eTrade 2005 Annual Report Download - page 67

Table of Contents
Nonperforming Assets
We classify loans as nonperforming when full and timely collection of interest or principal becomes uncertain or when they are 90 days
past due. The following table shows the comparative data for nonperforming loans and assets (dollars in thousands):
December31,
2005
2004
2003
2002
2001
Real estate loans:
One- to four-family
$
18,067
$
11,029
$
18,094
$
22,497
$
20,595
HELOC, second mortgage and other
9,568
2,755
269
81
—
Total real estate loans
27,635
13,784
18,363
22,578
20,595
Consumer and other loans:
Recreational vehicle
2,826
1,416
1,399
1,486
—
Marine
873
908
1,067
94
—
Automobile
448
826
1,602
2,277
91
Credit card
2,858
2,999
2,147
—
—
Other
14
22
16
53
—
Total consumer and other loans
7,019
6,171
6,231
3,910
91
Total nonperforming loans, net
34,654
19,955
24,594
26,488
20,686
REO and other repossessed assets, net
6,555
5,367
6,690
6,723
3,328
Total nonperforming assets, net
$
41,209
$
25,322
$
31,284
$
33,211
$
24,014
Total nonperforming loans, net as a percentage of total
loans, net
0.18
%
0.17
%
0.27
%
0.36
%
0.26
%
Total allowance for loan losses as a percentage of total
nonperforming loans, net
182.62
%
238.94
%
153.89
%
104.45
%
96.07
%
We expect that the amount of nonperforming loans will change due to portfolio growth, portfolio seasoning and resolution through
collections, sales or charge-offs. The performance of any loan can be affected by external factors, such as economic conditions, or
factors particular to a borrower.
During 2005, our nonperforming assets, net increased $15.9 million, or 62.7%, from $25.3 million at December31, 2004. The increase is
attributed to an increase in nonperforming real estate loans of $13.9 million. The overall growth in the real estate loan portfolio to $15.3
billion from $7.5 billion at December31, 2005 and 2004, respectively is contributing to the higher level of nonperforming assets. The
increase in REO and other repossessed assets, net was due to the timing of RV and marine repossession sales and only a slight
increase in real estate related foreclosures during 2005. The increase in nonperforming loans has not resulted in significantly higher
charge-offs in 2005. Our portfolio quality has not shown significant signs of deterioration; however, the overall level of nonperforming
assets has increased as a result of this volume.
If our nonperforming loans at December31, 2005, had been performing in accordance with their terms, we would have recorded
additional interest income of approximately $0.8 million during 2005. During 2005, we recognized $1.0 million in interest on loans that
were in nonperforming status at December31, 2005.
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2006. EDGAR Online, Inc.