eTrade 2009 Annual Report Download - page 54

wholesale borrowings was a result of paying down our FHLB advances and securities sold under agreements to
repurchase. Customer payables increased due to higher trading activity and net new brokerage customer
acquisition.
The increase in shareholders’ equity was due to the issuance of 620.9 million shares of common stock in
connection with our common stock offerings and the completion of our Debt Exchange along with the
subsequent conversions of the newly-issued convertible debentures into 696.6 million shares of common stock as
of December 31, 2009. The common stock issued in connection with our equity offerings combined with the
subsequent debt conversions resulted in an increase of $1.5 billion in shareholders’ equity during the year ended
December 31, 2009.
Available-for-Sale Mortgage-Backed and Investment Securities
Available-for-sale securities are summarized as follows (dollars in millions):
December 31,
Variance
2009 vs. 2008
2009 2008 Amount %
Residential mortgage-backed securities:
Agency mortgage-backed securities and
CMOs $ 8,966.9 $10,110.8 $(1,143.9) (11)%
Non-agency CMOs and other 375.1 602.4 (227.3) (38)%
Total residential mortgage-backed
securities 9,342.0 10,713.2 (1,371.2) (13)%
Investment securities 3,977.7 92.9 3,884.8 4181%
Total available-for-sale securities $13,319.7 $10,806.1 $ 2,513.6 23%
Available-for-sale securities represented 28% and 22% of total assets at December 31, 2009 and 2008,
respectively. Total available-for-sale securities increased 23% to $13.3 billion at December 31, 2009 when
compared to December 31, 2008, due primarily to the purchase of agency debentures, which increased
investment securities to $4.0 billion. This increase was partially offset by the sale of certain agency mortgage-
backed securities and CMOs. During the third quarter of 2009, we decided to reduce our interest rate risk
exposure in our available-for-sale securities portfolio. We accomplished this by reducing our position in
mortgage-backed securities and increasing our position in agency debentures, which have a lower sensitivity to
changes in interest rates when compared to mortgage-backed securities.
Loans, Net
Loans, net are summarized as follows (dollars in millions):
December 31,
Variance
2009 vs. 2008
2009 2008 Amount %
Loans held-for-sale $ 7.9 $ — $ 7.9 *
One- to four-family 10,567.1 12,979.8 (2,412.7) (19)%
Home equity 7,769.7 10,017.2 (2,247.5) (22)%
Consumer and other 1,841.3 2,298.6 (457.3) (20)%
Unamortized premiums, net 171.6 236.8 (65.2) (28)%
Allowance for loan losses (1,182.7) (1,080.6) (102.1) 9%
Total loans, net $19,174.9 $24,451.8 $(5,276.9) (22)%
* Percentage not meaningful
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