Juanmonino/E+ via Getty Images Co-authored with Hidden Opportunities. During the months of elevated interest rates, we have heard about the growing loan loss provisions among U.S. banking institutions. In the second quarter, U.S. banks' reserves increased by $1.9 billion to reach $220.54 billion.   S&P Global Banks set aside money as loan loss provisions to cover potential loan defaults. These are essentially “paper reductions” in earnings; they reduce reported earnings on the income statement, but no a ...