EXHIBIT 99.1
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY REPORTED BASIS
| (in millions, except per share data and as noted) | 2004 Q1 | 2003 Q4 | 2003 Q3 | 2003 Q2 | 2003 Q1 | |||||||||||||||
Earnings (Reported Basis) | ||||||||||||||||||||
Net Interest Income | $ | 732.0 | $ | 664.1 | $ | 703.9 | $ | 682.3 | $ | 734.8 | ||||||||||
Non-Interest Income | 1,443.1 | 1,437.5 | 1,363.2 | 1,310.6 | 1,304.6 | |||||||||||||||
Total Revenue(1) | 2,175.1 | 2,101.6 | 2,067.1 | 1,992.9 | 2,039.4 | |||||||||||||||
Provision for Loan Losses | 243.7 | 390.4 | 364.1 | 387.1 | 375.9 | |||||||||||||||
Marketing Expenses | 255.1 | 290.1 | 316.0 | 270.6 | 241.7 | |||||||||||||||
Operating Expenses | 969.7 | 999.3 | 925.8 | 881.0 | 932.2 | |||||||||||||||
Income Before Taxes and Accounting Change | 706.6 | 421.7 | 461.2 | 454.2 | 489.6 | |||||||||||||||
Tax Rate | 36.2 | % | 37.0 | % | 37.0 | % | 37.0 | % | 37.0 | % | ||||||||||
Cumulative Effect of Accounting Change, net of tax(2) | — | — | 15.0 | — | — | |||||||||||||||
Net Income | $ | 450.8 | $ | 265.7 | $ | 275.5 | $ | 286.2 | $ | 308.5 | ||||||||||
Common Share Statistics | ||||||||||||||||||||
Basic EPS | $ | 1.94 | $ | 1.16 | $ | 1.23 | $ | 1.28 | $ | 1.38 | ||||||||||
Diluted EPS | $ | 1.84 | $ | 1.11 | $ | 1.17 | $ | 1.23 | $ | 1.35 | ||||||||||
Dividends Per Share | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 | ||||||||||
Book Value Per Share (period end) | $ | 28.54 | $ | 25.75 | $ | 24.53 | $ | 23.37 | $ | 21.78 | ||||||||||
Stock Price Per Share (period end) | $ | 75.43 | $ | 61.29 | $ | 57.04 | $ | 49.18 | $ | 30.01 | ||||||||||
Total Market Capitalization (period end) | $ | 18,084.9 | $ | 14,405.7 | $ | 13,073.6 | $ | 11,170.0 | $ | 6,791.8 | ||||||||||
Shares Outstanding (period end) | 239.8 | 235.0 | 229.2 | 227.1 | 226.3 | |||||||||||||||
Shares Used to Compute Basic EPS | 232.0 | 228.1 | 224.6 | 223.7 | 223.0 | |||||||||||||||
Shares Used to Compute Diluted EPS | 245.4 | 239.2 | 236.3 | 232.6 | 228.4 | |||||||||||||||
Reported Balance Sheet Statistics (period avg.) | ||||||||||||||||||||
Average Loans | $ | 32,878 | $ | 31,297 | $ | 28,949 | $ | 27,101 | $ | 27,316 | ||||||||||
Average Earning Assets | $ | 44,112 | $ | 40,792 | $ | 38,133 | $ | 36,298 | $ | 34,144 | ||||||||||
Average Assets | $ | 47,699 | $ | 45,002 | $ | 41,704 | $ | 39,678 | $ | 38,318 | ||||||||||
Average Equity | $ | 6,443 | $ | 5,887 | $ | 5,424 | $ | 5,148 | $ | 4,823 | ||||||||||
Return on Average Assets (ROA) | 3.78 | % | 2.36 | % | 2.64 | % | 2.89 | % | 3.22 | % | ||||||||||
Return on Average Equity (ROE) | 27.99 | % | 18.05 | % | 20.32 | % | 22.24 | % | 25.59 | % | ||||||||||
Reported Balance Sheet Statistics (period end) | ||||||||||||||||||||
Loans | $ | 33,172 | $ | 32,850 | $ | 30,618 | $ | 26,849 | $ | 27,634 | ||||||||||
Total Assets | $ | 49,146 | $ | 46,284 | $ | 43,446 | $ | 40,367 | $ | 37,911 | ||||||||||
Capital(3) | $ | 7,675 | $ | 6,882 | $ | 6,450 | $ | 6,130 | $ | 5,749 | ||||||||||
Loan growth | $ | 321 | $ | 2,232 | $ | 3,769 | $ | (785 | ) | $ | 290 | |||||||||
% Loan Growth Q Over Q (annualized) | 4 | % | 29 | % | 56 | % | (11 | )% | 4 | % | ||||||||||
% Loan Growth Y Over Y | 20 | % | 20 | % | 11 | % | 10 | % | 15 | % | ||||||||||
Capital to Assets Ratio | 15.62 | % | 14.87 | % | 14.85 | % | 15.19 | % | 15.16 | % | ||||||||||
Capital plus Allowance to Assets Ratio | 18.66 | % | 18.31 | % | 18.46 | % | 19.12 | % | 19.48 | % | ||||||||||
Revenue & Expense Statistics (Reported) | ||||||||||||||||||||
Net Interest Income Growth (annualized) | 41 | % | (23 | )% | 13 | % | (29 | )% | 2 | % | ||||||||||
Non Interest Income Growth (annualized) | 2 | % | 22 | % | 16 | % | 2 | % | (5 | )% | ||||||||||
Revenue Growth (annualized) | 14 | % | 7 | % | 15 | % | (9 | )% | (2 | )% | ||||||||||
Net Interest Margin | 6.64 | % | 6.51 | % | 7.38 | % | 7.52 | % | 8.61 | % | ||||||||||
Revenue Margin | 19.72 | % | 20.61 | % | 21.68 | % | 21.96 | % | 23.89 | % | ||||||||||
Risk Adjusted Margin(4) | 16.62 | % | 17.02 | % | 17.66 | % | 17.16 | % | 18.49 | % | ||||||||||
Loan Revenue Margin(5) | 26.44 | % | 26.78 | % | 28.51 | % | 29.46 | % | 29.73 | % | ||||||||||
Loan Risk Adjusted Margin(6) | 22.27 | % | 22.10 | % | 23.22 | % | 23.03 | % | 22.97 | % | ||||||||||
Operating Expense as a % of Revenues | 44.58 | % | 47.55 | % | 44.79 | % | 44.21 | % | 45.71 | % | ||||||||||
Operating Expense as a % of Avg Loans (annualized) | 11.80 | % | 12.77 | % | 12.79 | % | 13.00 | % | 13.65 | % | ||||||||||
Asset Quality Statistics (Reported) | ||||||||||||||||||||
Allowance | $ | 1,495 | $ | 1,595 | $ | 1,570 | $ | 1,590 | $ | 1,635 | ||||||||||
30+ Day Delinquencies | $ | 1,266 | $ | 1,573 | $ | 1,540 | $ | 1,507 | $ | 1,490 | ||||||||||
Net Charge-Offs | $ | 342 | $ | 366 | $ | 383 | $ | 436 | $ | 462 | ||||||||||
Allowance as a % of Reported Loans | 4.51 | % | 4.86 | % | 5.13 | % | 5.92 | % | 5.92 | % | ||||||||||
Delinquency Rate (30+ days) | 3.82 | % | 4.79 | % | 5.03 | % | 5.61 | % | 5.39 | % | ||||||||||
Net Charge-Off Rate | 4.17 | % | 4.68 | % | 5.30 | % | 6.43 | % | 6.76 | % | ||||||||||
(1) In accordance with the Company’s finance charge and fee revenue recognition policy, the amounts billed to customers but not recognized as revenue were as follows: Q1 2004 - $258.9 million, Q4 2003 - $454.8 million, Q3 2003 - $481.0 million, Q2 2003 - $497.3 million, and Q1 2003 - $519.7 million.
(2) Net charge from the adoption of FASB Interpretation No. 46,Consolidation of Variable Interest Entities.
(3) Includes preferred interests and mandatory convertible securities.
(4) Risk adjusted margin is total revenue less net charge-offs as a percentage of average earning assets.
(5) Loan revenue margin is total loan revenue, loan interest income less interest expense plus non-interest income, as a percent of average loans outstanding for the period. Loan interest expense is calculated using the cost of funds rate applied to the average consumer loan balance.
(6) Loan risk adjusted margin is total loan revenue, loan net interest income and non-interest income, less net charge-offs as a percentage of average loans outstanding for the period.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY MANAGED BASIS(1)
| (in millions, except per share data and as noted) | 2004 Q1 | 2003 Q4 | 2003 Q3 | 2003 Q2 | 2003 Q1 | |||||||||||||||
Earnings (Managed Basis) | ||||||||||||||||||||
Net Interest Income | $ | 1,677.1 | $ | 1,571.7 | $ | 1,500.8 | $ | 1,457.5 | $ | 1,508.0 | ||||||||||
Non-Interest Income | 1,014.5 | 1,077.5 | 1,049.2 | 1,046.0 | 1,027.9 | |||||||||||||||
Total Revenue(2) | 2,691.6 | 2,649.2 | 2,550.0 | 2,503.5 | 2,535.9 | |||||||||||||||
Provision for Loan Losses | 760.1 | 938.0 | 847.0 | 897.7 | 872.3 | |||||||||||||||
Marketing Expenses | 255.1 | 290.1 | 316.0 | 270.6 | 241.7 | |||||||||||||||
Operating Expenses | 969.7 | 999.3 | 925.8 | 881.0 | 932.2 | |||||||||||||||
Income Before Taxes and Accounting Change | 706.6 | 421.7 | 461.2 | 454.2 | 489.6 | |||||||||||||||
Tax Rate | 36.2 | % | 37.0 | % | 37.0 | % | 37.0 | % | 37.0 | % | ||||||||||
Cumulative Effect of Accounting Change, net of tax(3) | — | — | 15.0 | — | — | |||||||||||||||
Net Income | $ | 450.8 | $ | 265.7 | $ | 275.5 | $ | 286.2 | $ | 308.5 | ||||||||||
Managed Balance Sheet Statistics (period avg.) | ||||||||||||||||||||
Average Loans | $ | 71,148 | $ | 68,679 | $ | 63,691 | $ | 59,916 | $ | 59,250 | ||||||||||
Average Earning Assets | $ | 80,495 | $ | 76,277 | $ | 71,022 | $ | 67,451 | $ | 64,602 | ||||||||||
Average Assets | $ | 85,324 | $ | 81,733 | $ | 75,831 | $ | 71,913 | $ | 69,670 | ||||||||||
Return on Average Assets (ROA) | 2.11 | % | 1.30 | % | 1.45 | % | 1.59 | % | 1.77 | % | ||||||||||
Managed Balance Sheet Statistics (period end) | ||||||||||||||||||||
Loans | $ | 71,817 | $ | 71,245 | $ | 67,260 | $ | 60,736 | $ | 59,214 | ||||||||||
Total Assets | $ | 87,197 | $ | 83,999 | $ | 79,465 | $ | 73,636 | $ | 68,927 | ||||||||||
Loan Growth | $ | 572 | $ | 3,985 | $ | 6,524 | $ | 1,522 | $ | (533 | ) | |||||||||
% Loan Growth Q over Q (annualized) | 3 | % | 24 | % | 43 | % | 10 | % | (4 | )% | ||||||||||
% Loan Growth Y over Y | 21 | % | 19 | % | 18 | % | 14 | % | 22 | % | ||||||||||
Capital to Assets Ratio | 8.80 | % | 8.19 | % | 8.12 | % | 8.33 | % | 8.34 | % | ||||||||||
Capital plus Allowance to Assets Ratio | 10.52 | % | 10.09 | % | 10.09 | % | 10.48 | % | 10.71 | % | ||||||||||
Number of Accounts (000’s) | 46,712 | 47,038 | 46,406 | 45,785 | 46,423 | |||||||||||||||
% Off-Balance Sheet Securitizations | 53 | % | 53 | % | 54 | % | 55 | % | 53 | % | ||||||||||
% at Introductory Rate | 8 | % | 10 | % | 11 | % | 10 | % | 9 | % | ||||||||||
Revenue & Expense Statistics (Managed) | ||||||||||||||||||||
Net Interest Income Growth (annualized) | 27 | % | 19 | % | 12 | % | (13 | )% | 18 | % | ||||||||||
Non Interest Income Growth (annualized) | (23 | )% | 11 | % | 1 | % | 7 | % | (22 | )% | ||||||||||
Revenue Growth (annualized) | 6 | % | 16 | % | 7 | % | (5 | )% | 1 | % | ||||||||||
Net Interest Margin | 8.33 | % | 8.24 | % | 8.45 | % | 8.64 | % | 9.34 | % | ||||||||||
Revenue Margin | 13.38 | % | 13.89 | % | 14.36 | % | 14.85 | % | 15.70 | % | ||||||||||
Risk Adjusted Margin(4) | 9.11 | % | 9.10 | % | 9.48 | % | 9.23 | % | 9.77 | % | ||||||||||
Loan Revenue Margin(5) | 15.26 | % | 15.54 | % | 16.15 | % | 16.87 | % | 17.20 | % | ||||||||||
Loan Risk Adjusted Margin(6) | 10.43 | % | 10.22 | % | 10.71 | % | 10.56 | % | 10.73 | % | ||||||||||
Operating Expense as a % of Revenues | 36.03 | % | 37.72 | % | 36.31 | % | 35.19 | % | 36.76 | % | ||||||||||
Operating Expense as a % of Avg Loans (annualized) | 5.45 | % | 5.82 | % | 5.81 | % | 5.88 | % | 6.29 | % | ||||||||||
Asset Quality Statistics (Managed) | ||||||||||||||||||||
30+ Day Delinquencies | $ | 2,731 | $ | 3,178 | $ | 3,126 | $ | 3,004 | $ | 2,942 | ||||||||||
Net Charge-Offs | $ | 859 | $ | 914 | $ | 866 | $ | 946 | $ | 958 | ||||||||||
Delinquency Rate (30+ days) | 3.80 | % | 4.46 | % | 4.65 | % | 4.95 | % | 4.97 | % | ||||||||||
Net Charge-Off Rate | 4.83 | % | 5.32 | % | 5.44 | % | 6.32 | % | 6.47 | % | ||||||||||
(1) The information in this statistical summary reflects the adjustment to add back the effect of securitization transactions qualifying as sales under generally accepted accounting principles. See accompanying schedule—“Reconciliation to GAAP Financial Measures”.
(2) In accordance with the Company’s finance charge and fee revenue recognition policy, the amounts billed to customers but not recognized as revenue were as follows: Q1 2004 - $258.9 million, Q4 2003 - $454.8 million, Q3 2003 - $481.0 million, Q2 2003 - $497.3 million, and Q1 2003 - $519.7 million.
(3) Net charge from the adoption of FASB Interpretation No. 46,Consolidation of Variable Interest Entities.
(4) Risk adjusted margin is total revenue less net charge-offs as a percentage of average earning assets.
(5) Loan revenue margin is total loan revenue, loan interest income less interest expense plus non-interest income, as a percent of average loans outstanding for the period. Loan interest expense is calculated using the cost of funds rate applied to the average consumer loan balance.
(6) Loan risk adjusted margin is total loan revenue, loan net interest income and non-interest income, less net charge-offs as a percentage of average loans outstanding for the period.
CAPITAL ONE FINANCIAL CORPORATION (COF)
SEGMENT FINANCIAL & STATISTICAL SUMMARY—MANAGED BASIS(1)
| (in millions, except per share data and as noted) | 2004 Q1 | 2003 Q4 | 2003 Q3 | 2003 Q2 | 2003 Q1 | |||||||||||||||
Segment Statistics | ||||||||||||||||||||
US Card: | ||||||||||||||||||||
Loans receivable | $ | 45,298 | $ | 46,279 | $ | 44,300 | $ | 39,318 | $ | 38,737 | ||||||||||
Net income (loss) | $ | 386.8 | $ | 322.7 | $ | 276.2 | $ | 274.2 | $ | 308.1 | ||||||||||
Net charge-off rate | 5.41 | % | 6.16 | % | 6.16 | % | 7.63 | % | 7.72 | % | ||||||||||
Delinquency rate (30+ days) | 3.99 | % | 4.60 | % | 4.88 | % | 5.42 | % | 5.55 | % | ||||||||||
Auto Finance: | ||||||||||||||||||||
Loans receivable | $ | 8,834 | $ | 8,467 | $ | 8,008 | $ | 7,380 | $ | 7,742 | ||||||||||
Net income (loss) | $ | 30.7 | $ | 34.4 | $ | 27.3 | $ | 44.0 | $ | (6.5 | ) | |||||||||
Net charge-off rate | 4.13 | % | 4.30 | % | 5.10 | % | 4.22 | % | 4.91 | % | ||||||||||
Delinquency rate (30+ days) | 5.44 | % | 7.55 | % | 7.07 | % | 6.97 | % | 5.37 | % | ||||||||||
Global Financial Services: | ||||||||||||||||||||
Loans receivable | $ | 17,643 | $ | 16,508 | $ | 14,960 | $ | 14,046 | $ | 12,726 | ||||||||||
Net income (loss) | $ | 50.9 | $ | 3.3 | $ | 21.0 | $ | 25.5 | $ | 14.9 | ||||||||||
Net charge-off rate | 3.60 | % | 3.69 | % | 3.78 | % | 3.95 | % | 3.95 | % | ||||||||||
Delinquency rate (30+ days) | 2.63 | % | 2.70 | % | 2.87 | % | 2.81 | % | 2.98 | % | ||||||||||
(1) The information in this statistical summary reflects the adjustment to add back the effect of securitization transactions qualifying as sales under generally accepted accounting principles. See accompanying schedule—“Reconciliation to GAAP Financial Measures”.
CAPITAL ONE FINANCIAL CORPORATION
Reconciliation to GAAP Financial Measures
For the Three Months Ended March 31, 2004
(dollars in thousands)(unaudited)
The Company’s consolidated financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) are referred to as its “reported” financial statements. Loans included in securitization transactions which qualified as sales under GAAP have been removed from the Company’s “reported” balance sheet. However, interest income, interchange, fees and recoveries generated from the securitized loan portfolio net of charge-offs in excess of the interest paid to investors of asset-backed securitizations are recognized as non-interest income on the “reported” income statement.
The Company’s “managed” consolidated financial statements add back the effects of securitization transactions qualifying as sales under GAAP. The Company generates earnings from its “managed” loan portfolio which includes both the on-balance sheet loans and off-balance sheet loans. The Company’s “managed” income statement takes the components of the non-interest income generated from the securitized portfolio and distributes the revenue to appropriate income statement line items from which it originated. For this reason the Company believes the “managed” consolidated financial statements and related managed metrics to be useful to stakeholders.
| Total Reported | Adjustments(1) | Total Managed(2) | ||||||||
Income Statement Measures | ||||||||||
Net interest income | $ | 732,022 | $ | 945,056 | $ | 1,677,078 | ||||
Non-interest income | $ | 1,443,134 | $ | (428,598 | ) | $ | 1,014,536 | |||
Total revenue | $ | 2,175,156 | $ | 516,458 | $ | 2,691,614 | ||||
Provision for loan losses | $ | 243,668 | $ | 516,458 | $ | 760,126 | ||||
Net charge-offs | $ | 342,391 | �� | $ | 516,458 | $ | 858,849 | |||
Balance Sheet Measures | ||||||||||
Consumer loans | $ | 33,171,516 | $ | 38,645,386 | $ | 71,816,902 | ||||
Total assets | $ | 49,146,425 | $ | 38,050,487 | $ | 87,196,912 | ||||
Average consumer loans | $ | 32,877,525 | $ | 38,270,762 | $ | 71,148,287 | ||||
Average earning assets | $ | 44,111,541 | $ | 36,383,693 | $ | 80,495,234 | ||||
Average total assets | $ | 47,699,012 | $ | 37,625,031 | $ | 85,324,043 | ||||
Delinquencies | $ | 1,266,425 | $ | 1,464,913 | $ | 2,731,338 | ||||
(1) Includes adjustments made related to the effects of securitization transactions qualifying as sales under GAAP and adjustments made to reclassify to “managed” loans outstanding the collectible portion of billed finance charge and fee income on the investors’ interest in securitized loans excluded from loans outstanding on the “reported” balance sheet in accordance with Financial Accounting Standards Board Staff Position, “Accounting for Accrued Interest Receivable Related to Securitized and Sold Receivables under FASB Statement 140,Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”, issued April 2003.
(2) The Managed loan portfolio does not include auto loans which have been sold in whole loan sale transactions where the Company has retained servicing rights.
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Balance Sheets
(in thousands)(unaudited)
| March 31 2004 | December 31 2003 | March 31 2003 | ||||||||||
Assets: | ||||||||||||
Cash and due from banks | $ | 323,346 | $ | 382,212 | $ | 328,791 | ||||||
Federal funds sold and resale agreements | 1,257,666 | 1,010,319 | 864,036 | |||||||||
Interest-bearing deposits at other banks | 188,237 | 587,751 | 247,560 | |||||||||
Cash and cash equivalents | 1,769,249 | 1,980,282 | 1,440,387 | |||||||||
Securities available for sale | 9,149,440 | 5,866,628 | 4,817,322 | |||||||||
Consumer loans | 33,171,516 | 32,850,269 | 27,634,440 | |||||||||
Less: Allowance for loan losses | (1,495,000 | ) | (1,595,000 | ) | (1,635,000 | ) | ||||||
Net loans | 31,676,516 | 31,255,269 | 25,999,440 | |||||||||
Accounts receivable from securitizations | 4,008,809 | 4,748,962 | 3,378,593 | |||||||||
Premises and equipment, net | 898,802 | 902,600 | 769,112 | |||||||||
Interest receivable | 236,852 | 214,295 | 208,998 | |||||||||
Other | 1,406,757 | 1,315,670 | 1,297,115 | |||||||||
Total assets | $ | 49,146,425 | $ | 46,283,706 | $ | 37,910,967 | ||||||
Liabilities: | ||||||||||||
Interest-bearing deposits | $ | 23,610,851 | $ | 22,416,332 | $ | 18,489,388 | ||||||
Senior and subordinated notes | 7,224,798 | 7,016,020 | 5,116,591 | |||||||||
Other borrowings | 8,254,383 | 7,796,613 | 6,576,876 | |||||||||
Interest payable | 245,172 | 256,015 | 194,629 | |||||||||
Other | 2,968,993 | 2,746,915 | 2,604,818 | |||||||||
Total liabilities | 42,304,197 | 40,231,895 | 32,982,302 | |||||||||
Stockholders’ Equity: | ||||||||||||
Common stock | 2,411 | 2,364 | 2,275 | |||||||||
Paid-in capital, net | 2,218,861 | 1,937,302 | 1,730,883 | |||||||||
Retained earnings and cumulative other comprehensive income | 4,670,384 | 4,161,666 | 3,244,673 | |||||||||
Less: Treasury stock, at cost | (49,428 | ) | (49,521 | ) | (49,166 | ) | ||||||
Total stockholders’ equity | 6,842,228 | 6,051,811 | 4,928,665 | |||||||||
Total liabilities and stockholders’ equity | $ | 49,146,425 | $ | 46,283,706 | $ | 37,910,967 | ||||||
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income
(in thousands, except per share data)(unaudited)
| Three Months Ended | |||||||||
| March 31 2004 | December 31 2003 | March 31 2003 | |||||||
Interest Income: | |||||||||
Consumer loans, including past-due fees | $ | 1,035,017 | $ | 969,571 | $ | 1,013,282 | |||
Securities available for sale | 63,716 | 52,328 | 42,931 | ||||||
Other | 65,998 | 65,884 | 50,353 | ||||||
Total interest income | 1,164,731 | 1,087,783 | 1,106,566 | ||||||
Interest Expense: | |||||||||
Deposits | 239,512 | 237,624 | 209,308 | ||||||
Senior and subordinated notes | 130,515 | 123,409 | 104,097 | ||||||
Other borrowings | 62,682 | 62,649 | 58,357 | ||||||
Total interest expense | 432,709 | 423,682 | 371,762 | ||||||
Net interest income | 732,022 | 664,101 | 734,804 | ||||||
Provision for loan losses | 243,668 | 390,405 | 375,851 | ||||||
Net interest income after provision for loan losses | 488,354 | 273,696 | 358,953 | ||||||
Non-Interest Income: | |||||||||
Servicing and securitizations | 917,669 | 918,762 | 729,689 | ||||||
Service charges and other customer-related fees | 354,493 | 380,925 | 441,226 | ||||||
Interchange | 105,595 | 106,414 | 85,351 | ||||||
Other | 65,377 | 31,390 | 48,337 | ||||||
Total non-interest income | 1,443,134 | 1,437,491 | 1,304,603 | ||||||
Non-Interest Expense: | |||||||||
Salaries and associate benefits | 424,392 | 408,884 | 398,467 | ||||||
Marketing | 255,147 | 290,145 | 241,696 | ||||||
Communications and data processing | 117,106 | 116,217 | 112,052 | ||||||
Supplies and equipment | 88,321 | 83,804 | 83,812 | ||||||
Occupancy | 38,719 | 51,645 | 43,574 | ||||||
Other | 301,211 | 338,777 | 294,331 | ||||||
Total non-interest expense | 1,224,896 | 1,289,472 | 1,173,932 | ||||||
Income before income taxes | 706,592 | 421,715 | 489,624 | ||||||
Income taxes | 255,786 | 156,034 | 181,161 | ||||||
Net income | $ | 450,806 | $ | 265,681 | $ | 308,463 | |||
Basic earnings per share | $ | 1.94 | $ | 1.16 | $ | 1.38 | |||
Diluted earnings per share | $ | 1.84 | $ | 1.11 | $ | 1.35 | |||
Dividends paid per share | $ | 0.03 | $ | 0.03 | $ | 0.03 | |||
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
| Reported | Quarter Ended 3/31/04 | Quarter Ended 12/31/03 | Quarter Ended 3/31/03 | ||||||||||||||||||||||||
| Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | |||||||||||||||||||
Earnings assets: | |||||||||||||||||||||||||||
Consumer loans | $ | 32,877,525 | $ | 1,035,017 | 12.59 | % | $ | 31,297,123 | $ | 969,571 | 12.39 | % | $ | 27,316,194 | $ | 1,013,282 | 14.84 | % | |||||||||
Securities available for sale | 7,098,951 | 63,716 | 3.59 | 5,816,001 | 52,328 | 3.60 | 4,417,538 | 42,931 | 3.89 | ||||||||||||||||||
Other | 4,135,065 | 65,998 | 6.38 | 3,679,088 | 65,884 | 7.16 | 2,410,750 | 50,353 | 8.35 | ||||||||||||||||||
Total earnings assets | $ | 44,111,541 | $ | 1,164,731 | 10.56 | % | $ | 40,792,212 | $ | 1,087,783 | 10.67 | % | $ | 34,144,482 | $ | 1,106,566 | 12.96 | % | |||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||
Deposits | $ | 22,992,712 | $ | 239,512 | 4.17 | % | $ | 21,604,968 | $ | 237,624 | 4.40 | % | $ | 17,940,058 | $ | 209,308 | 4.67 | % | |||||||||
Senior and subordinated notes | 7,270,889 | 130,515 | 7.18 | 6,734,569 | 123,409 | 7.33 | 5,309,690 | 104,097 | 7.84 | ||||||||||||||||||
Other borrowings | 7,834,046 | 62,682 | 3.20 | 7,661,016 | 62,649 | 3.27 | 7,009,915 | 58,357 | 3.33 | ||||||||||||||||||
Total interest-bearing liabilities | $ | 38,097,647 | $ | 432,709 | 4.54 | % | $ | 36,000,553 | $ | 423,682 | 4.71 | % | $ | 30,259,663 | $ | 371,762 | 4.91 | % | |||||||||
Net interest spread | 6.02 | % | 5.96 | % | 8.05 | % | |||||||||||||||||||||
Interest income to average earning assets | 10.56 | % | 10.67 | % | 12.96 | % | |||||||||||||||||||||
Interest expense to average earning assets | 3.92 | 4.16 | 4.35 | ||||||||||||||||||||||||
Net interest margin | 6.64 | % | 6.51 | % | 8.61 | % | |||||||||||||||||||||
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
| Managed (1) | Quarter Ended 3/31/04 | Quarter Ended 12/31/03 | Quarter Ended 3/31/03 | ||||||||||||||||||||||||
| Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | |||||||||||||||||||
Earning assets: | |||||||||||||||||||||||||||
Consumer loans | $ | 71,148,287 | $ | 2,405,738 | 13.53 | % | $ | 68,678,877 | $ | 2,295,802 | 13.37 | % | $ | 59,249,698 | $ | 2,148,419 | 14.50 | % | |||||||||
Securities available for sale | 7,098,951 | 63,716 | 3.59 | 5,816,001 | 52,328 | 3.60 | 4,417,538 | 42,931 | 3.89 | ||||||||||||||||||
Other | 2,247,996 | 13,056 | 2.32 | 1,782,263 | 11,326 | 2.54 | 934,382 | 5,323 | 2.28 | ||||||||||||||||||
Total earning assets | $ | 80,495,234 | $ | 2,482,510 | 12.34 | % | $ | 76,277,141 | $ | 2,359,456 | 12.37 | % | $ | 64,601,618 | $ | 2,196,673 | 13.60 | % | |||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||
Deposits | $ | 22,992,712 | $ | 239,512 | 4.17 | % | $ | 21,604,968 | $ | 237,624 | 4.40 | % | $ | 17,940,058 | $ | 209,308 | 4.67 | % | |||||||||
Senior and subordinated notes | 7,270,889 | 130,515 | 7.18 | 6,734,569 | 123,409 | 7.33 | 5,309,690 | 104,097 | 7.84 | ||||||||||||||||||
Other borrowings | 7,834,046 | 62,682 | 3.20 | 7,661,016 | 62,649 | 3.27 | 7,009,915 | 58,357 | 3.33 | ||||||||||||||||||
Securitization liability | 37,669,211 | 372,723 | 3.96 | 36,766,829 | 364,092 | 3.96 | 31,361,051 | 316,960 | 4.04 | ||||||||||||||||||
Total interest-bearing liabilities | $ | 75,766,858 | $ | 805,432 | 4.25 | % | $ | 72,767,382 | $ | 787,774 | 4.33 | % | $ | 61,620,714 | $ | 688,722 | 4.47 | % | |||||||||
Net interest spread | 8.09 | % | 8.04 | % | 9.13 | % | |||||||||||||||||||||
Interest income to average earning assets | 12.34 | % | 12.37 | % | 13.60 | % | |||||||||||||||||||||
Interest expense to average earning assets | 4.01 | 4.13 | 4.26 | ||||||||||||||||||||||||
Net interest margin | 8.33 | % | 8.24 | % | 9.34 | % | |||||||||||||||||||||
| (1) | The information in this table reflects the adjustment to add back the effect of securitized loans. |
NEWS RELEASE
1680 Capital One Drive McLean, VA 22102-3491
FOR IMMEDIATE RELEASE: April 21, 2004
| Contacts: | Paul Paquin | Tatiana Stead | ||||||||
| V.P., Investor Relations | Director, Corporate Media | |||||||||
| (703) 720-2456 | (703) 720-2352 |
Capital One Reports First Quarter Earnings
36 % EPS Increase Over Year Ago Period
2004 Earnings Guidance Unchanged
McLean, VA.(April 21,2004)—Capital One Financial Corporation (NYSE: COF) today announced that its fully diluted earnings per share for the first quarter of 2004 increased by 36 percent over the first quarter of 2003. The company has left unchanged its 2004 earnings guidance of $5.30 to $5.60 per share (fully diluted).
Earnings for the first quarter of 2004 were $450.8 million, or $1.84 per share (fully diluted), compared with earnings of $308.5 million, or $1.35 per share, for the first quarter of 2003 and $265.7 million, or $1.11 per share, in the previous quarter.
“We are pleased to report record earnings in the first quarter, which reflects strong credit performance and increased profitability of our diversified businesses,” said Richard D. Fairbank, Capital One’s Chairman and Chief Executive Officer. “We expect that the pattern of earnings reported this year will be similar to that of last year, starting with the highest earnings in the first quarter and moderating earnings as the year progresses.”
During the first quarter of 2004, Capital One grew its managed loan portfolio by $572.1 million to $71.8 billion. The managed charge-off rate declined to 4.83 percent in the first quarter of 2004, from 5.32 percent in the previous quarter and 6.47 percent in the first quarter of 2003. The managed delinquency rate (30+ days) declined to 3.80 percent as of March 31, 2004 from 4.46 percent as of the end of the previous quarter and 4.97 percent as of March 31, 2003.
The company continues to diversify its portfolio and earnings beyond U.S. credit cards and shift its product mix upmarket. As a result, Capital One’s managed revenue margin declined to 13.38 percent in the first quarter of 2004 from 13.89 percent in the previous quarter and 15.70 percent in the first quarter of 2003. As the company continues its asset diversification and its shift upmarket, management expects revenue margins to continue to trend somewhat lower in 2004.
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Capital One Reports First Quarter Earnings
At the same time, declining credit losses and other expenses are expected to leave the company’s return on managed assets relatively stable for the full year of 2004 as compared with 2003. The company expects its charge-off rate for the remaining three quarters of 2004 to be between four and five percent.
“The decline in the managed delinquency rate (30+ days) to 3.80 percent at the end of the first quarter from 4.46 percent the end of the previous quarter is a key driver of our reduced provisioning expense,” said Gary L. Perlin, Capital One’s Chief Financial Officer. “This decline, along with our expectation of little to no growth in the subprime portion of the company’s credit card portfolio, leads us to expect that our allowance for loan losses will continue to move somewhat lower in the near term.”
The company generates earnings from its managed loan portfolio, which includes both on-balance sheet loans and securitized loans. For this reason, the company believes managed financial measures to be useful to stakeholders. In compliance with Regulation G of the Securities and Exchange Commission, the company is providing a numerical reconciliation of managed financial measures to comparable measures calculated on a reported basis using generally accepted accounting principles (GAAP). Please see the schedule titled “Reconciliation to GAAP Financial Measures” attached to this release for more information.
The company cautions that its current expectations in this release, in the presentation slides available on the company’s website (www.capitalone.com), and on its Form 10-K for the fiscal year ended December 31, 2003, for 2004 earnings, charge-off rates, revenue margins, allowance for loan losses, loan growth, and the composition of loan growth are forward-looking statements and actual results could differ materially from current expectations due to a number of factors, including: continued intense competition from numerous providers of products and services which compete with our businesses; changes in our aggregate accounts and balances, and the growth rate and composition thereof; the company’s ability to continue to diversify its assets; the company’s ability to access the capital markets at attractive rates and terms to fund its operations and future growth; and general economic conditions affecting consumer income and spending, which may affect consumer bankruptcies, defaults, and charge-offs.
A discussion of these and other factors can be found in Capital One’s annual report and other reports filed with the Securities and Exchange Commission, including, but not limited to, Capital One’s report on Form 10-K for the fiscal year ended December 31, 2003.
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Capital One Reports First Quarter Earnings
About Capital One
Headquartered in McLean, Virginia, Capital One Financial Corporation (www.capitalone.com) is a holding company whose principal subsidiaries, Capital One Bank and Capital One, F.S.B., offer consumer lending products and Capital One Auto Finance, Inc., offers automobile and other motor vehicle financing products. Capital One’s subsidiaries collectively had 46.7 million managed accounts and $71.8 billion in managed loans outstanding as of March 31, 2004. Capital One, aFortune 500company, is one of the largest providers of MasterCard and Visa credit cards in the world. Capital One trades on the New York Stock Exchange under the symbol “COF” and is included in the S&P 500 index.
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NOTE: First quarter 2004 financial results, SEC Filings, and first quarter earnings conference call slides are accessible on Capital One’s home page (www.capitalone.com). Choose “Investors” under “Company Information” on the left side of the page to view and download the earnings press release, slides, and other financial information. Additionally, a webcast of today’s 5:00pm (EDT) earnings conference call is accessible through the same link.