Discover 2010 Annual Report Download - page 119

One Year
or
Less
After One
Year
Through
Five
Years
After
Five
Years
Through
Ten
Years
After Ten
Years Total
Available-for-sale investment securities(1)
U.S. Treasury securities ....................................................................................................... 0.31% 0.82% 0.00% 0.00% 0.75%
U.S. government agency securities ........................................................................................ 0.53% 0.78% 0.00% 0.00% 0.75%
Credit card asset-backed securities of other issuers .................................................................. 1.58% 3.00% 0.00% 0.00% 1.96%
Corporate debt securities..................................................................................................... 0.46% 0.62% 0.00% 0.00% 0.60%
Total available-for-sale investment securities ........................................................................ 1.12% 0.93% 0.00% 0.00% 0.98%
Held-to-maturity investment securities
U.S. Treasury securities ....................................................................................................... 0.16% 0.00% 0.00% 0.00% 0.16%
State and political subdivisions of states ................................................................................. 0.00% 4.27% 5.42% 4.69% 4.75%
Residential mortgage-backed securities.................................................................................. 0.00% 0.00% 0.00% 5.52% 5.52%
Other debt securities........................................................................................................... 4.17% 3.65% 6.16% 3.47% 4.10%
Total held-to-maturity investment securities .......................................................................... 2.28% 3.90% 5.62% 4.75% 4.72%
(1) The weighted average yield for available-for-sale investment securities is calculated based on the amortized cost.
The following table presents interest and dividends on investment securities (dollars in thousands):
For the Years Ended
November 30,
2010 2009 2008
Taxable interest....................................................................................................................................................... $23,857 $65,959 $48,787
Tax exempt interest .................................................................................................................................................. 2,365 2,735 2,489
Dividends............................................................................................................................................................... 0 0 69
Total income from investment securities .................................................................................................................... $26,222 $68,694 $51,345
6. Loan Receivables
Loan receivables consist of the following (dollars in thousands):
November 30,
2010 2009
Loans held for sale(1).................................................................................................................................................... $ 788,101 $ 0
Loan portfolio:
Credit card loans:
Discover Card(2) (3) ................................................................................................................................................ 44,904,267 19,826,153
Discover Business Card ......................................................................................................................................... 252,727 404,149
Total credit card loans ....................................................................................................................................... 45,156,994 20,230,302
Other consumer loans:
Personal loans ..................................................................................................................................................... 1,877,633 1,394,379
Federal student loans(4) .......................................................................................................................................... 0 1,352,587
Private student loans(4) ........................................................................................................................................... 999,322 579,679
Other ................................................................................................................................................................. 14,363 68,137
Total other consumer loans ................................................................................................................................. 2,891,318 3,394,782
Total loan portfolio ............................................................................................................................................ 48,048,312 23,625,084
Total loan receivables ........................................................................................................................................ 48,836,413 23,625,084
Allowance for loan losses.......................................................................................................................................... (3,304,118) (1,757,899)
Net loan receivables.......................................................................................................................................... $45,532,295 $21,867,185
(1) Amount represents the remaining federal student loans at November 30, 2010 which includes $500.2 million of student loan receivables, which, along with accrued interest of $1.2 million, are
pledged as collateral against a long-term borrowing.
(2) Amounts include $19.5 billion underlying investors’ interest in trust debt at November 30, 2010, and $14.9 billion and $9.9 billion in seller’s interest at November 30, 2010 and 2009,
respectively. See Note 7: Credit Card Securitization Activities for further information.
(3) Upon adoption of Statements No. 166 and 167, the Company consolidated $22.3 billion of securitized loan receivables, reclassified $4.6 billion from investment securities to loan receivables and
recorded a $2.1 billion allowance for loan losses. See Note 2: Change in Accounting Principle for more information.
(4) Federal student loans are guaranteed by the U.S. Department of Education. Private student loans are made directly to the student with no government guarantees.
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