eTrade 2009 Annual Report Download - page 36

Year Ended December 31,
2009 2008 2007
Enterprise net interest:
Spread 2.72% 2.52% 2.64%
Margin (net yield on interest-earning assets) 2.80% 2.66% 2.81%
Ratio of enterprise interest-earning assets to enterprise interest- bearing liabilities 106.36% 105.40% 105.10%
Return on average:
Total assets (2.68)% (0.99)% (2.34)%
Total shareholders’ equity (43.61)% (18.98)% (34.86)%
Average equity to average total assets 6.15% 5.20% 6.73%
Average enterprise interest-earning assets decreased 5% to $44.5 billion for the year ended December 31,
2009 compared to 2008. This decrease was primarily a result of the decrease in our average loans portfolio and
our average margin receivables, partially offset by an increase in average cash and equivalents. Average loans
decreased 17% to $23.1 billion for the year ended December 31, 2009 compared to 2008. For the foreseeable
future, we plan to allow our loan portfolio to pay down. Average margin receivables decreased 47% to $3.1
billion for the year ended December 31, 2009 compared to 2008. We believe this decrease was due to customers
deleveraging and reducing their risk exposure given the substantial volatility in the financial markets. These
decreases were offset by increases in average cash and cash equivalents and available-for-sale investment
securities. Average cash and cash equivalents increased 136% to $6.0 billion for the year ended December 31,
2009 compared to 2008. The increase in average available-for-sale investment securities was related to purchases
of AAA-rated agency debentures during 2009.
Average enterprise interest-bearing liabilities decreased 6% to $41.8 billion for the year ended
December 31, 2009 compared to 2008. The decrease in average enterprise interest-bearing liabilities was
primarily due to a decrease in average FHLB advances, average brokered certificates of deposit and average
stock loan and other. Average FHLB advances decreased 38% to $2.9 billion for the year ended December 31,
2009 compared to 2008. Brokered certificates of deposit decreased 80% to $0.2 billion for the year ended
December 31, 2009 compared to 2008. Average stock loan and other decreased 52% to $0.5 billion for the year
ended December 31, 2009 compared to 2008. While our average retail deposits increased by $0.6 billion for the
year ended December 31, 2009 when compared to 2008, our deposits at December 31, 2009 decreased $0.5
billion when compared to December 31, 2008, and we expect the non-sweep deposit balances to continue to
decrease into 2010.
Enterprise net interest spread increased by 20 basis points to 2.72% for the year ended December 31, 2009
compared to 2008. This increase was largely driven by a decrease in the yields paid on our deposits and lower
wholesale borrowing costs, partially offset by a decrease in higher yielding enterprise interest-earning assets.
Commissions
Commissions revenue increased 6% to $548.0 million for the year ended December 31, 2009 compared to
2008. The main factors that affect our commissions revenue are DARTs, average commission per trade and the
number of trading days during the period. Average commission per trade is impacted by both trade types and the
mix between our domestic and international businesses. Each business has a different pricing structure, unique to
its customer base and local market practices and, as a result, a change in the relative number of executed trades in
these businesses impacts average commission per trade. Each business also has different trade types (e.g.,
equities, options, fixed income, exchange-traded funds, contract for difference and mutual funds) that can have
different commission rates. Accordingly, changes in the mix of trade types within either of these businesses may
impact average commission per trade.
DARTs increased 4% to 196,521 for the year ended December 31, 2009 compared to 2008. Our U.S. DART
volume increased 6% for the year ended December 31, 2009 compared to 2008, driven entirely by organic
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