Other Assets and Liabilities

Other Assets

Other assets at March 31, 2015 and December 31, 2014, are summarized in the following table.



(In Thousands)	March 31, 2015		December 31, 2014
Margin receivable	$	79,760	$	65,374
Investment receivable	31,578		1,103
FHLBC stock	28,434		10,688
Pledged collateral	10,265		9,927
Guarantee asset	6,118		7,201
Income tax receivables	5,786		175
REO	5,305		4,391
Deposits	5,000		5,000
Prepaid expenses	2,816		3,372
Fixed assets and leasehold improvements ⁽¹⁾	3,868		3,008
Other	4,062		3,657
Total Other Assets	$	182,992	$	113,896


(1)	Fixed assets have a basis of $6 million and accumulated depreciation of $4 million at March 31, 2015.

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities at March 31, 2015 and December 31, 2014 are summarized in the following table.



(In Thousands)	March 31, 2015		December 31, 2014
Margin payable	$	15,007	$	6,455
Unsettled trades	11,050		—
Accrued compensation	8,518		19,273
Guarantee obligation	6,917		7,201
Residential repurchase reserve	4,292		3,724
Accrued operating expenses	3,096		3,334
Legal reserve	2,000		2,000
Income tax payable	721		—
Other	8,534		10,257
Total Other Liabilities	$	60,135	$	52,244

Margin Receivable and Payable

Margin receivable and payable resulted from margin calls between us and our swap, master repurchase agreements, and warehouse facilities counterparties whereby we or the counterparty were required to post collateral.

Investment Receivable and Unsettled Trades

In accordance with our policy to record purchases and sales of securities on the trade date, if the trade and settlement of a purchase or sale crosses over a quarterly reporting period, we will record an investment receivable for sales and an unsettled trades liability for purchases. The amounts in the table above for each of these items were settled for cash subsequent to March 31, 2015.

Guarantee Asset, Pledged Collateral, and Guarantee Obligation

The pledged collateral, guarantee asset, and guarantee obligation presented in the tables above are related to the risk sharing arrangement we entered into with Fannie Mae in the fourth quarter of 2014.

All of the loans in the reference pool subject to the guarantee were originated in 2014 and at March 31, 2015, the loans had an unpaid principal balance of $957 million and an original weighted average FICO score of 762 and LTV of 75%. At March 31, 2015, 0.44% of the outstanding principal balance was 30 days or more delinquent and none of the loans were 90 days or more delinquent or in foreclosure. At March 31, 2015, the maximum potential amount of future payments we could be required to make under this obligation was $10 million and this amount was fully collateralized by assets we have transferred to a custodian and are presented as pledged collateral in the table above. We have no recourse to any third parties that would allow us to recover any amounts related to this guarantee obligation. To date we have not incurred any losses under this agreement and as of March 31, 2015, we determined no allowance for contingent losses was required.

REO

The carrying value of REO at March 31, 2015, was $5 million, which includes the net effect of $3 million related to transfers into REO during three months ended March 31, 2015, offset by $1 million of REO liquidations, and $2 million of negative market valuation adjustments. At March 31, 2015 and December 31, 2014, there were 20 and 22 REO properties, respectively, recorded on our consolidated balance sheets, all of which were owned at consolidated Sequoia entities.

See Note 15 for additional information on the legal and residential repurchase reserves.