Loss Reserves
    The process of establishing an appropriate loan loss reserve involves a significant amount of discretion and expert credit judgment. It must take into account not ...
     
  8. Loan Loss Accounting Basics
    Loans 5,000 - Loan Loss Reserve 100 = Net Loans 4,900. On 5/25/2010, a loan in the amount if 5 becomes totally uncollectible and is written off: Debit: Loan ...