Other Assets and Liabilities

Other assets at June 30, 2017 and December 31, 2016, are summarized in the following table.

Table 10.1 – Components of Other Assets



(In Thousands)	June 30, 2017		December 31, 2016
Margin receivable	$	100,156	$	68,038
FHLBC stock	43,393		43,393
Pledged collateral	42,963		42,875
MSR holdback receivable	13,423		1,862
REO	4,645		5,533
Guarantee asset	3,288		4,092
Fixed assets and leasehold improvements ⁽¹⁾	3,025		2,750
Commercial loans	—		2,700
Prepaid expenses	1,155		1,639
Investment receivable	1,130		1,068
Other	3,151		7,995
Total Other Assets	$	216,329	$	181,945


(1)	Fixed assets and leasehold improvements had a basis of $6 million and accumulated depreciation of $3 million at June 30, 2017.

Accrued expenses and other liabilities at June 30, 2017 and December 31, 2016 are summarized in the following table.

Table 10.2 – Components of Accrued Expenses and Other Liabilities



(In Thousands)	June 30, 2017		December 31, 2016
Guarantee obligations	$	20,692	$	21,668
Unsettled trades	13,629		24
Accrued compensation	12,144		18,830
Accrued taxes payable	11,019		525
Residential loan and MSR repurchase reserve	4,558		5,432
Margin payable	2,020		12,783
Legal reserve	2,000		2,000
Accrued operating expenses	1,176		4,493
Deferred tax liability	898		898
Current accounts payable	1,234		1,151
Other	3,815		4,624
Total Other Liabilities	$	73,185	$	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 December 31, 2016, 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. This loan prepaid in full during the three months ended June 30, 2017, for which we recorded a gain of $0.3 million through Investment fair value changes, net on our consolidated statements of income and received a yield maintenance fee of $0.2 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.

MSR Holdback Receivable

MSR holdback receivable represents amounts owed to us from third parties related to the sale of MSRs.

REO

The carrying value of REO at June 30, 2017 was $5 million, which includes the net effect of $2 million related to transfers into REO during the six months ended June 30, 2017, offset by $3 million of REO liquidations, and $0.3 million of unrealized gains resulting from market valuation adjustments. At June 30, 2017 and December 31, 2016, there were 18 and 23 REO properties, respectively, recorded on our consolidated balance sheets, all of which were owned at consolidated Sequoia entities.

Accrued Taxes Payable

Accrued taxes payable at June 30, 2017 represents the interim period current and deferred tax provisions, less any estimated tax payments made during the interim period. Annually, we record separate current and deferred tax provisions and at December 31, 2016, the accrued taxes payable represents income taxes currently payable to federal and state tax authorities.

Legal and Repurchase Reserves

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