eTrade 2005 Annual Report Download - page 69

Table of Contents
In addition to the nonperforming assets in the table above, we monitor loans where a borrower’s past credit history casts doubt on the
borrower’s ability to repay a loan, whether or not the loan is delinquent (“Special Mention” loans.) Such Special Mention loans
continue to accrue interest and remain as a component of the loans receivable balance. These loans represented $127.2 million and
$71.8 million of the total loan portfolio at December31, 2005 and 2004, respectively, and are actively monitored.
Mortgage-Backed and Investment Securities Available-for-Sale
Available-for-sale securities are summarized as follows (dollars in thousands):
December31,
Variance
2005
2004
2005vs.2004
Mortgage-backed securities:
Federal National Mortgage Association
$
7,269,348
$
5,062,204
44
%
Government National Mortgage Association
2,138,270
2,710,808
(21
)
%
Collateralized mortgage obligations and other
1,015,794
1,279,057
(21
)
%
Total mortgage-backed securities
10,423,412
9,052,069
15
%
Investment securities:
Asset-backed securities
1,365,754
2,796,429
(51
)
%
Publicly traded equity securities
435,765
374,842
16
%
Other
339,807
320,478
6
%
Total investment securities
2,141,326
3,491,749
(39
)
%
Total available-for-sale securities
$
12,564,738
$
12,543,818
—
%
Available-for-sale securities represented 28% of total assets at December31, 2005 and 40% of total assets at December31, 2004. We
evaluate our portfolio of securities available-for-sale in light of changing market conditions and other factors and, where appropriate,
take steps intended to improve our overall positioning. During the period, we performed a balance sheet review and decided to
enhance the liquidity of our portfolio by reducing our securities portfolio of asset-backed securities and increasing our portfolio of
mortgage-backed securities.
As interest rates increase, the fair value of available-for-sale securities decreases and vice versa. The fair value of the portfolio will be
adversely impacted in 2006 if long-term interest rates continue to rise. Net unrealized gains and losses in available-for-sale securities
are included in shareholders’ equity as accumulated other comprehensive income or loss, net of tax.
Deposits
Deposits as of December31, 2005 and 2004 are summarized as follows (dollars in thousands):
December31,
Variance
2005
2004
2005vs.2004
Sweep deposit account
$
7,733,267
$
6,167,436
25
%
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2006. EDGAR Online, Inc.