eTrade 2001 Annual Report Download - page 64

Other borrowings 103,498 (8,591 ) 94,907 50,703 15,679 66,382
Subordinated debt, net — — — (2,359 ) — (2,359 )
Total interest-bearing banking
liabilities
322,096 (7,620 ) 314,476 197,235 38,871 236,106
Change in net interest income $ 94,504 $ (51,458 ) $ 43,046 $ 62,271 $ 5,952 $ 68,223
Global and Institutional
Global and institutional revenues decreased 8% from fiscal 2000 to fiscal 2001 and increased 34% from fiscal 1999 to fiscal 2000.
Global and institutional revenues are comprised primarily of revenues from E*TRADE Institutional and VERSUS Technologies, Inc.,
now E*TRADE Technologies, Inc. (“E*TRADE Technologies”) operations, as well as retail brokerage-related transaction revenue
from our international subsidiaries. The decrease in fiscal 2001 is primarily attributable to the decrease in net new global and
institutional accounts as well as a slowdown in the institutional business due to global market conditions in the year ended December
31, 2001. The increase in fiscal 2000 is primarily due to strong market conditions in Asia and Europe and the emerging on-line
brokerage market in Canada during fiscal year 2000. The acquisition of several of our international affiliates in fiscal 2000 also
resulted in increasing global and institutional revenues in fiscal 2000 as compared to fiscal 1999. E*TRADE Institutional’ s revenues
are largely comprised of commissions from institutional transaction executions. For fiscal 2001, approximately 47.4% of E*TRADE
Institutional’ s transactions were from outside the U.S. and approximately 66.4% were from cross-border transactions.
57
Table of Contents
Gains on sales of originated loans
Gains on the sales of originated loans of $95.5 million in fiscal year 2001 reflect the revenues contributed by E*TRADE Mortgage.
Revenues generated from E*TRADE Mortgage have been combined with our revenues since February 1, 2001, the date of acquisition.
Gain on Bank loans held for sale and other securities, net
Gains on sales of Bank loans held for sale and other securities, consists primarily of gains on sales of bank loans and mortgage-backed
securities of $32.2 million and $57.4 million in fiscal 2001; $3.6 million and $3.9million in fiscal 2000; and $2.8 million and $3.7
million in fiscal 1999, respectively. The total increased 793% from fiscal 2000 to fiscal 2001 and 36% from fiscal 1999 to fiscal 2000.
The increases in fiscal 2001 compared to fiscal year 2000 are due to a significant increase in sales of the Bank loans purchased from
correspondents and sales of available-for-sale securities in connection with the asset portfolio restructuring. The Bank actively chose
to reduce its investment in mortgage-backed securities and increase its investments in loans receivable, which carry a higher rate of
return.
Other
Other revenue increased 72% from fiscal 2000 to fiscal 2001 and 189% from fiscal 1999 to fiscal 2000. The increase in other revenues
in both years primarily reflects the ATM fees recorded by E*TRADE Access since its acquisition in May 2000 and the implementation
of a quarterly maintenance fee for low-balance, inactive accounts in December 2000. For purposes of the quarterly maintenance fee, an
inactive account is one in which there have been less than two commission generating transactions in the six months prior to quarter
end. We expect to continue our policy of assessing maintenance fees for low-balance, inactive accounts. Also, contributing to the
2002. EDGAR Online, Inc.