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© 2018 E*TRADE Financial Corporation. All rights reserved.This presentation contains confidential information and may not be disclosed without E*TRADE Financial Corporation’s written permission.

E*TRADE FinancialInvestor Presentation + Strategic UpdateOCTOBER 2018

Notice to investors

1

SAFE HARBOR STATEMENTThis presentation contains certain forward-looking statements regarding E*TRADE Financial Corporation’s (the “Company”) future operational and financial performance, financial targets and growth expectations, outlook on the broader economic environment, the proposed transaction with Capital One Financial Corporation, and its benefits and timing, the Company’s capital plan and intention to seek future quarterly dividends from the bank and broker subsidiaries to the parent, the Company’s balance sheet plans and expected costs, the Company’s planned payment of a dividend in November 2018, the Company's ability to generate capital and pay additional dividends in the future, the Company’s repurchases of outstanding shares, ability to continue to grow and deliver value for its shareholders. E*TRADE claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for all forward-looking statements. Such statements are not guarantees of future performance and are subject to risk, uncertainties and assumptions which are difficult to predict and outside of the Company’s control. Various factors, including risks and uncertainties referred to in the 10-K, 10-Q, and other reports the Company periodically files with the Securities and Exchange Commission (SEC) and that are available for free by visiting EDGAR on the SEC website at www.sec.gov, could cause the Company’s actual results to differ materially from those indicated by management’s projections or other forward-looking statements.

NON-GAAP FINANCIAL MEASURESIn addition to financial results prepared in accordance with Generally Accepted Accounting Principles, or GAAP, this presentation will also contain certain non-GAAP financial measures. Management uses these non-GAAP measures to evaluate the Company’s performance and in planning for future periods. Management believes that adjusting GAAP measures by excluding or including certain items is helpful to investors and analysts who may wish to use some or all of this information to analyze the Company’s current performance, prospects, and valuation. It is important to note these non-GAAP measures involve judgment by management and should be considered in addition to, not as a substitute for, the most directly comparable measures calculated and prepared in accordance with GAAP. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures with their most direct comparable GAAP financial measures included as an appendix to this presentation.

IMPORTANT NOTICESE*TRADE, E*TRADE Financial, E*TRADE Bank, the Converging Arrows logo, OptionsHouse, Equity Edge Online, Trust Company of America, TCA by E*TRADE, and Liberty are trademarks of E*TRADE Financial Corporation in the United States and in other countries. All other trademarks are the property of their respective owners. All mentions of the bank and the Company’s bank are in reference to E*TRADE Bank and E*TRADE Savings Bank, where applicable. All mentions of the parent are in reference to E*TRADE Financial Corporation.

This presentation presents data as of September 30, 2018, unless otherwise indicated. The Company disclaims any obligation to update this presentation or the information contained herein.

Content

Investor Presentation

Strategic Update

2Data presented as of September 30, 2018, unless otherwise indicated

Company overview

3

Financial overview

DARTs: 266k Customer assets: $473B Brokerage accounts: 3.9MM

Pre-tax income: $1,352MM Net income: $911MM Diluted earnings per common share: $3.29 Balance sheet assets: $65B

Incorporated: 1982 First-ever online trade: 1983 Initial public offering: 1996

Branches: 30 National branches: 2 Employees: ~4,000

Market capitalization(5 year history)

E*TRADE is a leading financial services company and pioneer in the online brokerage industry. Having executed the first-ever online trade by an individual investor more than 30 years ago, the Company has long been at the forefront of the digital revolution, focused on delivering complete and easy-to-use solutions for traders, investors and stock plan participants, and registered investment advisors. Founded on the principle of innovation, E*TRADE aims to enhance the financial independence of traders and investors through a powerful digital offering and professional guidance—over the phone at two national branches and in-person at 30 E*TRADE branches across the United States. E*TRADE operates a bank with the primary purpose of maximizing the value of deposits generated through its brokerage business.

64% 18%15%

3%

Net revenue: $2,775MM Net interest income: $1,783MM Commissions: $484MM Fees & service charges: $416MM Other non-interest income: $92MM

E*TRADE has steadily improved its financial profile, driving 2017 earnings to be the strongest for the Company in 10 years. E*TRADE remains well positioned to continue creating value for shareholders through earnings growth and the deployment of excess capital.

Over the last five years, E*TRADE has significantly reduced its corporate debt burden, eliminated its high-cost legacy wholesale funding, repurchased $1.5 billion of common stock, acquired OptionsHouse and Trust Company of America thereby adding a best-in-class derivatives platform and leading provider of custody services to independent RIAs to E*TRADE’s suite of offerings, and announced the intention to acquire roughly one million brokerage accounts from Capital One (expected to close by Q418), while significantly growing on an organic basis.

$13.5B

Data presented as of September 30, 2018, unless otherwise indicated

Digital experiences fuel secular growth within the direct brokerage industry

4

Industry dynamics favor direct brokerages and should continue to fuel growth

The direct space now represents 21% of the total brokerage industry(1)

Customers increasingly engage with financial providers via technology—particularly mobile

Direct brokerages are outpacing wirehouses in digital innovation

Consumers of all ages are growing more comfortable with digital channels

Investors seek an assisted digital approach defined by cutting-edge technology and human guidance

$9.4

$19.0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

15% 21%

TRADITIONAL INDUSTRY: 8% annual growth of assets

DIRECT INDUSTRY: 13% annual growth of assets

$1.7

Direct market share

($T) $5.2


A history of innovation in digital experiences


Key business objectives

6

ACCELERATE GROWTH OF CORE BROKERAGE BUSINESS

• Leverage industry-leading position to improve client acquisition • Foster strategically important drivers of brokerage account and asset growth

+ Capitalize on value of Corporate Services channel

• Deliver cutting-edge trading solutions• Improve market position in investing products• Drive customer acquisition and deepen engagement

+ Enhance overall customer experience

= Drive organic growth and improve competitive position

GENERATE ROBUST EARNINGS GROWTH AND HEALTHY RETURNS ON CAPITAL

• Unlock meaningful capital by bolstering risk and regulatory position • Generate, deploy and return excess capital

+ Put capital to work for shareholders

= Deliver long-term value for stakeholders

+ Utilize balance sheet to enhance returns• Maximize value of customer deposits


Financial Consultants

More than 300 FCs available by phone or at branches to provide one-on-one investing advice

Enhance overall customer experienceACCELERATE GROWTH OF CORE BROKERAGE BUSINESS

E*TRADE’s award-winning platforms(2) lead with a first-class digital experience …

… complemented by professional advice and support

Web

Our leading-edge site for customers and our primary channel to interact with prospects

Mobile

Top-rated applications for all popular smartphones and tabletsIncludes seamless experiences like the Apple Watch® app

Active trading platforms

Powerful trading solutionsSophisticated trading tools, advanced portfolio and market tracking, with idea generation and analysis

Customer Service

24/7 availability via phone, email, or chatWhite glove service for highest-tiered customers

Branches

30 locations throughout the United States plus two national branches


Deliver cutting-edge trading solutions

• Competitive pricing at $6.95 per trade• A full range of investment vehicles across

digital platforms• Seamless trading experiences across mobile

and online platforms• Educational resources and independent

research• Fully integrated cash management solutions

to easily fund trading ideas and strategies• Access to IPO and follow-on offerings

through New Issue Center– 400+ IPOs/follow-ons since 2014


SOLUTIONS FOR ALL INVESTORS ADVANCED CAPABILITIES FOR ACTIVE TRADERS

• The industry’s #1 retail options trading platform(2), with leading-edge tools such as Spectral Analysis and first-of-its kind automated pattern analysis and education tool

8

• Customizable option chain views that make it fast and easy to research, analyze, and take action

• Proprietary Risk Slide tool using powerful models to provide a theoretical P&L for every symbol/component in a portfolio

• Discounted pricing with $4.95 trades and $0.50 option contracts with 30+ trades per quarter

• A dedicated Trader Service Team comprised of many former floor traders and licensed Futures Specialists


Deliver cutting-edge trading solutionsACCELERATE GROWTH OF CORE BROKERAGE BUSINESS

9

Daily average revenue trades (DARTs)000s000s

$BCustomer margin balancesCustomer net buying (selling) activity

$B

168 155 164214

278

11%

2014

14%

20162015

17%20%

2017

23%

YTD18

Total DARTs Mobile DARTs

40 38 42

65

90

20172014 2015

24% 24%26%

2016

30%32%

YTD18

Derivatives DARTs % of total DARTs

$7.7$6.8

($0.6)

$9.2

$12.0

20172014 2015 2016 YTD18

$7.7 $7.4 $7.1

$9.1

$11.2

20152014 Q3182016 2017


Improve market position in investing products

`

• Complete range of retirement and investing services, tools, advisors, education, and support

• Life-stage planning resources to help investors plan for all phases of the retirement process

• Innovative and easy-to-understand solutions to help customers plan for and keep on track for their investing goals

EDUCATION & INSIGHTS

PROFESSIONAL GUIDANCE & SUPPORT

• Robust educational content—including live and on-demand seminars and events—provides relevant insight to customers

• Specialized tools help customers create plans and to-do lists to keep their goals on track

• Timely content helps with idea generation, trends, and actionable strategies

• More than 300 Financial Consultants available by phone or in person to provide guidance when customers want

• Complimentary portfolio reviews and personalized investment recommendations

• Chartered Retirement Planning CounselorsSM

• Rollover Specialists

• Managed portfolios


BEST-IN-CLASS DIGITAL EXPERIENCES


11

Improve market position in investing productsACCELERATE GROWTH OF CORE BROKERAGE BUSINESS

Fee-generating assets(4)

$B

Total brokerage accounts

Total customer assets$B

000sRetirement & investing

• Opportunity to increase engagement with existing customer base by expanding relationships beyond trading-based accounts to retirement & investing-related assets

• Estimated 10–12% of our customers’ investable assets(3)

• 25% of brokerage accounts are retirement accounts• 15% of customer assets are in retirement accounts• More than 250 commission-free ETFs including the

addition of 32 Vanguard ETFs in Q3’18857 883 906 952 976

Q3182014 2015 2016 2017

3,4633,2143,144

3,6353,949Total brokerage accounts Retirement accounts

$48 $48 $54 $66 $73

$473

2017

$383

2015 Q3182014 2016

$290 $288 $311

Total customer assets Retirement assets

$3.1 $3.2 $3.9 $5.4 $6.220162014 2015

$22.3

2017 Q318

$24.6$22.2

$31.3

$40.0Managed product Commission-free ETFsMutual funds


Improve market position in investing productsACCELERATE GROWTH OF CORE BROKERAGE BUSINESS

Blend Portfolios• FC guides customers to one of

seven investment profiles• Reviews progress quarterly

Dedicated Portfolios• Dedicated FC creates a fully

customized portfolio based on customer’s needs

Core Portfolios• Automated investing with access to a

dedicated team of specialists• Diversified, online managed portfolio of ETFs • No proprietary products

Screeners & All Star Lists• Choose from more than 250

commission-free ETFs, more than 9,000 mutual funds, and more than 4,400 no-load, NTF mutual funds

Digital FC-drivenHybrid

Min: $5,000 Flat annual fee: 0.30% of assets

Min: $150,000

Min: $25,000 Blended annual fee: 0.90% to 0.65% of assets

Full range of investing solutions—from the self-directed to the fully managed(5)

Fixed Income Portfolios• Bond portfolio built to customer

specifications by professional portfolio managers

Min: $250,000

Blended annual fee: 1.25% to 0.95% of assets

Blended annual fee: 0.75% to 0.35% of assets

Prebuilt portfolios• Deliver a diversified, self-directed

portfolio commission-free in two clicks

Standard commissions and fees

Min: $2,500


13

Net new brokerage accounts | annual growth rate(7)Net new brokerage assets | annual growth rate(6)

Average brokerage assets per account(8)

000s

$000s

$B

Drive customer acquisition and deepen engagementACCELERATE GROWTH OF CORE BROKERAGE BUSINESS

Brokerage-related cash$B

$10.9$9.3 $9.4

$12.2$11.2

YTD18

5.0%

2014 20172015

3.8%

2016

3.8%4.4% 4.4%

146

96 101

172 169

YTD18

4.9%

2014

3.1%

2015

3.2%

2016

5.0%

2017

6.2%

$78 $76 $80$94

$106

2014 2015 Q31820172016

$41.1 $41.7

$51.4 $52.9 $53.3

17.0%16.7%

2017

18.6%

2014 2015

15.6%

2016

12.8%

Q318

E*TRADE % of brokerage customer assets


• Equity Edge Online® is the top-rated platform for reporting and administration, providing end-to-end control for plan providers

– #1 seven years in a row for Loyalty and Overall Satisfaction in Group Five’s annual Stock Plan Administration Study(9)

• Represent approximately 20% of S&P 500® companies

• Represent over 50% of publicly traded U.S. technology companies

Leverage industry-leading position to improve client acquisition CAPITALIZE ON VALUE OF CORPORATE SERVICES CHANNEL

INDUSTRY LEADER GLOBAL SOLUTIONS EXECUTIVE SERVICES

• Multi-currency settlement and delivery

• Disbursement in 46 different currencies

• Streamlined tax calculations and country code compatibility

• Fully translated participant website in 15 languages

• Live support in four languages in addition to phone-based translation in more than 140languages

• Premium, personalized services for executives saves plan providers time and effort and delivers exemplary service to the most senior plan participants

– Custom 10b5-1 plan design and implementation, along with industry-first automated solution

– Restricted stock sales support

– SEC filing assistance


Foster strategically important drivers of brokerage account & asset growthCAPITALIZE ON VALUE OF CORPORATE SERVICES CHANNEL

15

Total stock plan accounts Total stock plan assets

000s $B

B2B relationship… …to build long-term relationship…creates B2C opportunity…

• Corporation selects E*TRADE for plan administration

• Plan participants moved onto E*TRADE platform, stock plan account opened

• $19B in new client implementations year-to-date

• $5.4B pipeline in new plan assets over next 12 months

• Engage, surprise, and delight:– Completely redesigned stock

plan experience on etrade.com– More relevant, and prominent,

educational content and planning resources

– In-person interactions with FCs at corporate offices

• Sale proceeds converted into E*TRADE brokerage account:

– Currently retaining 15% of proceeds 12 months post exercise

– Contributes nearly 1/3 of gross new brokerage accounts

• Success measured by retention and new assets moved to E*TRADE

1,2641,408 1,456 1,492

1,736

2014 Q3182015 2016 2017

$79 $71 $73 $94 $120$41 $44 $49

$65$90

$39 $37 $30

$38

$50

$159 $152

2014 2015 20172016

$152

Q318

$197

$260Vested Options

UnvestedVested Equities


Drive organic growth and improve competitive positionENHANCE DIGITAL AND OFFLINE CUSTOMER EXPERIENCE

Brand platform• A conscious return to E*TRADE’s irreverent,

challenger-brand status• Channels into positive action the everyday

frustrations consumers feel around outsized wealth• Includes activations with CNBC, CNN, Bloomberg,

and Cheddar• Extends via online video and social

Campaign evolution

% of 2018 marketing spend:

• Campaign continues to evolve and sharpen on E*TRADE’s value proposition for digitally inclined investors

• Recent iterations include long-term investing and active trading

• Premium placements targeted at highest-value prospects and customers

• Data-driven plan, optimizing placements across channels

• Innovative use of digital targeting

Media strategy


• TCA by E*TRADE(10) is a leading provider of technology solutions and custody services to the independent Registered Investment Advisor (RIA) market with more than 200 RIAs and $19.7B investor assets under custody (as of 9/30) which:

– Delivers exceptional service and support to the advisor through a single, dedicated point of contact

– Provides an open-architecture platform

– Bolsters E*TRADE’s ability to serve a broader base of clients and to retain those in need of higher-touch services, particularly within Corporate Services

Incorporating a leading custody platform for the independent RIA market

17

• A robust, mobile-ready technology platform that enables advisors to access sophisticated modeling, rebalancing, reporting, and practice management capabilities

• Delivers a unified technology, custody, and service capability

• Fully customizable for the RIA: documents, statements, and mobile app could be private labeled to provide a seamless experience to the end investor

Liberty, our proprietary state-of-the-art platform, provides a clean and simple interface

LEVERAGE E*TRADE’S PLATFORM FOR SCALE AND GROWTH


Acquiring approximately one million brokerage accounts from Capital One

18

Purchase price Source of funding Expected close Estimated accretion at time of announcement$170MM Existing cash Q4 2018 • neutral to 2018

• $0.06 accretive to 2019

Acquired accounts(11) Pro-forma addition to E*TRADE(11)

Estimated LTM revenue $83MM 3.0%

Margin balance $156MM 1.4%

Brokerage-related cash $1.9B 3.6%

Total customer assets $17.7B 4.2%

DARTs 16k 6.0%

LEVERAGE E*TRADE’S PLATFORM FOR SCALE AND GROWTH

• Meaningfully expands US household penetration at a compelling value, well below standard customer acquisition costs• Leverage E*TRADE’s superior platform to deepen customer engagement• Expect a mid-to-high-teen return on invested capital across economic scenarios


19

$41.9 $41.0$43.3

$53.2$60.1

2.30%2.50%

2.65%2.79%

3.10%

2%

2%

2%

2%

3%

3%

3%

3%

3%

20

25

30

35

40

45

50

55

60

65

2014 2015 2016 2017 Q318

$B

Maximize value of customer depositsUTILIZE BALANCE SHEET TO ENHANCE RETURNS

Balance sheet strategy• Brokerage generates stable, low cost deposits• Primary investments in agency securities | avg duration

of assets matched to liabilities @ 3–4 years• Third party sweep platform provides flexibility to manage

balance sheet size• Grew balance sheet by $15.7B (32%) over the last 21-

months driven by $12B in onboarded deposits and $3-4B in business growth and acquisitions.

Average interest-earning assets | net interest margin

Legacy loansMargin receivables & otherCash & equivalents

Investment securities

$B | yield (cost)

AssetsCustomer cash held by third parties

Deposits and customer payables

Corp. debt & other

(12)Liabilities

$2.3 | +538bps$11.7 | +456bps$1.3 | +204bps

$44.8 | +282bps

Balance sheet strategy Q318 average balance sheet

On B/SOff B/S

$4.0 | -215bps

$52.8 | -18bps

$5.0 | +143bps

E*TRADE consolidated balance sheet assets

On

B/S

Off

B/S

$B

$49.0 $64.7 $66.4

$11.9 $3.8 $1.7

$(14.9) $(3.0) $(3-4)-20

-10

0

10

20

30

40

50

60

70

80

Q416 3rd partyonboarded

Businessgrowth &

acquisition

Q318 Capital One Pro forma B/Ssize

Consolidated assets Customer assets held by third party


• Built out ERM framework

• Effectively managed down legacy loan portfolio, mitigating losses

– Portfolio now just 3% of total assets, down from 50%+ at peak

• Sold highest risk assets and non-core market-making unit

20

Unlock meaningful capital by bolstering risk and regulatory position Strengthened risk position & improved regulatory position

Rationalized corporate debt profile

Acquired #1 options trading platform (Sept. 2016)

• $4.4B—comprised ~10% of liabilities but 65% of funding costs $725MM

• First acquisition in 10+ years• ~$49MM of expense synergies

(2018) plus ~$21MM of additional cost reductions

• ~$20MM+ expected revenue synergies (2018)

0%

25%

50%

75%

100%

Avg. Liab. Cost

Wholesale funding Customer depositsCorp. debt & other

~10%65%

• $1.4B corp. debt outstanding @ 3.6% average coupon

• Corp. interest expense down 76%• Credit rating 8 notches to BBB

Ongoing capital actions

(2012-2018)

(13)

• Strong performance across stress testing

• Built out systems and governance to support enhanced prudential standards

Balance sheet growth• Crossed $50B by bringing customer

deposits on B/S• B/S $15.7B larger since Q416

Share repurchases • Repurchased $502MM between

Q415 and Q216• Completed $1B share repurchase

program launched in Q3’17

Eliminated legacy wholesalefunding obligations (Q315)(2011-2018)

BankTier 1 leverage thresholds

Enhanced capital flexibility

Down 250 bps

to:

Consolidated

6.5%

Down 50 bps

to:

Unlocked excess capital for deployment

$3.1BCapital distributed to parent

$1.4B from bank

$1.7B from broker

(2013…)

Capital unlocked from lower thresholds

$970MM $260MM

7.0%

$1.6B$1.4B

10.2%3.6%

0

0

0

0

0

0

0

0

0

1

1

1

1

1

2

2

2011 Q318

(2012-2017)

PUT CAPITAL TO WORK FOR SHAREHOLDERS


• Our ability to lower our capital threshold over time has created significant flexibility

• Improvements to the balance sheet and risk controls allowed us to:

• Reduce the bank Tier 1 leverage target from 9.5% in 2013 to 7.0%

• Reduce the consolidated Tier 1 leverage threshold from 7.0% in 2017 to 6.5%

• Improved adjusted return on common equity from 5% in 2015 to 15% in YTD18 driven by a more than doubling in the annualized pace of earnings, and a more efficient capital base

• Earnings improvement driven by increased customer engagement, growth in accounts and assets, and aided by a higher interest rate environment and lower tax rate

• A higher return on equity provides greater capacity for sustainable capital deployment

21

Generate, deploy and return excess capitalPUT CAPITAL TO WORK FOR SHAREHOLDERS

Growing adjusted return on common equity(14)

$MM

Steady reduction of Tier 1 leverage ratios

Q3182015 20172016

9.7%8.8%

7.1%

9.0%7.8% 7.4% 7.6% 7.1%

BankConsolidated

$310

$461$522

$694

20162015

15%

5%8% 9%

2017 YTD18

Adjusted Net Income Adjusted ROE


E*TRADE is well-positioned to deliver long-term value for stakeholders

22

• E*TRADE is consistently at the forefront of digital investing and trading innovation

• Business model is well positioned to capitalize on secular shift toward the direct brokerage space

• Significant opportunity to accelerate growth of brokerage business through increased customer awareness and engagement

• Complementary Corporate Services channel provides important drivers of brokerage account and asset growth

• Bank enables E*TRADE to maximize value of customer deposits

• Ability to grow revenue and operating margin in improved interest rate environment

• Value creation through continued efficient deployment of capital

KEY INVESTMENT TAKEAWAYS


Content

Investor Presentation

Strategic Update


24

DIFFERENTIATED VALUE CREATION OVER LAST 24 MONTHS• Update on 2016 growth goals• Proven track record of strong financial performance• Robust business growth• Significant expansion in revenue and earnings despite industry pricing pressure• Delivered shareholder returns meaningfully above the market and sector: +4,600bps vs. S&P 500 | +3,700bps vs. S&P Financials

Positioned for value creation with market leadership and emerging capabilitiesSTRATEGIC UPDATE

COMPELLING OPPORTUNITIES FOR VALUABLE GROWTH ACROSS THE FRANCHISE • Integrated customer offerings create powerful cycle• E*TRADE is growing rapidly among most profitable customers• Capturing leading share in stock plan administration• Corporate Services contributes meaningfully to financial results and growth• Digital wealth and advisory services gives footing in fastest growing segments

STRONG FOUNDATION FOR GROWTH AND SHAREHOLDER VALUE CREATION• Organic delivery of business model more than doubles EPS over next 5 years• Exceptional excess capital generation and commitment to capital return• Ambitious but attainable targets rooted in continued execution of strategy


$9.0

$13.8

12 monthsended Q316

12 monthsended Q318

25%

33%35%

12 monthsended Q316

Q318 Goal

2.8%

5.9%4.8%

12 monthsended Q316

12 months endedQ318

Goal

Net new brokerage assets: Growth Rate | Assets(6)

5.8%

Net new brokerage accounts: Growth Rate | Accounts(7)

In Q316 the Company outlined growth targets for its core brokerage business by late 2018

25

Derivatives: Mix | DARTs(15) Managed products

$3.7

$6.2 $6.0

Q316 Q318 Goal

3.8%4.3%

5.8%

12 monthsended Q316

12 monthsended Q318

Goal

6.8%$B 000s

38

86

12 monthsended Q316

Q318

000s $B+126%+68%

88

211

12 monthsended Q316

12 monthsended Q318

+140%+53%

DIFFERENTIATED VALUE CREATION OVER LAST 24 MONTHSUpdate on 2016 growth goals


Capital Distribution

EPSAdjusted Income and Margin(16)Total Net Revenue

26

$1.81$2.12

$3.29

Q3-16 TTM Q3-17 TTM Q3-18 TTM

+17%

+55%

$1,871$2,238

$2,775


+20%

+24%

$636$868

$1,256

34%

39%

45%


+36%+45%

Pretax Adjusted IncomeAdjusted Operating Margin

7%10%

16%

Q3-16 Q3-17 Q3-18

$MM $MM

Total Assets

$49.20$60.38 $64.71


+23% +7%$B

DIFFERENTIATED VALUE CREATION OVER LAST 24 MONTHSProven track record of strong financial performance

68% payout of net income in last 8 quarters

$1B Share buyback completed 3 months ahead of plan

Repurchased 7% of outstanding shares over the last 15 months

Adjusted return on common equity(14)


22

28

34

Q3-16 Q3-17 Q3-18

Robust business growth

27

88

150

215


$3.7

$6.2

$1.9

$0.6

Q3-16 Net Flows MarketImpact

Q3-18

+68%$9.0

$12.2

$14.4


$6.8$8.5

$11.2

Q3-16 Q3-17 Q3-18

DARTs TTM Net New Brokerage Accounts(7)

000s

TTM Net New Brokerage Assets(6)

$B

Managed Products$B

Accounts with Managed Products

EOP Customer Margin Balance

DIFFERENTIATED VALUE CREATION OVER LAST 24 MONTHS

38 61 85

11.9x

14.4x

17.8x


267

154

202

+124%

+73%

Activity RateDerivatives DARTsOther DARTs

$B

000s

(17)

000s

+70%

+43%

+27%

+21%

+25%+32% +36%

+18%


Significant expansion in revenue and earnings despite industry pricing pressure

$10.77$8.98

$7.25


Adjusted Income Before Tax(16)Revenue$MM$MM

$636$868

$1,256


DIFFERENTIATED VALUE CREATION OVER LAST 24 MONTHS

28

$1,871$2,238

$2,775


Total CommissionsAverage commission per trade$MM

$418$454

$485


+16%

+48%+97%

-33%


Integrated customer offerings create powerful cycleCOMPELLING OPPORTUNITIES FOR VALUABLE GROWTH ACROSS THE FRANCHISE

Self Directed Corporate Services

Advisory + Wealth Management

• Well-positioned franchise

• Resilient top and bottom line

• Compelling ROCA

• Rapid growth in highest value accounts

• High derivative and margin engagement

• Limited attrition

• Industry-leading and best-positioned player in Stock Plan Administration(9)

• Continue to gain share

• Investing to further enhance our capabilities

• Powerful growth engine for both self directed and advisory channels

• TCA by E*TRADE offers compelling RIA capabilities

• Improves overall asset retention

• Re-launched digital investments to better serve clients

• Significant opportunity with current customer base / further upside from low-cost acquisition of Capital One accounts


COMPELLING OPPORTUNITIES FOR VALUABLE GROWTH ACROSS THE FRANCHISEE*TRADE is growing rapidly among most profitable customers

Q316 Q317 Q318

Superior return on client assets (ROCA)(18)

Strong growth in multi-platform adoption over last 24 months Rapid growth In highest value accounts(19)

• Growing high-value accounts (>$500 in annual revenue) at more than 2x the pace of total accounts driven by deeper engagement across products and platforms

• Self-directed customers generate industry-leading ROCA• Retaining high value accounts at ~97% annual rate• Users of web + mobile generate 70% more revenue than

web-based users alone; users of mobile + advanced platform generate 50% more revenue than advanced platform users alone

26%

62%

Web + Mobile Advanced Trading Platform +Mobile Platforms

$6.1

0.70%

0.47%

0.29%

ETFC AMTD SCHW


22%

10%

10%8%

8%

8%

34%E*TRADE

$3.7$6.2

$20.3


Capturing leading share in stock plan administrationCOMPELLING OPPORTUNITIES FOR VALUABLE GROWTH ACROSS THE FRANCHISE

All others (none >5%)

Share of domestic public companieswith equity compensation(20)

31

New client implementations

• Rated #1 in Loyalty and Overall Satisfaction for 7 years running(9)

• Winning ~75% of RFPs in which we participate • Significant growth in new client implementations over last 2

years• Of S&P 500 companies: currently serve approximately 20%;

nearly 40% of technology; nearly 50% of healthcare• Represent over 50% of publicly traded U.S. technology

companies

E*TRADE Corporate Services leads the industry

$B


• Heavy weighting of cash in Corporate Services related accounts drives ROCA(18) of 1.8x of standard retail

• New grants to existing clients added $135B in gross stock plan assets over last two years

• Growth in proceeds with average retention of 15% provides powerful recurring revenue stream

Corporate Services contributes meaningfully to financial results and growth

Expansion of Corporate Services cash should lead to meaningful deposit growth

$B

COMPELLING OPPORTUNITIES FOR VALUABLE GROWTH ACROSS THE FRANCHISE

35%

65%

Corporate Services related cash

Other cash

32

35% of customer cash is currently related to Corporate Services

CAGR

$17$20 $21

Q316 Q317 Q318Corporate Services related cash

$B CAGR


$73 $88 $120$49

$61$90

$31$38

$50

Q316 Q317 Q318

$187$153

$260

UnvestedVested Options Vested Equities

33

Digital wealth and advisory services gives footing in fastest growing segmentsCOMPELLING OPPORTUNITIES FOR VALUABLE GROWTH ACROSS THE FRANCHISE

Digital Investing Advisory Services

• Access to 4,400+ no-load, no-transaction fee mutual funds and 250+ commission-free ETFs

• Three tiers of digitally native managed portfolios offering increasing levels of customization

• Simple and fast construction of commission-free, no-load and no-transaction-fee Prebuilt Portfolios of mutual funds or ETFs

• Leading mobile channel experience(2)

• Innovation Labs dedicated to leveraging new technologies to inform the next generation of E*TRADE products and services

• Advisory Services business (RIA custody) allows more assets to remain “in-house”

• Custody platform and RIA referral network:‒ Provides channel for customers seeking

advised solutions, across both Retail and Corporate Services

‒ ~$12B in committed assets – significant uplift from base of ~$17B at time of announcement of acquisition (October 2017)

‒ Onboarding Edelman as first national referral network partner

• Open architecture, model-centric platform with natively-enabled bulk rebalancing of trades and a-la-carte account billing


TTM revenue 2023

34

~$3.30

45-50%

Revenue growth

~30%20-25%

Operating margin expansion

Share repurchases

STRONG FOUNDATION FOR GROWTH AND SHAREHOLDER VALUE CREATIONOrganic delivery of business model more than doubles EPS over next 5 years

Fee based and other

Balance sheet growth

NIMexpansion

Transaction based

Model Assumptions:

• Interest rates: 3 Fed hikes through 2020• Equity market growth: ~5%• Cash as a % of customer brokerage assets: ~13%• Modest growth in customer activity metrics• Modest reduction in commission per trade• Operating margin expands to mid-50s

EPS growth relative contribution

TTM adjusted 2023

45-50%20-25%

~30%

~$3.30

>$7.00

(21)


Exceptional excess capital generation and commitment to capital return

35

STRONG FOUNDATION FOR GROWTH AND SHAREHOLDER VALUE CREATION

8% 9%

16%>20%

2016 2017 Q318 2023

800 bps expansion

Targeting adjusted ROE(14) expansion beyond 20% over next 5 years

• Continue to return meaningful capital to shareholders

• Generate double-digit growth in pre-tax income, despite considerable investments in the business, due to efficiency and scalability of model

• Launching quarterly common dividend—a testament to strength and stability of earnings

• Remaining disciplined in evaluation of inorganic opportunities, demanding compelling returns

Capital commitments

80-90%Expect to returnof earnings to shareholders $1B Share buyback

program to be completed through 2019

$0.14Initiating quarterly dividend to shareholders

Have repurchased 7% of outstanding shares over the last 15 months


Ambitious but attainable targets rooted in continued execution of strategy

36

STRONG FOUNDATION FOR GROWTH AND SHAREHOLDER VALUE CREATION

~90%Expect to returnof earnings to shareholders $1B

$0.14Initiating quarterly dividend to shareholders

Have repurchased 7% of outstanding shares over the last 15 months

Earnings per Share Growth

• Drive mid-teens earnings per share growth, or a more than doubling of our EPS to greater than $7.00 by 2023

Operating Margin Expansion

• Expand operating margin to 50% in 2020 and drive toward a mid-50s level by 2023

Return on Equity

• Expand return on equity(14) beyond 20%

Capital Return

• Launch of new $1 billion repurchase program

• Initiation of $0.14 quarterly common stock dividend


APPENDIX


Corporate debt and preferred stock APPENDIX

38

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Moody's: Baa2 | StableS&P: BBB | Stable

Credit ratings over time

2.8

8.9 9.2

16.4

10.0

2014 2015 2016 2017 Q318

Security:

Senior Convertible

Debentures due 2019

Senior Notesdue 2022



Non-Cumulative Perpetual Preferred

Stock(22)

Non-Cumulative Perpetual Preferred

Stock(23)

Amount outstanding $0.2MM $600MM $400MM $420MM $400MM $300MM

Coupon 0.000% 2.95% 3.80% 4.50% 5.875% 5.30%

Interest / dividend payable N/A Feb. 24 &

Aug. 24Feb. 24 & Aug. 24

Dec. 20 & Jun. 20

Mar. 15 & Sep. 15

Mar. 15 & Sep. 15

Issued Aug. 25, 2009 Aug. 24, 2017 Aug. 24, 2017 Jun. 20, 2018 Aug. 16, 2016 Nov. 27, 2017

Maturity Aug. 31, 2019 Aug. 24, 2022 Aug. 24, 2027 Jun. 20, 2028 N/A N/A

Debt service coverage

AA-ABBB+BBB-BBB+B-CCCCC

Investment grade

Aa3A2Baa1Baa3Ba2B1B3Caa2Ca

Moody’s S&P

38

Years


1) Based on data from Aite Group’s report titled “New Realities in Wealth Management: U.S. Retail Distribution and Market Sizing,” July 2018. 2) In StockBrokers.com's 2018 Online Broker Review of 13 firms across 292 different variables, E*TRADE was awarded the #1 Mobile Trading, #1 Options Trading, and #1 Web Based

Platform Awards. In addition, E*TRADE received seven Best in Class distinctions: Overall, Offering of Investments, Research, Mobile Trading, Education, Options Trading, and New Investors. E*TRADE's star ratings for all category rankings out of 5: Overall (4.5 stars), Commissions & Fees (3.5 stars), Offering of Investments (4.5 stars), Platforms & Tools (4.5 stars), Research (4.5 stars), Customer Service (4.5 stars), Mobile Trading (5 stars), Ease of Use (4 stars), Education (4.5 stars), Order Execution (3.5 stars), New Investors (4.5 stars), Options Trading (5 stars), and Banking (3.5 stars).

E*TRADE Financial ratings for Barron's annual ranking of the Best Online Brokers, 3/24/18, based on Mobile (4.8 stars), Research Amenities (4.7 stars), Customer Service & Education (4.6 stars), Usability (4.5 stars), Trading Experience & Technology (4.5 stars), Portfolio Analysis & Reports (4.1 stars), Range of Offerings (3.8 stars), and Costs (1.3 stars). E*TRADE received 4 out of 5 stars overall. E*TRADE earned "best of" distinctions in options trading, long-term investing, and in-person advice.

3) Based on data as of 12/31/17.4) Excludes customer cash held at third parties and excludes assets held in custody with TCA by E*TRADE.

5) For Core Portfolios clients, interaction with E*TRADE Capital Management will generally be limited to the web-based interface. A Core Portfolios client does not have an individual Financial Consultant or portfolio manager assigned to the account. E*TRADE Capital Management, through its Investment Policy Committee and with support of Investment Strategists, selects, removes, and adds portfolio holdings and determines the program's rebalancing methodology.

For more information on professionally managed portfolios offered by E*TRADE Capital Management (ETCM), please request a free copy of ETCM's Form ADV Part 2A, which describes, among other things, affiliations, services offered, and fees charged.

6) The net new brokerage assets metrics treat asset flows between E*TRADE entities in the same manner as unrelated third party accounts. Net new brokerage assets exclude $3.7 billion of assets from the OptionsHouse acquisition in the third quarter of 2016 and $18.4 billion of assets from the TCA acquisition in the second quarter of 2018. Trailing twelve month calculations exclude additional TCA net new brokerage assets post-acquisition activity of approximately $600 million.

7) Net new brokerage accounts and end of period brokerage accounts exclude the addition of 145,891 from the acquisition of TCA in the second quarter of 2018 and exclude 147,761 accounts from the OptionsHouse acquisition in the third quarter of 2016. Trailing twelve month calculations exclude additional TCA net new brokerage accounts post-acquisition activity of 4,172 accounts. For the full year 2015, net new and end of period brokerage accounts were impacted by the closure of 23,150 accounts related to the shutdown of the Company’s global trading platform and the closure of 3,484 accounts related to the escheatment of unclaimed property.

8) Average brokerage assets per account is calculated as the sum of security holdings and brokerage related cash divided by end of period brokerage accounts.9) Equity Edge Online was rated #1 in Loyalty and Overall Satisfaction in the 2018, 2017, 2016, 2015, 2014, 2013 and 2012 Group Five Stock Plan Administration Study Industry Report.

Group Five, Inc. is not affiliated with E*TRADE Financial Corporate Services, Inc. or its affiliates.

10) RIA custody solutions are offered by E*TRADE Savings Bank, doing business as “TCA by E*TRADE”, a federal savings bank (Member FDIC).

11) Capital One associated LTM adjusted revenue and full year DARTs are estimates that exclude fractional share related revenue and trades. Account details are presented are as of the time of the announcement of the acquisition on January 25, 2018, and have not been updated.

12) The yield on third party cash is based on the interest earned on customer cash held by third parties, including money market funds and sweep deposit accounts.

APPENDIX


APPENDIX

40

13) Represents acquisition consideration but excludes working capital and other closing adjustments.14) Return on common equity is calculated by dividing annualized net income available to common shareholders by average common shareholders' equity, which excludes preferred

stock. The following table provides a reconciliation of GAAP return on common equity percentage to non-GAAP adjusted return on common equity percentage (dollars in millions):

15) Derivatives mix excludes 200,838 TCA post-acquisition trades.

16) Operating margin is the percentage of net revenue that results in income before income taxes. The percentage is calculated by dividing income before income taxes by total net revenue. The following table presents a reconciliation of GAAP operating margin percentage to non-GAAP adjusted operating margin percentage (dollars in millions):

17) Activity rate is total trades divided by average customer brokerage accounts.

18) Revenue on customers assets (ROCA) is calculated as net revenue divided by average total customer assets. The ROCA for E*TRADE and peers are calculated using the first 6 months in 2018 and are annualized.

AmountOperating Margin %



Income before income tax expense and operating margin $1,352 49% $970 43% $790 42%

Add back impact of pre-tax items:Provision (benefit) for loan losses (100) (160) (154)Losses on early extinguishment of debt 4 58 -

Subtotal (96) (102) (154)Adjusted income before income tax expense and adjusted operating margin $1,256 45% $868 39% $636 34%

September 30, 2018 September 30, 2017 September 30, 2016Last 12 months ended


Net income available to common shareholders and return on common equity 261$ 17% 135$ 9% 139$ 9% 746$ 16% 589$ 10% 552$ 10% 268$ 5%Add back impact of the following items: Provision (benefit) for loan losses (34) (29) (62) (74) (168) (149) (40) Losses on early extinguishment of debt 4 58 - 4 58 - 112 Subtotal (30) 29 (62) (70) (110) (149) 72 Income tax impact of the items above 8 (12) 24 18 43 58 (30) Net of tax (22) 17 (38) (52) (67) (91) 42 Adjusted net income available to common shareholders and return on common equity

239$ 16% 152$ 10% 101$ 7% 694$ 15% 522$ 9% 461$ 8% 310$ 5%

December 31, 2015September 30, 2017Three months ended,

September 30, 2018 September 30, 2016Year ended,

September 30, 2018 December 31, 2017 December 31, 2016Nine months ended,

APPENDIX

41

For additional information, contact E*TRADE Investor Relations at: [email protected] | 646-521-4406

19) High value accounts are defined as those generating more than $500 in directly attributable trailing twelve month net revenue. Growth rates exclude any added accounts from the integration of OptionsHouse and TCA.

20) Market share data as per the American Coalition of Stock Plan Administrators (ACSPA) Survey Data.

21) The following table presents a reconciliation of GAAP diluted earnings per share to non-GAAP diluted earnings per share for the last twelve months ended September 30, 2018 (dollars in millions except per share amounts):

*Diluted weighted-average shares outstanding for the last twelve months ended September 30, 2018 were 265,955 (in thousands).

22) Preferred stock is non-callable, fixed rate at 5.875% for 10 years. Thereafter, callable and floating rate at 3-month LIBOR + 4.435%. Redemption may be in whole or in part on any dividend payment date on or after September 15, 2026 at a redemption price equal to $1,000 per share, plus any declared and unpaid dividends to, but excluding, the date fixed for redemption, without accumulation of any undeclared dividends.

23) Preferred stock is non-callable, fixed rate at 5.30% for 10 years. Thereafter, callable and floating rate at 3-month LIBOR + 3.16%. Redemption may be in whole or in part on any dividend payment date on or after March 15, 2023 at a redemption price equal to $1,000 per share, plus any declared and unpaid dividends to, but excluding, the date fixed for redemption, without accumulation of any undeclared dividends.


Net income available to common shareholders and diluted earnings per share* 875$ 3.29$ Add back

Preferred stock dividends 36 Income tax expense 441$

Income before income tax expense 1,352 Provision (benefit) for loan losses (100)

Losses on early extinguishment of debt4

Subtotal 1,256 Income tax impact assuming 27% tax rate 339 After-tax adjusted income 917 Preferred dividend 36 Adjusted net income available to common shareholders and diluted earnings per share* 881$ 3.31$

September 30, 2018Last 12 months ended

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