Net income of $71 million, or $0.24 per share, compared with net income of $0.16 per share in prior quarter and $0.03 per share in third quarter 2010

Income tax included a benefit of approximately $62 million, or $0.21 per share, related to the taxable liquidation of an international subsidiary

Other expenses included a reserve of $55 million, or $0.13 per share, related to E*TRADE Securities LLC's intention to initiate an offer to purchase auction rate securities purchased through the firm by individual investors before Feb. 11, 2008

FDIC expense increased $12 million from the prior quarter, including $6 million related to second quarter premiums

Total net revenue of $507 million, down from $518 million in prior quarter and up from $489 million in third quarter 2010

Provision for loan losses of $98 million, down from $103 million in prior quarter and $152 million in third quarter 2010

Special mention delinquencies (30-89 days) were flat compared with prior quarter; at-risk delinquencies (30-179 days) down five percent from prior quarter

Daily Average Revenue Trades (DARTs) of 165,000, up 11 percent from prior quarter and up 30 percent from third quarter 2010

Net new brokerage assets of $2.6 billion, up from $1.5 billion in prior quarter and $1.4 billion in third quarter 2010

Net new brokerage accounts of 13,000, down from 25,000 in prior quarter and up from 7,000 in third quarter 2010




E*TRADE Financial Corporation (NASDAQ: ETFC) announced results for its third quarter ended Sept. 30, 2011, reporting net income of $71 million, or $0.24 per share, compared with net income of $47 million, or $0.16 per share, in the prior quarter and net income of $8 million, or $0.03 per share, in the third quarter of 2010. The company reported total net revenue of $507 million for the third quarter, compared with $518 million in the prior quarter and $489 million in the year-ago period.

During the quarter, the company recorded an income tax benefit of approximately $62 million related to the taxable liquidation of a European subsidiary. The subsidiary was liquidated in connection with the company's international restructuring activities. This liquidation resulted in the taxable recognition of certain losses, including historical acquisition premiums that the company incurred internationally. This tax benefit resulted in a corresponding increase to the company's deferred tax asset which currently stands at $1.5 billion.

"We are pleased with our third quarter results which — amid significant market volatility — demonstrated strength in our brokerage business, continued improvement in our loan portfolio and measurable progress against our strategic initiatives," said Steven Freiberg, Chief Executive Officer of E*TRADE Financial Corporation. "The retail investor was highly engaged, particularly in early August when we successfully managed periods of record trade, call, online chat and login volumes. Over the course of the quarter, we benefited from growth in net new assets and accounts, supported by a stable customer retention rate. Delinquency trends in our loan portfolio continue to improve and our quarterly loan provision is down approximately 80 percent from its peak. Our solid execution continues to move the firm forward as we focus on delivering the best investing experience and creating franchise value."

During the quarter, the company reserved $55 million, recorded in other operating expenses, related to its intention to initiate an offer to buy auction rate securities (ARS) held by customers of E*TRADE Securities LLC. This reserve relates primarily to the company's estimate of the securities' current fair value relative to their par value, and includes other estimated settlement costs.

Mr. Freiberg commented: "While we played a limited role in the market for these securities, we believe these actions will put this matter behind us and are in the best interest of our customers and stakeholders."

More about ETFC at www.etrade.com

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