The attached article addresses increased loan loss reserves that many banks have undertaken as a result of the recent failures of Silicon Valley Bank, First Republic Bank and Signature Bank. Many of the  institutions cited in the article are household names: Bank of America, Goldman Sachs, Morgan Stanley and Wells Fargo. The approaches and measures taken relative to potential losses vary from bank to bank. The article, and a lot of news that was generated from the Silicon Valley Bank failure, reminded me of my time at American Savings and Loan (1982 – 1992) here in Salt Lake City when it was in its waning days of being a thriving institution. I ran REO. At least quarterly, and then more frequently depending on the asset, REO was charged with valuing and re-valuing assets owned by the savings & loan. It was a tortuous exercise as the values of the properties were declining in a very slow commercial real estate economy where sales were relatively infrequent. We rarely brought good news to the Credit Review Committee. These additional write downs came after the institution had already charged off credit based on the difference between the outstanding loan amount at foreclosure vs. the value of the property. It was a very challenging time.
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