eTrade 2012 Annual Report Download - page 41

Year Ended December 31,
2012 2011 2010
Enterprise net interest:
Spread 2.39% 2.79% 2.91%
Margin (net yield on interest-earning assets) 2.43% 2.84% 2.96%
Ratio of enterprise interest-earning assets to enterprise interest-bearing liabilities 106.09% 106.51% 106.49%
Return on average:
Total assets (0.23)% 0.33% (0.06)%
Total shareholders’ equity (2.24)% 3.36% (0.71)%
Average total shareholders’ equity to average total assets 10.19% 9.91% 8.84%
The fluctuation in enterprise interest-earning assets is driven primarily by changes in enterprise interest-
bearing liabilities, specifically customer cash and deposits. Average enterprise interest-earning assets increased
4% to $44.3 billion for the year ended December 31, 2012 compared to 2011. This was primarily a result of the
increases in average held-to-maturity securities, offset by a decrease in average loans.
Average enterprise interest-bearing liabilities increased 4% to $41.8 billion for the year ended December 31,
2012 compared to 2011. The increase in average enterprise interest-bearing liabilities was due primarily to an
increase in average deposits offset by a decrease in average securities sold under agreements to repurchase.
Enterprise net interest spread decreased by 40 basis points to 2.39% for the year ended December 31, 2012
compared to 2011, due primarily to lower yields on loans and the impact of the interest rate environment, which
remains challenging. We expect enterprise net interest spread will continue to compress in 2013 and anticipate a
decrease of approximately 10 basis points from 2012; however, enterprise net interest spread may further
fluctuate based on the size and mix of the balance sheet, as well as the impact from the level of interest rates.
Commissions
Commissions revenue decreased 13% to $377.8 million for the year ended December 31, 2012 compared to
2011. 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 customer mix and the different
commission rates on various trade types (e.g. equities, options, fixed income, stock plan, exchange-traded funds,
mutual funds, forex and cross border). Accordingly, changes in the mix of trade types will impact average
commission per trade.
DART volume decreased 12% to 138,112 for the year ended December 31, 2012 compared to 2011. Option-
related DARTs as a percentage of total DARTs represented 24% of trading volume for the year ended
December 31, 2012 compared to 20% in 2011. Exchange-traded funds-related DARTs as a percentage of total
DARTs represented 8% of trading volume for the year ended December 31, 2012 compared to 11% in 2011.
Average commission per trade was $11.01 for both years ended December 31, 2012 and 2011.
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