nonaccrual

The continued nonaccrual status of the bank's $1.9 billion in Brazilian loans reduced results by $38 million.

Wells said its total nonaccrual and restructured loans would increase by about $450 million.

Banks generally place loans on a nonaccrual basis when payments fall delinquent for 90 days or longer.

The profit also occurred despite the bank placing $394 million in Argentine loans on a nonaccrual basis.

It said more loans might also be put on nonaccrual status "in light of continuing uncertainties regarding Argentina."

Its nonaccrual assets were $4.61 billion, but excluding those to Argentina, the total was $312 million lower than in its second quarter.

When loans are in a nonaccrual status, payments are not put on the books until they are received.

Asset sales, accounting changes and the placing of some loans on nonaccrual status affected earnings significantly.

It put $430 million of the loans in nonaccrual status, reducing first-quarter earnings by $7 million.

Several leading American banks Wednesday put their short-term exposure here in nonaccrual status, meaning payments are recorded only when actually received.

First Chicago placed $386 million of debt on a nonaccrual basis, paring its first-quarter profit by $4.7 million.

Irving said its latest profit was reduced by $2.8 million because it placed $72 million of Argentine loans in nonaccrual status.

Wells Fargo said it would place about $400 million in commercial loans, about half of which involve deals with heavy debt, on nonaccrual.

Placing loans on a nonaccrual basis means that interest income from the loans is not counted until it is actually received.

BankAmerica also recorded a reduction for the fourth consecutive quarter in "nonaccrual" loans, which are loans not collecting interest.

Mellon classified $310 million of Brazilian loans as nonaccrual and said the move would trim $10 million from first-quarter net income.

As a consequence, banks were forced to put the loans on a nonaccrual basis, which means that interest cannot be recorded as income until cash is received.

The increase includes $401 million of Brazilian loans and $73 million of Ecuadorian loans put on nonaccrual status.

When loans are placed on nonaccrual status, they are accounted for only as they come in, rather than when they are due.

BankAmerica said that during the latest third quarter it placed $394 million of its $492 million portfolio of Argentine debt on a nonaccrual status.

Recording of Interest Changed When a loan is placed on nonaccrual status, a bank recognizes income from it when interest payments are received.

BankAmerica also said it was putting on nonaccrual status about $180 million of medium- and long-term loans to Ecuador, which is recovering from a severe earthquake.

When a loan is placed on nonaccrual status, the bank can record interest income only when it is actually received, not when it is due.

First Interstate placed loans to Brazil and Ecuador on nonaccrual status, which accounted for about two-thirds of the year-to-year increase in nonperforming assets.

Nonaccrual assets other than those related to countries that are restructuring their debt were up $202 million from one quarter ago and $873 million from a year ago.