eTrade 2001 Annual Report Download - page 168

Subordinated notes— Fair value is estimated using quoted market prices.
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FHLB stock —Cost is considered to be a reasonable estimate of fair value because the FHLB has historically redeemed these securities
at cost.
Financial derivatives and off-balance instruments —The fair value of financial derivatives and off-balance sheet instruments is the
amount the Company would pay or receive to terminate the agreement as determined from quoted market prices.
Commitments to purchase and originate loans —The fair value is estimated by calculating the net present value of the anticipated cash
flows associated with interest rate lock commitments (IRLC’ s).
The fair value of financial instruments whose estimated fair values were different than their carrying values is summarized below (in
thousands):
December 31, 2001 September 30, 2000
Carrying Value FairValue Carrying Value Fair Value
Assets
Loans receivable—net $ 8,010,457 $ 8,012,591 $ 4,172,754 $ 4,188,206
Equity method and other investments $ 82,744 $ 138,760 $ 140,349 $ 333,506
Liabilities
Banking deposits $ 8,082,859 $ 8,178,159 $ 4,721,801 $ 4,735,645
Fixed rate FHLB Advances $ 906,300 $ 906,300 $ 400,000 $ 402,348
Subordinated notes $ 760,250 $ 728,617 $ 650,000 $ 597,188
27.SEGMENT AND GEOGRAPHIC INFORMATION
Segment Information
With the expansion of its business during fiscal 2000, the Company separated its financial services into four major categories: (1)
Domestic Retail Brokerage, (2) Banking, (3) Global and Institutional and (4) Wealth Management and Other. Domestic Retail
Brokerage is comprised of the activities of the Company’ s wholly-owned subsidiary, E*TRADE Securities, which offers domestic
retail brokerage services online, by touch-tone telephone, direct modem access, Web Street, Inc, also a provider of online brokerage
services, and Dempsey, which offers market-making services. Banking is comprised of the activities of ETFC, the holding company of
the Bank, offering a wide range of FDIC-insured and other banking products, E*TRADE Access which operates a nationwide network
of ATMs, and E*TRADE Mortgage, provider of mortgage lending services. Global and Institutional includes the activities of
E*TRADE Institutional, which provides services primarily to institutional investors, E*TRADE Technologies, which provides both
retail and institutional services, and international affiliates which provide services primarily to retail investors. Wealth Management
and Other includes mutual fund operations, the E*TRADE Business Solutions Group, Inc. (“BSG”), eInvesting, and other services
focused on retirement and 401(k) rollover programs, college savings plans, delivery of electronic advice and money management,
tiered product offerings and activities generated from corporate operations. As the Wealth Management and Other operations business
represent emerging activities which are not material to the consolidated results and has characteristics comparable to the offerings of
other retail brokerage firms, management has aggregated Wealth Management and Other with Domestic Retail Brokerage to form one
2002. EDGAR Online, Inc.