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2009 E*TRADE FINANCIAL Corp. All rights reserved.2

Safe Harbor Statement

This presentation contains certain projections or other forward-looking statements regarding future events or the futureperformance of the company. Various factors, including risks

and uncertainties referred to in the 10Ks, 10Qs and otherreports E*TRADE FINANCIAL Corporation periodically fileswith the SEC, could cause our actual results to differ materiallyfrom those indicated by our projections or other forward-looking statements. This presentation also contains disclosureof non-GAAP financial measures. A reconciliation of thesefinancial measures to the most directly comparable GAAP

financial measure can be found on the investor relations site athttps://investor.etrade.com

2009 E*TRADE FINANCIAL Corp. All rights reserved.

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Completed major recapitalization

Bolstered Bank capital

Reduced Parent debt burden

Thriving online brokerage business

Demonstrating leadership in industry with strong

secular growth trends

Continuing to exceed expectations andremaining competitive among largest online brokers

Strategically investing for long-term growth

Improving loan performance trends

Expect continued reduction in loan loss provision

3

Overview

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4/34 2009 E*TRADE FINANCIAL Corp. All rights reserved.4

Completed Major Recapitalization

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5

Completed Major Recapitalization:

Raised more than $600 million of common equity in Q2

Q2 Actions ($ in millions) Proceeds

$65

$550

Total gross proceeds $615

Net proceeds $586

Follow-on common stock offering

Equity Drawdown Program

Exchanged $1.7 billion of high yield debt for zero couponconvertible debentures

$1.7 billion

$198 millionAnnual Interest Payment Reduction

Debt Exchanged

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7

($ in millions)8%

Due 2011

7 3/8%

Due 2013

7 7/8%

Due 2015

12 %

Due 2017(2)

$2,186

After exchange $3 $415 $243 $876 $1,537

Change ($432) $0

Total

Before exchange $435 $415 $243 $3,279

$0 ($1,310) ($1,742)

Completed Major Recapitalization: Reduced Parent debt burden through debt exchange

Outstanding Interest-Bearing Debt

($ in millions)8%

Due 2011

7 3/8%

Due 2013

7 7/8%

Due 2015

12 %

Due 2017(2)

$273

After exchange $0 $31 $19 $109 $160

Change ($35) $0

Total

Before exchange $35 $31 $19 $358

$0 ($164) ($198)

Annual Interest Payments

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Thriving Online Brokerage Business

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Growing and competitive business

Trading volume and account growth at competitive levels

Market recognition of industry leadership

Profit and growth through discipline and focus

Emphasis on core online brokerage franchise

Disciplined management of expenses and service quality

Investing in business for long-term growth

Full investment pipeline for active traders and long term investors

Marketing to drive brokerage account growth

Thriving Online Brokerage Business

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161 161

185

204

181172

184

216

194

221

190

50

75

100

125

150

175

200

225

250

Q107

Q207

Q307

Q407

Q108

Q208

Q308

Q408

Q109

Q209

Q3QTD

(0

00's)

Daily Average Revenue Trades

Thriving Online Brokerage Business: Customer DART growth exceeding expectations

10

17%

YTD/YTD

Increase

17%

YTD/YTD

Increase

0

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DARTs Indexed to Q1 2006

65

75

85

95

105

115

125

135

145

155

165

Q106

Q206

Q306

Q406

Q107

Q207

Q307

Q407

Q108

Q208

Q308

Q408

Q109

Q209

ETFC AMTD SCHW

Thriving Online Brokerage Business : Competitive within largest online brokers

11

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2,7152,733

2,597

2,5202,501

2,478

2,453

2,4922,475

2,449

2,661

2,300

2,350

2,400

2,450

2,500

2,550

2,600

2,650

2,700

2,750

2,800

Q107

Q207

Q307

Q407

Q108

Q208

Q308

Q408

Q109

Q209

Q309Q

TD

(000's)

Brokerage Accounts

Thriving Online Brokerage Business: Continued record brokerage accounts

12

8.5%y/y

Increase

8.5%y/y

Increase

0

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128%118%

76%

124% 124% 120%

175%165%

144%

110%

167%

0%

50%

100%

150%

200%

Q107

Q207

Q307

Q407

Q108

Q208

Q308

Q408

Q109

Q209

Q309QTD

Gross New Brokerage Accounts / Attriting Brokerage Accounts

Thriving Online Brokerage Business: Improved brokerage account attrition

13

Attrition Rate (3)

Q3 08: 15.4%

Q3 09^QTD: 9.4%

(3)(a)

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Thriving Online Brokerage Business: Market recognition of industry leadership

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$287$281

$345 $374 $349

$485

$345 $311$288 $314

$0

$100

$200

$300

$400

$500

Q107

Q207

Q307

Q407

Q108

Q208

Q308

Q408

Q109

Q209

(MM)

Total operating expense FDIC insurance preimiums and fees

Thriving Online Brokerage Business: Disciplined expense management

Total Operating Expense

18

17%Decline

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Enhancements

Back-testing and advancedscreeners

Fixed Income, Mutual fund, ETFtools for long term investors;

Portfolio Margining

New Products

E*TRADE Mobile Pro for

BlackBerry and iPhone

Investor Resource Center

Online Advisor

Excel Manager on Power E*TRADEPro

Thriving Online Brokerage Business: Full development pipeline of tools for active traders

and long-term investors

iPhone is a trademark of Apple Inc. BlackBerry is a registered trademark of RIM

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Tools focused onlong-term investors

Tools focused on active traders

Thriving Online Brokerage Business: Full development pipeline of tools for active traders

and long-term investors

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Brand identification /

Features and function

Market &Event driven

Validation tagline

Thriving Online Brokerage Business: Highly effective advertising driving brokerage account growth

21

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Improving Loan PerformanceTrends

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Portfolio in full run-off mode

Proactively managing to reduce charge-offs

Eliminated significant risk from open lines

Portfolio showing meaningful improvements

Home equity delinquencies significantly lower

1-4 family delinquencies gradually declining

Provision and charge-offs approaching inflection point

Loan loss provision and internally-generated Bank capitalreaching breakeven point

Improving Loan Performance Trends

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Improving Loan Performance Trends:

($ in billions)

Loan

Balance (4)

9/30/07NetPaydowns

(5) NetCharge-Offs

LoanBalance (4)

6/30/09

1-4 family Loans ($0.3)

Home equity $12.4 ($2.1) ($1.4) $9.0

Consumer $3.0 ($0.8) ($0.1) $2.1

($1.8)TOTAL

($4.7)

($7.6)

$16.9

$32.3

$11.9

$22.9

Loan portfolio in full run-off mode

29% Decline

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2008 $0.0B 0%

2007 $1.1B 12%

2006 $4.1B

$2.2B

$0.9B

2003and older

$0.7B 8%

$9.0B

46%

2005 25%

2004 10%

Total 100%

Home Equity Unpaid

Balances by Origination Vintage2007

2003

and older

2004

2005

2006

Improving Loan Performance Trends:

25

45month

s

average

age

45month

s

averag

e

age

Home equity delinquency trends show improvement

partly due to low 2007 vintage and overall seasoning

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I i L P f T d

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$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

Dec-08

Jan-09

Feb-

09

Mar

-09

Apr-09

May

-09

Jun-09

Jul-09

Aug-09

(MM)

30-89 Days Delinquent

Improving Loan Performance Trends: Home equity delinquencies significantly lower in 2009

27

34%YTDDecline

I i L P f T d

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$400

$450

$500

$550

$600

$650

Dec-08

Jan-09

Feb-

09

Mar

-09

Apr-09

May

-09

Jun-09

Jul-09

Aug-09

(MM)

30-89 Days Delinquent

Improving Loan Performance Trends: 1-4 Family delinquencies gradually declining

28

12%Decline

$0

I i L P f T d

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$0

$100

$200

$300

$400

$500

$600

Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09Range

($MM)(MM)

$566 $1,219$1,201$1,081$874$636

29

Improving Loan Performance Trends: Declining provisions converging with net charge-offs

Over Past

6 QuartersProvision for loanlosses 1.4x net

charge-offs

Provision forloan losses

Net charge-offs

Allowance for loan losses

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Overview

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Completed major recapitalization

Bolstered Bank capital

Reduced Parent debt burden Thriving online brokerage business

Demonstrating leadership in industry with strong

secular growth trends Continuing to exceed expectations and

remaining competitive among largest online brokers

Strategically investing for long-term growth

Improving loan performance trends

Expect continued reduction in loan loss provision

31

Overview

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Appendix

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AppendixExplanation of Non-GAAP Measures and Certain MetricsManagement believes that operating income (pre-credit cost) and bank earnings before taxes and before credit losses are appropriate measures for evaluating the operating and liquidity

performance of the Company. Management believes that the elimination of certain items from the related GAAP measures is helpful to investors and analysts who may wish to use some or allof this information to analyze our current performance, prospects and valuation. Management uses non-GAAP information internally to evaluate our operating performance in formulating ourbudget for future periods.

(1)Capital ratios are at the E*TRADE Bank level. The ratios and excess capital amounts are August 09 estimates based on the regulatory minimum well-capitalized threshold.

(2) Interest on the 12 % Springing Lien Notes may be paid in kind (PIK) through May 2010.

(3) The attrition rate is calculated by dividing attriting brokerage accounts (a) (annualized) by total brokerage accounts.(a) Attriting brokerage accounts: Gross new brokerage accounts, less net new brokerage accounts

(4) Represents unpaid principal balances.

(5) Net paydowns includes paydowns on loans, as well as limited origination activity, home equity advances, repurchase activity and transfers to real estate owned assets.

(6) The capital release from loan run-off only includes the decrease in risk based capital required for our 1-4 family, home equity and consumer loan portfolios. This slide does not depict thecapital impact related to changes in other risk-weighted assets (represented in other line in the below chart), such as securities, and the impact of our provision for loan losses.

Q209 Q109 Q408 Q308 Q208 Q108

Beginning excess risk-based capital 444$ 715$ 524$ 622$ 695$ 435$Pre-credit earnings 232 181 156 206 229 184

Provision for loan losses (405) (454) (513) (518) (319) (234)

Loan portfolio run-off and other 140 2 298 (36) 17 310

Cash infusion 500 - 250 250 - -

Ending excess risk-based capital 911$ 444$ 715$ 524$ 622$ 695$

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