Bank of the West 2014 Annual Report Download - page 38

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As of December 31, 2014, the aggregate annual maturities due on long-term debt were as follows:
(dollars in thousands)
2015 $ 730,995
2016 188,361
2017 120,780
2018 320,501
2019 1,385
2020 and thereafter 50,191
Total $1,412,213
13. Commitments, Guarantees and Contingencies
In the ordinary course of business, the Bank makes various commitments to extend credit that are not reflected in
the consolidated financial statements. The following table presents the Bank’s commitments:
As of December 31,
(dollars in thousands) 2014 2013
Commitments to extend credit(1)
Commercial $13,413,818 $11,903,439
Consumer 4,540,084 3,909,612
Standby and commercial letters of credit 1,339,494 1,088,506
(1) Commitments to extend credit represent unfunded amounts and are reported net of participations sold to other
lenders.
Commitments to extend credit
A commitment to extend credit is a legally binding agreement to lend funds to a customer usually at a stated interest
rate for a specified purpose with 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 obligations a customer must meet before the Bank is required to fund the
commitment. For our consumer loan commitments, the Bank may reduce or cancel such commitments as legally
permitted.
The Bank further manages the potential credit risk in commitments to extend credit by limiting the total amount of
arrangements, both by individual customer and in aggregate, by monitoring the size and maturity structure of these
portfolios and by applying the same credit standards maintained for all of its related credit activities.
Standby and commercial letters of credit
Standby letters of credit represent guarantees issued on behalf of customers in connection with contracts between
the customers and third parties. These are conditional commitments in which the Bank assures that the third parties will
receive specified funds if customers fail to meet their contractual obligations. The liquidity requirement and subsequent
credit risk to the Bank arises from its obligation to make payment in the event of a customer’s contractual default. The
commitments outstanding as of December 31, 2014 have maturities ranging from January 1, 2015 to November 1, 2027.
In connection with the issuance of such commitments, fees are charged based on contract terms and recognized into
income when they are earned.
The Bank has rental commitments under capital and noncancelable operating lease agreements. See Note 6 for
additional information.
Litigation
In the course of normal business, the Bank is subject to asserted and unasserted legal actions, which may seek
substantial relief or damages. While the Bank is unable to predict whether the outcome of such actions will materially
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