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January 25, 2018

E*TRADE Announces Acquisition of More Than One Million Retail Brokerage Accounts with $18 Billion in Assets

E*TRADE Financial Corporation announced today it has entered into a definitive agreement to acquire more than one million retail brokerage accounts with $18 billion in customer assets from Capital One Financial Corporation for a purchase price of $170 million. As of December 31, 2017 these accounts carried $1.9 billion in customer cash, as well as $0.2 billion in customer margin balances.

"The attractiveness of this acquisition is directly attributable to the power and flexibility of our business model," said Karl Roessner, Chief Executive Officer. "Our inherent scalability positions us to efficiently bring on these accounts and materially expand our US household penetration. As the deal closes, we look forward to introducing these new customers to the depth, breadth, and best-in-class nature of our products and services, and to deepening our relationship with them."

E*TRADE expects the transaction to be relatively neutral to earnings in 2018 and approximately $0.06 accretive in 2019 when full run-rate synergies are expected. The Company intends to fund the transaction with existing corporate cash. The transaction is expected to close during the third quarter of 2018, subject to customary closing conditions and regulatory approvals.

E*TRADE was advised by Credit Suisse and Skadden, Arps, Slate, Meagher & Flom LLP. Capital One Financial was advised by Centerview Partners, Berkshire Capital, and Wachtell, Lipton, Rosen & Katz.

About E*TRADE Financial
Securities products and services are offered by E*TRADE Securities LLC, Member FINRA/SIPC. Investment advisory services are offered through E*TRADE Capital Management, LLC, a Registered Investment Adviser. Commodity futures and options futures products and services are offered by E*TRADE Futures LLC, Member NFA. Banking products and services are offered by E*TRADE Bank, a federal savings bank, Member FDIC, or its subsidiaries. E*TRADE Securities LLC, E*TRADE Capital Management, LLC, E*TRADE Futures LLC, and E*TRADE Bank are separate but affiliated companies. 

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