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E*TRADE Financial Corporation Announces Third Quarter 2012 Results

Excluding the effect of these additional charge-offs, provision for loan losses increased $24 million from the prior quarter to $91 million (2). This sequential increase was due primarily to a decline of $16 million in put-back settlements.

Including the $50 million in charge-offs related to the aforementioned adjustments, net charge-offs in the quarter were $158 million, an increase of $38 million from the prior quarter. The allowance for loan losses at quarter-end was $508 million, down $17 million from the previous quarter. Despite the decline in the reserve balance, coverage ratios improved slightly across the portfolio.

For the Company’s entire loan portfolio, special mention delinquencies decreased six percent sequentially, and total at-risk delinquencies declined seven percent versus the second quarter. As compared to the year-ago period, both special mention delinquencies and total at-risk delinquencies declined 29 percent.

As of September 30, 2012, the Company reported a consolidated Tier 1 common ratio of 10.9 percent (3), up from 10.2 percent in the prior period and 9.3 percent at the end of the third quarter of 2011. E*TRADE Bank ended the quarter with Tier 1 leverage (4) and total risk-based capital ratios of 7.9 percent and 19.3 percent, compared with 7.9 percent and 18.0 percent, respectively, at the end of the prior period and 8.1 percent and 17.2 percent, respectively, in the year-ago period.

Historical metrics and financials can be found on the E*TRADE Financial Investor Relations website at

The Company will host a conference call to discuss the results beginning at 5:00 p.m. EDT today. This conference call will be available to domestic participants by dialing 888-754-4437 and international participants by dialing +44 (0) 800-528-0638 or 212-271-4651. No conference ID number is required. A live audio webcast and replay of this conference call will also be available at

About E*TRADE Financial

The E*TRADE Financial family of companies provides financial services including online brokerage and related banking products and services to retail investors. Specific business segments include Trading and Investing and Balance Sheet Management. Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Bank products and services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries and affiliates. More information is available at ETFC-E

Important Notices

E*TRADE Financial, E*TRADE and the E*TRADE logo are trademarks or registered trademarks of E*TRADE Financial Corporation.

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