E*TRADE Financial Corporation (NASDAQ:ETFC) Q4 2014 Earnings Conference Call - Final Transcript

Jan 22, 2015 • 05:00 pm ET


E*TRADE Financial Corporation (NASDAQ:ETFC) Q4 2014 Earnings Conference Call - Final Transcript


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Good evening, and thank you for joining E*TRADE's Fourth Quarter and Full Year 2014 Earnings Conference Call. Joining the call today are Chief Executive Officer, Paul Idzik; and Chief Financial Officer, Matthew Audette.

(Forward-Looking Cautionary Statements)

This call is being recorded and a replay will be available via phone and webcast later this evening at about.etrade.com. No other recordings or copies of this call are authorized or may be relied upon.

With that, I will now turn the call over to Mr. Idzik.

Paul Idzik

Wow, that's the last time I complain about the hold music. Good evening, it is truly a pleasure to be joining here to share our perspectives on E*TRADE's performance and progress in 2014. This was a momentous year for E*TRADE's the one in which we benefitted from a more focused organization and we shaped our brand both to better connect with our customers.

A year of sustained operation under a significantly upgraded risk management framework, ensuring we executed deliberately and with the right controls, and even more striking all our accomplishments are buoyed by the strong financial position and regulatory standing we've had in years leading to consistent delivery in our capital plan and value creation for our shareholders while positioning us to create even more in the future.

Building on this momentum and on behalf of the board and my colleagues, I am incredibly proud to announce the most significant developments the company has seen in years with respect to capital efficiency and company structure. To quickly summarize the announcements we've made today, we received a go-ahead from our regulators

Paul Idzik

to operate E*TRADE bank at a leverage ratio of 9% and to remove our broker dealers from under the bank placing them closer to the parent enabling us to distribute to the parent excess capital of approximately $430 million. We will cover these items in more detail shortly. Now back to 2014 and a quick walk through of our key highlights.

During the year we posted our strongest bottom line results since 2006, saw record customer engagement across a host of metrics particularly in asset and account growth evolved a public base of E*TRADE with a revamped brand platform, enhance the digital experience with our customer, ceased opportunities to eliminate asymmetric risks by selling legacy assets in a non-core business, navigated our first required stress test submission with satisfying results and feedback, receive regulatory approval for consistent quarterly capital distributions from our bank and paid down corporate debt with cash for the first time in the company's history.

This is a distinguished list of achievements and I cannot thank my colleagues enough for their hard work this year. When I began two years ago, we went to great lengths to realign our internal operating structure to empower colleagues to execute more effectively. We then took a hard look at our processes to see what we could improve.

During 2014, we were well into implementation and we are just starting to see the benefits of increased rigor, improved