商业银行管理Chap005.pptVIP

The Balance Sheet (Report of Condition) (continued) Trading Account Assets Securities purchased to provide short-term profits from short-term price movements Occurs when the bank acts as a securities dealer Valued at Market – FASB 115 The Balance Sheet (Report of Condition) (continued) Federal Funds Sold and Reverse Repurchase Agreements Includes mainly temporary loans (usually extended overnight, with the funds returned the next day) made to other depository institutions, securities dealers, or major industrial corporations The funds for these temporary loans often come from the reserves a bank has on deposit with the Federal Reserve Bank in its district “Fed funds” Some of these temporary credits are extended in the form of reverse repurchase (resale) agreements (RPs) in which the banking firm acquires temporary title to securities owned by the borrower and holds those securities as collateral until the loan is paid off The Balance Sheet (Report of Condition) (continued) Loan Accounts The Major Asset Gross Loans – Sum of All Loans Allowance for Possible Loan Losses Contra Asset Account For Potential Future Loan Losses Net Loans Unearned Discount Income Nonperforming Loans The Balance Sheet (Report of Condition) (continued) Types of Loans Commercial and industrial (or business) loans Consumer (or household) loans Real estate (or property-based) loans Financial institutions loans Foreign (or international) loans Agricultural production loans Security loans Leases The Balance Sheet (Report of Condition) (continued) Loan Losses Beginning Allowance for Loan Losses + This Year’s Provision for Loan Loss = Adjusted Allowance for Loan Losses - Actual Charge-Offs of Worthless Loans + Recoveries from Previous Charge-Offs = Ending Allowance for Loan Losses The Balance Sheet (Report of Condition) (continued) Specific and General Reserves Specific Reserves Set aside to cover a particular Loan Designate a portion of ALL or Add more reserves to ALL General Reserves Remain