Capital One Financial (COF) 10-Q 10 Aug 09 2009 Q2 Quarterly report Financial data

Statement Of Financial Position

Statement Of Financial Position Unclassified - Deposit Based Operations (USD $)
In Thousands	Jun. 30, 2009	Dec. 31, 2008
Assets:
Cash and due from banks	$3,001,944	$2,047,839
Federal funds sold and resale agreements	603,564	636,752
Interest-bearing deposits at other banks	1,166,419	4,806,752
Cash and cash equivalents	4,771,927	7,491,343
Securities available for sale	37,667,165	31,003,271
Securities held to maturity	87,545	0
Mortgage loans held for sale	319,975	68,462
Loans held for investment	101,073,629	101,017,771
Less: Allowance for loan and lease losses	(4,481,827)	(4,523,960)
Net loans held for investment	96,591,802	96,493,811
Accounts receivable from securitizations	5,219,968	6,342,754
Premises and equipment, net	2,824,785	2,313,106
Interest receivable	951,201	827,909
Goodwill	13,381,056	11,964,487
Other	10,095,883	9,408,309
Total assets	171,911,307	165,913,452
Liabilities:
Non-interest-bearing deposits	12,603,548	11,293,852
Interest-bearing deposits	104,120,642	97,326,937
Total deposits	116,724,190	108,620,789
Senior and subordinated notes	10,092,619	8,308,843
Other borrowings	13,260,589	14,869,648
Interest payable	659,784	676,398
Other	5,844,549	6,825,341
Total liabilities	146,581,731	139,301,019
Stockholders' Equity:
Preferred stock, par value $.01 per share; authorized 50,000,000 shares, zero and 3,555,199 issued or outstanding as of June 30, 2009 and December 31, 2008, respectively	0	3,096,466
Common stock, par value $.01 per share; authorized 1,000,000,000 shares, 501,853,170 and 438,434,235 issued as of June 30, 2009 and December 31, 2008, respectively	5,019	4,384
Paid-in capital, net	18,891,334	17,278,102
Retained earnings	10,001,299	10,621,164
Cumulative other comprehensive loss	(398,779)	(1,221,796)
Less: Treasury stock, at cost; 46,911,870 and 46,637,241 shares as of June 30, 2009 and December 31, 2008, respectively	(3,169,297)	(3,165,887)
Total stockholders' equity	25,329,576	26,612,433
Total liabilities and stockholders' equity	$171,911,307	$165,913,452

1_Statement Of Financial Positi

Statement Of Financial Position Unclassified - Deposit Based Operations (Parenthetical) (USD $)
	Jun. 30, 2009	Dec. 31, 2008
Preferred stock, par value	0.01	0.01
Preferred stock, authorized	50,000,000	50,000,000
Preferred stock, issued	0	3,555,199
Preferred stock, outstanding	0	3,555,199
Common stock, par value	0.01	0.01
Common stock, authorized	1,000,000,000	1,000,000,000
Common stock, issued	501,853,170	438,434,235
Treasury stock, shares	46,911,870	46,637,241

Statement Of Income Interest Ba

Statement Of Income Interest Based Revenue (USD $)
In Thousands, except Per Share data	3 Months Ended Jun. 30, 2009		3 Months Ended Jun. 30, 2008		6 Months Ended Jun. 30, 2009		6 Months Ended Jun. 30, 2008
Interest Income:
Loans held for investment, including past-due fees	$2,233,808		$2,297,709		$4,424,139		$4,806,102
Investment securities	412,845		281,084		807,625		538,825
Other	67,982		113,064		131,099		226,455
Total interest income	2,714,635		2,691,857		5,362,863		5,571,382
Interest Expense:
Deposits	555,579		592,576		1,187,427		1,202,965
Senior and subordinated notes	57,113		114,797		115,157		255,767
Other borrowings	155,357		256,728		326,942		572,977
Total interest expense	768,049		964,101		1,629,526		2,031,709
Net interest income	1,946,586		1,727,756		3,733,337		3,539,673
Provision for loan and lease losses	934,038		829,130		2,213,175		1,908,202
Net interest income after provision for loan and lease losses	1,012,548		898,626		1,520,162		1,631,471
Non-Interest Income:
Servicing and securitizations	362,416		834,740		816,053		1,917,802
Service charges and other customer-related fees	491,763		524,209		997,888		1,098,270
Mortgage servicing and other	13,163		16,552		36,543		51,807
Interchange	126,702		132,730		266,793		284,632
Net impairment losses recognized in earnings	(10,031)	[1]	0	[1]	(10,394)	[1]	0	[1]
Other	247,674		114,085		215,138		326,283
Total non-interest income	1,231,687		1,622,316		2,322,021		3,678,794
Non-Interest Expense:
Salaries and associate benefits	633,819		578,572		1,188,250		1,189,852
Marketing	133,970		288,100		296,682		585,893
Communications and data processing	194,578		195,102		393,682		382,345
Supplies and equipment	128,483		131,937		247,383		262,868
Occupancy	114,885		80,137		215,136		168,217
Restructuring expense	43,374		13,560		61,001		66,319
Other	672,647		532,193		1,264,714		986,384
Total non-interest expense	1,921,756		1,819,601		3,666,848		3,641,878
Income (loss) from continuing operations before income taxes	322,479		701,341		175,335		1,668,387
Income tax (benefit) provision	92,278		238,843		32,055		573,334
Income (loss) from continuing operations, net of tax	230,201		462,498		143,280		1,095,053
Loss from discontinued operations, net of tax	(5,998)		(9,593)		(30,956)		(93,644)
Net Income	224,203		452,905		112,324		1,001,409
Net income (loss) available to common shareholders	($275,515)		$452,905		($451,584)		$1,001,409
Basic earnings per common share:
Income (loss) from continuing operations	-0.64		1.24		-1.03		2.95
Loss from discontinued operations	-0.01		-0.03		-0.08		-0.25
Net income (loss)	-0.65		1.21		-1.11		2.7
Diluted earnings per common share:
Income (loss) from continuing operations	-0.64		1.24		-1.03		2.94
Loss from discontinued operations	-0.01		-0.03		-0.08		-0.25
Net income (loss)	-0.65		1.21		-1.11		2.69
Dividends paid per common share	0.05		0.375		0.425		0.75
[1]Total other-than-temporary impairment losses for the three and six months ended June 30, 2009 are $159.2 million and $159.6 million, respectively. The portion of loss recognized in other comprehensive income (before taxes) is $149.2 million for both the three and six months ended June 30, 2009.

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Thousands, except Share data		Common Stock [Member]	Preferred Stock	Paid-In Capital, Net	Retained Earnings	Cumulative Other Comprehensive Income (Loss)	Treasury Stock	Total
Beginning Balance at Dec. 31, 2007		$4,192	$0	$15,860,490	$11,267,568	$315,248	($3,153,386)	$24,294,112
Beginning Balance at Dec. 31, 2007	419,224,900
Adjustment to initially apply the measurement date provision of FAS 158, net of income tax benefit of $317					572	(1,161)		(589)
Comprehensive income:
Net income					1,001,409			1,001,409
Other comprehensive income (loss), net of income tax:
Unrealized gain/(losses) on securities, net of income taxes of $294,504 in 2009 and income tax benefit of $82,865 in 2008						(153,892)		(153,892)
Defined benefit pension plans, net of income tax benefit of $326 in 2009 and $1,388 in 2008						(2,730)		(2,730)
Foreign currency translation adjustments						(29,358)		(29,358)
Unrealized gains/(loss) on cash flow hedging instruments, net of income taxes of $37,223 in 2009 and income tax benefit of $810 in 2008						(1,504)		(1,504)
Other comprehensive income		0	0	0	0	(187,484)	0	(187,484)
Cash dividends-Common stock $0.425 in 2009 and $0.75 in 2008 per share					(280,671)			(280,671)
Purchase of treasury stock							(11,662)	(11,662)
Issuances of common stock and restricted stock, net of forfeitures	1,493,355
Issuances of common stock and restricted stock, net of forfeitures		15		18,561				18,576
Exercise of stock options and tax benefits of exercises and restricted stock vesting	1,580,365
Exercise of stock options and tax benefits of exercises and restricted stock vesting		16		47,259				47,275
Compensation expense for restricted stock awards and stock options				37,349				37,349
Allocation of ESOP shares				3,150				3,150
Ending Balance at Jun. 30, 2008	422,298,620
Ending Balance at Jun. 30, 2008		4,223	0	15,966,809	11,988,878	126,603	(3,165,048)	24,921,465
Other comprehensive income (loss), net of income tax:
Beginning Balance at Dec. 31, 2008		4,384	3,096,466	17,278,102	10,621,164	(1,221,796)	(3,165,887)	26,612,433
Beginning Balance at Dec. 31, 2008	438,434,235
Comprehensive income:
Net income					112,324			112,324
Other comprehensive income (loss), net of income tax:
Unrealized gain/(losses) on securities, net of income taxes of $294,504 in 2009 and income tax benefit of $82,865 in 2008						583,442		583,442
Defined benefit pension plans, net of income tax benefit of $326 in 2009 and $1,388 in 2008						(586)		(586)
Foreign currency translation adjustments						184,359		184,359
Unrealized gains/(loss) on cash flow hedging instruments, net of income taxes of $37,223 in 2009 and income tax benefit of $810 in 2008						55,802		55,802
Other comprehensive income		0	0	0	0	823,017	0	823,017
Cash dividends-Common stock $0.425 in 2009 and $0.75 in 2008 per share					(168,281)			(168,281)
Cash dividends-Preferred stock 5% per annum			(22,714)		(82,461)			(105,175)
Purchase of treasury stock							(3,410)	(3,410)
Issuances of common stock and restricted stock, net of forfeitures	60,856,434
Issuances of common stock and restricted stock, net of forfeitures		609		1,521,930				1,522,539
Exercise of stock options and tax benefits of exercises and restricted stock vesting	1,900
Exercise of stock options and tax benefits of exercises and restricted stock vesting				(1,558)				(1,558)
Accretion of preferred stock discount			33,554		(33,554)			0
Redemption of preferred stock			(3,107,306)		(447,893)			(3,555,199)
Compensation expense for restricted stock awards and stock options				60,797				60,797
Issuance of common stock for acquisition	2,560,601
Issuance of common stock for acquisition		26		30,830				30,856
Allocation of ESOP shares				1,233				1,233
Ending Balance at Jun. 30, 2009	501,853,170
Ending Balance at Jun. 30, 2009		$5,019	$0	$18,891,334	$10,001,299	($398,779)	($3,169,297)	$25,329,576

2_Statement Of Shareholders Equ

Statement Of Shareholders Equity And Other Comprehensive Income (Parenthetical) (USD $)
In Thousands, except Per Share data	Preferred Stock	Retained Earnings	Cumulative Other Comprehensive Income (Loss)	Total
Adjustment to initially apply the measurement date provision of FAS 158, income tax benefit		$317	$317	$317
Unrealized gain/(losses) on securities, income taxes/benefit			82,865	82,865
Defined benefit pension plans, income tax benefit			1,388	1,388
Unrealized gains/(loss) in cash flow hedging instruments, income taxes/benefit			810	810
Cash dividends, per share		0.75		0.75
Unrealized gain/(losses) on securities, income taxes/benefit			294,504	294,504
Defined benefit pension plans, income tax benefit			326	326
Unrealized gains/(loss) in cash flow hedging instruments, income taxes/benefit			$37,223	$37,223
Cash dividends, per share		0.425		0.425
Cash dividends-Preferred stock, percent per annum	5%	5%		5%

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect Deposit Based Operations (USD $)
In Thousands	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Operating Activities:
Income from continuing operations, net of tax	$143,280	$1,095,053
Loss from discontinued operations, net of tax	(30,956)	(93,644)
Net Income	112,324	1,001,409
Adjustments to reconcile net income to cash provided by operating activities:
Provision for loan and lease losses	2,213,175	1,908,202
Depreciation and amortization, net	381,586	361,133
Gains on sales of securities available for sale	(57,209)	(12,790)
Gain on sales of auto loans	0	(2,125)
Gain on repurchase of senior notes	0	(53,289)
Mortgage loans held for sale:
Transfers and originations	(814,804)	(1,247,090)
Loss (Gain) on sales	399	(21,158)
Proceeds from sales	794,382	1,479,198
Stock plan compensation expense	58,108	44,854
Changes in assets and liabilities:
(Increase) Decrease in interest receivable	(123,292)	60,722
Decrease (Increase) in accounts receivable from securitizations	1,122,786	(584,027)
Decrease (Increase) in other assets	1,404,549	(328,525)
Decreases in interest payable	(16,614)	(10,120)
Decreases in other liabilities	(1,924,554)	(72,984)
Net cash used in operating activities attributable to discontinued operations	(10,463)	(19,640)
Net cash provided by operating activities	3,140,373	2,503,770
Investing Activities:
Purchases of securities available for sale	(11,925,539)	(11,277,343)
Proceeds from maturities of securities available for sale	4,414,252	3,559,824
Proceeds from sales of securities available for sale	3,057,351	2,266,004
Proceeds from securitizations of loans	7,049,716	4,993,667
Net decrease in loans held for investment	(698,862)	(2,212,015)
Principal recoveries of loans previously charged off	401,640	333,172
Additions of premises and equipment, net	(175,870)	(203,047)
Net payment for companies acquired	(448,151)	0
Net cash provided by investing activities attributable to discontinued operations	301	11,683
Net cash provided by (used in) investing activities	1,674,838	(2,528,055)
Financing Activities:
Net (decrease) increase in deposits	(5,453,238)	9,645,884
Net decreases in other borrowings	(2,611,953)	(7,518,432)
Maturities of senior notes	(417,539)	(1,118,694)
Repurchases of senior notes	0	(1,064,597)
Redemptions of acquired company debt and noncontrolling interest	(464,915)	0
Issuance of senior notes	1,000,000	0
Issuance of subordinated notes	1,500,000	0
Redemption of preferred stock	(3,555,199)	0
Purchases of treasury stock	(3,410)	(11,662)
Dividends paid-common stock	(168,281)	(280,671)
Dividends paid-preferred stock	(105,175)	0
Net proceeds from issuances of common stock	1,523,772	21,726
Proceeds from share based payment activities	(1,558)	47,275
Net cash (used in) provided by financing activities attributable to discontinued operations	(3,448)	6,662
Net cash used in financing activities	(8,760,944)	(272,509)
Net decreases in cash and cash equivalents	(3,945,733)	(296,794)
Cash and cash equivalents at beginning of year	7,491,343	4,821,409
Cash and cash equivalents of acquired companies	1,226,317	0
Cash and cash equivalents at end of period	$4,771,927	$4,524,615

Notes to Financial Statements

Notes to Financial Statements
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
Note 1 Significant Accounting Policies	Note 1 Significant Accounting Policies Business Capital One Financial Corporation (the Corporation) is a diversified financial services company whose banking and non-banking subsidiaries market a variety of financial products and services. The Corporations principal subsidiaries are: Capital One Bank (USA), National Association (COBNA) which currently offers credit and debit card products, other lending products and deposit products. Capital One, National Association (CONA) which offers a broad spectrum of banking products and financial services to consumers, small businesses and commercial clients. Chevy Chase Bank, F.S.B. (Chevy Chase Bank) which offers a broad spectrum of banking products and financial services to consumers, small businesses and commercial clients. On February27, 2009, the Corporation acquired Chevy Chase Bank for $475.9 million comprised of cash of $445.0 million and 2.56million shares of common stock valued at $30.9 million. Chevy Chase Bank has the largest retail branch presence in the Washington D.C. region. See Note 2 for more information regarding the acquisition. On July30, 2009 the Company merged Chevy Chase Bank, F.S.B. with and into CONA. During 2008, the Corporation completed several reorganizations and consolidations to streamline operations and regulatory relationships. On January1, Capital One Auto Finance Inc. (COAF) moved from a direct subsidiary of the Corporation to become a direct operating subsidiary of CONA. In connection with the COAF move, one of COAFs direct operating subsidiaries, Onyx Acceptance Corporation (Onyx), became a direct subsidiary of the Corporation. On March1, the Corporation converted Capital One Bank from a Virginia-state chartered bank to a national association called Capital One Bank (USA), National Association (COBNA). On March8, Superior Savings of New England, N.A. (Superior) merged with and into CONA. Both COBNA and CONA are primarily regulated by the Office of the Comptroller of the Currency (the OCC). In May 2008, we consolidated the business and operations of two registered broker-dealers, Capital One Securities, LLC (dba Capital One Investments, LLC) and Capital One Investment Services Corporation (formerly NFB Investment Services Corporation), into Capital One Investments Services Corporation. In addition, in May 2008, we consolidated the business and operations of three insurance agencies, Capital One Agency Corp., GreenPoint Agency, Inc. and Hibernia Insurance Agency, LLC into Green Point Agency, Inc., which is now known as Capital One Agency LLC. The Corporation and its subsidiaries are hereafter collectively referred to as the Company. CONA, COBNA and Chevy Chase Bank are hereafter collectively referred to as the Banks. Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) that require management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. The Consolidated Fin
Note 2 Acquisitions	Note 2 Acquisitions Chevy Chase Bank On February27, 2009, the Company acquired all of the outstanding common stock of Chevy Chase Bank in exchange for Capital One common stock and cash with a total value of $475.9 million. Under the terms of the stock purchase agreement, Chevy Chase Bank common shareholders received $445.0 million in cash and 2.56million shares of Capital One common stock. In addition, to the extent that losses on certain of Chevy Chase Banks mortgage loans are less than the level reflected in the net credit mark estimated at the time the deal was signed, the Company will share a portion of the benefit with the former Chevy Chase Bank common shareholders (the earn-out). As of June30, 2009, the Company has not recognized a liability associated with the earn-out as given our expectations for credit losses on the portfolio the Company does not expect to make any payments under the earn-out. The maximum payment under the earn-out is $300.0 million and would occur after December31, 2013. Subsequent to the closing of the acquisition all of the outstanding shares of preferred stock of Chevy Chase Bank and the subordinated debt of its wholly-owned REIT subsidiary, were redeemed. This acquisition improves the Companys core deposit funding base, increases readily available and committed liquidity, adds additional scale in bank operations, and brings a strong customer base. Chevy Chase Banks results of operations are included in the Companys results after the acquisition date of February27, 2009. The Chevy Chase Bank acquisition is being accounted for under the acquisition method of accounting in accordance with SFAS141(R). Accordingly, the purchase price was allocated to the acquired assets and liabilities based on their estimated fair values at the Chevy Chase Bank acquisition date, as summarized in the following table. Preliminary goodwill of $1.4 billion is calculated as the purchase premium after adjusting for the fair value of net assets acquired and represents the value expected from the synergies created through the scale, operational and product enhancement benefits that will result from combining the operations of the two companies. During the second quarter of 2009, the Company continued the analysis of the fair values and purchase price allocation of Chevy Chase Banks assets and liabilities. The Company recorded an increase to goodwill of $291.1 million as a result. The change was predominantly related to a reduction in the fair value of net loans, offset by a corresponding change in deferred tax assets. The Company has not finalized the analysis and still considers goodwill to be preliminary, except as it relates to deposits and borrowings. The fair value of the noncontrolling interest was calculated based on the redemption price of the interests, as well as any accrued but unpaid dividends. The shares of preferred stock of Chevy Chase Bank have been redeemed as noted above, and therefore, there is no longer a noncontrolling interest. OriginalAllocation Adjustments Revised Allocation Costs to acquire Chevy Chase Bank: Cash consideration paid $ 445,
Note 3 Loans Acquired in a Transfer	Note 3 Loans Acquired in a Transfer The Companys acquired loans from the Chevy Chase Bank acquisition, subject to SFAS 141(R), are recorded at fair value and no separate valuation allowance is recorded at the date of acquisition. The Company is required to review each loan at acquisition to determine if it should be accounted for under SOP 03-3 and if so, determines whether each such loan is to be accounted for individually or whether such loans will be aggregated into pools of loans based on common risk characteristics. During the second quarter of 2009, the Company performed its analysis of the loans to be accounted for as impaired under SOP 03-3. The loans acquired with the Chevy Chase Bank acquisition not accounted for under SOP 03-3 have been accounted for under SFAS 141(R) and are considered performing. The accounting treatment is essentially the same under both standards. The disclosure requirements under SOP 03-3 are more extensive, though the Company has elected to provide such disclosures for all of the acquired Chevy Chase Bank loans. During the evaluation of whether a loan was considered impaired under SOP 03-3 or performing under SFAS 141(R), the Company considered a number of factors, including the delinquency status of the loan, payment options and other loan features (i.e. reduced documentation, interest only, or negative amortization features), the geographic location of the borrower or collateral and the risk rating assigned to the loans. Based on the criteria, the Company considered the entire option arm, hybrid arm and construction to permanent portfolios to be impaired and accounted for under SOP 03-3. Portions of the commercial loan, auto, HELOC and other consumer loan portfolios and the fixed mortgage portfolio were also considered impaired. The Company makes an estimate of the total cash flows it expects to collect from the loans (or pools of loans), which includes undiscounted expected principal and interest. The excess of that amount over the fair value of the loans is referred to as accretable yield. Accretable yield is recognized as interest income on a constant yield basis over the life of the loans. The Company also determines the loans contractual principal and contractual interest payments. The excess of that amount over the total cash flows it expects to collect from the loans is referred to as nonaccretable difference, which is not accreted into income. Judgmental prepayment assumptions are applied to both contractually required payments and cash flows expected to be collected at acquisition. The Company continues to estimate cash flows expected to be collected over the life of the loans. Subsequent increases in total cash flows it expects to collect are recognized as an adjustment to the accretable yield with the amount of periodic accretion adjusted over the remaining life of the loans. Subsequent decreases in cash flows expected to be collected over the life of the loans are recognized as impairment in the current period through a valuation allowance. Adjustments to the acquisition date fair value of the acquired loans made during the refinement of the allocation of purchase price could impact acc
Note 4 Discontinued Operations	Note 4 Discontinued Operations Shutdown of Mortgage Origination Operations of Wholesale Mortgage Banking Unit In the third quarter of 2007, the Company shut down the mortgage origination operations of its wholesale mortgage banking unit, GreenPoint Mortgage (GreenPoint). GreenPoint was acquired by the Company in December 2006 as part of the North Fork acquisition. The results of the mortgage origination operations of GreenPoint have been accounted for as a discontinued operation and have been removed from the Companys results from continuing operations for the three and six months ended June30, 2009 and 2008. The results of GreenPoints mortgage servicing business continue to be reported as part of the Companys continuing operations. The mortgage servicing function was moved into the Local Banking segment in conjunction with the shutdown of the mortgage origination operation and the results of the Local Banking segment include the mortgage servicing results for the three and six months ended June30, 2009 and 2008. The commercial and consumer mortgage loans held for investment portfolios were reported in the Local Banking segment and the Other segment, respectively, for the three and six months ended June30, 2009 and 2008. The Company will have no significant continuing involvement in the operations of the originate and sell business of GreenPoint. The loss from discontinued operations includes an expense of zero and $26.0 million for the three and six months ended June30, 2009, respectively, and income of $9.1 million and an expense of $95.1 million for the three and six months ended June30, 2008, respectively, which are recorded in non-interest expense for representations and warranties provided by the Company on loans previously sold to third parties by GreenPoints mortgage origination operation. The following is summarized financial information for discontinued operations related to the closure of the Companys wholesale mortgage banking unit: ThreeMonthsEnded June30 SixMonthsEnded June30 2009 2008 2009 2008 Net interest income $ 53 $ 1,797 $ 776 $ 3,720 Non-interest income 71 1,393 126 3,230 Non-interest expense 9,452 18,198 48,985 153,452 Income tax benefit (3,330 ) (5,415 ) (17,127 ) (52,858 ) Loss from discontinued operations, net of taxes $ (5,998 ) $ (9,593 ) $ (30,956 ) $ (93,644 ) The Companys wholesale mortgage banking unit had assets of approximately $45.9 million as of June30, 2009 consisting of $15.8 million of mortgage loans held for sale and other related assets. The related liabilities consisted of obligations to fund these assets, and obligations for representations and warranties provided by the Company on loans previously sold to third parties.
Note 5 Segments	Note 5 Segments The segments reflect the manner in which financial information is currently evaluated. The Company strategically manages and reports the results of its business through two operating segment levels: Local Banking and National Lending. The Local Banking segment includes the Companys branch, treasury services and national deposit gathering activities; its commercial, branch based small business lending and certain branch originated consumer lending; and its mortgage servicing activities. The results of the GreenPoint mortgage origination operations are being reported as discontinued operations for 2009 and 2008, and are not included in the segment results of the Company. The results of GreenPoints mortgage servicing business and small ticket commercial real estate loans held for investment portfolio are reported as part of the Companys continuing operations and included in the Local Banking segment. The results of GreenPoints consumer mortgage loans held for investment portfolio, that are in a state of run-off, are reported as part of the Companys continuing operations and included in the Other segment. The Local Banking and National Lending segments are considered reportable segments based on quantitative thresholds applied to the managed loan portfolio for reportable segments provided by SFAS131, and are disclosed separately. The National Lending segment consists of the following sub-segments: U.S. Card, which consists of the Companys domestic credit card business, including small business credit cards, and the installment loan businesses, Auto Finance and International lending. The Other segment includes the Companys liquidity portfolio, emerging businesses not included in the reportable segments, and various non-lending activities. The Other segment also includes, the results of GreenPoints consumer mortgage loans held for investment portfolio, the GreenPoint home equity line of credit portfolio, the net impact of transfer pricing, certain unallocated expenses, gains/losses related to the securitization of assets, and restructuring charges related to the Companys cost initiative announced in the second quarter of 2007. The results of Chevy Chase Bank operations since acquisition are included in the Other segment and will be reclassified into appropriate reporting segments in the third quarter of 2009. The Company maintains its books and records on a legal entity basis for the preparation of financial statements in conformity with GAAP. The following tables present information prepared from the Companys internal management information system, which is maintained on a line of business level through allocations from the consolidated financial results. The following tables present certain information regarding the Companys continuing operations by segment: Three months ended June30, 2009 Total Company National Lending Local Banking Other Total Managed Securitization Adjustments(1) Total Reported Net interest income $ 2,170,316 $ 637,383 $ 151,494 $ 2,959,193 $ (1,012,607 ) $ 1,946,586 Non-interest income 908,301
Note 6 Securities Available for Sale	Note 6 Securities Available for Sale Expected maturities aggregated by investment category, gross unrealized gains and gross unrealized losses on securities available-for sale as of June30, 2009 were as follows: Expected Maturity Schedule 1 Year or Less 15 Years 510 Years Over 10 Years Market Value Totals Gross Unrealized Gains Gross Unrealized Losses Amortized Cost Totals June 30, 2009 U.S.TreasuryandotherU.S. government agency obligations U.S. Treasury $ 45,088 $ 393,661 $ $ $ 438,749 $ 12,278 $ (210 ) $ 426,681 FNMA 114,495 161,880 276,375 11,860 264,515 FHLMC 107,813 107,813 8,126 99,687 Other GSE and FDIC Debt Guaranteed Program (DGP) 106,860 106,860 5,937 100,923 Total U.S. Treasury and other U.S. government agency obligations 159,583 770,214 929,797 38,201 (210 ) 891,806 Collateralized mortgage obligations (CMO) FNMA 457,407 2,932,977 1,260,817 4,651,201 100,094 (17,915 ) 4,569,022 FHLMC 81,868 2,899,204 2,031,030 80,456 5,092,558 134,052 (16,039 ) 4,974,545 Other GSE 11,939 263,160 275,099 8,309 (106 ) 266,896 Non GSE 80,721 1,131,067 319,305 7,209 1,538,302 8 (577,065 ) 2,115,359 Total CMO 631,935 7,226,408 3,611,152 87,665 11,557,160 242,463 (611,125 ) 11,925,822 Mortgage backed securities (MBS) FNMA 106,787 3,167,358 5,997,826 782,049 10,054,020 239,480 (23,277 ) 9,837,817 FHLMC 105,367 2,542,047 2,759,587 1,090,340 6,497,341 134,071 (24,799 ) 6,388,069 Other GSE 152 39,978 354,117 394,247 12,897 (193 ) 381,543 Non GSE 113,770 682,328 796,098 (338,177 ) 1,134,275 Total MBS 212,306 5,863,153 9,793,858 1,872,389 17,741,706 386,448 (386,446 ) 17,741,704 Asset backed securities 2,381,100 4,402,902 211,228 6,995,230 123,257 (81,287 ) 6,953,260 Other 151,669 134,656 19,932 137,015 443,272 7,474 (8,045 ) 443,843 Total $ 3,536,594 $ 18,397,333 $ 13,636,170 $ 2,097,069 $ 37,667,165 $ 797,843 $ (1,087,113 ) $ 37,956,435 The expected maturities of the Companys mortgage-backed and
Note 7 Fair Values of Assets and Liabilities	Note 7 Fair Values of Assets and Liabilities SFAS 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. SFAS 157 requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. SFAS 157 also establishes a fair value hierarchy which prioritizes the valuation inputs into three broad levels. Based on the underlying inputs, each fair value measurement in its entirety is reported in one of the three levels. These levels are: Level 1Valuation is based upon quoted prices for identical instruments traded in active markets. Level 1 assets and liabilities include debt and equity securities traded in an active exchange market, as well as U.S. Treasury securities. Level 2Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3Valuation is determined using model-based techniques with significant assumptions not observable in the market. These unobservable assumptions reflect the Companys own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include the use of third party pricing services, option pricing models, discounted cash flow models and similar techniques. SFAS 159 allows an entity the irrevocable option to elect fair value for the initial and subsequent measurement for certain financial assets and liabilities on a contract-by-contract basis. The Company has not made any material SFAS 159 elections as of the end of the second quarter of 2009. Assets and Liabilities Measured at Fair Value on a Recurring Basis June30, 2009 Fair Value Measurements Using (3) Assets/Liabilities at Fair Value Level 1 Level 2 Level 3 Assets Securities available for sale U.S. Treasury and other U.S. Govt agency 438,750 491,049 929,799 Collateralized mortgage obligations 10,258,971 1,309,089 11,568,060 Mortgage-backed securities 17,101,487 629,322 17,730,809 Asset-backed securities 6,993,513 1,716 6,995,229 Other 61,499 352,473 29,296 443,268 Total securities available for sale $ 500,249 $ 35,197,493 $ 1,969,423 $ 37,667,165 Other assets Mortgage servicing rights 280,742 280,742 Derivative receivables(1) 4,793 656,919 541,052 1,202,764 Retained interests in securitizations 3,939,213 3,939,213 Total Assets $ 505,042
Note 8 Goodwill and Other Intangible Assets	Note 8 Goodwill and Other Intangible Assets During the first quarter of 2009, the Company acquired Chevy Chase Bank, the largest retail branch presence in the Washington, D.C. region, which created $1.4 billion of goodwill. The goodwill associated with the acquisition of Chevy Chase Bank was held in the Other segment in the second quarter of 2009. See Note 2 for information regarding the Chevy Chase Bank acquisition. Goodwill impairment is tested at the reporting unit level, which is an operating segment or one level below on an annual basis in accordance with SFAS No.142, Goodwill and Other Intangible Assets. The Companys reporting units are Local Banking, U.S. Card, Auto Finance, and International. The goodwill impairment analysis is a two-step test. The first step, used to identify potential impairment, involves comparing each reporting units fair value to its carrying value including goodwill. If the fair value of a reporting unit exceeds its carrying value, applicable goodwill is considered not to be impaired. If the carrying value exceeds fair value, there is an indication of impairment and the second step is performed to measure the amount of impairment. Since our annual impairment testing , our stock price, along with the stock prices of others in the financial services industry, declined significantly, resulting in a decline in our market capitalization. The Company has continued to monitor its market capitalization, regulatory actions and assessments, as well as overall economic conditions and other events or circumstances. For the six months ended June30, 2009, no impairment of goodwill was recognized. The following table provides a summary of goodwill. Total Company National Lending Local Banking Other Total Balance at December31, 2008 $ 5,303,299 $ 6,661,188 $ $ 11,964,487 Additions 1,405,148 1,405,148 Other adjustments (4 ) (4 ) Foreign currency translation 11,425 11,425 Balance at June30, 2009 $ 5,314,724 $ 6,661,184 $ 1,405,148 $ 13,381,056 National Lending Detail U.S. Card Auto Finance International National Lending Total Balance at December31, 2008 $ 3,761,318 $ 619,512 $ 922,469 $ 5,303,299 Foreign currency translation 11,425 11,425 Balance at June30, 2009 $ 3,761,318 $ 619,512 $ 933,894 $ 5,314,724 In connection with the acquisition of Chevy Chase Bank, the Company recorded intangible assets of $286.8 million that consisted of core deposit intangibles, trust intangibles, lease intangibles, and other intangibles, which are subject to amortization. The core deposit and trust intangibles reflect the estimated value of deposit and trust relationships. The lease intangibles reflect the difference between the contractual obligation under current lease contracts and the fair market value of the lease contracts at the acquisition date. The other intangible items relate to customer
Note 9 Deposits and Borrowings	Note 9 Deposits and Borrowings Borrowings as of June30, 2009 and December31, 2008 were as follows: June30, 2009 December31, 2008 Outstanding Weighted Average Rate Outstanding Weighted Average Rate Deposits Non-interest bearing deposits $ 12,603,548 N/A $ 11,293,852 N/A Interest-bearing deposits 104,120,642 2.17 % 97,326,937 2.64 % Total deposits $ 116,724,190 $ 108,620,789 Senior and subordinated notes Bank notes: Senior-Fixed, interest rates ranging from 5.00% to 5.75%, due 2010 to 2014 $ 806,291 5.53 % $ 1,234,712 5.35 % Subordinated-Fixed, interest rates ranging from 6.50% to 9.25%, due 2010 to 2019 2,204,945 8.30 % 688,714 7.13 % Corporation notes: Senior-Fixed, interest rates ranging from 4.80% to 7.375%, due 2013 to 2017 4,462,206 6.34 % 3,580,923 6.04 % Subordinated-Fixed, interest rates ranging from 5.35% to 6.15%, due 2012 to 2016 1,589,351 6.03 % 1,774,668 6.03 % Senior-Variable, interest rate of LIBOR plus 0.28% per annum, due 2009 1,029,826 0.93 % 1,029,826 2.47 % Total senior and subordinated notes $ 10,092,619 $ 8,308,843 June30, 2009 December31, 2008 Outstanding Weighted Average Rate Outstanding Weighted Average Rate Other borrowings Secured borrowings Fixed, interest rates ranging from 4.34% to 5.76%, due 2009 to 2011 1,641,718 5.07 % 2,698,381 5.06 % Variable, interest rates ranging from 0.319% to 1.705%, due 2010 to 2011 3,628,649 0.36 % 4,812,457 1.24 % Junior subordinated debentures Fixed, interest rates ranging from 3.648% to 8.17%, due 2027 to 2066 1,649,988 7.37 % 1,648,268 7.38 % FHLB advances Fixed, interest rates ranging from 2.785% to 8.25%, due 2009 to 2019 2,396,801 3.02 % 2,777,179 3.20 % Variable, interest rates ranging from 0.64% to 3.435% due 2009 1,800,000 0.68 % 2,100,000 2.38 % Federal funds purchased and resale agreements Fixed, interest rates ranging from 0.10% to 0.45% due 2009 559,714 0.40 % N/A Variable, interest rates ranging from 0.188% to 0.24%, due 2009 1,583,410 0.01 % 832,961 0.01 % Other short-term borrowings 309 N/A 402 N/A Total other borrowings $ 13,260,589 $ 14,869,648 Deposits Interest-Bearing Deposits As of June30, 2009, the Company had $104.1 billion in interest-bearing deposits of which $11.5 billion represents large denomination certificates of $100 thousand or more. As of December31, 2008, the Company had $97.3 billion in interest-bearing deposits of which $11.3 billion represents large denomination certificates of $100 thou
Note 10 Shareholders' Equity, Comprehensive Income and Earnings Per Common Share	Note 10 Shareholders Equity, Comprehensive Income and Earnings Per Common Share Preferred Shares On June17, 2009, the Company repurchased all 3,555,199 preferred shares, at par, issued in the fourth quarter of 2008 to the U.S. Treasury Department under the TARP Capital Purchase Program with a book value of $3.1 billion for approximately $3.57 billion, including accrued dividends. The warrants to purchase common shares, which were issued together with preferred shares in the fourth quarter of 2008 and with an allocated fair value of $491.5 million, remain outstanding and are included in paid-in capital on the balance sheet. With the repurchase of the preferred shares the remaining accretion of the discount of $461.7 million was accelerated into the second quarter and treated as a dividend and reduced income available to common shareholders. Common Shares On May11, 2009, the Company raised $1.5 billion through the issuance of 56,000,000 shares of common stock at $27.75 per share. Comprehensive Income Comprehensive income for the three months ended June30, 2009 and 2008, respectively was as follows: ThreeMonthsEnded June30 2009 2008 Comprehensive Income: Net income (loss) $ 224,203 $ 452,905 Other comprehensive income (loss), net of tax 453,268 (56,970 ) Total comprehensive income $ 677,471 $ 395,935 Earnings Per Common Share The following table sets forth the computation of basic and diluted earnings per common share: ThreeMonthsEndedJune30 SixMonthsEndedJune30 (Shares in Thousands) 2009 2008 2009 2008 Numerator: Income (loss) from continuing operations, net of tax $ 230,201 $ 462,498 $ 143,280 $ 1,095,053 Loss from discontinued operations, net of tax (5,998 ) (9,593 ) (30,956 ) (93,644 ) Net income (loss) $ 224,203 $ 452,905 $ 112,324 $ 1,001,409 Preferred stock dividends and accretion of discount (2) $ (499,718 ) $ $ (563,908 ) $ Net income (loss) available to common shareholders $ (275,515 ) $ 452,905 $ (451,584 ) $ 1,001,409 Denominator: Denominator for basic earnings per share-weighted-average shares 421,851 372,348 406,240 371,545 Effect of dilutive securities (1): Stock options 501 572 Restricted stock and units 804 845 ThreeMonthsEndedJune30 SixMonthsEndedJune30 (Shares in Thousands) 2009 2008 2009 2008 Dilutive potential common shares 1,305 1,417 Denominator for diluted earnings per share-adjusted weighted-average shares 421,851 373,653 406,240 372,962 Basic earnings per share Incom
Note 11 Mortgage Servicing Rights	Note 11 Mortgage Servicing Rights MSRs are recognized when purchased and in conjunction with loan sales and securitization transactions when servicing rights are retained by the Company; changes in fair value are recognized in mortgage servicing and other income. The Company may enter into derivatives to economically hedge changes in fair value of MSRs. The Company has sold mortgage loans through whole loan sales transactions, and in some instances the loans were subsequently securitized by the third party purchaser and transferred into a VIE, and also through securitization transactions. The Company records the MSR at estimated fair value and has no other loss exposure over and above the recorded fair value. The Company continues to operate the mortgage servicing business and to report the changes in the fair value of MSRs in continuing operations. To evaluate and measure fair value, the underlying loans are stratified based on certain risk characteristics, including loan type, note rate and investor servicing requirements. The following table sets forth the changes in the fair value of mortgage servicing rights during the three and six months ended June30, 2009 and June30, 2008: ThreeMonthsEnded June30 SixMonthsEnded June30 Mortgage Servicing Rights: 2009 2008 2009 2008 Balance, beginning of period $ 258,663 $ 206,110 $ 150,544 $ 247,589 Acquired in acquisitions (1) 109,538 Originations 4,898 7,240 Sales (267 ) (273 ) Change in fair value, net 17,181 26,580 13,420 (14,893 ) Balance, end of period $ 280,742 $ 232,423 $ 280,742 $ 232,423 Ratio of mortgage servicing rights to related loans serviced for others 0.91 % 0.89 % 0.91 % 0.89 % Weighted average service fee 0.30 0.28 0.30 0.28 (1) Related to the Chevy Chase Bank acquisition completed on February27, 2009. Fair value adjustments to the MSRs for the three and six months ended June30, 2009 included a $7.6 million and $14.0 million decrease due to run-off, respectively, and a $24.8 million and $27.5 million increase due to changes in the valuation inputs and assumptions, respectively. The valuation adjustments for the MSR were partially offset by changes in the fair value of economic hedging instruments of $15.5 million and $35.5 million for the three months ended June30, 2009 and 2008, respectively, which were recognized in non-interest income. For additional information on hedging activities, refer to Note 13. The significant assumptions used in estimating the fair value of the servicing assets at June30, 2009 and 2008 were as follows: June30, 2009 June30, 2008 Weighted average prepayment rate (includes default rate) 18.98 % 23.67 % Weighted average life (in years) 4.9 4.1 Discount rate 11.89 % 10.26 % The decrease in the weighted average prepayment rate, and therefore the increase in the weigh
Note 12 Restructuring	Note 12 Restructuring During the second quarter of 2007, the Company announced a broad-based initiative to reduce expenses and improve the competitive cost position of the Company. Restructuring initiatives leverage the capabilities of recently completed infrastructure projects in several of the Companys businesses. The scope and timing of the expected cost reductions are the result of an ongoing, comprehensive review of operations within and across the Companys businesses, which began early in 2007. The Company anticipates recording charges of approximately $60.0 million in excess of the original $300.0 million pre-tax over the course of the cost reduction initiative as the Company has extended the initiative due to the continued economic deterioration. Approximately half of these charges are related to severance benefits, while the remaining charges are associated with items such as contract and lease terminations and consolidation of facilities and infrastructure. Since the start of the initiative the Company has incurred charges of $319.3million. As a result of the acquisition of Chevy Chase Bank, the Company has recorded certain restructuring charges within the income statement associated with the integration of Chevy Chase Bank into the operations of the Company. The employee termination benefits expenses presented below represent one-time activities and do not represent ongoing costs to fully integrate Chevy Chase Bank. The Company also expects to incur costs associated with contract and lease terminations and consolidation of facilities and infrastructure. Restructuring expenses associated with continuing operations were comprised of the following: ChevyChase Acquisition 2007 Company Initiative Threeandsix months ended June 30, 2009 Threemonths ended June 30, 2009 Sixmonths ended June 30, 2009 Restructuring expenses: Employee termination benefits $ 14,411 $ 15,975 $ 27,891 Communication and data processing 42 705 Supplies and equipment 1,515 2,729 Occupancy 10,778 11,431 Other 653 3,834 Total restructuring expenses $ 14,411 $ 28,963 $ 46,590 Employee termination benefits include for the 2007 company initiative charges for executives of the Company for the three and six months ended June30, 2009 of $0.1 million and $3.3 million, respectively, and charges for associates of $15.8 million and $24.6 million for the three and six months ended June30, 2009, respectively. The Company made $26.8 million ($20.5 million related to 2007 initiative and $6.3 related to the Chevy Chase acquisition) and $38.9 million ($32.6 million related to 2007 initiative and $6.3 related to the Chevy Chase acquisition) in cash payments for restructuring charges during the three and six months ended June30, 2009, respectively that related to employee termination benefits. Restructuring accrual activity associated with the Companys cost initiative for the three and six months ended June30, 2009, was as follows: Chevy Chase Acquisition 2007 C
Note 13 Derivative Instruments and Hedging Activities	Note 13 Derivative Instruments and Hedging Activities The Company maintains a risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings caused by interest rate and foreign exchange rate volatility. The Companys goal is to manage sensitivity to changes in rates by hedging the repricing or maturity characteristics of certain balance sheet assets and liabilities, thereby limiting the impact on earnings. By using derivative instruments, the Company is exposed to credit and market risk on those derivative positions. The Company manages the market risk associated with interest rate and foreign exchange contracts by establishing and monitoring limits as to the types and degree of risk that may be undertaken. Credit risk is equal to the extent of the fair value gain in a derivative, if the counterparty fails to perform. When the fair value of a derivative contract is positive, this generally indicates that the counterparty owes the Company, and, therefore, creates a repayment risk for the Company. When the fair value of a derivative contract is negative, the Company owes the counterparty, and therefore, has no repayment risk. The Company minimizes the credit (or repayment) risk in derivative instruments by entering into transactions with high-quality counterparties that are reviewed periodically by the Companys Asset and Liability Management Committee, a committee of Senior Management. The Company also maintains a policy of requiring that all derivative contracts be governed by an International Swaps and Derivatives Association Master Agreement; depending on the nature of the derivative transaction, bilateral collateral agreements are generally required as well. The Company uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps generally involve the exchange of fixed and variable rate interest payments between two parties, based on a common notional principal amount and maturity date with no exchange of underlying principal amounts. As a result of interest rate fluctuations, hedged assets and liabilities will appreciate or depreciate in market value. To the extent that there is a high degree of correlation between the hedged asset or liability and the derivative instrument, the income or loss generated will generally offset the effect of this unrealized appreciation or depreciation. The Companys foreign currency denominated assets and liabilities expose it to foreign currency exchange risk. The Company enters into various foreign exchange derivative contracts for managing foreign currency exchange risk. Changes in the fair value of the derivative instrument effectively offset the related foreign exchange gains or losses on the items to which they are designated. The Company has non-trading and trading derivatives that do not qualify as hedges. These derivatives are carried at fair value and changes in value are included in current earnings. The following table provides the notional value and fair values of the Companys derivative instruments, by category, as of June30, 2009: AsofJune3
Note 14 Securitizations	Note 14 Securitizations The Company actively engages in securitization transactions of loans for funding purposes. The Company receives the proceeds from third party investors for securities issued from the Companys securitization vehicles which are collateralized by transferred receivables from the Companys portfolio. The Company removes loans from the reported financial statements for securitizations that qualify as sales in accordance with SFAS 140. Alternatively, when the transfer would not be considered a sale but rather a financing, the assets will remain on the Companys reported financial statements with an offsetting liability recognized in the amount of proceeds received. The Company uses QSPEs to conduct off-balance sheet securitization activities and SPEs that are considered VIEs to conduct other securitization activities. Interests in the securitized and sold loans may be retained in the form of subordinated interest-only strips, subordinated tranches, cash collateral and spread accounts. The Company also retains a sellers interest in the non mortgage securitization loan receivables transferred to the trusts which is carried on a historical cost basis and classified as loans held for investment on the Reported Consolidated Balance Sheet. Accounts Receivable from Securitizations As of June30, 2009 NonMortgage Mortgage Total Interest only strip classified as trading $ 8,031 $ 273,014 $ 281,045 Retained interests classified as trading Retained notes 522,837 522,837 Cash collateral 687,827 899 688,726 Investor AIR 713,832 713,832 Total retained interests classified as trading 1,924,496 899 1,925,395 Retained interests classified as available for sale 1,732,773 1,732,773 Other retained interests 14,154 14,154 Total retained residual interests 3,665,300 288,067 3,953,367 Collections on deposit for off balance sheet securitizations (1)(2) 697,013 (518 ) 696,495 Collections on deposit for secured borrowings 570,106 570,106 Total Accounts Receivable from Securitizations $ 4,932,419 $ 287,549 $ 5,219,968 (1) Collections on deposit for off-balance sheet securitizations include $222 million of principal collections accumulated for expected maturities of securitization transactions as of June30, 2009. (2) Collections on deposit for off-balance sheet securitizations are shown net of payments due to investors for coupon on the notes. Off-Balance Sheet SecuritizationsNon Mortgage Off-balance sheet securitizations involve the transfer of pools of loan receivables by the Company to one or more third-party trusts or QSPEs in transactions that are accounted for as sales in accordance with SFAS 140. The trusts can engage only in limited business activities to maintain QSPE status. Certain undivided interests in the pool of loan receivables are sold to external investors as asset-backed securit
Note 15 Commitments, Contingencies and Guarantees	Note 15 Commitments, Contingencies and Guarantees Letters of Credit The Company issues letters of credit (financial standby, performance standby and commercial) to meet the financing needs of its customers. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party in a borrowing arrangement. Commercial letters of credit are short-term commitments issued primarily to facilitate trade finance activities for customers and are generally collateralized by the goods being shipped to the client. Collateral requirements are similar to those for funded transactions and are established based on managements credit assessment of the customer. Management conducts regular reviews of all outstanding letters of credit and customer acceptances, and the results of these reviews are considered in assessing the adequacy of the Companys allowance for loan and lease losses. The Company had contractual amounts of standby letters of credit and commercial letters of credit of $1.4 billion at June30, 2009. As of June30, 2009, financial guarantees had expiration dates ranging from 2009 to 2018. The fair value of the guarantees outstanding at June30, 2009 that have been issued since January1, 2003, was $2.8 million and was included in other liabilities. Loan and Line of Credit Commitments The Companys discontinued wholesale mortgage banking unit, GreenPoint, previously sold home equity lines of credit in whole loan sales and subsequently acquired a residual interest in certain SPEs which securitized some of those loans. Those SPEs had aggregate assets of $128.1 million at June30, 2009, representing the amount outstanding on the home equity lines of credit at that date. As residual interest holder, GreenPoint is required to fund advances on the home equity lines of credit when certain performance triggers are met due to deterioration in asset performance. GreenPoints ability to recover the full amount advanced to customers is dependent on monthly collections on the loans. In certain limited circumstances, such future advances could be reduced if GreenPoint suspends the right of mortgagors to receive draws or reduces the credit limit on home equity lines of credit. There are eight securitization transactions where GreenPoint is a residual interest holder with the longest draw period currently extending through 2023. GreenPoint has funded $21.0 million of advances through June30, 2009, of which $2.7 million and $5.4million was advanced in the three and six months ended June30, 2009, respectively, related to these transactions. The Company believes it is probable that a loss has been incurred on these transactions due to the deterioration in asset performance through June30, 2009, and has written off the entire amount of the advances as incurred. The maximum potential amount of future advances related to all third-party securitizations where GreenPoint is the residual interest holder is $180.9 million, an amount which represents the total loan amount on the home equity lines of credit within those eight securitizations. The total unutilized amount as of June30, 2009 is $52.8 milli
Note 16 Other Variable Interest Entities	Note 16 Other Variable Interest Entities The Company has various types of off-balance sheet arrangements that we enter into in the ordinary course of business. Off-balance sheet activities typically utilize SPEs that may be in the form of limited liability companies, partnerships or trusts. The SPEs raise funds by issuing debt to third party investors. The SPEs hold various types of financial assets whose cash flows are the primary source of repayment for the liabilities of the SPE. Investors only have recourse to the assets held by the SPE but may also benefit from other credit enhancements. The Company is involved with various SPEs that are considered to be VIEs, as defined by FIN 46(R). With respect to its investments, the Company is required to consolidate any VIE in which it is determined to be the primary beneficiary. The Company reviews all significant interests in VIEs it is involved with such as amounts and types of financial and other support including ownership interests, debt financing and guarantees. The Company also considers its rights and obligations as well as the rights and obligations of other variable interest holders to determine whether it is required to consolidate the VIEs. To provide the necessary disclosures, the Company aggregates similar VIEs based on the nature and purpose of the entities. The Companys involvement in these arrangements can take many different forms, including securitization activities, servicing activities, the purchase or sale of mortgage-backed securities (MBS) and other asset-backed securities (ABS) in connection with our investment portfolio, and loans to VIEs that hold debt, equity, real estate or other assets. In certain instances, the Company also provides guarantees to VIEs or holders of variable interests in VIEs. In addition to the information contained in this Note, the Company has disclosed its involvement with other types of VIEs in Note 11Mortgage Servicing Rights, Note 14Securitizations and Note 15Commitments, Contingencies and Guarantees. The Company may purchase and sell mortgage-backed securities and other asset-backed securities related to its investment portfolio. The Companys investment portfolio consists of Commercial mortgage-backed security (CMBS), Collateralized mortgage obligations (CMO), MBS and ABS investments that were issued by QSPEs or VIEs that are subject to the requirements of FIN46(R). The Companys variable interest in these structures is limited to high quality or investment grade securities and the Company does not hold subordinate residual interests or enter into other guarantees or liquidity agreements with these structures. The Company records its investment securities at fair value and has no other loss exposure over and above the recorded fair value. The Company is not considered to be the primary beneficiary and the Company does not hold a significant interest in any specific structure. As part of its community reinvestment initiatives, the Company invests in private investment funds that hold ownership interests in VIEs or provide debt financing to VIEs to support multi-family affordable housing properties. The Company receives affordable
Note 17 Subsequent Events	Note 17 Subsequent Events In accordance with SFAS 165, the Company evaluates subsequent events that have occurred after the balance sheet date but before the financial statements are issued.There are two types of subsequent events: (1)recognized, or those that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, and (2)nonrecognized, or those that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date.The Company evaluated subsequent events through August10, 2009. Based on the evaluation, the Company did not identify any recognized subsequent events that would haverequired adjustment to the financial statements.The following were nonrecognized subsequent events identified by the Company: On July 26, 2009, the Company sold its U.K. deposits business. The amount of deposits sold totalled approximately $1.2 billion. The Company recognized a small loss on the sale. On July29, 2009, the Company issued $1.0 billion of trust preferred securities at a fixed rate of 10.25%, due 2039. On July30, 2009, the Company merged Chevy Chase Bank, F.S.B with and into CONA.

Document Information

Document Information
	6 Months Ended Jun. 30, 2009 USD / shares
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Amendment Description	N.A.
Document Period End Date	2009-06-30

Entity Information

Entity Information (USD $)
	6 Months Ended Jun. 30, 2009	Jul. 31, 2009	Jun. 30, 2008
Entity [Text Block]
Trading Symbol	COF
Entity Registrant Name	CAPITAL ONE FINANCIAL CORP
Entity Central Index Key	0000927628
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		454,964,553
Entity Public Float			$14,119,470,287