What are Sterling Bancorp's Business Segments?
The allowance for loan losses also includes an element for estimated probable
but undetected losses. We analyzes loans by two broad segments or classes: real
estate secured loans and loans that are either unsecured or secured by other collateral.
The segments or classes considered real estate secured are: residential mortgage
loans; CRE loans; multi-family loans; ADC loans; homeowner loans; and home equity
lines of credit. The segments or classes considered unsecured or secured by other
than real estate collateral are: C&I loans, which includes asset based loans;
payroll finance loans; warehouse lending; factored receivables; equipment finance
loans; business banking C&I loans and consumer loans. In all segments or classes,
significant loans are reviewed for impairment once they are placed in a non-accrual
status or are assessed as a TDR. Generally we consider a homogeneous residential
mortgage loan or home equity line of credit to be significant if our investment
in the loan is greater than $500. If a loan is deemed to be impaired in one of
the real estate secured segments, and it is anticipated that our ultimate source
of repayment will be through foreclosure and sale of the underlying collateral,
it is generally considered collateral dependent. If the value of the collateral
securing a collateral dependent impaired loan is less than the carrying value
of the loan, a charge-off is recognized equal to the difference between the value
of the collateral and the book value of the loan. In addition, included in impairment
losses are amounts recognized for estimated costs to hold and to liquidate the
collateral. These costs to hold and liquidate are generally in the range of 22%
and are applied to all loans collateralized by real estate.
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