Figure 37. Reserves for loan and lease losses, 1990-2008.
Data are plotted as curves. There are three panels. In the top panel, reserves as a percentage of total loans and leases begins in 1990 at about 2.5 percent, rises to about 2.7 percent by 1992, falls smoothly to about 1.7 percent in 2000, edges up over the next two years to about 1.9 percent, and remains at that level in 2003 before declining to about 1.2 percent by 2006. It rises to about 1.4 percent in 2007 and to about 2.4 percent in 2008. In the middle panel, reserves as a percentage of net charge-offs begins in 1990 at about 190 percent, rises to about 480 percent by 1994, generally declines to about 190 percent by 2002, rises on balance over the next three years to around 300 percent by 2006, falls to around 220 percent by year-end 2007 and to about 160 by year-end 2008. In the bottom panel, reserves as a percentage of delinquent loans begins in 1990 at about 50 percent, rises to about 85 percent by 1995, declines gradually to a little less than 80 percent in 1999, and then drops to about 65 percent by year-end 2001. It returns to about 85 percent by 2004 but then declines over the next four years to just less than 50 percent by year-end 2008.
NOTE: The data are as of year-end. Delinquent loans are loans that are not accruing interest and those that are accruing interest but are more than 30 days past due. The delinquency rate is the end-of-period level of delinquent loans divided by the end-of-period level of outstanding loans. The net charge-off rate is the annualized amount of charge-offs over the period, net of recoveries, divided by the average level of outstanding loans over the period. For the computation of these rates, commercial real estate loans exclude loans not secured by real estate. Commercial real estate loans are measured as the sum of construction and land development loans secured by real estate; real estate loans secured by nonfarm nonresidential properties or by multifamily residential properties; and loans to finance commercial real estate, construction, and land development activities not secured by real estate.
