eTrade 2000 Annual Report Download - page 99

similar remaining maturities.
Brokered callable certificates of deposit —Fair value is estimated by discounting future cash flows at the currently offered rates for
deposits of similar remaining maturities.
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Advances from the FHLB of Atlanta —For adjustable rate advances, fair value is estimated at carrying value. For fixed rate advances,
fair value is estimated by discounting future cash flows at the currently offered rates for fixed-rate advances of similar remaining
maturities.
Securities sold under agreements to repurchase —Fair value is estimated using carrying value. The interest rate on the repurchase
arrangements adjust on a semiannual basis.
Subordinated notes— For subordinated notes, fair value is estimated using quoted market prices.
FHLB stock —Cost considered to be a reasonable estimate at fair market value because the FHLB has historically redeemed securities
at fair value.
Off-balance sheet instruments —The fair value of interest rate exchange agreements is the net cost to the Company to terminate the
agreement as determined from quoted market prices.
Commitments to purchase loans —The fair value is estimated value of all outstanding “failure to deliver” contract clauses, generally
equal to 0.25% of the applicable outstanding loans.
The fair value of financial instruments whose estimated fair values were different than carrying value at year end is as follows (in
thousands):
September 30, 2000 September 30, 1999
Carrying Value Fair Value Carrying Value Fair Value
Assets
Loans receivable-net $ 4,172,754 $ 4,188,206 $ 2,154,509 $ 2,075,676
Interest rate caps $ 14,935 $ 14,891 $ 19,388 $ 35,246
Equity method and other investments $ 140,349 $ 333,506 $ 106,505 $ 106,505
Liabilities
Banking deposits $ 4,630,068 $ 4,643,480 $ 2,095,584 $ 2,083,136
Brokered callable certificates of deposit $ 91,733 $ 92,165 $ 67,098 $ 66,042
Fixed rate FHLB Advances $ 400,000 $ 402,348 $ 200,000 $ 198,488
Subordinated notes $ 650,000 $ 597,188 $ — $ —
Off-balance sheet instruments $ (30,540 ) $ (39,191 ) $ — $ 4,844
Commitments to purchase loans $ — $ 130 $ — $ 72
23. SEGMENT AND GEOGRAPHIC INFORMATION
Segment Information
With the expansion of its business during fiscal 2000, the Company has separated its financial services into four major categories: 1)
domestic retail brokerage, 2) banking, 3) global and institutional, and 4) asset gathering and other. Domestic retail brokerage is
comprised of the activities of the Company’ s wholly-owned subsidiary, E*TRADE Securities, which offers domestic retail brokerage
services online, by touch-tone telephone, and direct modem access. Banking is comprised of the activities of ETFC, the holding
company of the Bank, offering a wide range of Federal Deposit Insurance Corporation (“FDIC”)-insured and other banking products,
and E*TRADE Access which operates a nationwide network of ATMs. Global and institutional includes the activities of TIR, which
provides services primarily to institutional investors, VERSUS, which provides both retail and institutional services, and international
affiliates which provide services primarily to retail investors. Asset gathering and other includes mutual fund operations, the Business
Solutions Group (“BSG”), eInvesting, and other services focused on retirement/401(k) programs, college savings plans, delivery of
electronic advice and money management, tiered product offerings and activities generated from corporate operations. As the asset
gathering and other operations business represent emerging activities which are not material to the consolidated results for segment
reporting purposes, management has aggregated asset gathering and other with domestic retail brokerage to form one of three
2002. EDGAR Online, Inc.