eTrade 2008 Annual Report Download - page 32

The following table presents enterprise average balance sheet data and enterprise income and expense data for our operations, as well as the related net
interest spread, yields and rates and has been prepared on the basis required by the SEC’s Industry Guide 3, “Statistical Disclosure by Bank Holding
Companies” (dollars in thousands):
Year Ended December 31,
2008 2007 2006
Average
Balance
Operating
Interest
Inc./Exp.
Average
Yield /
Cost
Average
Balance
Operating
Interest
Inc./Exp.
Average
Yield /
Cost
Average
Balance
Operating
Interest
Inc./Exp.
Average
Yield /
Cost
Enterprise interest-earning assets:
Loans, net(1) $27,761,938 $1,587,838 5.72% $30,887,047 $1,986,034 6.43% $22,193,663 $1,364,873 6.15%
Margin receivables 5,833,592 278,213 4.77% 7,033,559 502,149 7.14% 6,531,533 464,540 7.11%
Available-for-sale mortgage-backed securities 9,455,415 435,926 4.61% 12,425,346 650,891 5.24% 11,543,546 590,512 5.12%
Available-for-sale investment securities 141,176 9,359 6.63% 3,946,334 259,898 6.59% 2,886,506 183,125 6.34%
Trading securities 350,500 23,632 6.74% 110,829 11,507 10.38% 132,454 11,388 8.60%
Cash and cash equivalents(2) 2,546,275 60,550 2.38% 718,298 34,391 4.79% 927,650 42,039 4.53%
Stock borrow and other 762,497 53,669 7.04% 960,124 69,262 7.21% 661,367 44,878 6.79%
Total enterprise interest-earning assets(3) 46,851,393 2,449,187 5.22% 56,081,537 3,514,132 6.27% 44,876,719 2,701,355 6.02%
Non-operating interest-earning assets(4) 5,002,291 5,417,418 5,038,884
Total assets $51,853,684 $61,498,955 $49,915,603
Enterprise interest-bearing liabilities:
Retail deposits:
Money market and savings accounts $11,635,073 369,925 3.18% $10,565,100 464,084 4.39% $ 5,806,811 231,602 3.99%
Sweep deposit accounts 9,904,692 39,971 0.40% 11,044,185 102,131 0.92% 10,393,857 87,714 0.84%
Certificates of deposit 3,258,954 137,394 4.22% 4,509,699 224,649 4.98% 3,851,463 183,828 4.77%
Checking accounts 907,957 19,665 2.17% 390,077 5,689 1.46% 355,403 3,347 0.94%
Brokered certificates of deposit 976,097 48,893 5.01% 512,485 25,402 4.96% 535,835 24,726 4.61%
Customer payables 4,288,776 29,649 0.69% 5,707,211 67,485 1.18% 5,882,532 62,049 1.05%
Repurchase agreements and other borrowings 7,736,906 318,291 4.11% 12,261,145 643,382 5.25% 10,980,134 549,085 5.00%
Federal Home Loan Bank (“FHLB”)
advances 4,667,436 218,940 4.69% 7,071,762 364,442 5.15% 3,488,184 165,545 4.75%
Stock loan and other 1,075,551 18,615 1.73% 1,298,312 39,739 3.06% 1,067,726 34,317 3.21%
Total enterprise interest-bearing liabilities 44,451,442 1,201,343 2.70% 53,359,976 1,937,003 3.63% 42,361,945 1,342,213 3.17%
Non-operating interest-bearing liabilities(5) 4,706,266 4,002,648 3,756,673
Total liabilities 49,157,708 57,362,624 46,118,618
Total shareholders’ equity 2,695,976 4,136,331 3,796,985
Total liabilities and shareholders’
equity $51,853,684 $61,498,955 $49,915,603
Excess of enterprise interest-earning assets
over enterprise interest-bearing liabilities/
Enterprise net interest income/Spread $ 2,399,951 $1,247,844 2.52% $ 2,721,561 $1,577,129 2.64% $ 2,514,774 $1,359,142 2.85%
Reconciliation from enterprise net interest income to net operating interest income (dollars in thousands):
Year Ended December 31,
2008 2007 2006
Enterprise net interest income(6) $1,247,844 $1,577,129 $1,359,142
Taxable equivalent interest adjustment (9,120) (30,867) (19,297)
Customer cash held by third parties and other(7) 29,282 37,337 45,670
Net operating interest income $1,268,006 $1,583,599 $1,385,515
(1) Nonaccrual loans are included in the respective average loan balances. Income on such nonaccrual loans is recognized on a cash basis.
(2) Includes segregated cash balances.
(3) Amount includes a taxable equivalent increase in operating interest income of $9.1 million, $30.9 million and $19.3 million for 2008, 2007 and 2006,
respectively.
(4) Non-operating interest-earning assets consist of property and equipment, net, goodwill, other intangibles, net and other assets that do not generate
operating interest income. Some of these assets generate corporate interest income.
(5) Non-operating interest-bearing liabilities consist of corporate debt, accounts payable, accrued and other liabilities that do not generate operating interest
expense. Some of these liabilities generate corporate interest expense.
(6) Enterprise net interest income is 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. Management believes this non-GAAP
measure is useful to analysts and investors as it is a measure of the net operating interest income generated by our operations.
(7) Includes interest earned on average customer assets of $3.2 billion, $3.9 billion and $3.6 billion for the years ended December 31, 2008, 2007 and 2006,
respectively, held by parties outside E*TRADE Financial, including third party money market funds and sweep deposit accounts at unaffiliated financial
institutions. Other consists of net operating interest earned on average stock conduit assets of $1.3 million and $303.5 million for the years ended
December 31, 2007 and 2006, respectively. There were not any stock conduit assets at December 31, 2008.
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