Banks get a better overview of the credit risks Local news
“Last quarter we were challenged to see if our reserves were adequate,” said Don Kimble, Key’s chief financial officer, on whether or not we wanted to show declines in reserves this quarter. “
Christopher Gorman, chairman and CEO of Cleveland-based Key, said the decision to increase reserves was “only influenced by uncertainty in the economy.”
“There’s just no precedent and we want to make sure we’re conservative, so that’s what we did,” he said.
Evans Bank increased its provision for loan losses to $ 1.9 million, from more than three times the $ 600,000 it provided in the second quarter, citing its hotel loan portfolio.
“Your earnings are seasonal,” said John Connerton, chief financial officer of the Amherst-based bank. Hotels are entering what is usually a slow phase for them, not to mention what could happen to the pandemic in the colder months, he said.
“We want to help them over a longer period of time until next summer, so we will be evaluating this portfolio over the next few quarters,” said Connerton.
The bank’s $ 81 million hotel portfolio – including properties with brands like Hampton Inn, Clarion Suites, and Holiday Inn – accounts for approximately 6.5% of Evans’ total commercial loans. Connerton said the bank felt good about the hotel operators it lent to.