eTrade 2009 Annual Report Download - page 29

• our ability to generate capital sufficient to meet our operating needs, particularly at a level sufficient to
offset loan losses;
• our ability to assess and manage interest rate risk; and
• disciplined expense control and improved operational efficiency.
Management monitors a number of metrics in evaluating the Company’s performance. The most significant
of these are shown in the table and discussed in the text below:
As of or For the Year Ended December 31, Variance
2009 2008 2007 2009 vs. 2008
Customer Activity Metrics:
U.S. DARTs(1) 179,183 169,075 161,219 6%
U.S. average commission per trade $ 11.33 $ 10.98 $ 11.57 3%
End of period brokerage accounts(2) 2,630,079 2,515,806 2,373,265 5%
Net new brokerage accounts(2) 114,273 142,541 4,688 (20)%
Customer assets (dollars in billions) $ 153.2 $ 112.2 $ 185.0 37%
Net new brokerage assets (dollars in billions)(2) $ 7.2 $ 3.9 $ (13.3) *
Brokerage related cash (dollars in billions)(2) $ 20.4 $ 15.8 $ 17.5 29%
Company Financial Metrics:
Corporate cash (dollars in millions) $ 393.2 $ 434.9 $ 312.4 (10)%
E*TRADE Bank excess risk-based capital (dollars in
millions) $ 899.1 $ 714.7 $ 435.1 26%
Allowance for loan losses (dollars in millions) $ 1,182.7 $ 1,080.6 $ 508.2 9%
Enterprise net interest spread (basis points) 272 252 264 8%
Enterprise interest-earning assets (average in billions) $ 44.5 $ 46.9 $ 56.1 (5)%
* Percentage not meaningful.
(1) U.S. DARTs are defined as transactions executed on our domestic platforms.
(2) References to “brokerage” in these metrics refer to activity on our domestic platforms and do not include brokerage activity from our
international local brokerage accounts.
Customer Activity Metrics
• DARTs are the predominant driver of commissions revenue from our customers.
• Average commission per trade is an indicator of changes in our customer mix, product mix and/or
product pricing. As a result, this metric is impacted by the mix between our customer groups.
• End of period brokerage accounts and net new brokerage accounts are indicators of our ability to attract
and retain trading and investing customers.
• Changes in customer assets are an indicator of the value of our relationship with the customer. An
increase in customer assets generally indicates that the use of our products and services by existing and
new customers is expanding. Changes in this metric are also driven by changes in the valuations of our
customers’ underlying securities, which declined substantially towards the end of 2008 and into 2009.
• Net new brokerage assets are total inflows to all new and existing brokerage accounts less total
outflows from all closed and existing brokerage accounts and are a general indicator of the use of our
products and services by existing and new brokerage customers.
• Customer cash and deposits, particularly our brokerage related cash, are an indicator of a deepening
engagement with our customers and are a key driver of net operating interest income.
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