E*TRADE Financial Corporation Announces Third Quarter 2013 Results

E*TRADE Financial Corporation (NASDAQ: ETFC):

Third Quarter Results
  • Net income of $47 million, or $0.16 per share on total net revenue of $417 million
  • Total operating expenses of $271 million, including restructuring charges of $6 million
  • Provision for loan losses of $37 million; net charge-offs of $29 million
  • Corporate cash of $373 million, including a dividend from the Bank of $100 million
  • Daily Average Revenue Trades (DARTs) of 145,000
  • End of period margin receivables of $6.2 billion
  • Net new brokerage accounts of 13,000
  • Net new brokerage assets of $2.4 billion; end of period customer assets of $241 billion

E*TRADE Financial Corporation (NASDAQ: ETFC) today announced results for its third quarter ended September 30, 2013, reporting net income of $47 million, or $0.16 per share. This compares with a net loss of $54 million, or $0.19 loss per share in the prior quarter, and a net loss of $29 million, or $0.10 loss per share in the third quarter of 2012. The prior periods’ net losses were driven primarily by a $142 million impairment to goodwill in the second quarter, and $50 million in charge-offs related to untimely reporting of borrower bankruptcies in the year-ago quarter. Total net revenue of $417 million for the third quarter of 2013 compares with $440 million in the prior quarter, and was down from $490 million in the third quarter of 2012.

E*TRADE also announced today that it has entered into a definitive agreement to sell its market making business, G1 Execution Services, to an affiliate of Susquehanna International Group, LLP for $75 million. The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in three to six months. In addition, the Company will enter into an order flow arrangement whereby E*TRADE agrees, subject to best execution standards, to route 70 percent of its customer equity order flow to G1 Execution Services over the next five years.

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