Dear E*TRADE Customers:
We are living through the most challenging financial markets of our lifetimes. The disruption in our individual financial plans and the uncertainty about when the markets will recover has left us all uneasy.
I want you to know E*TRADE FINANCIAL has prepared aggressively. We were early in raising capital, in building liquidity, in reducing risk. First and foremost, we have been steadfast with our focus on you, our customers, and your financial services needs, and we remain completely committed to helping you navigate through these unprecedented times.
I am pleased to report that with the recent increase in FDIC-provided deposit insurance, the protection provided for each E*TRADE Bank depositor has more than doubled, increasing from $100,000 to $250,000. And for E*TRADE Securities customers with the Extended Insurance Sweep Deposit Account sweep option, the protection has increased to $1,250,000 - five times the amount of FDIC coverage provided per bank depositor. In addition, E*TRADE Securities is a member of SIPC which protects securities customers of its members up to $500,000 (including $100,000 for claims for cash).
Our most recent financial statements from September 30 highlight the strong actions we have taken in these difficult times to deal aggressively with the challenges posed by the global credit crisis:
As we have since the start of the credit crisis, we continue to plan ahead and build for the future by setting aside funds to cover estimated future losses in our loan portfolio - not just for 2008 but most of 2009 as well.
We have built significant capital and liquidity cushions: As of September 30, E*TRADE Bank had $516 million of capital in excess of the level our regulators require in order to deem the Bank "well capitalized," and E*TRADE FINANCIAL had an additional $665 million in cash, much of which can be deployed to increase the Bank's capital level if needed.
In short, by maintaining a strategy to set aside funds to cover anticipated losses in our loan portfolio and to continue to build our capital and liquidity, we are positioned to address the continuing challenges posed by our current financial markets. In addition, we remain resolute in our dedication to keeping our balance sheet robust. In this market, capital is king and with this in mind, we will continue our efforts to add additional capital and liquidity into 2009.
Still, our franchise is not immune to the market's volatility. Like so many others, our stock price has been hit hard. Fortunately, stock price is not an indicator of the operational stability, solvency or long-term value of E*TRADE. By staying the course with our disciplined approach, we will continue to work hard to realize the full value of this franchise for our customers and our shareholders alike.
Thank you, as always, for your continued support and loyalty to E*TRADE.
Donald H. Layton
Chairman and CEO
E*TRADE FINANCIAL Corp.
