E*TRADE Financial Corporation (NASDAQ:ETFC) Q3 2017 Earnings Conference Call Transcript

Oct 19, 2017 • 05:00 pm ET


E*TRADE Financial Corporation (NASDAQ:ETFC) Q3 2017 Earnings Conference Call Transcript


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Good evening and thank you for joining E*TRADE's Third Quarter 2017 Earnings Conference Call. Joining the call today are CEO, Karl Roessner; and CFO, Michael Pizzi.

(Forward-Looking Cautionary Statements)

During the call, the Company will also discuss non-GAAP financial measures. For a reconciliation of such non-GAAP measures to the comparable GAAP figures, and for a discussion of additional risks and uncertainties that may affect the future results of E*TRADE Financial, please refer to the Company's earnings release furnished on Form 8-K along with Form 10-Ks and 10-Qs and other documents the Company has filed with the SEC. All of these documents are also available at about.etrade.com.

Note that the Company has not reconciled its forward-looking non-GAAP measures, including non-GAAP adjusted operating margin, to the most directly comparable GAAP measures, because material items that impact that measure are out of Company's control, and cannot be reasonably predicted.

This call will present information as of October 19th, 2017. The Company disclaims any duty to update forward-looking statements made during the call. The 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 replied upon -- rely upon.

With that, I will now turn the call over to Mr. Roessner. Please go ahead.

Karl Roessner

Thank you, Jennifer. Good evening and thank you for joining. It's a pleasure to speak with you again, now with a little more than year under our belt as E*TRADE's CEO and especially in the wake of strong results and solid progress across our key initiatives and growth goals. This past quarter, we were busy to say the least. So I'll start with the hit parade and then revisit each elements in more detail.

In early August, we completed the integration of OptionsHouse, bringing all of our customers into the E*TRADE ecosystem and capturing all expected revenue and expense synergies. With this work behind us, we have now pivoted our efforts toward the most exciting component of this initiative, unleashing the full power of the industry's top derivatives platform.

On the marketing front, we enjoyed an overwhelmingly positive response to our new brand campaign, driving strong customer growth and increased engagement. We are on to the second phase of our new campaign in which we evolve our messaging to further highlight E*TRADE's value proposition along with new, powerful and irreverent creative. We continue to improve the customer experience through several enhancements across our services and platforms.

We marched forward on our capital deployment initiatives buying back $187 million worth of stock and onboarding customer deposits to grow our balance sheet to slightly north of $60 billion in total assets. We capitalized on the continued improvement to our credit profile and the recent ratings upgrade to refinance our corporate debt, landing a three-handle on our average coupon for savings of $17 million in annual interest expense.

We enjoyed strong customer activity in continuation of the summer's trend and we're now