eTrade 2011 Annual Report Download - page 74
Download and view the complete annual report
Please find page 74 of the 2011 eTrade annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64 -
65 -
66 -
67 -
68 -
69 -
70 -
71 -
72 -
73 -
74 -
75 -
76 -
77 -
78 -
79 -
80 -
81 -
82 -
83 -
84 -
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
-
137
-
138
-
139
-
140
-
141
-
142
-
143
-
144
-
145
-
146
-
147
-
148
-
149
-
150
-
151
-
152
-
153
-
154
-
155
-
156
-
157
-
158
-
159
-
160
-
161
-
162
-
163
-
164
-
165
-
166
-
167
-
168
-
169
-
170
-
171
-
172
-
173
-
174
-
175
-
176
-
177
-
178
-
179
-
180
-
181
-
182
-
183
-
184
-
185
-
186
-
187
-
188
-
189
-
190
-
191
-
192
-
193
-
194
-
195
-
196
-
197
-
198
-
199
-
200
-
201
-
202
-
203
-
204
-
205
-
206
-
207
-
208
-
209
-
210
-
211
-
212
-
213
-
214
-
215
-
216
 |
 |
In addition to nonperforming assets, we monitor loans in which a borrower’s past credit history casts doubt
on their ability to repay a loan. We classify loans as special mention when they are between 30 and 89 days past
due. The following table shows the comparative data for special mention loans (dollars in millions):
December 31,
2011 2010
One- to four-family $294.8 $388.6
Home equity 154.6 175.6
Consumer and other loans 17.7 25.2
Total special mention loans(1) $467.1 $589.4
Special mention loans receivable as a percentage of gross loans receivable 3.55% 3.65%
(1) The decrease in special mention loans includes the impact of loan modification programs in which borrowers who were 30 to 89 days
past due were made current. Loans modified as TDRs are accounted for as nonaccrual loans at the time of modification and return to
accrual status after six consecutive payments are made in accordance with the modified terms.
The trend in special mention loan balances are generally indicative of the expected trend for charge-offs in
future periods, as these loans have a greater propensity to migrate into nonaccrual status and ultimately charge-
off. One- to four-family loans are generally secured in a first lien position by real estate assets, reducing the
potential loss when compared to an unsecured loan. Home equity loans are generally secured by real estate
assets; however, the majority of these loans are secured in a second lien position, which substantially increases
the potential loss when compared to a first lien position. The loss severity of our second lien home equity loans is
approximately 95%.
During the year ended December 31, 2011, special mention loans decreased by $122.3 million to $467.1
million and are down 53% from their peak of $1.0 billion as of December 31, 2008. This decrease was largely
due to a decrease in both one- to four-family and home equity special mention loans. While the level of special
mention loans can fluctuate significantly in any given period, we believe the continued decrease is an
encouraging sign regarding the future credit performance of the mortgage loan portfolio.
The following graph illustrates the special mention loans by quarter:
Special Mention Loans Trend
$0
$200
$100
$300
$400
$500
$600
$700
$800
$900
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
Quarter ended
Special mention loans (dollars in millions)
One- to four-family Home equity Consumer and other Total
71