E Trade Financial 8K E*trade Financial Corporation Announces Strategic Plan to Better Align | ETFC 18 Sep 07

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

September 17, 2007

(All data as of 8/31/07)

Supplemental Portfolio Disclosure

EXHIBIT 99.2

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

This presentation contains certain projections or other forward-

looking statements regarding future events or the future

performance of the company. Various factors, including risks and

uncertainties referred to in the 10Ks, 10Qs, and other reports

E*TRADE FINANCIAL Corporation periodically files with the SEC,

could cause our actual results to differ materially from those

indicated by our projections or other forward-looking statements.

No statement is a guarantee of our future performance and we

disclaim any duty to update any data contained herein or any

forward-looking statements. Data contained herein are unaudited.

This presentation also contains disclosure of non-GAAP financial

measures. A reconciliation of these financial measures to the most

directly comparable GAAP financial measure can be found on the

investor relations site at www.etrade.com.

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

This document includes updated disclosure on the mortgage loan,

investment

security,

and

funding

sources

our

balance

sheet

August 31, 2007. E*TRADE FINANCIAL originally disclosed similar

information on August 16, 2007, with data as of June 30, 2007.

* Certain numbers and percentages contained herein may not recalculate due to rounding

Introduction

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Executive Summary

Our conservative approach to credit and funds management is demonstrated by the following

key points

First Lien Portfolio

As of August 31, 2007, the portfolio had a total unpaid principal balance of $17.0B and

delinquent loans of $338MM, or 1.98%

$17.0B portfolio is supported by high FICOs, low LTVs, and private mortgage insurance

All loans with an 80% or higher LTV are protected by private mortgage insurance

Home Equity Portfolio

As of August 31, 2007, the portfolio had a total unpaid principal balance of $12.6B and

delinquent loans of $349MM, or 2.78%

$9.4B,

75%,

portfolio

borrowers

with

FICOs

700

and

higher

$6.1B, or 48%, of portfolio has CLTV of 80% or lower

Investment Securities

$16.7B, or 92% of the Investment Securities portfolio is rated AAA or AA

$2.0B, or nearly 100% of the Corporate, Municipal and Preferred Stock portfolio are rated AAA

or AA

$2.7B, or 82%, of the Asset-Backed portfolio is rated A or higher

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Balance Sheet Funding Sources

Consistent and growing base of retail customer cash

Thrift charter provides access to FHLB -

$13B of additional borrowing

capacity

$250MM of undrawn committed senior secured revolving credit facility

$432MM of Free Cash

(1)

as of June 30, 2007

No material changes to date with respect to wholesale funding availability,

pricing or margin, including repurchase agreements

Executive Summary (continued)

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

August 31, 2007

Ending Period Interest Earning Assets

$61.1B

Loans

$40.2B

Securities

$18.2B

Avg. Rating: AA (92% AA-AAA)

Consumer: $2.7B

(Includes marine, RV)

Avg. FICO: 733

Mortgage: $29.6B

Avg. FICO:

735

DTI:

36%

CLTV:

73%

Margin: $7.9B

MBS: $12.9B

Agency

Avg. Rating: AAA

ABS: $3.3B

82% A or better

97% BBB or better

Avg. Rating

1st Lien (1-4 family): $17.0B

Avg. FICO:

738

DTI:

36%

CLTV:

69%

2nd Lien (HEIL & HELOC): $12.6B

Avg. FICO:

731

DTI:

36%

CLTV:

79%

Corp/Muni/Pfd: $2.0B

Avg. Rating: AA

Interest-Earning Assets Composition

NOTE: Loan balances are shown based on UPB, and securities are shown at amortized cost basis. Numbers may not add due to rounding.

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

First Lien Mortgage Loan Distribution by FICO

and LTV

FICO

0.1%

0.0%

<620

574

3.4%

0.2%

0.1%

278

1.6%

248

1.5%

659-620

1,063

6.2%

0.2%

584

3.4%

418

2.5%

679-660

11,320

66.4%

141

0.8%

122

0.7%

6,079

35.7%

4,978

29.2%

>=720

294

1.7%

0.3%

>90%

1,762

10.3%

0.2%

1,038

6.1%

640

3.8%

699-680

LTV

719-700

Total

<70%

909

5.3%

7,197

42.2%

70% -

80%

1,318

7.7%

9,305

54.6%

80% -

90%

0.2%

251

1.5%

Total

2,316

13.6%

17,047

100.0%

* Averages based upon 2006 engagement trends

(Unpaid principal

balances, $ in MM)

$17.0B portfolio is supported by high FICOs, low LTVs, and private mortgage

insurance

$545MM of loans with an 80% or higher LTV are protected by private mortgage

insurance

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

First Lien Delinquent Loan Distribution –

Traditional Method

(Unpaid principal

balances, $ in MM )

FICO

0.3%

0.0%

0.1%

0.2%

<620

11.6%

1.1%

0.7%

5.9%

3.9%

659-620

16.2%

1.1%

1.2%

9.6%

4.4%

679-660

138

40.8%

1.4%

1.0%

25.8%

12.6%

>=720

4.9%

0.6%

0.7%

>90%

16.2%

0.7%

11.7%

3.3%

699-680

LTV

719-700

Total

<70%

3.4%

27.7%

70% -

80%

9.8%

212

62.8%

80% -

90%

1.0%

4.6%

Total

14.9%

338

100.0%

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

First Lien Portfolio Attributes

Vintage

10%

20%

30%

40%

<=2003

2004

2005

2006

2007

Occupancy Type

20%

40%

60%

80%

100%

Owner Occupied

2nd Home / Vacation

Investor

Documentation Type

20%

40%

60%

Full / Alt Doc

SIVA

SISA

NINA

Geographic Concentration by MSA - Top 10

10%

12%

14%

NYC

Wash DC

San Jose

San Diego

Chi

Riverside

Phx

Den

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Home Equity Loan Distribution by FICO and CLTV

(Unpaid principal

balances, $ in MM )

$9.4B, or 75%, of portfolio to borrowers with FICOs

of 700 and higher

$6.1B, or 48%, of portfolio with CLTV of 80% or lower

FICO

0.1%

0.0%

0.1%

<620

616

4.8%

132

1.0%

238

1.9%

117

0.9%

129

1.0%

659-620

816

6.5%

215

1.7%

311

2.5%

128

1.0%

162

1.3%

679-660

7,374

58.8%

1,283

10.2%

2,076

16.5%

1,277

10.2%

2,738

21.9%

>=720

2,475

19.7%

385

3.1%

460

3.7%

>90%

1,753

13.9%

684

5.4%

316

2.5%

368

2.9%

699-680

CLTV

719-700

Total

<70%

451

3.6%

3,861

30.8%

70% -

80%

365

2.9%

2,206

17.5%

80% -

90%

719

5.7%

4,030

32.0%

Total

1,995

15.9%

12,572

100.0%

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Home Equity Delinquent Loan Distribution –

Traditional Method

(Unpaid principal

balances, $ in MM )

FICO

0.3%

0.0%

0.3%

<620

16.3%

4.6%

8.0%

2.3%

1.4%

659-620

15.3%

7.3%

5.7%

1.4%

0.9%

679-660

101

28.9%

14.0%

10.0%

2.9%

2.0%

>=720

156

44.8%

9.5%

9.4%

>90%

20.3%

7.4%

1.7%

699-680

CLTV

719-700

Total

<70%

0.9%

7.2%

70% -

80%

2.3%

10.6%

80% -

90%

6.3%

131

37.4%

Total

18.9%

349

100.0%

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Home Equity Portfolio Attributes

Vintage

10%

20%

30%

40%

50%

<=2003

2004

2005

2006

2007

Occupancy Type

20%

40%

60%

80%

100%

Owner Occupied

2nd Home / Vacation

Investor

Documentation Type

10%

20%

30%

40%

50%

Full / Alt Doc

Stated Income

Preferred

Geographic Concentration by MSA - Top 10

10%

NYC

Wash DC

Phx

Miami

Boston

San Diego

Riverside

Chi

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

We look first to the credit quality of a borrower, as indicated by FICO

and similar measures, for repayment of a loan. Should a loan

become delinquent, realized future losses will be dependent on a

number

factors

including,

but

not

limited

to,

cure

rates

(2)

local

real

estate dynamics and resulting loan-to-value (LTV)

The traditional method, as shown on previous pages, categorizes the

entire loan balance at the highest dollar LTV

The Principal at Risk (PAR) method is an internal approach that we

believe more appropriately depicts the unpaid principal balance by

tranching it against the supporting collateral value at time of

origination

The following example demonstrates how a $45,000 home equity loan

classified under the traditional method at a 95% CLTV can be

tranched to several PAR LTV thresholds under the PAR method

Principal at Risk (PAR) Method vs. Traditional

Method

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

First Lien Loan Distribution –

PAR Method

FICO

0.1%

0.0%

0.1%

<620

574

3.4%

0.0%

0.2%

536

3.1%

659-620

1,063

6.2%

0.0%

0.4%

993

5.8%

679-660

11,320

66.4%

0.1%

617

3.6%

10,669

62.6%

>=720

0.1%

0.0%

>90%

1,762

10.3%

0.0%

111

0.7%

1,641

9.6%

699-680

PAR

LTV

719-700

Total

<70%

2,164

12.7%

16,015

94.0%

70% -

80%

141

0.8%

963

5.6%

80% -

90%

0.0%

0.3%

Total

2,316

13.6%

17,047

100.0%

* Averages based upon 2006 engagement trends

(Unpaid principal

balances, $ in MM)

$17.0B portfolio is well supported by high FICOs, low LTVs, and private mortgage

insurance

$69MM of exposure greater than 80% of property value is protected by private

mortgage insurance

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

First Lien Delinquent Loan Distribution –

PAR

Method

FICO

0.3%

0.0%

0.3%

<620

11.6%

0.1%

0.2%

0.7%

10.6%

659-620

16.2%

0.1%

0.2%

1.2%

14.7%

679-660

138

40.8%

0.1%

0.2%

3.0%

127

37.5%

>=720

0.3%

0.0%

>90%

16.2%

0.1%

1.3%

14.7%

699-680

PAR

LTV

719-700

Total

<70%

13.5%

310

91.3%

70% -

80%

1.2%

7.5%

80% -

90%

0.1%

0.9%

Total

14.9%

338

100.0%

* Averages based upon 2006 engagement trends

(Unpaid principal

balances, $ in MM)

98.8% of delinquent balances are mitigated by PAR LTV of 80% or lower

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Home Equity Loan Distribution –

PAR Method

* Averages based upon 2006 engagement trends

(Unpaid principal

balances, $ in MM )

$8.6B, or 69%, of portfolio has a CLTV of 80% or below

Of the $4.0B in loans with CLTV above 80%, $2.7B are to borrowers with

FICOs

of 700 or higher

FICO

0.1%

0.0%

0.1%

<620

616

4.8%

0.4%

196

1.6%

126

1.0%

244

1.8%

659-620

816

6.5%

0.7%

267

2.1%

156

1.2%

310

2.5%

679-660

7,374

58.8%

464

3.7%

1,555

12.4%

1,221

9.7%

4,134

33.0%

>=720

906

7.2%

141

1.1%

168

1.3%

>90%

1,753

13.9%

501

4.0%

385

3.1%

726

5.7%

699-680

PAR

CLTV

719-700

Total

<70%

876

7.0%

6,306

50.1%

70% -

80%

425

3.4%

2,314

18.4%

80% -

90%

526

4.2%

3,046

24.3%

Total

1,995

15.9%

12,572

100.0%

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Home Equity Delinquent Loan Distribution –

PAR

Method

* Averages based upon 2006 engagement trends

(Unpaid principal

balances, $ in MM )

$201MM, or 58%, of delinquent balances have a PAR CLTV of over 80%

$167MM, or 48%, of delinquent balances have a FICO of 700 or greater

FICO

0.3%

0.0%

0.3%

<620

16.3%

1.7%

6.6%

3.7%

4.3%

659-620

15.3%

2.9%

6.9%

2.9%

2.6%

679-660

101

28.9%

5.7%

11.1%

5.2%

6.9%

>=720

17.7%

3.7%

>90%

20.3%

8.0%

4.3%

699-680

PAR

CLTV

719-700

Total

<70%

4.0%

22.4%

70% -

80%

4.0%

20.1%

80% -

90%

7.2%

139

39.8%

Total

18.9%

349

100.0%

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Loan Risk Mitigation Discipline

Geographic diversification with no single MSA greater than 10%

of mortgage loan portfolio

Low leveraged borrowers with average debt-to-income ratio of

35% across mortgage portfolio

No option or negative amortization ARMs

Top Sellers/Originators of mortgage loan portfolio with 70% of

$29.6B in unpaid principal balance from:

Bank of America

JPMorgan

Countrywide

Morgan Stanley

E-Loan

National City

E*TRADE

(3)

UBS

GMAC

Wells Fargo

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Risk Mitigation Strategy

Growth sources –

Portfolio growth, if any, will be driven

by prime first lien mortgage loans

Mix shift -

Allow home equity and consumer loan

portfolios to decline with repayments/prepayments

Credit line management –

Evaluate revolving credit

borrowers, reducing available lines based on leading

indicators

Loan modifications –

Provide rate and term

modifications to qualified borrowers

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Investment Securities Composition

3,275

18.0%

0.4%

464

2.6%

887

4.9%

1,785

9.8%

ABS

0.4%

Below

Inv.

Grade

2,046

11.2%

0.1%

2,030

11.2%

Corporate, Municipal and Preferred Stock

18,181

100.0%

0.4%

464

2.6%

904

5.0%

16,674

91.7%

Grand Total

12,860

70.7%

Grand

Total

Non-

Rated

12,859

70.7%

AA or

Higher

BBB

MBS

0.0%

($ in MM, based on book value)

$16.7B, or 92%, of the Investment Securities portfolio is rated AAA or AA

Over 99% of the Investment Securities portfolio is rated investment grade

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Mortgage-Backed Securities Breakdown

Below

Inv.

Grade

1,271

70.0%

0.0%

1,270

7.0%

Private Label CMO

12,860

70.7%

0.0%

12,859

70.7%

Total

11,589

63.8%

Total

Non-

Rated

11,589

63.8%

AA or

Higher

BBB

Agency MBS/CMO

($ in MM, based on book value)

Nearly all of the $12.9B MBS portfolio is rated AAA

Percentages are measured as a percent of the $18.2B Investment Securities Portfolio

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Corporate, Municipal and Preferred Stock

126

0.7%

0.1%

110

0.6%

Corporate Bonds ($78mm FNMA Note)

2,046

11.2%

0.1%

2,030

11.2%

Total

473

2.6%

512

2.8%

935

5.1%

Total

Non-

Rated

Below

Inv.

Grade

473

2.6%

512

2.8%

935

5.1%

AA or

Higher

BBB

Municipal Bonds

Agency Preferred Stock (FNM, FRE)

FHLB Stock

($ in MM, based on book value)

Nearly all of the Municipal bond, Agency stock and Corporate bond portfolio

is rated AAA or AA

Percentages are measured as a percent of the $18.2B Investment Securities Portfolio

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Asset-Backed Securities Breakdown

0.3%

0.1%

0.0%

0.1%

0.0%

Other

0.5%

0.1%

0.3%

0.2%

0.0%

Sub-prime Residential First Lien Mortgage

3,275

18.0%

178

1.0%

257

1.4%

450

2.5%

2,243

12.3%

Total

0.4%

0.1%

0.2%

Non-

Rated

0.4%

0.3%

0.0%

Below

Inv.

Grade

1,785

9.8%

0.3%

125

0.7%

224

1.2%

1,369

7.5%

AA or

Higher

0.1%

0.2%

Second Liens

464

2.6%

0.2%

0.3%

292

1.6%

BBB

Prime Residential First Lien Mortgage

582

3.2%

ABS CDO

149

0.8%

Commercial Real Estate & Trust Pfd CDO

0.4%

Total

887

4.9%

($ in MM, based on book value)

$2.7B, or 82%, of ABS portfolio is rated A or higher

Non-rated and below investment grade securities are $139MM, or 0.8% of

Investment Securities portfolio

Note: Includes $79MM of securities classified as Trading Securities

Percentages are measured as a percent of the $18.2B Investment Securities Portfolio

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Asset-Backed Securities Portfolio

The net growth in the portfolio quarter-to-date has occurred nearly

exclusively in the AA-AAA rating bucket

From June 30th through August 31st, there have been two issues upgraded

(3 bonds for $20M) and twelve issues downgraded (17 bonds for $116M) in

the portfolio. All of the downgrades have been in the second lien sector and

account for all of the increase in the Below Investment Grade (BIG)

category

Asset Backed Securities Portfolio

$500

$1,000

$1,500

$2,000

AA-AAA

BBB

BIG

6/30/2007

8/31/2007

Second Lien Securities Portfolio

$25

$50

$75

$100

AA-AAA

BBB

BIG

6/30/2007

8/31/2007

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Prime Residential First Lien Mortgage Securities

(Alt-A)

Weighted Average original FICO = 723; LTV = 72%

No bonds within our Alt-A portfolio have been downgraded

Recent performance and a continuation of recent performance will

not result

in material impairments

Percentages are measured as a percent of the $18.2B Investment Securities Portfolio

($ in MM, based on book value)

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Sub-prime Residential First Lien Mortgage

Securities

Weighted Average original FICO = 635; LTV = 82%

Since the beginning of July, Moody’s has downgraded 421 subprime

tranches

issued in 2006, while S&P has downgraded 498. Both rating

agencies continue to have additional tranches

on downgrade watch

There have not been any downgrades in our current subprime

portfolio

year-to-date. Recent performance and a continuation of recent performance

will not result in any significant impairments

Percentages are measured as a percent of the $18.2B Investment Securities

Portfolio

($ in MM, based on book value)

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

ABS, Commercial Real Estate and Trust Preferred

CDOs

Bonds rated AA or higher are adequately supported by excess

collateralization. No impairments in these bonds are expected

The most immediate risk of impairment for certain lower rated (<AA) CDO

bonds will be diversion of cash flow as required under pre-determined

performance criteria. The effect of this criteria is to redirect cash flow from

lower

rated

bonds

higher

rated

bonds.

Continued

deterioration

could

lead

to future impairments

257

1.4%

450

2.5%

Grand

Total

0.1%

0.2%

Non-

Rated

0.0%

Below

Inv.

Grade

125

0.7%

224

1.2%

AA or

Higher

0.2%

0.3%

BBB

ABS CDO

149

0.8%

Commercial Real Estate & Trust Pfd CDO

0.4%

(Unpaid principal balances, $ in MM )

Percentages are measured as a percent of the $18.2B Investment Securities Portfolio

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Second Lien Mortgage Securities

Weighted Average FICO = 682; CLTV = 97%

On August 16th, Moody’s downgraded 691 tranches

of 2006 second

liens deals, representing 84% of all such deals Moody’s rated.

Approximately 61% of the universe of 2006 Second Lien Baa2 bonds

are now at defaulted ratings (Ca/C)

Cumulative losses to date of 6% to 8% have nearly exceeded initial

lifetime expectations of 10%. Recent performance and a

continuation of recent performance will result in substantial

impairments

Percentages are measured as a percent of the $18.2B Investment Securities Portfolio

($ in MM, based on book value)

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Balance Sheet Funding Sources

Retail Deposits and Customer Payables

$34B –

84% from customers who also hold an investing account

Average

Quarterly

Growth

Total

Customer

Cash

and

Deposits

$1.6B

(4)

Wholesale Borrowings

Thrift charter provides access to FHLB

Approximately $13B of excess borrowing capacity

$12B in repurchase agreements

Primarily AAA FNMA and GNMA backed transactions

Diversified maturities with a strong group of over 20 counterparties

Not dependent on warehouse lines

Access to the Federal Reserve Discount Window

No material changes to date with respect to wholesale funding availability, pricing or margin,

including repurchase agreements

Corporate Liquidity

$250MM undrawn committed senior secured revolving credit facility

$432MM

Free

Cash

(1)

June

30,

2007

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

Endnotes and Glossary of Terms

Endnotes:

(1) Free cash represents cash held at the Company and its non-Bank and non-Brokerage subsidiaries, less

discretionary reserves, plus excess capital at Bank and Brokerage after application of regulatory capital

requirements and the Company’s own regulatory capital guidelines.

(2) Cure rates represent the rate of currently delinquent balances that return to performing status and/or fully

pay off.

(3) Includes direct and wholesale originated loans.

(4) Average organic quarterly total cash and deposit growth since 12/31/2005.

Terms:

ARM –

Adjustable Rate Mortgage

CDO –

Collateralized Debt Obligation

CLTV –

Combined Loan-to-Value

DTI –

Debt-to-Income

FHLB –

Federal Home Loan Bank

HELOC –

Home Equity Line of Credit

HEIL –

Home Equity Installment Loan

LTV –

Loan-to-Value

PMI –

Private Mortgage Insurance

MSA –

Metropolitan Statistical Area

NINA –

No Income No Asset

SISA –

Stated Income Stated Assets

SIVA –

Stated Income Verified Assets

This presentation contains confidential information and may not be disclosed without

E*TRADE FINANCIAL Corporation’s written permission.

E Trade Financial (ETFC) 8-KE*trade Financial Corporation Announces Strategic Plan to Better Align