eTrade 2012 Annual Report Download - page 2

E*TRADE FINANCIAL CORPORATION
FORM 10-K ANNUAL REPORT
For the Year Ended December 31, 2012
TABLE OF CONTENTS
PART I
Forward-Looking Statements ............................................................ 1
Item 1. Business ...................................................................... 1
Overview ..................................................................... 1
Strategy ....................................................................... 2
Products and Services ............................................................ 2
Sales and Customer Service ....................................................... 4
Technology .................................................................... 5
Competition ................................................................... 5
Regulation .................................................................... 5
Available Information ........................................................... 8
Item 1A. Risk Factors .................................................................. 9
Item 1B. Unresolved Staff Comments ..................................................... 21
Item 2. Properties .................................................................... 21
Item 3. Legal Proceedings .............................................................. 22
Item 4. Mine Safety Disclosures ......................................................... 27
PART II
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer
Purchases of Equity Securities ................................................... 28
Item 6. Selected Consolidated Financial Data ............................................. 30
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ... 32
Overview ..................................................................... 32
Earnings Overview .............................................................. 36
Segment Results Review ......................................................... 49
Balance Sheet Overview ......................................................... 55
Liquidity and Capital Resources ................................................... 60
Risk Management ............................................................... 65
Concentrations of Credit Risk ..................................................... 69
Summary of Critical Accounting Policies and Estimates ................................ 79
Statistical Disclosure by Bank Holding Companies .................................... 87
Glossary of Terms .............................................................. 92
Item 7A. Quantitative and Qualitative Disclosures about Market Risk .......................... 98
Item 8. Financial Statements and Supplementary Data ..................................... 101
Management Report on Internal Control Over Financial Reporting .................... 101
Reports of Independent Registered Public Accounting Firm .......................... 102
Consolidated Statement of Income (Loss) .......................................... 104
Consolidated Statement of Comprehensive Income (Loss) ............................ 105
Consolidated Balance Sheet ...................................................... 106
Consolidated Statement of Shareholders’ Equity .................................... 107
Consolidated Statement of Cash Flows ............................................ 108
Notes to Consolidated Financial Statements ........................................ 110
Note 1—Organization, Basis of Presentation and Summary of Significant Accounting
Policies ................................................................... 110
Note 2—Operating Interest Income and Operating Interest Expense ................... 120
Note 3—Fair Value Disclosures ............................................... 120
Note 4—Available-for-Sale and Held-to-Maturity Securities ......................... 130
Note 5—Loans Receivable, Net ................................................ 135
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