UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): July 23, 2015
E*TRADE
Financial Corporation
(Exact
name of registrant as specified in its charter)
Delaware
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1-11921
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94-2844166
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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1271 Avenue of the Americas, 14th Floor, New York,
New York 10020
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(Address
of principal executive offices and Zip Code)
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(646) 521-4300
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former name or former address, if changed since
last report)
Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
ITEM 2.02.
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RESULTS OF OPERATIONS AND FINANCIAL CONDITION
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On July 23, 2015, the Company announced its second quarter earnings for
fiscal year 2015. A copy of the Company’s press release is attached
hereto as Exhibit 99.1 and incorporated by reference herein.
The information furnished shall not be deemed “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934, or incorporated by
reference into any filing thereunder or under the Securities Act of 1933
unless expressly set forth by specific reference in such filing.
ITEM 7.01.
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REGULATION FD DISCLOSURE
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Additionally, the Company published an updated version of its investor
presentation with data for the quarter ended June 30, 2015. The
presentation is available on the Company’s corporate website, about.etrade.com.
Investors should note that the Company announces material financial
information in SEC filings, press releases and public conference calls.
Based on guidance from the SEC, the Company may also use the Investor
Relations section of its corporate website, about.etrade.com, to
communicate with investors about the Company. It is possible that the
financial and other information posted there could be deemed to be
material information. The information on the Company’s corporate website
is not part of this document.
ITEM 9.01.
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FINANCIAL STATEMENTS AND EXHIBITS
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99.1 Earnings Press Release, dated July 23, 2015
SIGNATURE
Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated:
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July 23, 2015
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E*TRADE FINANCIAL CORPORATION
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By:
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/s/ Karl A. Roessner
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Karl A. Roessner
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Corporate Secretary
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Exhibit 99.1
E*TRADE
Financial Corporation Announces Second Quarter 2015 Results
NEW YORK--(BUSINESS WIRE)--July 23, 2015--E*TRADE Financial Corporation
(NASDAQ: ETFC):
Second Quarter Results
-
Net income of $292 million, or $0.99 per diluted share
-
Net income of $72 million(1), or $0.25 per diluted share(1),
excluding an income tax benefit related to finalizing an IRS audit
-
Total net revenue of $445 million
-
Total operating expenses of $309 million, including severance of $6
million and $9 million related to a third party contract amendment
-
Provision for loan losses of $3 million
-
Daily Average Revenue Trades (DARTs) of 149,000
-
End of period margin receivables of $8.1 billion
-
Net new brokerage accounts of 25,000 and an annualized attrition
rate of 8.7 percent, excluding the impact of escheatment and shutting
down the global trading platform(2)
-
Net new brokerage assets of $0.9 billion; end of period total
customer assets of $302 billion
E*TRADE Financial Corporation (NASDAQ: ETFC) today announced results for
its second quarter ended June 30, 2015, reporting net income of $292
million, or $0.99 per diluted share. This compares to $40 million, or
$0.14 per diluted share, in the prior quarter and net income of $69
million, or $0.24 per diluted share, in the second quarter of 2014.
Excluding a $220 million income tax benefit related to finalizing an IRS
audit, net income would have been $72 million(1), or $0.25
per diluted share(1). This compares with adjusted net income
of $85 million(1), or $0.29 per diluted share(1),
in the prior quarter which excludes a charge related to early
extinguishment of corporate debt. Total net revenue of $445 million
decreased from $456 million in the prior quarter and increased from $438
million in the second quarter of 2014.
“We had a sound second quarter as we continued to make progress on key
customer and capital initiatives,” said Paul Idzik, Chief Executive
Officer. “Despite slower trading volumes across the industry, our
business continued to grow, with customer margin receivables just below
record highs and total customer assets surpassing $300 billion. We
maintained our steady drumbeat of customer-led innovations, and on the
capital front, we performed well in our second annual Dodd-Frank Act
Stress Tests, distributed more than $140 million in capital to the
parent, and recently finalized the move of our clearing broker out from
under our bank. I am encouraged by the runway we’ve established and by
the team’s ability to continue driving value for our customers and
owners.”
E*TRADE reported DARTs of 149,000 during the quarter, a decrease of 12
percent from the prior quarter and a decrease of 4 percent versus the
same quarter a year ago.
The Company ended the quarter with 3.2 million brokerage accounts, an
increase of 19,000 from the prior quarter. Excluding closed accounts
from the escheatment of unclaimed property, and the shutdown of the
Company’s global trading platform, net new accounts were 25,000. This
compared with 39,000 net new brokerage accounts in the prior quarter and
33,000 in the second quarter of 2014. Excluding these unique items,
brokerage account attrition would have been 8.7 percent annualized.
The Company ended the quarter with $302 billion in total customer
assets, compared with $299 billion at the end of the prior quarter and
$281 billion from a year ago.
During the quarter, customers added $0.9 billion in net new brokerage
assets. Brokerage related cash increased by $0.4 billion to $42.0
billion during the second quarter. Customers were net buyers of
approximately $0.3 billion of securities. Margin receivables averaged
$8.1 billion in the quarter, up 3 percent from the prior quarter and 11
percent year over year, ending the quarter at $8.1 billion.
Corporate cash ended the quarter at $406 million(3), an
increase of $148 million from the prior quarter, primarily due to a $51
million dividend from E*TRADE Securities and a $92 million dividend from
the bank.
Net operating interest income(4) for the second quarter was
$267 million, down from $271 million in the prior quarter and flat with
$267 million a year ago. Second quarter results reflected a net interest
spread of 2.50 percent on average interest-earning assets of $42.3
billion, compared with 2.62 percent on $41.1 billion in the prior
quarter and 2.55 percent on $41.4 billion in the second quarter of 2014.
Commissions, fees and service charges(4), and other revenue
in the second quarter were $167 million, down from $176 million in the
prior quarter and up from $164 million in the second quarter of 2014.
Average commission per trade for the quarter was $10.96, compared with
$10.94 in the prior quarter and $10.72 in the second quarter of 2014.
Total net revenue in the quarter also included $11 million of net gains
on loans and securities. This compared with $9 million in the prior
quarter and $7 million in the second quarter of 2014.
Total operating expenses in the quarter of $309 million increased $9
million sequentially and increased $25 million from the year ago period.
Expenses included $6 million of executive severance and $9 million
related to a third party contract amendment.
The Company’s loan portfolio ended the quarter at $5.7 billion,
contracting approximately $0.4 billion from the prior quarter.
Second quarter provision for loan losses of $3 million decreased from $5
million in the previous quarter.
Net charge-offs in the quarter were $3 million compared with $7 million
in the prior quarter. The allowance for loan losses ended the quarter at
$402 million, flat with the prior quarter.
As of June 30, 2015, the Company reported bank and consolidated Tier 1
leverage ratios of 9.8 percent(5) and 8.5 percent(6),
compared with 9.8 percent(5) and 8.4 percent(6) in
the previous quarter.
Historical metrics and financials can be found on the E*TRADE Financial
corporate website at about.etrade.com.
The Company will host a conference call to discuss the results beginning
at 5 p.m. ET today. This conference call will be available to domestic
participants by dialing 800-617-1412 while international participants
should dial +1 303-223-4365. A live audio webcast and replay of this
conference call will also be available at about.etrade.com.
About E*TRADE Financial
E*TRADE Financial and its subsidiaries provide financial services
including online brokerage and related banking products and services to
retail investors. Specific business segments include Trading and
Investing and Balance Sheet Management. Securities products and services
are offered by E*TRADE Securities (Member FINRA/SIPC). Bank products and
services are offered by E*TRADE Bank, a Federal savings bank, Member
FDIC, or its subsidiaries and affiliates. More information is available
at www.etrade.com. ETFC-E
Important Notices
E*TRADE Financial, E*TRADE and the E*TRADE logo are trademarks or
registered trademarks of E*TRADE Financial Corporation.
Forward-Looking Statements
The statements contained in this news release that are forward looking,
including statements regarding progress on key customer and capital
initiatives, continued growth in our business and the ability to drive
value for customers and owners are “forward-looking statements” within
the meaning of the safe harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995, and are subject to a number of
uncertainties and risks. Actual results may differ materially from those
indicated in the forward-looking statements. The uncertainties and risks
include, but are not limited to, macro trends of the economy in general
and the residential real estate market, instability in the consumer
credit markets and credit trends, increased mortgage loan delinquency
and default rates, portfolio growth, portfolio seasoning and resolution
through collections, sales or charge-offs, the uncertainty surrounding
the foreclosure process, and the potential negative regulatory
consequences resulting from the implementation of financial regulatory
reform as well as from actions by or more restrictive policies or
interpretations of the Federal Reserve and the Office of the Comptroller
of the Currency or other regulators. Further information about these
risks and uncertainties can be found in the annual, quarterly, and
current reports on Form 10-K, Form 10-Q, and Form 8-K previously filed
by E*TRADE Financial Corporation with the Securities and Exchange
Commission (including information in these reports under the caption
“Risk Factors”). Any forward-looking statement included in this release
speaks only as of the date of this communication; the Company disclaims
any obligation to update any information.
© 2015 E*TRADE Financial Corporation. All rights reserved.
Financial Statements
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E*TRADE FINANCIAL CORPORATION AND SUBSIDIARIES
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Consolidated Statement of Income
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(In millions, except share data and per share amounts)
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(Unaudited)
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|
|
|
|
|
|
|
|
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|
|
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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2015
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2014
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2015
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2014
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Revenue:
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Operating interest income
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$
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310
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$
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319
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$
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626
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$
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638
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Operating interest expense
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|
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(43
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)
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|
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(52
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)
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(88
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)
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|
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(108
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)
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Net operating interest income
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267
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267
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538
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530
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Commissions
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103
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105
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217
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233
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Fees and service charges
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55
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49
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107
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99
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Principal transactions
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-
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-
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-
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10
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Gains on loans and securities, net
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11
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7
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20
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22
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Other revenues
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|
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9
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|
|
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10
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19
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|
|
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19
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Total non-interest income
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178
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|
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171
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363
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|
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383
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Total net revenue
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|
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445
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|
|
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438
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901
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913
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Provision for loan losses
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|
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3
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|
|
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12
|
|
|
|
8
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|
|
|
16
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|
Operating expense:
|
|
|
|
|
|
|
|
|
|
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Compensation and benefits
|
|
|
|
|
118
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|
|
|
99
|
|
|
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231
|
|
|
|
197
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|
Advertising and market development
|
|
|
|
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32
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|
|
|
33
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|
|
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66
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|
|
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67
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Clearing and servicing
|
|
|
|
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25
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|
|
|
23
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|
|
|
49
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|
|
|
51
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FDIC insurance premiums
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|
|
|
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11
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|
|
|
19
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|
|
|
29
|
|
|
|
43
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|
Professional services
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|
|
|
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26
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|
|
|
28
|
|
|
|
53
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|
|
|
52
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|
Occupancy and equipment
|
|
|
|
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22
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|
|
|
19
|
|
|
|
43
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|
|
|
37
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|
Communications
|
|
|
|
|
19
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|
|
|
18
|
|
|
|
38
|
|
|
|
36
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|
Depreciation and amortization
|
|
|
|
|
20
|
|
|
|
20
|
|
|
|
40
|
|
|
|
41
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Amortization of other intangibles
|
|
|
|
|
5
|
|
|
|
6
|
|
|
|
10
|
|
|
|
11
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Facility restructuring and other exit activities
|
|
|
|
|
2
|
|
|
|
1
|
|
|
|
6
|
|
|
|
4
|
|
Other operating expenses
|
|
|
|
|
29
|
|
|
|
18
|
|
|
|
44
|
|
|
|
35
|
|
Total operating expense
|
|
|
|
|
309
|
|
|
|
284
|
|
|
|
609
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|
|
|
574
|
|
Income before other income (expense) and income tax (benefit) expense
|
|
|
|
|
133
|
|
|
|
142
|
|
|
|
284
|
|
|
|
323
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
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Corporate interest expense
|
|
|
|
|
(15
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)
|
|
|
(29
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)
|
|
|
(36
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)
|
|
|
(57
|
)
|
Losses on early extinguishment of debt
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(73
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)
|
|
|
(12
|
)
|
Equity in income (loss) of investments and other
|
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
5
|
|
|
|
2
|
|
Total other income (expense)
|
|
|
|
|
(16
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)
|
|
|
(30
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)
|
|
|
(104
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)
|
|
|
(67
|
)
|
Income before income tax (benefit) expense
|
|
|
|
|
117
|
|
|
|
112
|
|
|
|
180
|
|
|
|
256
|
|
Income tax (benefit) expense
|
|
|
|
|
(175
|
)
|
|
|
43
|
|
|
|
(152
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)
|
|
|
90
|
|
Net income
|
|
|
|
$
|
292
|
|
|
$
|
69
|
|
|
$
|
332
|
|
|
$
|
166
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
|
$
|
1.01
|
|
|
$
|
0.24
|
|
|
$
|
1.15
|
|
|
$
|
0.57
|
|
Diluted earnings per share
|
|
|
|
$
|
0.99
|
|
|
$
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0.24
|
|
|
$
|
1.13
|
|
|
$
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0.56
|
|
Shares used in computation of per share data:
|
|
|
|
|
|
|
|
|
|
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Basic (in thousands)
|
|
|
|
|
290,086
|
|
|
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288,705
|
|
|
|
289,915
|
|
|
|
288,380
|
|
Diluted (in thousands)
|
|
|
|
|
294,936
|
|
|
|
293,826
|
|
|
|
294,912
|
|
|
|
293,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E*TRADE FINANCIAL CORPORATION AND SUBSIDIARIES
|
Consolidated Statement of Income
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(In millions, except share data and per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
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June 30,
|
|
March 31,
|
|
June 30,
|
|
|
|
|
2015
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Operating interest income
|
|
|
|
$
|
310
|
|
|
$
|
316
|
|
|
$
|
319
|
|
Operating interest expense
|
|
|
|
|
(43
|
)
|
|
|
(45
|
)
|
|
|
(52
|
)
|
Net operating interest income
|
|
|
|
|
267
|
|
|
|
271
|
|
|
|
267
|
|
Commissions
|
|
|
|
|
103
|
|
|
|
114
|
|
|
|
105
|
|
Fees and service charges
|
|
|
|
|
55
|
|
|
|
52
|
|
|
|
49
|
|
Gains on loans and securities, net
|
|
|
|
|
11
|
|
|
|
9
|
|
|
|
7
|
|
Other revenues
|
|
|
|
|
9
|
|
|
|
10
|
|
|
|
10
|
|
Total non-interest income
|
|
|
|
|
178
|
|
|
|
185
|
|
|
|
171
|
|
Total net revenue
|
|
|
|
|
445
|
|
|
|
456
|
|
|
|
438
|
|
Provision for loan losses
|
|
|
|
|
3
|
|
|
|
5
|
|
|
|
12
|
|
Operating expense:
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
|
|
|
118
|
|
|
|
113
|
|
|
|
99
|
|
Advertising and market development
|
|
|
|
|
32
|
|
|
|
34
|
|
|
|
33
|
|
Clearing and servicing
|
|
|
|
|
25
|
|
|
|
24
|
|
|
|
23
|
|
FDIC insurance premiums
|
|
|
|
|
11
|
|
|
|
18
|
|
|
|
19
|
|
Professional services
|
|
|
|
|
26
|
|
|
|
27
|
|
|
|
28
|
|
Occupancy and equipment
|
|
|
|
|
22
|
|
|
|
21
|
|
|
|
19
|
|
Communications
|
|
|
|
|
19
|
|
|
|
19
|
|
|
|
18
|
|
Depreciation and amortization
|
|
|
|
|
20
|
|
|
|
20
|
|
|
|
20
|
|
Amortization of other intangibles
|
|
|
|
|
5
|
|
|
|
5
|
|
|
|
6
|
|
Facility restructuring and other exit activities
|
|
|
|
|
2
|
|
|
|
4
|
|
|
|
1
|
|
Other operating expenses
|
|
|
|
|
29
|
|
|
|
15
|
|
|
|
18
|
|
Total operating expense
|
|
|
|
|
309
|
|
|
|
300
|
|
|
|
284
|
|
Income before other income (expense) and income tax (benefit) expense
|
|
|
|
|
133
|
|
|
|
151
|
|
|
|
142
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
Corporate interest expense
|
|
|
|
|
(15
|
)
|
|
|
(21
|
)
|
|
|
(29
|
)
|
Losses on early extinguishment of debt
|
|
|
|
|
-
|
|
|
|
(73
|
)
|
|
|
-
|
|
Equity in income (loss) of investments and other
|
|
|
|
|
(1
|
)
|
|
|
6
|
|
|
|
(1
|
)
|
Total other income (expense)
|
|
|
|
|
(16
|
)
|
|
|
(88
|
)
|
|
|
(30
|
)
|
Income before income tax (benefit) expense
|
|
|
|
|
117
|
|
|
|
63
|
|
|
|
112
|
|
Income tax (benefit) expense
|
|
|
|
|
(175
|
)
|
|
|
23
|
|
|
|
43
|
|
Net income
|
|
|
|
$
|
292
|
|
|
$
|
40
|
|
|
$
|
69
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
|
$
|
1.01
|
|
|
$
|
0.14
|
|
|
$
|
0.24
|
|
Diluted earnings per share
|
|
|
|
$
|
0.99
|
|
|
$
|
0.14
|
|
|
$
|
0.24
|
|
Shares used in computation of per share data:
|
|
|
|
|
|
|
|
|
Basic (in thousands)
|
|
|
|
|
290,086
|
|
|
|
289,741
|
|
|
|
288,705
|
|
Diluted (in thousands)
|
|
|
|
|
294,936
|
|
|
|
294,722
|
|
|
|
293,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E*TRADE FINANCIAL CORPORATION AND SUBSIDIARIES
|
Consolidated Balance Sheet
|
(In millions, except share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
|
|
|
2015
|
|
2015
|
|
2014
|
ASSETS
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
|
|
|
$
|
1,872
|
|
|
$
|
1,025
|
|
|
$
|
1,783
|
|
Cash required to be segregated under federal or other regulations
|
|
|
|
|
767
|
|
|
|
849
|
|
|
|
555
|
|
Available-for-sale securities
|
|
|
|
|
13,866
|
|
|
|
13,841
|
|
|
|
12,388
|
|
Held-to-maturity securities
|
|
|
|
|
12,291
|
|
|
|
12,517
|
|
|
|
12,248
|
|
Margin receivables
|
|
|
|
|
8,139
|
|
|
|
8,220
|
|
|
|
7,675
|
|
Loans receivable, net
|
|
|
|
|
5,252
|
|
|
|
5,664
|
|
|
|
5,979
|
|
Investment in FHLB stock
|
|
|
|
|
89
|
|
|
|
86
|
|
|
|
88
|
|
Property and equipment, net
|
|
|
|
|
238
|
|
|
|
241
|
|
|
|
245
|
|
Goodwill
|
|
|
|
|
1,792
|
|
|
|
1,792
|
|
|
|
1,792
|
|
Other intangibles, net
|
|
|
|
|
184
|
|
|
|
189
|
|
|
|
194
|
|
Other assets
|
|
|
|
|
2,625
|
|
|
|
2,401
|
|
|
|
2,583
|
|
Total assets
|
|
|
|
$
|
47,115
|
|
|
$
|
46,825
|
|
|
$
|
45,530
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
$
|
26,214
|
|
|
$
|
26,272
|
|
|
$
|
24,890
|
|
Securities sold under agreements to repurchase
|
|
|
|
|
3,617
|
|
|
|
3,668
|
|
|
|
3,672
|
|
Customer payables
|
|
|
|
|
6,702
|
|
|
|
6,293
|
|
|
|
6,455
|
|
FHLB advances and other borrowings
|
|
|
|
|
1,309
|
|
|
|
1,304
|
|
|
|
1,299
|
|
Corporate debt
|
|
|
|
|
1,023
|
|
|
|
1,025
|
|
|
|
1,366
|
|
Other liabilities
|
|
|
|
|
2,536
|
|
|
|
2,810
|
|
|
|
2,473
|
|
Total liabilities
|
|
|
|
|
41,401
|
|
|
|
41,372
|
|
|
|
40,155
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
Common stock, $0.01 par value, shares authorized: 400,000,000 at
|
|
|
|
|
|
|
|
|
June 30, 2015, March 31, 2015 and December 31, 2014, shares issued
|
|
|
|
|
|
|
|
|
and outstanding: 290,236,778 at June 30, 2015, 289,897,529 at
|
|
|
|
|
|
|
|
|
March 31, 2015 and 289,272,576 at December 31, 2014
|
|
|
|
|
3
|
|
|
|
3
|
|
|
|
3
|
|
Additional paid-in-capital
|
|
|
|
|
7,361
|
|
|
|
7,350
|
|
|
|
7,350
|
|
Accumulated deficit
|
|
|
|
|
(1,397
|
)
|
|
|
(1,689
|
)
|
|
|
(1,729
|
)
|
Accumulated other comprehensive loss
|
|
|
|
|
(253
|
)
|
|
|
(211
|
)
|
|
|
(249
|
)
|
Total shareholders' equity
|
|
|
|
|
5,714
|
|
|
|
5,453
|
|
|
|
5,375
|
|
Total liabilities and shareholders' equity
|
|
|
|
$
|
47,115
|
|
|
$
|
46,825
|
|
|
$
|
45,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Reporting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2015
|
|
|
|
|
Trading and Investing
|
|
Balance Sheet Management
|
|
Corporate/ Other
|
|
Eliminations(7)
|
|
Total
|
|
|
|
|
(In millions)
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating interest income
|
|
|
|
$
|
180
|
|
|
$
|
209
|
|
|
$
|
1
|
|
|
$
|
(80
|
)
|
|
$
|
310
|
|
Operating interest expense
|
|
|
|
|
(2
|
)
|
|
|
(121
|
)
|
|
|
-
|
|
|
|
80
|
|
|
|
(43
|
)
|
Net operating interest income
|
|
|
|
|
178
|
|
|
|
88
|
|
|
|
1
|
|
|
|
-
|
|
|
|
267
|
|
Commissions
|
|
|
|
|
103
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
103
|
|
Fees and service charges
|
|
|
|
|
55
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
55
|
|
Gains on loans and securities, net
|
|
|
|
|
-
|
|
|
|
11
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11
|
|
Other revenues
|
|
|
|
|
8
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
9
|
|
Total non-interest income
|
|
|
|
|
166
|
|
|
|
12
|
|
|
|
-
|
|
|
|
-
|
|
|
|
178
|
|
Total net revenue
|
|
|
|
|
344
|
|
|
|
100
|
|
|
|
1
|
|
|
|
-
|
|
|
|
445
|
|
Provision for loan losses
|
|
|
|
|
-
|
|
|
|
3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3
|
|
Operating expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
|
|
|
75
|
|
|
|
3
|
|
|
|
40
|
|
|
|
-
|
|
|
|
118
|
|
Advertising and market development
|
|
|
|
|
32
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
32
|
|
Clearing and servicing
|
|
|
|
|
17
|
|
|
|
8
|
|
|
|
-
|
|
|
|
-
|
|
|
|
25
|
|
FDIC insurance premiums
|
|
|
|
|
-
|
|
|
|
11
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11
|
|
Professional services
|
|
|
|
|
13
|
|
|
|
-
|
|
|
|
13
|
|
|
|
-
|
|
|
|
26
|
|
Occupancy and equipment
|
|
|
|
|
18
|
|
|
|
1
|
|
|
|
3
|
|
|
|
-
|
|
|
|
22
|
|
Communications
|
|
|
|
|
18
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
19
|
|
Depreciation and amortization
|
|
|
|
|
15
|
|
|
|
-
|
|
|
|
5
|
|
|
|
-
|
|
|
|
20
|
|
Amortization of other intangibles
|
|
|
|
|
5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5
|
|
Facility restructuring and other exit activities
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2
|
|
|
|
-
|
|
|
|
2
|
|
Other operating expenses
|
|
|
|
|
21
|
|
|
|
3
|
|
|
|
5
|
|
|
|
-
|
|
|
|
29
|
|
Total operating expense
|
|
|
|
|
214
|
|
|
|
26
|
|
|
|
69
|
|
|
|
-
|
|
|
|
309
|
|
Segment income (loss) before other income (expense)
|
|
|
|
|
130
|
|
|
|
71
|
|
|
|
(68
|
)
|
|
|
-
|
|
|
|
133
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate interest expense
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(15
|
)
|
|
|
-
|
|
|
|
(15
|
)
|
Equity in income (loss) of investments and other
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
Total other income (expense)
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(16
|
)
|
|
|
-
|
|
|
|
(16
|
)
|
Segment income (loss)
|
|
|
|
$
|
130
|
|
|
$
|
71
|
|
|
$
|
(84
|
)
|
|
$
|
-
|
|
|
$
|
117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2015
|
|
|
|
|
Trading and Investing
|
|
Balance Sheet Management
|
|
Corporate/ Other
|
|
Eliminations(7)
|
|
Total
|
|
|
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating interest income
|
|
|
|
$
|
169
|
|
|
$
|
218
|
|
|
$
|
-
|
|
|
$
|
(71
|
)
|
|
$
|
316
|
|
Operating interest expense
|
|
|
|
|
(4
|
)
|
|
|
(112
|
)
|
|
|
-
|
|
|
|
71
|
|
|
|
(45
|
)
|
Net operating interest income
|
|
|
|
|
165
|
|
|
|
106
|
|
|
|
-
|
|
|
|
-
|
|
|
|
271
|
|
Commissions
|
|
|
|
|
114
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
114
|
|
Fees and service charges
|
|
|
|
|
52
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
52
|
|
Gains on loans and securities, net
|
|
|
|
|
-
|
|
|
|
9
|
|
|
|
-
|
|
|
|
-
|
|
|
|
9
|
|
Other revenues
|
|
|
|
|
8
|
|
|
|
2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10
|
|
Total non-interest income
|
|
|
|
|
174
|
|
|
|
11
|
|
|
|
-
|
|
|
|
-
|
|
|
|
185
|
|
Total net revenue
|
|
|
|
|
339
|
|
|
|
117
|
|
|
|
-
|
|
|
|
-
|
|
|
|
456
|
|
Provision for loan losses
|
|
|
|
|
-
|
|
|
|
5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5
|
|
Operating expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
|
|
|
78
|
|
|
|
4
|
|
|
|
31
|
|
|
|
-
|
|
|
|
113
|
|
Advertising and market development
|
|
|
|
|
34
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
34
|
|
Clearing and servicing
|
|
|
|
|
16
|
|
|
|
8
|
|
|
|
-
|
|
|
|
-
|
|
|
|
24
|
|
FDIC insurance premiums
|
|
|
|
|
-
|
|
|
|
18
|
|
|
|
-
|
|
|
|
-
|
|
|
|
18
|
|
Professional services
|
|
|
|
|
13
|
|
|
|
2
|
|
|
|
12
|
|
|
|
-
|
|
|
|
27
|
|
Occupancy and equipment
|
|
|
|
|
17
|
|
|
|
-
|
|
|
|
4
|
|
|
|
-
|
|
|
|
21
|
|
Communications
|
|
|
|
|
19
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
19
|
|
Depreciation and amortization
|
|
|
|
|
16
|
|
|
|
-
|
|
|
|
4
|
|
|
|
-
|
|
|
|
20
|
|
Amortization of other intangibles
|
|
|
|
|
5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5
|
|
Facility restructuring and other exit activities
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4
|
|
|
|
-
|
|
|
|
4
|
|
Other operating expenses
|
|
|
|
|
5
|
|
|
|
4
|
|
|
|
6
|
|
|
|
-
|
|
|
|
15
|
|
Total operating expense
|
|
|
|
|
203
|
|
|
|
36
|
|
|
|
61
|
|
|
|
-
|
|
|
|
300
|
|
Segment income (loss) before other income (expense)
|
|
|
|
|
136
|
|
|
|
76
|
|
|
|
(61
|
)
|
|
|
-
|
|
|
|
151
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate interest expense
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(21
|
)
|
|
|
-
|
|
|
|
(21
|
)
|
Losses on early extinguishment of debt
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(73
|
)
|
|
|
-
|
|
|
|
(73
|
)
|
Equity in income of investments and other
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6
|
|
|
|
-
|
|
|
|
6
|
|
Total other income (expense)
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(88
|
)
|
|
|
-
|
|
|
|
(88
|
)
|
Segment income (loss)
|
|
|
|
$
|
136
|
|
|
$
|
76
|
|
|
$
|
(149
|
)
|
|
$
|
-
|
|
|
$
|
63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2014
|
|
|
|
|
Trading and Investing
|
|
Balance Sheet Management
|
|
Corporate/ Other
|
|
Eliminations(7)
|
|
Total
|
|
|
|
|
(In millions)
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating interest income
|
|
|
|
$
|
152
|
|
|
$
|
233
|
|
|
$
|
-
|
|
|
$
|
(66
|
)
|
|
$
|
319
|
|
Operating interest expense
|
|
|
|
|
(4
|
)
|
|
|
(114
|
)
|
|
|
-
|
|
|
|
66
|
|
|
|
(52
|
)
|
Net operating interest income
|
|
|
|
|
148
|
|
|
|
119
|
|
|
|
-
|
|
|
|
-
|
|
|
|
267
|
|
Commissions
|
|
|
|
|
105
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
105
|
|
Fees and service charges
|
|
|
|
|
48
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
49
|
|
Gains on loans and securities, net
|
|
|
|
|
-
|
|
|
|
7
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7
|
|
Other revenues
|
|
|
|
|
8
|
|
|
|
2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10
|
|
Total non-interest income
|
|
|
|
|
161
|
|
|
|
10
|
|
|
|
-
|
|
|
|
-
|
|
|
|
171
|
|
Total net revenue
|
|
|
|
|
309
|
|
|
|
129
|
|
|
|
-
|
|
|
|
-
|
|
|
|
438
|
|
Provision for loan losses
|
|
|
|
|
-
|
|
|
|
12
|
|
|
|
-
|
|
|
|
-
|
|
|
|
12
|
|
Operating expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
|
|
|
69
|
|
|
|
3
|
|
|
|
27
|
|
|
|
-
|
|
|
|
99
|
|
Advertising and market development
|
|
|
|
|
33
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
33
|
|
Clearing and servicing
|
|
|
|
|
14
|
|
|
|
9
|
|
|
|
-
|
|
|
|
-
|
|
|
|
23
|
|
FDIC insurance premiums
|
|
|
|
|
-
|
|
|
|
19
|
|
|
|
-
|
|
|
|
-
|
|
|
|
19
|
|
Professional services
|
|
|
|
|
15
|
|
|
|
1
|
|
|
|
12
|
|
|
|
-
|
|
|
|
28
|
|
Occupancy and equipment
|
|
|
|
|
15
|
|
|
|
-
|
|
|
|
4
|
|
|
|
-
|
|
|
|
19
|
|
Communications
|
|
|
|
|
17
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
18
|
|
Depreciation and amortization
|
|
|
|
|
16
|
|
|
|
-
|
|
|
|
4
|
|
|
|
-
|
|
|
|
20
|
|
Amortization of other intangibles
|
|
|
|
|
6
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6
|
|
Facility restructuring and other exit activities
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
1
|
|
Other operating expenses
|
|
|
|
|
11
|
|
|
|
4
|
|
|
|
3
|
|
|
|
-
|
|
|
|
18
|
|
Total operating expense
|
|
|
|
|
196
|
|
|
|
36
|
|
|
|
52
|
|
|
|
-
|
|
|
|
284
|
|
Segment income (loss) before other income (expense)
|
|
|
|
|
113
|
|
|
|
81
|
|
|
|
(52
|
)
|
|
|
-
|
|
|
|
142
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate interest expense
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(29
|
)
|
|
|
-
|
|
|
|
(29
|
)
|
Equity in income (loss) of investments and other
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
Total other income (expense)
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(30
|
)
|
|
|
-
|
|
|
|
(30
|
)
|
Segment income (loss)
|
|
|
|
$
|
113
|
|
|
$
|
81
|
|
|
$
|
(82
|
)
|
|
$
|
-
|
|
|
$
|
112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Performance Metrics(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Metrics
|
|
|
|
Qtr ended 6/30/15
|
|
Qtr ended 3/31/15
|
|
Qtr ended 6/30/15 vs. 3/31/15
|
|
Qtr ended 6/30/14
|
|
Qtr ended 6/30/15 vs. 6/30/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin %(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
30 %
|
|
|
33 %
|
|
|
(3)%
|
|
|
32 %
|
|
|
(2)%
|
Trading and Investing
|
|
|
|
|
38 %
|
|
|
40 %
|
|
|
(2)%
|
|
|
37 %
|
|
|
1 %
|
Balance Sheet Management
|
|
|
|
|
71 %
|
|
|
65 %
|
|
|
6 %
|
|
|
63 %
|
|
|
8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employees
|
|
|
|
|
3,260
|
|
|
3,250
|
|
|
0 %
|
|
|
3,113
|
|
|
5 %
|
Consultants and other
|
|
|
|
|
100
|
|
|
105
|
|
|
(5)%
|
|
|
142
|
|
|
(30)%
|
Total headcount
|
|
|
|
|
3,360
|
|
|
3,355
|
|
|
0 %
|
|
|
3,255
|
|
|
3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share
|
|
|
|
$
|
19.69
|
|
$
|
18.81
|
|
|
5 %
|
|
$
|
17.97
|
|
|
10 %
|
Tangible book value per share(10)
|
|
|
|
$
|
14.31
|
|
$
|
13.38
|
|
|
7 %
|
|
$
|
12.34
|
|
|
16 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate cash ($MM)(3)
|
|
|
|
$
|
406
|
|
$
|
258
|
|
|
57 %
|
|
$
|
570
|
|
|
(29)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enterprise net interest spread (basis points)(11)
|
|
|
|
|
250
|
|
|
262
|
|
|
(5)%
|
|
|
255
|
|
|
(2)%
|
Enterprise interest-earning assets, average ($MM)
|
|
|
|
$
|
42,331
|
|
$
|
41,086
|
|
|
3 %
|
|
$
|
41,395
|
|
|
2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before interest, taxes, depreciation & amortization
("EBITDA") ($MM)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
292
|
|
$
|
40
|
|
|
630 %
|
|
$
|
69
|
|
|
323 %
|
Income tax (benefit) expense
|
|
|
|
|
(175)
|
|
|
23
|
|
|
(861)%
|
|
|
43
|
|
|
(507)%
|
Depreciation & amortization
|
|
|
|
|
25
|
|
|
25
|
|
|
0 %
|
|
|
26
|
|
|
(4)%
|
Corporate interest expense
|
|
|
|
|
15
|
|
|
21
|
|
|
(29)%
|
|
|
29
|
|
|
(48)%
|
EBITDA
|
|
|
|
$
|
157
|
|
$
|
109
|
|
|
44 %
|
|
$
|
167
|
|
|
(6)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest coverage(12)
|
|
|
|
|
10.9
|
|
|
5.2
|
|
N.M.
|
|
|
5.8
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E*TRADE Bank net income ($MM)(13)
|
|
|
|
$
|
114
|
|
$
|
92
|
|
|
24 %
|
|
$
|
106
|
|
|
8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading and Investing Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading days
|
|
|
|
|
63.0
|
|
|
61.0
|
|
N.M.
|
|
|
63.0
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DARTs
|
|
|
|
|
149,448
|
|
|
169,951
|
|
|
(12)%
|
|
|
155,194
|
|
|
(4)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total trades (MM)
|
|
|
|
|
9.4
|
|
|
10.4
|
|
|
(10)%
|
|
|
9.8
|
|
|
(4)%
|
Average commission per trade
|
|
|
|
$
|
10.96
|
|
$
|
10.94
|
|
|
0 %
|
|
$
|
10.72
|
|
|
2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period margin receivables ($B)
|
|
|
|
$
|
8.1
|
|
$
|
8.2
|
|
|
(1)%
|
|
$
|
7.3
|
|
|
11 %
|
Average margin receivables ($B)
|
|
|
|
$
|
8.1
|
|
$
|
7.9
|
|
|
3 %
|
|
$
|
7.3
|
|
|
11 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross new brokerage accounts
|
|
|
|
|
94,716
|
|
|
107,887
|
|
|
(12)%
|
|
|
99,136
|
|
|
(4)%
|
Gross new stock plan accounts
|
|
|
|
|
66,870
|
|
|
65,133
|
|
|
3 %
|
|
|
59,084
|
|
|
13 %
|
Gross new banking accounts
|
|
|
|
|
1,208
|
|
|
1,249
|
|
|
(3)%
|
|
|
2,001
|
|
|
(40)%
|
Closed accounts
|
|
|
|
|
(129,538)
|
|
|
(131,040)
|
|
N.M.
|
|
|
(117,670)
|
|
N.M.
|
Net new accounts
|
|
|
|
|
33,256
|
|
|
43,229
|
|
N.M.
|
|
|
42,551
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net new brokerage accounts(2)
|
|
|
|
|
18,687
|
|
|
38,716
|
|
N.M.
|
|
|
33,005
|
|
N.M.
|
Net new stock plan accounts
|
|
|
|
|
20,489
|
|
|
9,684
|
|
N.M.
|
|
|
17,787
|
|
N.M.
|
Net new banking accounts
|
|
|
|
|
(5,920)
|
|
|
(5,171)
|
|
N.M.
|
|
|
(8,241)
|
|
N.M.
|
Net new accounts
|
|
|
|
|
33,256
|
|
|
43,229
|
|
N.M.
|
|
|
42,551
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period brokerage accounts(2)
|
|
|
|
|
3,201,326
|
|
|
3,182,639
|
|
|
1 %
|
|
|
3,102,966
|
|
|
3 %
|
End of period stock plan accounts
|
|
|
|
|
1,293,957
|
|
|
1,273,468
|
|
|
2 %
|
|
|
1,246,182
|
|
|
4 %
|
End of period banking accounts
|
|
|
|
|
350,953
|
|
|
356,873
|
|
|
(2)%
|
|
|
379,307
|
|
|
(7)%
|
End of period total accounts
|
|
|
|
|
4,846,236
|
|
|
4,812,980
|
|
|
1 %
|
|
|
4,728,455
|
|
|
2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized brokerage account attrition rate(2)(14)
|
|
|
|
|
9.6%
|
|
|
8.8%
|
|
N.M.
|
|
|
8.6%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer Assets ($B)
|
|
|
|
|
|
|
|
|
|
|
|
|
Security holdings
|
|
|
|
$
|
215.2
|
|
$
|
213.8
|
|
|
1 %
|
|
$
|
197.8
|
|
9 %
|
Customer payables (cash)
|
|
|
|
|
6.7
|
|
|
6.3
|
|
|
6 %
|
|
|
6.6
|
|
|
2 %
|
Customer assets held by third parties(15)
|
|
|
|
|
14.6
|
|
|
14.9
|
|
|
(2)%
|
|
|
14.3
|
|
|
2 %
|
Sweep deposits
|
|
|
|
|
20.7
|
|
|
20.4
|
|
|
1 %
|
|
|
19.1
|
|
|
8 %
|
Brokerage customer assets
|
|
|
|
|
257.2
|
|
|
255.4
|
|
|
1 %
|
|
|
237.8
|
|
|
8 %
|
Unexercised stock plan customer holdings (vested)
|
|
|
|
|
39.7
|
|
|
38.2
|
|
|
4 %
|
|
|
37.1
|
|
|
7 %
|
Savings, checking and other banking customer assets
|
|
|
|
|
5.5
|
|
|
5.8
|
|
|
(5)%
|
|
|
6.0
|
|
|
(8)%
|
Total customer assets
|
|
|
|
$
|
302.4
|
|
$
|
299.4
|
|
|
1 %
|
|
$
|
280.9
|
|
|
8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net new brokerage assets ($B)(16)
|
|
|
|
$
|
0.9
|
|
$
|
3.5
|
|
N.M.
|
|
$
|
1.0
|
|
N.M.
|
Net new banking assets ($B)(16)
|
|
|
|
|
(0.3)
|
|
|
0.0
|
|
N.M.
|
|
|
(0.3)
|
|
N.M.
|
Net new customer assets ($B)(16)
|
|
|
|
$
|
0.6
|
|
$
|
3.5
|
|
N.M.
|
|
$
|
0.7
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brokerage related cash ($B)
|
|
|
|
$
|
42.0
|
|
$
|
41.6
|
|
|
1 %
|
|
$
|
40.0
|
|
5 %
|
Other customer cash and deposits ($B)
|
|
|
|
|
5.5
|
|
|
5.8
|
|
|
(5)%
|
|
|
6.0
|
|
|
(8)%
|
Total customer cash and deposits ($B)
|
|
|
|
$
|
47.5
|
|
$
|
47.4
|
|
|
0 %
|
|
$
|
46.0
|
|
|
3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock plan customer holdings (unvested) ($B)
|
|
|
|
$
|
78.9
|
|
$
|
79.2
|
|
|
0 %
|
|
$
|
73.6
|
|
7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer net buy activity ($B)
|
|
|
|
$
|
(0.3)
|
|
$
|
(3.1)
|
|
N.M.
|
|
$
|
(0.4)
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Management Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable ($MM)
|
|
|
|
|
|
|
|
|
|
|
|
|
Average loans receivable
|
|
|
|
$
|
5,862
|
|
$
|
6,203
|
|
$
|
(341)
|
|
$
|
7,201
|
|
$
|
(1,339)
|
Ending loans receivable, net
|
|
|
|
$
|
5,252
|
|
$
|
5,664
|
|
$
|
(412)
|
|
$
|
6,656
|
|
$
|
(1,404)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan performance detail (all loans, including TDRs) ($MM)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One- to Four-Family
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
$
|
2,578
|
|
$
|
2,687
|
|
$
|
(109)
|
|
$
|
3,100
|
|
$
|
(522)
|
30-89 days delinquent
|
|
|
|
|
76
|
|
|
107
|
|
|
(31)
|
|
|
88
|
|
|
(12)
|
90-179 days delinquent
|
|
|
|
|
17
|
|
|
25
|
|
|
(8)
|
|
|
27
|
|
|
(10)
|
Total 30-179 days delinquent
|
|
|
|
|
93
|
|
|
132
|
|
|
(39)
|
|
|
115
|
|
|
(22)
|
180+ days delinquent (net of $48M, $47M and $58M in charge-offs for Q215,
Q115 and Q214, respectively)
|
|
|
|
|
125
|
|
|
129
|
|
|
(4)
|
|
|
145
|
|
|
(20)
|
Total delinquent loans(17)
|
|
|
|
|
218
|
|
|
261
|
|
|
(43)
|
|
|
260
|
|
|
(42)
|
Gross loans receivable(18)
|
|
|
|
$
|
2,796
|
|
$
|
2,948
|
|
|
(152)
|
|
$
|
3,360
|
|
|
(564)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
$
|
2,322
|
|
$
|
2,541
|
|
$
|
(219)
|
|
$
|
3,033
|
|
$
|
(711)
|
30-89 days delinquent
|
|
|
|
|
61
|
|
|
77
|
|
|
(16)
|
|
|
56
|
|
|
5
|
90-179 days delinquent
|
|
|
|
|
33
|
|
|
27
|
|
|
6
|
|
|
32
|
|
|
1
|
Total 30-179 days delinquent
|
|
|
|
|
94
|
|
|
104
|
|
|
(10)
|
|
|
88
|
|
|
6
|
180+ days delinquent (net of $25M, $25M and $24M in charge-offs for Q215,
Q115 and Q214, respectively)
|
|
|
|
|
42
|
|
|
42
|
|
|
-
|
|
|
45
|
|
|
(3)
|
Total delinquent loans(17)
|
|
|
|
|
136
|
|
|
146
|
|
|
(10)
|
|
|
133
|
|
|
3
|
Gross loans receivable(18)
|
|
|
|
$
|
2,458
|
|
$
|
2,687
|
|
|
(229)
|
|
$
|
3,166
|
|
|
(708)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer and Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
$
|
393
|
|
$
|
423
|
|
$
|
(30)
|
|
$
|
519
|
|
$
|
(126)
|
30-89 days delinquent
|
|
|
|
|
6
|
|
|
7
|
|
|
(1)
|
|
|
11
|
|
|
(5)
|
90-179 days delinquent
|
|
|
|
|
1
|
|
|
1
|
|
|
-
|
|
|
1
|
|
|
-
|
Total 30-179 days delinquent
|
|
|
|
|
7
|
|
|
8
|
|
|
(1)
|
|
|
12
|
|
|
(5)
|
180+ days delinquent
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Total delinquent loans(17)
|
|
|
|
|
7
|
|
|
8
|
|
|
(1)
|
|
|
12
|
|
|
(5)
|
Gross loans receivable(18)
|
|
|
|
$
|
400
|
|
$
|
431
|
|
|
(31)
|
|
$
|
531
|
|
|
(131)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Loans Receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
$
|
5,293
|
|
$
|
5,651
|
|
$
|
(358)
|
|
$
|
6,652
|
|
$
|
(1,359)
|
30-89 days delinquent
|
|
|
|
|
143
|
|
|
191
|
|
|
(48)
|
|
|
155
|
|
|
(12)
|
90-179 days delinquent
|
|
|
|
|
51
|
|
|
53
|
|
|
(2)
|
|
|
60
|
|
|
(9)
|
Total 30-179 days delinquent
|
|
|
|
|
194
|
|
|
244
|
|
|
(50)
|
|
|
215
|
|
|
(21)
|
180+ days delinquent
|
|
|
|
|
167
|
|
|
171
|
|
|
(4)
|
|
|
190
|
|
|
(23)
|
Total delinquent loans(17)
|
|
|
|
|
361
|
|
|
415
|
|
|
(54)
|
|
|
405
|
|
|
(44)
|
Total gross loans receivable(18)
|
|
|
|
$
|
5,654
|
|
$
|
6,066
|
|
|
(412)
|
|
$
|
7,057
|
|
|
(1,403)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TDR performance detail ($MM)(19)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One- to Four-Family TDRs
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
$
|
225
|
|
$
|
219
|
|
$
|
6
|
|
$
|
244
|
|
$
|
(19)
|
30-89 days delinquent
|
|
|
|
|
23
|
|
|
30
|
|
|
(7)
|
|
|
19
|
|
|
4
|
90-179 days delinquent
|
|
|
|
|
5
|
|
|
10
|
|
|
(5)
|
|
|
6
|
|
|
(1)
|
Total 30-179 days delinquent
|
|
|
|
|
28
|
|
|
40
|
|
|
(12)
|
|
|
25
|
|
|
3
|
180+ days delinquent (net of $26M, $24M and $25M in charge-offs for Q215,
Q115 and Q214, respectively)
|
|
|
|
|
51
|
|
|
50
|
|
|
1
|
|
|
50
|
|
|
1
|
Total delinquent TDRs
|
|
|
|
|
79
|
|
|
90
|
|
|
(11)
|
|
|
75
|
|
|
4
|
TDRs
|
|
|
|
$
|
304
|
|
$
|
309
|
|
|
(5)
|
|
$
|
319
|
|
|
(15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home Equity TDRs
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
$
|
176
|
|
$
|
184
|
|
$
|
(8)
|
|
$
|
184
|
|
$
|
(8)
|
30-89 days delinquent
|
|
|
|
|
14
|
|
|
17
|
|
|
(3)
|
|
|
15
|
|
|
(1)
|
90-179 days delinquent
|
|
|
|
|
7
|
|
|
6
|
|
|
1
|
|
|
8
|
|
|
(1)
|
Total 30-179 days delinquent
|
|
|
|
|
21
|
|
|
23
|
|
|
(2)
|
|
|
23
|
|
|
(2)
|
180+ days delinquent (net of $15M, $16M and $14M in charge-offs for Q215,
Q115 and Q214, respectively)
|
|
|
|
|
19
|
|
|
18
|
|
|
1
|
|
|
19
|
|
|
-
|
Total delinquent TDRs
|
|
|
|
|
40
|
|
|
41
|
|
|
(1)
|
|
|
42
|
|
|
(2)
|
TDRs
|
|
|
|
$
|
216
|
|
$
|
225
|
|
|
(9)
|
|
$
|
226
|
|
|
(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total TDRs
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
$
|
401
|
|
$
|
403
|
|
$
|
(2)
|
|
$
|
428
|
|
$
|
(27)
|
30-89 days delinquent
|
|
|
|
|
37
|
|
|
47
|
|
|
(10)
|
|
|
34
|
|
|
3
|
90-179 days delinquent
|
|
|
|
|
12
|
|
|
16
|
|
|
(4)
|
|
|
14
|
|
|
(2)
|
Total 30-179 days delinquent
|
|
|
|
|
49
|
|
|
63
|
|
|
(14)
|
|
|
48
|
|
|
1
|
180+ days delinquent
|
|
|
|
|
70
|
|
|
68
|
|
|
2
|
|
|
69
|
|
|
1
|
Total delinquent TDRs
|
|
|
|
|
119
|
|
|
131
|
|
|
(12)
|
|
|
117
|
|
|
2
|
TDRs
|
|
|
|
$
|
520
|
|
$
|
534
|
|
|
(14)
|
|
$
|
545
|
|
|
(25)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Metrics(20)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E*TRADE Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio(5)
|
|
|
|
|
9.8%
|
|
|
9.8 %
|
|
|
0.0%
|
|
|
10.2 %
|
|
|
(0.4)%
|
Tier 1 risk-based capital ratio(5)
|
|
|
|
|
45.4%
|
|
|
42.4 %
|
|
|
3.0%
|
|
|
24.7 %
|
|
|
20.7%
|
Total risk-based capital ratio(5)
|
|
|
|
|
46.7%
|
|
|
43.7 %
|
|
|
3.0%
|
|
|
26.0 %
|
|
|
20.7%
|
Common Equity Tier 1 ratio(5)
|
|
|
|
|
45.4%
|
|
|
42.4 %
|
|
|
3.0%
|
|
|
24.7 %
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E*TRADE Financial
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio(6)
|
|
|
|
|
8.5%
|
|
|
8.4 %
|
|
|
0.1%
|
|
|
7.5 %
|
|
|
1.0%
|
Tier 1 risk-based capital ratio(6)
|
|
|
|
|
37.7%
|
|
|
35.0 %
|
|
|
2.7%
|
|
|
18.3 %
|
|
|
19.4%
|
Total risk-based capital ratio(6)
|
|
|
|
|
42.3%
|
|
|
39.4 %
|
|
|
2.9%
|
|
|
19.5 %
|
|
|
22.8%
|
Common Equity Tier 1 ratio(6)
|
|
|
|
|
37.7%
|
|
|
35.0 %
|
|
|
2.7%
|
|
|
15.8 %
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Activity in Allowance for Loan Losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2015
|
|
|
|
|
One- to Four- Family
|
|
Home Equity
|
|
Consumer and Other
|
|
Total
|
|
|
|
|
(In millions)
|
Allowance for loan losses, ending 3/31/15
|
|
|
|
$
|
31
|
|
|
$
|
360
|
|
|
$
|
11
|
|
|
$
|
402
|
|
Provision for loan losses
|
|
|
|
|
20
|
|
|
|
(15
|
)
|
|
|
(2
|
)
|
|
|
3
|
|
Charge-offs, net
|
|
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(3
|
)
|
Allowance for loan losses, ending 6/30/15
|
|
|
|
$
|
49
|
|
|
$
|
345
|
|
|
$
|
8
|
|
|
$
|
402
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2015
|
|
|
|
|
One- to Four- Family
|
|
Home Equity
|
|
Consumer and Other
|
|
Total
|
|
|
|
|
(In millions)
|
Allowance for loan losses, ending 12/31/14
|
|
|
|
$
|
27
|
|
|
$
|
367
|
|
|
$
|
10
|
|
|
$
|
404
|
|
Provision for loan losses
|
|
|
|
|
5
|
|
|
|
(2
|
)
|
|
|
2
|
|
|
|
5
|
|
Charge-offs, net
|
|
|
|
|
(1
|
)
|
|
|
(5
|
)
|
|
|
(1
|
)
|
|
|
(7
|
)
|
Allowance for loan losses, ending 3/31/15
|
|
|
|
$
|
31
|
|
|
$
|
360
|
|
|
$
|
11
|
|
|
$
|
402
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2014
|
|
|
|
|
One- to Four- Family
|
|
Home Equity
|
|
Consumer and Other
|
|
Total
|
|
|
|
|
(In millions)
|
Allowance for loan losses, ending 3/31/14
|
|
|
|
$
|
52
|
|
|
$
|
327
|
|
|
$
|
24
|
|
|
$
|
403
|
|
Provision for loan losses
|
|
|
|
|
(8
|
)
|
|
|
21
|
|
|
|
(1
|
)
|
|
|
12
|
|
Charge-offs, net
|
|
|
|
|
-
|
|
|
|
(11
|
)
|
|
|
(3
|
)
|
|
|
(14
|
)
|
Allowance for loan losses, ending 6/30/14
|
|
|
|
$
|
44
|
|
|
$
|
337
|
|
|
$
|
20
|
|
|
$
|
401
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specific Valuation Allowance Activity(21)
|
|
|
|
|
|
|
|
|
|
As of June 30, 2015
|
|
|
|
|
Recorded Investment in Modifications before
charge- offs
|
|
Charge-offs
|
|
Recorded Investment in Modifications
|
|
Specific Valuation Allowance
|
|
Net Investment in Modifications
|
|
Specific Valuation Allowance as a %
of Modifications
|
|
Total Expected Losses(22)
|
|
|
|
|
(Dollars in millions)
|
One- to four-family
|
|
|
|
$
|
225
|
|
$
|
(46
|
)
|
|
$
|
179
|
|
$
|
(12
|
)
|
|
$
|
167
|
|
7
|
%
|
|
25
|
%
|
Home equity
|
|
|
|
|
301
|
|
|
(128
|
)
|
|
|
173
|
|
|
(56
|
)
|
|
|
117
|
|
32
|
%
|
|
61
|
%
|
Total
|
|
|
|
$
|
526
|
|
$
|
(174
|
)
|
|
$
|
352
|
|
$
|
(68
|
)
|
|
$
|
284
|
|
19
|
%
|
|
46
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2015
|
|
|
|
|
Recorded Investment in Modifications before
charge- offs
|
|
Charge-offs
|
|
Recorded Investment in Modifications
|
|
Specific Valuation Allowance
|
|
Net Investment in Modifications
|
|
Specific Valuation Allowance as a %
of Modifications
|
|
Total Expected Losses(22)
|
|
|
|
|
(Dollars in millions)
|
One- to four-family
|
|
|
|
$
|
225
|
|
$
|
(45
|
)
|
|
$
|
180
|
|
$
|
(11
|
)
|
|
$
|
169
|
|
6
|
%
|
|
24
|
%
|
Home equity
|
|
|
|
|
312
|
|
|
(132
|
)
|
|
|
180
|
|
|
(62
|
)
|
|
|
118
|
|
35
|
%
|
|
62
|
%
|
Total
|
|
|
|
$
|
537
|
|
$
|
(177
|
)
|
|
$
|
360
|
|
$
|
(73
|
)
|
|
$
|
287
|
|
20
|
%
|
|
46
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2014
|
|
|
|
|
Recorded Investment in Modifications before
charge- offs
|
|
Charge-offs
|
|
Recorded Investment in Modifications
|
|
Specific Valuation Allowance
|
|
Net Investment in Modifications
|
|
Specific Valuation Allowance as a %
of Modifications
|
|
Total Expected Losses(22)
|
|
|
|
|
(Dollars in millions)
|
One- to four-family
|
|
|
|
$
|
232
|
|
$
|
(45
|
)
|
|
$
|
187
|
|
$
|
(14
|
)
|
|
$
|
173
|
|
7
|
%
|
|
25
|
%
|
Home equity
|
|
|
|
|
322
|
|
|
(145
|
)
|
|
|
177
|
|
|
(62
|
)
|
|
|
115
|
|
35
|
%
|
|
64
|
%
|
Total
|
|
|
|
$
|
554
|
|
$
|
(190
|
)
|
|
$
|
364
|
|
$
|
(76
|
)
|
|
$
|
288
|
|
21
|
%
|
|
48
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Enterprise Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
June 30, 2015
|
|
|
|
|
Average
|
|
Operating Interest
|
|
Average
|
|
|
|
|
Balance
|
|
Inc./Exp.
|
|
Yield/Cost
|
Enterprise interest-earning assets:
|
|
|
|
(In millions)
|
Loans(23)
|
|
|
|
$
|
5,864
|
|
$
|
57
|
|
3.89
|
%
|
Available-for-sale securities
|
|
|
|
|
13,587
|
|
|
66
|
|
1.93
|
%
|
Held-to-maturity securities
|
|
|
|
|
12,366
|
|
|
86
|
|
2.78
|
%
|
Margin receivables
|
|
|
|
|
8,118
|
|
|
70
|
|
3.44
|
%
|
Cash and equivalents
|
|
|
|
|
1,409
|
|
|
-
|
|
0.20
|
%
|
Segregated cash
|
|
|
|
|
379
|
|
|
-
|
|
0.15
|
%
|
Securities borrowed and other
|
|
|
|
|
608
|
|
|
31
|
|
20.41
|
%
|
Total enterprise interest-earning assets
|
|
|
|
$
|
42,331
|
|
|
310
|
|
2.93
|
%
|
Enterprise interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
$
|
26,285
|
|
$
|
1
|
|
0.01
|
%
|
Customer payables
|
|
|
|
|
6,576
|
|
|
1
|
|
0.08
|
%
|
Securities sold under agreements to repurchase(24)
|
|
|
|
|
3,642
|
|
|
25
|
|
2.77
|
%
|
FHLB advances and other borrowings(24)
|
|
|
|
|
1,306
|
|
|
16
|
|
4.65
|
%
|
Securities loaned and other
|
|
|
|
|
1,828
|
|
|
-
|
|
0.10
|
%
|
Total enterprise interest-bearing liabilities
|
|
|
|
$
|
39,637
|
|
|
43
|
|
0.43
|
%
|
Enterprise net interest income/spread(11)
|
|
|
|
|
|
$
|
267
|
|
2.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31, 2015
|
|
|
|
|
Average
|
|
Operating Interest
|
|
Average
|
|
|
|
|
Balance
|
|
Inc./Exp.
|
|
Yield/Cost
|
Enterprise interest-earning assets:
|
|
|
|
(In millions)
|
Loans(23)
|
|
|
|
$
|
6,204
|
|
$
|
62
|
|
4.00
|
%
|
Available-for-sale securities
|
|
|
|
|
12,341
|
|
|
66
|
|
2.15
|
%
|
Held-to-maturity securities
|
|
|
|
|
12,279
|
|
|
88
|
|
2.86
|
%
|
Margin receivables
|
|
|
|
|
7,888
|
|
|
68
|
|
3.49
|
%
|
Cash and equivalents
|
|
|
|
|
1,408
|
|
|
1
|
|
0.18
|
%
|
Segregated cash
|
|
|
|
|
309
|
|
|
-
|
|
0.08
|
%
|
Securities borrowed and other
|
|
|
|
|
657
|
|
|
31
|
|
19.13
|
%
|
Total enterprise interest-earning assets
|
|
|
|
$
|
41,086
|
|
|
316
|
|
3.09
|
%
|
Enterprise interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
$
|
25,051
|
|
$
|
2
|
|
0.03
|
%
|
Customer payables
|
|
|
|
|
6,388
|
|
|
1
|
|
0.08
|
%
|
Securities sold under agreements to repurchase(24)
|
|
|
|
|
3,729
|
|
|
26
|
|
2.77
|
%
|
FHLB advances and other borrowings(24)
|
|
|
|
|
1,301
|
|
|
15
|
|
4.65
|
%
|
Securities loaned and other
|
|
|
|
|
1,759
|
|
|
1
|
|
0.13
|
%
|
Total enterprise interest-bearing liabilities
|
|
|
|
$
|
38,228
|
|
|
45
|
|
0.47
|
%
|
Enterprise net interest income/spread(11)
|
|
|
|
|
|
$
|
271
|
|
2.62
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
June 30, 2014
|
|
|
|
|
Average
|
|
Operating Interest
|
|
Average
|
|
|
|
|
Balance
|
|
Inc./Exp.
|
|
Yield/Cost
|
Enterprise interest-earning assets:
|
|
|
|
(In millions)
|
Loans(23)
|
|
|
|
$
|
7,416
|
|
$
|
77
|
|
4.18
|
%
|
Available-for-sale securities
|
|
|
|
|
12,742
|
|
|
72
|
|
2.28
|
%
|
Held-to-maturity securities
|
|
|
|
|
11,298
|
|
|
82
|
|
2.91
|
%
|
Margin receivables
|
|
|
|
|
7,330
|
|
|
65
|
|
3.56
|
%
|
Cash and equivalents
|
|
|
|
|
1,310
|
|
|
1
|
|
0.15
|
%
|
Segregated cash
|
|
|
|
|
799
|
|
|
1
|
|
0.10
|
%
|
Securities borrowed and other
|
|
|
|
|
500
|
|
|
21
|
|
16.43
|
%
|
Total enterprise interest-earning assets
|
|
|
|
$
|
41,395
|
|
|
319
|
|
3.08
|
%
|
Enterprise interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
$
|
25,239
|
|
$
|
2
|
|
0.03
|
%
|
Customer payables
|
|
|
|
|
6,250
|
|
|
3
|
|
0.16
|
%
|
Securities sold under agreements to repurchase(24)
|
|
|
|
|
4,010
|
|
|
30
|
|
2.98
|
%
|
FHLB advances and other borrowings(24)
|
|
|
|
|
1,285
|
|
|
17
|
|
5.24
|
%
|
Securities loaned and other
|
|
|
|
|
1,506
|
|
|
-
|
|
0.03
|
%
|
Total enterprise interest-bearing liabilities
|
|
|
|
$
|
38,290
|
|
|
52
|
|
0.53
|
%
|
Enterprise net interest income/spread(11)
|
|
|
|
|
|
$
|
267
|
|
2.55
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Explanation of Non-GAAP Measures and Certain Metrics
Management believes that net income and EPS excluding the income tax
benefit resulting from the effective settlement of uncertain tax
positions related to the Company’s 2007, 2009, and 2010 federal tax
returns and loss on the early extinguishment of corporate debt,
corporate cash, tangible book value per share, EBITDA, interest
coverage, E*TRADE Bank Tier 1 common ratio and E*TRADE Financial capital
ratios calculated prior to Basel III becoming effective for the Company
on January 1, 2015 are appropriate measures for evaluating the operating
and liquidity performance of the Company. Management believes that
adjusting GAAP measures by excluding or including certain items is
helpful to investors and analysts who may wish to use some or all of
this information to analyze the Company’s current performance, prospects
and valuation. Management uses non-GAAP information internally to
evaluate operating performance and in formulating the budget for future
periods.
Net Income and EPS Excluding Income Tax Benefit and Loss on Early
Extinguishment of Corporate Debt
Management believes that excluding the income tax benefit resulting from
the effective settlement of uncertain tax positions related to the IRS
examination of the Company’s 2007, 2009, and 2010 federal tax returns
and loss on the early extinguishment of corporate debt from net income
and EPS provides useful additional measures of the Company’s ongoing
operating performance because the charge is not directly related to our
performance. See endnote (1) for a reconciliation of this non-GAAP
measure to the comparable GAAP measure.
Corporate Cash
Corporate cash represents cash held at the parent company as well as
cash held in certain subsidiaries that can distribute cash to the parent
company without any regulatory approval or notification. The Company
believes that corporate cash is a useful measure of the parent company’s
liquidity as it is the primary source of capital above and beyond the
capital deployed in regulated subsidiaries. See endnote (3) for a
reconciliation of this non-GAAP measure to the comparable GAAP measure.
Tangible Book Value per Share
Tangible book value per share represents shareholders’ equity less
goodwill (net of related deferred tax liability) and other intangible
assets divided by common stock outstanding. The Company believes that
tangible book value per share is a measure of the Company’s capital
strength. See endnote (10) for a reconciliation of this non-GAAP measure
to the comparable GAAP measure.
EBITDA
EBITDA represents net income (loss) before taxes, depreciation and
amortization and corporate interest expense. Management believes that
EBITDA provides a useful additional measure of the Company’s performance
by excluding certain non-cash charges and expenses that are not directly
related to the performance of the business. See the table entitled “Key
Performance Metrics” for a reconciliation of this non-GAAP measure to
the comparable GAAP measure.
Interest Coverage
Interest coverage represents EBITDA divided by corporate interest
expense. Management believes that by excluding the charges and expenses
that are excluded from EBITDA, interest coverage provides a useful
additional measure of the Company’s ability to continue to meet interest
obligations and liquidity needs. See endnote (12) for a calculation of
this non-GAAP measure on a GAAP basis.
E*TRADE Bank Tier 1 Common Ratio and E*TRADE Financial Capital Ratios
Prior to Basel III becoming effective for the Company on January 1,
2015, E*TRADE Financial capital ratios, including Tier 1 leverage, Tier
1 risk-based capital and total risk-based capital ratios, were based on
the Federal Reserve regulatory minimum well-capitalized threshold.
E*TRADE Bank’s and E*TRADE Financial’s Tier 1 common ratios were defined
as the Tier 1 capital less elements of Tier 1 capital that are not in
the form of common equity, such as trust preferred securities, divided
by total risk-weighted assets. Management believes these capital ratios
are an important measure of E*TRADE Bank’s and the Company’s capital
strength. See endnotes (5) and (6) for reconciliations of these non-GAAP
measures to the comparable GAAP measures.
It is important to note these metrics and other non-GAAP measures may
involve judgment by management and should be considered in addition to,
not as substitutes for, or superior to, net income, consolidated
statements of cash flows, or other measures of financial performance
prepared in accordance with GAAP. For additional information on the
adjustments to these non-GAAP measures, please see the Company’s
financial statements and “Management’s Discussion and Analysis of
Results of Operations and Financial Condition” that will be included in
the periodic report the Company expects to file with the SEC with
respect to the financial periods discussed herein.
ENDNOTES
(1) The following table provides a reconciliation of net income and EPS
after adjusting for the income tax benefit associated with the effective
settlement of uncertain tax positions related to our 2007, 2009, and
2010 federal tax returns and the charge related to early extinguishment
of corporate debt to GAAP net income and EPS (dollars in millions,
except for per share amounts):
|
|
|
|
Q2 2015
|
|
Q1 2015
|
|
|
|
|
Amount
|
|
Diluted EPS
|
|
Amount
|
|
Diluted EPS
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
292
|
|
|
$
|
0.99
|
|
|
$
|
40
|
|
|
$
|
0.14
|
|
Add back impact of corporate debt reduction and refinance:
|
|
|
|
|
|
|
|
|
|
|
Loss on early extinguishment of corporate debt
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
73
|
|
|
|
0.25
|
|
Income tax related to loss on early extinguishment of corporate debt
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(28
|
)
|
|
|
(0.10
|
)
|
Net of tax
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
45
|
|
|
|
0.15
|
|
Deduct income tax benefit related to effectively settled IRS
examination
|
|
|
|
|
(220
|
)
|
|
|
(0.74
|
)
|
|
|
-
|
|
|
|
-
|
|
Adjusted net income
|
|
|
|
$
|
72
|
|
|
$
|
0.25
|
|
|
$
|
85
|
|
|
$
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Net new brokerage accounts and end of period brokerage accounts
include the closure of 3,484 accounts related to the escheatment of
unclaimed property and 3,325 related to the shutdown of the Company’s
global trading platform.
(3) The following table provides a reconciliation of corporate cash to
GAAP consolidated cash and equivalents at period end (dollars in
millions):
|
|
|
|
Q2 2015
|
|
Q1 2015
|
|
Q2 2014
|
Corporate cash
|
|
|
|
$
|
406
|
|
$
|
258
|
|
$
|
570
|
Bank cash
|
|
|
|
|
1,330
|
|
|
606
|
|
|
1,215
|
E*TRADE Securities cash(a)
|
|
|
|
|
111
|
|
$
|
134
|
|
|
N/A
|
International brokerage and other cash
|
|
|
|
|
25
|
|
|
27
|
|
|
22
|
Total consolidated cash and equivalents
|
|
|
|
$
|
1,872
|
|
$
|
1,025
|
|
$
|
1,807
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Prior to the E*TRADE Securities move out from under E*TRADE Bank in
February 2015, E*TRADE Securities' cash was included in the "Bank
cash" line item.
|
(4) Beginning in the first quarter of 2015, the Company reclassified the
revenue earned on customer assets held by third parties from operating
interest income to fees and service charges. Prior periods have been
reclassified to conform to the current period presentation.
(5) E*TRADE Bank’s Tier 1 leverage, Tier 1 risk-based capital, total
risk-based capital and Common Equity Tier 1 ratios are preliminary for
the current period. Prior to Basel III becoming effective for E*TRADE
Bank on January 1, 2015, E*TRADE Bank’s Tier 1 common ratio was a
non-GAAP measure that management believes is an important measure of
capital strength. Common Equity Tier 1 capital under Basel III replaced
Tier 1 common capital. E*TRADE Bank’s capital ratios are calculated as
follows (dollars in millions):
|
|
|
|
Q2 2015
|
|
Q1 2015
|
|
Q2 2014
|
E*TRADE Bank shareholder's equity(a)
|
|
|
|
$
|
4,146
|
|
|
$
|
4,165
|
|
|
$
|
5,974
|
|
DEDUCT:
|
|
|
|
|
|
|
|
|
Losses in OCI on AFS debt securities and cash flow hedges, net of tax
|
|
|
|
|
(258
|
)
|
|
|
(216
|
)
|
|
|
(300
|
)
|
Goodwill & other intangible assets, net of deferred tax liabilities
|
|
|
|
|
38
|
|
|
|
38
|
|
|
|
1,500
|
|
Disallowed deferred tax assets
|
|
|
|
|
82
|
|
|
|
66
|
|
|
|
450
|
|
E*TRADE Bank Tier 1 capital/Common Equity Tier 1 capital(b)
|
|
|
|
|
4,284
|
|
|
|
4,277
|
|
|
|
4,324
|
|
ADD:
|
|
|
|
|
|
|
|
|
Allowable allowance for loan losses
|
|
|
|
|
123
|
|
|
|
130
|
|
|
|
221
|
|
E*TRADE Bank total capital
|
|
|
|
$
|
4,407
|
|
|
$
|
4,407
|
|
|
$
|
4,545
|
|
|
|
|
|
|
|
|
|
|
E*TRADE Bank average/total assets(a)(c)
|
|
|
|
$
|
44,021
|
|
|
$
|
43,622
|
|
|
$
|
44,517
|
|
DEDUCT:
|
|
|
|
|
|
|
|
|
Disallowed deferred tax assets
|
|
|
|
|
82
|
|
|
|
66
|
|
|
|
450
|
|
Goodwill & other intangible assets, net of deferred tax liabilities
|
|
|
|
|
38
|
|
|
|
38
|
|
|
|
1,500
|
|
Other
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(26
|
)
|
E*TRADE Bank adjusted average/total assets for leverage capital
purposes
|
|
|
|
$
|
43,901
|
|
|
$
|
43,518
|
|
|
$
|
42,593
|
|
|
|
|
|
|
|
|
|
|
E*TRADE Bank total risk-weighted assets(a)(d)
|
|
|
|
$
|
9,444
|
|
|
$
|
10,095
|
|
|
$
|
17,502
|
|
|
|
|
|
|
|
|
|
|
E*TRADE Bank Tier 1 leverage ratio (Tier 1 capital / Adjusted
total assets for leverage capital purposes)
|
|
|
|
|
9.8
|
%
|
|
|
9.8
|
%
|
|
|
10.2
|
%
|
E*TRADE Bank Tier 1 capital / Total risk-weighted assets
|
|
|
|
|
45.4
|
%
|
|
|
42.4
|
%
|
|
|
24.7
|
%
|
E*TRADE Bank total capital / Total risk-weighted assets
|
|
|
|
|
46.7
|
%
|
|
|
43.7
|
%
|
|
|
26.0
|
%
|
E*TRADE Bank Common Equity Tier 1 capital / Total risk-weighted
assets
|
|
|
|
|
45.4
|
%
|
|
|
42.4
|
%
|
|
|
24.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Amounts presented for E*TRADE Bank exclude E*TRADE Securities as of
February 1, 2015. We recently received regulatory approval to move
both E*TRADE Clearing and E*TRADE Securities out from under E*TRADE
Bank. E*TRADE Securities was moved from under E*TRADE Bank effective
February 1, 2015 and E*TRADE Clearing was moved from under E*TRADE
Bank as of July 1, 2015.
|
(b)
|
|
Common Equity Tier 1 capital under Basel III replaced Tier 1 common
capital.
|
(c)
|
|
As of June 30, 2015 and March 31, 2015, E*TRADE Bank’s Tier 1
Leverage ratio was calculated using average total assets. Prior to
Basel III becoming effective for E*TRADE Bank, E*TRADE Bank’s Tier 1
Leverage ratio was calculated using end of period total assets.
|
(d)
|
|
Under the regulatory guidelines for risk-based capital, on-balance
sheet assets and credit equivalent amounts of derivatives and
off-balance sheet items are assigned to one of several broad risk
categories according to the obligor or, if relevant, the guarantor
or the nature of any collateral. The aggregate dollar amount in each
risk category is then multiplied by the risk weight associated with
that category. The resulting weighted values from each of the risk
categories are aggregated for determining total risk-weighted assets.
|
(6) E*TRADE Financial’s Tier 1 leverage, Tier 1 risk-based capital,
total risk-based capital and Common Equity Tier 1 ratios are preliminary
for the current period. Prior to Basel III becoming effective for
E*TRADE Financial on January 1, 2015, E*TRADE Financial’s capital ratios
were non-GAAP measures and based on the Federal Reserve’s
well-capitalized requirements as management believes these ratios are an
important measure of the Company's capital strength and managed capital
against ratios then applicable to bank holding companies in preparation
for the application of these requirements. Common Equity Tier 1 capital
under Basel III replaced Tier 1 common capital. E*TRADE Financial’s
capital ratios are calculated as follows (dollars in millions):
|
|
|
|
Q2 2015
|
|
Q1 2015
|
|
Q2 2014
|
E*TRADE Financial shareholders' equity
|
|
|
|
$
|
5,714
|
|
|
$
|
5,453
|
|
|
$
|
5,188
|
|
DEDUCT:
|
|
|
|
|
|
|
|
|
Losses in OCI on AFS debt securities and cash flow hedges, net of tax
|
|
|
|
|
(259
|
)
|
|
|
(216
|
)
|
|
|
(300
|
)
|
Goodwill & other intangible assets, net of deferred tax liabilities
|
|
|
|
|
1,441
|
|
|
|
1,451
|
|
|
|
1,626
|
|
Disallowed deferred tax assets
|
|
|
|
|
827
|
|
|
|
645
|
|
|
|
1,097
|
|
Other(a)
|
|
|
|
|
(108
|
)
|
|
|
(108
|
)
|
|
|
-
|
|
E*TRADE Financial Common Equity Tier 1 capital(b)
|
|
|
|
|
3,813
|
|
|
|
3,681
|
|
|
|
2,765
|
|
ADD:
|
|
|
|
|
|
|
|
|
Qualifying restricted core capital elements (TRUPs)(a)
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
433
|
|
E*TRADE Financial Tier 1 capital
|
|
|
|
|
3,813
|
|
|
|
3,681
|
|
|
|
3,198
|
|
ADD:
|
|
|
|
|
|
|
|
|
Allowable allowance for loan losses
|
|
|
|
|
136
|
|
|
|
140
|
|
|
|
221
|
|
Non-qualifying capital instruments subject to phase-out (TRUPs)(a)
|
|
|
|
|
325
|
|
|
|
325
|
|
|
|
-
|
|
E*TRADE Financial total capital
|
|
|
|
$
|
4,274
|
|
|
$
|
4,146
|
|
|
$
|
3,419
|
|
|
|
|
|
|
|
|
|
|
E*TRADE Financial average total assets
|
|
|
|
$
|
47,133
|
|
|
$
|
45,931
|
|
|
$
|
45,598
|
|
DEDUCT:
|
|
|
|
|
|
|
|
|
Goodwill & other intangible assets, net of deferred tax liabilities
|
|
|
|
|
1,441
|
|
|
|
1,451
|
|
|
|
1,626
|
|
Disallowed deferred tax assets
|
|
|
|
|
827
|
|
|
|
645
|
|
|
|
1,097
|
|
Other(a)
|
|
|
|
|
(108
|
)
|
|
|
(108
|
)
|
|
|
-
|
|
E*TRADE Financial adjusted average total assets for leverage capital
purposes
|
|
|
|
$
|
44,973
|
|
|
$
|
43,943
|
|
|
$
|
42,875
|
|
|
|
|
|
|
|
|
|
|
E*TRADE Financial total risk-weighted assets(c)
|
|
|
|
$
|
10,103
|
|
|
$
|
10,523
|
|
|
$
|
17,510
|
|
|
|
|
|
|
|
|
|
|
E*TRADE Financial Tier 1 leverage ratio (Tier 1 capital / Adjusted
average total assets for leverage capital purposes)
|
|
|
|
|
8.5
|
%
|
|
|
8.4
|
%
|
|
|
7.5
|
%
|
E*TRADE Financial Tier 1 capital / Total risk-weighted assets
|
|
|
|
|
37.7
|
%
|
|
|
35.0
|
%
|
|
|
18.3
|
%
|
E*TRADE Financial total capital / Total risk-weighted assets
|
|
|
|
|
42.3
|
%
|
|
|
39.4
|
%
|
|
|
19.5
|
%
|
E*TRADE Financial Common Equity Tier 1 capital / Total risk-weighted
assets
|
|
|
|
|
37.7
|
%
|
|
|
35.0
|
%
|
|
|
15.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
As a result of applying the transition provisions under Basel III,
the Company included 25% of the TRUPs in the calculation of E*TRADE
Financial’s Tier 1 capital and 75% of the TRUPs in the calculation
of E*TRADE Financial’s total capital. Prior to Basel III becoming
effective for E*TRADE Financial, the Company included 100% of the
TRUPs in E*TRADE Financial’s Tier 1 capital due to the regulatory
agencies’ delay in the implementation of the TRUPs phase-out until
January 1, 2015.
|
(b)
|
|
Common Equity Tier 1 capital under Basel III replaced Tier 1 common
capital.
|
(c)
|
|
Under the regulatory guidelines for risk-based capital, on-balance
sheet assets and credit equivalent amounts of derivatives and
off-balance sheet items are assigned to one of several broad risk
categories according to the obligor or, if relevant, the guarantor
or the nature of any collateral. The aggregate dollar amount in each
risk category is then multiplied by the risk weight associated with
that category. The resulting weighted values from each of the risk
categories are aggregated for determining total risk-weighted assets.
|
(7) Reflects elimination of transactions between Trading and Investing
and Balance Sheet Management segments, which includes deposit and
intercompany transfer pricing arrangements.
(8) Amounts and percentages may not calculate due to rounding.
(9) Operating margin is the percentage of net revenue that results in
income before other income (expense) and income taxes. The percentage is
calculated by dividing income before other income (expense) and income
taxes by total net revenue.
(10) The following tables provide a reconciliation of GAAP book value
and book value per share to non-GAAP tangible book value and tangible
book value per share at period end (dollars in millions, except per
share amounts):
|
|
|
|
Q2 2015
|
|
Q1 2015
|
|
Q2 2014
|
Book value
|
|
|
|
$
|
5,714
|
|
|
$
|
5,453
|
|
|
$
|
5,188
|
|
Less: Goodwill and other intangibles, net
|
|
|
|
|
(1,976
|
)
|
|
|
(1,981
|
)
|
|
|
(1,997
|
)
|
Less: Deferred tax liability related to goodwill
|
|
|
|
|
414
|
|
|
|
407
|
|
|
|
371
|
|
Tangible book value
|
|
|
|
$
|
4,152
|
|
|
$
|
3,879
|
|
|
$
|
3,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2015
|
|
Q1 2015
|
|
Q2 2014
|
Book value per share
|
|
|
|
$
|
19.69
|
|
|
$
|
18.81
|
|
|
$
|
17.97
|
|
Less: Goodwill and other intangibles, net per share
|
|
|
|
|
(6.81
|
)
|
|
|
(6.83
|
)
|
|
|
(6.92
|
)
|
Less: Deferred tax liability related to goodwill per share
|
|
|
|
|
1.43
|
|
|
|
1.40
|
|
|
|
1.29
|
|
Tangible book value per share
|
|
|
|
$
|
14.31
|
|
|
$
|
13.38
|
|
|
$
|
12.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11) Enterprise net interest spread is the taxable equivalent rate
earned on average enterprise interest-earning assets less the rate paid
on average enterprise interest-bearing liabilities, excluding corporate
interest-earning assets and liabilities and customer assets held by
third parties.
(12) Interest coverage represents the ratio of the Company’s EBITDA to
its corporate interest expense. The interest coverage ratio calculated
based on the Company’s net income to its corporate interest expense was
19.5, 1.9, and 2.4 for the three months ended June 30, 2015, March 31,
2015, and June 30, 2014, respectively.
(13) E*TRADE Bank net income is calculated as follows (dollars in
millions):
|
|
|
|
Q2 2015
|
|
Q1 2015
|
|
Q2 2014
|
Total net revenue
|
|
|
|
$
|
219
|
|
|
$
|
296
|
|
|
$
|
426
|
|
Provision for loan losses
|
|
|
|
|
3
|
|
|
|
5
|
|
|
|
12
|
|
Total operating expenses
|
|
|
|
|
82
|
|
|
|
138
|
|
|
|
254
|
|
Other income (expense)
|
|
|
|
|
(2
|
)
|
|
|
(1
|
)
|
|
|
(1
|
)
|
Income before income taxes
|
|
|
|
|
132
|
|
|
|
152
|
|
|
|
159
|
|
Income tax expense
|
|
|
|
|
18
|
|
|
|
60
|
|
|
|
53
|
|
Net income
|
|
|
|
$
|
114
|
|
|
$
|
92
|
|
|
$
|
106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14) The brokerage account attrition rate is calculated by dividing
attriting brokerage accounts, which are gross new brokerage accounts
less net new brokerage accounts, by total brokerage accounts at the
previous period end. This rate is presented on an annualized basis.
(15) Customer assets held by third parties are held outside E*TRADE
Financial and include money market funds and sweep deposit accounts at
unaffiliated financial institutions. Customer assets held by third
parties are not reflected in the Company’s consolidated balance sheet
and are not immediately available for liquidity purposes. However, we
maintain the ability to bring the majority of these customer assets back
on-balance sheet with appropriate notification to the third party
financial institutions and customer consent, as appropriate. The
following table provides details of customer assets held by third
parties (dollars in billions):
|
|
|
|
Q2 2015
|
|
Q1 2015
|
|
Q2 2014
|
Money market fund
|
|
|
|
$
|
7.7
|
|
$
|
7.6
|
|
$
|
6.3
|
Sweep deposits at unaffiliated financial institutions
|
|
|
|
|
3.3
|
|
|
3.6
|
|
|
4.5
|
Subtotal
|
|
|
|
|
11.0
|
|
|
11.2
|
|
|
10.8
|
Municipal funds and other
|
|
|
|
|
3.6
|
|
|
3.7
|
|
|
3.5
|
Total customer assets held by third parties
|
|
|
|
$
|
14.6
|
|
$
|
14.9
|
|
$
|
14.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16) Net new customer assets are total inflows to all new and existing
customer accounts less total outflows from all closed and existing
customer accounts. The net new banking assets and net new brokerage
assets metrics treat asset flows between E*TRADE entities in the same
manner as unrelated third party accounts.
(17) Delinquent loans include charge-offs for loans that are in
bankruptcy or are 180 days past due which have been written down to
their expected recovery value. The following table shows the total
amount of charge-offs on loans that are still held by the Company at the
end of the periods presented (dollars in millions):
|
|
|
|
Q2 2015
|
|
Q1 2015
|
|
Q2 2014
|
One- to four-family
|
|
|
|
$
|
122
|
|
$
|
123
|
|
$
|
137
|
Home equity
|
|
|
|
|
243
|
|
|
250
|
|
|
274
|
Total charge-offs
|
|
|
|
$
|
365
|
|
$
|
373
|
|
$
|
411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(18) Includes unpaid principal balances and premiums (discounts).
(19) The TDR loan performance detail is a subset of the Company’s total
loan performance. TDRs include loan modifications performed under the
Company’s modification programs. Beginning in Q412, loans that had been
charged-off due to bankruptcy notification were also considered TDRs.
(20) Beginning on January 1, 2015, regulatory capital for E*TRADE Bank
and E*TRADE Financial was calculated under the Basel III Standardized
Approach, subject to transition provisions.
(21) Modifications are a subset of TDRs, and represent loan
modifications performed under the Company’s modification programs. They
do not include loans that have been charged-off due to the Company
receiving notification of bankruptcy if the loan has not been modified
previously by the Company. The following table shows the reconciliation
of total TDRs that had a modification and those which the Company
received a notification of bankruptcy (dollars in millions):
|
|
|
|
Q2 2015
|
|
Q1 2015
|
|
Q2 2014
|
Modified loans
|
|
|
|
$
|
352
|
|
$
|
360
|
|
$
|
364
|
Bankruptcy loans
|
|
|
|
|
168
|
|
|
174
|
|
|
181
|
Total TDRs
|
|
|
|
$
|
520
|
|
$
|
534
|
|
$
|
545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(22) The total expected losses on modifications includes both the
previously recorded charge-offs and the specific valuation allowance.
(23) Includes loans held-for-sale and excludes loans to customers on
margin.
(24) Scheduled balances for FHLB advances and securities sold under
agreements to repurchase are shown below (dollars in millions):
Date
|
|
|
|
Balance
|
12/31/2015
|
|
|
|
$
|
4,205
|
12/31/2016
|
|
|
|
$
|
3,510
|
12/31/2017
|
|
|
|
$
|
2,655
|
12/31/2018
|
|
|
|
$
|
1,940
|
12/31/2019
|
|
|
|
$
|
1,445
|
12/31/2020
|
|
|
|
$
|
1,150
|
12/31/2021
|
|
|
|
$
|
1,050
|
12/31/2022
|
|
|
|
$
|
-
|
CONTACT:
E*TRADE Media Relations
Thayer Fox,
646-521-4418
thayer.fox@etrade.com
or
E*TRADE
Investor Relations
Brett Goodman, 646-521-4406
brett.goodman@etrade.com
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