Here's the whole text from todays 8-k
10-Sep-2008
Regulation FD Disclosure
ITEM 7.01. REGULATION FD DISCLOSURE
The Company is making a presentation today at the 2008 Lehman Brothers Financial Services Conference. In the presentation the Company will provide updated information concerning certain performance expectations, including the information concerning its holdings of preferred equity in Fannie Mae and Freddie Mac. In its Form 10-Q for the period ended June 30, 2008, filed on August 8, 2008, the Company reported that as of June 30, 2008, the Company's trading securities portfolio included an investment of $330 million of preferred equity in Fannie Mae and Freddie Mac. These securities were rated AA- as of June 30, 2008. Based upon the Company's concerns about continuing market instability and potential government-led plans that could materially further impact the value of the securities, the majority of these positions were liquidated in July 2008, resulting in a pre-tax loss of $97 million, net of hedges. As of July 31, 2008, the remaining position of approximately $107 million had an unrealized market value loss of approximately $32 million, net of hedges. The Company reported that it planned to continue to reduce its remaining exposure to these securities. In today's presentation, the Company reports that as of September 8, 2008 it has sold all of its remaining holdings in these securities. The total pre-tax realized loss on these holdings in Q3-08 was approximately $150 million net of hedges.
The Company will also address its expected three year cumulative losses on the home equity portfolio held on the balance sheet of E*TRADE Bank, which the Company previously stated were expected to be at the upper end of a range of approximately $1-1.5 billion. In today's presentation, the Company reports that it is undertaking a fundamental review of its modeling for provision of loan losses because the current credit cycle has continued to worsen and is more severe than previously anticipated. The Company will state that it is likely that its review will generate a 3 year loss expectation somewhat above $1.5B, and the Company will discuss the expectation in more detail when the review is completed in time for Q3 reporting.
The Company's presentation is broadly accessible to the public by webcast; the financial and other statistical information contained in the presentation is provided on the Company's website, together with any information that would be required under 17 CFR 244.100; and the presentation was announced by a widely disseminated press release, that included instructions as to when and how to access the presentation and the location on the Company's website where the information is available.
The information appearing in this Item 7.01 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section.
