eTrade 2004 Annual Report Download - page 16

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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 incurred 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):
10
2004 Compared to 2003
Increase (Decrease) Due To
2003 Compared to 2002
Increase (Decrease) Due To
Volume
Rate
Total
Volume
Rate
Total
Interest
-
earning banking assets:
Loans receivable, net
$
117,505
$
(10,960
)
$
106,545
$
8,691
$
(102,641
)
$
(93,950
)
Mortgage
-
backed and related available
-
for
-
sale securities
63,159
12,499
75,658
81,747
(52,730
)
29,017
Available
-
for
-
sale investment securities
42,058
(5,360
)
36,698
46,934
(6,233
)
40,701
Trading securities
7,167
(634
)
6,533
8,561
470
9,031
Other
(2,256
)
1,326
(930
)
387
(2,126
)
(1,739
)
Total interest-earning banking assets
(1)
227,633
(3,129
)
224,504
(163,260
)
(16,940
)
Interest
-
bearing banking liabilities:
Retail deposits
(16,844
)
(72,665
)
(89,509
)
1,929
(74,642
)
(72,713
)
Brokered certificates of deposit
(177
)
(798
)
(975
)
4,455
(283
)
4,172
Repurchase agreements and other borrowings
65,125
33,990
99,115
66,875
(56,796
)
10,079
FHLB advances
10,122
(2,646
)
7,476
(2,001
)
(12,372
)
(14,373
)
Total interest
-
bearing banking liabilities
58,226
(42,119
)
16,107
71,258
(144,093
)
(72,835
)
Change in net interest income
$
169,407
$
38,990
$
208,397
$
75,062
$
(19,167
)
$
55,895
(1)
Amount includes a taxable equivalent increase in interest income in 2004, 2003 and 2002 of $7.0 million, $2.4 million and $0.3 million, respectively.