eTrade 2010 Annual Report Download - page 162

Download and view the complete annual report

Please find page 162 of the 2010 eTrade annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 195

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195

prompt corrective action, E*TRADE Bank must meet specific capital guidelines that involve quantitative
measures of E*TRADE Bank’s assets, liabilities and certain off-balance sheet items as calculated under
regulatory accounting practices. In addition, E*TRADE Bank may not pay dividends to the parent company
without approval from the OTS and any loans by E*TRADE Bank to the parent company and its other non-bank
subsidiaries are subject to various quantitative, arm’s length, collateralization and other requirements. E*TRADE
Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about
components, risk weightings and other factors.
Quantitative measures established by regulation to ensure capital adequacy require E*TRADE Bank to
maintain minimum amounts and ratios of Total and Tier I capital to risk-weighted assets and Tier I capital to
adjusted total assets. As shown in the table below, at both December 31, 2010 and 2009, the OTS categorized
E*TRADE Bank as “well capitalized” under the regulatory framework for prompt corrective action. However,
events beyond management’s control, such as a continued deterioration in residential real estate and credit
markets, could adversely affect future earnings and E*TRADE Bank’s ability to meet its future capital
requirements.
E*TRADE Bank’s actual and required capital amounts and ratios are presented in the table below (dollars in
thousands):
Actual
Minimum Required to be
Well Capitalized Under
Prompt Corrective
Action Provisions
Amount Ratio Amount Ratio
Excess
Capital
December 31, 2010:
Total capital to risk-weighted assets $3,308,991 15.02% >$2,203,369 >10.0% $1,105,622
Tier I capital to risk-weighted assets $3,028,647 13.75% >$1,322,021 > 6.0% $1,706,626
Tier I capital to adjusted total assets $3,052,012 7.30% >$2,091,530 > 5.0% $ 960,482
December 31, 2009:
Total capital to risk-weighted assets $3,102,618 14.08% >$2,203,492 >10.0% $ 899,126
Tier I capital to risk-weighted assets $2,818,370 12.79% >$1,322,095 > 6.0% $1,496,275
Tier I capital to adjusted total assets $2,860,312 6.69% >$2,136,752 > 5.0% $ 723,560
NOTE 21—LEASE ARRANGEMENTS
The Company has non-cancelable operating leases for facilities through 2022. Future minimum lease
payments and sublease proceeds under these leases, including leases involved in facility restructurings, are as
follows (dollars in thousands):
Minimum
Lease
Payments
Sublease
Proceeds
Net Lease
Commitments
Years ending December 31,
2011 $ 23,952 $ (3,220) $ 20,732
2012 23,337 (3,309) 20,028
2013 18,413 (2,884) 15,529
2014 17,647 (2,890) 14,757
2015 16,509 (284) 16,225
Thereafter 47,755 — 47,755
Total future minimum lease payments $147,613 $(12,587) $135,026
159