eTrade 2011 Annual Report Download - page 38
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Year Ended December 31,
2011 2010 2009
Enterprise net interest:
Spread 2.79% 2.91% 2.72%
Margin (net yield on interest-earning assets) 2.84% 2.96% 2.80%
Ratio of enterprise interest-earning assets to enterprise interest-bearing liabilities 106.51% 106.49% 106.36%
Return on average:
Total assets 0.33% (0.06)% (2.68)%
Total shareholders’ equity 3.36% (0.71)% (43.61)%
Average equity to average total assets 9.91% 8.84% 6.15%
The fluctuation in enterprise interest-earning assets is driven primarily by changes in enterprise interest-
earning liabilities, specifically customer cash and deposits. Average enterprise interest-earning assets increased
4% to $42.7 billion for the year ended December 31, 2011 compared to 2010. This was primarily a result of the
increases in average margin receivables and average available-for-sale and held-to-maturity securities, offset by
decreases in average loans and average cash and equivalents.
Average enterprise interest-bearing liabilities increased 4% to $40.1 billion for the year ended December 31,
2011 compared to 2010. The increase in average enterprise interest-bearing liabilities was primarily due to
increases in average sweep deposits and average customer payables, offset by a decrease in average securities
sold under agreements to repurchase.
Enterprise net interest spread decreased by 12 basis points to 2.79% for the year ended December 31, 2011
compared to 2010, reflecting yields on average enterprise interest-earning assets and the current interest rate
environment. We expect enterprise net interest spread to continue to compress and, given the continued
challenges of the current interest rate environment, our enterprise net interest spread could average less than
2.50% for the year ending December 31, 2012.
Commissions
Commissions revenue increased 1% to $436.2 million for the year ended December 31, 2011 compared to
2010. The main factors that affect commissions are DARTs, average commission per trade and the number of
trading days during the period. Average commission per trade is impacted by different trade types (e.g. equities,
options, fixed income, stock plan, exchange-traded funds, mutual funds and cross border) that can have different
commission rates. Accordingly, changes in the mix of trade types will impact average commission per trade.
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