eTrade 2011 Annual Report Download - page 132

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Nonperforming Loans
The Company classifies loans as nonperforming when they are no longer accruing interest, which includes
loans that are 90 days past due and TDRs that are on nonaccrual status for all classes of loans. If the Company’s
nonperforming loans at each year end had been performing in accordance with their terms, the Company would
have recorded interest income of approximately $92.5 million, $121.5 million and $108.7 million for the years
ended December 31, 2011, 2010 and 2009, respectively. During 2011, the Company recognized $15.3 million in
interest on loans that were in nonperforming status at December 31, 2011. At December 31, 2011 and 2010 there
were no commitments to lend additional funds to any of these borrowers.
Allowance for Loan Losses
The following table provides a roll-forward by loan portfolio of the allowance for loan losses for the years
ended December 31, 2011, 2010 and 2009 (dollars in thousands):
Year Ended December 31, 2011
One- to
Four- Family
Home
Equity
Consumer
and Other Total
Allowance for loan losses, beginning of period $ 389,594 $ 576,089 $ 65,486 $ 1,031,169
Provision for loan losses 132,655 286,396 21,563 440,614
Charge-offs (228,857) (457,302) (59,290) (745,449)
Recoveries 20,795 58,105 17,582 96,482
Charge-offs, net (208,062) (399,197) (41,708) (648,967)
Allowance for loan losses, end of period $ 314,187 $ 463,288 $ 45,341 $ 822,816
Year Ended December 31, 2010
One- to
Four- Family
Home
Equity
Consumer
and Other Total
Allowance for loan losses, beginning of period $ 489,887 $ 620,067 $ 72,784 $ 1,182,738
Provision for loan losses 202,302 529,461 47,649 779,412
Charge-offs (302,595) (600,035) (80,359) (982,989)
Recoveries — 26,596 25,412 52,008
Charge-offs, net (302,595) (573,439) (54,947) (930,981)
Allowance for loan losses, end of period $ 389,594 $ 576,089 $ 65,486 $ 1,031,169
Year Ended December 31, 2009
One- to
Four- Family
Home
Equity
Consumer
and Other Total
Allowance for loan losses, beginning of period $ 185,163 $ 833,835 $ 61,613 $ 1,080,611
Provision for loan losses 669,043 737,192 91,877 1,498,112
Charge-offs (364,319) (966,259) (111,609) (1,442,187)
Recoveries — 15,299 30,903 46,202
Charge-offs, net (364,319) (950,960) (80,706) (1,395,985)
Allowance for loan losses, end of period $ 489,887 $ 620,067 $ 72,784 $ 1,182,738
Impaired Loans—Troubled Debt Restructurings
The Company has a loan modification program that focuses on the mitigation of potential losses in the loan
portfolio. The Company considers modifications in which it made an economic concession to a borrower
129