eTrade 2012 Annual Report Download - page 137
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The following table presents a roll forward of the credit loss component of the amortized cost of debt
securities that have noncredit loss recognized in other comprehensive income (loss) and credit loss recognized in
earnings for the years ended December 31, 2012, 2011 and 2010 (dollars in thousands):
Year Ended December 31,
2012 2011 2010
Credit loss balance, beginning of period $202,945 $188,038 $150,372
Additions:
Initial credit impairment 987 61 1,642
Subsequent credit impairment 15,938 14,846 36,024
Securities sold (33,148) — —
Credit loss balance, end of period $186,722 $202,945 $188,038
Within the securities portfolio, the highest concentration of credit risk is the non-agency CMO portfolio. As
of December 31, 2012, the Company held approximately $179.9 million in amortized cost of non-agency CMO
securities that had been other-than-temporarily impaired as a result of deterioration in the expected credit
performance of the underlying loans in the securities. The following table shows the components of net
impairment for the periods presented (dollars in thousands):
Year Ended December 31,
2012 2011 2010
Other-than-temporary impairment (“OTTI”) $(19,799) $ (9,190) $(41,510)
Less: noncredit portion of OTTI recognized into (out of) other
comprehensive income (loss) (before tax) 2,874 (5,717) 3,840
Net impairment $(16,925) $(14,907) $(37,670)
Gains on Loans and Securities, Net
The detailed components of the gains on loans and securities, net line item on the consolidated statement of
income (loss) for the years ended December 31, 2012, 2011 and 2010 are as follows (dollars in thousands):
Year Ended December 31,
2012 2011 2010
Gains on loans, net $ 588 $ 146 $ 6,266
Gains on securities, net
Gains on available-for-sale securities and other investments 212,323 124,360 160,952
Losses on available-for-sale securities and other investments (5,059) — (187)
Gains (losses) on trading securities, net (306) (1,883) 162
Hedge ineffectiveness (7,180) (2,390) (981)
Gains on securities, net 199,778 120,087 159,946
Gains on loans and securities, net $200,366 $120,233 $166,212
134