eTrade 2010 Annual Report Download - page 33

• Changes in customer assets are an indicator of the value of our relationship with the customer. An
increase in customer assets generally indicates that the use of our products and services by existing and
new customers is expanding. Changes in this metric are also driven by changes in the valuations of our
customers’ underlying securities.
• Net new brokerage assets are total inflows to all new and existing brokerage accounts less total
outflows from all closed and existing brokerage accounts and are a general indicator of the use of our
products and services by existing and new brokerage customers.
• Customer cash and deposits, particularly brokerage related cash, are an indicator of a deepening
engagement with our customers and are a key driver of net operating interest income.
Company Financial Metrics
• Corporate cash is an indicator of the liquidity at the parent company. It is also a source of cash that can
be deployed in our regulated subsidiaries.
• E*TRADE Bank excess risk-based capital is the excess capital that E*TRADE Bank has compared to
the regulatory minimum to be considered well-capitalized and is an indicator of E*TRADE Bank’s
ability to absorb future losses. It is also a potential source of additional corporate cash as this capital, if
requested by us and approved by our regulators, could be sent as a dividend or otherwise distributed up
to the parent company.
• Special mention loan delinquencies are loans 30-89 days past due and are an indicator of the expected
trend for charge-offs in future periods as these loans have a greater propensity to migrate into
nonaccrual status and ultimately charge-off.
• Allowance for loan losses is an estimate of the losses inherent in our loan portfolio as of the balance
sheet date and is typically equal to the expected charge-offs in our loan portfolio over the next twelve
months as well as the estimated charge-offs, including economic concessions to borrowers, over the
estimated remaining life of loans modified in troubled debt restructurings. The general allowance for
loan losses also includes a specific qualitative component to account for a variety of economic and
operational factors, including the uncertainty of how modified loans will perform over the long term,
which we believe may impact our level of credit losses.
• Enterprise interest-earning assets, in conjunction with our enterprise net interest spread, are indicators
of our ability to generate net operating interest income.
Significant Events in 2010
Enhancements to Our Trading and Investing Products and Services
• We expanded our advice offering by introducing managed investment portfolio advisory services to
long-term investors with an investment of $25,000 or more, and unified managed account advisory
services to long-term investors with an investment of $250,000 or more;
• We expanded Power E*TRADE Pro’s customization capabilities, navigation tools, and news and
information, including CNBC Plus streaming video;
• We launched the E*TRADE Mobile Pro application for Apple iPad™ and Android™ Smartphones,
expanding our suite of mobile applications, which already included Blackberry®and Apple iPhone™;
• We created Open API for third-party and independent software developers, which allows customers to
have access to technical information and documentation, reference guides, and other resources to help
network external applications and programs with our active trader platform; and
• We introduced new research and trade idea generation tools that we believe help our customers identify
investment opportunities and make informed decisions. These new tools include market commentary
from Dreyfus and Minyanville’s Buzz & Banter, a business and finance site.
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