E*TRADE Financial Corp (NASDAQ: ETFC) stock fell over 3.6% on 25th January 2019 (as of 10:48 am GMT-5; Source: Google finance) after the company in the fourth quarter of FY 18 has reported the net income of $270 million, that includes a net benefit of $9 million, related to the benefit to provision for loan losses. The net interest income rose by $16 million sequentially as the net interest margin expanded by 10 basis points on flat average asset balances. The key drivers of the improved NIM were a 17-basis point expansion of the gross yield on invested assets, offset by a 7-basis point greater cost of funds.
For the fourth quarter, ETFC has posted DARTs of 296,000, which is second only to the first quarter of this past year. In addition, the company drove continued growth in derivatives engagement with overall derivative DARTs increasing 34% versus the year-ago quarter and the number of accounts trading derivatives growing by 11% over the same period.
The company expects the derivative mix to continue to improve as the company leverage the E*TRADE brand to attract option traders to our Power E*TRADE platform, which continues to expand its roster of intuitive and powerful capabilities. Account and asset growth were also strong in 2018. Excluding acquisitions, the company has generated $15.2 billion in net new assets and 204,000 net new brokerage accounts, both Company records.
Moreover, due to the purchase of nearly 1 million brokerage accounts from Capital One in November, the company now have close to 7 million accounts across self-directed brokerage advisory, stock plan administration and banking, representing significant scale across the breadth of offerings.
The company has declared a quarterly cash dividend of $0.14 per share on the Company’s outstanding shares of common stock. The dividend is payable on February 15, 2019, to shareholders of record as of the close of business on February 1, 2019. During the fourth quarter, the company has repurchased slightly north of $500 million worth of stock as we opportunistically accelerated repurchase volume amid a depressed valuation, bringing the total buybacks for the year to 1.1 billion.
For Q1 2019, the company expects the blended deposit rate including customer payables to be around 30 basis points. For the full year 2019, the company expects to generate a net interest margin of around 320 basis points, which assumes customer margin balances hold at their current levels and the Fed funds rate does not increase over the course of the year.