eTrade 2011 Annual Report Download - page 91

Interest rate swaps—Contracts that are entered into primarily as an asset/liability management strategy to
reduce interest rate risk. Interest rate swap contracts are exchanges of interest rate payments, such as fixed-rate
payments for floating-rate payments, based on notional principal amounts.
LIBOR—London Interbank Offered Rate. LIBOR is the interest rate at which banks borrow funds from
other banks in the London wholesale money market (or interbank market).
Long-term investor—The customer group that includes those who invest for the long term.
LTV—Loan-to-value.
NASAA—North American Securities Administrators Association.
NASDAQ—National Association of Securities Dealers Automated Quotations.
Net new customer asset flows—The total inflows to all new and existing customer accounts less total
outflows from all closed and existing customer accounts, excluding the effects of market movements in the value
of customer assets.
Net Present Value of Equity (“NPVE”)—The present value of expected cash inflows from existing assets,
minus the present value of expected cash outflows from existing liabilities, plus the expected cash inflows and
outflows from existing derivatives and forward commitments. This calculation is performed for E*TRADE Bank.
NOLs—Net operating losses.
Nonperforming assets—Assets that do not earn income, including those originally acquired to earn income
(nonperforming loans) and those not intended to earn income (REO). Loans are classified 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.
Notional amount—The specified dollar amount underlying a derivative on which the calculated payments
are based.
NYSE—New York Stock Exchange.
OCC—Office of the Comptroller of the Currency.
Operating margin—Income (loss) before other income (expense), income tax benefit and discontinued
operations.
Options—Contracts that grant the purchaser, for a premium payment, the right, but not the obligation, to
either purchase or sell the associated financial instrument at a set price during a period or at a specified date in
the future.
OTTI—Other-than-temporary impairment.
OTS—Office of Thrift Supervision.
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.
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