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Table of Contents
Index to Financial Statements
Interest expense on deposits in the past three years is summarized as follows (in thousands):
Accrued interest payable on these deposits, which is included in accounts payable, accrued and other liabilities, was $2.4 million at
December 31, 2003 and $6.0 million at December 31, 2002.
E*TRADE FINANCIAL Sweep Deposit Account Relationship
Year Ended December 31,
2003
2002
2001
Money market accounts
$
73,620
$
89,082
$
65,047
Sweep deposit accounts
1,313
—
—
Certificates of deposit
185,574
244,140
351,133
Brokered certificates of deposit
10,147
5,975
1,810
Passbook savings accounts
14
7
12
Checking accounts
2,496
2,501
4,872
Total
$
273,164
$
341,705
$
422,874
In 2003, the Company introduced the E*TRADE FINANCIAL Sweep Deposit Account (“SDA”). The SDA is a Sweep product that
transfers Brokerage Segment customer balances, previously held in money market funds not on our balance sheets, to the Banking Segment.
The Bank holds these funds as customer deposits in FDIC-insured NOW and money market deposit accounts. The Banking Segment pays the
Brokerage Segment a negotiated fee on the average SDA balances, which is eliminated in consolidation.
NOTE 14—SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND OTHER BORROWINGS BY BANK
SUBSIDIARY
The maturities of borrowings at December 31, 2003 and total borrowings at December 31, 2002 are shown below (dollars in thousands):
FHLB Advances
FHLB
Advances
Subordinated
Debentures
Repurchase
Agreements
and Other
Borrowings
Total
Weighted-
Average
Interest Rate
Due in:
2004
$
560,000
$
—
$
5,265,498
$
5,825,498
1.25
%
2005
210,000
—
100,000
310,000
2.23
%
2006
100,000
—
—
100,000
1.17
%
2007
50,000
—
—
50,000
6.96
%
2008
—
Thereafter
—
201,665
—
201,665
5.47
%
Total borrowings at December 31, 2003
$
920,000
$
201,665
$
5,365,498
$
6,487,163
Total borrowings at December 31, 2002
$
1,310,300
$
—
$
5,918,622
$
7,228,922
The Bank subsidiary had $720 million floating-rate and $200 million fixed-rate FHLB advances at December 31, 2003. The floating-rate
advances adjust quarterly based on the London InterBank Offering Rate (“LIBOR”).
The Bank is required to be a member of the FHLB System
and maintains a FHLB investment at least equal to the greater of: one percent of the unpaid principal balance of its residential mortgage loans;
one percent of 30 percent of its total assets; or one-twentieth of its outstanding FHLB advances. In addition, the Bank must maintain qualified
collateral equal to 85 to 90 percent of its advances, depending on the collateral type. These advances are secured with the Bank’s specific
mortgage loan collateral and mortgage-backed securities. The one-
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