E*Trade Financial Earnings Call Nuggets: Tier 1 Leverage Ratio and Brokerage Attrition
Tier 1 Leverage Ratio
Howard Chen – Credit Suisse: Matt now that you have completed the refinancing actions and you are making meaningful progress in deleveraging. Can you just outline for us what next steps the company has to take and what we should expect to hear is going to hit that time table to achieve your goal of after aiming bank capital by the end of the year?
Matthew J. Audette – EVP and CFO: The most measureable thing is going to be to continue to improve the Tier 1 leverage ratio at the bank. So, our target is 9.5% and to dividend capital above that, towards the end of 2013. That’s the most visible theme we have seen, but I think it’s important to emphasize that a dividend is not something that you can simply do based on above 9.5%. All of the things that are important and part of our plan, I think we really need to come together for that to make sense; meaning when you did continue to build out our enterprise risk management capabilities. I’d say continue to mitigate and decrease the credit risk on the balance sheet. We need to implement the cost reductions, we need to do all of those things and I think from, if we are able to execute on all of that, I feel like we would be in a good position for dividend, but I’d be (Indiscernible) it in close but I can’t speculate on whether the regulators would agree with what I’m saying. But I feel confident from our perspective is the right thing to focus on.
Howard Chen – Credit Suisse: And then you also noted in your comments your outlook for provision expenses declined over the longer term. But just given the loan book continues to burn down, and you are pulling down reserves. Why shouldn’t provision expense be also down in 2013 versus what we just experienced in 2012.
Matthew J. Audette – EVP and CFO: I think without getting precise in any individual quarter, which can be pretty choppy. I think our expectations are down over the long-term, it just something on a quarter-to-quarter basis that may not be the case. So, year-over-year certainly we would expect to decline.