This is from their site and is not the most reassuring way they could lay this out…
NEW YORK–(BUSINESS WIRE)–E*TRADE FINANCIAL Corporation (NASDAQ: ETFC) released supplemental disclosures today related to the composition and funding sources for its balance sheet. The Company provided a presentation containing additional information to its June 30, 2007 quarterly results, including expanded transparency on the credit quality of its mortgage and securities portfolios. This presentation can be found at https://investor.etrade.com. In addition, the Company stated that it has seen no material changes to date with respect to the availability, pricing or margin on its wholesale funding sources, including repurchase agreements. Management maintains that it does not believe that the current market capitalization accurately reflects the financial strength and performance of the business.
Selected highlights from the presentation include:
* The Company’s $15.7 billion first lien mortgage portfolio is supported by high FICO scores, low Loan-to-Value ratios (LTV) and private mortgage insurance
* All first lien mortgage loans with an 80% or higher LTV are protected by private mortgage insurance
* $9.2 billion, or 74%, of its home equity portfolio is to borrowers with FICO scores of 700 and higher
* $12.6 billion, or 99%, of mortgage-backed securities are rated AAA
* 97% of its Asset-backed Securities portfolio is rated investment grade
* Consistent and growing base of retail customer cash
* $10 billion in excess wholesale borrowing capacity from the Federal Home Loan Bank
As most institutions in the racket of home lending are finding their AAA rated MBS paper coming back as junk I am very worried about their exposure to insolvency. The CFO of the $800mil company I work for phoned in from vacation to warn everyone in the company. My most valued investment advisor wired out more than 500K immediately from Etrade. The next day there was a huge run at the Countrywide branches and a disclosure that >40% of the money in Countrywide accounts is not FDIC insured. I believe a lot of people are taking this pretty seriously. I myself am and I am really worried about what could happen to my short positions in the event of an Etrade shutdown. Scary. Just be careful and stay below the SPIC and FDIC limits in your accounts at any bank.
