Exhibit 99.1
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY REPORTED BASIS
(in millions, except per share data and as noted) | 2005 Q2 | 2005 Q1 | 2004 Q4 | 2004 Q3 | 2004 Q2 | |||||||||||||||
Earnings (Reported Basis) | ||||||||||||||||||||
Net Interest Income | $ | 872.5 | $ | 860.5 | $ | 784.6 | $ | 775.4 | $ | 711.0 | ||||||||||
Non-Interest Income | 1,582.0 | 1,516.0 | 1,521.5 | (1) | 1,539.4 | (1) | 1,396.1 | |||||||||||||
Total Revenue(2) | 2,454.5 | 2,376.5 | 2,306.1 | 2,314.8 | 2,107.1 | |||||||||||||||
Provision for Loan Losses | 291.6 | 259.6 | 467.1 | 267.8 | 242.3 | |||||||||||||||
Marketing Expenses | 277.0 | 311.8 | 511.1 | 317.7 | 253.8 | |||||||||||||||
Operating Expenses(3) | 1,058.6 | 1,016.1 | 1,045.4 | 994.3 | 975.0 | |||||||||||||||
Income Before Taxes | 827.3 | 789.0 | 282.5 | 735.0 | 636.0 | |||||||||||||||
Tax Rate | 35.8 | % | 35.8 | % | 30.9 | % | 33.3 | % | 36.0 | % | ||||||||||
Net Income | $ | 531.1 | $ | 506.6 | $ | 195.1 | $ | 490.2 | $ | 407.4 | ||||||||||
Common Share Statistics | ||||||||||||||||||||
Basic EPS | $ | 2.10 | $ | 2.08 | $ | 0.82 | $ | 2.07 | $ | 1.74 | ||||||||||
Diluted EPS | $ | 2.03 | $ | 1.99 | $ | 0.77 | $ | 1.97 | $ | 1.65 | ||||||||||
Dividends Per Share | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 | ||||||||||
Book Value Per Share (period end) | $ | 39.51 | $ | 35.62 | $ | 33.99 | $ | 32.67 | $ | 29.90 | ||||||||||
Stock Price Per Share (period end) | $ | 80.01 | $ | 74.77 | $ | 84.21 | $ | 73.90 | $ | 68.38 | ||||||||||
Total Market Capitalization (period end) | $ | 21,082.6 | $ | 18,849.5 | $ | 20,783.0 | $ | 17,936.8 | $ | 16,514.5 | ||||||||||
Shares Outstanding (period end) | 263.5 | 252.1 | 246.8 | 242.7 | 241.5 | |||||||||||||||
Shares Used to Compute Basic EPS | 252.6 | 244.0 | 239.2 | 236.4 | 234.7 | |||||||||||||||
Shares Used to Compute Diluted EPS | 261.7 | 255.2 | 253.0 | 249.0 | 247.6 | |||||||||||||||
Reported Balance Sheet Statistics (period avg.) | ||||||||||||||||||||
Average Loans | $ | 38,237 | $ | 38,204 | $ | 36,096 | $ | 34,772 | $ | 33,290 | ||||||||||
Average Earning Assets | $ | 51,694 | $ | 50,898 | $ | 49,500 | $ | 47,267 | $ | 45,705 | ||||||||||
Average Assets | $ | 56,963 | $ | 56,288 | $ | 53,339 | $ | 51,496 | $ | 50,020 | ||||||||||
Average Equity | $ | 8,925 | $ | 8,568 | $ | 8,221 | $ | 7,561 | $ | 6,943 | ||||||||||
Return on Average Assets (ROA) | 3.73 | % | 3.60 | % | 1.46 | % | 3.81 | % | 3.26 | % | ||||||||||
Return on Average Equity (ROE) | 23.80 | % | 23.65 | % | 9.49 | % | 25.93 | % | 23.47 | % | ||||||||||
Reported Balance Sheet Statistics (period end) | ||||||||||||||||||||
Loans | $ | 38,611 | $ | 37,959 | $ | 38,216 | $ | 35,161 | $ | 34,551 | ||||||||||
Total Assets | $ | 56,996 | $ | 55,632 | $ | 53,747 | $ | 51,960 | $ | 50,070 | ||||||||||
Capital(4) | $ | 10,511 | $ | 9,839 | $ | 9,231 | $ | 8,769 | $ | 8,057 | ||||||||||
Loan growth | $ | 652 | $ | (257 | ) | $ | 3,055 | $ | 610 | $ | 1,379 | |||||||||
% Loan Growth Q Over Q (annualized) | 7 | % | (3 | )% | 35 | % | 7 | % | 17 | % | ||||||||||
% Loan Growth Y Over Y | 12 | % | 14 | % | 16 | % | 15 | % | 29 | % | ||||||||||
Capital to Assets Ratio | 18.44 | % | 17.69 | % | 17.17 | % | 16.88 | % | 16.09 | % | ||||||||||
Capital plus Allowance to Assets Ratio | 20.91 | % | 20.27 | % | 19.98 | % | 19.56 | % | 18.94 | % | ||||||||||
Revenue & Expense Statistics (Reported) | ||||||||||||||||||||
Net Interest Income Growth (annualized) | 6 | % | 39 | % | 5 | % | 36 | % | (11 | )% | ||||||||||
Non Interest Income Growth (annualized) | 17 | % | (1 | )% | (5 | )% | 41 | % | (13 | )% | ||||||||||
Revenue Growth (annualized) | 13 | % | 12 | % | (2 | )% | 39 | % | (13 | )% | ||||||||||
Net Interest Margin | 6.75 | % | 6.76 | % | 6.34 | % | 6.56 | % | 6.22 | % | ||||||||||
Revenue Margin | 18.99 | % | 18.68 | % | 18.64 | % | 19.59 | % | 18.44 | % | ||||||||||
Risk Adjusted Margin(5) | 16.49 | % | 16.08 | % | 15.85 | % | 17.07 | % | 15.73 | % | ||||||||||
Operating Expense as a % of Revenues | 43.13 | % | 42.76 | % | 45.33 | % | 42.95 | % | 46.27 | % | ||||||||||
Operating Expense as a % of Avg Loans (annualized) | 11.07 | % | 10.64 | % | 11.58 | % | 11.44 | % | 11.72 | % | ||||||||||
Asset Quality Statistics (Reported) | ||||||||||||||||||||
Allowance | $ | 1,405 | $ | 1,440 | $ | 1,505 | $ | 1,395 | $ | 1,425 | ||||||||||
30+ Day Delinquencies | $ | 1,400 | $ | 1,319 | $ | 1,472 | $ | 1,407 | $ | 1,351 | ||||||||||
Net Charge-Offs | $ | 324 | $ | 330 | $ | 345 | $ | 298 | $ | 310 | ||||||||||
Allowance as a % of Reported Loans | 3.64 | % | 3.79 | % | 3.94 | % | 3.97 | % | 4.12 | % | ||||||||||
Delinquency Rate (30+ days) | 3.62 | % | 3.47 | % | 3.85 | % | 4.00 | % | 3.91 | % | ||||||||||
Net Charge-Off Rate | 3.39 | % | 3.46 | % | 3.82 | % | 3.43 | % | 3.72 | % | ||||||||||
| (1) | Includes a $41.1 million gain resulting from the sale of the French loan portfolio in Q4 2004 and a $31.5 million gain resulting from the sale of a joint venture investment in South Africa in Q3 2004. |
| (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: Q2 2005 - $259.8, Q1 2005 - $243.9, Q4 2004 - $276.8, Q3 2004 - $269.7, and Q2 2004 - $263.5 million. |
| (3) | Includes employee termination benefits and charges for facility consolidation related to corporate-wide cost reduction initiatives of $26.0 million, $23.7 million, $42.1 million, $26.7 million and $56.0 million for Q2 2005, Q1 2005, Q4 2004, Q3 2004 and Q2 2004, respectively. In addition, Q1 2005 includes an $18.8 million reversal of a previously recognized impairment related to the sale of the Tampa, FL facility and Q3 2004 had charges of $20.6 million related to a change in the fixed asset capitalization thresholds and $15.8 million related to impairment of internally developed software. |
| (4) | Includes preferred interests for all periods presented and mandatory convertible securities for all periods prior to Q2 2005. |
| (5) | Risk adjusted margin is total revenue less net charge-offs as a percentage of average earning assets. |
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY MANAGED BASIS(1)
(in millions) | 2005 Q2 | 2005 Q1 | 2004 Q4 | 2004 Q3 | 2004 Q2 | |||||||||||||||
Earnings (Managed Basis) | ||||||||||||||||||||
Net Interest Income | $ | 1,830.3 | $ | 1,818.8 | $ | 1,701.8 | $ | 1,670.4 | $ | 1,585.4 | ||||||||||
Non-Interest Income | 1,144.8 | 1,071.4 | 1,099.0 | (2) | 1,099.8 | (2) | 1,011.3 | |||||||||||||
Total Revenue(3) | 2,975.1 | 2,890.2 | 2,800.8 | 2,770.2 | 2,596.7 | |||||||||||||||
Provision for Loan Losses | 812.2 | 773.3 | 961.8 | 723.2 | 731.9 | |||||||||||||||
Marketing Expenses | 277.0 | 311.8 | 511.1 | 317.7 | 253.8 | |||||||||||||||
Operating Expenses(4) | 1,058.6 | 1,016.1 | 1,045.4 | 994.3 | 975.0 | |||||||||||||||
Income Before Taxes | 827.3 | 789.0 | 282.5 | 735.0 | 636.0 | |||||||||||||||
Tax Rate | 35.8 | % | 35.8 | % | 30.9 | % | 33.3 | % | 36.0 | % | ||||||||||
Net Income | $ | 531.1 | $ | 506.6 | $ | 195.1 | $ | 490.2 | $ | 407.4 | ||||||||||
Managed Balance Sheet Statistics (period avg.) | ||||||||||||||||||||
Average Loans | $ | 82,472 | $ | 81,652 | $ | 76,930 | $ | 74,398 | $ | 72,327 | ||||||||||
Average Earning Assets | $ | 94,075 | $ | 92,477 | $ | 88,461 | $ | 85,045 | $ | 82,905 | ||||||||||
Average Assets | $ | 100,640 | $ | 99,283 | $ | 93,574 | $ | 90,543 | $ | 88,473 | ||||||||||
Return on Average Assets (ROA) | 2.11 | % | 2.04 | % | 0.83 | % | 2.17 | % | 1.84 | % | ||||||||||
Managed Balance Sheet Statistics (period end) | ||||||||||||||||||||
Loans | $ | 82,951 | $ | 81,592 | $ | 79,861 | $ | 75,457 | $ | 73,367 | ||||||||||
Total Assets | $ | 100,757 | $ | 98,724 | $ | 94,792 | $ | 91,665 | $ | 88,317 | ||||||||||
Loan Growth | $ | 1,359 | $ | 1,731 | $ | 4,404 | $ | 2,090 | $ | 1,550 | ||||||||||
% Loan Growth Q over Q (annualized) | 7 | % | 9 | % | 23 | % | 11 | % | 9 | % | ||||||||||
% Loan Growth Y over Y | 13 | % | 14 | % | 12 | % | 12 | % | 21 | % | ||||||||||
Capital to Assets Ratio | 10.43 | % | 9.97 | % | 9.74 | % | 9.57 | % | 9.12 | % | ||||||||||
Capital plus Allowance to Assets Ratio | 11.83 | % | 11.42 | % | 11.33 | % | 11.09 | % | 10.74 | % | ||||||||||
Number of Accounts (000’s) | 48,861 | 49,062 | 48,573 | 47,224 | 46,591 | |||||||||||||||
% Off-Balance Sheet Securitizations | 53 | % | 53 | % | 52 | % | 53 | % | 53 | % | ||||||||||
% at Introductory Rate | 6 | % | 6 | % | 7 | % | 6 | % | 6 | % | ||||||||||
Revenue & Expense Statistics (Managed) | ||||||||||||||||||||
Net Interest Income Growth (annualized) | 3 | % | 28 | % | 8 | % | 21 | % | (22 | )% | ||||||||||
Non Interest Income Growth (annualized) | 27 | % | (10 | )% | 0 | % | 35 | % | (1 | )% | ||||||||||
Revenue Growth (annualized) | 12 | % | 13 | % | 4 | % | 27 | % | (14 | )% | ||||||||||
Net Interest Margin | 7.78 | % | 7.87 | % | 7.70 | % | 7.86 | % | 7.65 | % | ||||||||||
Revenue Margin | 12.65 | % | 12.50 | % | 12.66 | % | 13.03 | % | 12.53 | % | ||||||||||
Risk Adjusted Margin(5) | 9.06 | % | 8.85 | % | 8.87 | % | 9.48 | % | 8.67 | % | ||||||||||
Operating Expense as a % of Revenues | 35.58 | % | 35.16 | % | 37.33 | % | 35.89 | % | 37.55 | % | ||||||||||
Operating Expense as a % of Avg Loans (annualized) | 5.13 | % | 4.98 | % | 5.44 | % | 5.35 | % | 5.39 | % | ||||||||||
Asset Quality Statistics (Managed) | ||||||||||||||||||||
30+ Day Delinquencies | $ | 2,893 | $ | 2,812 | $ | 3,054 | $ | 2,944 | $ | 2,756 | ||||||||||
Net Charge-Offs | $ | 845 | $ | 844 | $ | 840 | $ | 754 | $ | 800 | ||||||||||
Delinquency Rate (30+ days) | 3.49 | % | 3.45 | % | 3.82 | % | 3.90 | % | 3.76 | % | ||||||||||
Net Charge-Off Rate | 4.10 | % | 4.13 | % | 4.37 | % | 4.05 | % | 4.42 | % | ||||||||||
| (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) | Includes a $41.1 million gain resulting from the sale of the French loan portfolio in Q4 2004 and a $31.5 million gain resulting from the sale of a joint venture investment in South Africa in Q3 2004. |
| (3) | 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: Q2 2005 - $259.8, Q1 2005 - $243.9, Q4 2004 - $276.8, Q3 2004 - $269.7, and Q2 2004 - $263.5 million. |
| (4) | Includes employee termination benefits and charges for facility consolidation related to corporate-wide cost reduction initiatives of $26.0 million, $23.7 million, $42.1 million, $26.7 million and $56.0 million for Q2 2005, Q1 2005, Q4 2004, Q3 2004 and Q2 2004, respectively. In addition, Q1 2005 includes an $18.8 million reversal of a previously recognized impairment related to the sale of the Tampa, FL facility and Q3 2004 had charges of $20.6 million related to a change in the fixed asset capitalization thresholds and $15.8 million related to impairment of internally developed software. |
| (5) | Risk adjusted margin is total revenue less net charge-offs as a percentage of average earning assets. |
CAPITAL ONE FINANCIAL CORPORATION (COF)
SEGMENT FINANCIAL & STATISTICAL SUMMARY - MANAGED BASIS(1)
(in thousands) | 2005 Q2 | 2005 Q1 | 2004 Q4 | 2004 Q3 | 2004 Q2 | |||||||||||||||
Segment Statistics | ||||||||||||||||||||
| US Card: | ||||||||||||||||||||
Net interest income | $ | 1,151,692 | $ | 1,250,638 | $ | 1,158,773 | $ | 1,172,447 | $ | 1,124,099 | ||||||||||
Non-interest income | 846,720 | 779,415 | 823,012 | 811,465 | 816,034 | |||||||||||||||
Provision for loan losses | 539,211 | 489,036 | 649,862 | 503,179 | 519,569 | |||||||||||||||
Non-interest expenses | 794,012 | 836,142 | 1,016,384 | 833,183 | 820,424 | |||||||||||||||
Income tax provision (benefit) | 232,816 | 246,706 | 113,594 | 233,118 | 216,051 | |||||||||||||||
Net income (loss) | $ | 432,373 | $ | 458,169 | $ | 201,945 | $ | 414,432 | $ | 384,089 | ||||||||||
Loans receivable | $ | 46,408,912 | $ | 46,629,763 | $ | 48,609,571 | $ | 46,081,967 | $ | 45,247,444 | ||||||||||
Net charge-off rate | 4.90 | % | 4.73 | % | 4.93 | % | 4.68 | % | 5.19 | % | ||||||||||
Delinquency Rate (30+ days) | 3.60 | % | 3.66 | % | 3.97 | % | 4.14 | % | 3.95 | % | ||||||||||
| Auto Finance: | ||||||||||||||||||||
Net interest income | $ | 285,744 | $ | 249,507 | $ | 207,379 | $ | 205,385 | $ | 195,974 | ||||||||||
Non-interest income | 6,964 | 11,339 | 13,690 | 20,926 | 22,666 | |||||||||||||||
Provision for loan losses | 20,330 | 92,313 | 88,408 | 56,483 | 54,908 | |||||||||||||||
Non-interest expenses | 124,584 | 113,765 | 93,482 | 83,401 | 81,345 | |||||||||||||||
Income tax provision (benefit) | 51,728 | 19,169 | 14,104 | 31,114 | 29,659 | |||||||||||||||
Net income (loss) | $ | 96,066 | $ | 35,599 | $ | 25,075 | $ | 55,313 | $ | 52,728 | ||||||||||
Loans receivable | $ | 14,520,216 | $ | 13,292,953 | $ | 9,997,497 | $ | 9,734,254 | $ | 9,383,432 | ||||||||||
Net charge-off rate | 1.74 | % | 2.89 | % | 3.87 | % | 2.63 | % | 2.53 | % | ||||||||||
Delinquency Rate (30+ days) | 4.09 | % | 3.51 | % | 5.50 | % | 5.54 | % | 5.59 | % | ||||||||||
| Global Financial Services: | ||||||||||||||||||||
Net interest income | $ | 411,825 | $ | 412,733 | $ | 390,262 | $ | 361,165 | $ | 338,192 | ||||||||||
Non-interest income | 265,499 | 233,841 | 240,781 | 240,597 | 185,488 | |||||||||||||||
Provision for loan losses | 256,766 | 188,316 | 220,253 | 150,921 | 159,001 | |||||||||||||||
Non-interest expenses | 378,278 | 351,476 | 368,020 | 322,552 | 295,117 | |||||||||||||||
Income tax provision (benefit) | 15,621 | 36,309 | 13,561 | 41,445 | 23,471 | |||||||||||||||
Net income (loss) | $ | 26,659 | $ | 70,473 | $ | 29,209 | $ | 86,844 | $ | 46,091 | ||||||||||
Loans receivable | $ | 22,053,145 | $ | 21,683,102 | $ | 21,240,325 | $ | 19,614,693 | $ | 18,722,812 | ||||||||||
Net charge-off rate | 3.89 | % | 3.55 | % | 3.30 | % | 3.26 | % | 3.43 | % | ||||||||||
Delinquency Rate (30+ days) | 2.93 | % | 3.04 | % | 2.81 | % | 2.65 | % | 2.50 | % | ||||||||||
| Other: | ||||||||||||||||||||
Net interest income | $ | (18,959 | ) | $ | (94,118 | ) | $ | (54,587 | ) | $ | (68,630 | ) | $ | (72,795 | ) | |||||
Non-interest income | 25,577 | 46,806 | 21,496 | 26,785 | (12,890 | ) | ||||||||||||||
Provision for loan losses | (4,144 | ) | 3,627 | 3,277 | 12,593 | (1,535 | ) | |||||||||||||
Non-interest expenses | 38,743 | 26,449 | 78,641 | 72,848 | 31,926 | |||||||||||||||
Income tax provision (benefit) | (4,001 | ) | (19,709 | ) | (53,908 | ) | (60,858 | ) | (40,555 | ) | ||||||||||
Net income (loss) | $ | (23,980 | ) | $ | (57,679 | ) | $ | (61,101 | ) | $ | (66,428 | ) | $ | (75,521 | ) | |||||
Loans receivable | $ | (30,921 | ) | $ | (13,826 | ) | $ | 13,906 | $ | 25,917 | $ | 13,664 | ||||||||
| Total: | ||||||||||||||||||||
Net interest income | $ | 1,830,302 | $ | 1,818,760 | $ | 1,701,827 | $ | 1,670,367 | $ | 1,585,470 | ||||||||||
Non-interest income | 1,144,760 | 1,071,401 | 1,098,979 | 1,099,773 | 1,011,298 | |||||||||||||||
Provision for loan losses | 812,163 | 773,292 | 961,800 | 723,176 | 731,943 | |||||||||||||||
Non-interest expenses | 1,335,617 | 1,327,832 | 1,556,527 | 1,311,984 | 1,228,812 | |||||||||||||||
Income tax provision (benefit) | 296,164 | 282,475 | 87,351 | 244,819 | 228,626 | |||||||||||||||
Net income (loss) | $ | 531,118 | $ | 506,562 | $ | 195,128 | $ | 490,161 | $ | 407,387 | ||||||||||
Loans receivable | $ | 82,951,352 | $ | 81,591,992 | $ | 79,861,299 | $ | 75,456,831 | $ | 73,367,352 | ||||||||||
Net charge-off rate | 4.10 | % | 4.13 | % | 4.37 | % | 4.05 | % | 4.42 | % | ||||||||||
Delinquency Rate (30+ days) | 3.49 | % | 3.45 | % | 3.82 | % | 3.90 | % | 3.76 | % | ||||||||||
| (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 June 30, 2005
(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, servicing fees, finance charges, and other fees, net of charge-offs, and interest paid to investors of securitizations are recognized as servicing and securitizations income on the “reported” income statement.
The Company’s “managed” consolidated financial statements reflect adjustments made related to 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 servicing and securitizations income generated from the securitized portfolio and distributes the revenue and expense 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 | $ | 872,503 | $ | 957,799 | $ | 1,830,302 | ||||
Non-interest income | $ | 1,581,996 | $ | (437,236 | ) | $ | 1,144,760 | |||
Total revenue | $ | 2,454,499 | $ | 520,563 | $ | 2,975,062 | ||||
Provision for loan losses | $ | 291,600 | $ | 520,563 | $ | 812,163 | ||||
Net charge-offs | $ | 324,047 | $ | 520,563 | $ | 844,610 | ||||
Balance Sheet Measures | ||||||||||
Consumer loans | $ | 38,610,787 | $ | 44,340,565 | $ | 82,951,352 | ||||
Total assets | $ | 56,995,967 | $ | 43,761,307 | $ | 100,757,274 | ||||
Average consumer loans | $ | 38,237,463 | $ | 44,234,365 | $ | 82,471,828 | ||||
Average earning assets | $ | 51,693,930 | $ | 42,380,839 | $ | 94,074,769 | ||||
Average total assets | $ | 56,962,652 | $ | 43,677,152 | $ | 100,639,804 | ||||
Delinquencies | $ | 1,399,552 | $ | 1,493,307 | $ | 2,892,859 | ||||
| (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)
June 30 2005 | March 31 2005 | June 30 2004 | ||||||||||
Assets: | ||||||||||||
Cash and due from banks | $ | 581,267 | $ | 761,234 | $ | 346,978 | ||||||
Federal funds sold and resale agreements | 1,283,015 | 12,283 | 1,082,939 | |||||||||
Interest-bearing deposits at other banks | 721,806 | 446,793 | 290,242 | |||||||||
Cash and cash equivalents | 2,586,088 | 1,220,310 | 1,720,159 | |||||||||
Securities available for sale | 9,522,515 | 9,460,688 | 8,946,836 | |||||||||
Consumer loans | 38,610,787 | 37,959,203 | 34,551,343 | |||||||||
Less: Allowance for loan losses | (1,405,000 | ) | (1,440,000 | ) | (1,425,000 | ) | ||||||
Net loans | 37,205,787 | 36,519,203 | 33,126,343 | |||||||||
Accounts receivable from securitizations | 4,890,933 | 5,605,009 | 3,972,754 | |||||||||
Premises and equipment, net | 782,372 | 806,411 | 868,203 | |||||||||
Interest receivable | 274,547 | 259,350 | 234,348 | |||||||||
Goodwill | 739,889 | 747,756 | 352,157 | |||||||||
Other | 993,836 | 1,012,839 | 848,861 | |||||||||
Total assets | $ | 56,995,967 | $ | 55,631,566 | $ | 50,069,661 | ||||||
Liabilities: | ||||||||||||
Interest-bearing deposits | $ | 26,521,031 | $ | 25,854,025 | $ | 24,178,756 | ||||||
Senior and subordinated notes | 6,692,311 | 6,876,432 | 7,727,810 | |||||||||
Other borrowings | 9,692,941 | 10,243,235 | 7,885,340 | |||||||||
Interest payable | 252,677 | 242,464 | 256,293 | |||||||||
Other | 3,425,226 | 3,435,680 | 2,800,405 | |||||||||
Total liabilities | 46,584,186 | 46,651,836 | 42,848,604 | |||||||||
Stockholders’ Equity: | ||||||||||||
Common stock | 2,650 | 2,536 | 2,428 | |||||||||
Paid-in capital, net | 3,783,074 | 2,878,237 | 2,348,401 | |||||||||
Retained earnings and cumulative other comprehensive income | 6,695,753 | 6,166,070 | 4,919,656 | |||||||||
Less: Treasury stock, at cost | (69,696 | ) | (67,113 | ) | (49,428 | ) | ||||||
Total stockholders’ equity | 10,411,781 | 8,979,730 | 7,221,057 | |||||||||
Total liabilities and stockholders’ equity | $ | 56,995,967 | $ | 55,631,566 | $ | 50,069,661 | ||||||
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income
(in thousands, except per share data)(unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||
June 30 2005 | March 31 2005 | June 30 2004 | June 30 2005 | June 30 2004 | |||||||||||
Interest Income: | |||||||||||||||
Consumer loans, including past-due fees | $ | 1,190,098 | $ | 1,184,036 | $ | 1,019,076 | $ | 2,374,134 | $ | 2,054,093 | |||||
Securities available for sale | 91,245 | 90,164 | 76,081 | 181,409 | 139,797 | ||||||||||
Other | 70,557 | 62,068 | 56,789 | 132,625 | 122,787 | ||||||||||
Total interest income | 1,351,900 | 1,336,268 | 1,151,946 | 2,688,168 | 2,316,677 | ||||||||||
Interest Expense: | |||||||||||||||
Deposits | 279,438 | 264,025 | 244,978 | 543,463 | 484,490 | ||||||||||
Senior and subordinated notes | 104,593 | 114,480 | 124,809 | 219,073 | 249,227 | ||||||||||
Other borrowings | 95,366 | 97,242 | 71,142 | 192,608 | 139,921 | ||||||||||
Total interest expense | 479,397 | 475,747 | 440,929 | 955,144 | 873,638 | ||||||||||
Net interest income | 872,503 | 860,521 | 711,017 | 1,733,024 | 1,443,039 | ||||||||||
Provision for loan losses | 291,600 | 259,631 | 242,256 | 551,231 | 485,924 | ||||||||||
Net interest income after provision for loan losses | 580,903 | 600,890 | 468,761 | 1,181,793 | 957,115 | ||||||||||
Non-Interest Income: | |||||||||||||||
Servicing and securitizations | 1,024,629 | 951,602 | 868,041 | 1,976,231 | 1,785,710 | ||||||||||
Service charges and other customer-related fees | 360,410 | 401,186 | 368,469 | 761,596 | 722,962 | ||||||||||
Interchange | 132,068 | 123,440 | 117,329 | 255,508 | 222,924 | ||||||||||
Other | 64,889 | 39,751 | 42,225 | 104,640 | 107,602 | ||||||||||
Total non-interest income | 1,581,996 | 1,515,979 | 1,396,064 | 3,097,975 | 2,839,198 | ||||||||||
Non-Interest Expense: | |||||||||||||||
Salaries and associate benefits | 442,101 | 433,501 | 419,695 | 875,602 | 844,087 | ||||||||||
Marketing | 277,034 | 311,759 | 253,838 | 588,793 | 508,985 | ||||||||||
Communications and data processing | 138,916 | 142,819 | 108,191 | 281,735 | 225,297 | ||||||||||
Supplies and equipment | 83,661 | 86,446 | 74,582 | 170,107 | 162,903 | ||||||||||
Occupancy | 40,209 | 17,901 | 70,494 | 58,110 | 109,213 | ||||||||||
Other | 353,696 | 335,406 | 302,012 | 689,102 | 603,223 | ||||||||||
Total non-interest expense | 1,335,617 | 1,327,832 | 1,228,812 | 2,663,449 | 2,453,708 | ||||||||||
Income before income taxes | 827,282 | 789,037 | 636,013 | 1,616,319 | 1,342,605 | ||||||||||
Income taxes | 296,164 | 282,475 | 228,626 | 578,639 | 484,412 | ||||||||||
Net income | $ | 531,118 | $ | 506,562 | $ | 407,387 | $ | 1,037,680 | $ | 858,193 | |||||
Basic earnings per share | $ | 2.10 | $ | 2.08 | $ | 1.74 | $ | 4.18 | $ | 3.68 | |||||
Diluted earnings per share | $ | 2.03 | $ | 1.99 | $ | 1.65 | $ | 4.02 | $ | 3.48 | |||||
Dividends paid per share | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.05 | $ | 0.05 | |||||
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
| Reported | Quarter Ended 6/30/05 | Quarter Ended 3/31/05 | Quarter Ended 6/30/04 | ||||||||||||||||||||||||
| Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | |||||||||||||||||||
Earning assets: | |||||||||||||||||||||||||||
Consumer loans | $ | 38,237,463 | $ | 1,190,098 | 12.45 | % | $ | 38,203,914 | $ | 1,184,036 | 12.40 | % | $ | 33,290,487 | $ | 1,019,076 | 12.24 | % | |||||||||
Securities available for sale | 9,592,645 | 91,245 | 3.80 | % | 9,654,437 | 90,164 | 3.74 | % | 9,291,237 | 76,081 | 3.28 | % | |||||||||||||||
Other | 3,863,822 | 70,557 | 7.30 | % | 3,039,304 | 62,068 | 8.17 | % | 3,123,672 | 56,789 | 7.27 | % | |||||||||||||||
Total earning assets | $ | 51,693,930 | $ | 1,351,900 | 10.46 | % | $ | 50,897,655 | $ | 1,336,268 | 10.50 | % | $ | 45,705,396 | $ | 1,151,946 | 10.08 | % | |||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||
Deposits | $ | 26,391,233 | $ | 279,438 | 4.24 | % | $ | 25,654,741 | $ | 264,025 | 4.12 | % | $ | 23,948,154 | $ | 244,978 | 4.09 | % | |||||||||
Senior and subordinated notes | 6,987,888 | 104,593 | 5.99 | % | 6,908,505 | 114,480 | 6.63 | % | 7,380,437 | 124,809 | 6.76 | % | |||||||||||||||
Other borrowings | 10,838,955 | 95,366 | 3.52 | % | 10,698,085 | 97,242 | 3.64 | % | 8,488,027 | 71,142 | 3.35 | % | |||||||||||||||
Total interest-bearing liabilities | $ | 44,218,076 | $ | 479,397 | 4.34 | % | $ | 43,261,331 | $ | 475,747 | 4.40 | % | $ | 39,816,618 | $ | 440,929 | 4.43 | % | |||||||||
Net interest spread | 6.12 | % | 6.10 | % | 5.65 | % | |||||||||||||||||||||
Interest income to average earning assets | 10.46 | % | 10.50 | % | 10.08 | % | |||||||||||||||||||||
Interest expense to average earning assets | 3.71 | % | 3.74 | % | 3.86 | % | |||||||||||||||||||||
Net interest margin | 6.75 | % | 6.76 | % | 6.22 | % | |||||||||||||||||||||
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
| Managed (1) | Quarter Ended 6/30/05 | Quarter Ended 3/31/05 | Quarter Ended 6/30/04 | ||||||||||||||||||||||||
| Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | |||||||||||||||||||
Earning assets: | |||||||||||||||||||||||||||
Consumer loans | $ | 82,471,828 | $ | 2,652,370 | 12.86 | % | $ | 81,652,485 | $ | 2,631,751 | 12.89 | % | $ | 72,327,220 | $ | 2,314,957 | 12.80 | % | |||||||||
Securities available for sale | 9,592,645 | 91,245 | 3.80 | % | 9,654,437 | 90,164 | 3.74 | % | 9,291,237 | 76,081 | 3.28 | % | |||||||||||||||
Other | 2,010,296 | 22,503 | 4.48 | % | 1,170,566 | 17,672 | 6.04 | % | 1,286,629 | 9,517 | 2.96 | % | |||||||||||||||
Total earning assets | $ | 94,074,769 | $ | 2,766,118 | 11.76 | % | $ | 92,477,488 | $ | 2,739,587 | 11.85 | % | $ | 82,905,086 | $ | 2,400,555 | 11.58 | % | |||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||
Deposits | $ | 26,391,233 | $ | 279,438 | 4.24 | % | $ | 25,654,741 | $ | 264,025 | 4.12 | % | $ | 23,948,154 | $ | 244,978 | 4.09 | % | |||||||||
Senior and subordinated notes | 6,987,888 | 104,593 | 5.99 | % | 6,908,505 | 114,480 | 6.63 | % | 7,380,437 | 124,809 | 6.76 | % | |||||||||||||||
Other borrowings | 10,838,955 | 95,366 | 3.52 | % | 10,698,085 | 97,242 | 3.64 | % | 8,488,027 | 71,142 | 3.35 | % | |||||||||||||||
Securitization liability | 43,810,547 | 456,419 | 4.17 | % | 43,215,671 | 445,080 | 4.12 | % | 38,514,533 | 374,156 | 3.89 | % | |||||||||||||||
Total interest-bearing liabilities | $ | 88,028,623 | $ | 935,816 | 4.25 | % | $ | 86,477,002 | $ | 920,827 | 4.26 | % | $ | 78,331,151 | $ | 815,085 | 4.16 | % | |||||||||
Net interest spread | 7.51 | % | 7.59 | % | 7.42 | % | |||||||||||||||||||||
Interest income to average earning assets | 11.76 | % | 11.85 | % | 11.58 | % | |||||||||||||||||||||
Interest expense to average earning assets | 3.98 | % | 3.98 | % | 3.93 | % | |||||||||||||||||||||
Net interest margin | 7.78 | % | 7.87 | % | 7.65 | % | |||||||||||||||||||||
| (1) | The information in this table reflects the adjustment to add back the effect of securitized loans. |
News Release
[GRAPHIC]
1680 Capital One Drive McLean, VA 22102-3491
FOR IMMEDIATE RELEASE: July 20, 2005
| Contacts: | Investor Relations | Media Relations | ||||
| Mike Rowen | Tatiana Stead | Julie Rakes | ||||
| 703-720-2455 | 703-720-2352 | 804-284-5800 | ||||
Capital One Reports Second Quarter Earnings
Company reaffirms loan growth, return on assets, and EPS guidance for 2005
McLean, Va. (July 20, 2005) – Capital One Financial Corporation (NYSE: COF) today announced that its earnings for the second quarter of 2005 were $531.1 million, or $2.03 per share (diluted), compared with $407.4 million, or $1.65 per share (diluted), for the second quarter of 2004, and $506.6 million, or $1.99 per share (diluted), for the first quarter of 2005.
“Capital One’s second quarter results demonstrate the continued strength of our diversified consumer financial services company,” said Richard D. Fairbank, Capital One’s Chairman and Chief Executive Officer. “The company delivered solid credit quality, loan growth, and profitability while planning for the acquisition of Hibernia and integrating our new auto and home loan businesses.”
Capital One expects the acquisition of Hibernia Corporation to close on September 1, 2005, subject to approval by Hibernia’s shareholders, the receipt of all necessary regulatory approvals and expiration of all regulatory waiting periods prior to that date.
Managed loans grew to $83.0 billion as of June 30, 2005, up $1.4 billion, or 7 percent annualized, from the previous quarter, and up $9.6 billion, or 13 percent, from the second quarter of 2004. The company continues to expect that managed loans will grow at a rate of between 12 and 15 percent during 2005, excluding the impact of the Hibernia transaction. Additionally, the company expects its US Card loan growth rate to be in the low single digits, and its Auto Finance and Global Financial Services businesses to grow at a faster rate than US Card.
The managed charge-off rate decreased to 4.10 percent in the second quarter of 2005 from 4.13 percent in the previous quarter, and from 4.42 percent in the second quarter of 2004. The company continues to expect its quarterly managed net charge-off rate to stay below 4.25 percent in 2005, with seasonal variations and excluding the impact of the Hibernia transaction. The company decreased its allowance for loan losses in the second quarter of 2005 by $35.0 million. The reduction was driven largely by continued loan diversification in our reported balance sheet and credit
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Capital One Reports Second Quarter Earnings
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performance in our auto business. The company continues to expect a net increase in its allowance for loan losses in the full year 2005, inclusive of reductions taken in the first half of 2005 and excluding the impact of the Hibernia transaction.
The managed delinquency rate (30+ days) increased to 3.49 percent as of June 30, 2005 from 3.45 percent as of the end of the previous quarter. The managed delinquency rate as of June 30, 2004 was 3.76 percent. Capital One’s managed revenue margin increased to 12.65 percent in the second quarter of 2005 from 12.50 percent in the previous quarter, and 12.53 percent in the second quarter of 2004. The company continues to expect a modest decline in managed revenue margin over time due to its diversification and bias towards lower loss assets.
“The company remains on track to deliver diluted earnings of between $6.60 and $7.00 per share in 2005, including the expected impact of completing the acquisition of Hibernia,” said Gary L. Perlin, Capital One’s Chief Financial Officer. “This guidance reflects the normal seasonality in loan growth and credit performance, which causes earnings in the second half of the year to be lower than those reported in the first half.”
Marketing expenses for the second quarter of 2005 were $277.0 million, down $34.8 million from the $311.8 million spent in the first quarter of 2005. Marketing expenses were $253.8 million in the comparable quarter of the prior year. The company expects annual marketing spend for 2005 to be approximately $1.4 billion, excluding the impact of the Hibernia transaction.
Annualized operating expenses as a percentage of average managed loans increased to 5.13 percent in the second quarter of 2005, up from 4.98 percent in the previous quarter and down from 5.39 percent in the second quarter of 2004. Included in operating expenses were charges for a combination of employee termination benefits and continued facility consolidations totaling $26.0 million for the second quarter of 2005, $4.9 million for the first quarter of 2005 and $56.0 million for the second quarter of 2004. The company expects about $20 million in additional restructuring charges in 2005 related to programs initiated in 2004.
The company continues to expect a return on managed assets of between 1.7 and 1.8 percent in 2005, with some quarterly variability, excluding the impact of the Hibernia transaction.
The company generates earnings from its managed loan portfolio, which includes both on-balance sheet loans and securitized (off-balance sheet) 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
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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 and on its Form 8-K dated July 20, 2005 for 2005 earnings, charge-off rates, revenue margins, return on assets, allowance for loan losses, loan growth rates, marketing, the composition of loan growth, restructuring charges, the benefits of the business combination transaction involving Capital One and Hibernia, including future financial and operating results, and the new company’s plans, objectives, expectations and intentions 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; changes in the reputation of the credit card industry and/or the company with respect to practices or products; the success of the company’s marketing efforts; the company’s ability to execute on its strategic and operating plans; and general economic conditions affecting interest rates and consumer income and spending, which may affect consumer bankruptcies, defaults, and charge-offs; the ability to obtain regulatory approvals of the proposed Capital One – Hibernia transaction on the proposed terms and schedule; the failure of Hibernia stockholders to approve the transaction; the risk that the businesses will not be integrated successfully; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; and disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers.
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, 2004.
Additional Information About the Hibernia Transaction
Hibernia shareholders are urged to read the definitive proxy statement/prospectus regarding the proposed merger of Capital One Financial Corp. (“Capital One”) and Hibernia Corporation (“Hibernia”), which was first mailed to Hibernia shareholders on or about June 20, 2005 because it
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contains important information. You may obtain a free copy of the definitive proxystatement/prospectus and other related documents filed by Capital One and Hibernia with the Securities and Exchange Commission (“SEC”) at the SEC’s website at www.sec.gov. The definitive proxy statement/prospectus and the other documents may also be obtained for free by accessing Capital One’s website at www.capitalone.com under the tab “Investors” and then under the heading “SEC & Regulatory Filings” or by accessing Hibernia’s website at www.hibernia.com under the tab “About Hibernia” and then under the heading “Investor Relations—SEC Filings.”
Capital One, Hibernia and their respective directors, executive officers and certain other members of management and employees may be soliciting proxies from Hibernia stockholders in favor of the merger. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the Hibernia stockholders in connection with the proposed merger is set forth in the definitive proxy statement/prospectus filed with the SEC. You can find information about Capital One’s executive officers and directors in its definitive proxy statement filed with the SEC on March 21, 2005. You can find information about Hibernia’s executive officers and directors in its definitive proxy statement filed with the SEC on March 15, 2005. You can obtain free copies of these documents from Capital One and Hibernia using the contact information above.
About Capital One
Headquartered in McLean, Virginia, Capital One Financial Corporation (www.capitalone.com) is a bank holding company whose principal subsidiaries, Capital One Bank, Capital One, F.S.B. and Capital One Auto Finance, Inc. offer a variety of consumer lending products. Capital One’s subsidiaries collectively had 48.9 million accounts and $83.0 billion in managed loans outstanding as of June 30, 2005. Capital One is a Fortune 500 company and, through its subsidiaries, 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: Second quarter 2005 financial results, SEC Filings, and second quarter earnings conference call slides are accessible on Capital One’s home page (www.capitalone.com). Choose “Investors” on the bottom right corner of the home page to view and download the earnings press release, slides, and other financial information. Additionally, a webcast of today’s 5:00 pm (EST) earnings conference call is accessible through the same link.
