A bank must maintain an allowance for loan and lease losses (ALLL) at a level that appropriately covers estimated credit losses on individually evaluated loans as well as estimated credit losses inherent in the remainder of the loan and lease portfolio. The analysis must be performed at least quarterly and must be consistent with generally accepted accounting principles. Bank management must maintain supporting documentation to validate ALLL appropriateness. The bank's board of directors must review the analysis and results and ensure the ALLL is appropriately funded throughout the accounting cycle. The actions of the board of directors must be recorded in the meeting minutes of the board of directors.

Source: 11 SDR 46, effective October 9, 1984; 12 SDR 151, 12 SDR 155, effective July 1, 1986; 13 SDR 37, effective October 9, 1986; 13 SDR 120, effective March 12, 1987; 14 SDR 46, effective September 28, 1987; 15 SDR 28, effective August 21, 1988; 34 SDR 322, effective June 30, 2008.

General Authority: SDCL 51A-2-13.

Law Implemented: SDCL 51A-2-13.