eTrade 2009 Annual Report Download - page 94

Organic—Business related to new and existing customers as opposed to acquisitions.
OTS—Office of Thrift Supervision.
OTTI—Other-than-temporary impairment.
Principal transactions—Transactions that primarily consist of revenue from market-making activities.
QSPEs—Qualifying special-purpose entities.
Real estate owned (“REO”) and other repossessed assets—Ownership of real property by the Company,
generally acquired as a result of foreclosure or repossession.
Recovery—Cash proceeds received on a loan that had been previously charged off.
Repurchase agreement—An agreement giving the seller of an asset the right or obligation to buy back the
same or similar securities at a specified price on a given date. These agreements are generally collateralized by
mortgage-backed or investment-grade securities.
Retail deposits—Balances of customer cash held at the Bank; excludes brokered certificates of deposit.
Return on average total assets—Annualized net income divided by average assets.
Return on average total shareholders’ equity—Annualized net income divided by average shareholders’
equity.
Risk-weighted assets—Primarily computed by the assignment of specific risk-weightings assigned by the
OTS to assets and off-balance sheet instruments for capital adequacy calculations. This calculation is for
E*TRADE Bank only.
SEC—Securities and Exchange Commission.
Special mention loans—loans where a borrower’s past credit history casts doubt on their ability to repay a
loan. Loans are classified as special mention when loans are between 30 and 89 days past due.
S&P—Standard & Poor’s.
Sweep deposit accounts—Accounts with the functionality to transfer brokerage cash balances to and from a
FDIC insured money market account at the banking subsidiaries.
Sub-prime—Defined as borrowers with FICO scores less than 620 at the time of origination.
Taxable equivalent interest adjustment—The operating interest income earned on certain assets is
completely or partially exempt from federal and/or state income tax. As such, these tax-exempt instruments
typically yield lower returns than a taxable investment. To provide more meaningful comparison of yields and
margins for all interest-earning assets, the interest income earned on tax exempt assets is increased to make it
fully equivalent to interest income on other taxable investments. This adjustment is done for the analytic
purposes in the net enterprise interest income/spread calculation and is not made on the consolidated statement
loss, as that is not permitted under GAAP.
Tier 1 capital—Adjusted equity capital used in the calculation of capital adequacy ratios at E*TRADE Bank
as required by the OTS. Tier 1 capital equals: total shareholder’s equity at E*TRADE Bank, plus/(less)
unrealized losses (gains) on available-for-sale securities and cash flow hedges, less deferred tax assets, goodwill
and certain other intangible assets.
Troubled Debt Restructuring (“TDR”)—A loan modification that involves granting an economic concession
to a borrower who is experiencing financial difficulty.
91