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## 6. LOANS AND LEASES 

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Total portfolio loans and leases were recorded net of unearned income, which totaled $1.0 billion and $1.2 billion as of December 31, 2010 and 2009, respectively. Additionally, unamortized premiums and discounts, deferred loan fees and costs, and fair value adjustments (associated with acquired loans or loans designated as fair value upon origination), totaled a net discount of $19 million and $106 million as of December 31, 2010 and 2009, respectively. 

The Bancorp diversifies its loan and lease portfolio by offering a variety of loan and lease products with various payment terms and rate structures. Lending activities are concentrated within those states in which the Bancorp has banking centers and are primarily located in the Midwestern and Southeastern regions of the United States. The Bancorp’s commercial loan portfolio consists of lending to various industry types. Management periodically reviews the performance of its loan and lease products to evaluate whether they are performing within 

The components of the investment in lease financing at December 31: 

acceptable interest rate and credit risk levels and changes are made to underwriting policies and procedures as needed. The Bancorp maintains an allowance to absorb loan and lease losses inherent in the portfolio. For further information on credit quality and the ALLL, see Note 7. 

The Bancorp engages in commercial and consumer lease products primarily related to the financing of commercial equipment and automobiles. The Bancorp had $3.0 billion of direct financing leases and $1.7 billion of leveraged leases at December 31, 2010 compared to $3.2 billion and $2.0 billion, respectively, at December 31, 2009. 

Pre-tax income from leveraged leases for 2010 was $49 million compared to pre-tax income in 2009 of $57 million and a pre-tax loss in 2008 of $97 million. The tax effect of this income was an expense of $10 million in each of the years ended 2010 and 2009 and a tax benefit of $37 million in 2008. 

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(a) The accumulated allowance for uncollectible minimum lease payments was $112  and $125 at December 31, 2010  and 2009, respectively. 

The Bancorp periodically reviews residual values associated with its leasing portfolio. Declines in residual values that are deemed to be other-than-temporary are recognized as a loss. Residual value write-downs related to consumer automobile leases for the year ended December 31, 2010 were immaterial to the Consolidated Financial Statements. The Bancorp recognized $1 million and $3 million in residual value write-downs related to consumer automobile leases for the years ended December 31, 2009 and 

2008, respectively. The Bancorp recognized an immaterial amount of residual value write-downs related to commercial leases in 2010 and 2008 and $4 million for the year ended December 31, 2009. At December 31, 2010, the minimum future lease payments receivable for each of the years 2011 through 2015 was $860 million, $686 million, $492 million, $457 million and $251 million, respectively. 

