eTrade 2005 Annual Report Download - page 194

Table of Contents
claims prove to be untrue, the investor can require the Bank to repurchase the loan and return all loan purchase and servicing
release premiums.
•
Should any eligible mortgage loan delivered pay off prior to the receipt of the first payment, the loan purchase and servicing
release premiums shall be fully refunded.
•
Should any eligible mortgage loan delivered to an investor pay off between the receipt of the first payment and a contractually
designated period of time (typically 60—120 days from the date of purchase), the servicing release premiums shall be fully
refunded.
Management has determined that the maximum potential liability under these guarantees is $18.3 million and $38.1 million based on all
available information at December31, 2005 and December31, 2004, respectively. The current carrying amount of the liability recorded at
December31, 2005 is $0.4 million and is considered adequate based upon analysis of historical trends and current economic conditions
for these guarantees.
During the 30-year period prior to the redemption of the Floating Rate Cumulative Preferred Securities, ETBH guarantees the accrued
and unpaid distributions on these securities as well as the redemption price of the securities and certain costs that may be incurred in
liquidating, terminating or dissolving the trusts (all of which would otherwise be payable by the trusts.) At December31, 2005,
management estimated that the maximum potential liability under this arrangement is equal to approximately $312 million or the total
face value of these securities plus dividends, which may be unpaid at the termination of the trust arrangement.
NOTE 25—SEGMENT AND GEOGRAPHIC INFORMATION
In January 2005, the Company revised its financial reporting to reflect the manner in which its chief operating decision maker has
begun assessing the Company’s performance and makes resource allocation decisions. As a result, the Company now reports its
operating results in two segments, retail and institutional, rather than its former brokerage and banking segments.
Retail includes:
•
investing, trading, cash management and lending products and services to individuals; and
•
stock plan administration products and services activity
Institutional includes:
•
balance sheet management, including generation of institutional net interest spread, gain on sales of loans and securities, net
and management income;
•
market-making; and
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2006. EDGAR Online, Inc.