I want to clarify information in the article, "More Banks, S&Ls Expected to Boost Loss Reserves" (Dec. 11), that was confusing and caused great concern to us and others who read it.
Quotes and estimates attributed to Montgomery Securities gave potential events a degree of certainty, which was not our intention or belief. Three points need to be clarified to avoid unfair damage to the nation's depository institutions:
* Our loss-reserve estimates are just that, worst-case estimates, based on our own analysis of appropriate general reserve levels. These "general" reserves are included in regulatory capital and are set aside against potential problems on currently performing assets. General reserves are not specific reserves against problem loans nor are they writeoffs.
* The potential reserve action may be initiated by the S&Ls themselves or encouraged by regulators concerned about general real estate and economic conditions.