Exhibit 99.1
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY
REPORTED BASIS
(in millions, except per share data and as noted) | 2009 Q3 | 2009 Q2 | 2009 Q1(10) | 2008 Q4 | 2008 Q3 | |||||||||||||||
Earnings (Reported Basis) | ||||||||||||||||||||
Net Interest Income | $ | 2,050.7 | $ | 1,946.6 | $ | 1,786.8 | $ | 1,802.4 | $ | 1,806.6 | ||||||||||
Non-Interest Income(2) | 1,552.4 | 1,231.7 | (5) | 1,090.3 | 1,368.3 | 1,696.9 | ||||||||||||||
Total Revenue(1) | 3,603.1 | 3,178.3 | 2,877.1 | 3,170.7 | 3,503.5 | |||||||||||||||
Provision for Loan Losses | 1,173.2 | 934.0 | 1,279.1 | 2,098.9 | 1,093.9 | |||||||||||||||
Marketing Expenses | 103.7 | 134.0 | 162.7 | 264.9 | 267.4 | |||||||||||||||
Restructuring Expenses | 26.4 | 43.4 | 17.6 | 52.8 | 15.3 | |||||||||||||||
Goodwill Impairment Charge | — | — | — | 810.9 | (7) | — | ||||||||||||||
Operating Expenses(3) | 1,672.4 | 1,744.4 | (11) | 1,564.8 | 1,629.3 | 1,527.5 | ||||||||||||||
Income (Loss) Before Taxes | 627.4 | 322.5 | (147.1 | ) | (1,686.1 | ) | 599.4 | |||||||||||||
Tax Rate | 25.2 | % | 28.6 | % | 40.9 | % | 17.2 | % | 35.6 | % | ||||||||||
Income (Loss) From Continuing Operations, Net of Tax | $ | 469.2 | $ | 230.2 | $ | (86.9 | ) | $ | (1,396.3 | ) | $ | 385.8 | ||||||||
Loss From Discontinued Operations, Net of Tax | (43.6 | ) | (6.0 | ) | (25.0 | ) | (25.2 | ) | (11.7 | ) | ||||||||||
Net Income (Loss) | $ | 425.6 | $ | 224.2 | $ | (111.9 | ) | $ | (1,421.5 | ) | $ | 374.1 | ||||||||
Net Income (Loss) Available to Common Shareholders(F) | $ | 425.6 | $ | (275.5 | )(13) | $ | (176.1 | ) | $ | (1,454.3 | ) | $ | 374.1 | |||||||
Common Share Statistics | ||||||||||||||||||||
Basic EPS:(G) | ||||||||||||||||||||
Income (Loss) From Continuing Operations | $ | 1.04 | $ | (0.64 | ) | $ | (0.39 | ) | $ | (3.67 | ) | $ | 1.03 | |||||||
Loss From Discontinued Operations | $ | (0.09 | ) | $ | (0.01 | ) | $ | (0.06 | ) | $ | (0.07 | ) | $ | (0.03 | ) | |||||
Net Income (Loss) | $ | 0.95 | $ | (0.65 | ) | $ | (0.45 | ) | $ | (3.74 | ) | $ | 1.00 | |||||||
Diluted EPS:(G) | ||||||||||||||||||||
Income (Loss) From Continuing Operations | $ | 1.03 | $ | (0.64 | ) | $ | (0.39 | ) | $ | (3.67 | ) | $ | 1.03 | |||||||
Loss From Discontinued Operations | $ | (0.09 | ) | $ | (0.01 | ) | $ | (0.06 | ) | $ | (0.07 | ) | $ | (0.03 | ) | |||||
Net Income (Loss) | $ | 0.94 | $ | (0.65 | ) | $ | (0.45 | ) | $ | (3.74 | ) | $ | 1.00 | |||||||
Dividends Per Common Share | $ | 0.05 | $ | 0.05 | $ | 0.375 | $ | 0.375 | $ | 0.375 | ||||||||||
Tangible Book Value Per Common Share (period end) | $ | 27.02 | $ | 25.34 | $ | 25.11 | $ | 28.24 | $ | 31.63 | ||||||||||
Stock Price Per Common Share (period end) | $ | 35.73 | $ | 21.88 | $ | 12.24 | $ | 31.89 | $ | 51.00 | ||||||||||
Total Market Capitalization (period end) | $ | 16,064.2 | $ | 9,826.3 | $ | 4,806.6 | $ | 12,411.6 | $ | 19,833.9 | ||||||||||
Common Shares Outstanding (period end) | 449.6 | 449.1 | 392.7 | 389.2 | 388.9 | |||||||||||||||
Shares Used to Compute Basic EPS | 449.4 | 421.9 | 390.5 | 389.0 | 372.9 | |||||||||||||||
Shares Used to Compute Diluted EPS | 453.7 | 421.9 | 390.5 | 389.0 | 374.3 | |||||||||||||||
Reported Balance Sheet Statistics (period average)(A) | ||||||||||||||||||||
Average Loans Held for Investment | $ | 99,485 | $ | 105,278 | $ | 103,445 | $ | 99,335 | $ | 98,778 | ||||||||||
Average Earning Assets | $ | 145,410 | $ | 151,400 | $ | 145,374 | $ | 137,799 | $ | 133,277 | ||||||||||
Average Assets | $ | 173,348 | $ | 177,589 | $ | 168,454 | $ | 161,976 | $ | 156,958 | ||||||||||
Average Interest Bearing Deposits | $ | 103,105 | $ | 107,040 | $ | 100,852 | $ | 93,144 | $ | 84,655 | ||||||||||
Total Average Deposits | $ | 115,883 | $ | 119,611 | $ | 112,138 | $ | 104,093 | $ | 95,328 | ||||||||||
Average Equity | $ | 25,999 | $ | 27,658 | (9),(12) | $ | 27,002 | $ | 26,658 | (9) | $ | 25,046 | ||||||||
Return on Average Assets (ROA) | 1.08 | % | 0.52 | % | (0.21 | )% | (3.45 | )% | 0.98 | % | ||||||||||
Return on Average Equity (ROE) | 7.22 | % | 3.33 | % | (1.29 | )% | (20.95 | )% | 6.16 | % | ||||||||||
Reported Balance Sheet Statistics (period end)(A) | ||||||||||||||||||||
Loans Held for Investment | $ | 96,783 | $ | 101,074 | $ | 105,527 | $ | 101,018 | $ | 97,965 | ||||||||||
Total Assets | $ | 168,472 | $ | 171,865 | $ | 177,357 | $ | 165,878 | $ | 154,783 | ||||||||||
Interest Bearing Deposits | $ | 101,769 | $ | 104,121 | $ | 108,696 | $ | 97,327 | $ | 88,248 | ||||||||||
Total Deposits | $ | 114,503 | $ | 116,724 | $ | 121,119 | $ | 108,621 | $ | 98,913 | ||||||||||
Performance Statistics (Reported)(A) | ||||||||||||||||||||
Net Interest Income Growth (annualized) | 21 | % | 36 | % | (3 | )% | (1 | )% | 18 | % | ||||||||||
Non Interest Income Growth (annualized) | 104 | % | 52 | % | (81 | )% | (77 | )% | 18 | % | ||||||||||
Revenue Growth (annualized) | 53 | % | 42 | % | (37 | )% | (38 | )% | 18 | % | ||||||||||
Net Interest Margin | 5.64 | % | 5.14 | % | 4.92 | % | 5.23 | % | 5.42 | % | ||||||||||
Revenue Margin | 9.91 | % | 8.40 | % | 7.92 | % | 9.20 | % | 10.51 | % | ||||||||||
Risk Adjusted Margin(B) | 6.81 | % | 5.44 | % | 4.79 | % | 6.17 | % | 7.90 | % | ||||||||||
Non Interest Expense as a % of Average Loans Held for Investment (annualized) | 7.25 | % | 7.30 | % | 6.75 | % | 7.84 | %(8) | 7.33 | % | ||||||||||
Efficiency Ratio(C) | 49.29 | % | 59.10 | % | 60.04 | % | 59.74 | %(8) | 51.23 | % | ||||||||||
Asset Quality Statistics (Reported)(A) | ||||||||||||||||||||
Allowance | $ | 4,513 | $ | 4,482 | $ | 4,648 | $ | 4,524 | $ | 3,520 | ||||||||||
Allowance as a % of Reported Loans Held for Investment | 4.66 | %(4) | 4.43 | %(4) | 4.40 | %(4) | 4.48 | % | 3.59 | % | ||||||||||
Net Charge-Offs | $ | 1,127 | (4) | $ | 1,119 | (4) | $ | 1,138 | (4) | $ | 1,045 | $ | 872 | |||||||
Net Charge-Off Rate | 4.53 | %(4) | 4.25 | %(4) | 4.40 | %(4) | 4.21 | % | 3.53 | % | ||||||||||
30+ day performing delinquency rate | 4.11 | %(4) | 3.71 | %(4) | 3.63 | %(4) | 4.37 | % | 3.85 | % | ||||||||||
Full-time equivalent employees (in thousands) | 26.0 | 26.6 | 27.5 | 23.7 | 23.5 | |||||||||||||||
1
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY
MANAGED BASIS (*)
(in millions) | 2009 Q3 | 2009 Q2 | 2009 Q1(10) | 2008 Q4 | 2008 Q3 | |||||||||||||||
Earnings (Managed Basis) | ||||||||||||||||||||
Net Interest Income | $ | 3,257.5 | $ | 2,959.2 | $ | 2,743.8 | $ | 2,767.9 | $ | 2,889.3 | ||||||||||
Non-Interest Income(2) | 1,372.7 | 1,189.0 | (5) | 986.2 | 1,183.2 | 1,325.6 | ||||||||||||||
Total Revenue(1) | 4,630.2 | 4,148.2 | 3,730.0 | 3,951.1 | 4,214.9 | |||||||||||||||
Provision for Loan Losses | 2,200.3 | 1,903.9 | 2,132.0 | 2,879.3 | 1,805.3 | |||||||||||||||
Marketing Expenses | 103.7 | 134.0 | 162.7 | 264.9 | 267.4 | |||||||||||||||
Restructuring Expenses | 26.4 | 43.4 | 17.6 | 52.8 | 15.3 | |||||||||||||||
Goodwill Impairment Charge | — | — | — | 810.9 | (7) | — | ||||||||||||||
Operating Expenses(3) | 1,672.4 | 1,744.4 | (11) | 1,564.8 | 1,629.3 | 1,527.5 | ||||||||||||||
Income (Loss) Before Taxes | 627.4 | 322.5 | (147.1 | ) | (1,686.1 | ) | 599.4 | |||||||||||||
Tax Rate | 25.2 | % | 28.6 | % | 40.9 | % | 17.2 | % | 35.6 | % | ||||||||||
Income (Loss) From Continuing Operations, Net of Tax | $ | 469.2 | $ | 230.2 | $ | (86.9 | ) | $ | (1,396.3 | ) | $ | 385.8 | ||||||||
Loss From Discontinued Operations, Net of Tax | (43.6 | ) | (6.0 | ) | (25.0 | ) | (25.2 | ) | (11.7 | ) | ||||||||||
Net Income (Loss) | $ | 425.6 | $ | 224.2 | $ | (111.9 | ) | $ | (1,421.5 | ) | $ | 374.1 | ||||||||
Net Income (Loss) Available to Common Shareholders(F) | $ | 425.6 | $ | (275.5 | )(13) | $ | (176.1 | ) | $ | (1,454.3 | ) | $ | 374.1 | |||||||
Managed Balance Sheet Statistics (period average)(A) | ||||||||||||||||||||
Average Loans Held for Investment | $ | 143,671 | $ | 148,609 | $ | 147,385 | $ | 146,586 | $ | 147,247 | ||||||||||
Average Earning Assets | $ | 186,005 | $ | 191,804 | $ | 186,817 | $ | 182,660 | $ | 179,753 | ||||||||||
Average Assets | $ | 214,575 | $ | 218,325 | $ | 210,133 | $ | 207,240 | $ | 204,694 | ||||||||||
Return on Average Assets (ROA) | 0.87 | % | 0.42 | % | (0.17 | )% | (2.70 | )% | 0.75 | % | ||||||||||
Managed Balance Sheet Statistics (period end)(A) | ||||||||||||||||||||
Loans Held for Investment | $ | 141,059 | $ | 146,251 | $ | 150,335 | $ | 146,937 | $ | 147,346 | ||||||||||
Total Assets | $ | 209,723 | $ | 214,095 | $ | 219,883 | $ | 209,840 | $ | 203,452 | ||||||||||
Tangible Assets(D) | $ | 195,647 | $ | 200,110 | $ | 206,161 | $ | 197,337 | $ | 190,141 | ||||||||||
Tangible Common Equity(E) | $ | 12,146 | $ | 11,379 | $ | 9,862 | $ | 10,990 | $ | 12,301 | ||||||||||
Tangible Common Equity to Tangible Assets Ratio(H) | 6.21 | % | 5.69 | %(6) | 4.78 | % | 5.57 | % | 6.47 | %(6) | ||||||||||
% Off-Balance Sheet Securitizations | 31 | % | 31 | % | 30 | % | 31 | % | 34 | % | ||||||||||
Performance Statistics (Managed)(A) | ||||||||||||||||||||
Net Interest Income Growth (annualized) | 40 | % | 31 | % | (3 | )% | (17 | )% | 15 | % | ||||||||||
Non Interest Income Growth (annualized) | 62 | % | 82 | % | (67 | )% | (43 | )% | 7 | % | ||||||||||
Revenue Growth (annualized) | 46 | % | 45 | % | (22 | )% | (25 | )% | 12 | % | ||||||||||
Net Interest Margin | 7.01 | % | 6.17 | % | 5.87 | % | 6.06 | % | 6.43 | % | ||||||||||
Revenue Margin | 9.96 | % | 8.65 | % | 7.99 | % | 8.65 | % | 9.38 | % | ||||||||||
Risk Adjusted Margin(B) | 5.32 | % | 4.30 | % | 3.72 | % | 4.65 | % | 5.86 | % | ||||||||||
Non Interest Expense as a % of Average Loans Held for Investment (annualized) | 5.02 | % | 5.17 | % | 4.74 | % | 5.31 | %(8) | 4.92 | % | ||||||||||
Efficiency Ratio(C) | 38.36 | % | 45.28 | % | 46.31 | % | 47.94 | %(8) | 42.58 | % | ||||||||||
Asset Quality Statistics (Managed)(A) | ||||||||||||||||||||
Net Charge-Offs | $ | 2,155 | (4) | $ | 2,087 | (4) | $ | 1,991 | (4) | $ | 1,826 | $ | 1,583 | |||||||
Net Charge-Off Rate | 6.00 | %(4) | 5.62 | %(4) | 5.40 | %(4) | 4.98 | % | 4.30 | % | ||||||||||
30+ day performing delinquency rate | 4.55 | %(4) | 4.09 | %(4) | 4.09 | %(4) | 4.49 | % | 3.99 | % | ||||||||||
| (*) | 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
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY NOTES
| (1) | In accordance with the Company’s finance charge and fee revenue recognition policy, the amounts billed to customers but not recognized as revenue were as follows: Q3 2009—$517.0 million, Q2 2009—$571.9 million, Q1 2009—$544.4 million, Q4 2008—$591.0 million and Q3 2008—$445.7 million. |
| (2) | Includes the impact from the change in fair value of retained interests, including the interest-only strips, of an increase of $37.3 million in Q3 2009, and a decrease of $114.5 million in Q2 2009, $128.0 million in Q1 2009, $158.2 million in Q4 2008, and $73.5 million in Q3 2008. |
| (3) | Includes core deposit intangible amortization expense of $55.5 million in Q3 2009, $57.4 million in Q2 2009, $49.2 million in Q1 2009, $46.0 million in Q4 2008 and $47.3 million in Q3 2008, and integration costs of $10.7 million in Q3 2009, $8.8 million in Q2 2009, $23.6 million in Q1 2009, $3.2 million in Q4 2008 and $10.3 million in Q3 2008. |
| (4) | Allowance as a % of Reported Loans Held for Investment, Net Charge-off Rate and 30+ Day Performing Delinquency Rate on both a Reported and Managed basis include period end loans held for investment and average loans held for investment acquired as part of the Chevy Chase Bank, FSB (CCB) acquisition. The period end and average loans held for investment and metrics excluding such loans are as follows. The net charge-off dollars were unchanged. |
| Q3 2009 | Q2 2009 | Q1 2009 | ||||||||||
CCB period end acquired loan portfolio (in millions) | $ | 8,002.3 | $ | 8,552.9 | $ | 9,464.3 | ||||||
CCB average acquired loan portfolio (in millions) | $ | 8,525.2 | $ | 8,931.9 | $ | 3,282.5 | ||||||
Allowance as a % of reported loans held for investment | 5.08 | % | 4.84 | % | 4.84 | % | ||||||
Net charge-off rate (Reported) | 4.96 | % | 4.65 | % | 4.54 | % | ||||||
Net charge-off rate (Managed) | 6.38 | % | 5.98 | % | 5.52 | % | ||||||
30+ day performing delinquency rate (Reported) | 4.48 | % | 4.05 | % | 3.99 | % | ||||||
30+ day performing delinquency rate (Managed) | 4.82 | % | 4.35 | % | 4.36 | % | ||||||
| (5) | In Q2 2009 the Company elected to convert and sell 404,508 shares of MasterCard class B common stock and recognized a gain of $65.5 million in non-interest income from the transaction. |
| (6) | The Q2 2009 TCE ratio reflects the issuance of 56,000,000 common shares on May 14, 2009 at $27.75 per share. The Q3 2008 TCE ratio reflects the issuance of 15,527,000 shares on September 30, 2008 at $49 per share. |
| (7) | In Q4 2008 the Company recorded impairment of goodwill in its automobile business of $810.9 million. |
| (8) | Excludes the impact of the goodwill impairment of $810.9 million. |
| (9) | Average equity includes the impact of the Company’s participation in the U.S. Treasury’s Capital Purchase Program. On November 14, 2008, the Company issued 3,555,199 preferred shares and 12,657,960 warrants to purchase common shares, while receiving proceeds of $3.56 billion. The allocated fair value for the preferred shares and the warrants to purchase common shares was $3.06 billion and $491.5 million, respectively. On June 17, 2009, the Company repurchased all 3,555,199 preferred shares issued in Q4 2008 for approximately $3.57 billion, including accrued dividends. The warrants to purchase common shares of $491.5 million remain outstanding and are included in paid-in capital on the balance sheet. |
| (10) | Effective February 27, 2009 the Company acquired Chevy Chase Bank, FSB for $475.9 million, which included $9.8 billion in loans and $13.6 billion in deposits. The Company paid cash of $445.0 million and issued 2.6 million shares valued at $30.9 million. |
| (11) | Includes the FDIC Special Assessment of $80.5 million. |
| (12) | Average equity includes the impact of the issuance of 56,000,000 common shares on May 14, 2009 at $27.75 per share. |
| (13) | The calculation of net income (loss) available to common shareholders includes the impact from dividends on preferred shares of $38.0 million and from the accretion of the discount on preferred shares of $461.7 million. With the repayment of the preferred shares to the U.S. Treasury, the remaining accretion was accelerated to Q2 2009 and treated as a dividend. |
STATISTICS / METRIC DEFINITIONS
| (A) | Based on continuing operations. Average equity and return on equity are based on the Company’s stockholders’ equity. |
| (B) | Risk adjusted margin equals total revenue less net charge-offs as a percentage of average earning assets. |
| (C) | Efficiency ratio equals non-interest expense less restructuring expense divided by total revenue. |
| (D) | Tangible assets include managed assets less intangible assets and is considered a non-GAAP measure. See accompanying scheduleReconciliation to GAAP Financial Measures for a reconciliation of tangible assets. |
| (E) | Includes stockholders’ equity less preferred shares less intangible assets and related deferred tax liabilities. Tangible Common Equity on a reported and managed basis is the same and is considered a non-GAAP measure. See accompanying scheduleReconciliation To GAAP Financial Measures for a reconciliation of tangible common equity. |
| (F) | Net income (loss) available to common shareholders equals net income (loss) less dividends on preferred shares. |
| (G) | Earnings per share is based on net income (loss) available to common shareholders. |
| (H) | Tangible Common Equity to Tangible Assets Ratio (“TCE Ratio”) is considered a non-GAAP measure. See accompanying scheduleReconciliation To GAAP Financial Measures for a reconciliation of the TCE Ratio. |
3
CAPITAL ONE FINANCIAL CORPORATION
Reconciliation to GAAP Financial Measures
For the Three Months Ended September 30, 2009
(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 they 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(3) | ||||||||||
Net interest income | $ | 2,050,680 | $ | 1,206,867 | $ | 3,257,547 | ||||
Non-interest income | 1,552,380 | (179,700 | ) | 1,372,680 | ||||||
Total revenue | 3,603,060 | 1,027,167 | 4,630,227 | |||||||
Provision for loan and lease losses | 1,173,165 | 1,027,167 | 2,200,332 | |||||||
Net charge-offs | $ | 1,127,465 | $ | 1,027,167 | $ | 2,154,632 | ||||
Balance Sheet Measures | ||||||||||
Loans held for investment | $ | 96,783,165 | $ | 44,275,350 | $ | 141,058,515 | ||||
Total assets | $ | 168,503,921 | $ | 41,250,924 | $ | 209,754,845 | ||||
Total liabilities | $ | 142,281,769 | $ | 41,250,924 | $ | 183,532,693 | ||||
Average loans held for investment | $ | 99,484,847 | $ | 44,185,873 | $ | 143,670,720 | ||||
Average earning assets | $ | 145,425,656 | $ | 40,594,656 | $ | 186,020,312 | ||||
Average total assets | $ | 173,389,149 | $ | 41,226,895 | $ | 214,616,044 | ||||
Average total liabilities | $ | 147,390,307 | $ | 41,226,895 | $ | 188,617,202 | ||||
Delinquencies | $ | 3,982,504 | $ | 2,434,461 | $ | 6,416,965 | ||||
The table below presents a reconciliation of tangible common equity and tangible assets, which are the components used to calculate the tangible common equity “TCE” ratio. The Company believes the TCE ratio is an important financial measure of capital strength to our investors and readers even though it is considered to be a non-GAAP measure.
(dollars in millions)(unaudited) | 2009 Q3 | 2009 Q2 | 2009 Q1 | 2008 Q4 | 2008 Q3 | |||||||||||||||
Equity | $ | 26,222 | $ | 25,326 | $ | 26,744 | $ | 26,612 | $ | 25,612 | ||||||||||
Less: preferred stock | — | 38 | (3,159 | ) | (3,120 | ) | — | |||||||||||||
Less: intangible assets(4) | (14,076 | ) | (13,985 | ) | (13,723 | ) | (12,503 | ) | (13,311 | ) | ||||||||||
Tangible common equity | $ | 12,146 | $ | 11,379 | $ | 9,862 | $ | 10,989 | $ | 12,301 | ||||||||||
Total assets | 209,754 | 214,141 | 219,914 | 209,875 | 203,472 | |||||||||||||||
Less: discontinued ops assets | (31 | ) | (46 | ) | (31 | ) | (35 | ) | (20 | ) | ||||||||||
Total assets- continuing ops | 209,723 | 214,095 | 219,883 | 209,840 | 203,452 | |||||||||||||||
Less: intangible assets(4) | (14,076 | ) | (13,985 | ) | (13,723 | ) | (12,503 | ) | (13,311 | ) | ||||||||||
Tangible assets | $ | 195,647 | $ | 200,110 | $ | 206,160 | $ | 197,337 | $ | 190,141 | ||||||||||
TCE ratio | 6.21 | 5.69 | 4.78 | 5.57 | 6.47 | |||||||||||||||
| (1) | Income statement adjustments reclassify the net of finance charges of $1,317.2 million, past-due fees of $198.3 million, other interest income of $(51.0) million and interest expense of $257.6 million; and net charge-offs of $1,027.2 million from non-interest income to net interest income and provision for loan and lease losses, respectively. |
| (2) | The managed loan portfolio does not include auto loans or mortgage loans which have been sold in whole loan sale transactions or securitizations where the Company has retained servicing rights. |
| (3) | Based on continuing operations. |
| (4) | Includes impact from related deferred taxes. |
4
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Balance Sheets
(in thousands)(unaudited)
| As of September 30 2009 | As of June 30 2009 | As of September 30 2008 | ||||||||||
Assets: | ||||||||||||
Cash and due from banks | $ | 2,719,100 | $ | 3,001,944 | $ | 3,511,558 | ||||||
Federal funds sold and resale agreements | 544,793 | 603,564 | 1,435,521 | |||||||||
Interest-bearing deposits at other banks | 863,310 | 1,166,419 | 673,662 | |||||||||
Cash and cash equivalents | 4,127,203 | 4,771,927 | 5,620,741 | |||||||||
Securities available for sale | 37,693,001 | 37,667,165 | 26,969,471 | |||||||||
Securities held to maturity | 83,608 | 87,545 | — | |||||||||
Mortgage loans held for sale | 141,158 | 319,975 | 98,900 | |||||||||
Loans held for investment | 96,783,165 | 101,073,629 | 97,965,351 | |||||||||
Less: Allowance for loan and lease losses | (4,513,493 | ) | (4,481,827 | ) | (3,519,610 | ) | ||||||
Net loans held for investment(1) | 92,269,672 | 96,591,802 | 94,445,741 | |||||||||
Accounts receivable from securitizations | 6,985,200 | 5,219,968 | 4,980,823 | |||||||||
Premises and equipment, net | 2,773,173 | 2,824,785 | 2,305,286 | |||||||||
Interest receivable | 947,738 | 951,201 | 750,717 | |||||||||
Goodwill(1) | 13,524,978 | 13,381,056 | 12,815,642 | |||||||||
Other(1) | 9,958,190 | 10,095,883 | 6,815,792 | |||||||||
Total assets | $ | 168,503,921 | $ | 171,911,307 | $ | 154,803,113 | ||||||
Liabilities: | ||||||||||||
Non-interest-bearing deposits | $ | 12,734,589 | $ | 12,603,548 | $ | 10,665,286 | ||||||
Interest-bearing deposits | 101,768,522 | 104,120,642 | 88,247,688 | |||||||||
Senior and subordinated notes | 9,208,769 | 10,092,619 | 8,278,856 | |||||||||
Other borrowings | 12,126,181 | 13,260,589 | 15,962,072 | |||||||||
Interest payable | 582,969 | 659,784 | 508,091 | |||||||||
Other(1) | 5,860,739 | 5,848,464 | 5,529,580 | |||||||||
Total liabilities | 142,281,769 | 146,585,646 | 129,191,573 | |||||||||
Stockholders’ Equity: | ||||||||||||
Preferred stock | — | — | — | |||||||||
Common stock | 5,021 | 5,019 | 4,383 | |||||||||
Paid-in capital, net | 18,928,719 | 18,891,333 | 16,752,078 | |||||||||
Retained earnings and cumulative other comprehensive income | 10,460,779 | 9,598,606 | 12,020,490 | |||||||||
Less: Treasury stock, at cost | (3,172,367 | ) | (3,169,297 | ) | (3,165,411 | ) | ||||||
Total stockholders’ equity | 26,222,152 | 25,325,661 | 25,611,540 | |||||||||
Total liabilities and stockholders’ equity | $ | 168,503,921 | $ | 171,911,307 | $ | 154,803,113 | ||||||
| (1) | Balances at September 30, 2009 reflect adjustments made to the allocation of purchase price of the Chevy Chase Bank acquisition. The balances at June 30, 2009 have not been adjusted, however, if the adjustments had been made at June 30, 2009, net loans held for investment would have been $96,518.7 million (a decrease of $73.1 million), goodwill would have been $13,527.9 million (an increase of $146.9 million), other assets would have been $10,045.2 million (an decrease of $50.7 million) and other liabilities would have been $5,822.8 million (a decrease of $25.7 million). The allocation of purchase price is still preliminary and will be finalized upon completion of the analysis of the fair values of Chevy Chase Bank’s assets and liabilities. |
5
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income
(in thousands, except per share data)(unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30 2009 | June 30 2009 | September 30 2008 | September 30 2009 | September 30 2008 | ||||||||||||||||
Interest Income: | ||||||||||||||||||||
Loans held for investment, including past-due fees | $ | 2,265,720 | $ | 2,233,808 | $ | 2,347,480 | $ | 6,689,859 | $ | 7,153,582 | ||||||||||
Investment securities | 398,835 | 412,845 | 317,268 | 1,206,460 | 856,093 | |||||||||||||||
Other | 83,195 | 67,982 | 107,048 | 214,294 | 333,503 | |||||||||||||||
Total interest income | 2,747,750 | 2,714,635 | 2,771,796 | 8,110,613 | 8,343,178 | |||||||||||||||
Interest Expense: | ||||||||||||||||||||
Deposits | 479,178 | 555,579 | 624,319 | 1,666,605 | 1,827,284 | |||||||||||||||
Senior and subordinated notes | 74,032 | 57,113 | 96,568 | 189,189 | 352,335 | |||||||||||||||
Other borrowings | 143,860 | 155,357 | 244,264 | 470,802 | 817,241 | |||||||||||||||
Total interest expense | 697,070 | 768,049 | 965,151 | 2,326,596 | 2,996,860 | |||||||||||||||
Net interest income | 2,050,680 | 1,946,586 | 1,806,645 | 5,784,017 | 5,346,318 | |||||||||||||||
Provision for loan and lease losses | 1,173,165 | 934,038 | 1,093,917 | 3,386,340 | 3,002,119 | |||||||||||||||
Net interest income after provision for loan and lease losses | 877,515 | 1,012,548 | 712,728 | 2,397,677 | 2,344,199 | |||||||||||||||
Non-Interest Income: | ||||||||||||||||||||
Servicing and securitizations | 720,698 | 362,416 | 875,718 | 1,536,751 | 2,793,520 | |||||||||||||||
Service charges and other customer-related fees | 496,404 | 491,763 | 576,762 | 1,494,292 | 1,675,032 | |||||||||||||||
Mortgage servicing and other | 8,656 | 13,163 | 39,183 | 45,199 | 90,990 | |||||||||||||||
Interchange | 122,585 | 126,702 | 148,076 | 389,378 | 432,708 | |||||||||||||||
Net impairment losses recognized in earnings(1) | (11,173 | ) | (10,031 | ) | — | (21,567 | ) | — | ||||||||||||
Other | 215,210 | 247,674 | 57,152 | 430,348 | 383,435 | |||||||||||||||
Total non-interest income | 1,552,380 | 1,231,687 | 1,696,891 | 3,874,401 | 5,375,685 | |||||||||||||||
Non-Interest Expense: | ||||||||||||||||||||
Salaries and associate benefits | 648,180 | 633,819 | 571,686 | 1,836,430 | 1,761,538 | |||||||||||||||
Marketing | 103,698 | 133,970 | 267,372 | 400,380 | 853,265 | |||||||||||||||
Communications and data processing | 175,575 | 194,578 | 176,720 | 569,257 | 559,065 | |||||||||||||||
Supplies and equipment | 122,777 | 128,483 | 126,781 | 370,160 | 389,649 | |||||||||||||||
Occupancy | 113,913 | 114,885 | 96,483 | 329,049 | 264,700 | |||||||||||||||
Restructuring expense | 26,357 | 43,374 | 15,306 | 87,358 | 81,625 | |||||||||||||||
Other | 611,978 | 672,647 | 555,858 | 1,876,692 | 1,542,242 | |||||||||||||||
Total non-interest expense | 1,802,478 | 1,921,756 | 1,810,206 | 5,469,326 | 5,452,084 | |||||||||||||||
Income from continuing operations before income taxes | 627,417 | 322,479 | 599,413 | 802,752 | 2,267,800 | |||||||||||||||
Income taxes | 158,191 | 92,278 | 213,624 | 190,246 | 786,958 | |||||||||||||||
Income from continuing operations, net of tax | 469,226 | 230,201 | 385,789 | 612,506 | 1,480,842 | |||||||||||||||
Loss from discontinued operations, net of tax | (43,587 | ) | (5,998 | ) | (11,650 | ) | (74,543 | ) | (105,294 | ) | ||||||||||
Net income | $ | 425,639 | $ | 224,203 | $ | 374,139 | $ | 537,963 | $ | 1,375,548 | ||||||||||
Net income (loss) available to common shareholders | $ | 425,639 | $ | (275,515 | ) | $ | 374,139 | $ | (25,945 | ) | $ | 1,375,548 | ||||||||
Basic earnings per common share | ||||||||||||||||||||
Income (loss) from continuing operations | $ | 1.04 | $ | (0.64 | ) | $ | 1.03 | $ | 0.12 | $ | 3.98 | |||||||||
Loss from discontinued operations | (0.09 | ) | (0.01 | ) | (0.03 | ) | (0.18 | ) | (0.28 | ) | ||||||||||
Net Income (loss) per common share | $ | 0.95 | $ | (0.65 | ) | $ | 1.00 | $ | (0.06 | ) | $ | 3.70 | ||||||||
Diluted earnings per common share | ||||||||||||||||||||
Income (loss) from continuing operations | $ | 1.03 | $ | (0.64 | ) | $ | 1.03 | $ | 0.12 | $ | 3.96 | |||||||||
Loss from discontinued operations | (0.09 | ) | (0.01 | ) | (0.03 | ) | (0.18 | ) | (0.28 | ) | ||||||||||
Net Income (loss) per common share | $ | 0.94 | $ | (0.65 | ) | $ | 1.00 | $ | (0.06 | ) | $ | 3.68 | ||||||||
Dividends paid per common share | $ | 0.05 | $ | 0.05 | $ | 0.375 | $ | 0.475 | $ | 1.125 | ||||||||||
| (1) | Total other-than-temporary impairment losses for the three and nine months ended September 30, 2009 are $131.0 million and $290.6 million, respectively. The portion of loss recognized in other comprehensive income (before taxes) for the three and nine months ended September 30, 2009 are $119.9 million and $269.0 million, respectively. Total other-than-temporary impairment losses for the three months ended June 30, 2009 is $159.2 million. The portion of loss recognized in other comprehensive income (before taxes) for the three months ended June 30, 2009 is $149.2 million. |
6
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates(1)
(dollars in thousands)(unaudited)
| Reported | Quarter Ended 09/30/09 | Quarter Ended 06/30/09 | Quarter Ended 09/30/08 | ||||||||||||||||||||||||
| Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | |||||||||||||||||||
Earning assets: | |||||||||||||||||||||||||||
Loans held for investment | $ | 99,484,847 | $ | 2,265,720 | 9.11 | % | $ | 105,278,045 | $ | 2,233,808 | 8.49 | % | $ | 98,778,393 | $ | 2,347,480 | 9.51 | % | |||||||||
Investment Securities(2) | 37,376,895 | 398,835 | 4.27 | % | 37,499,187 | 412,845 | 4.40 | % | 25,780,198 | 317,268 | 4.92 | % | |||||||||||||||
Other | 8,548,610 | 83,195 | 3.89 | % | 8,623,100 | 67,982 | 3.15 | % | 8,718,392 | 107,048 | 4.91 | % | |||||||||||||||
Total earning assets | $ | 145,410,352 | $ | 2,747,750 | 7.56 | % | $ | 151,400,332 | $ | 2,714,635 | 7.17 | % | $ | 133,276,983 | $ | 2,771,796 | 8.32 | % | |||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||
Interest-bearing deposits | |||||||||||||||||||||||||||
NOW accounts | 10,418,557 | 12,745 | 0.49 | % | $ | 10,914,679 | $ | 14,602 | 0.54 | % | $ | 9,292,819 | $ | 30,263 | 1.30 | % | |||||||||||
Money market deposit accounts | 36,036,826 | 96,477 | 1.07 | % | 35,751,007 | 103,855 | 1.16 | % | 26,914,607 | 187,740 | 2.79 | % | |||||||||||||||
Savings accounts | 12,266,254 | 22,772 | 0.74 | % | 9,931,058 | 13,399 | 0.54 | % | 7,759,024 | 16,243 | 0.84 | % | |||||||||||||||
Other consumer time deposits | 32,075,905 | 248,272 | 3.10 | % | 35,841,099 | 300,572 | 3.35 | % | 26,733,531 | 262,101 | 3.92 | % | |||||||||||||||
Public fund CD’s of $100,000 or more | 1,061,134 | 2,789 | 1.05 | % | 1,117,460 | 3,450 | 1.23 | % | 1,305,438 | 8,233 | 2.52 | % | |||||||||||||||
CD’s of $100,000 or more | 9,764,172 | 92,681 | 3.80 | % | 11,097,722 | 108,228 | 3.90 | % | 9,084,740 | 89,192 | 3.93 | % | |||||||||||||||
Foreign time deposits | 1,482,519 | 3,442 | 0.93 | % | 2,387,093 | 11,473 | 1.92 | % | 3,564,449 | 30,547 | 3.43 | % | |||||||||||||||
Total interest-bearing deposits | $ | 103,105,367 | $ | 479,178 | 1.86 | % | $ | 107,040,118 | $ | 555,579 | 2.08 | % | $ | 84,654,608 | $ | 624,319 | 2.95 | % | |||||||||
Senior and subordinated notes | 9,553,950 | 74,032 | 3.10 | % | 8,322,746 | 57,113 | 2.74 | % | 8,282,536 | 96,568 | 4.66 | % | |||||||||||||||
Other borrowings | 13,480,527 | 143,860 | 4.27 | % | 16,274,845 | 155,357 | 3.82 | % | 22,368,976 | 244,264 | 4.37 | % | |||||||||||||||
Total interest-bearing liabilities | $ | 126,139,844 | $ | 697,070 | 2.21 | % | $ | 131,637,709 | $ | 768,049 | 2.33 | % | $ | 115,306,120 | $ | 965,151 | 3.35 | % | |||||||||
Net interest spread | 5.35 | % | 4.84 | % | 4.97 | % | |||||||||||||||||||||
Interest income to average earning assets | 7.56 | % | 7.17 | % | 8.32 | % | |||||||||||||||||||||
Interest expense to average earning assets | 1.92 | % | 2.03 | % | 2.90 | % | |||||||||||||||||||||
Net interest margin | 5.64 | % | 5.14 | % | 5.42 | % | |||||||||||||||||||||
| (1) | Average balances, income and expenses, yields and rates are based on continuing operations. |
| (2) | Includes securities available for sale and securities held to maturity. |
7
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates(2)
(dollars in thousands)(unaudited)
| Managed(1) | Quarter Ended 09/30/09 | Quarter Ended 06/30/09 | Quarter Ended 09/30/08 | ||||||||||||||||||||||||
| Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | |||||||||||||||||||
Earning assets: | |||||||||||||||||||||||||||
Loans held for investment | $ | 143,670,720 | $ | 3,795,387 | 10.57 | % | $ | 148,609,132 | $ | 3,564,773 | 9.60 | % | $ | 147,247,398 | $ | 3,974,375 | 10.80 | % | |||||||||
Investment Securities(3) | 37,376,895 | 398,835 | 4.27 | % | 37,499,187 | 412,845 | 4.40 | % | 25,780,198 | 317,268 | 4.92 | % | |||||||||||||||
Other | 4,957,393 | 18,038 | 1.46 | % | 5,695,941 | 17,074 | 1.20 | % | 6,725,201 | 54,618 | 3.25 | % | |||||||||||||||
Total earning assets | $ | 186,005,008 | $ | 4,212,260 | 9.06 | % | $ | 191,804,260 | $ | 3,994,692 | 8.33 | % | $ | 179,752,797 | $ | 4,346,261 | 9.67 | % | |||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||
Interest-bearing deposits | |||||||||||||||||||||||||||
NOW accounts | $ | 10,418,557 | $ | 12,745 | 0.49 | % | $ | 10,914,679 | $ | 14,602 | 0.54 | % | $ | 9,292,819 | $ | 30,263 | 1.30 | % | |||||||||
Money market deposit accounts | 36,036,826 | 96,477 | 1.07 | % | 35,751,007 | 103,855 | 1.16 | % | 26,914,607 | 187,740 | 2.79 | % | |||||||||||||||
Savings accounts | 12,266,254 | 22,772 | 0.74 | % | 9,931,058 | 13,399 | 0.54 | % | 7,759,024 | 16,243 | 0.84 | % | |||||||||||||||
Other consumer time deposits | 32,075,905 | 248,272 | 3.10 | % | 35,841,099 | 300,572 | 3.35 | % | 26,733,531 | 262,101 | 3.92 | % | |||||||||||||||
Public fund CD’s of $100,000 or more | 1,061,134 | 2,789 | 1.05 | % | 1,117,460 | 3,450 | 1.23 | % | 1,305,438 | 8,233 | 2.52 | % | |||||||||||||||
CD’s of $100,000 or more | 9,764,172 | 92,681 | 3.80 | % | 11,097,722 | 108,228 | 3.90 | % | 9,084,740 | 89,192 | 3.93 | % | |||||||||||||||
Foreign time deposits | 1,482,519 | 3,442 | 0.93 | % | 2,387,093 | 11,473 | 1.92 | % | 3,564,449 | 30,547 | 3.43 | % | |||||||||||||||
Total interest-bearing deposits | $ | 103,105,367 | $ | 479,178 | 1.86 | % | $ | 107,040,118 | $ | 555,579 | 2.08 | % | $ | 84,654,608 | $ | 624,319 | 2.95 | % | |||||||||
Senior and subordinated notes | 9,553,950 | 74,032 | 3.10 | % | 8,322,746 | 57,113 | 2.74 | % | 8,282,536 | 96,568 | 4.66 | % | |||||||||||||||
Other borrowings | 13,480,527 | 143,860 | 4.27 | % | 16,274,845 | 155,357 | 3.82 | % | 22,368,976 | 244,264 | 4.37 | % | |||||||||||||||
Securitization liability | 41,251,788 | 257,643 | 2.50 | % | 40,806,188 | 267,450 | 2.62 | % | 48,069,177 | 491,780 | 4.09 | % | |||||||||||||||
Total interest-bearing liabilities | $ | 167,391,632 | $ | 954,713 | 2.28 | % | $ | 172,443,897 | $ | 1,035,499 | 2.40 | % | $ | 163,375,297 | $ | 1,456,931 | 3.57 | % | |||||||||
Net interest spread | 6.78 | % | 5.93 | % | 6.10 | % | |||||||||||||||||||||
Interest income to average earning assets | 9.06 | % | 8.33 | % | 9.67 | % | |||||||||||||||||||||
Interest expense to average earning assets | 2.05 | % | 2.16 | % | 3.24 | % | |||||||||||||||||||||
Net interest margin | 7.01 | % | 6.17 | % | 6.43 | % | |||||||||||||||||||||
| (1) | The information in this table reflects the adjustment to add back the effect of securitized loans. |
| (2) | Average balances, income and expenses, yields and rates are based on continuing operations. |
| (3) | Includes securities available for sale and securities held to maturity. |
8
CAPITAL ONE FINANCIAL CORPORATION (COF)
LENDING INFORMATION AND STATISTICS
MANAGED BASIS(1) (10)
| 2009 Q3 | 2009 Q2 | 2009 Q1(7) | 2008 Q4 | 2008 Q3 | ||||||||||||||||
Period end loans held for investment | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Domestic credit card | $ | 61,891,573 | $ | 64,760,128 | $ | 67,015,166 | $ | 70,944,581 | $ | 69,361,743 | ||||||||||
International credit card | 8,477,236 | 8,638,441 | 8,069,961 | 8,720,642 | 10,254,713 | |||||||||||||||
Total Credit Card | $ | 70,368,809 | $ | 73,398,569 | $ | 75,085,127 | $ | 79,665,223 | $ | 79,616,456 | ||||||||||
Commercial and multi-family real estate | $ | 13,920,431 | $ | 14,153,752 | $ | 13,522,154 | $ | 13,303,081 | $ | 12,997,111 | ||||||||||
Middle market | 9,987,237 | 10,190,701 | 9,850,735 | 10,081,823 | 9,768,420 | |||||||||||||||
Specialty lending | 3,542,350 | 3,469,699 | 3,489,813 | 3,547,287 | 3,634,212 | |||||||||||||||
Total Commercial Lending | $ | 27,450,018 | $ | 27,814,152 | $ | 26,862,702 | $ | 26,932,191 | $ | 26,399,743 | ||||||||||
Small ticket commercial real estate | 2,412,400 | 2,503,035 | 2,568,395 | 2,609,123 | 2,695,570 | |||||||||||||||
Total Commercial Banking | $ | 29,862,418 | $ | 30,317,187 | $ | 29,431,097 | $ | 29,541,314 | $ | 29,095,313 | ||||||||||
Automobile | $ | 19,295,218 | $ | 19,916,167 | $ | 20,795,291 | $ | 21,494,436 | $ | 22,318,970 | ||||||||||
Mortgages | 15,838,327 | 16,674,368 | 9,648,271 | 10,098,430 | 10,355,853 | |||||||||||||||
Retail banking | 5,346,260 | 5,593,040 | 5,499,070 | 5,603,696 | 5,402,783 | |||||||||||||||
Total Consumer Banking | $ | 40,479,805 | $ | 42,183,575 | $ | 35,942,632 | $ | 37,196,562 | $ | 38,077,606 | ||||||||||
Other loans(9) | $ | 347,483 | $ | 351,393 | $ | 9,876,138 | $ | 533,655 | $ | 556,371 | ||||||||||
Total | $ | 141,058,515 | $ | 146,250,724 | $ | 150,334,994 | $ | 146,936,754 | $ | 147,345,746 | ||||||||||
Average loans held for investment | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Domestic credit card | $ | 63,298,525 | $ | 65,862,569 | $ | 69,187,704 | $ | 69,643,290 | $ | 68,581,983 | ||||||||||
International credit card | 8,609,235 | 8,327,859 | 8,382,679 | 9,440,972 | 10,703,229 | |||||||||||||||
Total Credit Card | $ | 71,907,760 | $ | 74,190,428 | $ | 77,570,383 | $ | 79,084,262 | $ | 79,285,212 | ||||||||||
Commercial and multi-family real estate | $ | 13,956,465 | $ | 14,056,005 | $ | 13,437,351 | $ | 13,082,096 | $ | 12,937,927 | ||||||||||
Middle market | 9,924,849 | 10,426,572 | 10,003,213 | 10,093,083 | 9,303,068 | |||||||||||||||
Specialty lending | 3,753,054 | 3,472,258 | 3,504,544 | 3,584,963 | 3,657,406 | |||||||||||||||
Total Commercial Lending | $ | 27,634,368 | $ | 27,954,835 | $ | 26,945,108 | $ | 26,760,142 | $ | 25,898,401 | ||||||||||
Small ticket commercial real estate | 2,470,961 | 2,542,082 | 2,600,169 | 2,655,883 | 2,709,568 | |||||||||||||||
Total Commercial Banking | $ | 30,105,329 | $ | 30,496,917 | $ | 29,545,277 | $ | 29,416,025 | $ | 28,607,969 | ||||||||||
Automobile | $ | 19,635,979 | $ | 20,303,296 | $ | 21,123,000 | $ | 21,967,154 | $ | 22,870,070 | ||||||||||
Mortgages | 16,156,009 | 17,013,312 | 9,897,086 | 10,201,024 | 10,562,385 | |||||||||||||||
Retail banking | 5,515,647 | 5,727,032 | 5,523,011 | 5,366,737 | 5,391,590 | |||||||||||||||
Total Consumer Banking | $ | 41,307,635 | $ | 43,043,640 | $ | 36,543,097 | $ | 37,534,915 | $ | 38,824,045 | ||||||||||
Other loans(9) | $ | 349,996 | $ | 878,147 | $ | 3,832,180 | $ | 550,950 | $ | 530,172 | ||||||||||
Total | $ | 143,670,720 | $ | 148,609,132 | $ | 147,490,937 | $ | 146,586,152 | $ | 147,247,398 | ||||||||||
Net Charge-off Rates | ||||||||||||||||||||
Domestic credit card | 9.64 | % | 9.23 | % | 8.39 | % | 7.08 | % | 6.13 | % | ||||||||||
International credit card | 9.19 | % | 9.32 | % | 7.30 | % | 5.84 | % | 5.90 | % | ||||||||||
Total Credit Card | 9.59 | % | 9.24 | % | 8.27 | % | 6.93 | % | 6.10 | % | ||||||||||
Commercial and multi-family real estate(5) | 1.37 | % | 0.92 | % | 0.63 | % | 1.16 | % | 0.14 | % | ||||||||||
Middle market(5) | 0.56 | % | 0.58 | % | 0.07 | % | 0.47 | % | 0.15 | % | ||||||||||
Specialty lending | 1.39 | % | 0.99 | % | 0.86 | % | 0.47 | % | 0.27 | % | ||||||||||
Total Commercial Lending(5) | 1.08 | % | 0.80 | % | 0.45 | % | 0.81 | % | 0.16 | % | ||||||||||
Small ticket commercial real estate | 5.19 | % | 1.86 | % | 1.74 | % | 0.90 | % | 0.10 | % | ||||||||||
Total Commercial Banking(5) | 1.42 | % | 0.89 | % | 0.56 | % | 0.82 | % | 0.16 | % | ||||||||||
Automobile | 4.38 | % | 3.65 | % | 4.88 | % | 5.67 | % | 4.99 | % | ||||||||||
Mortgages(5) | 0.68 | % | 0.42 | % | 0.45 | % | 0.46 | % | 0.43 | % | ||||||||||
Retail banking(5) | 2.44 | % | 2.41 | % | 2.37 | % | 2.15 | % | 2.08 | % | ||||||||||
Total Consumer Banking(5) | 2.67 | % | 2.21 | % | 3.30 | % | 3.75 | % | 3.35 | % | ||||||||||
Other loans | 28.53 | % | 37.00 | % | 4.24 | % | 21.65 | % | 18.98 | % | ||||||||||
Total | 6.00 | % | 5.62 | % | 5.40 | % | 4.98 | % | 4.30 | % | ||||||||||
30+ day performing delinquency rate | ||||||||||||||||||||
Domestic credit card | 5.38 | % | 4.77 | % | 5.08 | % | 4.78 | % | 4.20 | % | ||||||||||
International credit card | 6.63 | % | 6.69 | % | 6.25 | % | 5.51 | % | 5.24 | % | ||||||||||
Total Credit Card | 5.53 | % | 4.99 | % | 5.20 | % | 4.86 | % | 4.34 | % | ||||||||||
Automobile(8) | 9.52 | % | 8.89 | % | 7.48 | % | 9.90 | % | 9.31 | % | ||||||||||
Mortgages(5) | 1.15 | % | 0.97 | % | 1.91 | % | 1.57 | % | 0.82 | % | ||||||||||
Retail banking(5) | 1.23 | % | 0.88 | % | 1.16 | % | 1.06 | % | 0.89 | % | ||||||||||
Total Consumer Banking(5) | 5.15 | % | 4.69 | % | 5.01 | % | 6.31 | % | 5.81 | % | ||||||||||
Non Performing Asset Rates(2) (6) | ||||||||||||||||||||
Commercial and multi-family real estate(5) | 2.68 | % | 2.16 | % | 2.00 | % | 1.21 | % | 1.07 | % | ||||||||||
Middle market(5) | 1.26 | % | 1.16 | % | 0.57 | % | 0.43 | % | 0.26 | % | ||||||||||
Specialty lending | 2.04 | % | 1.96 | % | 1.16 | % | 1.05 | % | 0.38 | % | ||||||||||
Total Commercial Lending(5) | 2.08 | % | 1.77 | % | 1.37 | % | 0.89 | % | 0.67 | % | ||||||||||
Small ticket commercial real estate | 11.39 | % | 10.08 | % | 8.00 | % | 6.67 | % | 4.49 | % | ||||||||||
Total Commercial Banking(5) | 2.83 | % | 2.46 | % | 1.95 | % | 1.41 | % | 1.03 | % | ||||||||||
Automobile(8) | 0.87 | % | 0.78 | % | 0.69 | % | 1.06 | % | 0.99 | % | ||||||||||
Mortgages(5) | 1.81 | % | 1.50 | % | 1.89 | % | 1.28 | % | 1.16 | % | ||||||||||
Retail banking(5) | 1.93 | % | 1.80 | % | 1.68 | % | 1.51 | % | 0.97 | % | ||||||||||
Total Consumer Banking(5) | 1.38 | % | 1.20 | % | 1.16 | % | 1.19 | % | 1.03 | % | ||||||||||
9
CAPITAL ONE FINANCIAL CORPORATION (COF)
CREDIT CARD SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS
MANAGED BASIS(1) (10)
(in thousands) | 2009 Q3 | 2009 Q2 | 2009 Q1 | 2008 Q4 | 2008 Q3 | |||||||||||||||
Credit Card: | ||||||||||||||||||||
Earnings | ||||||||||||||||||||
Net interest income | $ | 2,024,250 | $ | 1,797,303 | $ | 1,691,688 | $ | 1,816,484 | $ | 1,862,034 | ||||||||||
Non-interest income | 966,862 | 897,440 | 985,481 | 1,138,220 | 1,181,015 | |||||||||||||||
Total revenue | $ | 2,991,112 | $ | 2,694,743 | $ | 2,677,169 | $ | 2,954,704 | $ | 3,043,049 | ||||||||||
Provision for loan and lease losses | 1,643,721 | 1,520,292 | 1,682,786 | 2,164,529 | 1,434,435 | |||||||||||||||
Non-interest expenses | 897,578 | 909,572 | 988,652 | 1,075,446 | 1,059,641 | |||||||||||||||
Income (loss) before taxes | 449,813 | 264,879 | 5,731 | (285,271 | ) | 548,973 | ||||||||||||||
Income taxes (benefit) | 158,074 | 92,251 | 2,402 | (98,053 | ) | 192,461 | ||||||||||||||
Net income (loss) | $ | 291,739 | $ | 172,628 | $ | 3,329 | $ | (187,218 | ) | $ | 356,512 | |||||||||
Selected Metrics | ||||||||||||||||||||
Period end loans held for investment | $ | 70,368,809 | $ | 73,398,569 | $ | 75,085,127 | $ | 79,665,223 | $ | 79,616,456 | ||||||||||
Average loans held for investment | $ | 71,907,760 | $ | 74,190,428 | $ | 77,570,383 | $ | 79,084,262 | $ | 79,285,212 | ||||||||||
Loans held for investment yield | 13.75 | % | 12.31 | % | 11.51 | % | 12.56 | % | 13.20 | % | ||||||||||
Revenue margin | 16.64 | % | 14.53 | % | 13.81 | % | 14.94 | % | 15.35 | % | ||||||||||
Net charge-off rate | 9.59 | % | 9.24 | % | 8.27 | % | 6.93 | % | 6.10 | % | ||||||||||
30+ day performing delinquency rate | 5.53 | % | 4.99 | % | 5.20 | % | 4.86 | % | 4.34 | % | ||||||||||
Purchase Volume(3) | $ | 25,982,259 | $ | 25,746,799 | $ | 23,473,560 | $ | 27,564,750 | $ | 29,394,045 | ||||||||||
Domestic Card Sub-segment | ||||||||||||||||||||
Earnings | ||||||||||||||||||||
Net interest income | $ | 1,797,173 | $ | 1,586,686 | $ | 1,504,695 | $ | 1,608,705 | $ | 1,616,038 | ||||||||||
Non-interest income | 855,571 | 794,440 | 883,891 | 1,018,689 | 1,027,918 | |||||||||||||||
Total revenue | $ | 2,652,744 | $ | 2,381,126 | $ | 2,388,586 | $ | 2,627,394 | $ | 2,643,956 | ||||||||||
Provision for loan and lease losses | 1,436,959 | 1,336,736 | 1,521,997 | 2,000,928 | 1,240,580 | |||||||||||||||
Non-interest expenses | 769,995 | 787,624 | 865,460 | 897,687 | 873,866 | |||||||||||||||
Income (loss) before taxes | 445,790 | 256,766 | 1,129 | (271,221 | ) | 529,510 | ||||||||||||||
Income taxes (benefit) | 156,027 | 89,868 | 396 | (94,928 | ) | 185,328 | ||||||||||||||
Net income (loss) | $ | 289,763 | $ | 166,898 | $ | 733 | $ | (176,293 | ) | $ | 344,182 | |||||||||
Selected Metrics | ||||||||||||||||||||
Period end loans held for investment | $ | 61,891,573 | $ | 64,760,128 | $ | 67,015,166 | $ | 70,944,581 | $ | 69,361,743 | ||||||||||
Average loans held for investment | $ | 63,298,525 | $ | 65,862,569 | $ | 69,187,704 | $ | 69,643,290 | $ | 68,581,983 | ||||||||||
Loans held for investment yield | 13.74 | % | 12.17 | % | 11.40 | % | 12.52 | % | 13.07 | % | ||||||||||
Revenue margin | 16.76 | % | 14.46 | % | 13.81 | % | 15.09 | % | 15.42 | % | ||||||||||
Net charge-off rate | 9.64 | % | 9.23 | % | 8.39 | % | 7.08 | % | 6.13 | % | ||||||||||
30+ day performing delinquency rate | 5.38 | % | 4.77 | % | 5.08 | % | 4.78 | % | 4.20 | % | ||||||||||
Purchase Volume(3) | $ | 23,760,963 | $ | 23,610,760 | $ | 21,601,837 | $ | 25,217,781 | $ | 26,536,070 | ||||||||||
International Card Sub-segment | ||||||||||||||||||||
Earnings | ||||||||||||||||||||
Net interest income | $ | 227,077 | $ | 210,617 | $ | 186,993 | $ | 207,779 | $ | 245,996 | ||||||||||
Non-interest income | 111,291 | 103,000 | 101,590 | 119,531 | 153,097 | |||||||||||||||
Total revenue | $ | 338,368 | $ | 313,617 | $ | 288,583 | $ | 327,310 | $ | 399,093 | ||||||||||
Provision for loan and lease losses | 206,762 | 183,556 | 160,789 | 163,601 | 193,855 | |||||||||||||||
Non-interest expenses | 127,583 | 121,948 | 123,192 | 177,759 | 185,775 | |||||||||||||||
Income (loss) before taxes | 4,023 | 8,113 | 4,602 | (14,050 | ) | 19,463 | ||||||||||||||
Income taxes (benefit) | 2,047 | 2,383 | 2,006 | (3,125 | ) | 7,133 | ||||||||||||||
Net income (loss) | $ | 1,976 | $ | 5,730 | $ | 2,596 | $ | (10,925 | ) | $ | 12,330 | |||||||||
Selected Metrics | ||||||||||||||||||||
Period end loans held for investment | $ | 8,477,236 | $ | 8,638,441 | $ | 8,069,961 | $ | 8,720,642 | $ | 10,254,713 | ||||||||||
Average loans held for investment | $ | 8,609,235 | $ | 8,327,859 | $ | 8,382,679 | $ | 9,440,972 | $ | 10,703,229 | ||||||||||
Loans held for investment yield | 13.81 | % | 13.42 | % | 12.41 | % | 12.84 | % | 14.02 | % | ||||||||||
Revenue margin | 15.72 | % | 15.06 | % | 13.77 | % | 13.87 | % | 14.91 | % | ||||||||||
Net charge-off rate | 9.19 | % | 9.32 | % | 7.30 | % | 5.84 | % | 5.90 | % | ||||||||||
30+ day performing delinquency rate | 6.63 | % | 6.69 | % | 6.25 | % | 5.51 | % | 5.24 | % | ||||||||||
Purchase Volume(3) | $ | 2,221,296 | $ | 2,136,039 | $ | 1,871,723 | $ | 2,346,969 | $ | 2,857,975 | ||||||||||
10
CAPITAL ONE FINANCIAL CORPORATION (COF)
COMMERCIAL BANKING SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS
MANAGED BASIS(1) (10)
(in thousands) | 2009 Q3 | 2009 Q2 | 2009 Q1 | 2008 Q4 | 2008 Q3 | |||||||||||||||
Commercial Banking: | ||||||||||||||||||||
Earnings | ||||||||||||||||||||
Net interest income | $ | 297,484 | $ | 274,927 | $ | 245,459 | $ | 248,913 | $ | 238,641 | ||||||||||
Non-interest income | 43,299 | 49,043 | 41,214 | 42,803 | 35,608 | |||||||||||||||
Total revenue | $ | 340,783 | $ | 323,970 | $ | 286,673 | $ | 291,716 | $ | 274,249 | ||||||||||
Provision for loan and lease losses | 375,095 | 122,497 | 117,304 | 133,154 | 41,706 | |||||||||||||||
Non-interest expenses | 166,043 | 155,591 | 141,805 | 121,420 | 121,558 | |||||||||||||||
Income (loss) before taxes | (200,355 | ) | 45,882 | 27,564 | 37,142 | 110,985 | ||||||||||||||
Income taxes (benefit) | (70,125 | ) | 16,059 | 9,647 | 13,000 | 38,845 | ||||||||||||||
Net income (loss) | $ | (130,230 | ) | $ | 29,823 | $ | 17,917 | $ | 24,142 | $ | 72,140 | |||||||||
Selected Metrics | ||||||||||||||||||||
Period end loans held for investment | $ | 29,862,418 | $ | 30,317,187 | $ | 29,431,097 | $ | 29,541,314 | $ | 29,095,313 | ||||||||||
Average loans held for investment | $ | 30,105,329 | $ | 30,496,917 | $ | 29,545,277 | $ | 29,416,025 | $ | 28,607,969 | ||||||||||
Loans held for investment yield | 5.01 | % | 4.97 | % | 4.92 | % | 5.72 | % | 5.82 | % | ||||||||||
Period end deposits | $ | 18,617,112 | $ | 16,897,441 | $ | 15,691,679 | $ | 16,483,361 | $ | 16,764,330 | ||||||||||
Average deposits | $ | 17,760,860 | $ | 17,020,998 | $ | 16,045,943 | $ | 15,103,199 | $ | 17,152,610 | ||||||||||
Deposit interest expense rate | 0.75 | % | 0.77 | % | 0.92 | % | 1.42 | % | 1.75 | % | ||||||||||
Core deposit intangible amortization | $ | 9,664 | $ | 9,975 | $ | 9,092 | $ | 9,353 | $ | 9,614 | ||||||||||
Net charge-off rate(5) | 1.42 | % | 0.89 | % | 0.56 | % | 0.82 | % | 0.16 | % | ||||||||||
Non-performing loans as a percentage of loans held for investment(5) | 2.64 | % | 2.32 | % | 1.85 | % | 1.31 | % | 1.00 | % | ||||||||||
Non-performing asset rate(5) | 2.83 | % | 2.46 | % | 1.95 | % | 1.41 | % | 1.03 | % | ||||||||||
11
CAPITAL ONE FINANCIAL CORPORATION (COF)
CONSUMER BANKING SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS
MANAGED BASIS(1) (10)
(in thousands) | 2009 Q3 | 2009 Q2 | 2009 Q1 | 2008 Q4(4) | 2008 Q3 | |||||||||||||||
Consumer Banking: | ||||||||||||||||||||
Earnings | ||||||||||||||||||||
Net interest income | $ | 908,744 | $ | 839,304 | $ | 723,654 | $ | 759,716 | $ | 754,439 | ||||||||||
Non-interest income | 212,716 | 225,627 | 163,257 | 159,831 | 194,741 | |||||||||||||||
Total revenue | $ | 1,121,460 | $ | 1,064,931 | $ | 886,911 | $ | 919,547 | $ | 949,180 | ||||||||||
Provision for loan and lease losses | 156,052 | 202,055 | 268,233 | 518,572 | 283,424 | |||||||||||||||
Goodwill impairment(4) | — | — | — | 810,876 | — | |||||||||||||||
Non-interest expenses | 681,391 | 724,760 | 579,724 | 629,257 | 614,740 | |||||||||||||||
Income (loss) before taxes | 284,017 | 138,116 | 38,954 | (1,039,158 | ) | 51,016 | ||||||||||||||
Income taxes (benefit) | 99,406 | 48,340 | 13,634 | (86,457 | ) | 17,856 | ||||||||||||||
Net income (loss) | $ | 184,611 | $ | 89,776 | $ | 25,320 | $ | (952,701 | ) | $ | 33,160 | |||||||||
Selected Metrics | ||||||||||||||||||||
Period end loans held for investment | $ | 40,479,805 | $ | 42,183,575 | $ | 35,942,632 | $ | 37,196,562 | $ | 38,077,606 | ||||||||||
Average loans held for investment | $ | 41,307,635 | $ | 43,043,640 | $ | 36,543,097 | $ | 37,534,915 | $ | 38,824,045 | ||||||||||
Loans held for investment yield | 9.50 | % | 8.52 | % | 9.09 | % | 9.22 | % | 9.19 | % | ||||||||||
Auto loan originations | 1,512,707 | 1,341,583 | 1,463,402 | 1,476,136 | 1,444,291 | |||||||||||||||
Period end deposits | $ | 72,252,596 | $ | 73,882,639 | $ | 63,422,760 | $ | 61,763,503 | $ | 57,492,140 | ||||||||||
Average deposits | $ | 73,284,397 | $ | 74,320,889 | $ | 62,730,379 | $ | 60,747,850 | $ | 57,034,702 | ||||||||||
Deposit interest expense rate | 1.58 | % | 1.76 | % | 2.04 | % | 2.45 | % | 2.39 | % | ||||||||||
Core deposit intangible amortization | $ | 45,856 | $ | 47,447 | $ | 35,593 | $ | 36,615 | $ | 37,637 | ||||||||||
Net charge-off rate(5) | 2.67 | % | 2.21 | % | 3.30 | % | 3.75 | % | 3.35 | % | ||||||||||
Non-performing loans as a percentage of loans held for investment(5)(8) | 1.25 | % | 1.07 | % | 0.98 | % | 0.93 | % | 0.81 | % | ||||||||||
Non-performing asset rate (5)(8) | 1.38 | % | 1.20 | % | 1.16 | % | 1.19 | % | 1.03 | % | ||||||||||
30+ day performing delinquency rate (5)(8) | 5.15 | % | 4.69 | % | 5.01 | % | 6.31 | % | 5.81 | % | ||||||||||
Period end loans serviced for others | $ | 30,659,074 | $ | 31,491,554 | $ | 22,270,797 | $ | 22,926,037 | $ | 25,384,945 | ||||||||||
12
CAPITAL ONE FINANCIAL CORPORATION (COF)
OTHER AND TOTAL SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS
MANAGED BASIS(1) (10)
(in thousands) | 2009 Q3 | 2009 Q2 | 2009 Q1(7) | 2008 Q4 | 2008 Q3 | |||||||||||||||
Other: | ||||||||||||||||||||
Earnings | ||||||||||||||||||||
Net interest income | $ | 27,070 | $ | 47,659 | $ | 82,952 | $ | (57,233 | ) | $ | 34,216 | |||||||||
Non-interest income | 149,802 | 16,905 | (203,800 | ) | (157,674 | ) | (85,805 | ) | ||||||||||||
Total revenue | $ | 176,872 | $ | 64,564 | $ | (120,848 | ) | $ | (214,907 | ) | $ | (51,589 | ) | |||||||
Provision for loan and lease losses | 25,464 | 59,129 | 63,634 | 63,043 | 45,705 | |||||||||||||||
Restructuring expenses | 26,357 | 43,374 | 17,627 | 52,839 | 15,306 | |||||||||||||||
Non-interest expenses | 31,109 | 88,459 | 17,284 | 68,105 | (1,039 | ) | ||||||||||||||
Income (loss) before taxes | 93,942 | (126,398 | ) | (219,393 | ) | (398,894 | ) | (111,561 | ) | |||||||||||
Income taxes (benefit) | (29,164 | ) | (64,372 | ) | (85,906 | ) | (118,346 | ) | (35,538 | ) | ||||||||||
Net income (loss) | $ | 123,106 | $ | (62,026 | ) | $ | (133,487 | ) | $ | (280,548 | ) | $ | (76,023 | ) | ||||||
Selected Metrics | ||||||||||||||||||||
Period end loans held for investment(9) | $ | 347,483 | $ | 351,393 | $ | 9,876,138 | $ | 533,655 | $ | 556,371 | ||||||||||
Average loans held for investment(9) | $ | 349,996 | $ | 878,147 | $ | 3,832,180 | $ | 550,950 | $ | 530,172 | ||||||||||
Period end deposits | $ | 23,633,403 | $ | 25,944,110 | $ | 42,004,459 | $ | 30,373,925 | $ | 24,656,504 | ||||||||||
Average deposits | $ | 24,837,483 | $ | 28,268,755 | $ | 33,361,282 | $ | 28,242,075 | $ | 21,140,718 | ||||||||||
Total: | ||||||||||||||||||||
Earnings | ||||||||||||||||||||
Interest income | $ | 4,212,260 | $ | 3,994,692 | $ | 3,888,885 | $ | 4,205,821 | $ | 4,346,261 | ||||||||||
Interest expense | 954,712 | 1,035,499 | 1,145,132 | 1,437,941 | 1,456,931 | |||||||||||||||
Net interest income | $ | 3,257,548 | $ | 2,959,193 | $ | 2,743,753 | $ | 2,767,880 | $ | 2,889,330 | ||||||||||
Non-interest income | 1,372,679 | 1,189,015 | 986,152 | 1,183,180 | 1,325,559 | |||||||||||||||
Total revenue | $ | 4,630,227 | $ | 4,148,208 | $ | 3,729,905 | $ | 3,951,060 | $ | 4,214,889 | ||||||||||
Provision for loan and lease losses | 2,200,332 | 1,903,973 | 2,131,957 | 2,879,298 | 1,805,270 | |||||||||||||||
Restructuring expenses | 26,357 | 43,374 | 17,627 | 52,839 | 15,306 | |||||||||||||||
Goodwill impairment(4) | — | — | — | 810,876 | — | |||||||||||||||
Non-interest expenses | 1,776,121 | 1,878,382 | 1,727,465 | 1,894,228 | 1,794,900 | |||||||||||||||
Income (loss) before taxes | 627,417 | 322,479 | (147,144 | ) | (1,686,181 | ) | 599,413 | |||||||||||||
Income taxes (benefit) | 158,191 | 92,278 | (60,223 | ) | (289,856 | ) | 213,624 | |||||||||||||
Net income (loss) | $ | 469,226 | $ | 230,201 | $ | (86,921 | ) | $ | (1,396,325 | ) | $ | 385,789 | ||||||||
Selected Metrics | ||||||||||||||||||||
Period end loans held for investment | $ | 141,058,515 | $ | 146,250,724 | $ | 150,334,994 | $ | 146,936,754 | $ | 147,345,746 | ||||||||||
Average loans held for investment | $ | 143,670,720 | $ | 148,609,132 | $ | 147,490,937 | $ | 146,586,152 | $ | 147,247,398 | ||||||||||
Period end deposits | $ | 114,503,111 | $ | 116,724,190 | $ | 121,118,898 | $ | 108,620,789 | $ | 98,912,974 | ||||||||||
Average deposits | $ | 115,882,740 | $ | 119,610,642 | $ | 112,137,604 | $ | 104,093,124 | $ | 95,328,030 | ||||||||||
13
CAPITAL ONE FINANCIAL CORPORATION (COF)
LOAN DISCLOSURES AND SEGMENT
FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS NOTES
| (1) | The information in this report 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) | Non performing assets is comprised of non performing loans and other real estate owned (OREO). The non performing asset rate equals non performing assets divided by the sum of loans held for investment and OREO. |
| (3) | Includes all purchase transactions net of returns and excludes cash advance transactions. |
| (4) | In the fourth quarter of 2008 the Company recorded impairment of goodwill in its automobile business of $810.9 million. |
| (5) | Net charge-off rates and 30+ day performing delinquency rates include period end loans held for investment and average loans held for investment acquired as part of the Chevy Chase Bank, FSB (CCB) acquisition. The period end and average loans held for investment and metrics excluding such loans are as follows. Net charge-off dollars were unchanged. |
| Q3 2009 | Q2 2009 | |||||||
CCB period end acquired loan portfolio (in millions) | $ | 8,002.3 | $ | 8,552.9 | ||||
CCB average acquired loan portfolio (in millions) | $ | 8,525.2 | $ | 8,931.9 | ||||
Net charge-off rate | ||||||||
Commercial and Multi-Family Real Estate | 1.42 | % | 0.95 | % | ||||
Middle Market | 0.59 | % | 0.61 | % | ||||
Total Commercial Lending | 1.12 | % | 0.83 | % | ||||
Total Commercial Banking | 1.46 | % | 0.92 | % | ||||
Mortgage | 1.24 | % | 0.77 | % | ||||
Retail Banking | 2.57 | % | 2.56 | % | ||||
Total Consumer Banking | 3.28 | % | 2.72 | % | ||||
30+ day performing delinquency rate | ||||||||
Mortgage | 2.06 | % | 1.74 | % | ||||
Retail Banking | 1.29 | % | 0.92 | % | ||||
Total Consumer Banking | 6.27 | % | 5.74 | % | ||||
Non performing asset rate | ||||||||
Commercial and Multi-Family Real Estate | 2.76 | % | 2.25 | % | ||||
Middle Market | 1.30 | % | 1.20 | % | ||||
Total Commercial Lending | 2.16 | % | 1.83 | % | ||||
Total Commercial Banking | 2.91 | % | 2.53 | % | ||||
Mortgage | 3.23 | % | 2.78 | % | ||||
Retail Banking | 2.03 | % | 1.90 | % | ||||
Total Consumer Banking | 1.68 | % | 1.47 | % | ||||
Non performing loans as a percentage of loans held for investment | ||||||||
Commercial Banking | 2.71 | % | 2.39 | % | ||||
Consumer Banking | 1.52 | % | 1.31 | % | ||||
| (6) | The Company’s policy is not to reclassify credit card loans as nonperforming loans. Credit card loans continue to accrue finance charges and fees until charged off. The amount of finance charges and fees considered uncollectible are suppressed and are not recognized in income. |
| (7) | The impact and balances from the Chevy Chase Bank acquisition are included in the Other category for the first quarter of 2009. |
| (8) | Includes non accrual consumer auto loans 90+ days past due. |
| (9) | Other loans held for investment includes unamortized premiums and discounts and certain other purchase accounting adjustments on loans acquired in the Chevy Chase Bank, North Fork and Hibernia acquisitions. |
| (10) | During the third quarter of 2009, the Company realigned its business segment reporting structure to better reflect the manner in which the performance of the Company’s operations are evaluated. The Company now reports the results of its business through three operating segments: Credit Card, Commercial Banking, and Consumer Banking. Segment and certain sub-segment results have been recasted for all periods presented. The three segments consist of the following: |
| • | Credit Card includes the Company’s domestic consumer and small business card lending, domestic national small business lending, national closed end installment lending and the international card lending businesses in Canada and the United Kingdom. |
| • | Commercial Banking includes the Company’s lending, deposit gathering and treasury management services to commercial real estate and middle market customers. The Commercial segment also includes the financial results of a national portfolio of small ticket commercial real estate loans that are in run-off mode. |
| • | Consumer Banking includes the Company’s branch based lending and deposit gathering activities for small business customers as well as its branch-based consumer deposit gathering and lending activities, national deposit gathering, consumer mortgage lending and servicing activities and national automobile lending. |
The segment reorganization includes the allocation of Chevy Chase Bank to the appropriate segments. Chevy Chase Bank’s operations are included in the Commercial Banking and Consumer Banking segments beginning in the second quarter 2009. Chevy Chase Bank’s operations for the first quarter of 2009 remain in the Other category. Chevy Chase Bank’s operations are impacted by the Company’s analysis of the fair values and purchase price allocation of Chevy Chase Bank’s assets and liabilities. As of September 30, 2009, the Company has not finalized the analysis. Changes to the purchase price allocation could result in the Company recasting results of Chevy Chase Bank’s operations.
14
FOR IMMEDIATE RELEASE: October 22, 2009
Capital One Reports Third Quarter Net Income of $425.6 million, or $0.94 per share
Income from continuing operations of $1.03 per share
Third Quarter Highlights
| • | Managed revenue increased $482.0 million, or 11.6 percent, relative to the second quarter. |
| • | Provision expense increased $296.4 million, due to an anticipated increase in charge-offs as well as a modest allowance build of $31.7 million in the third quarter. |
| • | Allowance as a percentage of reported loans rose to 5.08 percent in the third quarter of 2009 from 4.84 percent in the second quarter of 2009. |
| • | Tangible common equity to tangible managed assets, or “TCE ratio,” increased to 6.2 percent, up 52 basis points from the June 30, 2009 ratio of 5.7 percent, and Tier 1 capital rose to 11.8 percent. |
McLean, Va. (October 22, 2009) –Capital One Financial Corporation (NYSE: COF) today announced net income for the third quarter of 2009 of $425.6 million, or $0.94 per common share (diluted), versus second quarter 2009 net income of $224.2 million, or $0.53 per common share (diluted), before taking into account the impact from the repayment of the government’s TARP preferred share investment. In the third quarter of 2008, the company reported $374.1 million, or $1.00 per common share (diluted).
“We’ve worked for years to position our company to be resilient, and our third quarter results demonstrate that resiliency in the midst of the most challenging economic cycle we’ve seen in generations” said Richard D. Fairbank, Capital One’s Chairman and Chief Executive Officer. “We are successfully weathering the storm, but the storm is not over. Therefore, we will continue to take the decisive actions necessary to place our company in the best position to navigate the downturn and drive shareholder value over the cycle.”
Total Company Results
| • | Total managed revenue in the third quarter of 2009 was $4.6 billion, an increase of $482.0 million, or |
11.6 percent, relative to the second quarter. Net interest income increased $298.3 million in the third quarter, or 10.1 percent, while non-interest income increased $183.7 million, or 15.4
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percent. The increase in revenue was driven primarily by higher yields in Domestic Card, lower funding costs, a sequential improvement in valuation adjustments to retained securitization interests, and opportunistic moves in the investment portfolio that resulted in gains from securities sales.
| • | Provision expense increased $296.4 million quarter over quarter, due to an anticipated increase in charge-offs as well as a $31.7 million allowance build in the third quarter compared to a second quarter release of $166.2 million. The total company allowance build was a result of a significant increase in the Commercial Banking allowance partially offset by releases in both the Credit Card and Consumer Banking allowances. |
| – | Credit Card total allowance release of $78 million |
| • | Domestic credit card release of $89 million |
| • | International credit card build of $11 million |
| – | Consumer Banking total allowance release of $124 million |
| • | Auto release of $190 million |
| • | Other Consumer Banking build of $66 million |
| – | Commercial Banking total allowance build of $256 million |
| • | Allowance as a percentage of reported loans rose to 5.08 percent in the third quarter of 2009 from 4.84 percent in the second quarter of 2009 and from 3.59 percent from the third quarter of 2008, excluding the effect of Chevy Chase Bank. |
| • | Average deposits decreased by $3.7 billion in the quarter to $115.9 billion, or 3.1 percent, over the prior quarter. |
| • | The cost of managed interest-bearing liabilities decreased from 2.40 percent in the second quarter to 2.28 percent in the third quarter as the company benefited from lower interest rates and continued to replace the run off of higher cost funding with lower cost Consumer Banking and Commercial Banking deposits. The total cost of funds declined 12 basis points to 2.28 percent in the third quarter. |
| • | Average assets held for investment decreased $4.9 billion in the quarter, driven primarily by reductions in loans outstanding. |
| • | Non-interest expenses declined $119.3 million in the third quarter of 2009, driven primarily by the absence of the FDIC special assessment that impacted the second quarter as well as modestly lower |
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marketing and restructuring expenses. The managed efficiency ratio decreased to 38.36 percent in the third quarter of 2009 from 45.28 percent in the second quarter of 2009, driven largely by increasing revenue.
| • | The company’s TCE ratio increased to 6.2 percent on September 30, 2009, an improvement of 52 basis points from the second quarter level of 5.7 percent. The Tier 1 risk-based capital ratio of an estimated 11.8 percent, increased 2.1 percentage points, and continues to be well above the regulatory well-capitalized minimum. |
“Despite continued credit pressures, Capital One posted solid growth in both revenues and bottom-line profits in the third quarter,” said Gary L. Perlin, Capital One’s Chief Financial Officer. “Our strong balance sheet is supported by healthy reserve levels and a tangible common equity ratio that grew to 6.2 percent, which positions the company against downside risk while enabling future growth.”
Segment Results
During the third quarter of 2009, the company realigned its business segment reporting structure to better reflect the manner in which the performance of the company’s operations is evaluated. The company now reports the results of its business through three operating segments: Credit Card, Commercial Banking, and Consumer Banking.
Credit Card Highlights
For details on the sub-segments’ results, please refer to the Financial Supplement.
The Credit Card segment reported net income in the third quarter of $291.7 million, an increase of $119.1 million, or 69.0 percent, from second quarter net income $172.6 million. Improving revenue margin in the Domestic Credit Card sub-segment drove the improved profitability despite higher provision expense.
| • | Revenues improved $296.4 million, or 11.0 percent, to $3.0 billion in the third quarter of 2009. |
| – | Domestic Card – revenues up $271.6 million, or 11.4 percent from the second quarter |
| – | International Card – revenues up $24.7 million, or 7.9 percent from the second quarter |
| • | Revenue margin in the Domestic Card sub-segment improved to approximately 16.8 percent in the third quarter, up from 14.5 percent in the second quarter. The company expects Domestic Card |
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revenue margin to remain above 16 percent in the fourth quarter. In 2010, the company expects Domestic Card quarterly revenue margin to moderate modestly, but remain close to its fourth quarter 2009 level.
| • | Period-end loans in the Credit Card segment were $70.4 billion, a decline of $3.0 billion, or 4.1 percent, from the second quarter of 2009. |
| – | Domestic Card – loans declined $2.9 billion, or 4.4 percent from the second quarter. The continuing run-off of nationally-originated Installment Loans drove approximately 40 percent of the decline, although they comprise only 13 percent of the Domestic Card loan balances. |
| – | International Card – loans declined $0.2 billion or 1.9 percent from the second quarter |
| • | The managed net charge-off rate for the Credit Card segment increased 35 basis points to 9.59 percent in the third quarter of 2009 from 9.24 percent in the second quarter of 2009, primarily as a result of the continuing difficult credit environment. |
| – | Domestic Card – net charge-offs increased to 9.64 percent in the third quarter from 9.23 percent in the second quarter. The increase was driven by declining balances, the implementation of the OCC minimum payment policies, and the absence of the one-time second quarter benefit from a change in bankruptcy processing partially offset by favorable seasonal trends and a modest improvement in the underlying charge-off rate. |
| – | International Card – net charge-offs decreased to 9.19 percent in the third quarter from 9.32 percent in the second quarter. |
| • | The delinquency rate for the Credit Card segment increased 54 basis points to 5.53 percent in the third quarter of 2009 from 4.99 percent in the second quarter of 2009. |
| – | Domestic Card – delinquencies increased to 5.38 percent in the third quarter from 4.77 percent in the second quarter, reflecting seasonal patterns as well as revenue enhancements taken earlier in 2009. |
| – | International Card – delinquencies remained basically flat, decreasing to 6.63 percent in the third quarter from 6.69 percent in the second quarter. |
Commercial Banking highlights
For more lending information and statistics on the segment results, please refer to the Financial Supplement.
The Commercial Banking segment consists of commercial and multi-family real-estate, middle market lending, and specialty lending, which are summarized under Commercial Lending, and small ticket commercial real estate. The total segment reported a net loss of $130.2 million in the third quarter, down from a profit of $29.8 million in the prior quarter, driven by a $252.6 million increase in the loss provision relative to the second quarter. The provision expense increased primarily as a result
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of a large allowance build in anticipation of future credit losses. The two most important drivers of the allowance build were the significant decline in collateral values, particularly in the company’s construction portfolio, and recognizing the effects of higher charge-offs.
| • | Commercial Banking revenue increased $16.8 million, or 5.2 percent, to $340.8 million in the third quarter of 2009, while non-interest expenses increased $10.5 million, or 6.7 percent, to $166.0 million. |
| • | Average loans declined $391.6 million, or 1.3 percent, to $30.1 billion during the third quarter from $30.5 billion during the second quarter of 2009. |
| – | Commercial Lending – declined $320.5 million, or 1.1 percent, to $27.6 billion |
| – | Small ticket commercial real estate – declined $71.1 million, or 2.8 percent, to $2.5 billion |
| • | Average deposits increased $739.9 million, or 4.3 percent, to $17.8 billion during the third quarter from $17.0 billion during the second quarter of 2009, while the deposit interest expense was effectively stable at 75 basis points. |
| • | The managed net charge-off rate for Commercial Banking increased 53 basis points in the third quarter of 2009 to 1.42 percent from 0.89 percent in the second quarter of 2009. |
| – | Commercial Lending – 1.08 percent, an increase of 28 basis points over the second quarter of 2009 |
| – | Small ticket commercial real estate – 5.19 percent, an increase of 333 basis points over the second quarter of 2009 |
| • | Non-performing loans as a percentage of loans held for investment for Commercial Banking was 2.64 percent, an increase of 32 basis points from 2.32 percent at the end of the second quarter of 2009. |
Consumer Banking highlights
For more lending information and statistics on the segment’s results, please refer to the Financial Supplement.
Consumer Banking reported net income for the third quarter of $184.6 million. Revenue increased $56.5 million in the quarter, with improvements across the Consumer Banking segment. Provision expense declined $46.0 million, driven by an allowance release in the auto finance business. Non-interest expense declined $43.4 million.
| • | Average loans declined $1.7 billion, or 4.0 percent, to $41.3 billion during the third quarter. Auto finance loans declined as a result of the company’s earlier efforts to retrench and reposition the auto finance business. Mortgage loans fell as the company continued to experience expected run off in the portfolio. |
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| – | Auto – declined $667.3 million, or 3.3 percent, to $19.6 billion |
| – | Mortgages – declined $857.3 million, or 5.0 percent, to $16.2 billion |
| – | Retail banking – declined $211.4 million, or 3.7 percent, to $5.5 billion |
| • | Average deposits in the Consumer Banking segment declined $1.0 billion, or 1.4 percent, to $73.3 billion during the third quarter from $74.3 billion during the second quarter of 2009. Improved deposit mix and favorable interest rates drove an 18 basis point improvement in the deposit interest expense rate in the third quarter. |
| • | The managed net charge-off rate for Consumer Banking increased 46 basis points in the third quarter of 2009 to 2.67 percent from 2.21 percent in the second quarter of 2009. |
| – | Auto – 4.38 percent, an increase of 73 basis points over the second quarter |
| – | Mortgages – 0.68 percent, an increase of 26 basis points from the second quarter |
| – | Retail Banking – 2.44 percent, an increase of 3 basis points from the second quarter |
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 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.
Forward looking statements
The company cautions that its current expectations in this release, in the presentation slides available on the company’s website and in its Form 8-K dated October 22, 2009, including those regarding Domestic Card revenue margin in the fourth quarter of 2009 and in 2010; and the company’s plans, objectives, expectations, and intentions, are forward-looking statements. Actual results could differ materially from current expectations due to a number of factors, including: general economic conditions in the U.S., the UK, or the company’s local markets, including conditions affecting consumer income, confidence, spending, and savings which may affect consumer bankruptcies, defaults, charge-offs, deposit activity, and interest rates; changes in the labor and employment market; changes in the credit environment; the company’s ability to execute on its strategic and
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operational plans; competition from providers of products and services that compete with the company’s businesses; increases or decreases in the company’s aggregate accounts and balances, or the growth rate and/or composition thereof; changes in the reputation of or expectations regarding the financial services industry or the company with respect to practices, products or financial condition; financial, legal, regulatory, tax or accounting changes or actions, including with respect to any litigation matter involving the company; and the success of the company’s marketing efforts in attracting or retaining customers. A discussion of these and other factors can be found in the company’s annual report and other reports filed with the Securities and Exchange Commission, including, but not limited to, the company’s reports on Form 10-K for the fiscal year ended December 31, 2008 and reports on Form 10-Q for the quarters ended March 31, 2009 and June 30, 2009.
About Capital One
Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A. and Capital One Bank (USA), N. A., had $114.5 billion in deposits and $209.7 billion in total managed assets outstanding as of September 30, 2009. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients. Capital One, N.A. has approximately 1,000 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia, and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol “COF” and is included in the S&P 100 index.
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NOTE: Third quarter 2009 financial results, SEC Filings, and earnings conference call slides are accessible on Capital One’s home page (www.capitalone.com). Choose “Investors” on the bottom of the home page to view and download the earnings press release, slides, and other financial information. Additionally, a podcast and webcast of today’s 5:00 pm (ET) earnings conference call is accessible through the same link.
