Other Assets and Liabilities

Other assets at March 31, 2017 and December 31, 2016, are summarized in the following table.

Table 10.1 – Components of Other Assets



(In Thousands)	March 31, 2017		December 31, 2016
Margin receivable	$	83,229	$	68,038
FHLBC stock	43,393		43,393
Pledged collateral	42,916		42,875
REO	3,953		5,533
Guarantee asset	3,846		4,092
Fixed assets and leasehold improvements ⁽¹⁾	3,309		2,750
Commercial loans	2,700		2,700
Prepaid expenses	1,691		1,639
Investment receivable	712		1,068
Other	11,333		9,857
Total Other Assets	$	197,082	$	181,945


(1)	Fixed assets and leasehold improvements have a basis of $6 million and accumulated depreciation of $3 million at March 31, 2017.

Accrued expenses and other liabilities at March 31, 2017 and December 31, 2016 are summarized in the following table.

Table 10.2 – Components of Accrued Expenses and Other Liabilities



(In Thousands)	March 31, 2017		December 31, 2016
Guarantee obligations	$	21,082	$	21,668
Accrued compensation	7,923		18,830
Accrued taxes payable	6,792		525
Residential loan and MSR repurchase reserve	5,617		5,432
Margin payable	3,394		12,783
Legal reserve	2,000		2,000
Accrued operating expenses	1,489		4,493
Deferred tax liability	898		898
Current accounts payable	776		1,151
Other	1,989		4,648
Total Other Liabilities	$	51,960	$	72,428

Margin Receivable and Payable

Margin receivable and payable resulted from margin calls between us and our counterparties under derivatives, master repurchase agreements, and warehouse facilities, whereby we or the counterparty posted collateral.

FHLB Stock

In accordance with our FHLB-member subsidiary's borrowing agreement with the FHLBC, our subsidiary is required to purchase and hold stock in the FHLBC. See Note 13 for additional detail.

Guarantee Asset, Pledged Collateral, and Guarantee Obligations

The pledged collateral, guarantee asset, and guarantee obligations presented in the tables above are related to our risk sharing arrangements with Fannie Mae and Freddie Mac. In accordance with these arrangements, we are required to pledge collateral to secure our guarantee obligations. See Note 14 for additional information on our risk sharing arrangements.

Commercial Loans

At March 31, 2017, we held one commercial loan at the lower of cost or fair value with $3 million in outstanding principal balance, a carrying value of $3 million, and an estimated net fair value of $3 million.

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.

REO

The carrying value of REO at March 31, 2017 was $4 million, which includes the net effect of $1 million related to transfers into REO during the three months ended March 31, 2017, offset by $3 million of REO liquidations, and $0.3 million of unrealized gains resulting from market valuation adjustments. At March 31, 2017 and December 31, 2016, there were 17 and 23 REO properties, respectively, recorded on our consolidated balance sheets, all of which were owned at consolidated Sequoia entities.

Legal and Repurchase Reserves

See Note 14 for additional information on the legal and residential repurchase reserves.