eTrade 2006 Annual Report Download - page 34
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Gain on Sales of Loans and Securities, Net
Gain on sales of loans and securities, net decreased 43% to $56.0 million for 2006 compared to 2005, as
shown in the following table (dollars in thousands):
Variance
Year Ended December 31, 2006 vs. 2005
2006 2005 Amount %
Gain on sales of originated loans:
Mortgage loans $11,834 $39,161 $(27,327) (70)%
Consumer loans(1) 184 15,686 (15,502) (99)%
Gain on sales of originated loans 12,018 54,847 (42,829) (78)%
Loss on sales of loans held-for-sale, net (6,775) (1,208) (5,567) *
Gain on sales of loans, net 5,243 53,639 (48,396) (90)%
Gain on sales of securities, net 50,743 45,219 5,524 12 %
Gain on sales of loans and securities, net $55,986 $98,858 $(42,872) (43)%
*Percentage not meaningful.
(1) Consumer loans originated by our retail segment are sold to our institutional segment at an arm’s length transfer price. The gains (losses)
associated with our retail segment were reclassified to discontinued operations and the amounts related to our institutional segment
remained in continuing operations.
The decline in the total gain on sales of loans and securities, net during 2006 was due primarily to our lower
sales of mortgage and consumer loans compared to 2005. We retained a greater number of originated mortgage
loans on the balance sheet in an effort to retain the customer relationship and drive growth in net operating
interest income. The decline in gain on sales of consumer loans was also due in part to the sale of our consumer
finance business in 2005. The increase in gain on sales of securities, net resulted from higher security sales
volumes in 2006 compared to 2005.
Other Revenue
Other revenue increased 44% to $136.3 million for 2006 compared to 2005. The increases were the result of
higher payment for order flow from improved option and equity trading volumes, offset by decreases in
proprietary fund revenue relating to the closure of certain of our proprietary funds. In addition, other revenue
includes foreign exchange margin revenue, stock plan administration products revenue and other revenue
ancillary to our retail customer transactions.
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