E*TRADE Financial Corporation (NASDAQ:ETFC) Q3 2018 Earnings Conference Call Transcript

Oct 18, 2018 • 05:00 pm ET


E*TRADE Financial Corporation (NASDAQ:ETFC) Q3 2018 Earnings Conference Call Transcript


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Good evening, and thank you for joining E*TRADE's Third Quarter 2018 Conference Call. Joining the call today are Chief Executive Officer, Karl Roessner, Executive Chairman of the Board, Rodger Lawson; and Chief Operating and Chief Financial Officer, Michael Pizzi.

(Forward-Looking Cautionary Statement)

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

Karl Roessner

Good evening, and thank you for joining our third quarter call. In September of 2016, we began a new journey of E*TRADE. A journey defined by a call to accelerate growth and to return to our roots as the undisputed leader for digitally inclined traders and investors. Over the course of the last two years we've made exceptional progress on this journey and we've created enormous value for our shareholders along the way.

We've truly positioned the company for continued success and for sustainable long term value creation. On behalf of E*TRADE's leadership team, I look forward to expanding on these statements in more detail. But we will begin with an overview of tonight's call. First, our Executive Chairman, Rodger Lawson will walk you through the Board's assessment of our performance and the impact of that assessment on the company's future.

Next, I will provide my thoughts on our progress and my team's vision for the future of E*TRADE. Finally, Mike Pizzi will follow with an update on our capital allocation plans and summarize our Q3 results. Then we will commence our customary Q&A.

In addition to our earnings press release, we have included supplementary pages in our investor presentation which highlight several of the key elements we will cover on the call this evening. It has been a very exciting and fulfilling two years and it is a pleasure to turn the page on this chapter in such a positive passion and I look forward to sharing our vision for the future.

With that, I'll hand the call over to our Executive Chairman, Rodger Lawson.

Rodger Lawson

Good evening, everyone. In the October 2016 having announced the acquisition of OptionsHouse, the Board set out a series of business driver related performance goals to serve as proof (inaudible) that we could reinvigorate growth, improve operating leverage and install a deeper sense of urgency in our ranks. As a Board, we want a confirmation that E*TRADE had bonafide a long term growth trajectory and could keep delivering meaningful value for our shareholders over time.

As many of you know, we also expressed if we couldn't achieve those goals over a reasonable period of time, which we outlined is 18 to 24 months, we would consider other strategic options to protect and enhance shareholder value, including a merger or even the sale of the company. Two years on the company has clearly reinvigorated its growth and delivered outstanding returns, while the specific driver goals we set represent only one aspect of the company's strong performance, we are pleased with having outperformance on three of the four benchmarks we laid out. The area where we've fallen short is net new asset growth,