Agenda - Council - 11/13/2012 - Laserfiche WebLink

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Loans totaling $26,6 billion were pledged to collateralize the Bank's borrowing capacity at the Federal Reserve Bank and Federal Horne Loan Bank at December 31, 2011, Our leasing activities consist primarily of leasing automobiles and commercial equipment. Generally, lessees are responsible for all maintenance, taxes and insurance on the leased property. The following lists the components of the net investment in financing leases, which includes equipment and consumer leases at December 31: (dollars in millions) 2011 2010 Total minimum lease payments to be received Estimated residual values of leased property Less: Unearned income $2,761 $2,538 247 276 241 265 Net investment in financing leases(1) $2,767 $2,549 (o Includes auto leases of $126 million and $185 million at December 31, 2011 and 2010, respectively. At December 31, 2011, minimum lease receivables for the five succeeding years and thereafter were as follows: (dollars in millions) Lease Receivable 2012 $ 978 2013 784 2014 533 2015 356 2016 186 2017 and thereafter 171 Gross minimum payments 3,008 Less: Unearned income 241 Net minimum receivable $2,767 In the normal course of business, the Bank makes loans to executive officers and directors of the Bank and to entities and individuals affiliated with those executive officers and directors. The aggregate amount of all such extensions of credit was $4.0 million and $4.2 million as of December 31, 2011 and 2010, respectively. Such loans are made on terms no less favorable to the Bank than those prevailing at the time for comparable transactions with other persons or, in the case of certain residential real estate loans, on terms that were widely available to employees of the Bank who were not directors or executive officers. In the course of evaluating the credit risk presented by a customer and the pricing that will adequately compensate the Bank for assuming that risk, management may require a certain amount of collateral support. The type of collateral held varies, but may include accounts receivable, inventory, land, buildings, equipment, income -producing commercial properties and residential real estate. The Bank has the same collateral policy for loans whether they are funded immediately or on a delayed basis (loan commitments). A commitment to extend credit is a legally binding agreement to lend funds to a customer usually at a stated interest rate and for a specified purpose. Such commitments have fixed expiration dates and generally require a fee. The extension of a commitment gives rise to credit risk. The actual liquidity requirements or credit risk that the Bank will experience will be lower than the contractual amount of commitments to extend credit because a significant portion of those commitments are expected to expire without being drawn upon. Additionally, certain commitments are subject to loan agreements containing covenants regarding the financial performance of the customer that must be met before the Bank is required to fund the commitment. For our consumer loan commitments, the Bank may reduce or cancel such commitments by providing prior notice to the borrower or, in some cases, without notice as legally permitted. -23- 2011 Bank of the West Annual Report