**E*TRADE Financial Corporation Announces Third Quarter 2019 Results**

Third Quarter Results

Net income of $274 million; net income available to common shareholders of $254 million

Diluted earnings per common share of $1.08, which includes a net benefit of $9 million, or $0.04 per diluted share, related to the benefit to provision for loan losses

Total net revenue of $767 million, a Company record⁽¹⁾

Operating margin of 50 percent; adjusted operating margin of 48 percent⁽²⁾

Average interest-earning assets of $55.4 billion; net interest margin of 328 basis points

Daily Average Revenue Trades (DARTs) of 267,000, including 36 percent in derivatives, a Company record⁽¹⁾; derivative DARTs of 95,000

Average and end of period margin receivables of $9.9 billion

Net new accounts of 47,000

Net new retail and advisor services assets of $2.8 billion

Capital return to shareholders⁽³⁾ of $600 million, including share repurchases of $566 million and dividends of $34 million

NEW YORK--(BUSINESS WIRE)--October 17, 2019--E*TRADE Financial Corporation (NASDAQ: ETFC) today announced results for its third quarter ended September 30, 2019, reporting net income of $274 million, diluted earnings per common share of $1.08 and total net revenue of $767 million. Operating margin for the quarter was 50 percent and adjusted operating margin was 48 percent⁽²⁾.

“This past quarter was marked by record net revenue, strong operating results and customer engagement, as well as a myriad of accolades for the intuitive experience we deliver to our customers time and again,” said Mike Pizzi, Chief Executive Officer. “The commission changes over the past few weeks have caused a meaningful shift for the industry—making it even more crucial to deliver a cutting-edge and easy-to-use experience to investors and traders alike. As a digital-first company, backed by one of the most sophisticated customer support teams in the industry, we will leverage our advantage to grow and take share, especially as price is removed as a point of competitive differentiation. Our business is well positioned for the long-term, and we will remain dynamic, optimizing our model in a manner that best delivers long-term value for shareholders.”

The Company also declared a quarterly cash dividend of $0.14 per share on the Company's outstanding shares of common stock. The dividend is payable on November 15, 2019, to shareholders of record as of the close of business on November 8, 2019.

The Company will host a conference call beginning at 5 p.m. ET today to discuss the quarterly results. This conference call will be available to domestic participants by dialing 800-705-7259 while international participants should dial +1 303 223 4387. A live audio webcast and replay of this conference call will also be available at about.etrade.com.

Historical metrics and financials can be found on the E*TRADE Financial corporate website at about.etrade.com.

About E*TRADE Financial

E*TRADE Financial and its subsidiaries provide financial services including brokerage and banking products and services to traders, investors, stock plan administrators and participants and registered investment advisers (RIAs). Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Commodity futures and options on futures products and services are offered by E*TRADE Futures LLC (Member NFA). Managed Account Solutions are offered through E*TRADE Capital Management, LLC, a Registered Investment Adviser. Bank products and services are offered by E*TRADE Bank, and RIA custody solutions are offered by E*TRADE Savings Bank, both of which are federal savings banks (Members FDIC). Equity compensation plan services are offered by E*TRADE Financial Corporate Services, Inc. More information is available at www.etrade.com. ETFC-E

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Important Notices

E*TRADE, E*TRADE Financial, E*TRADE Bank, E*TRADE Savings Bank, the Converging Arrows logo, and the E*TRADE logo are trademarks or registered trademarks of E*TRADE Financial Corporation.

Forward-Looking Statements

The statements contained in this press release that are forward looking, including statements regarding the Company's long-term positioning and its ability to leverage its competitive advantages to grow and gain market share, optimize its business model to deliver long-term value for shareholders and pay additional dividends in the future, are “forward-looking statements” within the meaning of the federal securities laws, and are subject to a number of uncertainties and risks. Actual results may differ materially from those indicated in the forward-looking statements. The uncertainties and risks include, but are not limited to: risks related to macro trends of the economy in general; market volatility and its impact on trading volumes; fluctuations in interest rates; potential system disruptions and security breaches; our ability to attract and retain customers and develop new products and services; increased competition; increased restrictions resulting from financial regulatory reform or changes in the policies of our regulators, including with respect to approval of any future dividend or share repurchase; our ability to participate in consolidation opportunities in our industry, to complete consolidation transactions and to realize synergies or implement integration plans; adverse developments in litigation or regulatory matters; the timing and duration of, and the amount of shares repurchased and amount of cash expended in connection with, the share repurchase program and dividend payments; and the other factors set forth in our annual and quarterly reports on Form 10-K, as amended, and Form 10-Q previously filed with the Securities and Exchange Commission (including information in these reports under the caption “Risk Factors”). Any forward-looking statement included in this release speaks only as of the date of this communication; the Company disclaims any obligation to update any information, except as required by law.

E*TRADE FINANCIAL CORPORATION Consolidated Statement of Income (In millions, except share data and per share amounts) (Unaudited)

	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
		2019			2019			2018			2019			2018
Revenue:
Interest income	$	521		$	560		$	514		$	1,636		$	1,471
Interest expense		(66	)		(70	)		(48	)		(199	)		(107	)
Net interest income		455			490			466			1,437			1,364
Commissions		122			121			117			365			375
Fees and service charges		163			126			108			407			323
Gains (losses) on securities and other, net		16			(64	)		17			(37	)		42
Other revenue		11			12			12			35			34
Total non-interest income		312			195			254			770			774
Total net revenue		767			685			720			2,207			2,138
Provision (benefit) for loan losses		(12	)		(8	)		(34	)		(32	)		(74	)
Non-interest expense:
Compensation and benefits		167			168			157			499			469
Advertising and market development		41			48			45			143			152
Clearing and servicing		36			32			28			98			94
Professional services		27			26			23			75			70
Occupancy and equipment		34			32			29			98			89
Communications		26			29			30			70			89
Depreciation and amortization		23			21			25			65			70
FDIC insurance premiums		3			4			8			11			26
Amortization of other intangibles		16			15			12			46			34
Restructuring and acquisition-related activities		2		—				4			2			6
Losses on early extinguishment of debt	—			—				4		—				4
Other non-interest expenses		24			23			15			65			56
Total non-interest expense		399			398			380			1,172			1,159
Income before income tax expense		380			295			374			1,067			1,053
Income tax expense		106			76			89			284			271
Net income	$	274		$	219		$	285		$	783		$	782
Preferred stock dividends		20		—				24			40			36
Net income available to common shareholders	$	254		$	219		$	261		$	743		$	746
Basic earnings per common share	$	1.08		$	0.90		$	1.01		$	3.08		$	2.84
Diluted earnings per common share	$	1.08		$	0.90		$	1.00		$	3.07		$	2.82
Weighted average common shares outstanding:
Basic (in thousands)		235,829			243,007			259,498			241,657			263,292
Diluted (in thousands)		236,313			243,465			260,661			242,199			264,433
Dividends declared per common share	$	0.14		$	0.14		$ —			$	0.42		$ —

E*TRADE FINANCIAL CORPORATION Consolidated Balance Sheet (In millions, except share data) (Unaudited)

	September 30,			December 31,
		2019			2018
ASSETS
Cash and equivalents	$	493		$	2,333
Cash segregated under federal or other regulations		1,365			1,011
Available-for-sale securities		21,020			23,153
Held-to-maturity securities		21,542			21,884
Margin receivables		9,859			9,560
Loans receivable, net⁽⁴⁾		1,747			2,103
Receivables from brokers, dealers and clearing organizations		1,038			760
Property and equipment, net		338			281
Goodwill		2,485			2,485
Other intangibles, net		446			491
Other assets		1,374			942
Total assets	$	61,707		$	65,003
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits	$	40,382		$	45,313
Customer payables		11,183			10,117
Payables to brokers, dealers and clearing organizations		1,091			948
Corporate debt		1,410			1,409
Other liabilities		1,072			654
Total liabilities		55,138			58,441
Shareholders' equity:
Preferred stock, $0.01 par value; shares authorized: 1,000,000; shares issued and outstanding at September 30, 2019: 403,000		689			689
Common stock, $0.01 par value; shares authorized: 400,000,000; shares issued and outstanding at September 30, 2019: 226,795,480		2			2
Additional paid-in-capital		4,578			5,462
Retained earnings		1,324			684
Accumulated other comprehensive loss		(24	)		(275	)
Total shareholders' equity		6,569			6,562
Total liabilities and shareholders' equity	$	61,707		$	65,003

Key Performance Metrics⁽⁵⁾

*Corporate (dollars in millions)*	Qtr ended 9/30/19			Qtr ended 6/30/19			Qtr ended 9/30/19 vs. 6/30/19		Qtr ended 9/30/18			Qtr ended 9/30/19 vs. 9/30/18
Operating margin%⁽²⁾		50	%		43	%	7	%		52	%	(2	)%
Adjusted operating margin%⁽²⁾		48	%		42	%	6	%		48	%	—	%
Employees		4,297			4,261		1	%		4,091		5	%
Return on common equity⁽⁶⁾		17	%		15	%	2	%		17	%	—	%
Adjusted return on common equity⁽⁶⁾		16	%		14	%	2	%		16	%	—	%
Common equity book value per share⁽⁷⁾	$	25.92		$	25.75		1	%	$	23.67		10	%
Tangible common equity book value per share⁽⁷⁾	$	15.01		$	15.35		(2	)%	$	14.13		6	%
Cash and equivalents	$	493		$	380		30	%	$	596		(17	)%
Corporate cash⁽⁸⁾	$	380		$	323		18	%	$	517		(26	)%
Average interest-earning assets	$	55,438		$	61,361		(10	)%	$	60,112		(8	)%
Net interest margin (basis points)		328			320		8			310		18

*Customer Activity (dollars in billions)*	Qtr ended 9/30/19			Qtr ended 6/30/19			Qtr ended 9/30/19 vs. 6/30/19	Qtr ended 9/30/18			Qtr ended 9/30/19 vs. 9/30/18
Commissionable trades (MM)⁽⁹⁾		17.0			16.9		1%		15.9		7%
Trading days		63.5			63.0		N.M.		62.5		N.M.
DARTs⁽⁹⁾		266,935			268,488		(1)%		255,139		5%
Derivative DARTs⁽⁹⁾		94,895			89,402		6%		84,978		12%
Derivative DARTs %⁽⁹⁾		36	%		33	%	3%		33	%	3%
Average commission per trade⁽⁹⁾	$	7.18		$	7.14		1%	$	7.34		(2)%
Margin receivables	$	9.9		$	9.9		—%	$	11.2		(12)%

*Customer Activity (dollars in billions)*	Qtr ended 9/30/19			Qtr ended 6/30/19			Qtr ended 9/30/19 vs. 6/30/19	Qtr ended 9/30/18			Qtr ended 9/30/19 vs. 9/30/18
Gross new retail accounts		121,754			143,205		(15)%		150,715		(19	)%
Gross new advisor services accounts		6,785			6,775		— %		8,695		(22	)%
Gross new corporate services accounts		86,870			91,388		(5)%		109,998		(21	)%
Gross new accounts		215,409			241,368		(11)%		269,408		(20	)%
Net new retail accounts		7,469			34,072		(78)%		63,841		(88	)%
Net new advisor services accounts		(874	)		53		N.M.		2,423		(136	)%
Net new corporate services accounts		40,006			35,892		11%		69,321		(42	)%
Net new accounts		46,601			70,017		(33)%		135,585		(66	)%
End of period retail accounts		5,130,138			5,122,669		—%		4,056,416		26	%
End of period advisor services accounts		150,401			151,275		(1)%		150,063		—	%
End of period corporate services accounts		1,893,881			1,853,875		2%		1,735,675		9	%
End of period accounts		7,174,420			7,127,819		1%		5,942,154		21	%
Net new retail account growth rate		0.6	%		2.7	%	(2.1)%		6.4	%	(5.8	)%
Net new advisor services account growth rate		(2.3	)%		0.1	%	(2.4)%		6.6	%	(8.9	)%
Net new corporate services account growth rate		8.6	%		7.9	%	0.7%		16.6	%	(8.0	)%
Net new total account growth rate		2.6	%		4.0	%	(1.4)%		9.3	%	(6.7	)%
Net new retail assets⁽¹⁰⁾	$	2.8		$	1.7		65%	$	3.1		(10	)%
Net new advisor services assets⁽¹⁰⁾	—				(0.1	)	100%		0.3		(100	)%
Net new retail and advisor services assets	$	2.8		$	1.6		75%	$	3.4		(18	)%
Net new retail assets growth rate		3.4	%		2.1	%	1.3%		4.2	%	(0.8	)%
Net new advisor services assets growth rate		0.8	%		(1.2	)%	2.0%		7.6	%	(6.8	)%
Net new retail and advisor services assets growth rate		3.2	%		1.9	%	1.3%		4.4	%	(1.2	)%

Key Performance Metrics⁽⁵⁾

*Customer Activity (dollars in billions)*	Qtr ended 9/30/19		Qtr ended 6/30/19			Qtr ended 9/30/19 vs. 6/30/19	Qtr ended 9/30/18			Qtr ended 9/30/19 vs. 9/30/18
Retail Assets
Security holdings	$	266.3	$	268.2		(1)%	$	256.1		4%
Cash and deposits		64.0		61.2		5%		57.1		12%
Retail assets	$	330.3	$	329.4		—%	$	313.2		5%
Advisor Services Assets
Security holdings	$	18.4	$	18.4		— %	$	18.3		1%
Cash and deposits		1.0		1.0		— %		1.3		(23)%
Advisor services assets	$	19.4	$	19.4		— %	$	19.6		(1)%
Corporate Services Assets
Vested equity holdings	$	95.6	$	95.3		— %	$	89.8		6%
Vested options holdings		43.3		47.0		(8)%		50.2		(14)%
Corporate services vested assets	$	138.9	$	142.3		(2)%	$	140.0		(1)%
Unvested holdings		115.4		117.0		(1)%		119.5		(3)%
Corporate services assets	$	254.3	$	259.3		(2)%	$	259.5		(2)%
Total Customer Assets
Security holdings	$	284.7	$	286.6		(1)%	$	274.4		4%
Cash and deposits⁽¹¹⁾		65.0		62.2		5%		58.4		11%
Retail and advisor services assets	$	349.7	$	348.8		— %	$	332.8		5%
Corporate services vested assets		138.9		142.3		(2)%		140.0		(1)%
Retail, advisor services, and corporate services vested assets	$	488.6	$	491.1		(1)%	$	472.8		3%
Corporate services unvested holdings		115.4		117.0		(1)%		119.5		(3)%
Total customer assets	$	604.0	$	608.1		(1)%	$	592.3		2%
Net (buy) / sell activity
Retail net (buy) / sell activity	$	0.2	$	(0.5	)	N.M.	$	(2.2	)	N.M.
Advisor services net (buy) / sell activity	—			0.2		N.M.	—			N.M.
Net (buy) / sell activity	$	0.2	$	(0.3	)	N.M.	$	(2.2	)	N.M.
Market Indices
Dow Jones Industrial Average		26,917		26,600		1%		26,458		2%
Nasdaq Composite		7,999		8,006		—%		8,046		(1)%
Standard & Poor's 500		2,977		2,942		1%		2,914		2%

*Capital*	Qtr ended 9/30/19		Qtr ended 6/30/19		Qtr ended 9/30/19 vs. 6/30/19		Qtr ended 9/30/18		Qtr ended 9/30/19 vs. 9/30/18

E*TRADE Financial
Tier 1 leverage ratio⁽¹²⁾	6.9	%	6.7	%	0.2	%	7.1	%	(0.2	)%
Common Equity Tier 1 capital ratio⁽¹²⁾	31.4	%	33.9	%	(2.5	)%	34.1	%	(2.7	)%
Tier 1 risk-based capital ratio⁽¹²⁾	37.8	%	40.4	%	(2.6	)%	40.5	%	(2.7	)%
Total risk-based capital ratio⁽¹²⁾	38.2	%	40.7	%	(2.5	)%	40.9	%	(2.7	)%

E*TRADE Bank
Tier 1 leverage ratio⁽¹²⁾	7.4	%	7.3	%	0.1	%	7.1	%	0.3	%
Common Equity Tier 1 capital ratio⁽¹²⁾	37.2	%	40.2	%	(3.0	)%	34.6	%	2.6	%
Tier 1 risk-based capital ratio⁽¹²⁾	37.2	%	40.2	%	(3.0	)%	34.6	%	2.6	%
Total risk-based capital ratio⁽¹²⁾	37.5	%	40.5	%	(3.0	)%	35.0	%	2.5	%

*Average Balance Sheet Data*
*(dollars in millions)*	Three Months Ended
	September 30, 2019						June 30, 2019
	Average Balance		Interest Inc./Exp.		Average Yield/Cost		Average Balance		Interest Inc./Exp.		Average Yield/Cost
Cash and equivalents	$	429	$	2	2.11	%	$	452	$	3	2.33	%
Cash segregated under federal or other regulations		1,073		7	2.41	%		871		6	2.63	%
Investment securities		41,326		324	3.13	%		47,375		368	3.11	%
Margin receivables		9,880		120	4.83	%		10,084		130	5.17	%
Loans		1,812		25	5.58	%		1,920		28	5.75	%
Broker-related receivables and other		918		5	2.02	%		659		3	2.23	%
Total interest-earning assets		55,438		483	3.47	%		61,361		538	3.51	%
Other interest revenue^(a)	—			38			—			22
Total interest-earning assets		55,438		521	3.74	%		61,361		560	3.66	%
Total non-interest earning assets		5,859						5,093
Total assets	$	61,297					$	66,454
Sweep deposits	$	30,559	$	11	0.14	%	$	37,380	$	18	0.20	%
Savings deposits		7,533		27	1.44	%		6,347		23	1.47	%
Other deposits		1,614	—		0.03	%		1,732	—		0.03	%
Customer payables		10,915		7	0.27	%		10,593		8	0.31	%
Broker-related payables and other		1,241		2	0.51	%		1,050		1	0.46	%
Other borrowings		102		1	4.77	%		312		4	3.78	%
Corporate debt		1,410		14	3.86	%		1,410		14	4.06	%
Total interest-bearing liabilities		53,374		62	0.46	%		58,824		68	0.47	%
Other interest expense^(b)	—			4			—			2
Total interest-bearing liabilities		53,374		66	0.49	%		58,824		70	0.48	%
Total non-interest-bearing liabilities		1,251						1,016
Total liabilities		54,625						59,840
Total shareholders' equity		6,672						6,614
Total liabilities and shareholders' equity	$	61,297					$	66,454
Excess interest earning assets over interest bearing liabilities/ net interest income/ net interest margin	$	2,064	$	455	3.28	%	$	2,537	$	490	3.20	%

(a) Other interest revenue is earned on certain securities loaned balances. Interest expense incurred on other securities loaned balances is presented on the broker-related payables and other line item above.

(b) Other interest expense is incurred on certain securities borrowed balances. Interest income earned on other securities borrowed balances is presented on the broker-related receivables and other line item above.

*Average Balance Sheet Data*	Three Months Ended
*(dollars in millions)*	September 30, 2018
	Average Balance		Interest Inc./Exp.		Average Yield/Cost
Cash and equivalents	$	471	$	2	1.84	%
Cash segregated under federal or other regulations		836		4	2.15	%
Investment securities		44,773		315	2.82	%
Margin receivables		10,902		130	4.74	%
Loans		2,332		32	5.38	%
Broker-related receivables and other		798		4	2.02	%
Total interest-earning assets		60,112		487	3.24	%
Other interest revenue^(a)	—			27
Total interest-earning assets		60,112		514	3.41	%
Total non-interest-earning assets		4,291
Total assets	$	64,403
Sweep deposits	$	37,550	$	14	0.15	%
Savings deposits		2,972		2	0.26	%
Other deposits		1,934	—		0.03	%
Customer payables		10,352		8	0.30	%
Broker-related payables and other		1,880		3	0.53	%
Other borrowings		752		6	2.95	%
Corporate debt		1,408		13	3.90	%
Total interest-bearing liabilities		56,848		46	0.32	%
Other interest expense^(b)	—			2
Total interest-bearing liabilities		56,848		48	0.33	%
Total non-interest-bearing liabilities		859
Total liabilities		57,707
Total shareholders' equity		6,696
Total liabilities and shareholders' equity	$	64,403
Excess interest earning assets over interest bearing liabilities/ net interest income/ net interest margin	$	3,264	$	466	3.10	%

Fees and Service Charges (dollars in millions)	Three Months Ended
	September 30, 2019		June 30, 2019		September 30, 2018
Money market funds and sweep deposits revenue^(a)	$	62	$	23	$	18
Order flow revenue		46		45		40
Advisor management and custody fees		19		19		19
Mutual fund service fees		13		13		13
Foreign exchange revenue		8		8		7
Reorganization fees		5		7		3
Other fees and service charges		10		11		8
Total fees and service charges	$	163	$	126	$	108

(a) Includes revenue earned on average customer cash held by third parties based on the federal funds rate or LIBOR plus a negotiated spread or other contractual arrangements with the third party institutions.

Explanation of Non-GAAP Measures

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. Management uses this non- GAAP information internally to evaluate operating performance and in formulating the budget for future periods. Management believes that the non-GAAP measures discussed below are appropriate for evaluating the operating and liquidity performance of the Company.

Adjusted Operating Margin

Adjusted operating margin is calculated by dividing adjusted income before income taxes by net revenue. Adjusted income before income taxes excludes the provision (benefit) for loan losses and losses on early extinguishment of debt. Management believes that excluding the provision (benefit) for loan losses and losses on early extinguishment of debt from operating margin provides a useful measure of the Company's ongoing operating performance because management excludes these when evaluating operating margin performance. See endnote (2) for a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure.

Adjusted Return on Common Equity

Adjusted return on common equity is calculated by dividing annualized adjusted net income available to common shareholders by average common shareholders' equity, which excludes preferred stock. Adjusted net income available to common shareholders excludes the after-tax impact of the provision (benefit) for loan losses and losses on early extinguishment of debt.

Management believes that excluding the provision (benefit) for loan losses and losses on early extinguishment of debt from net income available to common shareholders provides a useful measure of the Company's ongoing operating performance because management excludes these when evaluating return on common equity performance. See endnote (6) for a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure.

Tangible Common Equity Book Value per Share

Tangible common equity book value per share represents common shareholders’ equity, which excludes preferred stock, less goodwill and other intangible assets (net of related deferred tax liabilities) divided by common stock outstanding. The Company believes that tangible common equity book value per share is a measure of the Company’s capital strength. See endnote (7) for a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure.

Corporate Cash

Corporate cash represents cash held at the parent company as well as cash held in certain subsidiaries, not including bank and brokerage subsidiaries, that can distribute cash to the parent company without any regulatory approval or notification. The Company believes that corporate cash is a useful measure of the parent company’s liquidity as it is the primary source of capital above and beyond the capital deployed in regulated subsidiaries. See endnote (8) for a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure.

It is important to note that these non-GAAP measures may involve judgment by management and should be considered in addition to, not as substitutes for, or superior to, measures prepared in accordance with GAAP. For additional information on the adjustments to these non- GAAP measures, please see the Company’s financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that will be included in the periodic report the Company expects to file with the SEC with respect to the financial periods discussed herein.

ENDNOTES

(1) Records based on the period during which metric has been reported by the Company.

(2) 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. As noted above, adjusted operating margin is a non-GAAP measure. The following table provides a reconciliation of GAAP operating margin percentage to non-GAAP adjusted operating margin (dollars in millions):

	Q3 2019					Q2 2019					Q3 2018
	Amount			Operating Margin %		Amount			Operating Margin %		Amount			Operating Margin %
Income before income tax expense and operating margin^(a)	$	380		50	%	$	295		43	%	$	374		52	%
Provision (benefit) for loan losses		(12	)				(8	)				(34	)
Losses on early extinguishment of debt		—					—					4
Subtotal		(12	)				(8	)				(30	)
Adjusted income before income tax expense and adjusted operating margin(a)	$	368		48	%	$	287		42	%	$	344		48	%

(a) In Q2 2019, income before income tax expense and adjusted income before income tax expense includes $80 million of losses from balance sheet repositioning, which resulted in a 6 percentage point reduction to both operating margin and adjusted operating margin.

(3) Capital return to shareholders represents the amount returned to shareholders through share repurchases and common stock dividends.

(4) The following table presents the allowance for loan losses (dollars in millions):

	Q3 2019		Q4 2018
Allowance for loan losses, beginning	$	30	$	41
Provision (benefit) for loan losses		(12)		(12)
(Charge-offs) recoveries, net		9		8
Allowance for loan losses, ending	$	27	$	37

Loan servicing expense was $3 million, $3 million, and $5 million for the three months ended September 30, 2019, June 30, 2019, and September 30, 2018, respectively. Loan servicing expense was $9 million and $15 million for the nine months ended September 30, 2019 and 2018, respectively.

(5) Amounts and percentages may not recalculate due to rounding. For percentage based metrics, the variance represents the current period less the prior period. Net new account and asset growth rates have been annualized.

(6) Return on common equity is calculated by dividing annualized net income available to common shareholders by average common shareholders' equity, which excludes preferred stock. As noted above, adjusted return on common equity is a non-GAAP measure. 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):

	Q3 2019					Q2 2019					Q3 2018
	Amount			Return on Common Equity %		Amount			Return on Common Equity %		Amount			Return on Common Equity %
Net income available to common shareholders and return on common equity^(a)	$	254		17	%	$	219		15	%	$	261		17	%
Add back impact of the following items:
Provision (benefit) for loan losses		(12	)				(8	)				(34	)
Losses on early extinguishment of debt	—					—						4
Subtotal		(12	)				(8	)				(30	)
Income tax impact		3					2					8
Net of tax		(9	)				(6	)				(22	)
Adjusted net income available to common shareholders and return on common equity^(a)	$	245		16	%		213		14	%	$	239		16	%

(a) In Q2 2019, net income available to common shareholders and adjusted net income available to common shareholders includes $59 million of after-tax losses from balance sheet repositioning, which resulted in a 4 percentage point reduction to both return on common equity and adjusted return on common equity.

(7) As noted above, tangible common equity book value and tangible common equity book value per share are non-GAAP measures. The following table provides a reconciliation of GAAP common equity book value and common equity book value per share to non-GAAP tangible common equity book value and tangible common equity book value per share at period end (dollars in millions, except per share amounts):

	Q3 2019					Q2 2019					Q3 2018
	Amount			Per Share		Amount			Per Share		Amount			Per Share
Common equity book value	$	5,880		$	25.92	$	6,181		$	25.75	$	6,077		$	23.67
Less: Goodwill and other intangibles, net		(2,931	)				(2,946	)				(2,876	)
Add: Deferred tax liabilities related to goodwill and other intangibles, net		456					450					426
Tangible common equity book value	$	3,405		$	15.01	$	3,685		$	15.35	$	3,627		$	14.13

(8) As noted above, corporate cash is a non-GAAP measure. The following table provides a reconciliation of GAAP consolidated cash and equivalents to non-GAAP corporate cash at period end (dollars in millions):

	Q3 2019			Q2 2019			Q3 2018
Consolidated cash and equivalents	$	493		$	380		$	596
Less: Cash at regulated subsidiaries		(465	)		(373	)		(590	)
Add: Cash on deposit at E*TRADE Bank^(a)		352			316			511
Corporate cash	$	380		$	323		$	517

(a) Corporate cash includes the parent company's deposits placed with E*TRADE Bank. E*TRADE Bank may use these deposits for investment purposes; however, these investments are not included in consolidated cash and equivalents.

(9) Commissionable trades exclude trades related to no transaction fee mutual funds and commission-free exchange-traded funds, rebalancing trades associated with managed products, and other non-commissionable trades.

(10) Net new retail and advisor services assets exclude the effects of market movements in the value of retail and advisor services assets.

(11) The following table provides the components of total cash and deposits (dollars in billions):

	Q3 2019		Q2 2019		Q3 2018
Sweep deposits	$	30.8	$	31.7	$	38.0
Customer payables		11.2		10.6		10.5
Savings, checking and other banking assets^(a)		9.6		8.6		5.1
Total on-balance sheet cash		51.6		50.9		53.6
Sweep deposits at unaffiliated financial institutions		11.7		9.6		3.0
Money market funds and other		1.7		1.7		1.8
Total customer cash held by third parties^(b)		13.4		11.3		4.8
Total cash and deposits	$	65.0	$	62.2	$	58.4

(a) Includes $6.3 billion, $5.1 billion and $0.7 billion of deposits at September 30, 2019, June 30, 2019 and September 30, 2018, respectively, in our Premium Savings Account product.

(b) Customer cash held by third parties is held outside E*TRADE Financial and includes money market funds and sweep deposit accounts at unaffiliated financial institutions. Customer cash held by third parties is not reflected in the Company's consolidated balance sheet and is not immediately available for liquidity purposes.

(12) E*TRADE Financial and E*TRADE Bank's capital ratios are calculated as follows and are preliminary for the current period (dollars in millions):

	*ETRADE Financial**						*ETRADE Bank**
	Q3 2019			Q4 2018			Q3 2019			Q4 2018
Shareholders’ equity	$	6,569		$	6,562		$	3,662		$	3,557
Deduct:
Preferred stock		(689	)		(689	)	—			—
Common Equity Tier 1 capital before regulatory adjustments	$	5,880		$	5,873		$	3,662		$	3,557
Add:
Losses in other comprehensive income on available-for-sale debt securities, net of tax		24			275			24			275
Deduct:
Goodwill and other intangible assets, net of deferred tax liabilities		(2,475	)		(2,540	)		(279	)		(287	)
Disallowed deferred tax assets		(74	)		(200	)		(3	)		(61	)
Common Equity Tier 1 capital	$	3,355		$	3,408		$	3,404		$	3,484
Add:
Preferred stock		689			689		—			—
Tier 1 capital	$	4,044		$	4,097		$	3,404		$	3,484
Add:
Other		35			46			27			37
Total capital	$	4,079		$	4,143		$	3,431		$	3,521

Average assets for leverage capital purposes	$	61,364		$	64,767		$	46,126		$	49,568
Deduct:
Goodwill and other intangible assets, net of deferred tax liabilities		(2,475	)		(2,540	)		(279	)		(287	)
Disallowed deferred tax assets		(74	)		(200	)		(3	)		(61	)
Adjusted average assets for leverage capital purposes	$	58,815		$	62,027		$	45,844		$	49,220

Total risk-weighted assets^(a)	$	10,689		$	10,970		$	9,155		$	9,994

Tier 1 leverage ratio (Tier 1 capital / Adjusted average assets for leverage capital purposes)		6.9	%		6.6	%		7.4	%		7.1	%
Common Equity Tier 1 capital / Total risk-weighted assets^(a)		31.4	%		31.1	%		37.2	%		34.9	%
Tier 1 capital / Total risk-weighted assets		37.8	%		37.3	%		37.2	%		34.9	%
Total capital / Total risk-weighted assets		38.2	%		37.8	%		37.5	%		35.2	%

(a) Under the regulatory guidelines for risk-based capital, on-balance sheet assets, and credit equivalent amounts of derivatives and off-balance sheet items are assigned to one of several broad risk categories according to the obligor or, if relevant, the guarantor or the nature of any collateral. The aggregate dollar amount in each risk category is then multiplied by the risk weight associated with that category. The resulting weighted values from each of the risk categories are aggregated for determining total risk-weighted assets.

Contacts

E*TRADE Media Relations
646-521-4418
mediainq@etrade.com

E*TRADE Investor Relations
646-521-4406
ir@etrade.com

Document and Entity Information	Oct. 16, 2019
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 16, 2019
Entity Registrant Name	E*TRADE Financial Corporation
Entity Incorporation, State or Country Code	DE
Entity File Number	001-11921
Entity Tax Identification Number	94-2844166
Entity Address, Address Line One	11 Times Square
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10036
City Area Code	646
Local Phone Number	521-4300
Entity Information, Former Legal or Registered Name	Not Applicable
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0001015780
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	ETFC
Security Exchange Name	NASDAQ

Document and Entity Information

Oct. 16, 2019

Cover [Abstract]

Document Type

8-K

Amendment Flag

false

Document Period End Date

Oct. 16, 2019

Entity Registrant Name

E*TRADE Financial Corporation

Entity Incorporation, State or Country Code

Entity File Number

001-11921

Entity Tax Identification Number

94-2844166

Entity Address, Address Line One

11 Times Square

Entity Address, City or Town

New York

Entity Address, State or Province

Entity Address, Postal Zip Code

10036

City Area Code

646

Local Phone Number

521-4300

Entity Information, Former Legal or Registered Name

Not Applicable

Written Communications

false

Soliciting Material

false

Pre-commencement Tender Offer

false

Pre-commencement Issuer Tender Offer

false

Entity Emerging Growth Company

false

Entity Central Index Key

0001015780

Title of 12(b) Security

Common Stock, par value $0.01 per share

Trading Symbol

ETFC

Security Exchange Name

NASDAQ

Delaware	001-11921	94-2844166
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number)
11 Times Square, New York, New York 10036 (Address of Principal Executive Offices and Zip Code)

(d)	Exhibits

	99.1 Earnings Press Release, dated October 17, 2019
	104 Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document

	E*TRADE FINANCIAL CORPORATION


	By:	/s/ Lori S. Sher
		Lori S. Sher
		Corporate Secretary

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share	ETFC	The Nasdaq Stock Market LLC NASDAQ Global Select Market