Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-11921 | |
Entity Registrant Name | E*TRADE Financial Corporation | |
Entity Central Index Key | 0001015780 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 94-2844166 | |
Entity Address, Address Line One | 671 N. Glebe Road, | |
Entity Address, City or Town | Arlington, | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 22203 | |
City Area Code | 646 | |
Local Phone Number | 521-4340 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | ETFC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 221,046,419 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF INCOME - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue: | ||
Interest income | $ 443 | $ 555 |
Interest expense | (43) | (63) |
Net interest income | 400 | 492 |
Gains on securities and other, net | 20 | 11 |
Other revenue | 13 | 12 |
Total non-interest income | 307 | 263 |
Total net revenue | 707 | 755 |
Provision (benefit) for credit losses | 6 | (12) |
Non-interest expense: | ||
Compensation and benefits | 168 | 164 |
Advertising and market development | 56 | 54 |
Clearing and servicing | 44 | 30 |
Professional services | 23 | 22 |
Occupancy and equipment | 36 | 32 |
Communications | 29 | 15 |
Depreciation and amortization | 23 | 21 |
FDIC insurance premiums | 4 | 4 |
Amortization of other intangibles | 15 | 15 |
Restructuring and acquisition-related activities | 16 | 0 |
Other non-interest expenses | 31 | 18 |
Total non-interest expense | 445 | 375 |
Income before income tax expense | 256 | 392 |
Income tax expense | 75 | 102 |
Net Income (Loss) Attributable to Parent, Total | 181 | 290 |
Preferred stock dividends | 20 | 20 |
Net income available to common stockholders | $ 161 | $ 270 |
Basic earnings per common share (in dollars per share) | $ 0.73 | $ 1.10 |
Diluted earnings per common share (in dollars per share) | $ 0.72 | $ 1.09 |
Basic (in thousands) | 222,295 | 246,252 |
Diluted (in thousands) | 222,742 | 246,934 |
Commissions [Member] | ||
Non-interest Income | ||
Revenue | $ 71 | $ 122 |
Fees and service charges [Member] | ||
Non-interest Income | ||
Revenue | $ 203 | $ 118 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 181 | $ 290 |
Available-for-sale securities: | ||
Unrealized (losses) gains, net | (126) | 112 |
Reclassification into earnings, net | (14) | (7) |
Net change from available-for-sale securities | (140) | 105 |
Other comprehensive income (loss) | (140) | 105 |
Comprehensive income | $ 41 | $ 395 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and equivalents | $ 1,105 | $ 750 |
Cash segregated under federal or other regulations | 5,730 | 1,879 |
Available-for-sale securities (amortized cost of $19,863 and $18,708 at March 31, 2020 and December 31, 2019, respectively) | 21,440 | 19,501 |
Held-to-maturity securities (fair value of $25,926 and $22,246 at March 31, 2020 and December 31, 2019, respectively) | 25,090 | 21,969 |
Margin receivables | 7,251 | 9,675 |
Loans receivable, net (net of allowance for credit losses of $86 and ($17) at March 31, 2020 and December 31, 2019, respectively) | 1,634 | 1,595 |
Receivables from brokers, dealers and clearing organizations | 1,124 | 1,395 |
Property and equipment, net | 339 | 339 |
Goodwill | 2,509 | 2,510 |
Other intangibles, net | 419 | 433 |
Other assets | 1,215 | 1,370 |
Total assets | 67,856 | 61,416 |
Liabilities: | ||
Deposits | 42,146 | 38,606 |
Customer payables | 15,960 | 12,849 |
Payables to brokers, dealers and clearing organizations | 776 | 893 |
Corporate debt | 1,411 | 1,410 |
Other liabilities | 1,044 | 1,115 |
Total liabilities | 61,337 | 54,873 |
Commitments and contingencies (see Note 14) | ||
Shareholders’ equity: | ||
Preferred stock, $0.01 par value, 1,000,000 shares authorized, 403,000 shares issued and outstanding at both March 31, 2020 and December 31, 2019, respectively; aggregate liquidation preference of $700 at both March 31, 2020 and December 31, 2019, respectively | 689 | 689 |
Common stock, $0.01 par value, 400,000,000 shares authorized, 221,032,420 and 222,622,333 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 2 | 2 |
Additional paid-in-capital | 4,318 | 4,416 |
Retained earnings | 1,678 | 1,464 |
Accumulated other comprehensive loss | (168) | (28) |
Total shareholders’ equity | 6,519 | 6,543 |
Total liabilities and shareholders’ equity | $ 67,856 | $ 61,416 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEET (Parentheticals) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Available-for-sale securities, amortized cost | $ 19,863 | $ 18,708 |
Held-to-maturity securities, fair value | 25,926 | 22,246 |
Allowance for loan losses | $ (86) | $ 17 |
Shareholders’ equity: | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 403,000 | 403,000 |
Preferred stock, shares outstanding (in shares) | 403,000 | 403,000 |
Preferred stock, liquidation preference, value | $ 700 | $ 700 |
Common stock par value | $ 0.01 | $ 0.01 |
Common stock shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock shares issued (in shares) | 221,032,420 | 222,622,333 |
Common stock shares outstanding (in shares) | 221,032,420 | 222,622,333 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss | Preferred Class A | Preferred Class ARetained Earnings (Accumulated Deficit) | Preferred Class B | Preferred Class BRetained Earnings (Accumulated Deficit) |
Balance, at Dec. 31, 2018 | $ 6,562 | $ 689 | $ 2 | $ 5,462 | $ 684 | $ (275) | ||||
Balance, (in shares) at Dec. 31, 2018 | 246 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 290 | 290 | ||||||||
Other comprehensive income (loss) | 105 | 105 | ||||||||
Common stock dividends | (35) | (35) | ||||||||
Preferred stock dividend declared | (20) | $ (12) | $ (12) | $ (8) | $ (8) | |||||
Repurchases of common stock, shares | (2) | |||||||||
Repurchases of common stock | (120) | (120) | ||||||||
Share-based compensation | 13 | 13 | ||||||||
Other common stock activity, shares | 1 | |||||||||
Other common stock activity | (13) | (13) | ||||||||
Balance, at Mar. 31, 2019 | 6,782 | 689 | $ 2 | 5,342 | 919 | (170) | ||||
Balance, (in shares) at Mar. 31, 2019 | 245 | |||||||||
Balance, at Dec. 31, 2019 | 6,543 | 689 | $ 2 | 4,416 | 1,464 | (28) | ||||
Balance, (in shares) at Dec. 31, 2019 | 223 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Cumulative effect of accounting change | Accounting Standards Update 2016-13 [Member] | 84 | 84 | ||||||||
Net income | 181 | 181 | ||||||||
Other comprehensive income (loss) | (140) | (140) | ||||||||
Common stock dividends | (31) | (31) | ||||||||
Preferred stock dividend declared | (20) | $ (12) | $ (12) | $ (8) | $ (8) | |||||
Repurchases of common stock, shares | (2) | |||||||||
Repurchases of common stock | (95) | (95) | ||||||||
Share-based compensation | 8 | 8 | ||||||||
Other common stock activity | (11) | (11) | ||||||||
Balance, at Mar. 31, 2020 | $ 6,519 | $ 689 | $ 2 | $ 4,318 | $ 1,678 | $ (168) | ||||
Balance, (in shares) at Mar. 31, 2020 | 221 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Dividend per share [Abstract] | ||
Dividends declared per common share | $ 0.14 | $ 0.14 |
Preferred Class A [Member] | ||
Dividend per share [Abstract] | ||
Preferred stock dividend declared, per share | 29.38 | 29.38 |
Preferred Class B [Member] | ||
Dividend per share [Abstract] | ||
Preferred stock dividend declared, per share | $ 2,650 | $ 2,650 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 181 | $ 290 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision (benefit) for credit losses | 6 | (12) |
Depreciation and amortization (including amortization and accretion on investment securities) | 57 | 54 |
Gains on securities and other, net | (20) | (11) |
Share-based compensation | 8 | 13 |
Deferred tax expense | (11) | 93 |
Other | (11) | 3 |
Net effect of changes in assets and liabilities: | ||
Decrease in receivables from brokers, dealers and clearing organizations | 271 | 163 |
Decrease (increase) in margin receivables | 2,424 | (707) |
Increase in other assets | (103) | (183) |
(Decrease) increase in payables to brokers, dealers and clearing organizations | (117) | 214 |
Increase in customer payables | 3,111 | 483 |
Decrease in other liabilities | (997) | (209) |
Net cash provided by operating activities | 4,821 | 185 |
Cash flows from investing activities: | ||
Purchases of available-for-sale securities | (3,479) | (3,589) |
Proceeds from sales of available-for-sale securities | 2,102 | 1,760 |
Proceeds from maturities of and principal payments on available-for-sale securities | 368 | 361 |
Purchases of held-to-maturity securities | (4,367) | (3,084) |
Proceeds from maturities of and principal payments on held-to-maturity securities | 1,235 | 1,034 |
Decrease in loans receivable | 65 | 145 |
Capital expenditures for property and equipment | (34) | (38) |
Proceeds from Securities Purchased under Agreements to Resell | 200 | 0 |
Proceeds from sale of real estate owned and repossessed assets | 3 | 4 |
Net cash flow from derivative contracts | (89) | (29) |
Other | (1) | (18) |
Net cash used in investing activities | (3,997) | (3,454) |
Cash flows from financing activities: | ||
Increase in deposits | 3,540 | 1,015 |
Common stock dividends | (31) | (35) |
Preferred stock dividends | (20) | (20) |
Net increase in advances from FHLB | 0 | 300 |
Repurchases of common stock | (95) | (120) |
Other | (12) | (15) |
Net cash provided by financing activities | 3,382 | 1,125 |
Decrease in cash, cash equivalents and segregated cash | 4,206 | (2,144) |
Cash, cash equivalents and segregated cash, beginning of period | 2,629 | 3,344 |
Cash, cash equivalents and segregated cash, end of period | 6,835 | 1,200 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||
Cash and equivalents, end of period | 1,105 | 523 |
Segregated cash, end of period | 5,730 | 677 |
Cash, cash equivalents and segregated cash, end of period | 6,835 | 1,200 |
Supplemental disclosures: | ||
Cash paid for interest | 46 | 65 |
(Refund received) cash paid for income taxes, net | (22) | 3 |
Right-of-use assets recognized upon adoption of new lease standard | 0 | 193 |
Right-of-use assets obtained during the period | 4 | 13 |
Cash paid for amounts included in the measurement of operating lease liabilities | 9 | 7 |
Non-cash investing and financing activities: | ||
Transfers from loans to other real estate owned and repossessed assets | $ 4 | $ 4 |
Organization, Basis of Presenta
Organization, Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1—ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization E*TRADE Financial Corporation is a financial services company that provides brokerage and related products and services for traders, investors, stock plan administrators and participants, and RIAs. The Company also provides investor-focused banking products, including sweep deposit accounts insured by the FDIC, to customers. The Company's most significant, wholly-owned subsidiaries are described below: • E*TRADE Securities is a registered broker-dealer that clears and settles customer transactions • E*TRADE Bank is a federally chartered savings bank that provides FDIC insurance on certain qualifying amounts of customer deposits and provides other banking and cash management capabilities • E*TRADE Savings Bank, a subsidiary of E*TRADE Bank, is a federally chartered savings bank that provides FDIC insurance on certain qualifying amounts of customer deposits and provides custody solutions for RIAs • E*TRADE Financial Corporate Services is a provider of software and services for managing equity compensation plans and student loan and financial wellness benefits to our corporate clients • E*TRADE Futures is a registered non-clearing FCM that provides retail futures transaction capabilities for our customers • E*TRADE Capital Management is an RIA that provides investment advisory services for our customers Basis of Presentation The condensed consolidated financial statements, also referred to herein as the consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries as determined under the voting interest model. Entities in which the Company has the ability to exercise significant influence but in which the Company does not possess control are generally accounted for by the equity method. Entities in which the Company does not have the ability to exercise significant influence are generally carried at cost. The Company also evaluates its initial and continuing involvement with certain entities to determine if the Company is required to consolidate the entities under the variable interest entity (VIE) model. This evaluation is based on a qualitative assessment of whether the Company is the primary beneficiary of a VIE, which requires the Company to possess both: 1) the power to direct the activities that most significantly impact the economic performance of the VIE; and 2) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. There are no investments in which the Company represents the primary beneficiary of a VIE; therefore, there are no consolidated VIEs included for all periods presented. The Company's consolidated financial statements are prepared in accordance with GAAP. Intercompany accounts and transactions are eliminated in consolidation. These consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary to present fairly the financial position, results of operations and cash flows for the periods presented and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2019. Use of Estimates Preparing the Company's consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and related notes for the periods presented. Actual results could differ from management’s estimates. Certain significant accounting policies are critical because they are based on estimates and assumptions that require complex and subjective judgments by management including the allowance for credit losses, valuation and impairment of goodwill and acquired intangible assets, and income taxes. Management also makes estimates in recognizing accrued operating expenses and other liabilities. These liabilities are impacted by estimates for litigation and regulatory matters as well as estimates related to general operating expenses, such as incentive compensation. Management estimates reflect the liabilities deemed probable at the balance sheet date as determined as part of the Company's ongoing evaluations based on available information. The Company evaluated its goodwill and finite lived intangible assets for impairment as a result of the decline in its share price related to actions taken by the Federal Reserve to contain the financial and economic impact of the COVID-19 pandemic. This analysis included a quantitative impairment test for its goodwill and a review of the recoverability of its finite lived intangible assets. No impairment of goodwill or finite lived intangible assets was indicated at March 31, 2020 as a result of this analysis. Adoption of New Accounting Standards Accounting for Credit Losses In June 2016, the FASB amended the guidance on accounting for credit losses and subsequently issued clarifications and improvements. The amended guidance requires measurement of an allowance for credit losses for financial instruments, including loans and debt securities, and other commitments to extend credit held at the reporting date. For financial assets measured at amortized cost, factors such as historical performance, prepayment expectations, current conditions, and reasonable and supportable forecasts, including expected recoveries, are used to estimate expected credit losses over the contractual life of the underlying assets. The amended guidance also requires credit losses on impaired available-for-sale debt securities to be recorded through an allowance for credit losses. The CECL standard allows for subsequent increases in the fair value of collateral for collateral-dependent loans to be recognized up to the amount previously charged-off. A loan is considered to be collateral-dependent when foreclosure is probable or when repayment is expected to be provided substantially through the sale of the underlying collateral when the borrower is experiencing financial difficulty. The Company adopted the new standard on its effective date of January 1, 2020 using a modified retrospective approach and recognized an after-tax benefit related to mortgage loans of $84 million as an adjustment to opening retained earnings. The benefit primarily related to appreciation of fair value of the underlying collateral for mortgage loans that had been determined to be collateral-dependent and charged-off to the fair value of the underlying collateral in prior periods. This adoption impact is presented on the balance sheet as a “negative allowance” associated with the mortgage loans. Current expected credit losses on the Company’s investment security portfolio, margin receivables, securities-based lending and other financial assets held at amortized cost were not material. Adoption of the standard did not have an impact on the Company’s cash flows. See Note 7—Loans Receivable and Allowance for Credit Losses for further details. In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. The pandemic, and actions taken by governmental authorities to contain its financial and economic impact, resulted in significant market volatility during March 2020. The Company's allowance for credit losses on its mortgage loan portfolio as of March 31, 2020 includes the estimated financial impacts of the pandemic on its expected credit losses and resulted in an increase to the allowance for credit losses of $5 million as compared to January 1, 2020. See Note 7—Loans Receivable and Allowance for Credit Losses for further details. The Company's estimate of expected credit losses and related allowance for credit losses for its margin receivables, trade receivables, securities-based lending, securities lending, and agency debt securities were not directly impacted by the pandemic. The Company's analysis of its non-agency portfolio continued to indicate no expectation of credit losses as a result of credit enhancements associated with the investments, including the value of underlying collateral and the ability of subordinated interests to absorb estimated losses. As a result, no allowance for credit losses was recorded related to these portfolios as of March 31, 2020. Management will continue to evaluate conditions related to this and other significant events and their impacts on the factors used to estimate expected credit losses. Loans Receivable, Net Loans receivable, net consists of mortgage and securities-based lending loans that management has the intent and ability to hold for the foreseeable future or until maturity, also known as loans held-for-investment. The related allowance for credit losses is determined in accordance with the amended CECL guidance. Mortgage Loans Mortgage loans consist of the Company’s one- to- four-family and home equity loans. Current expected credit losses for mortgage loans that share similar risk characteristics, including loans that are performing in accordance with their contractual terms, are determined on a collective basis. Current expected credit losses for mortgage loans that do not share similar risk characteristics, including loans modified as troubled debt restructurings (TDRs) and loans that are collateral-dependent, are determined individually based on the characteristics of each loan. The Company’s accounting policies and practices for evaluating the risk characteristics of its mortgage loan portfolio were not impacted by the adoption of the new guidance. The Company’s accounting policies and practices for determining that a loan should be placed on nonaccrual status or that a loan has become delinquent or uncollectible, including the policies for discontinuing accrual of interest, recording payments received, and resuming accrual of interest were not impacted by the adoption of the new guidance. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies in Part II. Item 8. Financial Statements and Supplementary Data of ou r Annual Repor t The Company uses a probability of default and loss given default model for determining the allowance for credit losses for its mortgage loans that are evaluated collectively. A probability of default and loss given default model utilizes prepayment forecasts, loan amortization calculations, and other internally derived and externally sourced data and assumptions to determine the likelihood that the Company’s mortgage loans will experience a default and determine the expected loss given default. The Company also utilizes an externally provided macroeconomic forecast over the remaining life of the loans. The model parameters are adjusted to reflect past events, including general default data for loans with similar vintages and the Company's historical experience with borrower defaults, prepayments, losses, and charge-offs over the past 12 months. The Company utilizes a qualitative factor framework whereby, on a quarterly basis, the risk associated with the following three primary sets of factors are evaluated: external factors, internal factors, and portfolio specific factors. The uncertainty related to these factors may expand over time, temporarily impacting the qualitative component in advance of the more precise identification of these expected credit losses within the modeled credit losses. Management’s estimate of expected credit losses includes qualitative adjustments for model weaknesses, macroeconomic forecast uncertainty, and recoveries. The Company’s forecast includes a forward-looking view of macroeconomic factors over the next two to five years, after which the macroeconomic factors revert to externally provided long-term equilibrium values, rates, or patterns that do not include specific predictions for the economy. Key inputs for the forecast include US home prices and unemployment data. Loan modifications accounted for as TDRs that are not collateral-dependent are considered to be cash-flow dependent as the Company expects repayment to come from the loan principal and interest. The Company uses a discounted cash flow method to discount expected cash flows for these loans using the loan’s effective interest rate immediately prior to modification, which is consistent with the policy used for estimating the impact at adoption. Assumptions utilized in the discounted cash flow model are based on pools of loans that had modifications completed under the Company's loss mitigation program in which an economic concession was granted to the borrower experiencing financial difficulties. The Company does not adjust the effective interest rate for estimated prepayment assumptions. The allowance for credit losses reflects the difference between the amortized cost basis and the present value of the expected cash flows. Changes in the present value of expected cash flows are presented as credit loss expense or a reversal of credit loss expense. A mortgage loan is considered collateral-dependent when repayment is expected to be provided substantially through sale of the collateral when the borrower is experiencing financial difficulty or where foreclosure is probable. The Company uses the fair value of the collateral at the reporting date when measuring the net carrying amount of the asset and determining the allowance for credit losses. The fair value of the collateral is adjusted for estimated costs to sell. When the fair value of the collateral less costs to sell at the reporting date exceeds the recorded investment in the loan, the Company adjusts the allowance for credit losses such that the net carrying value equals the fair value of the collateral, less costs to sell. Such instances will result in a “negative allowance,” or increase to the carrying value of the loan receivable; however, any such amount cannot exceed amounts previously charged-off. If the fair value of the collateral less estimated costs to sell subsequently declines, the Company will adjust the carrying value of the mortgage loan by first reversing any negative allowance previously recorded. When applicable, the Company will further adjust the recorded investment of the mortgage loan by recording an incremental charge-off. Changes in the fair value of the collateral less costs to sell are recorded as a provision (benefit) for credit losses. The Company does not measure an allowance for credit losses for accrued interest receivable on mortgage loans because the Company reverses accrued interest receivable on loans that have principal or interest that is 90 days or greater past due, TDRs that are placed on nonaccrual status for all classes of loans (including loans in bankruptcy), and certain junior liens that have a delinquent senior lien. The Company reverses accrued interest through interest income. Securities-based Lending Securities-based lending includes the E*TRADE Line of Credit product, which allows customers to borrow against the market value of their securities pledged as collateral, and securities lending, which includes deposits paid for securities borrowed that are recorded at the amount of cash collateral advanced. The E*TRADE Line of Credit portfolio is included within the Loans receivable, net line item on the consolidated balance sheets. Deposits paid for securities borrowed are included within the Receivables from brokers, dealers, and clearing organizations line item while deposits paid for securities borrowed under the fully paid lending program are included in the Other assets line item on the consolidated balance sheets. Securities-based lending is fully collateralized by cash and securities with fair values in excess of the amount borrowed. The borrowers are contractually required to continually adjust the amount of the collateral as a result of changes in its fair value such that the collateral can be replenished on a daily basis. The Company expects the borrowers will continually replenish the collateral and elected the practical expedient which permits it to compare the amortized cost basis of the loaned amount with the fair value of collateral received at the reporting date to estimate of expected credit losses. As a result of this election, and the fully collateralized nature of these arrangements, the Company has no expectation of credit losses on its securities-based lending loans. The Company fully reserves for unsecured securities-based lending and related accrued interest receivable when they become 90 days past due. Margin Receivables Margin receivables represent credit extended to customers to finance their purchases of securities by borrowing against securities they own and are fully collateralized by these securities in customer accounts. Similar to securities-based lending, the borrowers of a margin loan are contractually required to continually adjust the amount of the collateral as a result of changes in its fair value such that the collateral can be replenished on a daily basis. The Company expects the borrowers will continually replenish the collateral as necessary because the Company subjects the borrowers to an internal qualification process and an interview to align investing objectives and risk appetite in addition to monitoring customer activity. The Company elected the practical expedient which permits it to compare the amortized cost basis of the loaned amount with the fair value of collateral received at the reporting date to measure the estimate of expected credit losses. The Company has no expectation of credit losses for margin loans where the fair value of the collateral securing the loans is equal to or in excess of the loaned amount. In cases where the fair value of the collateral is less than the amortized cost basis of the loan, for example, in times of severe or prolonged market volatility, the Company recognizes an allowance for credit losses in the amount of the difference, or unsecured balance. The Company fully reserves for unsecured margin balances and related accrued interest receivable when they become 90 days past due. The allowance for credit losses on margin receivables and the related accrued interest was not material and is presented within the Other assets line of the consolidated balance sheets, and provision for credit losses is presented within the Other non-interest expenses line of the consolidated statements of income. Debt Securities The Company’s available-for-sale securities are composed primarily of agency mortgage-backed and agency debt securities, and also include non-agency asset-backed and mortgage-backed securities. The Company’s held-to-maturity securities consist of debt securities, primarily agency mortgage-backed securities and agency debt securities. The Company monitors the credit quality of the agencies and has no expectation of credit losses on investment securities, or the related accrued interest receivable, that are backed by the US government or its agencies because of the credit profiles of those entities and our historical loss experience for such investments. Accrued interest receivable on debt securities is excluded from both the fair value and the amortized cost basis for purposes of identifying and measuring an impairment. All accrued and uncollected interest is reversed against interest income when it is considered uncollectible. As of March 31, 2020, accrued interest receivable for available-for-sale and held-to-maturity securities was $51 million and $67 million, respectively, and is included within the Other assets line of the consolidated balance sheets. The Company's non-agency asset-backed and mortgage-backed securities include senior classes of commercial mortgage-backed securities and ABS collateralized by credit card, automobile loan and student loan receivables. The Company applies a variety of stress case scenarios based on forecasts to determine expected credit losses in the non-agency portfolio. If an expected credit loss is identified, the Company uses a discounted cash flow method to determine the allowance for credit losses. The discounted cash flow method utilizes the effective interest rate implicit at the acquisition date and contractual cash flows adjusted for expected prepayments and default assumptions. If a security is impaired and the present value of expected cash flows is less than the amortized cost basis of the security, then an allowance for credit loss is recognized, limited to the difference between the fair value and amortized cost of the security. If the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before the recovery of the security’s amortized cost basis, the Company writes down the security’s amortized cost basis to its fair value. There were no expected credit losses on the Company's non-agency available-for-sale securities or related accrued interest receivable as of March 31, 2020. See Note 6—Available-for-Sale and Held-to-Maturity Securities for further details. Receivables from Brokers, Dealers, and Other Clearing Organizations The Receivables from brokers, dealers, and clearing organizations line item includes deposits paid for securities borrowed as well as receivables from clearing organizations and other brokerage receivables which are in scope of the amended guidance. The Company continually reviews the credit quality of its counterparties and has not experienced a default. As a result, the Company has zero expectation of credit losses for these arrangements. Codification Improvements Related to Credit Losses, Financial Instruments, Derivatives and Hedging In April 2019, the FASB clarified recently released guidance related to credit losses, financial instruments, derivatives and hedging. The FASB has an ongoing project on its agenda for improving the FASB's Accounting Standards Codification or correcting its unintended application. The Company adopted all new guidance related to credit losses on January 1, 2020 using a modified retrospective approach. The new guidance related to financial instruments was applied on January 1, 2020; however, there was no impact to the Company. The Company applied the new guidance related to derivatives and hedging on a prospective basis effective January 1, 2020 and enhanced its derivatives disclosures accordingly. See Note 8—Derivative Instruments and Hedging Activities for further details. Simplifying the Test for Goodwill Impairment In January 2017, the FASB amended the guidance to simplify the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test. The amended guidance requires the Company to perform its annual goodwill impairment test by comparing the fair value of a reporting unit to its carrying amount. An impairment charge would be recognized at the amount by which the carrying amount exceeds the fair value of the reporting unit; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Income tax effects resulting from any tax deductible goodwill should be considered when measuring the goodwill impairment loss, if applicable. The Company has the option to perform a qualitative assessment to conclude whether it is more likely than not that the carrying amount of the Company exceeds its fair value. The Company adopted the new standard on its effective date of January 1, 2020 and applied the standard prospectively. Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract In August 2018, the FASB amended the guidance on accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The amended guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company adopted the new standard on its effective date of January 1, 2020 and applied the standard prospectively. Implementation costs incurred on and after January 1, 2020 in a cloud computing arrangement that is a service contract are capitalized or expensed in accordance with the accounting guidance, and capitalized costs are amortized over the term of the hosting arrangement. New Accounting Standards Not Yet Adopted Simplifying the Accounting for Income Taxes In December 2019, the FASB amended the guidance to simplify the accounting for income taxes as part of its initiative to reduce complexity in accounting standards. The amendments remove certain exceptions to the general income tax accounting principles and provide for consistent application of and simplify GAAP for other areas by clarifying and amending existing guidance. The guidance will be effective for interim and annual periods beginning January 1, 2021 and each amendment will be applied on either a retrospective basis, modified retrospective basis, or prospective basis as required in accordance with the new standard. The Company is currently evaluating the impact of these clarifications on the Company's financial condition, results of operations and cash flows. Clarifying the Interactions Between Accounting for Investments in Equity Securities, Investments in Equity Method and Joint Ventures, and Derivatives and Hedging In January 2020, the FASB amended the guidance to clarify the interaction of the accounting for equity securities and investments accounted for under the equity method of accounting and the accounting for certain forward contracts and purchased options. The amended guidance clarifies that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative immediately before applying or upon discontinuing the equity method. The amended guidance also clarifies how a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option. The guidance will be effective for interim and annual periods beginning January 1, 2021, and must be applied prospectively. Early adoption is permitted. The Company is currently evaluating the impact of these clarifications on the Company's financial condition, results of operations and cash flows. Facilitation of the Effects of Reference Rate Reform on Financial Reporting In March 2020, the FASB amended the guidance to provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The guidance is effective for hedges in place as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the timing of adoption and the impact of these amendments, which when adopted, could have a material impact on the Company's financial condition and results of operations. For example, any changes in the designated benchmark rate affecting the cumulative fair value hedge basis adjustment as a result of an anticipated discontinuance of LIBOR would be recognized in current earnings in the period of adoption. |
Acquisition and Restructuring
Acquisition and Restructuring | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITION | NOTE 2—ACQUISITIONS AND RESTRUCTURING Proposed Merger with Morgan Stanley On February 20, 2020, the Company entered into the Merger Agreement with Morgan Stanley under which Morgan Stanley will acquire the Company in an all-stock transaction. Under the terms of the agreement, E*TRADE common stockholders will receive 1.0432 Morgan Stanley common shares for each E*TRADE common share. The acquisition is subject to customary closing conditions, including regulatory approvals and approval by the Company's shareholders. During the three months ended March 31, 2020, the Company incurred $16 million of restructuring and acquisition-related activities expenses in connection with the proposed merger. These costs related primarily to investment banking and legal fees. There were no restructuring and acquisition-related activities expenses during the three months ended March 31, 2019. Gradifi Acquisition |
Net Revenue
Net Revenue | 3 Months Ended |
Mar. 31, 2020 | |
Revenues [Abstract] | |
NET REVENUE DISCLOSURE | NOTE 3—NET REVENUE The following table presents the significant components of total net revenue (dollars in millions): Three Months Ended March 31, 2020 2019 Net interest income $ 400 $ 492 Commissions 71 122 Fees and service charges 203 118 Gains on securities and other, net 20 11 Other revenue 13 12 Total net revenue (1) $ 707 $ 755 (1) Contract balances and transaction price allocated to remaining performance obligations were not material for the periods presented. Effective October 7, 2019, the Company eliminated retail commissions for online US listed stock, ETF, and options trades. We also reduced the options contract charge to $0.65 per contract for all traders while maintaining our active trader pricing at $0.50 per contract. Interest Income and Interest Expense The following table presents the significant components of interest income and interest expense (dollars in millions): Three Months Ended March 31, 2020 2019 Interest income: Cash and equivalents $ 2 $ 3 Cash segregated under federal or other regulations 8 6 Investment securities 285 365 Margin receivables 94 126 Loans 21 28 Broker-related receivables and other 4 4 Subtotal interest income 414 532 Other interest revenue (1) 29 23 Total interest income 443 555 Interest expense: Sweep deposits: Brokerage sweep deposits 5 20 Bank sweep deposits (2) 13 — Savings deposits 3 15 Customer payables 4 9 Broker-related payables and other — 1 Other borrowings 1 2 Corporate debt 14 14 Subtotal interest expense 40 61 Other interest expense (3) 3 2 Total interest expense 43 63 Net interest income $ 400 $ 492 (1) Other interest revenue is earned on certain securities loaned balances. Interest expense incurred on other securities loaned balances is presented on the broker-related payables and other line item above. (2) Beginning in Q4 2019, bank sweep deposits include Premium Savings Accounts participating in the newly established bank sweep deposit account program. Refer to Note 9—Deposits for additional information. (3) Other interest expense is incurred on certain securities borrowed balances. Interest income earned on other securities borrowed balances is presented on the broker-related receivables and other line item above. Fees and Service Charges The following table presents the significant components of fees and service charges (dollars in millions): Three Months Ended March 31, 2020 2019 Fees and service charges: Order flow revenue $ 85 $ 43 Money market funds and sweep deposits revenue 60 21 Advisor management and custody fees 19 18 Mutual fund service fees 13 12 Foreign exchange revenue 9 8 Reorganization fees 4 6 Other fees and service charges 13 10 Total fees and service charges $ 203 $ 118 |
Fair Value Disclosures
Fair Value Disclosures | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | NOTE 4—FAIR VALUE DISCLOSURES Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company may use various valuation approaches, including market, income and/or cost approaches. The fair value hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is a market-based measure considered from the perspective of a market participant. Accordingly, even when market assumptions are not readily available, the Company’s own assumptions reflect those that market participants would use in pricing the asset or liability at the measurement date. The fair value measurement accounting guidance describes the following three levels used to classify fair value measurements: • Level 1 - unadjusted quoted prices in active markets for identical assets or liabilities that are accessible by the Company • Level 2 - quoted prices for similar assets and liabilities in an active market, quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly • Level 3 - unobservable inputs that are significant to the fair value of the assets or liabilities The availability of observable inputs can vary and in certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to a fair value measurement requires judgment and consideration of factors specific to the asset or liability. Recurring Fair Value Measurement Techniques Agency Debt and Mortgage-backed Securities The Company’s agency mortgage-backed securities portfolio is comprised of debt securities which are guaranteed by US government sponsored enterprises and federal agencies. The fair value of agency mortgage-backed securities was determined using a market approach with quoted market prices, recent transactions and spread data for identical or similar instruments. Agency mortgage-backed securities were categorized in Level 2 of the fair value hierarchy. The fair value measurements of agency debentures and other agency debt securities were determined using market and income approaches along with the Company’s own trading activities for identical or similar instruments and were categorized in Level 2 of the fair value hierarchy. US Treasuries The Company's fair value level classification of US Treasuries is based on the original maturity dates of the securities and whether the securities are the most recent issuances of a given maturity. US Treasuries with original maturities less than one year are classified as Level 1. US Treasuries with original maturities greater than one year are classified as Level 1 if they represent the most recent issuance of a given maturity; otherwise, these securities are classified as Level 2. Non-agency Debt Securities The Company's non-agency debt securities include senior classes of commercial mortgage-backed securities and ABS collateralized by credit card, automobile loan and student loan receivables. The fair value of non-agency debt securities was determined using a market approach with recent transactions and spread data for identical or similar instruments. Non-agency debt securities were categorized in Level 2 of the fair value hierarchy. Nonrecurring Fair Value Measurement Techniques Certain other assets are recorded at fair value on a nonrecurring basis: 1) one- to four-family and home equity loans in which the amount of the loan balance in excess of the estimated current value of the underlying property less estimated selling costs has been charged-off; and 2) real estate owned that is carried at the lower of the property’s carrying value or fair value less estimated selling costs. Loans Receivable Loans that have been delinquent for 180 days or that are in bankruptcy and certain TDR loan modifications are charged-off based on the estimated current value of the underlying property less estimated selling costs. Property valuations for these one- to four-family and home equity loans are based on the most recent "as is" property valuation data available, which may include appraisals, broker price opinions, automated valuation models or updated values using home price indices. Real Estate Owned Property valuations for real estate owned are based on the lowest value of the most recent property valuation data available, which may include appraisals, listing prices or approved offer prices. Nonrecurring fair value measurements on one- to four-family loans, home equity loans and real estate owned were classified as Level 3 of the fair value hierarchy as the valuations included unobservable inputs that were significant to the fair value. The following table presents additional information about significant unobservable inputs used in the valuation of assets measured at fair value on a nonrecurring basis that were categorized in Level 3 of the fair value hierarchy: Unobservable Inputs Average Range March 31, 2020: Loans receivable: One- to four-family Appraised value $ 402,200 $69,000 - $796,000 Home equity Appraised value $ 295,900 $70,000 - $756,000 Real estate owned Appraised value $ 407,000 $100,000 - $979,000 December 31, 2019: Loans receivable: One- to four-family Appraised value $ 815,900 $92,000 - $2,700,000 Home equity Appraised value $ 437,300 $75,000 - $1,440,000 Real estate owned Appraised value $ 391,700 $80,000 - $897,000 Recurring and Nonrecurring Fair Value Measurements The following tables present the significant components of assets and liabilities measured at fair value (dollars in millions): Level 1 Level 2 Level 3 Total March 31, 2020: Recurring fair value measurements: Assets Available-for-sale securities: Agency mortgage-backed securities $ — $ 17,449 $ — $ 17,449 Agency debentures — 965 — 965 US Treasuries — 1,343 — 1,343 Non-agency asset-backed securities — 1,411 — 1,411 Non-agency mortgage-backed securities — 272 — 272 Total available-for-sale securities — 21,440 — 21,440 Total assets measured at fair value on a recurring basis (1) $ — $ 21,440 $ — $ 21,440 Nonrecurring fair value measurements: Loans receivable, net: One- to four-family $ — $ — $ 3 $ 3 Home equity — — 2 2 Total loans receivable — — 5 5 Other assets: Real estate owned — — 8 8 Total assets measured at fair value on a nonrecurring basis (2) $ — $ — $ 13 $ 13 (1) Assets measured at fair value on a recurring basis represented 32% of the Company’s total assets at March 31, 2020. (2) Represents the fair value of assets prior to deducting estimated selling costs that were carried on the consolidated balance sheets at March 31, 2020, and for which a fair value measurement was recorded during the period. Level 1 Level 2 Level 3 Total December 31, 2019: Recurring fair value measurements: Assets Available-for-sale securities: Agency mortgage-backed securities $ — $ 17,035 $ — $ 17,035 Agency debentures — 659 — 659 US Treasuries — 1,227 — 1,227 Non-agency asset-backed securities — 417 — 417 Non-agency mortgage-backed securities — 163 — 163 Total available-for-sale securities — 19,501 — 19,501 Total assets measured at fair value on a recurring basis (1) $ — $ 19,501 $ — $ 19,501 Nonrecurring fair value measurements: Loans receivable, net: One- to four-family $ — $ — $ 14 $ 14 Home equity — — 4 4 Total loans receivable — — 18 18 Other assets: Real estate owned — — 12 12 Total assets measured at fair value on a nonrecurring basis (2) $ — $ — $ 30 $ 30 (1) Assets measured at fair value on a recurring basis represented 32% of the Company’s total assets at December 31, 2019. (2) Represents the fair value of assets prior to deducting estimated selling costs that were carried on the consolidated balance sheets at December 31, 2019, and for which a fair value measurement was recorded during the period. Gains and losses on assets measured at fair value on a nonrecurring basis were not material for the periods presented. Recurring Fair Value Measurements Categorized within Level 3 For the periods presented, no assets or liabilities measured at fair value on a recurring basis were categorized within Level 3 of the fair value hierarchy. The Company had no transfers between levels during the periods presented. Fair Value of Financial Instruments Not Carried at Fair Value The following tables present the carrying values, fair values and fair value hierarchy level classification of financial instruments that are not carried at fair value on the consolidated balance sheets (dollars in millions): March 31, 2020 Carrying Level 1 Level 2 Level 3 Total Assets Cash and equivalents $ 1,105 $ 1,105 $ — $ — $ 1,105 Cash segregated under federal or other regulations $ 5,730 $ 5,730 $ — $ — $ 5,730 Held-to-maturity securities: Agency mortgage-backed securities $ 23,531 $ — $ 24,297 $ — $ 24,297 Agency debentures 108 — 121 — 121 Other agency debt securities 1,451 — 1,508 — 1,508 Total held-to-maturity securities $ 25,090 $ — $ 25,926 $ — $ 25,926 Margin receivables (1) $ 7,251 $ — $ 7,251 $ — $ 7,251 Loans receivable, net: One- to four-family $ 794 $ — $ — $ 751 $ 751 Home equity 645 — — 599 599 Securities-based lending 195 — 195 — 195 Total loans receivable, net (2) $ 1,634 $ — $ 195 $ 1,350 $ 1,545 Receivables from brokers, dealers and clearing organizations (1) $ 1,124 $ — $ 1,124 $ — $ 1,124 Other assets (1)(3) $ 97 $ — $ 97 $ — $ 97 Liabilities Deposits $ 42,146 $ — $ 42,146 $ — $ 42,146 Customer payables $ 15,960 $ — $ 15,960 $ — $ 15,960 Payables to brokers, dealers and clearing organizations $ 776 $ — $ 776 $ — $ 776 Corporate debt $ 1,411 $ — $ 1,400 $ — $ 1,400 (1) The fair value of securities that the Company received as collateral in connection with margin receivables and securities borrowing activities, including the fully paid lending program, where the Company is permitted to sell or re-pledge the securities, was $10.1 billion at March 31, 2020. Of this amount, $3.0 billion had been pledged or sold in connection with securities loaned and deposits with clearing organizations at March 31, 2020. (2) The carrying value of loans receivable, net includes the net "negative allowance" for credit losses of $86 million and loans that are recorded at fair value on a nonrecurring basis at March 31, 2020. (3) Represents securities borrowing from customers under the fully paid lending program. December 31, 2019 Carrying Level 1 Level 2 Level 3 Total Assets Cash and equivalents $ 750 $ 750 $ — $ — $ 750 Cash segregated under federal or other regulations $ 1,879 $ 1,879 $ — $ — $ 1,879 Held-to-maturity securities: Agency mortgage-backed securities $ 20,085 $ — $ 20,329 $ — $ 20,329 Agency debentures 267 — 271 — 271 Other agency debt securities 1,617 — 1,646 — 1,646 Total held-to-maturity securities $ 21,969 $ — $ 22,246 $ — $ 22,246 Margin receivables (1) $ 9,675 $ — $ 9,675 $ — $ 9,675 Loans receivable, net: One- to four-family $ 802 $ — $ — $ 835 $ 835 Home equity 624 — — 659 659 Securities-based lending 169 — 169 — 169 Total loans receivable, net (2) $ 1,595 $ — $ 169 $ 1,494 $ 1,663 Receivables from brokers, dealers and clearing organizations (1) $ 1,395 $ — $ 1,395 $ — $ 1,395 Other assets (1)(3) $ 313 $ — $ 313 $ — $ 313 Liabilities Deposits $ 38,606 $ — $ 38,605 $ — $ 38,605 Customer payables $ 12,849 $ — $ 12,849 $ — $ 12,849 Payables to brokers, dealers and clearing organizations $ 893 $ — $ 893 $ — $ 893 Corporate debt $ 1,410 $ — $ 1,485 $ — $ 1,485 (1) The fair value of securities that the Company received as collateral in connection with margin receivables and securities borrowing activities, including the fully paid lending program, where the Company is permitted to sell or re-pledge the securities, was $14.0 billion at December 31, 2019. Of this amount, $2.1 billion had been pledged or sold in connection with securities loaned and deposits with clearing organizations at December 31, 2019. (2) The carrying value of loans receivable, net includes the allowance for loan losses of ($17) million and loans that are recorded at fair value on a nonrecurring basis at December 31, 2019. (3) Includes $200 million of securities purchased under agreements to resell and $113 million of securities borrowing from customers under the fully paid lending program. The fair value of the securities that the Company received as collateral for securities purchased under agreements to resell was $206 million at December 31, 2019. Fair Value of Commitments and Contingencies In the normal course of business, the Company makes various commitments to extend credit and incur contingent liabilities that are not reflected in the consolidated balance sheets. Changes in the economy or interest rates may influence the impact that these commitments and contingencies have on the Company in the future. The Company does not estimate the fair value of those commitments. Information related to such commitments and contingent liabilities is included in Note 14—Commitments, Contingencies and Other Regulatory Matters. |
Offsetting Assets and Liabiliti
Offsetting Assets and Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Offsetting Assets and Liabilities [Abstract] | |
Offsetting Assets and Liabilities [Text Block] | NOTE 5—OFFSETTING ASSETS AND LIABILITIES Securities Purchased Under Agreements to Resell Securities purchased under agreements to resell are treated as collateralized financing transactions and are recorded at their contractual amounts plus accrued interest. For financial statement purposes, the Company does not offset securities purchased under agreements to resell transactions with securities sold under agreements to repurchase. The Company obtains securities as collateral from the counterparty with a market value in excess of the principal amount loaned. This activity could result in losses if the counterparty fails to repurchase the securities held as collateral for the cash advanced and the market value of the securities declines. The Company continuously monitors the collateral value and obtains additional collateral from the counterparty in an effort to ensure full collateralization. Securities Lending Transactions Securities borrowed and securities loaned transactions are recorded at the amount of cash collateral delivered to or received from the counterparty plus accrued interest. For financial statement purposes, the Company does not offset securities borrowing and securities lending transactions. These activities are generally transacted under master agreements that are widely used by counterparties and that may allow for net settlements of payments in the normal course, as well as offsetting of all contracts with a given counterparty in the event of bankruptcy or default of one of the two parties to the transaction. The Company is required to deliver cash to the lender for securities borrowed whereas the Company receives collateral in the form of cash for securities loaned. These activities both require cash in an amount generally in excess of the market value of the securities and have overnight or continuous remaining contractual maturities. Securities lending transactions expose the Company to counterparty credit risk and market risk. To manage the counterparty risk, the Company maintains internal standards for approving counterparties, reviews and analyzes the credit rating of each counterparty, and monitors its positions with each counterparty on an ongoing basis. In addition, for certain of the Company's securities lending transactions, the Company uses a program with a clearing organization that guarantees the return of collateral. The Company monitors the market value of the securities borrowed and loaned using collateral arrangements that require additional collateral to be obtained from or excess collateral to be returned to the counterparties based on changes in market value, in an effort to maintain specified collateral levels. The following table presents information about these transactions to enable the users of the Company’s consolidated financial statements to evaluate the potential effect of rights of set-off between these recognized assets and liabilities (dollars in millions): Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts of Recognized Assets and Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets (1) Financial Instruments Collateral Received or Pledged (Including Cash) Net Amount March 31, 2020: Assets: Securities borrowed (2) $ 604 $ — $ 604 $ (68) $ (510) $ 26 Total $ 604 $ — $ 604 $ (68) $ (510) $ 26 Liabilities: Securities loaned (3) $ 696 $ — $ 696 $ (68) $ (535) $ 93 Total $ 696 $ — $ 696 $ (68) $ (535) $ 93 December 31, 2019: Assets: Securities purchased under agreements to resell (4) $ 200 $ — $ 200 $ — $ (200) $ — Securities borrowed (2) 1,116 — 1,116 (83) (1,003) 30 Total $ 1,316 $ — $ 1,316 $ (83) $ (1,203) $ 30 Liabilities: Securities loaned (3) $ 838 $ — $ 838 $ (83) $ (699) $ 56 Total $ 838 $ — $ 838 $ (83) $ (699) $ 56 (1) The vast majority of the net amount of cash collateral paid for securities borrowed are reflected in the receivables from brokers, dealers and clearing organizations line item while the cash collateral paid for securities borrowed under the fully paid lending program are reflected in other assets. Cash collateral received for securities loaned are reflected in the payables to brokers, dealers and clearing organizations line item in the consolidated balance sheets. (2) Included in the gross amounts of cash collateral paid for securities borrowed was $208 million and $757 million at March 31, 2020 and December 31, 2019, respectively, transacted through a program with a clearing organization, which guarantees the return of cash to the Company. For presentation purposes, these amounts presented are based on the counterparties under the Company’s master securities loan agreements. (3) Included in the gross amounts of cash collateral received for securities loaned was $357 million and $401 million at March 31, 2020 and December 31, 2019, respectively, transacted through a program with a clearing organization, which guarantees the return of securities to the Company. For presentation purposes, these amounts presented are based on the counterparties under the Company’s master securities loan agreements. (4) Securities purchased under agreements to resell were over-collateralized at December 31, 2019, as the market value of the securities received by the Company was $206 million, and were included in the other assets line item in the consolidated balance sheets. Derivative Transactions At March 31, 2020, all of the derivatives that the Company utilized in its hedging activities were subject to derivatives clearing agreements (centrally cleared derivatives contracts). These cleared derivatives contracts enable clearing by a derivatives clearing organization through a clearing member. Under the contracts, the clearing member typically has a one-way right to offset all contracts in the event of the Company's default or bankruptcy. Collateral exchanged under these contracts is not included in the preceding table as the contracts may not qualify as master netting agreements. For financial statement purposes, the Company does not offset derivatives assets and derivative liabilities. See Note 8—Derivative Instruments and Hedging Activities for additional information. |
Available-for-Sale and Held-to-
Available-for-Sale and Held-to-Maturity Securities | 3 Months Ended |
Mar. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
AVAILABLE-FOR-SALE AND HELD-TO-MATURITY SECURITIES | NOTE 6—AVAILABLE-FOR-SALE AND HELD-TO-MATURITY SECURITIES The following table presents the amortized cost and fair value of available-for-sale and held-to-maturity securities (dollars in millions): Amortized Gross Gross Fair Value March 31, 2020: Available-for-sale securities: Agency mortgage-backed securities $ 16,130 $ 1,367 $ (48) $ 17,449 Agency debentures 910 55 — 965 US Treasuries 1,122 221 — 1,343 Non-agency asset-backed securities (1) 1,428 5 (22) 1,411 Non-agency mortgage-backed securities 273 3 (4) 272 Total available-for-sale securities $ 19,863 $ 1,651 $ (74) $ 21,440 Held-to-maturity securities: Agency mortgage-backed securities $ 23,531 $ 812 $ (46) $ 24,297 Agency debentures 108 13 — 121 Other agency debt securities 1,451 58 (1) 1,508 Total held-to-maturity securities $ 25,090 $ 883 $ (47) $ 25,926 December 31, 2019: Available-for-sale securities: (2) Agency mortgage-backed securities $ 16,267 $ 836 $ (68) $ 17,035 Agency debentures 632 27 — 659 US Treasuries 1,233 34 (40) 1,227 Non-agency asset-backed securities (1) 417 2 (2) 417 Non-agency mortgage-backed securities 159 4 — 163 Total available-for-sale securities $ 18,708 $ 903 $ (110) $ 19,501 Held-to-maturity securities: (2) Agency mortgage-backed securities $ 20,085 $ 293 $ (49) $ 20,329 Agency debentures 267 4 — 271 Other agency debt securities 1,617 31 (2) 1,646 Total held-to-maturity securities $ 21,969 $ 328 $ (51) $ 22,246 (1) Non-agency ABS collateralized by credit card, automobile loan and student loan receivables represented approximately 41%, 34% and 25% respectively, of the amortized cost of the non-agency ABS held at March 31, 2020 and approximately 54%, 18% and 28%, respectively, of the amortized cost of the non-agency ABS held at December 31, 2019. (2) Securities with a fair value of $744 million were transferred from available-for-sale to held-to-maturity based on a change in intent and demonstrated ability to hold these to maturity in December 2019. Contractual Maturities The following table presents the contractual maturities of all available-for-sale and held-to-maturity debt securities (dollars in millions): March 31, 2020 Amortized Cost Fair Value Available-for-sale debt securities: Due within one year $ 253 $ 256 Due within one to five years 962 967 Due within five to ten years 9,464 10,610 Due after ten years 9,184 9,607 Total available-for-sale debt securities $ 19,863 $ 21,440 Held-to-maturity debt securities: Due within one year $ 68 $ 69 Due within one to five years 2,047 2,123 Due within five to ten years 2,921 3,090 Due after ten years 20,054 20,644 Total held-to-maturity debt securities $ 25,090 $ 25,926 At March 31, 2020 and December 31, 2019, the Company had pledged $6.9 billion and $7.4 billion, respectively, of held-to-maturity debt securities, and $616 million and $456 million, respectively, of available-for-sale securities, as collateral for FHLB advances, derivatives and other purposes. Investments with Unrealized or Unrecognized Losses The following table presents the fair value and unrealized or unrecognized losses on available-for-sale and held-to-maturity securities, and the length of time that individual securities have been in a continuous unrealized or unrecognized loss position (dollars in millions): Less than 12 Months 12 Months or More Total Fair Value Unrealized / Fair Value Unrealized / Fair Value Unrealized / March 31, 2020: Available-for-sale securities: Agency mortgage-backed securities $ 735 $ (12) $ 1,275 $ (36) $ 2,010 $ (48) Non-agency mortgage-backed securities 160 (4) — — 160 (4) Non-agency asset-backed securities 1,136 (22) — — 1,136 (22) Total temporarily impaired available-for-sale securities $ 2,031 $ (38) $ 1,275 $ (36) $ 3,306 $ (74) Held-to-maturity securities: Agency mortgage-backed securities $ 1,219 $ (15) $ 1,141 $ (31) $ 2,360 $ (46) Other agency debt securities — — 93 (1) 93 (1) Total temporarily impaired held-to-maturity securities $ 1,219 $ (15) $ 1,234 $ (32) $ 2,453 $ (47) December 31, 2019: Available-for-sale securities: Agency mortgage-backed securities $ 2,045 $ (32) $ 1,916 $ (36) $ 3,961 $ (68) Non-agency mortgage-backed securities 50 — — — 50 — US Treasuries 402 (40) — — 402 (40) Non-agency asset-backed securities 251 (2) — — 251 (2) Total temporarily impaired available-for-sale securities $ 2,748 $ (74) $ 1,916 $ (36) $ 4,664 $ (110) Held-to-maturity securities: Agency mortgage-backed securities $ 1,337 $ (4) $ 3,600 $ (45) $ 4,937 $ (49) Other agency debt securities 181 (1) 135 (1) 316 (2) Total temporarily impaired held-to-maturity securities $ 1,518 $ (5) $ 3,735 $ (46) $ 5,253 $ (51) The Company does not believe that any individual unrealized loss in the available-for-sale portfolio or unrecognized loss in the held-to-maturity portfolio as of March 31, 2020 represents a credit loss. Investment securities backed by the US government or its agencies comprised 96% and 99%, respectively, of the amortized cost basis of the Company's portfolio at March 31, 2020 and December 31, 2019. The Company has no expectation of credit losses for these securities based on the credit profiles of those entities and our historical loss experience for such investments. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for additional details. For the non-agency portfolio, the Company applied stressed cash flow scenarios and no credit losses were indicated. Unrealized losses on the non-agency securities reflect non-credit related factors such as changing interest rates and market liquidity. Further, the Company does not intend to sell any of its debt securities in an unrealized or unrecognized loss position as of the balance sheet date and it is not more likely than not that the Company will be required to sell the debt securities before the anticipated recovery of its remaining amortized cost of the debt securities in an unrealized or unrecognized loss position. There were no impairment losses recognized in earnings on available-for-sale or held-to-maturity securities during the three months ended March 31, 2020 and 2019. Gains on Securities and Other, Net The following table presents the components of gains on securities and other, net (dollars in millions): Three Months Ended March 31, 2020 2019 Gains on available-for-sale securities $ 19 $ 11 Equity method investment income and other 1 — Gains on securities and other, net $ 20 $ 11 |
Loans Receivable, Net
Loans Receivable, Net | 3 Months Ended |
Mar. 31, 2020 | |
Loans and Leases Receivable Disclosure [Abstract] | |
LOANS RECEIVABLE, NET | 120% 15 19 32 36 Total mortgage loans receivable $ 755 $ 803 $ 594 $ 635 Average estimated current LTV/CLTV (2) 61 % 61 % 77 % 76 % Average LTV/CLTV at loan origination (3) 70 % 70 % 82 % 82 % (1) Current CLTV calculations for home equity loans are based on the maximum available line for HELOCs and outstanding principal balance for HEILs. For home equity loans in the second lien position, the original balance of the first lien loan at origination date and updated valuations on the property underlying the loan are used to calculate CLTV. Current property value estimates are updated on a quarterly basis. (2) The average estimated current LTV/CLTV ratio reflects the outstanding balance at the balance sheet date and the maximum available line for HELOCs, divided by the estimated current value of the underlying property. (3) Average LTV/CLTV at loan origination calculations are based on LTV/CLTV at time of purchase for one- to four-family purchased loans, HEILs and the maximum available line for HELOCs. One- to Four-Family Home Equity March 31, December 31, March 31, December 31, Current FICO 2020 2019 2020 2019 >=720 $ 423 $ 462 $ 309 $ 333 719 - 700 65 77 56 61 699 - 680 52 55 49 54 679 - 660 44 40 42 43 659 - 620 66 63 54 59 <620 105 106 84 85 Total mortgage loans receivable $ 755 $ 803 $ 594 $ 635 One- to four-family loans include loans with an interest-only period, followed by an amortizing period. At March 31, 2020, 100% of these loans were amortizing. The home equity loan portfolio consists of HEILs and HELOCs. HEILs are primarily fully amortizing loans that do not offer the option of an interest-only payment. The majority of HELOCs had an interest only draw period at origination and converted to amortizing loans at the end of the draw period. At March 31, 2020, substantially all of the HELOC portfolio had converted from the interest-only draw period. The weighted average age of our mortgage loans receivable was 14.0 years and 13.7 years at March 31, 2020 and December 31, 2019, respectively. Approximately 32% of the Company’s mortgage loans receivable were concentrated in California at both March 31, 2020 and December 31, 2019, respectively. Approximately 11% and 10% of the Company's mortgage loans receivable were concentrated in New York at March 31, 2020 and December 31, 2019. No other state had concentrations of mortgage loans that represented 10% or more of the Company’s mortgage loans receivable at March 31, 2020 or December 31, 2019. At March 31, 2020, 24% and 21% of the Company’s past-due mortgage loans were concentrated in California and New York, respectively. No other state had concentrations of past-due mortgage loans that represented 10% or more of the Company's past-due mortgage loans. At March 31, 2020, 41% and 10% of the Company’s impaired mortgage loans were concentrated in California and New York, respectively. No other state had concentrations of impaired mortgage loans that represented 10% or more of the Company's impaired mortgage loans. Nonperforming Loans The Company classifies loans as nonperforming when they are no longer accruing interest. The following table presents nonperforming loans by loan portfolio (dollars in millions): March 31, 2020 December 31, 2019 One- to four-family $ 104 $ 114 Home equity 51 54 Total nonperforming loans receivable $ 155 $ 168 Interest income recognized on nonaccrual loans was not material for the three months ended March 31, 2020. There were no nonaccrual loans for which the Company had not recognized an allowance for credit losses at March 31, 2020. There were no loans that were 90 days or more past due, but were not on nonaccrual status at March 31, 2020. At both March 31, 2020 and December 31, 2019, the Company held $13 million of real estate owned that was acquired through foreclosure or through a deed in lieu of foreclosure or similar legal agreement. The Company held $31 million and $32 million of loans for which formal foreclosure proceedings were in process at March 31, 2020 and December 31, 2019, respectively. Collateral-Dependent Loans The Company's collateral-dependent loans were a significant driver of the net benefit recognized upon CECL adoption. The benefit primarily related to the appreciation in fair value of the underlying collateral as compared to prior period charge-offs associated with these loans. The fair value of the underlying collateral, less estimated selling costs, are based on the most recent "as is" property valuation data available, which may include appraisals, broker price opinions, automated valuation models or updated values using home price indices, all of which are categorized within Level 3 of the fair value hierarchy. See Note 4—Fair Value Disclosures for further details. The following table presents credit quality characteristics of the collateral-dependent loan population (dollars in millions): March 31, 2020 One- to Four-Family Home Equity Unpaid principal balance $ 184 $ 154 Recorded investment $ 136 $ 57 Negative allowance for credit losses $ 37 $ 65 Average estimated current LTV/CLTV 71 % 76 % Average loan amount (dollars in thousands) $ 361 $ 63 Approximately 36% and 15% of the Company's collateral-dependent loans were concentrated in California and New York, respectively at March 31, 2020. No other state had concentrations of mortgage loans that represented 10% or more of the Company's collateral-dependent loans. All of these loans were amortizing at March 31, 2020. Allowance for Credit Losses The allowance for credit losses is management’s estimate of expected credit losses over the life of the loan portfolio at the balance sheet date, as well as the forecasted losses, including economic concessions to borrowers, over the estimated remaining life of loans modified as TDRs. The allowance for credit losses on mortgage loans evaluated collectively includes a qualitative component to account for a variety of factors that present additional uncertainty that may not be fully considered in the quantitative loss model but are factors we believe may impact the level of credit losses. Expected recoveries of amounts previously charged-off and expected to be charged-off are included in the allowance and do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. The Company recognizes a credit loss expense in the amount necessary to adjust the allowance for credit losses for management’s current estimate of expected credit losses on mortgage loans receivable. The following table presents a roll forward by loan portfolio of the allowance for credit losses (dollars in millions): Three Months Ended March 31, 2020 One- to Four-Family Home Equity Total (2) Allowance for loan losses, beginning of period (1) $ (6) $ (11) $ (17) Impact of CECL adoption (1)(3) 43 71 114 (Provision) benefit for credit losses (1) (5) (6) Charge-offs (4) — — — Recoveries (4) (1) (4) (5) Net charge-offs (recoveries) (1) (4) (5) Allowance for credit losses, end of period (1) $ 35 $ 51 $ 86 Three Months Ended March 31, 2019 One- to Four-Family Home Equity Consumer Total (2) Allowance for loan losses, beginning of period (1) $ (9) $ (26) $ (2) $ (37) (Provision) benefit for loan losses 2 10 — 12 Charge-offs (4) — — 1 1 Recoveries (4) (2) (5) (1) (8) Net charge-offs (recoveries) (2) (5) — (7) Allowance for loan losses, end of period (1) $ (9) $ (21) $ (2) $ (32) (1) The Company adopted amended accounting guidance related to accounting for credit losses on January 1, 2020. Prior year amounts related to the allowance for loan losses were not restated as the amended accounting guidance was adopted on a modified retrospective basis. At January 1, 2020, the Company had a net "negative allowance" for credit losses of $37 million for its one-to-four-family portfolio and a net "negative allowance" of $60 million for its home equity portfolio. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for further details. (2) Securities-based lending loans were fully collateralized by cash and securities with fair values in excess of borrowings for the three months ended March 31, 2020 and 2019, respectively, and were unconditionally cancellable by the Company. (3) The benefit recognized as a "negative allowance" at adoption is primarily related to the increases in fair value of the underlying collateral for mortgage loans determined to be collateral-dependent compared to prior period charge-offs associated with these loans. This fair value appreciation resulted in a benefit of $39 million for the one- to four-family portfolio and a benefit of $70 million for the home equity portfolio at adoption. (4) Includes benefits resulting from recoveries of partial charge-offs due to principal paydowns or payoffs for the periods presented. The benefits included in the charge-offs line item exceeded other charge-offs for both one-to-four family and home equity loans in both periods presented. Troubled Debt Restructurings The Company considers a loan to be impaired when it meets the definition of a TDR. Delinquency status is the primary measure the Company uses to evaluate the performance of loans modified as TDRs. The Company classifies loans as nonperforming when they are no longer accruing interest. The recorded investment in loans modified as TDRs includes the charge-offs related to certain loans that were written down to the estimated current value of the underlying property less estimated selling costs. The Company had $270 million of recorded investment in loans that had been modified as TDRs at March 31, 2020, including $163 million of one-to-four family loans and $107 million of home equity loans, respectively. This compared to $280 million of recorded investment in TDRs at December 31, 2019, including $168 million of one-to-four family loans and $112 million of home equity loans, respectively. The following table presents the number of loans and post-modification balances immediately after being modified by major class (dollars in millions): Three Months Ended Interest Rate Reduction Number of Re-age/ Other (1) Total March 31, 2020: One- to four-family 4 $ 2 $ — $ 2 Home equity 8 1 — 1 Total 12 $ 3 $ — $ 3 March 31, 2019: One- to four-family 9 $ 1 $ 1 $ 2 Home equity 11 1 — 1 Total 20 $ 2 $ 1 $ 3 (1) Amounts represent loans whose terms were modified in a manner that did not result in an interest rate reduction, including re-aged loans, extensions, and loans with capitalized interest." id="sjs-B4">NOTE 7—LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES The Company adopted amended accounting guidance related to accounting for credit losses on January 1, 2020 and recognized an after-tax benefit related to mortgage loans of $84 million as an adjustment to opening retained earnings. The benefit primarily related to the increases in fair value of the underlying collateral for mortgage loans determined to be collateral-dependent compared to prior period charge-offs associated with these loans. This appreciation resulted in a net “negative allowance” associated with the mortgage loans. Loans receivable decreased 4% to $1.5 billion during the three months ended March 31, 2020 as a result of runoff in our mortgage loan portfolio offset by increased securities-based lending. Loans receivable, net increased 2% to $1.6 billion during the three months ended March 31, 2020. This increase related primarily to the $114 million pre-tax benefit associated with the adoption of the amended guidance. This pre-tax benefit, offset by the provision expense and net recoveries, was the primary driver of the $86 million net "negative allowance" for credit losses at March 31, 2020. The "negative allowance" for credit losses represented 5.6% of total loans receivable as of March 31, 2020. The allowance for credit losses was ($17) million, or (1.1)% of total loans receivable, as of December 31, 2019. The provision for credit losses was $6 million for the three months ended March 31, 2020. The timing and magnitude of the provision (benefit) for credit losses is affected by many factors that could result in variability. Changes in management's reasonable and supportable forecasts of estimated credit losses and collateral valuations, offset by actual charge-offs net of recoveries, will drive variability in provision (benefit) for credit losses in future periods. In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. The pandemic, and actions taken by governmental authorities to contain its financial and economic impact, resulted in significant market volatility during March 2020. The Company's allowance for credit losses as of March 31, 2020 includes the estimated financial impacts of the pandemic on its expected credit losses resulting in an increase to the allowance for credit losses of $5 million as of March 31, 2020 compared to January 1, 2020. The following table presents loans receivable disaggregated by delinquency status (dollars in millions): Days Past Due Current 30-89 90-179 180+ Total Unamortized Premiums, Net Allowance for Credit Losses (1) Loans Receivable, Net March 31, 2020: One- to four-family $ 673 $ 40 $ 9 $ 33 $ 755 $ 4 $ 35 $ 794 Home equity 550 22 8 14 594 — 51 645 Securities-based lending (2) 195 — — — 195 — — 195 Total loans receivable $ 1,418 $ 62 $ 17 $ 47 $ 1,544 $ 4 $ 86 $ 1,634 Days Past Due Current 30-89 90-179 180+ Total Unamortized Premiums, Net Allowance for Loan Losses (1) Loans Receivable, Net December 31, 2019: One- to four-family $ 718 $ 39 $ 11 $ 35 $ 803 $ 5 $ (6) $ 802 Home equity 590 21 7 17 635 — (11) 624 Securities-based lending (2) 169 — — — 169 — — 169 Total loans receivable $ 1,477 $ 60 $ 18 $ 52 $ 1,607 $ 5 $ (17) $ 1,595 (1) The Company adopted amended accounting guidance related to accounting for credit losses on January 1, 2020. Prior year amounts related to the allowance for loan losses were not restated as the amended accounting guidance was adopted on a modified retrospective basis. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for further details. (2) E*TRADE Line of Credit is a securities-based lending product where customers can borrow against the market value of their securities pledged as collateral. The Company has no expectation of credit losses for these loans as they are fully collateralized by cash and securities with fair values in excess of borrowings at both March 31, 2020 and December 31, 2019, respectively. The unused credit line amount totaled $569 million and $431 million as of March 31, 2020 and December 31, 2019, respectively, and were unconditionally cancellable by the Company. The Company pledged $1.2 billion of loans as collateral to the FHLB at both March 31, 2020 and December 31, 2019. Credit Quality and Concentrations of Credit Risk The Company tracks and reviews factors to predict and monitor credit risk in its mortgage loan portfolio on an ongoing basis. Property values, FICO scores, and loan balances are updated quarterly. The Company has not originated a mortgage loan since 2008 when it exited direct retail lending, which was the last remaining origination channel after the Company’s exit from the wholesale mortgage lending channel in 2007. The following tables present the distribution of the Company’s mortgage loan portfolios by credit quality indicator (dollars in millions): One- to Four-Family Home Equity March 31, December 31, March 31, December 31, Current LTV/CLTV (1) 2020 2019 2020 2019 <=80% $ 624 $ 661 $ 350 $ 377 80%-100% 88 97 143 154 100%-120% 28 26 69 68 >120% 15 19 32 36 Total mortgage loans receivable $ 755 $ 803 $ 594 $ 635 Average estimated current LTV/CLTV (2) 61 % 61 % 77 % 76 % Average LTV/CLTV at loan origination (3) 70 % 70 % 82 % 82 % (1) Current CLTV calculations for home equity loans are based on the maximum available line for HELOCs and outstanding principal balance for HEILs. For home equity loans in the second lien position, the original balance of the first lien loan at origination date and updated valuations on the property underlying the loan are used to calculate CLTV. Current property value estimates are updated on a quarterly basis. (2) The average estimated current LTV/CLTV ratio reflects the outstanding balance at the balance sheet date and the maximum available line for HELOCs, divided by the estimated current value of the underlying property. (3) Average LTV/CLTV at loan origination calculations are based on LTV/CLTV at time of purchase for one- to four-family purchased loans, HEILs and the maximum available line for HELOCs. One- to Four-Family Home Equity March 31, December 31, March 31, December 31, Current FICO 2020 2019 2020 2019 >=720 $ 423 $ 462 $ 309 $ 333 719 - 700 65 77 56 61 699 - 680 52 55 49 54 679 - 660 44 40 42 43 659 - 620 66 63 54 59 <620 105 106 84 85 Total mortgage loans receivable $ 755 $ 803 $ 594 $ 635 One- to four-family loans include loans with an interest-only period, followed by an amortizing period. At March 31, 2020, 100% of these loans were amortizing. The home equity loan portfolio consists of HEILs and HELOCs. HEILs are primarily fully amortizing loans that do not offer the option of an interest-only payment. The majority of HELOCs had an interest only draw period at origination and converted to amortizing loans at the end of the draw period. At March 31, 2020, substantially all of the HELOC portfolio had converted from the interest-only draw period. The weighted average age of our mortgage loans receivable was 14.0 years and 13.7 years at March 31, 2020 and December 31, 2019, respectively. Approximately 32% of the Company’s mortgage loans receivable were concentrated in California at both March 31, 2020 and December 31, 2019, respectively. Approximately 11% and 10% of the Company's mortgage loans receivable were concentrated in New York at March 31, 2020 and December 31, 2019. No other state had concentrations of mortgage loans that represented 10% or more of the Company’s mortgage loans receivable at March 31, 2020 or December 31, 2019. At March 31, 2020, 24% and 21% of the Company’s past-due mortgage loans were concentrated in California and New York, respectively. No other state had concentrations of past-due mortgage loans that represented 10% or more of the Company's past-due mortgage loans. At March 31, 2020, 41% and 10% of the Company’s impaired mortgage loans were concentrated in California and New York, respectively. No other state had concentrations of impaired mortgage loans that represented 10% or more of the Company's impaired mortgage loans. Nonperforming Loans The Company classifies loans as nonperforming when they are no longer accruing interest. The following table presents nonperforming loans by loan portfolio (dollars in millions): March 31, 2020 December 31, 2019 One- to four-family $ 104 $ 114 Home equity 51 54 Total nonperforming loans receivable $ 155 $ 168 Interest income recognized on nonaccrual loans was not material for the three months ended March 31, 2020. There were no nonaccrual loans for which the Company had not recognized an allowance for credit losses at March 31, 2020. There were no loans that were 90 days or more past due, but were not on nonaccrual status at March 31, 2020. At both March 31, 2020 and December 31, 2019, the Company held $13 million of real estate owned that was acquired through foreclosure or through a deed in lieu of foreclosure or similar legal agreement. The Company held $31 million and $32 million of loans for which formal foreclosure proceedings were in process at March 31, 2020 and December 31, 2019, respectively. Collateral-Dependent Loans The Company's collateral-dependent loans were a significant driver of the net benefit recognized upon CECL adoption. The benefit primarily related to the appreciation in fair value of the underlying collateral as compared to prior period charge-offs associated with these loans. The fair value of the underlying collateral, less estimated selling costs, are based on the most recent "as is" property valuation data available, which may include appraisals, broker price opinions, automated valuation models or updated values using home price indices, all of which are categorized within Level 3 of the fair value hierarchy. See Note 4—Fair Value Disclosures for further details. The following table presents credit quality characteristics of the collateral-dependent loan population (dollars in millions): March 31, 2020 One- to Four-Family Home Equity Unpaid principal balance $ 184 $ 154 Recorded investment $ 136 $ 57 Negative allowance for credit losses $ 37 $ 65 Average estimated current LTV/CLTV 71 % 76 % Average loan amount (dollars in thousands) $ 361 $ 63 Approximately 36% and 15% of the Company's collateral-dependent loans were concentrated in California and New York, respectively at March 31, 2020. No other state had concentrations of mortgage loans that represented 10% or more of the Company's collateral-dependent loans. All of these loans were amortizing at March 31, 2020. Allowance for Credit Losses The allowance for credit losses is management’s estimate of expected credit losses over the life of the loan portfolio at the balance sheet date, as well as the forecasted losses, including economic concessions to borrowers, over the estimated remaining life of loans modified as TDRs. The allowance for credit losses on mortgage loans evaluated collectively includes a qualitative component to account for a variety of factors that present additional uncertainty that may not be fully considered in the quantitative loss model but are factors we believe may impact the level of credit losses. Expected recoveries of amounts previously charged-off and expected to be charged-off are included in the allowance and do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. The Company recognizes a credit loss expense in the amount necessary to adjust the allowance for credit losses for management’s current estimate of expected credit losses on mortgage loans receivable. The following table presents a roll forward by loan portfolio of the allowance for credit losses (dollars in millions): Three Months Ended March 31, 2020 One- to Four-Family Home Equity Total (2) Allowance for loan losses, beginning of period (1) $ (6) $ (11) $ (17) Impact of CECL adoption (1)(3) 43 71 114 (Provision) benefit for credit losses (1) (5) (6) Charge-offs (4) — — — Recoveries (4) (1) (4) (5) Net charge-offs (recoveries) (1) (4) (5) Allowance for credit losses, end of period (1) $ 35 $ 51 $ 86 Three Months Ended March 31, 2019 One- to Four-Family Home Equity Consumer Total (2) Allowance for loan losses, beginning of period (1) $ (9) $ (26) $ (2) $ (37) (Provision) benefit for loan losses 2 10 — 12 Charge-offs (4) — — 1 1 Recoveries (4) (2) (5) (1) (8) Net charge-offs (recoveries) (2) (5) — (7) Allowance for loan losses, end of period (1) $ (9) $ (21) $ (2) $ (32) (1) The Company adopted amended accounting guidance related to accounting for credit losses on January 1, 2020. Prior year amounts related to the allowance for loan losses were not restated as the amended accounting guidance was adopted on a modified retrospective basis. At January 1, 2020, the Company had a net "negative allowance" for credit losses of $37 million for its one-to-four-family portfolio and a net "negative allowance" of $60 million for its home equity portfolio. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for further details. (2) Securities-based lending loans were fully collateralized by cash and securities with fair values in excess of borrowings for the three months ended March 31, 2020 and 2019, respectively, and were unconditionally cancellable by the Company. (3) The benefit recognized as a "negative allowance" at adoption is primarily related to the increases in fair value of the underlying collateral for mortgage loans determined to be collateral-dependent compared to prior period charge-offs associated with these loans. This fair value appreciation resulted in a benefit of $39 million for the one- to four-family portfolio and a benefit of $70 million for the home equity portfolio at adoption. (4) Includes benefits resulting from recoveries of partial charge-offs due to principal paydowns or payoffs for the periods presented. The benefits included in the charge-offs line item exceeded other charge-offs for both one-to-four family and home equity loans in both periods presented. Troubled Debt Restructurings The Company considers a loan to be impaired when it meets the definition of a TDR. Delinquency status is the primary measure the Company uses to evaluate the performance of loans modified as TDRs. The Company classifies loans as nonperforming when they are no longer accruing interest. The recorded investment in loans modified as TDRs includes the charge-offs related to certain loans that were written down to the estimated current value of the underlying property less estimated selling costs. The Company had $270 million of recorded investment in loans that had been modified as TDRs at March 31, 2020, including $163 million of one-to-four family loans and $107 million of home equity loans, respectively. This compared to $280 million of recorded investment in TDRs at December 31, 2019, including $168 million of one-to-four family loans and $112 million of home equity loans, respectively. The following table presents the number of loans and post-modification balances immediately after being modified by major class (dollars in millions): Three Months Ended Interest Rate Reduction Number of Re-age/ Other (1) Total March 31, 2020: One- to four-family 4 $ 2 $ — $ 2 Home equity 8 1 — 1 Total 12 $ 3 $ — $ 3 March 31, 2019: One- to four-family 9 $ 1 $ 1 $ 2 Home equity 11 1 — 1 Total 20 $ 2 $ 1 $ 3 (1) Amounts represent loans whose terms were modified in a manner that did not result in an interest rate reduction, including re-aged loans, extensions, and loans with capitalized interest. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 8—DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Presentation on the Consolidated Balance Sheets Hedging Instruments The Company utilizes fair value hedges to offset exposure to changes in value of certain fixed-rate assets. All derivative contracts were designated as hedging instruments at March 31, 2020 and December 31, 2019, and the notional amount associated with these fair value hedge contracts was $11.3 billion and $10.1 billion for the same periods, respectively. The Company had no bilateral derivative contracts at March 31, 2020 or December 31, 2019. The consolidated balance sheets exclude derivative assets of $6 million and $52 million at March 31, 2020 and December 31, 2019, respectively, and derivative liabilities of $1.4 billion and $457 million for the same periods. These contracts were executed through central clearing organizations and were settled by variation margin payments. Credit Risk As all of the derivatives that the Company utilizes in its hedging activities at March 31, 2020 are subject to derivatives clearing agreements (cleared derivatives contracts), the credit risk associated with these cleared derivatives contracts is largely mitigated by the daily variation margin exchanged with counterparties. Hedged Assets The following table presents the cumulative basis adjustments related to the amortized cost basis or carrying amount of hedged assets in fair value hedging relationships (dollars in millions): Cumulative Amount of Fair Value Hedging Basis Adjustment of Hedged Assets (2) Amortized Cost of Hedged Assets (1) Total Active Discontinued March 31, 2020: Available-for-sale securities (3) $ 14,144 $ 1,561 $ 1,785 $ (224) Cumulative Amount of Fair Value Hedging Basis Adjustment Included in Carrying Amount of Hedged Assets (2) Carrying Amount of Hedged Assets (4) Total Active Discontinued December 31, 2019: Available-for-sale securities (3) $ 12,480 $ 583 $ 810 $ (227) (1) The Company adopted amended accounting guidance related to derivatives and hedging on a prospective basis on January 1, 2020. Prior year amounts were not restated. Refer to Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for further details. Amortized cost includes the initial acquisition price and the cost basis adjustments relating to discontinued fair value hedges, net of accumulated amortization or accretion. (2) Represents the increase (decrease) to the amortized cost or carrying amount of hedged assets. If fair value hedge accounting is discontinued, the previously hedged item is no longer adjusted for changes in fair value through the consolidated statements of income and the cumulative net gain or loss on the hedged item is amortized to net interest income using the effective interest method over the contractual life of the hedged item adjusted to reflect actual prepayments. (3) Includes the amortized cost basis and carrying value of closed portfolios of prepayable securities designated in hedging relationships in which the hedged item is the last layer of principal expected to be remaining throughout the hedge term as of March 31, 2020 and December 31, 2019. As of March 31, 2020 and December 31, 2019, respectively, the amortized cost basis of this portfolio was $410 million and $162 million, the amount of the designated hedged items was $316 million and $148 million and the cumulative amount of fair value hedging basis adjustments associated with these hedges was a loss of $19 million and a gain of $1 million. (4) The carrying amount includes the amortized cost and the impact of basis adjustments on active fair value hedges. Presentation on the Consolidated Statements of Income The following table presents the effects of fair value hedge accounting on the consolidated statements of income (dollars in millions): Interest Income Three Months Ended March 31, 2020 2019 Total interest income $ 443 $ 555 Effects of fair value hedging on total interest income (1)(2) Agency debentures: Changes in fair value of hedged items 215 7 Changes in fair value of derivatives (215) (7) Net loss on fair value hedging relationships - agency debentures — — Agency mortgage-backed securities: Amounts recognized as interest accruals on derivatives (12) 3 Amortization of basis adjustments from discontinued hedges 8 10 Changes in fair value of hedged items 855 274 Changes in fair value of derivatives (866) (273) Net (loss) gain on fair value hedging relationships - agency mortgage-backed securities (15) 14 Total net (loss) gain on fair value hedging relationships $ (15) $ 14 (1) Excludes interest income accruals on hedged items and amounts recognized upon the sale of securities attributable to fair value hedge accounting. (2) Excludes interest on variation margin related to centrally cleared derivative contracts. |
Deposits
Deposits | 3 Months Ended |
Mar. 31, 2020 | |
Deposits [Abstract] | |
DEPOSITS | NOTE 9—DEPOSITS The following table presents the significant components of deposits (dollars in millions): March 31, 2020 December 31, 2019 Sweep deposits: Brokerage sweep deposits $ 38,095 $ 27,949 Bank sweep deposits (1) 680 6,355 Savings deposits (2) 1,667 2,592 Other deposits (3) 1,704 1,710 Total deposits $ 42,146 $ 38,606 (1) Beginning in Q4 2019, bank sweep deposits include Premium Savings Accounts participating in the newly established bank sweep deposit account program. (2) Savings deposits include $1.0 billion of deposits at December 31, 2019 in our Premium Savings Account product that were subsequently converted to the bank sweep deposit account program. All new Premium Savings Accounts are now automatically enrolled in the program. (3) Includes checking deposits, money market deposits and certificates of deposit. As of March 31, 2020 and December 31, 2019, the Company had $220 million and $197 million in non-interest bearing deposits, respectively. |
Other Borrowings and Corporate
Other Borrowings and Corporate Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
CORPORATE DEBT AND OTHER BORROWINGS | NOTE 10—OTHER BORROWINGS AND CORPORATE DEBT Other Borrowings The following table presents the Company's external lines of credit at March 31, 2020 (dollars in millions): Description Maturity Date Borrower Outstanding Available Senior unsecured, committed revolving credit facility (1) June 2024 ETFC $ — $ 300 FHLB secured credit facility Determined at trade ETB $ — $ 6,430 Federal Reserve Bank discount window Overnight ETB $ — $ 1,245 Senior unsecured, committed revolving credit facility (2) June 2020 ETS $ — $ 600 Secured, committed lines of credit June 2020 ETS $ — $ 175 Unsecured, uncommitted lines of credit June 2020 ETS $ — $ 50 Unsecured, uncommitted lines of credit None ETS $ — $ 75 Secured, uncommitted lines of credit None ETS $ — $ 425 (1) The senior unsecured committed revolving credit facility contains certain covenants, including maintenance covenants related to the Company's interest coverage, leverage and regulatory net capital ratios with which the Company was in compliance at March 31, 2020. (2) The senior unsecured committed revolving credit facility contains certain covenants, including maintenance covenants related to E*TRADE Securities' minimum consolidated tangible net worth and regulatory net capital ratio with which the Company was in compliance at March 31, 2020. Corporate Debt The following tables present the significant components of E*TRADE Financial's corporate debt (dollars in millions): Face Value Discount Net March 31, 2020: Interest-bearing notes: 2.95% Senior Notes, due 2022 $ 600 $ (3) $ 597 3.80% Senior Notes, due 2027 400 (3) 397 4.50% Senior Notes, due 2028 420 (3) 417 Total corporate debt $ 1,420 $ (9) $ 1,411 December 31, 2019: Interest-bearing notes: 2.95% Senior Notes, due 2022 $ 600 $ (3) $ 597 3.80% Senior Notes, due 2027 400 (3) 397 4.50% Senior Notes, due 2028 420 (4) 416 Total corporate debt $ 1,420 $ (10) $ 1,410 |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 11—SHAREHOLDERS' EQUITY Preferred Stock The following table presents the preferred stock outstanding (in millions except total shares outstanding and per share data): Carrying Value at Description Issuance Date Per Annum Dividend Rate Total Shares Outstanding Liquidation Preference per Share March 31, 2020 December 31, 2019 Series A Fixed-to-Floating Rate Non-Cumulative 8/25/2016 5.875% to, but excluding, 9/15/2026; 3-mo LIBOR + 4.435% thereafter 400,000 $ 1,000 $ 394 $ 394 Series B Fixed-to-Floating Rate Non-Cumulative 12/6/2017 5.30% to, but excluding, 3/15/2023; 3-mo LIBOR + 3.16% thereafter 3,000 $ 100,000 295 295 Total 403,000 $ 689 $ 689 Dividend on Preferred Stock The following table presents the cash dividends paid on preferred stock (in millions except per share data): Three Months Ended March 31, 2020 Declaration Date Record Date Payment Date Dividend per Share Dividend Paid Series A (1) 2/6/2020 3/2/2020 3/16/2020 $ 29.38 $ 12 Series B (1) 2/6/2020 3/2/2020 3/16/2020 $ 2,650.00 8 Total $ 20 Three Months Ended March 31, 2019 Declaration Date Record Date Payment Date Dividend per Share Dividend Paid Series A (1) 2/7/2019 2/28/2019 3/15/2019 $ 29.38 $ 12 Series B (1) 2/7/2019 2/28/2019 3/15/2019 $ 2,650.00 8 Total $ 20 (1) Dividends are non-cumulative and payable semi-annually, if declared. Common Stock Dividend on Common Stock The following table presents the cash dividends paid on common stock (in millions except per share data): Three Months Ended March 31, 2020 Declaration Date Record Date Payment Date Dividend per Share Dividend Paid 1/22/2020 2/25/2020 3/2/2020 $ 0.14 $ 31 Total $ 31 Three Months Ended March 31, 2019 Declaration Date Record Date Payment Date Dividend per Share Dividend Paid 1/23/2019 2/1/2019 2/15/2019 $ 0.14 $ 35 Total $ 35 On April 22, 2020, the Company declared a cash dividend for the second quarter of $0.14 per share on its outstanding shares of common stock. The dividend will be payable on May 19, 2020 to shareholders of record as of the close of business on May 13, 2020. Share Repurchases In July 2019, the Company announced that its board of directors authorized a $1.5 billion share repurchase program. During February 2020, the Company repurchased 2.1 million shares of common stock for a total of $95 million prior to suspending share repurchases in connection with the proposed merger with Morgan Stanley. See Note 2—Acquisitions and Restructuring for further details. The Company accounts for share repurchases retired after repurchase by allocating the excess repurchase price over par to additional paid-in-capital. Other Common Stock Activity Other common stock activity includes shares withheld to pay taxes for share-based compensation, employee stock purchase plan and other activity. Accumulated Other Comprehensive Loss The following table presents after-tax changes in each component of accumulated other comprehensive loss (dollars in millions): Three Months Ended March 31, 2020 2019 Accumulated other comprehensive loss, beginning of period (1) $ (28) $ (275) Other comprehensive (loss) income before reclassifications (126) 112 Amounts reclassified from accumulated other comprehensive loss (14) (7) Net change (140) 105 Accumulated other comprehensive loss, end of period (1) $ (168) $ (170) (1) The accumulated other comprehensive loss balances and activities were related to available-for-sale securities in both periods. The following table presents other comprehensive (loss) income activity and the related tax effect (dollars in millions): Three Months Ended March 31, 2020 2019 Before Tax Tax Effect After Tax Before Tax Tax Effect After Tax Other comprehensive (loss) income Available-for-sale securities: Unrealized (losses) gains, net $ (172) $ 46 $ (126) $ 150 $ (38) $ 112 Reclassification into earnings, net (19) 5 (14) (10) 3 (7) Net change from available-for-sale securities (191) 51 (140) 140 (35) 105 Other comprehensive (loss) income $ (191) $ 51 $ (140) $ 140 $ (35) $ 105 The following table presents the consolidated statements of income line items impacted by reclassifications out of accumulated other comprehensive loss (dollars in millions): Accumulated Other Comprehensive Loss Components Amounts Reclassified from Accumulated Other Comprehensive Loss Affected Line Items in the Consolidated Statements of Income Three Months Ended March 31, 2020 2019 Available-for-sale securities: $ 20 $ 11 Gains on securities and other, net (1) (1) Interest income 19 10 Reclassification into earnings, before tax (5) (3) Income tax expense $ 14 $ 7 Reclassification into earnings, net |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 12—EARNINGS PER SHARE Net income available to common shareholders, or net income less preferred stock dividends, represents the numerator used in the computation of basic and diluted earnings per common share. The denominators used in the computation of basic and diluted earnings per common share are basic and diluted weighted average common shares outstanding, respectively. Basic weighted average common shares outstanding were 222.3 million and 246.3 million for the three months ended March 31, 2020 and 2019, respectively. The difference between basic and diluted weighted average common shares outstanding includes the weighted-average dilutive impact of securities, including restricted stock units and awards, dividend equivalent units, employee stock purchase plan shares and stock options, as well as the weighted-average dilutive impact of convertible debentures. This activity represented 0.4 million and 0.6 million shares for the three months ended March 31, 2020 and 2019, respectively. This resulted in diluted weighted average common shares outstanding of 222.7 million and 246.9 million for the three months ended March 31, 2020 and 2019, respectively. The amount of certain restricted stock and options excluded from the calculations of diluted earnings per common share due to the anti-dilutive effect was not material for the three months ended March 31, 2020 and 2019. |
Regulatory Requirements
Regulatory Requirements | 3 Months Ended |
Mar. 31, 2020 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
REGULATORY REQUIREMENTS | NOTE 13—REGULATORY REQUIREMENTS Broker-Dealer and FCM Capital Requirements The Company's US broker-dealer, E*TRADE Securities, is subject to the Uniform Net Capital Rule under the Securities Exchange Act of 1934 administered by the SEC and FINRA, which requires the maintenance of minimum net capital. The minimum net capital requirements can be met under either the Aggregate Indebtedness method or the Alternative method. Under the Aggregate Indebtedness method, a broker-dealer is required to maintain net capital equal to or in excess of the greater of 6 2/3% of its aggregate indebtedness, as defined, or a minimum dollar amount. E*TRADE Securities has elected the Alternative method, under which it is required to maintain net capital equal to the greater of $250,000 or 2% of aggregate debit balances arising from customer transactions. The Company's FCM, E*TRADE Futures, is subject to CFTC net capital requirements, including the maintenance of adjusted net capital equal to or in excess of the greater of (1) $1,000,000, (2) the FCM's risk-based capital requirement, computed as 8% of the total risk margin requirements for all positions carried in customer and non-customer accounts, or (3) the amount of adjusted net capital required by the NFA. At March 31, 2020 and December 31, 2019, all of the Company’s broker-dealer and FCM subsidiaries met applicable minimum net capital requirements. The following table presents a summary of the minimum net capital requirements and excess capital for the Company’s broker-dealer and FCM subsidiaries (dollars in millions): Required Net Net Capital Excess Net March 31, 2020: E*TRADE Securities (1) $ 179 $ 1,360 $ 1,181 E*TRADE Futures 3 29 26 Total $ 182 $ 1,389 $ 1,207 December 31, 2019: E*TRADE Securities $ 223 $ 1,251 $ 1,028 E*TRADE Futures 3 28 25 Total $ 226 $ 1,279 $ 1,053 (1) E*TRADE Securities paid dividends of $50 million to the parent company during the three months ended March 31, 2020. Bank Capital Requirements E*TRADE Financial and its bank subsidiaries, E*TRADE Bank and E*TRADE Savings Bank, are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can trigger certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the financial condition and results of operations of these entities. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, these entities must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. In addition, the Company's bank subsidiaries may not pay dividends to the parent company without the non-objection, or in certain cases the approval, of their regulators, and any loans by the bank subsidiaries to the parent company or its other non-bank subsidiaries are subject to various quantitative, arm’s length, collateralization and other requirements. The capital amounts and classifications of these entities are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require these entities to meet minimum Tier 1 leverage, Common Equity Tier 1 capital, Tier 1 risk-based capital and Total risk-based capital ratios. Events beyond management's control, such as deterioration in credit markets, could adversely affect future earnings and their ability to meet future capital requirements. E*TRADE Financial, E*TRADE Bank and E*TRADE Savings Bank were categorized as "well capitalized" under the regulatory framework for prompt corrective action for the periods presented in the following table (dollars in millions): March 31, 2020 December 31, 2019 Actual Well Capitalized Minimum Capital Excess Capital Actual Well Capitalized Minimum Capital Excess Capital Amount Ratio Amount Ratio Amount Amount Ratio Amount Ratio Amount E*TRADE Financial (1) Tier 1 leverage $ 4,179 6.8 % $ 3,051 5.0 % $ 1,128 $ 4,035 6.9 % $ 2,922 5.0 % $ 1,113 Common Equity Tier 1 $ 3,490 29.3 % $ 775 6.5 % $ 2,715 $ 3,346 31.5 % $ 692 6.5 % $ 2,654 Tier 1 risk-based $ 4,179 35.1 % $ 954 8.0 % $ 3,225 $ 4,035 37.9 % $ 852 8.0 % $ 3,183 Total risk-based $ 4,179 35.1 % $ 1,192 10.0 % $ 2,987 $ 4,060 38.2 % $ 1,064 10.0 % $ 2,996 E*TRADE Bank (1) Tier 1 leverage $ 3,420 7.4 % $ 2,314 5.0 % $ 1,106 $ 3,240 7.2 % $ 2,253 5.0 % $ 987 Common Equity Tier 1 $ 3,420 35.8 % $ 621 6.5 % $ 2,799 $ 3,240 36.5 % $ 577 6.5 % $ 2,663 Tier 1 risk-based $ 3,420 35.8 % $ 764 8.0 % $ 2,656 $ 3,240 36.5 % $ 710 8.0 % $ 2,530 Total risk-based $ 3,420 35.8 % $ 956 10.0 % $ 2,464 $ 3,257 36.7 % $ 888 10.0 % $ 2,369 E*TRADE Savings Bank (1) Tier 1 leverage $ 1,492 38.5 % $ 193 5.0 % $ 1,299 $ 1,480 40.7 % $ 182 5.0 % $ 1,298 Common Equity Tier 1 $ 1,492 200.4 % $ 48 6.5 % $ 1,444 $ 1,480 224.7 % $ 43 6.5 % $ 1,437 Tier 1 risk-based $ 1,492 200.4 % $ 59 8.0 % $ 1,433 $ 1,480 224.7 % $ 53 8.0 % $ 1,427 Total risk-based $ 1,492 200.4 % $ 74 10.0 % $ 1,418 $ 1,480 224.7 % $ 66 10.0 % $ 1,414 |
Commitments, Contingencies and
Commitments, Contingencies and Other Regulatory Matters | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, CONTINGENCIES AND OTHER REGULATORY MATTERS | NOTE 14—COMMITMENTS, CONTINGENCIES AND OTHER REGULATORY MATTERS The Company reviews its lawsuits, regulatory inquiries and other legal proceedings on an ongoing basis and provides disclosure and records loss contingencies in accordance with the loss contingencies accounting guidance. The Company establishes an accrual for losses at management's best estimate when it assesses that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company monitors these matters for developments that would affect the likelihood of a loss and the accrued amount, if any, and adjusts the amount as appropriate. Litigation Matters On October 27, 2000, Ajaxo, Inc. (Ajaxo) filed a complaint in the Superior Court for the State of California, County of Santa Clara. Ajaxo sought damages and certain non-monetary relief for the Company’s alleged breach of a non-disclosure agreement with Ajaxo pertaining to certain wireless technology that Ajaxo offered the Company as well as damages and other relief against the Company for their alleged misappropriation of Ajaxo’s trade secrets. Following a jury trial, a judgment was entered in 2003 in favor of Ajaxo against the Company for $1 million for breach of the Ajaxo non-disclosure agreement. The trial court subsequently denied Ajaxo’s requests for additional damages and relief following which Ajaxo appealed. Although the Company paid Ajaxo the full amount due on the above-described judgment, the case was remanded back to the trial court by the California Court of Appeals, and on May 30, 2008, a jury returned a verdict in favor of the Company denying all claims raised and demands for damages against the Company. After various appeals the case was again remanded back to the trial court. Following the third trial in this matter, in a Judgment and Statement of Decision filed September 16, 2015, the Court denied all claims for royalties by Ajaxo. Ajaxo’s post-trial motions were denied. Ajaxo has appealed to the Court of Appeals, Sixth District. On April 23, 2020, the California Court of Appeals upheld the trial Court's judgment and denied all appeals by Ajaxo. The Company will continue to defend itself vigorously in this matter. On May 13, 2019, a FINRA Dispute Resolution Statement of Claim was received on behalf of an E*TRADE customer and the customer's limited liability company. The Statement of Claim alleges that E*TRADE Securities and E*TRADE Capital Management violated Section 10(b) of the Securities Exchange Act, committed common law fraud, breached fiduciary duties, breached contractual duties, failed to supervise, and were negligent in the maintenance of the LLC’s accounts. The claim relates to margin liquidations from the LLC's accounts in February 2018. The Company intends to defend itself vigorously in this matter. Several shareholders have filed federal lawsuits alleging that the Company violated Sections 14 and 20(a) of the Securities Exchange Act by failing to disclose material information in connection with the proxy statement / prospectus that Morgan Stanley filed on Form S-4 with the SEC on April 17, 2020. The Company believes that the claims made in these lawsuits are without merit. In addition to the matters described above, the Company is subject to various legal proceedings and claims that arise in the normal course of business. In each pending matter, the Company contests liability or the amount of claimed damages. In view of the inherent difficulty of predicting the outcome of such matters, particularly in cases where claimants seek substantial or indeterminate damages, or where investigation or discovery have yet to be completed, the Company is unable to estimate a range of reasonably possible losses on its remaining outstanding legal proceedings; however, the Company believes any losses, both individually or in the aggregate, should not be reasonably likely to have a material adverse effect on the consolidated financial condition or results of operations of the Company. An unfavorable outcome in any matter could have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. In addition, even if the ultimate outcomes are resolved in the Company’s favor, the defense of such litigation could entail considerable cost or the diversion of the efforts of management, either of which could have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. Regulatory Matters The securities, futures, foreign currency and banking industries are subject to extensive regulation under federal, state and applicable international laws. From time to time, the Company has been threatened with or named as a defendant in lawsuits, arbitrations and administrative claims involving securities, banking and other matters. The Company is also subject to periodic regulatory examinations and inspections. Compliance and trading problems that are reported to regulators, such as the SEC, FINRA, NASDAQ, CFTC, NFA, FDIC, Federal Reserve Bank of Richmond, OCC, or the CFPB by dissatisfied customers or others are investigated by such regulators, and may, if pursued, result in formal claims being filed against the Company by customers or disciplinary action being taken against the Company or its employees by regulators. Any such claims or disciplinary actions that are decided against the Company could have a material impact on the financial results of the Company or any of its subsidiaries. Insurance The Company maintains insurance coverage that management believes is reasonable and prudent. The principal insurance coverage it maintains covers commercial general liability; property damage; hardware/software damage; cyber liability; directors and officers; employment practices liability; certain criminal acts against the Company; and errors and omissions. The Company believes that such insurance coverage is adequate for the purpose of its business. The Company’s ability to maintain this level of insurance coverage in the future, however, is subject to the availability of affordable insurance in the marketplace. Commitments In the normal course of business, the Company makes various commitments to extend credit and incur contingent liabilities that are not reflected in the consolidated balance sheets. Significant changes in the economy or interest rates may influence the impact that these commitments and contingencies have on the Company in the future. The Company’s equity method investments, investments measured at cost and other investments are generally limited liability investments in partnerships, companies and other similar entities, including tax credit partnerships and community development entities, which are not required to be consolidated. The Company had $41 million in unfunded contingent investment commitments with respect to these investments at March 31, 2020. At March 31, 2020, the Company had $13 million of certificates of deposit scheduled to mature in less than one year. Guarantees In prior periods when the Company sold loans, the Company provided guarantees to investors purchasing mortgage loans, which are considered standard representations and warranties within the mortgage industry. The primary guarantees are that: the mortgage and the mortgage note have been duly executed and each is the legal, valid and binding obligation of the Company, enforceable in accordance with its terms; the mortgage has been duly acknowledged and recorded and is valid; and the mortgage and the mortgage note are not subject to any right of rescission, set-off, counterclaim or defense, including, without limitation, the defense of usury, and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto. The Company is responsible for the guarantees on loans sold. If these claims prove to be untrue, the investor can require the Company to repurchase the loan and return all loan purchase and servicing release premiums. Management does not believe the potential liability exposure will have a material impact on the Company’s results of operations, cash flows or financial condition due to the nature of the standard representations and warranties, which have resulted in a minimal amount of loan repurchases. |
Organization, Basis of Presen_2
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization E*TRADE Financial Corporation is a financial services company that provides brokerage and related products and services for traders, investors, stock plan administrators and participants, and RIAs. The Company also provides investor-focused banking products, including sweep deposit accounts insured by the FDIC, to customers. The Company's most significant, wholly-owned subsidiaries are described below: • E*TRADE Securities is a registered broker-dealer that clears and settles customer transactions • E*TRADE Bank is a federally chartered savings bank that provides FDIC insurance on certain qualifying amounts of customer deposits and provides other banking and cash management capabilities • E*TRADE Savings Bank, a subsidiary of E*TRADE Bank, is a federally chartered savings bank that provides FDIC insurance on certain qualifying amounts of customer deposits and provides custody solutions for RIAs • E*TRADE Financial Corporate Services is a provider of software and services for managing equity compensation plans and student loan and financial wellness benefits to our corporate clients • E*TRADE Futures is a registered non-clearing FCM that provides retail futures transaction capabilities for our customers • E*TRADE Capital Management is an RIA that provides investment advisory services for our customers |
Basis of Accounting | Basis of Presentation The condensed consolidated financial statements, also referred to herein as the consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries as determined under the voting interest model. Entities in which the Company has the ability to exercise significant influence but in which the Company does not possess control are generally accounted for by the equity method. Entities in which the Company does not have the ability to exercise significant influence are generally carried at cost. The Company also evaluates its initial and continuing involvement with certain entities to determine if the Company is required to consolidate the entities under the variable interest entity (VIE) model. This evaluation is based on a qualitative assessment of whether the Company is the primary beneficiary of a VIE, which requires the Company to possess both: 1) the power to direct the activities that most significantly impact the economic performance of the VIE; and 2) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. There are no investments in which the Company represents the primary beneficiary of a VIE; therefore, there are no consolidated VIEs included for all periods presented. The Company's consolidated financial statements are prepared in accordance with GAAP. Intercompany accounts and transactions are eliminated in consolidation. These consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary to present fairly the financial position, results of operations and cash flows for the periods presented and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2019. |
Use of Estimates | Use of Estimates Preparing the Company's consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and related notes for the periods presented. Actual results could differ from management’s estimates. Certain significant accounting policies are critical because they are based on estimates and assumptions that require complex and subjective judgments by management including the allowance for credit losses, valuation and impairment of goodwill and acquired intangible assets, and income taxes. Management also makes estimates in recognizing accrued operating expenses and other liabilities. These liabilities are impacted by estimates for litigation and regulatory matters as well as estimates related to general operating expenses, such as incentive compensation. Management estimates reflect the liabilities deemed probable at the balance sheet date as determined as part of the Company's ongoing evaluations based on available information. The Company evaluated its goodwill and finite lived intangible assets for impairment as a result of the decline in its share price related to actions taken by the Federal Reserve to contain the financial and economic impact of the COVID-19 pandemic. This analysis included a quantitative impairment test for its goodwill and a review of the recoverability of its finite lived intangible assets. No impairment of goodwill or finite lived intangible assets was indicated at March 31, 2020 as a result of this analysis. |
Accounting for Credit Loss, Financial Instruments | Accounting for Credit Losses In June 2016, the FASB amended the guidance on accounting for credit losses and subsequently issued clarifications and improvements. The amended guidance requires measurement of an allowance for credit losses for financial instruments, including loans and debt securities, and other commitments to extend credit held at the reporting date. For financial assets measured at amortized cost, factors such as historical performance, prepayment expectations, current conditions, and reasonable and supportable forecasts, including expected recoveries, are used to estimate expected credit losses over the contractual life of the underlying assets. The amended guidance also requires credit losses on impaired available-for-sale debt securities to be recorded through an allowance for credit losses. The CECL standard allows for subsequent increases in the fair value of collateral for collateral-dependent loans to be recognized up to the amount previously charged-off. A loan is considered to be collateral-dependent when foreclosure is probable or when repayment is expected to be provided substantially through the sale of the underlying collateral when the borrower is experiencing financial difficulty. The Company adopted the new standard on its effective date of January 1, 2020 using a modified retrospective approach and recognized an after-tax benefit related to mortgage loans of $84 million as an adjustment to opening retained earnings. The benefit primarily related to appreciation of fair value of the underlying collateral for mortgage loans that had been determined to be collateral-dependent and charged-off to the fair value of the underlying collateral in prior periods. This adoption impact is presented on the balance sheet as a “negative allowance” associated with the mortgage loans. Current expected credit losses on the Company’s investment security portfolio, margin receivables, securities-based lending and other financial assets held at amortized cost were not material. Adoption of the standard did not have an impact on the Company’s cash flows. See Note 7—Loans Receivable and Allowance for Credit Losses for further details. In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. The pandemic, and actions taken by governmental authorities to contain its financial and economic impact, resulted in significant market volatility during March 2020. The Company's allowance for credit losses on its mortgage loan portfolio as of March 31, 2020 includes the estimated financial impacts of the pandemic on its expected credit losses and resulted in an increase to the allowance for credit losses of $5 million as compared to January 1, 2020. See Note 7—Loans Receivable and Allowance for Credit Losses for further details. The Company's estimate of expected credit losses and related allowance for credit losses for its margin receivables, trade receivables, securities-based lending, securities lending, and agency debt securities were not directly impacted by the pandemic. The Company's analysis of its non-agency portfolio continued to indicate no expectation of credit losses as a result of credit enhancements associated with the investments, including the value of underlying collateral and the ability of subordinated interests to absorb estimated losses. As a result, no allowance for credit losses was recorded related to these portfolios as of March 31, 2020. Management will continue to evaluate conditions related to this and other significant events and their impacts on the factors used to estimate expected credit losses. Loans Receivable, Net Loans receivable, net consists of mortgage and securities-based lending loans that management has the intent and ability to hold for the foreseeable future or until maturity, also known as loans held-for-investment. The related allowance for credit losses is determined in accordance with the amended CECL guidance. Mortgage Loans Mortgage loans consist of the Company’s one- to- four-family and home equity loans. Current expected credit losses for mortgage loans that share similar risk characteristics, including loans that are performing in accordance with their contractual terms, are determined on a collective basis. Current expected credit losses for mortgage loans that do not share similar risk characteristics, including loans modified as troubled debt restructurings (TDRs) and loans that are collateral-dependent, are determined individually based on the characteristics of each loan. The Company’s accounting policies and practices for evaluating the risk characteristics of its mortgage loan portfolio were not impacted by the adoption of the new guidance. The Company’s accounting policies and practices for determining that a loan should be placed on nonaccrual status or that a loan has become delinquent or uncollectible, including the policies for discontinuing accrual of interest, recording payments received, and resuming accrual of interest were not impacted by the adoption of the new guidance. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies in Part II. Item 8. Financial Statements and Supplementary Data of ou r Annual Repor t The Company uses a probability of default and loss given default model for determining the allowance for credit losses for its mortgage loans that are evaluated collectively. A probability of default and loss given default model utilizes prepayment forecasts, loan amortization calculations, and other internally derived and externally sourced data and assumptions to determine the likelihood that the Company’s mortgage loans will experience a default and determine the expected loss given default. The Company also utilizes an externally provided macroeconomic forecast over the remaining life of the loans. The model parameters are adjusted to reflect past events, including general default data for loans with similar vintages and the Company's historical experience with borrower defaults, prepayments, losses, and charge-offs over the past 12 months. The Company utilizes a qualitative factor framework whereby, on a quarterly basis, the risk associated with the following three primary sets of factors are evaluated: external factors, internal factors, and portfolio specific factors. The uncertainty related to these factors may expand over time, temporarily impacting the qualitative component in advance of the more precise identification of these expected credit losses within the modeled credit losses. Management’s estimate of expected credit losses includes qualitative adjustments for model weaknesses, macroeconomic forecast uncertainty, and recoveries. The Company’s forecast includes a forward-looking view of macroeconomic factors over the next two to five years, after which the macroeconomic factors revert to externally provided long-term equilibrium values, rates, or patterns that do not include specific predictions for the economy. Key inputs for the forecast include US home prices and unemployment data. Loan modifications accounted for as TDRs that are not collateral-dependent are considered to be cash-flow dependent as the Company expects repayment to come from the loan principal and interest. The Company uses a discounted cash flow method to discount expected cash flows for these loans using the loan’s effective interest rate immediately prior to modification, which is consistent with the policy used for estimating the impact at adoption. Assumptions utilized in the discounted cash flow model are based on pools of loans that had modifications completed under the Company's loss mitigation program in which an economic concession was granted to the borrower experiencing financial difficulties. The Company does not adjust the effective interest rate for estimated prepayment assumptions. The allowance for credit losses reflects the difference between the amortized cost basis and the present value of the expected cash flows. Changes in the present value of expected cash flows are presented as credit loss expense or a reversal of credit loss expense. A mortgage loan is considered collateral-dependent when repayment is expected to be provided substantially through sale of the collateral when the borrower is experiencing financial difficulty or where foreclosure is probable. The Company uses the fair value of the collateral at the reporting date when measuring the net carrying amount of the asset and determining the allowance for credit losses. The fair value of the collateral is adjusted for estimated costs to sell. When the fair value of the collateral less costs to sell at the reporting date exceeds the recorded investment in the loan, the Company adjusts the allowance for credit losses such that the net carrying value equals the fair value of the collateral, less costs to sell. Such instances will result in a “negative allowance,” or increase to the carrying value of the loan receivable; however, any such amount cannot exceed amounts previously charged-off. If the fair value of the collateral less estimated costs to sell subsequently declines, the Company will adjust the carrying value of the mortgage loan by first reversing any negative allowance previously recorded. When applicable, the Company will further adjust the recorded investment of the mortgage loan by recording an incremental charge-off. Changes in the fair value of the collateral less costs to sell are recorded as a provision (benefit) for credit losses. The Company does not measure an allowance for credit losses for accrued interest receivable on mortgage loans because the Company reverses accrued interest receivable on loans that have principal or interest that is 90 days or greater past due, TDRs that are placed on nonaccrual status for all classes of loans (including loans in bankruptcy), and certain junior liens that have a delinquent senior lien. The Company reverses accrued interest through interest income. Securities-based Lending Securities-based lending includes the E*TRADE Line of Credit product, which allows customers to borrow against the market value of their securities pledged as collateral, and securities lending, which includes deposits paid for securities borrowed that are recorded at the amount of cash collateral advanced. The E*TRADE Line of Credit portfolio is included within the Loans receivable, net line item on the consolidated balance sheets. Deposits paid for securities borrowed are included within the Receivables from brokers, dealers, and clearing organizations line item while deposits paid for securities borrowed under the fully paid lending program are included in the Other assets line item on the consolidated balance sheets. Securities-based lending is fully collateralized by cash and securities with fair values in excess of the amount borrowed. The borrowers are contractually required to continually adjust the amount of the collateral as a result of changes in its fair value such that the collateral can be replenished on a daily basis. The Company expects the borrowers will continually replenish the collateral and elected the practical expedient which permits it to compare the amortized cost basis of the loaned amount with the fair value of collateral received at the reporting date to estimate of expected credit losses. As a result of this election, and the fully collateralized nature of these arrangements, the Company has no expectation of credit losses on its securities-based lending loans. The Company fully reserves for unsecured securities-based lending and related accrued interest receivable when they become 90 days past due. Margin Receivables Margin receivables represent credit extended to customers to finance their purchases of securities by borrowing against securities they own and are fully collateralized by these securities in customer accounts. Similar to securities-based lending, the borrowers of a margin loan are contractually required to continually adjust the amount of the collateral as a result of changes in its fair value such that the collateral can be replenished on a daily basis. The Company expects the borrowers will continually replenish the collateral as necessary because the Company subjects the borrowers to an internal qualification process and an interview to align investing objectives and risk appetite in addition to monitoring customer activity. The Company elected the practical expedient which permits it to compare the amortized cost basis of the loaned amount with the fair value of collateral received at the reporting date to measure the estimate of expected credit losses. The Company has no expectation of credit losses for margin loans where the fair value of the collateral securing the loans is equal to or in excess of the loaned amount. In cases where the fair value of the collateral is less than the amortized cost basis of the loan, for example, in times of severe or prolonged market volatility, the Company recognizes an allowance for credit losses in the amount of the difference, or unsecured balance. The Company fully reserves for unsecured margin balances and related accrued interest receivable when they become 90 days past due. The allowance for credit losses on margin receivables and the related accrued interest was not material and is presented within the Other assets line of the consolidated balance sheets, and provision for credit losses is presented within the Other non-interest expenses line of the consolidated statements of income. Debt Securities The Company’s available-for-sale securities are composed primarily of agency mortgage-backed and agency debt securities, and also include non-agency asset-backed and mortgage-backed securities. The Company’s held-to-maturity securities consist of debt securities, primarily agency mortgage-backed securities and agency debt securities. The Company monitors the credit quality of the agencies and has no expectation of credit losses on investment securities, or the related accrued interest receivable, that are backed by the US government or its agencies because of the credit profiles of those entities and our historical loss experience for such investments. Accrued interest receivable on debt securities is excluded from both the fair value and the amortized cost basis for purposes of identifying and measuring an impairment. All accrued and uncollected interest is reversed against interest income when it is considered uncollectible. As of March 31, 2020, accrued interest receivable for available-for-sale and held-to-maturity securities was $51 million and $67 million, respectively, and is included within the Other assets line of the consolidated balance sheets. The Company's non-agency asset-backed and mortgage-backed securities include senior classes of commercial mortgage-backed securities and ABS collateralized by credit card, automobile loan and student loan receivables. The Company applies a variety of stress case scenarios based on forecasts to determine expected credit losses in the non-agency portfolio. If an expected credit loss is identified, the Company uses a discounted cash flow method to determine the allowance for credit losses. The discounted cash flow method utilizes the effective interest rate implicit at the acquisition date and contractual cash flows adjusted for expected prepayments and default assumptions. If a security is impaired and the present value of expected cash flows is less than the amortized cost basis of the security, then an allowance for credit loss is recognized, limited to the difference between the fair value and amortized cost of the security. If the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before the recovery of the security’s amortized cost basis, the Company writes down the security’s amortized cost basis to its fair value. There were no expected credit losses on the Company's non-agency available-for-sale securities or related accrued interest receivable as of March 31, 2020. See Note 6—Available-for-Sale and Held-to-Maturity Securities for further details. Receivables from Brokers, Dealers, and Other Clearing Organizations The Receivables from brokers, dealers, and clearing organizations line item includes deposits paid for securities borrowed as well as receivables from clearing organizations and other brokerage receivables which are in scope of the amended guidance. The Company continually reviews the credit quality of its counterparties and has not experienced a default. As a result, the Company has zero expectation of credit losses for these arrangements. |
New accounting pronouncements (policy) | Codification Improvements Related to Credit Losses, Financial Instruments, Derivatives and Hedging In April 2019, the FASB clarified recently released guidance related to credit losses, financial instruments, derivatives and hedging. The FASB has an ongoing project on its agenda for improving the FASB's Accounting Standards Codification or correcting its unintended application. The Company adopted all new guidance related to credit losses on January 1, 2020 using a modified retrospective approach. The new guidance related to financial instruments was applied on January 1, 2020; however, there was no impact to the Company. The Company applied the new guidance related to derivatives and hedging on a prospective basis effective January 1, 2020 and enhanced its derivatives disclosures accordingly. See Note 8—Derivative Instruments and Hedging Activities for further details. Simplifying the Test for Goodwill Impairment In January 2017, the FASB amended the guidance to simplify the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test. The amended guidance requires the Company to perform its annual goodwill impairment test by comparing the fair value of a reporting unit to its carrying amount. An impairment charge would be recognized at the amount by which the carrying amount exceeds the fair value of the reporting unit; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Income tax effects resulting from any tax deductible goodwill should be considered when measuring the goodwill impairment loss, if applicable. The Company has the option to perform a qualitative assessment to conclude whether it is more likely than not that the carrying amount of the Company exceeds its fair value. The Company adopted the new standard on its effective date of January 1, 2020 and applied the standard prospectively. Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract In August 2018, the FASB amended the guidance on accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The amended guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company adopted the new standard on its effective date of January 1, 2020 and applied the standard prospectively. Implementation costs incurred on and after January 1, 2020 in a cloud computing arrangement that is a service contract are capitalized or expensed in accordance with the accounting guidance, and capitalized costs are amortized over the term of the hosting arrangement. New Accounting Standards Not Yet Adopted Simplifying the Accounting for Income Taxes In December 2019, the FASB amended the guidance to simplify the accounting for income taxes as part of its initiative to reduce complexity in accounting standards. The amendments remove certain exceptions to the general income tax accounting principles and provide for consistent application of and simplify GAAP for other areas by clarifying and amending existing guidance. The guidance will be effective for interim and annual periods beginning January 1, 2021 and each amendment will be applied on either a retrospective basis, modified retrospective basis, or prospective basis as required in accordance with the new standard. The Company is currently evaluating the impact of these clarifications on the Company's financial condition, results of operations and cash flows. Clarifying the Interactions Between Accounting for Investments in Equity Securities, Investments in Equity Method and Joint Ventures, and Derivatives and Hedging In January 2020, the FASB amended the guidance to clarify the interaction of the accounting for equity securities and investments accounted for under the equity method of accounting and the accounting for certain forward contracts and purchased options. The amended guidance clarifies that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative immediately before applying or upon discontinuing the equity method. The amended guidance also clarifies how a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option. The guidance will be effective for interim and annual periods beginning January 1, 2021, and must be applied prospectively. Early adoption is permitted. The Company is currently evaluating the impact of these clarifications on the Company's financial condition, results of operations and cash flows. Facilitation of the Effects of Reference Rate Reform on Financial Reporting In March 2020, the FASB amended the guidance to provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The guidance is effective for hedges in place as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the timing of adoption and the impact of these amendments, which when adopted, could have a material impact on the Company's financial condition and results of operations. For example, any changes in the designated benchmark rate affecting the cumulative fair value hedge basis adjustment as a result of an anticipated discontinuance of LIBOR would be recognized in current earnings in the period of adoption. |
Net Revenue (Tables)
Net Revenue (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenues [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The following table presents the significant components of total net revenue (dollars in millions): Three Months Ended March 31, 2020 2019 Net interest income $ 400 $ 492 Commissions 71 122 Fees and service charges 203 118 Gains on securities and other, net 20 11 Other revenue 13 12 Total net revenue (1) $ 707 $ 755 (1) Contract balances and transaction price allocated to remaining performance obligations were not material for the periods presented. The following table presents the significant components of fees and service charges (dollars in millions): Three Months Ended March 31, 2020 2019 Fees and service charges: Order flow revenue $ 85 $ 43 Money market funds and sweep deposits revenue 60 21 Advisor management and custody fees 19 18 Mutual fund service fees 13 12 Foreign exchange revenue 9 8 Reorganization fees 4 6 Other fees and service charges 13 10 Total fees and service charges $ 203 $ 118 |
Interest Income and Interest Expense Disclosure | The following table presents the significant components of interest income and interest expense (dollars in millions): Three Months Ended March 31, 2020 2019 Interest income: Cash and equivalents $ 2 $ 3 Cash segregated under federal or other regulations 8 6 Investment securities 285 365 Margin receivables 94 126 Loans 21 28 Broker-related receivables and other 4 4 Subtotal interest income 414 532 Other interest revenue (1) 29 23 Total interest income 443 555 Interest expense: Sweep deposits: Brokerage sweep deposits 5 20 Bank sweep deposits (2) 13 — Savings deposits 3 15 Customer payables 4 9 Broker-related payables and other — 1 Other borrowings 1 2 Corporate debt 14 14 Subtotal interest expense 40 61 Other interest expense (3) 3 2 Total interest expense 43 63 Net interest income $ 400 $ 492 (1) Other interest revenue is earned on certain securities loaned balances. Interest expense incurred on other securities loaned balances is presented on the broker-related payables and other line item above. (2) Beginning in Q4 2019, bank sweep deposits include Premium Savings Accounts participating in the newly established bank sweep deposit account program. Refer to Note 9—Deposits for additional information. (3) Other interest expense is incurred on certain securities borrowed balances. Interest income earned on other securities borrowed balances is presented on the broker-related receivables and other line item above. |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Inputs, Assets, Quantitative Information | The following table presents additional information about significant unobservable inputs used in the valuation of assets measured at fair value on a nonrecurring basis that were categorized in Level 3 of the fair value hierarchy: Unobservable Inputs Average Range March 31, 2020: Loans receivable: One- to four-family Appraised value $ 402,200 $69,000 - $796,000 Home equity Appraised value $ 295,900 $70,000 - $756,000 Real estate owned Appraised value $ 407,000 $100,000 - $979,000 December 31, 2019: Loans receivable: One- to four-family Appraised value $ 815,900 $92,000 - $2,700,000 Home equity Appraised value $ 437,300 $75,000 - $1,440,000 Real estate owned Appraised value $ 391,700 $80,000 - $897,000 |
Fair Value Measurements, Recurring and Nonrecurring | The following tables present the significant components of assets and liabilities measured at fair value (dollars in millions): Level 1 Level 2 Level 3 Total March 31, 2020: Recurring fair value measurements: Assets Available-for-sale securities: Agency mortgage-backed securities $ — $ 17,449 $ — $ 17,449 Agency debentures — 965 — 965 US Treasuries — 1,343 — 1,343 Non-agency asset-backed securities — 1,411 — 1,411 Non-agency mortgage-backed securities — 272 — 272 Total available-for-sale securities — 21,440 — 21,440 Total assets measured at fair value on a recurring basis (1) $ — $ 21,440 $ — $ 21,440 Nonrecurring fair value measurements: Loans receivable, net: One- to four-family $ — $ — $ 3 $ 3 Home equity — — 2 2 Total loans receivable — — 5 5 Other assets: Real estate owned — — 8 8 Total assets measured at fair value on a nonrecurring basis (2) $ — $ — $ 13 $ 13 (1) Assets measured at fair value on a recurring basis represented 32% of the Company’s total assets at March 31, 2020. (2) Represents the fair value of assets prior to deducting estimated selling costs that were carried on the consolidated balance sheets at March 31, 2020, and for which a fair value measurement was recorded during the period. Level 1 Level 2 Level 3 Total December 31, 2019: Recurring fair value measurements: Assets Available-for-sale securities: Agency mortgage-backed securities $ — $ 17,035 $ — $ 17,035 Agency debentures — 659 — 659 US Treasuries — 1,227 — 1,227 Non-agency asset-backed securities — 417 — 417 Non-agency mortgage-backed securities — 163 — 163 Total available-for-sale securities — 19,501 — 19,501 Total assets measured at fair value on a recurring basis (1) $ — $ 19,501 $ — $ 19,501 Nonrecurring fair value measurements: Loans receivable, net: One- to four-family $ — $ — $ 14 $ 14 Home equity — — 4 4 Total loans receivable — — 18 18 Other assets: Real estate owned — — 12 12 Total assets measured at fair value on a nonrecurring basis (2) $ — $ — $ 30 $ 30 (1) Assets measured at fair value on a recurring basis represented 32% of the Company’s total assets at December 31, 2019. |
Fair Value, by Balance Sheet Grouping | The following tables present the carrying values, fair values and fair value hierarchy level classification of financial instruments that are not carried at fair value on the consolidated balance sheets (dollars in millions): March 31, 2020 Carrying Level 1 Level 2 Level 3 Total Assets Cash and equivalents $ 1,105 $ 1,105 $ — $ — $ 1,105 Cash segregated under federal or other regulations $ 5,730 $ 5,730 $ — $ — $ 5,730 Held-to-maturity securities: Agency mortgage-backed securities $ 23,531 $ — $ 24,297 $ — $ 24,297 Agency debentures 108 — 121 — 121 Other agency debt securities 1,451 — 1,508 — 1,508 Total held-to-maturity securities $ 25,090 $ — $ 25,926 $ — $ 25,926 Margin receivables (1) $ 7,251 $ — $ 7,251 $ — $ 7,251 Loans receivable, net: One- to four-family $ 794 $ — $ — $ 751 $ 751 Home equity 645 — — 599 599 Securities-based lending 195 — 195 — 195 Total loans receivable, net (2) $ 1,634 $ — $ 195 $ 1,350 $ 1,545 Receivables from brokers, dealers and clearing organizations (1) $ 1,124 $ — $ 1,124 $ — $ 1,124 Other assets (1)(3) $ 97 $ — $ 97 $ — $ 97 Liabilities Deposits $ 42,146 $ — $ 42,146 $ — $ 42,146 Customer payables $ 15,960 $ — $ 15,960 $ — $ 15,960 Payables to brokers, dealers and clearing organizations $ 776 $ — $ 776 $ — $ 776 Corporate debt $ 1,411 $ — $ 1,400 $ — $ 1,400 (1) The fair value of securities that the Company received as collateral in connection with margin receivables and securities borrowing activities, including the fully paid lending program, where the Company is permitted to sell or re-pledge the securities, was $10.1 billion at March 31, 2020. Of this amount, $3.0 billion had been pledged or sold in connection with securities loaned and deposits with clearing organizations at March 31, 2020. (2) The carrying value of loans receivable, net includes the net "negative allowance" for credit losses of $86 million and loans that are recorded at fair value on a nonrecurring basis at March 31, 2020. (3) Represents securities borrowing from customers under the fully paid lending program. December 31, 2019 Carrying Level 1 Level 2 Level 3 Total Assets Cash and equivalents $ 750 $ 750 $ — $ — $ 750 Cash segregated under federal or other regulations $ 1,879 $ 1,879 $ — $ — $ 1,879 Held-to-maturity securities: Agency mortgage-backed securities $ 20,085 $ — $ 20,329 $ — $ 20,329 Agency debentures 267 — 271 — 271 Other agency debt securities 1,617 — 1,646 — 1,646 Total held-to-maturity securities $ 21,969 $ — $ 22,246 $ — $ 22,246 Margin receivables (1) $ 9,675 $ — $ 9,675 $ — $ 9,675 Loans receivable, net: One- to four-family $ 802 $ — $ — $ 835 $ 835 Home equity 624 — — 659 659 Securities-based lending 169 — 169 — 169 Total loans receivable, net (2) $ 1,595 $ — $ 169 $ 1,494 $ 1,663 Receivables from brokers, dealers and clearing organizations (1) $ 1,395 $ — $ 1,395 $ — $ 1,395 Other assets (1)(3) $ 313 $ — $ 313 $ — $ 313 Liabilities Deposits $ 38,606 $ — $ 38,605 $ — $ 38,605 Customer payables $ 12,849 $ — $ 12,849 $ — $ 12,849 Payables to brokers, dealers and clearing organizations $ 893 $ — $ 893 $ — $ 893 Corporate debt $ 1,410 $ — $ 1,485 $ — $ 1,485 (1) The fair value of securities that the Company received as collateral in connection with margin receivables and securities borrowing activities, including the fully paid lending program, where the Company is permitted to sell or re-pledge the securities, was $14.0 billion at December 31, 2019. Of this amount, $2.1 billion had been pledged or sold in connection with securities loaned and deposits with clearing organizations at December 31, 2019. (2) The carrying value of loans receivable, net includes the allowance for loan losses of ($17) million and loans that are recorded at fair value on a nonrecurring basis at December 31, 2019. (3) Includes $200 million of securities purchased under agreements to resell and $113 million of securities borrowing from customers under the fully paid lending program. The fair value of the securities that the Company received as collateral for securities purchased under agreements to resell was $206 million at December 31, 2019. |
Offsetting Assets and Liabili_2
Offsetting Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Offsetting Assets and Liabilities [Abstract] | |
Offsetting Assets and Liabilities [Table Text Block] | The following table presents information about these transactions to enable the users of the Company’s consolidated financial statements to evaluate the potential effect of rights of set-off between these recognized assets and liabilities (dollars in millions): Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts of Recognized Assets and Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets (1) Financial Instruments Collateral Received or Pledged (Including Cash) Net Amount March 31, 2020: Assets: Securities borrowed (2) $ 604 $ — $ 604 $ (68) $ (510) $ 26 Total $ 604 $ — $ 604 $ (68) $ (510) $ 26 Liabilities: Securities loaned (3) $ 696 $ — $ 696 $ (68) $ (535) $ 93 Total $ 696 $ — $ 696 $ (68) $ (535) $ 93 December 31, 2019: Assets: Securities purchased under agreements to resell (4) $ 200 $ — $ 200 $ — $ (200) $ — Securities borrowed (2) 1,116 — 1,116 (83) (1,003) 30 Total $ 1,316 $ — $ 1,316 $ (83) $ (1,203) $ 30 Liabilities: Securities loaned (3) $ 838 $ — $ 838 $ (83) $ (699) $ 56 Total $ 838 $ — $ 838 $ (83) $ (699) $ 56 (1) The vast majority of the net amount of cash collateral paid for securities borrowed are reflected in the receivables from brokers, dealers and clearing organizations line item while the cash collateral paid for securities borrowed under the fully paid lending program are reflected in other assets. Cash collateral received for securities loaned are reflected in the payables to brokers, dealers and clearing organizations line item in the consolidated balance sheets. (2) Included in the gross amounts of cash collateral paid for securities borrowed was $208 million and $757 million at March 31, 2020 and December 31, 2019, respectively, transacted through a program with a clearing organization, which guarantees the return of cash to the Company. For presentation purposes, these amounts presented are based on the counterparties under the Company’s master securities loan agreements. (3) Included in the gross amounts of cash collateral received for securities loaned was $357 million and $401 million at March 31, 2020 and December 31, 2019, respectively, transacted through a program with a clearing organization, which guarantees the return of securities to the Company. For presentation purposes, these amounts presented are based on the counterparties under the Company’s master securities loan agreements. (4) Securities purchased under agreements to resell were over-collateralized at December 31, 2019, as the market value of the securities received by the Company was $206 million, and were included in the other assets line item in the consolidated balance sheets. |
Available-for-Sale and Held-t_2
Available-for-Sale and Held-to-Maturity Securities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments Securities | The following table presents the amortized cost and fair value of available-for-sale and held-to-maturity securities (dollars in millions): Amortized Gross Gross Fair Value March 31, 2020: Available-for-sale securities: Agency mortgage-backed securities $ 16,130 $ 1,367 $ (48) $ 17,449 Agency debentures 910 55 — 965 US Treasuries 1,122 221 — 1,343 Non-agency asset-backed securities (1) 1,428 5 (22) 1,411 Non-agency mortgage-backed securities 273 3 (4) 272 Total available-for-sale securities $ 19,863 $ 1,651 $ (74) $ 21,440 Held-to-maturity securities: Agency mortgage-backed securities $ 23,531 $ 812 $ (46) $ 24,297 Agency debentures 108 13 — 121 Other agency debt securities 1,451 58 (1) 1,508 Total held-to-maturity securities $ 25,090 $ 883 $ (47) $ 25,926 December 31, 2019: Available-for-sale securities: (2) Agency mortgage-backed securities $ 16,267 $ 836 $ (68) $ 17,035 Agency debentures 632 27 — 659 US Treasuries 1,233 34 (40) 1,227 Non-agency asset-backed securities (1) 417 2 (2) 417 Non-agency mortgage-backed securities 159 4 — 163 Total available-for-sale securities $ 18,708 $ 903 $ (110) $ 19,501 Held-to-maturity securities: (2) Agency mortgage-backed securities $ 20,085 $ 293 $ (49) $ 20,329 Agency debentures 267 4 — 271 Other agency debt securities 1,617 31 (2) 1,646 Total held-to-maturity securities $ 21,969 $ 328 $ (51) $ 22,246 (1) Non-agency ABS collateralized by credit card, automobile loan and student loan receivables represented approximately 41%, 34% and 25% respectively, of the amortized cost of the non-agency ABS held at March 31, 2020 and approximately 54%, 18% and 28%, respectively, of the amortized cost of the non-agency ABS held at December 31, 2019. |
Investments Classified by Contractual Maturity Date | The following table presents the contractual maturities of all available-for-sale and held-to-maturity debt securities (dollars in millions): March 31, 2020 Amortized Cost Fair Value Available-for-sale debt securities: Due within one year $ 253 $ 256 Due within one to five years 962 967 Due within five to ten years 9,464 10,610 Due after ten years 9,184 9,607 Total available-for-sale debt securities $ 19,863 $ 21,440 Held-to-maturity debt securities: Due within one year $ 68 $ 69 Due within one to five years 2,047 2,123 Due within five to ten years 2,921 3,090 Due after ten years 20,054 20,644 Total held-to-maturity debt securities $ 25,090 $ 25,926 |
Schedule of Unrealized Loss on Investments | The following table presents the fair value and unrealized or unrecognized losses on available-for-sale and held-to-maturity securities, and the length of time that individual securities have been in a continuous unrealized or unrecognized loss position (dollars in millions): Less than 12 Months 12 Months or More Total Fair Value Unrealized / Fair Value Unrealized / Fair Value Unrealized / March 31, 2020: Available-for-sale securities: Agency mortgage-backed securities $ 735 $ (12) $ 1,275 $ (36) $ 2,010 $ (48) Non-agency mortgage-backed securities 160 (4) — — 160 (4) Non-agency asset-backed securities 1,136 (22) — — 1,136 (22) Total temporarily impaired available-for-sale securities $ 2,031 $ (38) $ 1,275 $ (36) $ 3,306 $ (74) Held-to-maturity securities: Agency mortgage-backed securities $ 1,219 $ (15) $ 1,141 $ (31) $ 2,360 $ (46) Other agency debt securities — — 93 (1) 93 (1) Total temporarily impaired held-to-maturity securities $ 1,219 $ (15) $ 1,234 $ (32) $ 2,453 $ (47) December 31, 2019: Available-for-sale securities: Agency mortgage-backed securities $ 2,045 $ (32) $ 1,916 $ (36) $ 3,961 $ (68) Non-agency mortgage-backed securities 50 — — — 50 — US Treasuries 402 (40) — — 402 (40) Non-agency asset-backed securities 251 (2) — — 251 (2) Total temporarily impaired available-for-sale securities $ 2,748 $ (74) $ 1,916 $ (36) $ 4,664 $ (110) Held-to-maturity securities: Agency mortgage-backed securities $ 1,337 $ (4) $ 3,600 $ (45) $ 4,937 $ (49) Other agency debt securities 181 (1) 135 (1) 316 (2) Total temporarily impaired held-to-maturity securities $ 1,518 $ (5) $ 3,735 $ (46) $ 5,253 $ (51) |
Gains on Securities and Other, Net | The following table presents the components of gains on securities and other, net (dollars in millions): Three Months Ended March 31, 2020 2019 Gains on available-for-sale securities $ 19 $ 11 Equity method investment income and other 1 — Gains on securities and other, net $ 20 $ 11 |
Loans Receivable, Net (Tables)
Loans Receivable, Net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Total Loans Receivable, Net | The following table presents loans receivable disaggregated by delinquency status (dollars in millions): Days Past Due Current 30-89 90-179 180+ Total Unamortized Premiums, Net Allowance for Credit Losses (1) Loans Receivable, Net March 31, 2020: One- to four-family $ 673 $ 40 $ 9 $ 33 $ 755 $ 4 $ 35 $ 794 Home equity 550 22 8 14 594 — 51 645 Securities-based lending (2) 195 — — — 195 — — 195 Total loans receivable $ 1,418 $ 62 $ 17 $ 47 $ 1,544 $ 4 $ 86 $ 1,634 Days Past Due Current 30-89 90-179 180+ Total Unamortized Premiums, Net Allowance for Loan Losses (1) Loans Receivable, Net December 31, 2019: One- to four-family $ 718 $ 39 $ 11 $ 35 $ 803 $ 5 $ (6) $ 802 Home equity 590 21 7 17 635 — (11) 624 Securities-based lending (2) 169 — — — 169 — — 169 Total loans receivable $ 1,477 $ 60 $ 18 $ 52 $ 1,607 $ 5 $ (17) $ 1,595 (1) The Company adopted amended accounting guidance related to accounting for credit losses on January 1, 2020. Prior year amounts related to the allowance for loan losses were not restated as the amended accounting guidance was adopted on a modified retrospective basis. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for further details. (2) E*TRADE Line of Credit is a securities-based lending product where customers can borrow against the market value of their securities pledged as collateral. The Company has no expectation of credit losses for these loans as they are fully collateralized by cash and securities with fair values in excess of borrowings at both March 31, 2020 and December 31, 2019, respectively. The unused credit line amount totaled $569 million and $431 million as of March 31, 2020 and December 31, 2019, respectively, and were unconditionally cancellable by the Company. |
Credit Quality Indicators for Loan Portfolio | The following tables present the distribution of the Company’s mortgage loan portfolios by credit quality indicator (dollars in millions): One- to Four-Family Home Equity March 31, December 31, March 31, December 31, Current LTV/CLTV (1) 2020 2019 2020 2019 <=80% $ 624 $ 661 $ 350 $ 377 80%-100% 88 97 143 154 100%-120% 28 26 69 68 >120% 15 19 32 36 Total mortgage loans receivable $ 755 $ 803 $ 594 $ 635 Average estimated current LTV/CLTV (2) 61 % 61 % 77 % 76 % Average LTV/CLTV at loan origination (3) 70 % 70 % 82 % 82 % (1) Current CLTV calculations for home equity loans are based on the maximum available line for HELOCs and outstanding principal balance for HEILs. For home equity loans in the second lien position, the original balance of the first lien loan at origination date and updated valuations on the property underlying the loan are used to calculate CLTV. Current property value estimates are updated on a quarterly basis. (2) The average estimated current LTV/CLTV ratio reflects the outstanding balance at the balance sheet date and the maximum available line for HELOCs, divided by the estimated current value of the underlying property. (3) Average LTV/CLTV at loan origination calculations are based on LTV/CLTV at time of purchase for one- to four-family purchased loans, HEILs and the maximum available line for HELOCs. One- to Four-Family Home Equity March 31, December 31, March 31, December 31, Current FICO 2020 2019 2020 2019 >=720 $ 423 $ 462 $ 309 $ 333 719 - 700 65 77 56 61 699 - 680 52 55 49 54 679 - 660 44 40 42 43 659 - 620 66 63 54 59 <620 105 106 84 85 Total mortgage loans receivable $ 755 $ 803 $ 594 $ 635 The following table presents credit quality characteristics of the collateral-dependent loan population (dollars in millions): March 31, 2020 One- to Four-Family Home Equity Unpaid principal balance $ 184 $ 154 Recorded investment $ 136 $ 57 Negative allowance for credit losses $ 37 $ 65 Average estimated current LTV/CLTV 71 % 76 % Average loan amount (dollars in thousands) $ 361 $ 63 |
Loans by Delinquency Category and Non-Performing Loans | The following table presents nonperforming loans by loan portfolio (dollars in millions): March 31, 2020 December 31, 2019 One- to four-family $ 104 $ 114 Home equity 51 54 Total nonperforming loans receivable $ 155 $ 168 |
Loans Receivable, Allowance for Loan Losses | The following table presents a roll forward by loan portfolio of the allowance for credit losses (dollars in millions): Three Months Ended March 31, 2020 One- to Four-Family Home Equity Total (2) Allowance for loan losses, beginning of period (1) $ (6) $ (11) $ (17) Impact of CECL adoption (1)(3) 43 71 114 (Provision) benefit for credit losses (1) (5) (6) Charge-offs (4) — — — Recoveries (4) (1) (4) (5) Net charge-offs (recoveries) (1) (4) (5) Allowance for credit losses, end of period (1) $ 35 $ 51 $ 86 Three Months Ended March 31, 2019 One- to Four-Family Home Equity Consumer Total (2) Allowance for loan losses, beginning of period (1) $ (9) $ (26) $ (2) $ (37) (Provision) benefit for loan losses 2 10 — 12 Charge-offs (4) — — 1 1 Recoveries (4) (2) (5) (1) (8) Net charge-offs (recoveries) (2) (5) — (7) Allowance for loan losses, end of period (1) $ (9) $ (21) $ (2) $ (32) (1) The Company adopted amended accounting guidance related to accounting for credit losses on January 1, 2020. Prior year amounts related to the allowance for loan losses were not restated as the amended accounting guidance was adopted on a modified retrospective basis. At January 1, 2020, the Company had a net "negative allowance" for credit losses of $37 million for its one-to-four-family portfolio and a net "negative allowance" of $60 million for its home equity portfolio. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for further details. (2) Securities-based lending loans were fully collateralized by cash and securities with fair values in excess of borrowings for the three months ended March 31, 2020 and 2019, respectively, and were unconditionally cancellable by the Company. (3) The benefit recognized as a "negative allowance" at adoption is primarily related to the increases in fair value of the underlying collateral for mortgage loans determined to be collateral-dependent compared to prior period charge-offs associated with these loans. This fair value appreciation resulted in a benefit of $39 million for the one- to four-family portfolio and a benefit of $70 million for the home equity portfolio at adoption. (4) Includes benefits resulting from recoveries of partial charge-offs due to principal paydowns or payoffs for the periods presented. The benefits included in the charge-offs line item exceeded other charge-offs for both one-to-four family and home equity loans in both periods presented. |
Troubled Debt Restructurings - Modifications | The following table presents the number of loans and post-modification balances immediately after being modified by major class (dollars in millions): Three Months Ended Interest Rate Reduction Number of Re-age/ Other (1) Total March 31, 2020: One- to four-family 4 $ 2 $ — $ 2 Home equity 8 1 — 1 Total 12 $ 3 $ — $ 3 March 31, 2019: One- to four-family 9 $ 1 $ 1 $ 2 Home equity 11 1 — 1 Total 20 $ 2 $ 1 $ 3 (1) Amounts represent loans whose terms were modified in a manner that did not result in an interest rate reduction, including re-aged loans, extensions, and loans with capitalized interest. |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) - Fair Value Hedging [Member] | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Cumulative Basis Adjustments Fair Value Hedges | The following table presents the cumulative basis adjustments related to the amortized cost basis or carrying amount of hedged assets in fair value hedging relationships (dollars in millions): Cumulative Amount of Fair Value Hedging Basis Adjustment of Hedged Assets (2) Amortized Cost of Hedged Assets (1) Total Active Discontinued March 31, 2020: Available-for-sale securities (3) $ 14,144 $ 1,561 $ 1,785 $ (224) Cumulative Amount of Fair Value Hedging Basis Adjustment Included in Carrying Amount of Hedged Assets (2) Carrying Amount of Hedged Assets (4) Total Active Discontinued December 31, 2019: Available-for-sale securities (3) $ 12,480 $ 583 $ 810 $ (227) (1) The Company adopted amended accounting guidance related to derivatives and hedging on a prospective basis on January 1, 2020. Prior year amounts were not restated. Refer to Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for further details. Amortized cost includes the initial acquisition price and the cost basis adjustments relating to discontinued fair value hedges, net of accumulated amortization or accretion. (2) Represents the increase (decrease) to the amortized cost or carrying amount of hedged assets. If fair value hedge accounting is discontinued, the previously hedged item is no longer adjusted for changes in fair value through the consolidated statements of income and the cumulative net gain or loss on the hedged item is amortized to net interest income using the effective interest method over the contractual life of the hedged item adjusted to reflect actual prepayments. (3) Includes the amortized cost basis and carrying value of closed portfolios of prepayable securities designated in hedging relationships in which the hedged item is the last layer of principal expected to be remaining throughout the hedge term as of March 31, 2020 and December 31, 2019. As of March 31, 2020 and December 31, 2019, respectively, the amortized cost basis of this portfolio was $410 million and $162 million, the amount of the designated hedged items was $316 million and $148 million and the cumulative amount of fair value hedging basis adjustments associated with these hedges was a loss of $19 million and a gain of $1 million. (4) The carrying amount includes the amortized cost and the impact of basis adjustments on active fair value hedges. |
Schedule of Effect of Derivatives designated as Fair Value Hedges and Related Hedged Items | The following table presents the effects of fair value hedge accounting on the consolidated statements of income (dollars in millions): Interest Income Three Months Ended March 31, 2020 2019 Total interest income $ 443 $ 555 Effects of fair value hedging on total interest income (1)(2) Agency debentures: Changes in fair value of hedged items 215 7 Changes in fair value of derivatives (215) (7) Net loss on fair value hedging relationships - agency debentures — — Agency mortgage-backed securities: Amounts recognized as interest accruals on derivatives (12) 3 Amortization of basis adjustments from discontinued hedges 8 10 Changes in fair value of hedged items 855 274 Changes in fair value of derivatives (866) (273) Net (loss) gain on fair value hedging relationships - agency mortgage-backed securities (15) 14 Total net (loss) gain on fair value hedging relationships $ (15) $ 14 (1) Excludes interest income accruals on hedged items and amounts recognized upon the sale of securities attributable to fair value hedge accounting. (2) Excludes interest on variation margin related to centrally cleared derivative contracts. |
Deposits (Tables)
Deposits (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Deposits [Abstract] | |
Deposit Liabilities, Type | The following table presents the significant components of deposits (dollars in millions): March 31, 2020 December 31, 2019 Sweep deposits: Brokerage sweep deposits $ 38,095 $ 27,949 Bank sweep deposits (1) 680 6,355 Savings deposits (2) 1,667 2,592 Other deposits (3) 1,704 1,710 Total deposits $ 42,146 $ 38,606 (1) Beginning in Q4 2019, bank sweep deposits include Premium Savings Accounts participating in the newly established bank sweep deposit account program. (2) Savings deposits include $1.0 billion of deposits at December 31, 2019 in our Premium Savings Account product that were subsequently converted to the bank sweep deposit account program. All new Premium Savings Accounts are now automatically enrolled in the program. (3) Includes checking deposits, money market deposits and certificates of deposit. As of March 31, 2020 and December 31, 2019, the Company had $220 million and $197 million in non-interest bearing deposits, respectively. |
Other Borrowings and Corporat_2
Other Borrowings and Corporate Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Other Borrowings | The following table presents the Company's external lines of credit at March 31, 2020 (dollars in millions): Description Maturity Date Borrower Outstanding Available Senior unsecured, committed revolving credit facility (1) June 2024 ETFC $ — $ 300 FHLB secured credit facility Determined at trade ETB $ — $ 6,430 Federal Reserve Bank discount window Overnight ETB $ — $ 1,245 Senior unsecured, committed revolving credit facility (2) June 2020 ETS $ — $ 600 Secured, committed lines of credit June 2020 ETS $ — $ 175 Unsecured, uncommitted lines of credit June 2020 ETS $ — $ 50 Unsecured, uncommitted lines of credit None ETS $ — $ 75 Secured, uncommitted lines of credit None ETS $ — $ 425 (1) The senior unsecured committed revolving credit facility contains certain covenants, including maintenance covenants related to the Company's interest coverage, leverage and regulatory net capital ratios with which the Company was in compliance at March 31, 2020. (2) The senior unsecured committed revolving credit facility contains certain covenants, including maintenance covenants related to E*TRADE Securities' minimum consolidated tangible net worth and regulatory net capital ratio with which the Company was in compliance at March 31, 2020. |
Schedule of Corporate Debt Instruments | The following tables present the significant components of E*TRADE Financial's corporate debt (dollars in millions): Face Value Discount Net March 31, 2020: Interest-bearing notes: 2.95% Senior Notes, due 2022 $ 600 $ (3) $ 597 3.80% Senior Notes, due 2027 400 (3) 397 4.50% Senior Notes, due 2028 420 (3) 417 Total corporate debt $ 1,420 $ (9) $ 1,411 December 31, 2019: Interest-bearing notes: 2.95% Senior Notes, due 2022 $ 600 $ (3) $ 597 3.80% Senior Notes, due 2027 400 (3) 397 4.50% Senior Notes, due 2028 420 (4) 416 Total corporate debt $ 1,420 $ (10) $ 1,410 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Schedule of Accumulated Other Comprehensive Loss | The following table presents after-tax changes in each component of accumulated other comprehensive loss (dollars in millions): Three Months Ended March 31, 2020 2019 Accumulated other comprehensive loss, beginning of period (1) $ (28) $ (275) Other comprehensive (loss) income before reclassifications (126) 112 Amounts reclassified from accumulated other comprehensive loss (14) (7) Net change (140) 105 Accumulated other comprehensive loss, end of period (1) $ (168) $ (170) (1) The accumulated other comprehensive loss balances and activities were related to available-for-sale securities in both periods. |
Components of Other Comprehensive Income (Loss) | The following table presents other comprehensive (loss) income activity and the related tax effect (dollars in millions): Three Months Ended March 31, 2020 2019 Before Tax Tax Effect After Tax Before Tax Tax Effect After Tax Other comprehensive (loss) income Available-for-sale securities: Unrealized (losses) gains, net $ (172) $ 46 $ (126) $ 150 $ (38) $ 112 Reclassification into earnings, net (19) 5 (14) (10) 3 (7) Net change from available-for-sale securities (191) 51 (140) 140 (35) 105 Other comprehensive (loss) income $ (191) $ 51 $ (140) $ 140 $ (35) $ 105 |
Reclassification out of Accumulated Other Comprehensive Loss | The following table presents the consolidated statements of income line items impacted by reclassifications out of accumulated other comprehensive loss (dollars in millions): Accumulated Other Comprehensive Loss Components Amounts Reclassified from Accumulated Other Comprehensive Loss Affected Line Items in the Consolidated Statements of Income Three Months Ended March 31, 2020 2019 Available-for-sale securities: $ 20 $ 11 Gains on securities and other, net (1) (1) Interest income 19 10 Reclassification into earnings, before tax (5) (3) Income tax expense $ 14 $ 7 Reclassification into earnings, net |
Preferred Stock | |
Schedule of Stock by Class | The following table presents the preferred stock outstanding (in millions except total shares outstanding and per share data): Carrying Value at Description Issuance Date Per Annum Dividend Rate Total Shares Outstanding Liquidation Preference per Share March 31, 2020 December 31, 2019 Series A Fixed-to-Floating Rate Non-Cumulative 8/25/2016 5.875% to, but excluding, 9/15/2026; 3-mo LIBOR + 4.435% thereafter 400,000 $ 1,000 $ 394 $ 394 Series B Fixed-to-Floating Rate Non-Cumulative 12/6/2017 5.30% to, but excluding, 3/15/2023; 3-mo LIBOR + 3.16% thereafter 3,000 $ 100,000 295 295 Total 403,000 $ 689 $ 689 |
Dividends Declared and Paid | The following table presents the cash dividends paid on preferred stock (in millions except per share data): Three Months Ended March 31, 2020 Declaration Date Record Date Payment Date Dividend per Share Dividend Paid Series A (1) 2/6/2020 3/2/2020 3/16/2020 $ 29.38 $ 12 Series B (1) 2/6/2020 3/2/2020 3/16/2020 $ 2,650.00 8 Total $ 20 Three Months Ended March 31, 2019 Declaration Date Record Date Payment Date Dividend per Share Dividend Paid Series A (1) 2/7/2019 2/28/2019 3/15/2019 $ 29.38 $ 12 Series B (1) 2/7/2019 2/28/2019 3/15/2019 $ 2,650.00 8 Total $ 20 (1) Dividends are non-cumulative and payable semi-annually, if declared. |
Common Stock | |
Dividends Declared and Paid | The following table presents the cash dividends paid on common stock (in millions except per share data): Three Months Ended March 31, 2020 Declaration Date Record Date Payment Date Dividend per Share Dividend Paid 1/22/2020 2/25/2020 3/2/2020 $ 0.14 $ 31 Total $ 31 Three Months Ended March 31, 2019 Declaration Date Record Date Payment Date Dividend per Share Dividend Paid 1/23/2019 2/1/2019 2/15/2019 $ 0.14 $ 35 Total $ 35 |
Regulatory Requirements (Tables
Regulatory Requirements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Schedule Of Subsidiary Compliance With Regulatory Capital Requirements | The following table presents a summary of the minimum net capital requirements and excess capital for the Company’s broker-dealer and FCM subsidiaries (dollars in millions): Required Net Net Capital Excess Net March 31, 2020: E*TRADE Securities (1) $ 179 $ 1,360 $ 1,181 E*TRADE Futures 3 29 26 Total $ 182 $ 1,389 $ 1,207 December 31, 2019: E*TRADE Securities $ 223 $ 1,251 $ 1,028 E*TRADE Futures 3 28 25 Total $ 226 $ 1,279 $ 1,053 |
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | E*TRADE Financial, E*TRADE Bank and E*TRADE Savings Bank were categorized as "well capitalized" under the regulatory framework for prompt corrective action for the periods presented in the following table (dollars in millions): March 31, 2020 December 31, 2019 Actual Well Capitalized Minimum Capital Excess Capital Actual Well Capitalized Minimum Capital Excess Capital Amount Ratio Amount Ratio Amount Amount Ratio Amount Ratio Amount E*TRADE Financial (1) Tier 1 leverage $ 4,179 6.8 % $ 3,051 5.0 % $ 1,128 $ 4,035 6.9 % $ 2,922 5.0 % $ 1,113 Common Equity Tier 1 $ 3,490 29.3 % $ 775 6.5 % $ 2,715 $ 3,346 31.5 % $ 692 6.5 % $ 2,654 Tier 1 risk-based $ 4,179 35.1 % $ 954 8.0 % $ 3,225 $ 4,035 37.9 % $ 852 8.0 % $ 3,183 Total risk-based $ 4,179 35.1 % $ 1,192 10.0 % $ 2,987 $ 4,060 38.2 % $ 1,064 10.0 % $ 2,996 E*TRADE Bank (1) Tier 1 leverage $ 3,420 7.4 % $ 2,314 5.0 % $ 1,106 $ 3,240 7.2 % $ 2,253 5.0 % $ 987 Common Equity Tier 1 $ 3,420 35.8 % $ 621 6.5 % $ 2,799 $ 3,240 36.5 % $ 577 6.5 % $ 2,663 Tier 1 risk-based $ 3,420 35.8 % $ 764 8.0 % $ 2,656 $ 3,240 36.5 % $ 710 8.0 % $ 2,530 Total risk-based $ 3,420 35.8 % $ 956 10.0 % $ 2,464 $ 3,257 36.7 % $ 888 10.0 % $ 2,369 E*TRADE Savings Bank (1) Tier 1 leverage $ 1,492 38.5 % $ 193 5.0 % $ 1,299 $ 1,480 40.7 % $ 182 5.0 % $ 1,298 Common Equity Tier 1 $ 1,492 200.4 % $ 48 6.5 % $ 1,444 $ 1,480 224.7 % $ 43 6.5 % $ 1,437 Tier 1 risk-based $ 1,492 200.4 % $ 59 8.0 % $ 1,433 $ 1,480 224.7 % $ 53 8.0 % $ 1,427 Total risk-based $ 1,492 200.4 % $ 74 10.0 % $ 1,418 $ 1,480 224.7 % $ 66 10.0 % $ 1,414 |
Organization, Basis of Presen_3
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details - Adoption of New Accounting Standards) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Provision (benefit) for credit losses | $ 6 | $ (12) |
Available-for-sale Securities [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Interest Receivable | 51 | |
Held-to-maturity Securities [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Interest Receivable | 67 | |
Covid19 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Allowance for Loan and Lease Losses, Period Increase (Decrease) | 5 | |
Receivables From Broker Dealers And Clearing Organizations [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Provision (benefit) for credit losses | 0 | |
Accounting Standards Update 2016-13 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of accounting change | 84 | |
Retained Earnings (Accumulated Deficit) | Accounting Standards Update 2016-13 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of accounting change | $ 84 |
Acquisition and Restructuring (
Acquisition and Restructuring (Details) - USD ($) | Dec. 09, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Restructuring Costs | $ 16,000,000 | $ 0 | |
Gradifi [Member] | |||
Business Acquisition [Line Items] | |||
Payments to acquire businesses | $ 30,000,000 | ||
Goodwill acquired during period | 25,000,000 | ||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Goodwill, Purchase Accounting Adjustments | (1,000,000) | ||
Gradifi [Member] | Technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Fair Value | $ 3,000,000 | ||
Estimated Useful Life (In Years) | 6 years | ||
Finite-Lived Intangible Assets, Purchase Accounting Adjustments | 1,000,000 | ||
Morgan Stanley [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
CommonShareReceivedMerger | 1.0432 | ||
CommonShareReceivedMerger | $ 1.0432 |
Net Revenue (Details - Total Re
Net Revenue (Details - Total Revenue) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Oct. 07, 2019 | |
Revenue from Contract with Customer [Abstract] | |||
Net interest income | $ 400,000,000 | $ 492,000,000 | |
Gains on securities and other, net | 20,000,000 | 11,000,000 | |
Other revenue | 13,000,000 | 12,000,000 | |
Revenues | 707,000,000 | 755,000,000 | |
Options contract [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Contract rate | $ 0.65 | ||
Active trader pricing [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Contract rate | $ 0.50 | ||
Commissions [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 71,000,000 | 122,000,000 | |
Fees and service charges [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 203,000,000 | $ 118,000,000 |
Net Revenue (Details - Interest
Net Revenue (Details - Interest Income and Interest Expense) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Interest income: | ||
Cash and equivalents | $ 2 | $ 3 |
Cash segregated under federal or other regulations | 8 | 6 |
Investment securities | 285 | 365 |
Margin receivables | 94 | 126 |
Loans | 21 | 28 |
Broker-related receivables and other | 4 | 4 |
Subtotal interest income | 414 | 532 |
Other interest revenue(1) | 29 | 23 |
Total interest income | 443 | 555 |
Interest expense: | ||
Brokerage sweep deposits | 5 | 20 |
Bank sweep deposits | 13 | 0 |
Savings deposits | 3 | 15 |
Customer payables | 4 | 9 |
Broker-related payables and other | 0 | 1 |
Other borrowings | 1 | 2 |
Corporate debt | 14 | 14 |
Subtotal interest expense | 40 | 61 |
Other interest expense(2) | 3 | 2 |
Total interest expense | 43 | 63 |
Net interest income | 400 | 492 |
Gains on securities and other, net | $ 20 | $ 11 |
Net Revenue (Details - Fees and
Net Revenue (Details - Fees and Service Charges) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Order flow revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 60 | $ 43 |
Money market funds and sweep deposits revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 85 | 21 |
Advisor management and custody fees [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 19 | 18 |
Mutual fund service fees [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 13 | 12 |
Foreign exchange revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 9 | 8 |
Reorganization fees [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 4 | 6 |
Other fees and service charges [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 13 | 10 |
Fees and service charges [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 203 | $ 118 |
Fair Value Disclosures (Details
Fair Value Disclosures (Details - Inputs) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Total mortgage loans receivable | $ 1,544,000,000 | $ 1,607,000,000 |
Real Estate Owned | 13,000,000 | 13,000,000 |
Average [Member] | Level 3 [Member] | Fair Value, Nonrecurring [Member] | Measurement Input, Appraised Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Real Estate Owned | 407,000 | 391,700 |
Minimum [Member] | Level 3 [Member] | Fair Value, Nonrecurring [Member] | Measurement Input, Appraised Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Real Estate Owned | 100,000 | 80,000 |
Maximum [Member] | Level 3 [Member] | Fair Value, Nonrecurring [Member] | Measurement Input, Appraised Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Real Estate Owned | 979,000 | 897,000 |
One- To Four-Family [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Total mortgage loans receivable | 755,000,000 | 803,000,000 |
One- To Four-Family [Member] | Average [Member] | Level 3 [Member] | Fair Value, Nonrecurring [Member] | Measurement Input, Appraised Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Total mortgage loans receivable | 402,200 | 815,900 |
One- To Four-Family [Member] | Minimum [Member] | Level 3 [Member] | Fair Value, Nonrecurring [Member] | Measurement Input, Appraised Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Total mortgage loans receivable | 69,000 | 92,000 |
One- To Four-Family [Member] | Maximum [Member] | Level 3 [Member] | Fair Value, Nonrecurring [Member] | Measurement Input, Appraised Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Total mortgage loans receivable | 796,000 | 2,700,000 |
Home Equity [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Total mortgage loans receivable | 594,000,000 | 635,000,000 |
Home Equity [Member] | Average [Member] | Level 3 [Member] | Fair Value, Nonrecurring [Member] | Measurement Input, Appraised Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Total mortgage loans receivable | 295,900 | 437,300 |
Home Equity [Member] | Minimum [Member] | Level 3 [Member] | Fair Value, Nonrecurring [Member] | Measurement Input, Appraised Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Total mortgage loans receivable | 70,000 | 75,000 |
Home Equity [Member] | Maximum [Member] | Level 3 [Member] | Fair Value, Nonrecurring [Member] | Measurement Input, Appraised Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Total mortgage loans receivable | $ 756,000 | $ 1,440,000 |
Fair Value Disclosures (Detai_2
Fair Value Disclosures (Details - Recurring and Nonrecurring) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, fair value | $ 21,440,000 | $ 19,501,000 |
Assets measured at fair value on recurring basis percentage of total assets | 32.00% | 32.00% |
Fair Value, Transfers Between Level 1 and Level 2 and Level 3, Description and Policy (Textuals) [Abstract] | ||
Fair value, assets, Level 1 to Level 2 transfers, amount | $ 0 | $ 0 |
Fair value, assets, Level 2 to Level 1 transfers, amount | 0 | 0 |
Fair value, liabilities, Level 1 to Level 2 transfers, amount | 0 | 0 |
Fair value, liabilities, Level 2 to Level 1 transfers, amount | 0 | 0 |
Asset transfer into Level 3 | 0 | 0 |
Asset transfer out of Level 3 | 0 | 0 |
Liability transfer into Level 3 | 0 | 0 |
Liability transfer out of Level 3 | 0 | 0 |
Fair Value, Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, fair value | 21,440,000 | 19,501,000 |
Total assets measured at fair value | 21,440,000 | 19,501,000 |
Fair Value, Nonrecurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total loans receivable | 5,000 | 18,000 |
Real estate owned | 8,000 | 12,000 |
Total assets measured at fair value | 13,000 | 30,000 |
Level 2 [Member] | Fair Value, Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, fair value | 21,440,000 | 19,501,000 |
Total assets measured at fair value | 21,440,000 | 19,501,000 |
Level 3 [Member] | Fair Value, Nonrecurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total loans receivable | 5,000 | 18,000 |
Real estate owned | 8,000 | 12,000 |
Total assets measured at fair value | 13,000 | 30,000 |
One- To Four-Family [Member] | Loans Receivable [Member] | Fair Value, Nonrecurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total loans receivable | 3,000 | 14,000 |
One- To Four-Family [Member] | Loans Receivable [Member] | Level 3 [Member] | Fair Value, Nonrecurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total loans receivable | 3,000 | 14,000 |
Home Equity [Member] | Loans Receivable [Member] | Fair Value, Nonrecurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total loans receivable | 2,000 | 4,000 |
Home Equity [Member] | Loans Receivable [Member] | Level 3 [Member] | Fair Value, Nonrecurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total loans receivable | 2,000 | 4,000 |
Agency mortgage-backed securities [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, fair value | 17,449,000 | 17,035,000 |
Agency mortgage-backed securities [Member] | Fair Value, Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, fair value | 17,449,000 | 17,035,000 |
Agency mortgage-backed securities [Member] | Level 2 [Member] | Fair Value, Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, fair value | 17,449,000 | 17,035,000 |
Agency debentures [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, fair value | 965,000 | 659,000 |
Agency debentures [Member] | Fair Value, Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, fair value | 965,000 | 659,000 |
Agency debentures [Member] | Level 2 [Member] | Fair Value, Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, fair value | 965,000 | 659,000 |
US Treasuries [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, fair value | 1,343,000 | 1,227,000 |
US Treasuries [Member] | Fair Value, Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, fair value | 1,343,000 | 1,227,000 |
US Treasuries [Member] | Level 2 [Member] | Fair Value, Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, fair value | 1,343,000 | 1,227,000 |
Non-agency asset-backed securities [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, fair value | 1,411,000 | 417,000 |
Non-agency asset-backed securities [Member] | Fair Value, Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, fair value | 1,411,000 | 417,000 |
Non-agency asset-backed securities [Member] | Level 2 [Member] | Fair Value, Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, fair value | 1,411,000 | 417,000 |
Non-agency mortgage backed securities [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, fair value | 272,000 | 163,000 |
Non-agency mortgage backed securities [Member] | Fair Value, Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, fair value | 272,000 | 163,000 |
Non-agency mortgage backed securities [Member] | Level 2 [Member] | Fair Value, Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, fair value | $ 272,000 | $ 163,000 |
Fair Value Disclosures (Detai_3
Fair Value Disclosures (Details - Level 3) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value Disclosures [Abstract] | ||
Level 3 recurring assets | $ 0 | $ 0 |
Level 3 recurring liabilities | $ 0 | $ 0 |
Fair Value Disclosures (Detai_4
Fair Value Disclosures (Details - FV of Financial Instruments) - USD ($) $ in Millions | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Cash and equivalents | $ 1,105 | $ 750 | $ 523 | ||
Cash segregated under federal or other regulations | 5,730 | 1,879 | 677 | ||
Total held-to-maturity securities | 25,090 | 21,969 | |||
Margin receivables | 7,251 | 9,675 | |||
Total loans receivable, net | 1,634 | 1,595 | |||
Receivables from brokers, dealers and clearing organizations | 1,124 | 1,395 | |||
Deposits | 42,146 | 38,606 | |||
Customer payables | 15,960 | 12,849 | |||
Payables to brokers, dealers and clearing organizations | 776 | 893 | |||
Corporate debt | 1,411 | 1,410 | |||
Disclosure Endnotes [Abstract] | |||||
Customer Securities for which Entity has Right to Sell or Repledge, Fair Value | 10,100 | 14,000 | |||
Customer Securities for which Entity has Right to Sell or Repledge, Fair Value of Securities Sold or Repledged | 3,000 | 2,100 | |||
Allowance for loan losses | (86) | 17 | 32 | $ 37 | |
Securities purchased under agreement to resell | 200 | ||||
Securities borrowed | 604 | 1,116 | |||
Securities purchased under agreement to resell, fair value of collateral | 206 | ||||
Carrying Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Cash and equivalents | 1,105 | 750 | |||
Cash segregated under federal or other regulations | 5,730 | 1,879 | |||
Total held-to-maturity securities | 25,090 | 21,969 | |||
Margin receivables | 7,251 | 9,675 | |||
Total loans receivable, net | 1,634 | 1,595 | |||
Receivables from brokers, dealers and clearing organizations | 1,124 | 1,395 | |||
Other assets | 97 | 313 | |||
Deposits | 42,146 | 38,606 | |||
Customer payables | 15,960 | 12,849 | |||
Payables to brokers, dealers and clearing organizations | 776 | 893 | |||
Corporate debt | 1,411 | 1,410 | |||
Fair Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Cash and equivalents | 1,105 | 750 | |||
Cash segregated under federal or other regulations | 5,730 | 1,879 | |||
Total held-to-maturity securities | 25,926 | 22,246 | |||
Margin receivables | 7,251 | 9,675 | |||
Total loans receivable, net | 1,545 | 1,663 | |||
Receivables from brokers, dealers and clearing organizations | 1,124 | 1,395 | |||
Other assets | 97 | 313 | |||
Deposits | 42,146 | 38,605 | |||
Customer payables | 15,960 | 12,849 | |||
Payables to brokers, dealers and clearing organizations | 776 | 893 | |||
Corporate debt | 1,400 | 1,485 | |||
One- To Four-Family [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total loans receivable, net | 794 | 802 | |||
Disclosure Endnotes [Abstract] | |||||
Allowance for loan losses | (35) | $ (37) | 6 | 9 | 9 |
One- To Four-Family [Member] | Carrying Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total loans receivable, net | 794 | 802 | |||
One- To Four-Family [Member] | Fair Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total loans receivable, net | 751 | 835 | |||
Home Equity [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total loans receivable, net | 645 | 624 | |||
Disclosure Endnotes [Abstract] | |||||
Allowance for loan losses | (51) | $ (60) | 11 | 21 | 26 |
Home Equity [Member] | Carrying Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total loans receivable, net | 645 | 624 | |||
Home Equity [Member] | Fair Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total loans receivable, net | 599 | 659 | |||
Consumer and other [Member] | |||||
Disclosure Endnotes [Abstract] | |||||
Allowance for loan losses | $ 2 | $ 2 | |||
Securities-based lending [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total loans receivable, net | 195 | 169 | |||
Disclosure Endnotes [Abstract] | |||||
Allowance for loan losses | 0 | 0 | |||
Securities-based lending [Member] | Carrying Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total loans receivable, net | 195 | 169 | |||
Securities-based lending [Member] | Fair Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total loans receivable, net | 195 | 169 | |||
Fully paid lending program [Member] | |||||
Disclosure Endnotes [Abstract] | |||||
Securities borrowed | 113 | ||||
Agency mortgage-backed securities [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total held-to-maturity securities | 23,531 | 20,085 | |||
Agency mortgage-backed securities [Member] | Carrying Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total held-to-maturity securities | 23,531 | 20,085 | |||
Agency mortgage-backed securities [Member] | Fair Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total held-to-maturity securities | 24,297 | 20,329 | |||
Agency debentures [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total held-to-maturity securities | 108 | 267 | |||
Agency debentures [Member] | Carrying Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total held-to-maturity securities | 108 | 267 | |||
Agency debentures [Member] | Fair Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total held-to-maturity securities | 121 | 271 | |||
Other agency debt securities [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total held-to-maturity securities | 1,451 | 1,617 | |||
Other agency debt securities [Member] | Carrying Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total held-to-maturity securities | 1,451 | 1,617 | |||
Other agency debt securities [Member] | Fair Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total held-to-maturity securities | 1,508 | 1,646 | |||
Level 1 [Member] | Fair Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Cash and equivalents | 1,105 | 750 | |||
Cash segregated under federal or other regulations | 5,730 | 1,879 | |||
Level 2 [Member] | Fair Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total held-to-maturity securities | 25,926 | 22,246 | |||
Margin receivables | 7,251 | 9,675 | |||
Total loans receivable, net | 195 | 169 | |||
Receivables from brokers, dealers and clearing organizations | 1,124 | 1,395 | |||
Other assets | 97 | 313 | |||
Deposits | 42,146 | 38,605 | |||
Customer payables | 15,960 | 12,849 | |||
Payables to brokers, dealers and clearing organizations | 776 | 893 | |||
Corporate debt | 1,400 | 1,485 | |||
Level 2 [Member] | Securities-based lending [Member] | Fair Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total loans receivable, net | 195 | 169 | |||
Level 2 [Member] | Agency mortgage-backed securities [Member] | Fair Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total held-to-maturity securities | 24,297 | 20,329 | |||
Level 2 [Member] | Agency debentures [Member] | Fair Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total held-to-maturity securities | 121 | 271 | |||
Level 2 [Member] | Other agency debt securities [Member] | Fair Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total held-to-maturity securities | 1,508 | 1,646 | |||
Level 3 [Member] | Fair Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total loans receivable, net | 1,350 | 1,494 | |||
Level 3 [Member] | One- To Four-Family [Member] | Fair Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total loans receivable, net | 751 | 835 | |||
Level 3 [Member] | Home Equity [Member] | Fair Value [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Total loans receivable, net | $ 599 | $ 659 |
Offsetting Assets and Liabili_3
Offsetting Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Offsetting Assets [Abstract] | ||
Securities Purchased under Agreements to Resell, Gross | $ 200 | |
Securities Purchased under Agreements to Resell, Liability | 0 | |
Securities Purchased under Agreements to Resell | 200 | |
Securities Purchased under Agreements to Resell, Financial Instruments, Not Offset | 0 | |
Securities Purchased under Agreements to Resell, Collateral Received, Not Offset | (200) | |
Securities Purchased under Agreements to Resell, Amount Offset Against Collateral | 0 | |
Securities Borrowed, Gross | $ 604 | 1,116 |
Securities Borrowed, Liability | 0 | 0 |
Securities Borrowed | 604 | 1,116 |
Securities Borrowed, Financial Instruments, Not Offset | (68) | (83) |
Securities Borrowed, Collateral Received, Not Offset | (510) | (1,003) |
Securities Borrowed, Net | 26 | 30 |
Total, Gross | 1,316 | |
Total, Liability | 0 | |
Total | 1,316 | |
Total, Financial Instruments, Not Offset | (83) | |
Total, Collateral Received, Not Offset | (1,203) | |
Total, Net | 30 | |
Offsetting Liabilities [Abstract] | ||
Securities Loaned, Gross | 696 | 838 |
Securities Loaned, Asset | 0 | 0 |
Securities Loaned | 696 | 838 |
Securities Loaned, Financial Instruments, Not Offset | (68) | (83) |
Securities Loaned, Collateral Pledged, Not Offset | (535) | (699) |
Securities Loaned, Net | 93 | 56 |
Offsetting Assets [Line Items] | ||
Securities Purchased under Agreements to Resell, Fair Value of Collateral | 206 | |
Exchange Cleared [Member] | ||
Offsetting Assets [Line Items] | ||
Cash Collateral Paid for Securities Borrowed, at Carrying Value | 208 | 757 |
Cash Collateral Received for Securities Loaned, at Carrying Value | $ 357 | $ 401 |
Available-for-Sale Securities (
Available-for-Sale Securities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2019 | Mar. 31, 2020 | |
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale debt securities, amortized cost basis | $ 18,708 | $ 19,863 |
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 903 | 1,651 |
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | (110) | (74) |
Available-for-sale debt securities, fair value | 19,501 | $ 21,440 |
Transfer of available-for-sale securities to held-to-maturity | $ 744 | |
Credit card receivable [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of asset backed securities collateral | 54.00% | 41.00% |
Auto loan receivable [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of asset backed securities collateral | 18.00% | 34.00% |
Student loan receivable [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of asset backed securities collateral | 28.00% | 25.00% |
Agency mortgage-backed securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale debt securities, amortized cost basis | $ 16,267 | $ 16,130 |
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 836 | 1,367 |
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | (68) | (48) |
Available-for-sale debt securities, fair value | 17,035 | 17,449 |
Agency debentures [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale debt securities, amortized cost basis | 632 | 910 |
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 27 | 55 |
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | 0 | 0 |
Available-for-sale debt securities, fair value | 659 | 965 |
US Treasuries [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale debt securities, amortized cost basis | 1,233 | 1,122 |
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 34 | 221 |
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | (40) | 0 |
Available-for-sale debt securities, fair value | 1,227 | 1,343 |
Non-agency asset-backed securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale debt securities, amortized cost basis | 417 | 1,428 |
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 2 | 5 |
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | (2) | (22) |
Available-for-sale debt securities, fair value | 417 | 1,411 |
Non-agency mortgage backed securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale debt securities, amortized cost basis | 159 | 273 |
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 4 | 3 |
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | 0 | (4) |
Available-for-sale debt securities, fair value | $ 163 | $ 272 |
Held-to-Maturity Securities (De
Held-to-Maturity Securities (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity securities, amortized cost | $ 25,090 | $ 21,969 |
Held-to-maturity securities, gross unrecognized gains | 883 | 328 |
Held-to-maturity securities, gross unrecognized losses | (47) | (51) |
Held-to-maturity securities, fair value | 25,926 | 22,246 |
Agency mortgage-backed securities [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity securities, amortized cost | 23,531 | 20,085 |
Held-to-maturity securities, gross unrecognized gains | 812 | 293 |
Held-to-maturity securities, gross unrecognized losses | (46) | (49) |
Held-to-maturity securities, fair value | 24,297 | 20,329 |
Agency debentures [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity securities, amortized cost | 108 | 267 |
Held-to-maturity securities, gross unrecognized gains | 13 | 4 |
Held-to-maturity securities, gross unrecognized losses | 0 | 0 |
Held-to-maturity securities, fair value | 121 | 271 |
Other agency debt securities [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity securities, amortized cost | 1,451 | 1,617 |
Held-to-maturity securities, gross unrecognized gains | 58 | 31 |
Held-to-maturity securities, gross unrecognized losses | (1) | (2) |
Held-to-maturity securities, fair value | $ 1,508 | $ 1,646 |
Available-for-Sale and Held-t_3
Available-for-Sale and Held-to-Maturity Securities (Details - Maturity) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Available-for-Sale Securities, Debt Maturities [Abstract] | ||
Available-for-sale securities, due within one year, amortized cost | $ 253 | |
Available-for-sale securities, due within one to five years, amortized cost | 962 | |
Available-for-sale securities, due within five to ten years, amortized cost | 9,464 | |
Available-for-sale securities, due after ten years, amortized cost | 9,184 | |
Available-for-sale debt securities, amortized cost basis | 19,863 | $ 18,708 |
Available-for-sale securities, due within one year, fair value | 256 | |
Available-for-sale securities, due within one to five years, fair value | 967 | |
Available-for-sale securities, due within five to ten years, fair value | 10,610 | |
Available-for-sale securities, due after ten years, fair value | 9,607 | |
Available-for-sale securities, fair value | 21,440 | 19,501 |
Held-to-Maturity Securities, Debt Maturities [Abstract] | ||
Held-to-maturity securities, due within one year, amortized cost | 68 | |
Held-to-maturity securities, due within one to five years, amortized cost | 2,047 | |
Held-to-maturity securities, due within five to ten years, amortized cost | 2,921 | |
Held-to-maturity securities, due after ten years, amortized cost | 20,054 | |
Held-to-maturity securities, amortized cost | 25,090 | 21,969 |
Held-to-maturity securities, due within one year, fair value | 69 | |
Held-to-maturity securities, due within one to five years, fair value | 2,123 | |
Held-to-maturity securities, due within five to ten years, fair value | 3,090 | |
Held-to-maturity securities, due after ten years, fair value | 20,644 | |
Held-to-maturity securities, fair value | 25,926 | 22,246 |
Collateral Pledged [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Held-to-maturity debt securities pledged as collateral | 6,900 | 7,400 |
Available-for-sale debt securities pledged as collateral | $ 616 | $ 456 |
Available-for-Sale and Held-t_4
Available-for-Sale and Held-to-Maturity Securities (Details - OTTI) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | $ 2,031 | $ 2,748 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer | 1,275 | 1,916 |
Debt Securities, Available-for-sale, Unrealized Loss Position | 3,306 | 4,664 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (38) | (74) |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (36) | (36) |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | (74) | (110) |
Schedule of Held-to-maturity Securities [Line Items] | ||
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value | 1,219 | 1,518 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value | 1,234 | 3,735 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Fair Value | 2,453 | 5,253 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (15) | (5) |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (32) | (46) |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss | (47) | (51) |
Agency mortgage-backed securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | 735 | 2,045 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer | 1,275 | 1,916 |
Debt Securities, Available-for-sale, Unrealized Loss Position | 2,010 | 3,961 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (12) | (32) |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (36) | (36) |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | (48) | (68) |
Schedule of Held-to-maturity Securities [Line Items] | ||
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value | 1,219 | 1,337 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value | 1,141 | 3,600 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Fair Value | 2,360 | 4,937 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (15) | (4) |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (31) | (45) |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss | (46) | (49) |
US Treasuries [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | 402 | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer | 0 | |
Debt Securities, Available-for-sale, Unrealized Loss Position | 402 | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (40) | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 0 | |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | (40) | |
Non-agency asset-backed securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | 1,136 | 251 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer | 0 | 0 |
Debt Securities, Available-for-sale, Unrealized Loss Position | 1,136 | 251 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (22) | (2) |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 0 | 0 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | (22) | (2) |
Other agency debt securities [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value | 0 | 181 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value | 93 | 135 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Fair Value | 93 | 316 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 0 | (1) |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (1) | (1) |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss | (1) | (2) |
Non-agency mortgage backed securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | 160 | 50 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer | 0 | 0 |
Debt Securities, Available-for-sale, Unrealized Loss Position | 160 | 50 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (4) | 0 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 0 | 0 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | $ (4) | $ 0 |
Available-for-Sale and Held-t_5
Available-for-Sale and Held-to-Maturity Securities (Details - Other) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |||
Net impairment | $ 0 | $ 0 | |
Agency securities as the percentage of the amortized cost of the total investment securities portfolio | 96.00% | 99.00% | |
Components of gains (losses) on securities and other, net | |||
Debt Securities, Available-for-sale, Realized Gain | $ 19 | 11 | |
Equity method investment income and other | 1 | 0 | |
Gains on securities and other, net | $ 20 | $ 11 |
Loans Receivable, Net (Details
Loans Receivable, Net (Details - Aging) - USD ($) $ in Millions | 3 Months Ended | ||||
Mar. 31, 2020 | Mar. 31, 2019 | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Line of Credit Facility [Line Items] | |||||
Cumulative Effect on Retained Earnings, before Tax | $ (114) | ||||
Financing Receivable, Past Due [Line Items] | |||||
Loans receivable, Current | 1,418 | $ 1,477 | |||
Total mortgage loans receivable | 1,544 | 1,607 | |||
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums | 4 | 5 | |||
Loans and Leases Receivable, Allowance | 86 | $ (32) | (17) | $ (37) | |
Total loans receivable, net | 1,634 | 1,595 | |||
Loans Receivable, Net [Abstract] | |||||
Loans Pledged Federal Home Loan Bank | $ 1,200 | 1,200 | |||
Percentage Increase (Decrease) in Finance Receivables | (4.00%) | ||||
Total mortgage loans receivable | $ 1,544 | 1,607 | |||
Percentage increase (decrease) in loans net | 2.00% | ||||
Total loans receivable, net | $ 1,634 | $ 1,595 | |||
Allowance as a percentage of total loans receivable | 5.60% | (1.10%) | |||
Provision (benefit) for credit losses | $ 6 | (12) | |||
Financing Receivables, 30 To 89 Days Past Due [Member] | |||||
Financing Receivable, Past Due [Line Items] | |||||
Financing Receivable, Past Due | 62 | $ 60 | |||
Financing Receivables, 90 To 179 Days Past Due [Member] | |||||
Financing Receivable, Past Due [Line Items] | |||||
Financing Receivable, Past Due | 17 | 18 | |||
Financing Receivables, Equal to Greater than 180 Days Past Due [Member] | |||||
Financing Receivable, Past Due [Line Items] | |||||
Financing Receivable, Past Due | 47 | 52 | |||
E TRADE Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Unused Commitments to Extend Credit | 569 | 431 | |||
Accounting Standards Update 2016-13 [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Cumulative effect of accounting change | 84 | ||||
Cumulative Effect on Retained Earnings, before Tax | 114 | ||||
Covid19 [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Allowance for Loan and Lease Losses, Period Increase (Decrease) | 5 | ||||
One- To Four-Family [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Cumulative Effect on Retained Earnings, before Tax | (43) | ||||
Financing Receivable, Past Due [Line Items] | |||||
Loans receivable, Current | 673 | 718 | |||
Total mortgage loans receivable | 755 | 803 | |||
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums | 4 | 5 | |||
Loans and Leases Receivable, Allowance | 35 | (9) | $ 37 | (6) | (9) |
Total loans receivable, net | 794 | 802 | |||
Loans Receivable, Net [Abstract] | |||||
Total mortgage loans receivable | 755 | 803 | |||
Total loans receivable, net | 794 | 802 | |||
Provision (benefit) for credit losses | 1 | (2) | |||
One- To Four-Family [Member] | Financing Receivables, 30 To 89 Days Past Due [Member] | |||||
Financing Receivable, Past Due [Line Items] | |||||
Financing Receivable, Past Due | 40 | 39 | |||
One- To Four-Family [Member] | Financing Receivables, 90 To 179 Days Past Due [Member] | |||||
Financing Receivable, Past Due [Line Items] | |||||
Financing Receivable, Past Due | 9 | 11 | |||
One- To Four-Family [Member] | Financing Receivables, Equal to Greater than 180 Days Past Due [Member] | |||||
Financing Receivable, Past Due [Line Items] | |||||
Financing Receivable, Past Due | 33 | 35 | |||
Home Equity [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Cumulative Effect on Retained Earnings, before Tax | (71) | ||||
Financing Receivable, Past Due [Line Items] | |||||
Loans receivable, Current | 550 | 590 | |||
Total mortgage loans receivable | 594 | 635 | |||
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums | 0 | 0 | |||
Loans and Leases Receivable, Allowance | 51 | (21) | $ 60 | (11) | $ (26) |
Total loans receivable, net | 645 | 624 | |||
Loans Receivable, Net [Abstract] | |||||
Total mortgage loans receivable | 594 | 635 | |||
Total loans receivable, net | 645 | 624 | |||
Provision (benefit) for credit losses | 5 | $ (10) | |||
Home Equity [Member] | Financing Receivables, 30 To 89 Days Past Due [Member] | |||||
Financing Receivable, Past Due [Line Items] | |||||
Financing Receivable, Past Due | 22 | 21 | |||
Home Equity [Member] | Financing Receivables, 90 To 179 Days Past Due [Member] | |||||
Financing Receivable, Past Due [Line Items] | |||||
Financing Receivable, Past Due | 8 | 7 | |||
Home Equity [Member] | Financing Receivables, Equal to Greater than 180 Days Past Due [Member] | |||||
Financing Receivable, Past Due [Line Items] | |||||
Financing Receivable, Past Due | 14 | 17 | |||
Securities-based lending [Member] | |||||
Financing Receivable, Past Due [Line Items] | |||||
Loans receivable, Current | 195 | 169 | |||
Total mortgage loans receivable | 195 | 169 | |||
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums | 0 | 0 | |||
Loans and Leases Receivable, Allowance | 0 | 0 | |||
Total loans receivable, net | 195 | 169 | |||
Loans Receivable, Net [Abstract] | |||||
Total mortgage loans receivable | 195 | 169 | |||
Total loans receivable, net | 195 | 169 | |||
Securities-based lending [Member] | Financing Receivables, 30 To 89 Days Past Due [Member] | |||||
Financing Receivable, Past Due [Line Items] | |||||
Financing Receivable, Past Due | 0 | 0 | |||
Securities-based lending [Member] | Financing Receivables, 90 To 179 Days Past Due [Member] | |||||
Financing Receivable, Past Due [Line Items] | |||||
Financing Receivable, Past Due | 0 | 0 | |||
Securities-based lending [Member] | Financing Receivables, Equal to Greater than 180 Days Past Due [Member] | |||||
Financing Receivable, Past Due [Line Items] | |||||
Financing Receivable, Past Due | $ 0 | $ 0 |
Loans Receivable, Net (Detail_2
Loans Receivable, Net (Details - Credit Quality) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jan. 01, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | $ 1,544 | $ 1,607 | |||
Average Age, Financing Receivable | 14 years | 13 years 8 months 12 days | |||
Greater Than 10% of Loans States Other than California and New York, Count | 0 | 0 | |||
Greater Than 10% of Past Due Loans, States Other than California and New York, Count | 0 | ||||
Greater Than 10% of Impaired Loans, States Other than California and New York, Count | 0 | ||||
Greater Than 10 Collateral Dependent Loans States Other Than California Or New York Count | 0 | ||||
Allowance for loan losses | $ (86) | $ 17 | $ 32 | $ 37 | |
One- To Four-Family [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | $ 755 | $ 803 | |||
Average estimated current LTV/CLTV | 61.00% | 61.00% | |||
Average LTV/CLTV at loan origination | 70.00% | 70.00% | |||
Allowance for loan losses | $ (35) | $ 6 | $ (37) | 9 | 9 |
One- To Four-Family [Member] | FICO Score, Greater than 720 [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 423 | 462 | |||
One- To Four-Family [Member] | FICO Score, 719 to 700 [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 65 | 77 | |||
One- To Four-Family [Member] | FICO Score, 699 to 680 [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 52 | 55 | |||
One- To Four-Family [Member] | FICO Score, 679 to 660 [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 44 | 40 | |||
One- To Four-Family [Member] | FICO Score, 659 to 620 [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 66 | 63 | |||
One- To Four-Family [Member] | FICO Score, Less than 620 [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 105 | 106 | |||
One- To Four-Family [Member] | Debt-to-Value Ratio, Less than 80 Percent [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 624 | 661 | |||
One- To Four-Family [Member] | Debt-to-Value Ratio, 80 to 100 Percent [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 88 | 97 | |||
One- To Four-Family [Member] | LTV 100 to 120 Percent [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 28 | 26 | |||
One- To Four-Family [Member] | LTV Greater than 120 Percent [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 15 | 19 | |||
Home Equity [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | $ 594 | $ 635 | |||
Average estimated current LTV/CLTV | 77.00% | 76.00% | |||
Average LTV/CLTV at loan origination | 82.00% | 82.00% | |||
Allowance for loan losses | $ (51) | $ 11 | $ (60) | $ 21 | $ 26 |
Home Equity [Member] | FICO Score, Greater than 720 [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 309 | 333 | |||
Home Equity [Member] | FICO Score, 719 to 700 [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 56 | 61 | |||
Home Equity [Member] | FICO Score, 699 to 680 [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 49 | 54 | |||
Home Equity [Member] | FICO Score, 679 to 660 [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 42 | 43 | |||
Home Equity [Member] | FICO Score, 659 to 620 [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 54 | 59 | |||
Home Equity [Member] | FICO Score, Less than 620 [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 84 | 85 | |||
Home Equity [Member] | Debt-to-Value Ratio, Less than 80 Percent [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 350 | 377 | |||
Home Equity [Member] | Debt-to-Value Ratio, 80 to 100 Percent [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 143 | 154 | |||
Home Equity [Member] | LTV 100 to 120 Percent [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | 69 | 68 | |||
Home Equity [Member] | LTV Greater than 120 Percent [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | $ 32 | $ 36 | |||
One- To Four-Family and Home Equity Benchmark [Member] | Financing Receivables, State, Risk [Member] | CALIFORNIA | |||||
Credit Quality Indicators [Line Items] | |||||
Concentration Risk, Percentage | 32.00% | 32.00% | |||
One- To Four-Family and Home Equity Benchmark [Member] | Financing Receivables, State, Risk [Member] | NEW YORK | |||||
Credit Quality Indicators [Line Items] | |||||
Concentration Risk, Percentage | 11.00% | 10.00% | |||
One- To Four-Family Benchmark [Member] | Interest only, Already Amortizing | Maximum [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Concentration Risk, Percentage | 100.00% | ||||
Past due mortgage loans [Member] | Financing Receivables, State, Risk [Member] | CALIFORNIA | |||||
Credit Quality Indicators [Line Items] | |||||
Concentration Risk, Percentage | 24.00% | ||||
Past due mortgage loans [Member] | Financing Receivables, State, Risk [Member] | NEW YORK | |||||
Credit Quality Indicators [Line Items] | |||||
Concentration Risk, Percentage | 21.00% | ||||
Impaired mortgage loans [Member] | Financing Receivables, State, Risk [Member] | CALIFORNIA | |||||
Credit Quality Indicators [Line Items] | |||||
Concentration Risk, Percentage | 41.00% | ||||
Impaired mortgage loans [Member] | Financing Receivables, State, Risk [Member] | NEW YORK | |||||
Credit Quality Indicators [Line Items] | |||||
Concentration Risk, Percentage | 10.00% | ||||
Collateral Dependent Loans [Member] | One- To Four-Family [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | $ 184 | ||||
Average estimated current LTV/CLTV | 71.00% | ||||
Impaired Financing Receivable, Recorded Investment | $ 136 | ||||
Allowance for loan losses | (37) | ||||
Average Loan Amount | 361 | ||||
Collateral Dependent Loans [Member] | Home Equity [Member] | |||||
Credit Quality Indicators [Line Items] | |||||
Total mortgage loans receivable | $ 154 | ||||
Average estimated current LTV/CLTV | 76.00% | ||||
Impaired Financing Receivable, Recorded Investment | $ 57 | ||||
Allowance for loan losses | (65) | ||||
Average Loan Amount | $ 63 | ||||
Collateral Dependent Loans [Member] | Financing Receivables, State, Risk [Member] | CALIFORNIA | |||||
Credit Quality Indicators [Line Items] | |||||
Concentration Risk, Percentage | 36.00% | ||||
Collateral Dependent Loans [Member] | Financing Receivables, State, Risk [Member] | NEW YORK | |||||
Credit Quality Indicators [Line Items] | |||||
Concentration Risk, Percentage | 15.00% |
Loans Receivable, Net (Detail_3
Loans Receivable, Net (Details - Nonperforming Loans) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Other Real Estate, Foreclosed Assets, and Repossessed Assets [Abstract] | ||
Real Estate Acquired Through Foreclosure | $ 13 | $ 13 |
Mortgage Loans in Process of Foreclosure, Amount | 31 | 32 |
Nonperforming Financial Instruments [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Financing Receivable, Nonaccrual | 155 | 168 |
Nonperforming Financial Instruments [Member] | One- To Four-Family [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Financing Receivable, Nonaccrual | 104 | 114 |
Nonperforming Financial Instruments [Member] | Home Equity [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Financing Receivable, Nonaccrual | $ 51 | $ 54 |
Loans Receivable, Net (Detail_4
Loans Receivable, Net (Details - Allowance) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Jan. 01, 2020 | |
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | |||
Allowance for loan losses, beginning of period | $ 17 | $ 37 | |
Cumulative Effect on Retained Earnings, before Tax | (114) | ||
Provision (benefit) for credit losses | 6 | (12) | |
Charge-offs | 0 | (1) | |
Recoveries | 5 | 8 | |
Net (charge-offs) recoveries | 5 | 7 | |
Allowance for loan losses, end of period | (86) | 32 | |
Allowance for loan losses | (86) | 32 | |
One- To Four-Family [Member] | |||
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | |||
Allowance for loan losses, beginning of period | 6 | 9 | |
Cumulative Effect on Retained Earnings, before Tax | (43) | ||
Provision (benefit) for credit losses | 1 | (2) | |
Charge-offs | 0 | 0 | |
Recoveries | 1 | 2 | |
Net (charge-offs) recoveries | 1 | 2 | |
Allowance for loan losses, end of period | (35) | 9 | |
Benefit from Fair Value Appreciation Loans | $ 39 | ||
Allowance for loan losses | 6 | 9 | (37) |
Home Equity [Member] | |||
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | |||
Allowance for loan losses, beginning of period | 11 | 26 | |
Cumulative Effect on Retained Earnings, before Tax | (71) | ||
Provision (benefit) for credit losses | 5 | (10) | |
Charge-offs | 0 | 0 | |
Recoveries | 4 | 5 | |
Net (charge-offs) recoveries | 4 | 5 | |
Allowance for loan losses, end of period | (51) | 21 | |
Benefit from Fair Value Appreciation Loans | 70 | ||
Allowance for loan losses | $ 11 | 21 | $ (60) |
Consumer and other [Member] | |||
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | |||
Allowance for loan losses, beginning of period | 2 | ||
Provision (benefit) for credit losses | 0 | ||
Charge-offs | (1) | ||
Recoveries | 1 | ||
Net (charge-offs) recoveries | 0 | ||
Allowance for loan losses, end of period | 2 | ||
Allowance for loan losses | $ 2 |
Loans Receivable, Net (Detail_5
Loans Receivable, Net (Details - TDRs Accrual and Nonaccrual) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Financing Receivable, Impaired [Line Items] | ||
Financing Receivable, Troubled Debt Restructurings, Modifications, Total1 | $ 270 | $ 280 |
One- To Four-Family [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Financing Receivable, Troubled Debt Restructurings, Modifications, Total1 | 163 | 168 |
Home Equity [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Financing Receivable, Troubled Debt Restructurings, Modifications, Total1 | $ 107 | $ 112 |
Loans Receivable, Net (Detail_6
Loans Receivable, Net (Details - Modifications Types and Financial Impact) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)loan | Mar. 31, 2019USD ($)loan | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Financing Receivable, Modifications, Number of Contracts | loan | 12 | 20 |
Financing Receivable, Troubled Debt Restructuring, Postmodification | $ 3 | $ 3 |
Re-Age Extension or Interest Capitalization with Interest Rate Reduction [Member] | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Financing Receivable, Troubled Debt Restructuring, Postmodification | 3 | 2 |
Other without Interest Rate Reduction [Member] | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Financing Receivable, Troubled Debt Restructuring, Postmodification | $ 0 | $ 1 |
One- To Four-Family [Member] | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Financing Receivable, Modifications, Number of Contracts | loan | 4 | 9 |
Financing Receivable, Troubled Debt Restructuring, Postmodification | $ 2 | $ 2 |
One- To Four-Family [Member] | Re-Age Extension or Interest Capitalization with Interest Rate Reduction [Member] | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Financing Receivable, Troubled Debt Restructuring, Postmodification | 2 | 1 |
One- To Four-Family [Member] | Other without Interest Rate Reduction [Member] | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Financing Receivable, Troubled Debt Restructuring, Postmodification | $ 0 | $ 1 |
Home Equity [Member] | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Financing Receivable, Modifications, Number of Contracts | loan | 8 | 11 |
Financing Receivable, Troubled Debt Restructuring, Postmodification | $ 1 | $ 1 |
Home Equity [Member] | Re-Age Extension or Interest Capitalization with Interest Rate Reduction [Member] | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Financing Receivable, Troubled Debt Restructuring, Postmodification | 1 | 1 |
Home Equity [Member] | Other without Interest Rate Reduction [Member] | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Financing Receivable, Troubled Debt Restructuring, Postmodification | $ 0 | $ 0 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities (Details - Fair Value of Derivatives) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Derivative, Collateral [Abstract] | ||
Derivative Asset, Fair Value, Amount Offset Against Collateral | $ 6 | $ 52 |
Derivative Liability, Fair Value, Amount Offset Against Collateral | 1,400 | 457 |
Fair Value Hedging [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | $ 11,300 | $ 10,100 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities (Details - Cumulative Basis Adjustments) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Summary of Dervative Instruments By Hedge Designation [Abstract] | ||
Carrying Amount of Hedged Assets | $ 14,144 | $ 12,480 |
Cumulative amount of basis adjustment included in total carrying amount of fair value hedges | 1,561 | 583 |
Cumulative amount of basis adjustment, active | 1,785 | 810 |
Cumulative amount of basis adjustment included in carrying amount of discontinued fair value hedges | (224) | (227) |
Closed Portfolio and Beneficial Interest Last of Layer Amortized Cost [Abstract] | ||
Prepayable Financial Asset Closed Portfolio, Last-of-Layer, Amortized Cost | 410 | 162 |
Amount Representing Hedged Items Designated as Last-of-Layer | 316 | 148 |
Cumulative Basis Adjustment Associated with Hedged Items Designated as Last-of-Layer | $ (19) | $ 1 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities (Details - Fair Value Hedge) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total interest income | $ 443 | $ 555 |
Interest Income [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total interest income | 443 | 555 |
Net gain (loss) on fair value hedging relationships | (15) | 14 |
Agency debentures [Member] | Interest Income [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Changes in fair value of hedged item | 215 | 7 |
Changes in fair value of derivatives | (215) | (7) |
Net gain (loss) on fair value hedging relationships | 0 | 0 |
Agency mortgage-backed securities [Member] | Interest Income [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amounts recognized as interest settlements on derivatives | (12) | 3 |
Amortization of basis adjustment | 8 | 10 |
Changes in fair value of hedged item | 855 | 274 |
Changes in fair value of derivatives | (866) | (273) |
Net gain (loss) on fair value hedging relationships | $ (15) | $ 14 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Deposits By Type [Abstract] | ||
Brokerage sweep deposits | $ 38,095 | $ 27,949 |
Bank sweep deposits(1) | 680 | 6,355 |
Savings deposits(2) | 1,667 | 2,592 |
Other deposits(3) | 1,704 | 1,710 |
Total deposits | 42,146 | 38,606 |
Deposits Textuals [Abstract] | ||
Premium Savings Account deposits | 1,000 | |
Non-interest-bearing deposits | $ 220 | $ 197 |
Other Borrowings and Corporat_3
Other Borrowings and Corporate Debt (Details - Other Borrowings) $ in Millions | Mar. 31, 2020USD ($) |
Revolving Credit Facility [Member] | Parent Company [Member] | June 2024 Maturity [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Fair Value of Amount Outstanding | $ 0 |
Line of Credit Facility, Maximum Borrowing Capacity | 300 |
Revolving Credit Facility [Member] | E TRADE Securities [Member] | June 2020 Maturity [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Fair Value of Amount Outstanding | 0 |
Line of Credit Facility, Maximum Borrowing Capacity | 600 |
FHLB secured credit facility [Member] | E TRADE Bank [Member] | Determined at Trade [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Fair Value of Amount Outstanding | 0 |
Line of Credit Facility, Maximum Borrowing Capacity | 6,430 |
Federal Reserve Bank discount window [Member] | E TRADE Bank [Member] | Overnight [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Fair Value of Amount Outstanding | 0 |
Line of Credit Facility, Maximum Borrowing Capacity | 1,245 |
Secured Committed Line of Credit [Member] | E TRADE Securities [Member] | June 2020 Maturity [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Fair Value of Amount Outstanding | 0 |
Line of Credit Facility, Maximum Borrowing Capacity | 175 |
Unsecured Uncommitted Line of Credit [Member] | E TRADE Securities [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Fair Value of Amount Outstanding | 0 |
Line of Credit Facility, Maximum Borrowing Capacity | 75 |
Unsecured Uncommitted Line of Credit [Member] | E TRADE Securities [Member] | June 2020 Maturity [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Fair Value of Amount Outstanding | 0 |
Line of Credit Facility, Maximum Borrowing Capacity | 50 |
Secured Uncommitted Line of Credit [Member] | E TRADE Securities [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Fair Value of Amount Outstanding | 0 |
Line of Credit Facility, Maximum Borrowing Capacity | $ 425 |
Other Borrowings and Corporat_4
Other Borrowings and Corporate Debt (Details - Corporate Debt) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Total corporate debt | $ 1,411 | $ 1,410 |
Corporate Debt Securities [Member] | ||
Debt Instrument [Line Items] | ||
Face Value | 1,420 | 1,420 |
Unamortized discount | (9) | (10) |
Total corporate debt | 1,411 | 1,410 |
Senior Notes Interest Bearing Two And Nine Five Percent [Member] | Corporate Debt Securities [Member] | ||
Debt Instrument [Line Items] | ||
Face Value | 600 | 600 |
Unamortized discount | (3) | (3) |
Total corporate debt | $ 597 | $ 597 |
Debt Instrument Interest Rate Stated Percentage [Abstract] | ||
Debt instrument maturity year | 2022 | 2022 |
Debt instrument, interest rate, stated percentage | 2.95% | 2.95% |
Senior Notes Interest Bearing Three And Eight Percent [Member] | Corporate Debt Securities [Member] | ||
Debt Instrument [Line Items] | ||
Face Value | $ 400 | $ 400 |
Unamortized discount | (3) | (3) |
Total corporate debt | $ 397 | $ 397 |
Debt Instrument Interest Rate Stated Percentage [Abstract] | ||
Debt instrument maturity year | 2027 | 2027 |
Debt instrument, interest rate, stated percentage | 3.80% | 3.80% |
Senior Notes Interest Bearing Four And Five Percent [Member] | Corporate Debt Securities [Member] | ||
Debt Instrument [Line Items] | ||
Face Value | $ 420 | $ 420 |
Unamortized discount | (3) | (4) |
Total corporate debt | $ 417 | $ 416 |
Debt Instrument Interest Rate Stated Percentage [Abstract] | ||
Debt instrument maturity year | 2028 | 2028 |
Debt instrument, interest rate, stated percentage | 4.50% | 4.50% |
Shareholders' Equity (Details -
Shareholders' Equity (Details - Stock) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |||
Jun. 30, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Class of Stock [Line Items] | ||||
Preferred stock, shares outstanding | 403,000 | 403,000 | ||
Preferred stock, amount outstanding | $ 689 | $ 689 | ||
Preferred stock dividend declared | $ 20 | $ 20 | ||
Dividends declared per common share | $ 0.14 | $ 0.14 | ||
Common stock dividends | $ 31 | $ 35 | ||
Series A Preferred Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Preferred stock, dividend rate, percentage | 5.875% | |||
Preferred stock, shares outstanding | 400,000 | |||
Preferred stock, liquidation preference per share | $ 1,000 | |||
Preferred stock, amount outstanding | $ 394 | 394 | ||
Dividends payable, date declared | Feb. 6, 2020 | Feb. 7, 2019 | ||
Dividends payable, date of record | Mar. 2, 2020 | Feb. 28, 2019 | ||
Dividends payable, date to be paid | Mar. 16, 2020 | Mar. 15, 2019 | ||
Preferred stock dividend declared, per share | $ 29.38 | $ 29.38 | ||
Preferred stock dividend declared | $ 12 | $ 12 | ||
Series A Preferred Stock [Member] | LIBOR [Member] | ||||
Class of Stock [Line Items] | ||||
Preferred stock, basis spread on variable rate | 4.435% | |||
Series B Preferred Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Preferred stock, dividend rate, percentage | 5.30% | |||
Preferred stock, shares outstanding | 3,000 | |||
Preferred stock, liquidation preference per share | $ 100,000 | |||
Preferred stock, amount outstanding | $ 295 | $ 295 | ||
Dividends payable, date declared | Feb. 6, 2020 | Feb. 7, 2019 | ||
Dividends payable, date of record | Mar. 2, 2020 | Feb. 28, 2019 | ||
Dividends payable, date to be paid | Mar. 16, 2020 | Mar. 15, 2019 | ||
Preferred stock dividend declared, per share | $ 2,650 | $ 2,650 | ||
Preferred stock dividend declared | $ 8 | $ 8 | ||
Series B Preferred Stock [Member] | LIBOR [Member] | ||||
Class of Stock [Line Items] | ||||
Preferred stock, basis spread on variable rate | 3.16% | |||
Common Stock | ||||
Dividends payable, date declared | Jan. 22, 2020 | Jan. 23, 2019 | ||
Dividends payable, date of record | Feb. 25, 2020 | Feb. 1, 2019 | ||
Dividends payable, date to be paid | Mar. 2, 2020 | Feb. 15, 2019 | ||
Dividends declared per common share | $ 0.14 | $ 0.14 | ||
Common stock dividends | $ 31 | $ 35 | ||
Common Stock | Subsequent Event [Member] | ||||
Dividends payable, date declared | Apr. 22, 2020 | |||
Dividends payable, date of record | May 13, 2020 | |||
Dividends payable, date to be paid | May 19, 2020 | |||
Dividends declared per common share | $ 0.14 |
Shareholders' Equity (Details_2
Shareholders' Equity (Details - Share Repurchases) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Jul. 31, 2019 | |
Repurchases of common stock | $ 95 | $ 120 | |
Common Stock | |||
Repurchases of common stock, shares | 2 | 2 | |
Common Stock | Current share repurchase program [Member] | |||
Repurchases of stock, authorized amount | $ 1,500 | ||
Repurchases of common stock, shares | 2.1 | ||
Repurchases of common stock | $ 95 |
Shareholders' Equity (Details_3
Shareholders' Equity (Details - Accumulated Other Comprehensive Loss) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance, | $ (28) | |
Other comprehensive income (loss) | (140) | $ 105 |
Ending balance, | (168) | |
Available-for-sale securities | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance, | (28) | (275) |
Other comprehensive income (loss), before reclassifications | (126) | 112 |
Amounts reclassified from accumulated other comprehensive income (loss) | (14) | (7) |
Other comprehensive income (loss) | (140) | 105 |
Ending balance, | $ (168) | $ (170) |
Shareholders' Equity (Details_4
Shareholders' Equity (Details - Other Comprehensive Income Activity) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Available-for-sale securities, before tax | ||
Unrealized gains (losses), before tax | $ (172) | $ 150 |
Reclassification into earnings, before tax | (19) | (10) |
Net change from available-for-sale securities, before tax | (191) | 140 |
Available-for-sale securities, tax effect | ||
Unrealized gains (losses), tax effect | 46 | (38) |
Reclassification into earnings, tax effect | 5 | 3 |
Net change from available-for-sale securities, tax effect | 51 | (35) |
Available-for-sale securities, after tax | ||
Unrealized gains (losses), after tax | (126) | 112 |
Reclassification into earnings, after tax | (14) | (7) |
Net change from available-for-sale securities | (140) | 105 |
Other comprehensive income (loss), before tax | (191) | 140 |
Other comprehensive income (loss), tax effect | 51 | (35) |
Other comprehensive income (loss) | $ (140) | $ 105 |
Shareholders' Equity (Details_5
Shareholders' Equity (Details - Reclassification Out Of Accumulated Other Comprehensive Loss) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Gains on securities and other, net | $ 20 | $ 11 |
Interest income | 443 | 555 |
Reclassification into earnings, net | 256 | 392 |
Income tax (expense) benefit | (75) | (102) |
Other Non-interest expense | (31) | (18) |
Net income | 181 | 290 |
Available-for-sale securities | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Gains on securities and other, net | 20 | 11 |
Interest income | (1) | (1) |
Reclassification into earnings, net | 19 | 10 |
Income tax (expense) benefit | (5) | (3) |
Net income | $ 14 | $ 7 |
Earnings per Share (Details)
Earnings per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Basic weighted-average shares outstanding | 222,295 | 246,252 |
Restricted stock and options | 400 | 600 |
Diluted weighted-average shares outstanding | 222,742 | 246,934 |
Regulatory Requirements (Detail
Regulatory Requirements (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Broker Dealer Subsidiaries Net Capital [Line Items] | ||
Minimum percentage of net capital required for broker dealer subsidiary aggregate indebtedness | 6.67% | |
Total Net Capital [Abstract] | ||
Total Required Net Capital | $ 182,000,000 | $ 226,000,000 |
Total Net Capital | 1,389,000,000 | 1,279,000,000 |
Total Excess Net Capital | 1,207,000,000 | 1,053,000,000 |
E TRADE Securities [Member] | ||
Broker Dealer Subsidiaries Net Capital [Line Items] | ||
Capital requirement of consolidated broker-dealer subsidiary electing alternative method | $ 250,000 | |
Minimum percentage of aggregate debit balances to calculate net capital | 2.00% | |
Broker-Dealer, Minimum Net Capital Required, Alternative Standard [Abstract] | ||
Broker-Dealer, Minimum Net Capital Required, Alternative Standard | $ 179,000,000 | 223,000,000 |
Broker-Dealer, Net Capital | 1,360,000,000 | 1,251,000,000 |
Broker-Dealer, Excess Net Capital, Alternative Standard | 1,181,000,000 | 1,028,000,000 |
Total Net Capital [Abstract] | ||
Dividends from subsidiaries paid to parent company | $ 50,000,000 | |
E TRADE Futures [Member] | ||
Broker Dealer Subsidiaries Net Capital [Line Items] | ||
Minimum percentage of total risk margin requirements to calculate net capital | 8.00% | |
Futures Commission Merchant, Commodity Exchange Act, Excess Net Capital [Abstract] | ||
Futures Commission Merchant, Commodity Exchange Act, Required Net Capital | $ 3,000,000 | 3,000,000 |
Futures Commission Merchant, Commodity Exchange Act, Adjusted Net Capital | 29,000,000 | 28,000,000 |
Futures Commission Merchant, Commodity Exchange Act, Excess Net Capital | 26,000,000 | $ 25,000,000 |
E TRADE Futures [Member] | Minimum [Member] | ||
Futures Commission Merchant, Commodity Exchange Act, Excess Net Capital [Abstract] | ||
Futures Commission Merchant, Commodity Exchange Act, Required Net Capital | $ 1,000,000 |
Regulatory Requirements - Bank
Regulatory Requirements - Bank Capital Requirements (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Total risk-based capital [Abstract] | ||
Minimum percentage of Common Equity Tier 1 capital conservation buffer | 2.50% | |
Minimum [Member] | Capital conservation buffer [Member] | ||
Common equity Tier I capital [Abstract] | ||
Common Equity Tier 1 Capital Required To Be Well Capitalized To Risk Weighted Assets | 4.50% | |
Tier I risk based capital [Abstract] | ||
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets | 6.00% | |
Total risk-based capital [Abstract] | ||
Capital Required to be Well Capitalized to Risk Weighted Assets | 8.00% | |
Parent Company [Member] | ||
Tier I leverage [Abstract] | ||
Tier 1 Leverage Capital | $ 4,179 | $ 4,035 |
Tier 1 Leverage Capital to Average Assets | 6.80% | 6.90% |
Tier 1 Leverage Capital Required to be Well Capitalized | $ 3,051 | $ 2,922 |
Tier 1 Leverage Capital Required to be Well Capitalized to Average Assets | 5.00% | 5.00% |
Excess Tier 1 Leverage Capital | $ 1,128 | $ 1,113 |
Common equity Tier I capital [Abstract] | ||
Common Equity Tier 1 Capital | $ 3,490 | $ 3,346 |
Common Equity Tier 1 Capital to Risk Weighted Assets | 29.30% | 31.50% |
Common Equity Tier 1 Capital Required To Be Well Capitalized | $ 775 | $ 692 |
Common Equity Tier 1 Capital Required To Be Well Capitalized To Risk Weighted Assets | 6.50% | 6.50% |
Excess Common Equity Tier 1 Capital To Be Well Capitalized | $ 2,715 | $ 2,654 |
Tier I risk based capital [Abstract] | ||
Tier One Risk Based Capital | $ 4,179 | $ 4,035 |
Tier One Risk Based Capital to Risk Weighted Assets | 35.10% | 37.90% |
Tier One Risk Based Capital Required to be Well Capitalized | $ 954 | $ 852 |
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets | 8.00% | 8.00% |
Excess Tier One Risk Based Capital to be Well Capitalized | $ 3,225 | $ 3,183 |
Total risk-based capital [Abstract] | ||
Capital | $ 4,179 | $ 4,060 |
Capital to Risk Weighted Assets | 35.10% | 38.20% |
Capital Required to be Well Capitalized | $ 1,192 | $ 1,064 |
Capital Required to be Well Capitalized to Risk Weighted Assets | 10.00% | 10.00% |
Excess capital | $ 2,987 | $ 2,996 |
E TRADE Bank [Member] | ||
Tier I leverage [Abstract] | ||
Tier 1 Leverage Capital | $ 3,420 | $ 3,240 |
Tier 1 Leverage Capital to Average Assets | 7.40% | 7.20% |
Tier 1 Leverage Capital Required to be Well Capitalized | $ 2,314 | $ 2,253 |
Tier 1 Leverage Capital Required to be Well Capitalized to Average Assets | 5.00% | 5.00% |
Excess Tier 1 Leverage Capital | $ 1,106 | $ 987 |
Common equity Tier I capital [Abstract] | ||
Common Equity Tier 1 Capital | $ 3,420 | $ 3,240 |
Common Equity Tier 1 Capital to Risk Weighted Assets | 35.80% | 36.50% |
Common Equity Tier 1 Capital Required To Be Well Capitalized | $ 621 | $ 577 |
Common Equity Tier 1 Capital Required To Be Well Capitalized To Risk Weighted Assets | 6.50% | 6.50% |
Excess Common Equity Tier 1 Capital To Be Well Capitalized | $ 2,799 | $ 2,663 |
Tier I risk based capital [Abstract] | ||
Tier One Risk Based Capital | $ 3,420 | $ 3,240 |
Tier One Risk Based Capital to Risk Weighted Assets | 35.80% | 36.50% |
Tier One Risk Based Capital Required to be Well Capitalized | $ 764 | $ 710 |
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets | 8.00% | 8.00% |
Excess Tier One Risk Based Capital to be Well Capitalized | $ 2,656 | $ 2,530 |
Total risk-based capital [Abstract] | ||
Capital | $ 3,420 | $ 3,257 |
Capital to Risk Weighted Assets | 35.80% | 36.70% |
Capital Required to be Well Capitalized | $ 956 | $ 888 |
Capital Required to be Well Capitalized to Risk Weighted Assets | 10.00% | 10.00% |
Excess capital | $ 2,464 | $ 2,369 |
E TRADE Savings Bank | ||
Tier I leverage [Abstract] | ||
Tier 1 Leverage Capital | $ 1,492 | $ 1,480 |
Tier 1 Leverage Capital to Average Assets | 38.50% | 40.70% |
Tier 1 Leverage Capital Required to be Well Capitalized | $ 193 | $ 182 |
Tier 1 Leverage Capital Required to be Well Capitalized to Average Assets | 5.00% | 5.00% |
Excess Tier 1 Leverage Capital | $ 1,299 | $ 1,298 |
Common equity Tier I capital [Abstract] | ||
Common Equity Tier 1 Capital | $ 1,492 | $ 1,480 |
Common Equity Tier 1 Capital to Risk Weighted Assets | 200.40% | 224.70% |
Common Equity Tier 1 Capital Required To Be Well Capitalized | $ 48 | $ 43 |
Common Equity Tier 1 Capital Required To Be Well Capitalized To Risk Weighted Assets | 6.50% | 6.50% |
Excess Common Equity Tier 1 Capital To Be Well Capitalized | $ 1,444 | $ 1,437 |
Tier I risk based capital [Abstract] | ||
Tier One Risk Based Capital | $ 1,492 | $ 1,480 |
Tier One Risk Based Capital to Risk Weighted Assets | 200.40% | 224.70% |
Tier One Risk Based Capital Required to be Well Capitalized | $ 59 | $ 53 |
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets | 8.00% | 8.00% |
Excess Tier One Risk Based Capital to be Well Capitalized | $ 1,433 | $ 1,427 |
Total risk-based capital [Abstract] | ||
Capital | $ 1,492 | $ 1,480 |
Capital to Risk Weighted Assets | 200.40% | 224.70% |
Capital Required to be Well Capitalized | $ 74 | $ 66 |
Capital Required to be Well Capitalized to Risk Weighted Assets | 10.00% | 10.00% |
Excess capital | $ 1,418 | $ 1,414 |
Commitments, Contingencies an_2
Commitments, Contingencies and Other Regulatory Matters (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2003 | Mar. 31, 2020 | |
Loss Contingencies [Line Items] | ||
Unfunded contingent investment commitments | $ 41 | |
Certificates of deposit scheduled to mature in less than one year. | $ 13 | |
Axajo Complaint [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Awarded, Value | $ 1 |