eTrade 2010 Annual Report Download - page 32

• our ability to obtain regulatory approval to move capital from our bank to our parent company; and
• changes to the rules and regulations governing the financial services industry.
In addition to the items noted above, our success in the future will depend upon, among other things:
• continuing our success in the acquisition, growth and retention of trading customers;
• our ability to generate meaningful growth in the long-term investing customer group;
• our ability to assess and manage credit risk;
• our ability to generate capital sufficient to meet our operating needs, particularly 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
2010 2009 2008 2010 vs. 2009
Customer Activity Metrics:(1)
DARTs 150,532 179,183 169,075 (16)%
Average commission per trade $ 11.21 $ 11.33 $ 10.98 (1)%
Margin receivables (dollars in billions) $ 5.1 $ 3.7 $ 2.7 38%
End of period brokerage accounts 2,684,311 2,630,079 2,515,806 2%
Net new brokerage accounts 54,232 114,273 142,541 *
Customer assets (dollars in billions) $ 176.2 $ 150.5 $ 110.1 17%
Net new brokerage assets (dollars in billions) $ 8.1 $ 7.2 $ 3.9 *
Brokerage related cash (dollars in billions) $ 24.5 $ 20.4 $ 15.8 20%
Company Financial Metrics:
Corporate cash (dollars in millions) $ 470.5 $ 393.2 $ 434.9 20%
E*TRADE Bank excess risk-based capital (dollars in
millions) $ 1,105.6 $ 899.1 $ 714.7 23%
Special mention loan delinquencies (dollars in millions) $ 589.4 $ 804.5 $ 1,035.1 (27)%
Allowance for loan losses (dollars in millions) $ 1,031.2 $ 1,182.7 $ 1,080.6 (13)%
Enterprise net interest spread 2.91% 2.72% 2.52% 0.19%
Enterprise interest-earning assets (average in billions) $ 41.1 $ 44.5 $ 46.9 (8)%
*Percentage not meaningful.
(1) The prior periods presented have been updated to exclude international local market trading.
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 and is impacted by the mix between our customer groups.
• Margin receivables represent credit extended to customers and non-customers to finance their
purchases of securities by borrowing against securities they currently own. Margin receivables are a
key driver of net operating interest income.
• End of period brokerage accounts and net new brokerage accounts are indicators of our ability to attract
and retain trading and investing customers.
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