Exhibit 99.1
1
FOR IMMEDIATE RELEASE: Contact: Paul Paquin Tatiana Stead
- ------------------------ V.P., Investor Relations Media Relations
April 17, 2001 (703) 205-1039 (703) 205-1070
Capital One Reports Record First Quarter Earnings
Earnings Per Share Rise 29% Over Year Ago Period
Falls Church, Va. (April 17, 2001) - Capital One Financial Corporation (NYSE:
COF) today announced record first quarter 2001 earnings, driven by a 36 percent
increase in total revenues, and the best credit performance of any of the major
credit card institutions in the country.
Earnings for the first quarter of 2001 were $143.6 million, or $0.66 per
share, versus earnings of $106.7 million, or $0.51 per share, for the comparable
period in the prior year. Earnings in the fourth quarter of 2000 were $128.3
million, or $0.61 per share.
"Capital One achieved its fifteenth consecutive quarter of record earnings
reflecting the extraordinary capacity of our information-based strategy to
deliver consistent growth and performance," said Richard D. Fairbank, Capital
One's Chairman and Chief Executive Officer. "Our ability to grow and manage the
credit quality of our portfolio has put us on track for another year of 30
percent earnings growth."
First quarter 2001 revenue, defined as managed net interest income and non-
interest income, rose to $1.5 billion versus $1.4 billion in the fourth quarter
of 2000 and $1.1 billion for the comparable period in the prior year. For the
quarter, Capital One added 2.7 million net new accounts, bringing total accounts
to 36.5 million. The company's managed consumer loan balances increased by $2.0
billion to $31.6 billion.
The managed net charge-off rate declined to 3.75 percent for the first
quarter of 2001 compared to 3.98 percent for the fourth quarter of 2000. The
managed delinquency rate (30+ days) also declined to 4.72 percent as of March
31, 2001, compared to 5.23 percent as of December 31, 2000.
"Our relentless scientific testing and stringent risk management systems
are evident in both our net charge-off rate and our managed delinquency rate. By
continuing to deliver the right products to the right customers through a
variety of channels, we've grown our customer base to a record 36.5 million
worldwide. Our achievements this quarter reflect our absolute commitment to
having the flexibility and disciplined marketing strategies necessary to quickly
bring to market innovative products that meet our customers' needs," said Nigel
W. Morris, Capital One's President and Chief Operating Officer.
-more-
Capital One Reports Record First Quarter Earnings
Page 2
The company's managed net interest margin decreased to 9.21 percent in the
first quarter of 2001 versus 10.16 percent in the fourth quarter of 2000 and
11.23 percent in the comparable period of 2000, reflecting strong growth in the
superprime portfolio and the success of the company's 0% purchase teaser offer.
The decreased margin was the primary contributor to the decline in the risk
adjusted margin to 14.80 percent, which compares to 16.32 percent for the fourth
quarter of 2000 and 16.57 percent for the comparable period in the prior year.
Marketing expense for the first quarter of 2001 decreased to $231.2 million
versus $259.5 million in the fourth quarter of 2000, and increased $29 million
over the $201.9 million spent in the comparable period of the prior year. Other
non-interest expenses (excluding marketing) for the first quarter of 2001 were
$687 million versus $617 million for the fourth quarter of 2000 and $508 million
in the comparable period of the prior year. Annualized operating expenses per
account increased slightly to $78.26 for the first quarter of 2001 from $78.09
for the fourth quarter of 2000 and decreased from $82.93 from the comparable
period in the prior year.
The allowance for loan losses increased by $70 million during the first
quarter to $597 million or 3.83 percent of on-balance sheet receivables as of
March 31, 2001, compared to 3.49 percent as of December 31, 2000. The capital
to managed assets ratio was strong as of March 31, 2001, at 6.93 percent,
reflecting the issuance of $413 million in equity in January 2001.
Headquartered in Falls Church, Virginia, Capital One Financial Corporation
(www.CapitalOne.com) is a holding company whose principal subsidiaries, Capital
One Bank and Capital One, F.S.B., offer consumer lending products. Capital
One's subsidiaries collectively had 36.5 million accounts and $31.6 billion in
managed loans outstanding as of March 31, 2001. Capital One, a Fortune 500
company, is one of the largest providers of MasterCard and Visa credit cards in
the world. Capital One trades on the New York Stock Exchange under the symbol
"COF" and is included in the S&P 500 index.
###
Note: This release, financial information and a live webcast of today's 5:00pm
(EDT) analyst conference call is accessible on the Internet on Capital One's
home page (http://www.CapitalOne.com). Click on "Investor Center" to
view/download the earnings press release and other financial information.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY
(in millions, except per share data 2001 2000 2000 2000 2000
and as noted) Q1 Q4 Q3 Q2 Q1
- ----------------------------------------------------------------------------------------------------------------------------
Earnings (Managed Basis)
Net Interest Income $ 759.3 $ 716.1 $ 665.1 $ 614.4 $ 618.9
Non-Interest Income 747.1 696.5 619.9 554.4 489.3
------------------------------------------------------------------------------
Total Revenue 1,506.4 1,412.5 1,285.0 1,168.8 1,108.2
Provision for Loan Losses 356.5 329.1 269.0 245.0 226.1
Marketing Expenses 231.2 259.5 233.2 211.6 201.9
Operating Expenses 687.0 617.1 585.8 530.7 508.0
------------------------------------------------------------------------------
Income Before Taxes 231.6 206.9 197.0 181.5 172.1
Tax Rate 38.0% 38.0% 38.0% 38.0% 38.0%
Net Income $ 143.6 $ 128.3 $ 122.1 $ 112.5 $ 106.7
- ----------------------------------------------------------------------------------------------------------------------------
Common Share Statistics
Basic EPS $ 0.70 $ 0.65 $ 0.62 $ 0.57 $ 0.54
Diluted EPS $ 0.66 $ 0.61 $ 0.58 $ 0.54 $ 0.51
Dividends Per Share $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03
Book Value Per Share (period end) $ 11.81 $ 9.94 $ 9.02 $ 8.39 $ 7.93
Stock Price Per Share (period end) $ 55.50 $ 65.81 $ 70.06 $ 44.63 $ 47.94
Total Market Capitalization (period end) $ 11,509.1 $ 12,989.3 $ 13,783.1 $ 8,747.4 $ 9,376.5
Shares Outstanding (period end) 207.4 197.4 196.7 196.0 195.6
Shares Used to Compute Basic EPS 204.8 197.0 196.3 196.0 196.6
Shares Used to Compute Diluted EPS 217.8 210.4 210.1 208.6 208.7
- ----------------------------------------------------------------------------------------------------------------------------
Managed Loan Statistics (period avg.)
Average Loans $ 30,505 $ 26,377 $ 23,020 $ 20,915 $ 20,181
Average Earning Assets $ 32,983 $ 28,188 $ 24,749 $ 22,581 $ 22,038
Average Assets $ 35,303 $ 30,234 $ 27,015 $ 24,567 $ 23,497
Average Equity $ 2,347 $ 1,865 $ 1,743 $ 1,626 $ 1,567
Net Interest Margin 9.21% 10.16% 10.75% 10.88% 11.23%
Risk Adjusted Margin (1) 14.80% 16.32% 17.24% 17.03% 16.57%
Return on Average Assets (ROA) 1.63% 1.70% 1.81% 1.83% 1.82%
Return on Average Equity (ROE) 24.47% 27.51% 28.02% 27.68% 27.24%
Net Charge-Off Rate 3.75% 3.98% 3.80% 3.97% 3.87%
Net Charge-Offs $ 285.9 $ 262.3 $ 218.4 $ 207.6 $ 195.3
Cost Per Account (in dollars) $ 78.26 $ 78.09 $ 82.84 $ 80.97 $ 82.93
- ----------------------------------------------------------------------------------------------------------------------------
Managed Loan Statistics (period end)
Reported Loans $ 15,572 $ 15,113 $ 12,331 $ 11,383 $ 9,449
Securitized Loans 15,979 14,411 11,821 10,500 10,850
------------------------------------------------------------------------------
Total Loans $ 31,551 $ 29,524 $ 24,152 $ 21,883 $ 20,299
Delinquency Rate (30+ days) 4.72% 5.23% 5.32% 5.35% 5.26%
Number of Accounts (000's) 36,462 33,774 29,437 27,133 25,302
Total Assets $ 36,749 $ 33,286 $ 28,185 $ 25,610 $ 23,361
Capital, Including Preferred Interests $ 2,547.7 $ 2,061.0 $ 1,873.8 $ 1,743.9 $ 1,649.3
Capital to Managed Assets Ratio 6.93% 6.19% 6.65% 6.81% 7.06%
- ----------------------------------------------------------------------------------------------------------------------------
(1) Risk adjusted margin is total revenue less net charge-offs as a percentage
of average earning assets.
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Balance Sheets
(in thousands)(unaudited)
March 31 Dec 31 March 31
2001 2000 2000
------------------- ------------------- ------------------
Assets:
Cash and due from banks $ 49,842 $ 74,493 $ 84,084
Federal funds sold and resale agreements 247,676 60,600 18,000
Interest-bearing deposits at other banks 492,390 101,614 96,491
------------------- ------------------- ------------------
Cash and cash equivalents 789,908 236,707 198,575
Securities available for sale 2,112,180 1,696,815 1,519,027
Consumer loans 15,571,754 15,112,712 9,449,498
Less: Allowance for loan losses (597,000) (527,000) (372,000)
------------------- ------------------- ------------------
Net loans 14,974,754 14,585,712 9,077,498
Premises and equipment, net 709,207 664,461 501,238
Interest receivable 108,944 82,675 81,967
Accounts receivable from securitizations 1,492,818 1,143,902 666,972
Other 614,194 479,069 479,781
------------------- ------------------- ------------------
Total assets $ 20,802,005 $ 18,889,341 $ 12,525,058
=================== =================== ==================
Liabilities:
Interest-bearing deposits $ 9,390,524 $ 8,379,025 $ 4,096,241
Other borrowings 1,845,509 2,925,938 1,955,978
Senior notes 5,040,761 4,050,597 3,818,936
Interest payable 135,863 122,658 88,438
Other 1,940,103 1,448,609 1,014,384
------------------- ------------------- ------------------
Total liabilities 18,352,760 16,926,827 10,973,977
Stockholders' Equity:
Common stock 2,086 1,997 1,997
Paid-in capital, net 974,503 575,179 598,012
Retained earnings and cumulative other comprehensive income 1,519,855 1,474,024 1,092,021
Less: Treasury stock, at cost (47,199) (88,686) (140,949)
------------------- ------------------- ------------------
Total stockholders' equity 2,449,245 1,962,514 1,551,081
------------------- ------------------- ------------------
Total liabilities and stockholders' equity $ 20,802,005 $ 18,889,341 $ 12,525,058
=================== =================== ==================
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income
(in thousands, except per share data)(unaudited)
Three Months Ended
March 31 Dec 31 March 31
2001 2000 2000
------------------- ------------------- -------------------
Interest Income:
Consumer loans, including fees $ 617,889 $ 679,079 $ 488,937
Securities available for sale 28,234 25,608 24,734
Other 3,750 1,548 1,776
------------------- ------------------- -------------------
Total interest income 649,873 706,235 515,447
Interest Expense:
Deposits 146,961 118,072 52,120
Other borrowings 43,900 57,699 41,454
Senior notes 83,293 71,904 68,376
------------------- ------------------- -------------------
Total interest expense 274,154 247,675 161,950
------------------- ------------------- -------------------
Net interest income 375,719 458,560 353,497
Provision for loan losses 250,614 247,226 126,525
------------------- ------------------- -------------------
Net interest income after provision for loan losses 125,105 211,334 226,972
Non-Interest Income:
Servicing and securitizations 543,791 291,634 270,758
Service charges and other customer-related fees 406,134 504,239 341,232
Interchange 74,851 76,207 43,070
------------------- ------------------- -------------------
Total non-interest income 1,024,776 872,080 655,060
Non-Interest Expense:
Salaries and associate benefits 325,716 287,742 234,836
Marketing 231,200 259,461 201,938
Communications and data processing 75,292 74,436 70,822
Supplies and equipment 73,603 76,171 52,274
Occupancy 31,302 29,404 25,292
Other 181,134 149,302 124,758
------------------- ------------------- -------------------
Total non-interest expense 918,247 876,516 709,920
------------------- ------------------- -------------------
Income before income taxes 231,634 206,898 172,112
Income taxes 88,021 78,621 65,403
------------------- ------------------- -------------------
Net income $ 143,613 $ 128,277 $ 106,709
=================== =================== ===================
Basic earnings per share $ 0.70 $ 0.65 $ 0.54
=================== =================== ===================
Diluted earnings per share $ 0.66 $ 0.61 $ 0.51
=================== =================== ===================
Dividends paid per share $ 0.03 $ 0.03 $ 0.03
=================== =================== ===================
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Managed (1) Quarter Ended 3/31/01
--------------------------------------------------
Average Income/ Yield/
Balance Expense Rate
------- ------- -----
Earning assets:
Consumer loans $ 30,505,450 1,235,002 16.19%
Securities available for sale 1,913,357 28,234 5.90
Other 564,592 3,750 2.66
--------------------------------------------------
Total earning assets $ 32,983,399 1,266,986 15.37%
====================================
Interest-bearing liabilities:
Deposits $ 8,996,414 146,961 6.53%
Other borrowings 2,442,200 43,900 7.19
Senior notes 4,678,452 83,293 7.12
Securitization liability 14,948,262 233,524 6.25
--------------------------------------------------
Total interest-bearing liabilities $ 31,065,328 507,678 6.54%
====================================
--------------
Net interest spread 8.83%
==============
Interest income to average earning assets 15.37%
Interest expense to average earning assets 6.16
--------------
Net interest margin 9.21%
==============
Managed (1) Quarter Ended 12/31/00
---------------------------------------------------
Average Income/ Yield/
Balance Expense Rate
------- ------- -----
Earning assets:
Consumer loans $ 26,377,427 $ 1,146,056 17.38%
Securities available for sale 1,688,092 25,608 6.07
Other 122,192 1,548 5.07
---------------------------------------------------
Total earning assets $ 28,187,711 $ 1,173,212 16.65%
=====================================
Interest-bearing liabilities:
Deposits $ 7,155,771 $ 118,072 6.60%
Other borrowings 3,290,499 57,699 7.01
Senior notes 4,084,761 71,904 7.04
Securitization liability 12,274,193 209,481 6.83
---------------------------------------------------
Total interest-bearing liabilities $ 26,805,224 $ 457,156 6.82%
=====================================
--------------
Net interest spread 9.83%
==============
Interest income to average earning assets 16.65%
Interest expense to average earning assets 6.49
--------------
Net interest margin 10.16%
==============
Managed (1) Quarter Ended 3/31/00
----------------------------------------------------
Average Income/ Yield/
Balance Expense Rate
------- ------- ----
Earning assets:
Consumer loans $ 20,181,373 $ 911,418 18.06%
Securities available for sale 1,681,537 24,734 5.88
Other 174,658 1,776 4.07
----------------------------------------------------
Total earning assets $ 22,037,568 $ 937,928 17.02%
======================================
Interest-bearing liabilities:
Deposits $ 3,894,250 $ 52,120 5.35%
Other borrowings 2,504,724 41,454 6.62
Senior notes 4,019,484 68,376 6.80
Securitization liability 10,458,226 157,124 6.01
----------------------------------------------------
Total interest-bearing liabilities $ 20,876,684 $ 319,074 6.11%
======================================
--------------
Net interest spread 10.91%
==============
Interest income to average earning assets 17.02%
Interest expense to average earning assets 5.79
--------------
Net interest margin 11.23%
==============
(1) The information in this table reflects the adjustment to add back the
effect of securitized loans.