eTrade 2009 Annual Report Download - page 90

Borrowings
Deposits represent our most significant source of funding. In addition, we borrow from the FHLB and sell
securities under repurchase agreements.
We are a member of, and own capital stock in, the FHLB system. The FHLB provides us with reserve credit
capacity and authorizes us to apply for advances based on the security of pledged home mortgages and other
assets—principally securities that are obligations of, or guaranteed by, the U.S. Government—provided we meet
certain creditworthiness standards. At December 31, 2009, our outstanding advances from the FHLB totaled
$2.3 billion at interest rates ranging from 0.33% to 5.56% and at a weighted-average rate of 3.17%.
We also raise funds by selling securities under agreements to repurchase the same or similar securities. The
counterparties to these agreements hold the securities in custody. We treat repurchase agreements as borrowings
and secure them with designated fixed- and variable-rate securities. We also participate in the Federal Reserve
Bank’s term investment option and treasury, tax and loan borrowing programs. We use the proceeds from these
transactions to meet our cash flow or asset/liability matching needs.
The following table sets forth information regarding the weighted-average interest rates and the highest and
average month-end balances of our borrowings (dollars in millions):
Ending
Balance
Weighted-
Average
Rate(1)
Maximum
Amount At
Month-End
Yearly Weighted -Average
Balance Rate
At or for the year ended December 31, 2009:
FHLB advances $2,303.6 3.17% $ 3,903.6 $ 2,900.6 4.57%
Securities sold under agreement to
repurchase and other borrowings(2) $6,883.7 0.85% $ 7,646.7 $ 7,216.8 3.00%
At or for the year ended December 31, 2008:
FHLB advances $3,903.6 4.15% $ 6,549.1 $ 4,667.4 4.69%
Securities sold under agreement to
repurchase and other borrowings(2) $7,828.0 3.04% $ 8,153.7 $ 7,736.9 4.11%
At or for the year ended December 31, 2007:
FHLB advances $6,967.4 4.80% $ 9,959.3 $ 7,071.8 5.15%
Securities sold under agreement to
repurchase and other borrowings(2) $9,372.0 5.11% $14,593.9 $12,261.1 5.25%
(1) Excludes hedging costs.
(2) Excludes other borrowings of the parent company of $1.6 million, $3.4 million and $39.8 million at December 31, 2009, 2008 and 2007,
respectively, which do not generate operating interest expense. These liabilities generate corporate interest expense.
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