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E*TRADE Financial Management Discusses Q2 2012 Results - Earnings Call Transcript

We were also proud to post another quarterly franchise record for brokerage account attrition of 8.4% annualized during the second quarter. This represents an improvement of more than 200 basis points from a year ago and is a testament to our focus on an extraordinary customer experience.

Turning to credit. Our legacy loan portfolio ended the quarter at $11.8 billion, down 5% sequentially and 64% from its peak. Our overall delinquencies were down 11% during the quarter while special mention delinquencies were down 7%. Both are at their lowest levels in approximately 5 years. We are proud of our progress on the continued derisking of the company as we closely manage the runoff of this portfolio.

As for our customer offering, we made enhancements to our E*TRADE pro- platform and simplified the overall user experience on the customer website. We added new tools, including a trading ladder and strategy screeners, giving customers even more realtime market depth and information, including realtime quotes for all E*TRADE 360 users. We opened 2 new branches during the quarter, one in Cupertino, California and one in New York City, bringing our branch total to 30. Over half of our 270 financial consultants reside within our branches providing an important point of contact for our customers, particularly as we expand our activities in the retirement and long-term investing segments. With $33 billion in retirement assets across nearly 800,000 accounts, we have a meaningful base from which to grow. Additionally, we ended the quarter with just under $1 billion in managed assets, over half of which are retirement assets. We're encouraged by our progress and are focused on continuing to build out our brand as a trusted destination for rollover accounts and other retirement services by providing solutions, advice and guidance and client education. Educated investors are typically more engaged customers, so we remain committed to our education efforts across a broad spectrum of categories with over 300,000 interactions during the quarter comprising seminars, webinars and videos, both live and on-demand. We believe that a clear indication of the increasing sophistication of our customers is the steady increase of options as a percentage of DARTs.

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