Net Investment in Leases and Loans

3 Months Ended

Sep. 30, 2011

Net Investment in Leases and Loans [Abstract]

NOTE 3 - Net Investment in Leases and Loans

Net investment in leases and loans consists of the following:

	September 30,		December 31,
	2011		2010

	(Dollars in thousands)

Minimum lease payments receivable	$	411,233	$	389,247
Estimated residual value of equipment		33,868		37,320
Unearned lease income, net of initial direct costs and fees deferred		(69,898)		(63,355)
Security deposits		(3,451)		(5,026)
Loans, including unamortized deferred fees and costs		707		1,101
Allowance for credit losses		(5,459)		(7,718)
	$	367,000	$	351,569

At September 30, 2011, a total of $160.5 million of minimum lease payments receivable is assigned as collateral for borrowings, including the amounts related to consolidated VIEs.

Initial direct costs net of fees deferred were $6.9 million and $6.8 million as of September 30, 2011 and December 31, 2010, respectively, and are netted in unearned income and will be amortized to income using the effective interest method. At September 30, 2011 and December 31, 2010, $27.6 million and $30.6 million, respectively, of the estimated residual value of equipment retained on our Consolidated Balance Sheets was related to copiers.

Minimum lease payments receivable under lease contracts and the amortization of unearned lease income, including initial direct costs and fees deferred, are as follows as of September 30, 2011:

	Minimum Lease
	Payments		Income
	Receivable		Amortization

	(Dollars in thousands)

Period Ending December 31,
2011	$	48,512	$	10,829
2012		161,232		30,932
2013		102,021		16,859
2014		57,596		7,966
2015		32,459		2,938
Thereafter		9,413		374
	$	411,233	$	69,898

Income is not recognized on leases or loans when a default on monthly payment exists for a period of 90 days or more. Income recognition resumes when the contract becomes less than 90 days delinquent. As of September 30, 2011 and December 31, 2010, the Company maintained total finance receivables which were on a non-accrual basis of $1.2 million and $2.0 million, respectively. As of September 30, 2011 and December 31, 2010, the Company had total finance receivables in which the terms of the original agreements had been renegotiated in the amount of $1.3 million and $2.2 million, respectively. (See Note 4 for additional asset quality information.)