eTrade 2011 Annual Report Download - page 158

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, 2011:
Total capital to risk-weighted assets $3,602,384 17.27% >$2,086,243 >10.00% $1,516,141
Tier I capital to risk-weighted assets $3,338,618 16.00% >$1,251,746 > 6.00% $2,086,872
Tier I capital to adjusted total assets $3,351,860 7.75% >$2,163,785 > 5.00% $1,188,075
December 31, 2010:
Total capital to risk-weighted assets $3,308,991 15.02% >$2,203,369 >10.00% $1,105,622
Tier I capital to risk-weighted assets $3,028,647 13.75% >$1,322,021 > 6.00% $1,706,626
Tier I capital to adjusted total assets $3,052,012 7.30% >$2,091,530 > 5.00% $ 960,482
NOTE 20—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,
2012 $ 24,549 $(3,447) $ 21,102
2013 20,750 (2,942) 17,808
2014 19,985 (2,889) 17,096
2015 18,817 (285) 18,532
2016 17,212 — 17,212
Thereafter 53,237 — 53,237
Total future minimum lease payments $154,550 $(9,563) $144,987
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 $19.6 million, $22.6 million and $24.5 million
for the years ended December 31, 2011, 2010 and 2009, respectively. Rent expense, which is recorded in the
occupancy and equipment line item in the consolidated statement of income (loss), excludes costs related to
leases involved in facility restructurings, which are recorded in the facility restructuring and other exit activities
line item in the consolidated statement of income (loss).
NOTE 21—COMMITMENTS, CONTINGENCIES AND OTHER REGULATORY MATTERS
Legal Matters
Litigation Matters
On October 27, 2000, Ajaxo, Inc. (“Ajaxo”) filed a complaint in the Superior Court for the State of
California, County of Santa Clara. Ajaxo sought damages and certain non-monetary relief for the Company’s
alleged breach of a non-disclosure agreement with Ajaxo pertaining to certain wireless technology that Ajaxo
offered the Company as well as damages and other relief against the Company for their alleged misappropriation
of Ajaxo’s trade secrets. Following a jury trial, a judgment was entered in 2003 in favor of Ajaxo against the
Company for $1.3 million for breach of the Ajaxo non-disclosure agreement. Although the jury found in favor of
Ajaxo on its claim against the Company for misappropriation of trade secrets, the trial court subsequently denied
Ajaxo’s requests for additional damages and relief. On December 21, 2005, the California Court of Appeal
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