eTrade 2003 Annual Report Download - page 13

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Table of Contents
Index to Financial Statements
Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning
banking assets and liabilities, as well as changes in average interest rates (rate). The following table shows the effect that these factors had on
the interest earned on the Company’s interest-earning banking assets and the interest expense on the Company’s interest-earning banking
liabilities. The effect of changes in volume is determined by multiplying the change in volume by the previous year’s average yield/cost.
Similarly, the effect of rate changes is calculated by multiplying the change in interest by the previous year’s volume. Changes applicable to
both volume and rate have been allocated proportionately (in thousands):
6
2003 Compared to 2002
Increase (Decrease) Due To
2002 Compared to 2001
Increase (Decrease) Due To
Volume
Rate
Total
Volume
Rate
Total
Interest
-
earning banking assets:
Loans receivable, net
$
8,691
$
(102,641
)
$
(93,950
)
$
56,604
$
(74,417
)
$
(17,813
)
Interest
-
bearing deposits
173
(655
)
(482
)
1,368
(589
)
779
Mortgage-backed and related available-for-sale
securities
81,747
(52,730
)
29,017
33,861
(80,766
)
(46,905
)
Available
-
for
-
sale investment securities
46,934
(6,233
)
40,701
(13,089
)
(17,387
)
(30,476
)
Investment in FHLB stock
214
(1,471
)
(1,257
)
583
(503
)
80
Trading securities
8,561
470
9,031
4,866
(1,720
)
3,146
Total interest
-
earning banking assets(1)
146,320
(163,260
)
(16,940
)
84,193
(175,382
)
(91,189
)
Interest
-
bearing banking liabilities:
Retail deposits
1,929
(74,642
)
(72,713
)
(10,301
)
(75,033
)
(85,334
)
Brokered certificates of deposit
4,455
(283
)
4,172
5,590
(1,425
)
4,165
FHLB advances
(2,001
)
(12,372
)
(14,373
)
(15,276
)
(6,211
)
(21,487
)
Other borrowings
66,875
(56,796
)
10,079
34,170
(74,661
)
(40,491
)
Total interest
-
bearing banking liabilities
71,258
(144,093
)
(72,835
)
14,183
(157,330
)
(143,147
)
Change in net interest income
$
75,062
$
(19,167
)
$
55,895
$
70,010
$
(18,052
)
$
51,958
(1) Amount includes a taxable equivalent increase in interest income of $2.4 million in 2003, $0.3 million in 2002 and none in 2001.