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The changes for 2010 in Level 3 assets measured at fair value on a recurring basis are summarized
<br />below. There were no Level 3 liabilities measured at fair value on a recurring basis for the year ended
<br />December 31, 2010:
<br />(dollars in thousands)
<br />Securities available for sale:
<br />Non -government mortgage -
<br />Net
<br />unrealized
<br />gains
<br />(losses)
<br />Purchases, included in
<br />Total net Total net gains sales, net income
<br />losses included in issuances for the year
<br />included other and Transfers relating to
<br />Beginning in net comprehensive settlements, out of Ending assets held
<br />balance income income net Level 3 balance at year end
<br />backed securities(' $692,906 $(23,246) $149,072 $(818,732) $ $ - $ -
<br />Collateralized debt obligations 79,753 (7,483) 54,308 (59,586) 66,992 -
<br />Collateralized loan obligations 136,975 (459) 58 (6,668) 129,906 (459)
<br />Other asset -backed securities 5,984 (130) 9,407 (14,398) 863
<br />Total securities available for
<br />sale $915,618 $(31,318) $212,845 $(899,384) $ - $197,761 $(459)
<br />Derivative assets - (73,200) 223,929 - 150,729
<br />Other assets 3,673 - (55) (3,526)(3) 92
<br />(`) Included in noninterest income in the income statement.
<br />(2) Backed by residential real estate.
<br />(2) Related to the adoption of new accounting guidance for the consolidation of VIES and transfers of financial assets.
<br />The following table presents gains or losses in Level 3 assets from the above tables that were reported
<br />in noninterest income for the years ended December 31, 2011 and 2010:
<br />(dollars in thousands) 2011 2010
<br />Total losses included in earnings $(29,646) $(104,518)
<br />Change in unrealized gains or losses relating to assets still held at
<br />reporting date (459)
<br />We may be required, from time to time, to measure certain other assets at fair value on a nonrecurring
<br />basis in accordance with GAAP. These adjustments to fair value usually result from application of lower of
<br />cost or fair value accounting or write downs of individual financial assets. The following table provides the
<br />level of valuation inputs used to determine each adjustment, the carrying value of the related individual
<br />assets or portfolios for assets measured at fair value on a nonrecurring basis, and total losses for the year
<br />ended:
<br />(dollars in thousands)
<br />December 31, 2011:
<br />Impaired loans $- $517,710i" $- $ -
<br />Foreclosed assets 156,049 34,174
<br />Loans held for sale 244,509m -
<br />December 31, 2010:
<br />Impaired loans $- $968,707(0 $- $ -
<br />Foreclosed assets 195,017 36,770
<br />Loans held for sale - 107,440 -
<br />(`) The fair value adjustment is not related to actual losses but is related to the allocation of the allowance in order to adjust the
<br />carrying amount of the loan to the fair value of the collateral.
<br />(2) See Note 5, for related charge -offs at time of transfer to held for sale.
<br />Carrying Value Total Losses for
<br />Level 1 Level 2 Level 3 Year Ended
<br />Fair Value of Financial Instruments
<br />In compliance with GAAP, we disclose estimated fair values for certain financial instruments.
<br />Financial instruments include such items as loans, deposits, securities, interest rate and foreign exchange
<br />contracts, swaps and other instruments as defined by the standard.
<br />-45-
<br />2011 Bank of the West Annual Report
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