eTrade 2006 Annual Report Download - page 68

Enterprise interest-bearing liabilities—Liabilities such as customer deposits, repurchase agreements, other
borrowings and advances from the FHLB, certain customer credit balances and stock loan programs on which the
Company pays interest; excludes customer money market balances held by third parties.
Enterprise interest-earning assets—Consists of the primary interest-earning assets of the Company and
includes: loans receivable, mortgage-backed and available-for-sale securities, margin receivables, stock borrow
balances, and cash required to be segregated under regulatory guidelines that earn interest for the Company.
Enterprise net interest income—The taxable equivalent basis net operating interest income excluding
corporate interest income and corporate interest expense, stock conduit interest income and expense and interest
earned on customer cash held by third parties.
Enterprise net interest spread—The taxable equivalent rate earned on average enterprise interest-earning
assets less the rate paid on average enterprise interest-bearing liabilities, excluding corporate interest-earning
assets and liabilities, stock conduit and cash held by third parties.
Exchange-traded funds—A fund that invests in a group of securities and trades like an individual stock on
an exchange.
Fair value hedge—A financial derivative instrument designated in a hedging relationship that mitigates
exposure to changes in the fair value of a recognized asset or liability or a firm commitment.
Free credits—Balances held in brokerage customer accounts arising from deposits of funds and sales of
securities.
GAAP—Accounting principles generally accepted in the United States of America.
Interest-bearing banking liabilities—Liabilities such as customer deposits, repurchase agreements, other
borrowings and advances from the FHLB on which the Company pays interest.
Interest-earning banking assets—Assets such as loans receivable, mortgage-backed and available-for-sale
securities, trading securities and cash that earn interest for the Company.
Interest rate cap—An options contract which puts an upper limit on a floating exchange rate. The writer of
the cap has to pay the holder of the cap the difference between the floating rate and the upper limit when that
upper limit is breached. There is usually a premium paid by the buyer of such a contract.
Interest rate floor—An options contract which puts a lower limit on a floating exchange rate. The writer of
the floor has to pay the holder of the floor the difference between the floating rate and the lower limit when that
lower limit is breached. There is usually a premium paid by the buyer of such a contract.
Interest rate swaps—Contracts that are entered into primarily as an asset/liability management strategy to
reduce interest rate risk. Interest rate swap contacts are exchanges of interest rate payments, such as fixed-rate
payments for floating-rate payments, based on notional principal amounts.
Main Street Investor—The customer segment that includes those who execute less than 30 trades per
quarter, hold less than $50,000 in assets in combined retail accounts and have base pricing of $12.99 per trade
Margin receivables—The extension of credit to brokerage customers of the Company, where the loan is
secured with securities owned by the customer.
Mass Affluent—The customer segment that includes those who execute more than 30 trades per quarter or
hold $50,000 or more in assets in combined retail accounts and have base pricing of $9.99 per trade.
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