eTrade 2007 Annual Report Download - page 137
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as “well capitalized” under the regulatory framework for prompt corrective action. E*TRADE Bank is also
required by OTS regulations to maintain tangible capital of at least 1.50% of tangible assets. E*TRADE Bank
satisfied this requirement at both December 31, 2007 and 2006. 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 required actual capital amounts and ratios are presented in the table below (dollars in
thousands):
Actual
Minimum Required to
Qualify as Adequately
Capitalized
Minimum Required to
be Well Capitalized
Under Prompt
Corrective
Action Provisions
Amount Ratio Amount Ratio Amount Ratio
December 31, 2007(1):
Total Capital to risk-weighted assets $3,618,454 11.37% >$2,546,669 >8.0% >$3,183,336 >10.0%
Tier I Capital to risk-weighted assets $3,219,176 10.11% >$1,273,335 >4.0% >$1,910,002 > 6.0%
Tier I Capital to adjusted total assets $3,219,176 6.22% >$2,070,287 >4.0% >$2,587,858 > 5.0%
December 31, 2006:
Total Capital to risk-weighted assets $2,593,081 10.55% >$1,967,129 >8.0% >$2,458,911 >10.0%
Tier I Capital to risk-weighted assets $2,525,453 10.27% >$ 983,565 >4.0% >$1,475,347 > 6.0%
Tier I Capital to adjusted total assets $2,525,453 6.07% >$1,665,062 >4.0% >$2,081,328 > 5.0%
(1) Capital amounts and ratios include ETC.
NOTE 22—LEASE ARRANGEMENTS
The Company has non-cancelable operating leases for facilities through 2024. Future minimum lease
payments and sublease proceeds under these leases are as follows (dollars in thousands):
Minimum
Lease
Payments
Sublease
Proceeds
Net Lease
Commitments
Years ending December 31,
2008 $ 47,790 $ (9,023) $ 38,767
2009 43,440 (7,287) 36,153
2010 35,507 (1,412) 34,095
2011 24,008 (56) 23,952
2012 22,151 — 22,151
Thereafter 67,686 — 67,686
Total future minimum lease payments $240,582 $(17,778) $222,804
Certain leases contain provisions for renewal options and rent escalations based on increases in certain costs
incurred by the lessor. Rent expense, net of sublease income, was $30.2 million, $28.6 million and $22.2 million
for the years ended December 31, 2007, 2006 and 2005, respectively.
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