PLEASE HELP ME
You are the Chief Risk Officer (CRO) for your bank. One ofyour responsibilities is to estimate your bank's FAS 114ASC 310 specific and FAS 5ASC 450 general reserves for loan and lease losses (RLLL) and determine if it wil be necessary for your bank to take a provision for loan and ease losses (PLLL). The bank hasidentified three distinct categories ofloans: realestate, commercial, and consumer loans. Differences among the loans in each category are regarded as small while differences among loans in each of the three categories are regarded as material PDs, Recovery Rates (RCVRs), and LGDs within each category have been estimated based upon historical data. The end-of-year balance in the RLLLfrom the previous year, and thus the beginning balance for the current year is $145,500,000.00. During the current year the bank has had to write-off losses of $82,875,375.00 against the RLLLbut was able to recover $26.610.446.00 oflosses recorded in previous years. (note: an recoveries must be posted to the RLLL). Givem the following information on the bank's loan portfobo, estimate the amount of FAS 114 specific, FAS 5 general and total loan and lease loss reserves that the bank must hold in its Allowance or Reserve for Loan and Lease Losses (RLLL to cover the expected losses in its current loan portfolio. Initial Information: Loan Volume by Loan Loan Type Type RealEstate Loans 2,775,000,000.00 C&I Loans ISI665,000,000.00 Consumer Loans S1,110,000,000.00 5,550,000,000.00 Total Loans Beginning Balance of RLLL $145,500,000.00 $82,87S,375.00 Write-offs this period Recoveries this period $26,610,446.25 You are the Chief Risk Officer (CRO) for your bank. One ofyour responsibilities is to estimate your bank's FAS 114ASC 310 specific and FAS 5ASC 450 general reserves for loan and lease losses (RLLL) and determine if it wil be necessary for your bank to take a provision for loan and ease losses (PLLL). The bank hasidentified three distinct categories ofloans: realestate, commercial, and consumer loans. Differences among the loans in each category are regarded as small while differences among loans in each of the three categories are regarded as material PDs, Recovery Rates (RCVRs), and LGDs within each category have been estimated based upon historical data. The end-of-year balance in the RLLLfrom the previous year, and thus the beginning balance for the current year is $145,500,000.00. During the current year the bank has had to write-off losses of $82,875,375.00 against the RLLLbut was able to recover $26.610.446.00 oflosses recorded in previous years. (note: an recoveries must be posted to the RLLL). Givem the following information on the bank's loan portfobo, estimate the amount of FAS 114 specific, FAS 5 general and total loan and lease loss reserves that the bank must hold in its Allowance or Reserve for Loan and Lease Losses (RLLL to cover the expected losses in its current loan portfolio. Initial Information: Loan Volume by Loan Loan Type Type RealEstate Loans 2,775,000,000.00 C&I Loans ISI665,000,000.00 Consumer Loans S1,110,000,000.00 5,550,000,000.00 Total Loans Beginning Balance of RLLL $145,500,000.00 $82,87S,375.00 Write-offs this period Recoveries this period $26,610,446.25
