eTrade 2003 Annual Report Download - page 19
Download and view the complete annual report
Please find page 19 of the 2003 eTrade annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9 -
10 -
11 -
12 -
13 -
14 -
15 -
16 -
17 -
18 -
19 -
20 -
21 -
22 -
23 -
24 -
25 -
26 -
27 -
28 -
29 -
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
-
137
-
138
-
139
-
140
 |
 |
Table of Contents
Index to Financial Statements
In determining our allowance for loan losses, we have established both specific and general allowances. The amount of the specific
allowance is determined through a loan-by-loan analysis of certain large dollar real estate loans. Loans not individually reviewed are evaluated
as a group using expected loss ratios, which are based on our historical charge-off experience, industry loss experience and current market and
economic conditions. Our internal policy requires that the provision for loan losses is at least equal to twelve months of projected losses for all
loan types. We believe this level is representative of probable losses inherent in the loan portfolio. The general allowances set by management
are subject to review and approval by the Bank’s Board of Directors. Each month, management reviews the allowance for adequacy, based on
our assessment of the risk in our loan portfolio as a whole, considering the following factors:
Based on the above factors, we regularly consider whether it is appropriate to increase the general allowance to more than the twelve-
month minimum of probable loan losses. In determining the adequacy of the general allowance, we validate the assumptions underlying the
twelve-month loss projection by analyzing our actual loss experience, industry loss experience and changes in portfolio quality and also
consider changes in economic conditions and the potential impact on the loan portfolio’s performance. When loans are unseasoned and lack
sufficient data to project future losses, we apply appropriate industry charge-off and loss rates as a proxy for the Bank’s actual loss experience.
However, as our loan portfolios season and we have sufficient historical data to project future losses, we only use industry loss experience to
validate our own loss projections.
11
•
the composition and quality of the portfolio;
•
delinquency levels and trends;
•
expected losses for the next twelve months;
•
current and historical charge-off and loss experience;
•
current industry charge-off and loss experience;
•
the condition of the real estate market and geographic concentrations within the loan portfolio; and
•
current general economic and market conditions.