E*Trade's February DARTs Take a Dive

NEW YORK (TheStreet) -- E*Trade Financial(ETFC) Wednesday said daily average revenue trades, or DARTs, fell 20% in February vs. a month earlier, reversing gains it experienced to start the year.

Monthly trading activity for the company's U.S. operations totaled 138,728 trades, down from 172,445 in January, and a decline of 15% from 162,981 in the year-earlier period. The slide reflects lower volatility seen by E*Trade and other online brokers after large gains were made during the first three quarters of 2009 as the markets lifted from their crisis lows.

New and existing clients brought in $600 million worth of net new brokerage assets last month, down from the $800 million in the same period a year earlier but matching what E*Trade clients brought in January.

The online broker did not provide an update in the release regarding its search for a permanent CEO.

Within E*Trade's loan portfolio, total special mention delinquencies (loans 30-89 days overdue) fell by less than 1% from Dec. 31 through the end of February, the company said. E*Trade's total "at risk" delinquencies (loans 30-179 days delinquent) fell by 3% for the same time period. E*Trade has been working to shore up problems within its troubled loan portfolio, a major reason why the company was forced to recapitalize twice, with hedge fund giant Citadel Investments taking a large stake in the firm.

TD Ameritrade (AMTD) said after the markets closed on Tuesday that daily average client trades dropped 18% from the prior month to 347,000.

TD Ameritrade's CFO Bill Gerber said in its press release that as the company continues to experience the fallout from low interest rates and lower intra-day volatility, earnings for the March-ending quarter "are shaping up much like the December quarter."

TD Ameritrade said that profit fell 26% for the December-ending quarter compared to a year earlier and missed analysts' estimates.

Schwab (SCHW) warned last Friday that first-quarter profit would come in below consensus estimates because of revenue pressures resulting from low interest rates and higher compensation expenses. The profit warning was in conjunction with the San Francisco's release of monthly trading activity in which Schwab said that client daily average trading activity fell 15% on a sequential basis in February to 302,600 trades.