eTrade 2003 Annual Report Download - page 20

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Table of Contents
Index to Financial Statements
Our allowance for loan losses at December 31, 2003 totaled $37.8 million or 0.46% of total loans held-for-investment and at December
31, 2002 totaled $27.7 million or 0.50% of total loans held-for-investment. Based on the loan portfolio’s historical loss experience and our
estimate of projected losses inherent in the loan portfolio, we believe our allowance for loan losses during the reported periods was appropriate
and earnings could be adversely affected, if the actual loan losses realized by the Company were to significantly exceed the amounts assumed
by management in its determination of the allowance for loan losses. The following table provides an analysis of the Bank’s allowance for loan
losses during the past five years (in thousands):
12
Year Ended December 31,
Three Months
Ended
December 31,
2000
Year Ended
September 30,
2003
2002
2001
2000
1999
Allowance for loan losses, beginning of year
$
27,666
$
19,874
$
12,565
$
10,930
$
7,161
$
4,715
Charge
-
offs:
Real estate loans
(364
)
(460
)
(94
)
(12
)
(240
)
(400
)
Home equity lines of credit and second mortgage loans
(75
)
—
(
79
)
—
(
13
)
(56
)
RV loans
(20,341
)
(3,456
)
—
—
—
—
Automobile loans
(22,695
)
(28,046
)
(5,395
)
—
—
—
Marine loans
(7,369
)
—
—
—
—
—
Credit card loans
(919
)
—
—
—
—
—
Other loans
(1,971
)
—
—
—
—
(
2
)
Total charge
-
offs
(53,734
)
(31,962
)
(5,568
)
(12
)
(253
)
(458
)
Recoveries:
Real estate loans
223
30
29
—
19
38
Home equity lines of credit and second mortgage loans
—
—
4
—
—
79
RV loans
9,738
—
—
—
—
—
Automobile loans
8,335
10,632
669
—
—
—
Marine loans
3,806
—
—
—
—
—
Credit card loans
1
—
—
—
—
—
Other loans
541
—
—
—
—
4
Total recoveries
22,644
10,662
702
—
19
121
Net charge
-
offs
(31,090
)
(21,300
)
(4,866
)
(12
)
(234
)
(337
)
Allowance acquired through acquisitions(1)
2,748
14,428
4,699
—
—
—
Provision for loan losses
38,523
14,664
7,476
1,647
4,003
2,783
Allowance for loan losses, end of year
$
37,847
$
27,666
$
19,874
$
12,565
$
10,930
$
7,161
Net charge
-
offs to average loans outstanding
0.41
%
0.28
%
0.07
%
0.00
%
0.01
%
0.03
%
(1)
Acquisition of credit card portfolio in 2003, E*TRADE Consumer Finance loan portfolio in 2002 and automobile portfolio in 2001.