NOTE 3 - Net Investment in Leases and Loans

Net investment in leases and loans consists of the following:

At December 31, 2013, a total of $15.0 million of minimum lease payments receivable is assigned as collateral for borrowings.

Initial direct costs net of fees deferred were $10.3 million and $9.3 million as of December 31, 2013 and December 31, 2012, respectively, are netted in unearned income and will be amortized to income using the effective interest method. At December 31, 2013 and December 31, 2012, $22.7 million and $23.8 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 December 31, 2013:

Income recognition is discontinued 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 December 31, 2013 and December 31, 2012, the Company maintained total finance receivables which were on a non-accrual basis of $1.7 million and $1.4 million, respectively. As of December 31, 2013 and December 31, 2012, the Company had total finance receivables in which the terms of the original agreements had been renegotiated in the amount of $0.8 million and $0.9 million, respectively. (See Note 5 for additional asset quality information.)