Navy Federal Credit Union 2012 Annual Report Download - page 23

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Navy Federal Credit Union26 Leading with Vision. Achieving Results. 27
2012 Financial Section
NOTE 13: PROPERTY, PLANT, AND EQUIPMENT
The following is a summary of Navy Federal’s property, plant, and equipment at December 31, 2012
and 2011:
(dollars in thousands) 2012 2011
Land and buildings $ 731,925 $ 709,360
Equipment, furniture, and fixtures 365,418 376,350
Computer software and capitalized IT projects 424,745 326,421
Leasehold improvements 106,599 110,088
Subtotal 1,628,687 1,522,219
Less: Accumulated depreciation (786,402) (692,356)
Total $ 842,285 $ 829,863
Navy Federal has obligations under a number of non-cancelable operating leases for premises.
The future minimum payments under the terms of the leases as of December 31, 2012 were:
(dollars in thousands) Amount
2013 $ 16,653
2014 12,915
2015 10,195
2016 8,668
Thereafter 11,995
Total $ 60,426
Rent expense was $21.6 million and $20.9 million for the years ended December 31, 2012 and
2011, respectively.
The notional value of forward sales contracts was $2.4 billion and $1.1 billion, respectively, as of December
31, 2012 and 2011. All of these forward sales contracts are scheduled to settle within a three-month
period, and their note rates range between 2.5% and 4.0%. Management has the intent and ability to fill
the incremental balance of forward sales contracts over the open mortgage loan commitments with the
balance of closed loans classified on the Consolidated Statements of Financial Condition as “Mortgage
loans awaiting sale.”
The unrealized gain or loss on these derivatives at December 31 was as follows:
(dollars in thousands) 2012 2011
Gain $ 1,402 $ 25
Loss (3,115) (7,337)
Net $ (1,713) $ (7,312)
Net unrealized gains of $33.4 million and net unrealized losses of $2.6 million during 2012 and 2011,
respectively, are included in “Gain on mortgage loan sales, net” on the Consolidated Statements
of Income.
NOTE 11: LEGAL CONTINGENCIES
Navy Federal is a party to various legal actions normally associated with financial institutions, the
aggregate eect of which, in management’s and legal counsel’s opinion, would not be material to
Navy Federal’s financial condition or results of operations.
NOTE 12: COMMITMENTS
In the normal course of business, Navy Federal enters into conditional commitments to meet the
financing needs of its members. Unused commitments for loans to members are amounts that
Navy Federal has agreed to lend to members as long as the members do not default on existing loans
or violate any condition of the loan agreement. Commitments generally have fixed expiration dates
or other termination clauses. Since many of the commitments are expected to expire without being
drawn upon, the total commitment amounts do not necessarily represent future cash requirements.
Navy Federal uses the same credit policies in making commitments as it does for all loans to members
and, accordingly, at December 31, 2012, the credit risk related to these commitments was similar to
that on its existing loans.
Unused commitment balances as of December 31, 2012 and 2011 were as follows:
(dollars in thousands) 2012 2011
Credit cards $ 9,480,072 $ 7,760,576
Overdraft lines of credit 770,056 707,678
Home equity lines of credit 923,661 973,931
Pre-approved auto loans 249,953 187,930
Utility deposit guarantee programs 1,817 2,035
Letters of credit 7,870 7,820
Total $ 11,433,429 $ 9,639,970