SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
October 16, 2001
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(Date of earliest event reported)
Capital One Financial Corporation
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(Exact name of registrant as specified in its charter)
Delaware 1-13300 54-1719854
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(State of incorporation (Commission File (IRS Employer
or organization) Number) Identification No.)
2980 Fairview Park Drive
Suite 1300
Falls Church, Virginia 22042
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 205-1000
Item 5. Other Events.
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(a) See attached press release.
(b) Cautionary Factors
The attached press release contains forward-looking statements which
involve a number of risks and uncertainties. The Company cautions readers that
any forward-looking information is not a guarantee of future performance and
that actual results could differ materially from those contained in the forward-
looking information as a result of various factors including, but not limited
to, the following: continued intense competition from numerous providers of
products and services which compete with the Company's businesses; with respect
to financial and other products, changes in the Company's aggregate accounts or
consumer loan balances and the growth rate thereof, including changes resulting
from factors such as shifting product mix, amount of actual marketing expenses
made by the Company and attrition of accounts and loan balances; an increase in
credit losses (including increases due to a worsening of general economic
conditions); the ability of the Company to continue to securitize its credit
cards and consumer loans and to otherwise access the capital markets at
attractive rates and terms to fund its operations and future growth;
difficulties or delays in the development, production, testing and marketing of
new products or services; losses associated with new products or services or
expansion internationally; financial, legal, regulatory or other difficulties
that may affect investment in, or the overall performance of, a product or
business, including changes in existing laws to regulate further the credit card
and consumer loan industry and the financial services industry, in general
(including the flexibility of financial services companies to obtain, use and
share consumer data); the amount of, and rate of growth in, the Company's
expenses (including salaries and associate benefits and marketing expenses) as
the Company's business develops or changes or as it expands into new market
areas; the availability of capital necessary to fund the Company's new
businesses; the ability of the Company to build the operational and
organizational infrastructure necessary to engage in new businesses or to expand
internationally; the ability of the Company to recruit experienced personnel to
assist in the management and operations of new products and services; and other
factors listed from time to time in the Company's SEC reports, including, but
not limited to, the Annual Report on Form 10-K for the year ended December 31,
2000 (Part I, Item 1, Risk Factors).
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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99.1. Press Release of the Company dated October 16, 2001.
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned, thereto duly authorized.
CAPITAL ONE FINANCIAL CORPORATION
Dated: October 16, 2001 By: /s/ John G. Finneran, Jr.
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John G. Finneran, Jr.
Executive Vice President,
General Counsel and Corporate
Secretary
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EXHIBIT INDEX
99.1 Press Release of the Company dated October 16, 2001
4
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY
2001 2001 2001 2000 2000
(in millions, except per share data and as noted) Q3 Q2 Q1 Q4 Q3
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Earnings (Managed Basis)
Net Interest Income $ 926.7 $ 823.7 $ 759.3 $ 716.1 $ 665.1
Non-Interest Income 852.5 796.3 747.1 696.5 619.9
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Total Revenue 1,779.2 1,620.0 1,506.4 1,412.5 1,285.0
Provision for Loan Losses 437.6 379.1 356.5 329.1 269.0
Marketing Expenses 281.9 268.7 231.2 259.5 233.2
Operating Expenses 793.0 (2) 721.6 687.0 617.1 585.8
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Income Before Taxes 266.7 250.5 231.6 206.9 197.0
Tax Rate 38.0 % 38.0 % 38.0 % 38.0 % 38.0 %
Net Income $ 165.3 $ 155.3 $ 143.6 $ 128.3 $ 122.1
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Common Share Statistics
Basic EPS $ 0.78 $ 0.74 $ 0.70 $ 0.65 $ 0.62
Diluted EPS $ 0.75 $ 0.70 $ 0.66 $ 0.61 $ 0.58
Dividends Per Share $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03
Book Value Per Share (period end) $ 14.14 $ 13.02 $ 11.81 $ 9.94 $ 9.02
Stock Price Per Share (period end) $ 46.03 $ 60.15 $ 55.50 $ 65.81 $ 70.06
Total Market Capitalization (period end) $ 9,710.1 $12,666.5 $11,509.1 $12,989.3 $13,783.1
Shares Outstanding (period end) 211.0 210.6 207.4 197.4 196.7
Shares Used to Compute Basic EPS 210.8 209.1 204.8 197.0 196.3
Shares Used to Compute Diluted EPS 219.9 221.2 217.8 210.4 210.1
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Managed Loan Statistics (period avg.)
Average Loans $ 37,017 $ 33,440 $ 30,505 $ 26,377 $ 23,020
Average Earning Assets $ 39,994 $ 36,180 $ 32,983 $ 28,188 $ 24,749
Average Assets $ 43,363 $ 38,820 $ 35,303 $ 30,234 $ 27,015
Average Equity $ 2,935 $ 2,608 $ 2,347 $ 1,865 $ 1,743
Net Interest Margin 9.27 % 9.11 % 9.21 % 10.16 % 10.75 %
Risk Adjusted Margin (1) 14.17 % 14.23 % 14.80 % 16.32 % 17.24 %
Return on Average Assets (ROA) 1.53 % 1.60 % 1.63 % 1.70 % 1.81 %
Return on Average Equity (ROE) 22.53 % 23.83 % 24.47 % 27.51 % 28.02 %
Net Charge-Off Rate 3.92 % 3.98 % 3.75 % 3.98 % 3.80 %
Net Charge-Offs $ 362.7 $ 332.8 $ 285.9 $ 262.3 $ 218.4
Cost Per Account (in dollars) $ 81.03 $ 77.38 $ 78.26 $ 78.09 $ 82.84
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Managed Loan Statistics (period end)
Reported Loans $ 17,480 $ 16,327 $ 15,572 $ 15,113 $ 12,331
Securitized Loans 21,009 18,956 15,979 14,411 11,821
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Total Loans $ 38,489 $ 35,283 $ 31,551 $ 29,524 $ 24,152
Delinquency Rate (30+ days) 5.20 % 4.92 % 4.72 % 5.23 % 5.32 %
Number of Accounts (000's) 40,145 38,146 36,462 33,774 29,437
Total Assets $ 44,497 $ 40,587 $ 36,749 $ 33,286 $ 28,185
Capital, Including Preferred Interests $ 3,081.9 $ 2,840.1 $ 2,547.7 $ 2,061.0 $ 1,873.8
Capital to Managed Assets Ratio 6.93 % 7.00 % 6.93 % 6.19 % 6.65 %
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(1) Risk adjusted margin is total revenue less net charge-offs as a percentage
of average earning assets.
(2) Includes one-time charges of $38.8 million.
5
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Balance Sheets
(in thousands)(unaudited)
Sept 30 June 30 Sept 30
2001 2001 2000
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Assets:
Cash and due from banks $ 64,884 $ 134,918 $ 81,403
Federal funds sold and resale agreements 365,652 39,770 12,688
Interest-bearing deposits at other banks 102,094 62,050 128,377
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Cash and cash equivalents 532,630 236,738 222,468
Securities available for sale 2,707,564 2,554,967 1,652,330
Consumer loans 17,479,715 16,326,617 12,331,088
Less: Allowance for loan losses (727,000) (647,000) (457,000)
-------------- -------------- --------------
Net loans 16,752,715 15,679,617 11,874,088
Premises and equipment, net 740,144 729,525 560,974
Interest receivable 108,868 79,089 93,817
Accounts receivable from securitizations 1,949,361 1,708,055 1,403,377
Other 722,155 672,338 571,771
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Total assets $ 23,513,437 $ 21,660,329 $ 16,378,825
============== ============== ==============
Liabilities:
Interest-bearing deposits $ 11,075,499 $ 10,029,736 $ 6,323,924
Other borrowings 1,810,208 2,320,734 2,820,533
Senior notes 5,462,025 4,757,481 4,119,101
Interest payable 148,931 151,429 109,842
Other 2,033,481 1,659,412 1,230,037
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Total liabilities 20,530,144 18,918,792 14,603,437
Stockholders' Equity:
Common stock 2,121 2,118 1,997
Paid-in capital, net 1,154,211 1,089,582 559,595
Retained earnings and cumulative other comprehensive income 1,872,520 1,695,468 1,322,744
Less: Treasury stock, at cost (45,559) (45,631) (108,948)
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Total stockholders' equity 2,983,293 2,741,537 1,775,388
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Total liabilities and stockholders' equity $ 23,513,437 $ 21,660,329 $ 16,378,825
============== ============== ==============
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CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income
(in thousands, except per share data)(unaudited)
Three Months Ended Nine Months Ended
Sept 30 June 30 Sept 30 Sept 30 Sept 30
2001 2001 2000 2001 2000
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Interest Income:
Consumer loans, including fees $ 667,335 $ 620,866 $606,872 $ 1,906,090 $ 1,607,695
Securities available for sale 37,032 33,942 23,367 99,208 70,946
Other 18,323 2,408 1,474 24,481 5,026
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Total interest income 722,690 657,216 631,713 2,029,779 1,683,667
Interest Expense:
Deposits 161,411 155,479 90,197 463,851 205,936
Other borrowings 43,233 43,825 55,967 130,958 144,335
Senior notes 90,225 87,842 72,679 261,360 203,071
------------ ----------- ---------- ------------ -------------
Total interest expense 294,869 287,146 218,843 856,169 553,342
------------ ----------- ---------- ------------ -------------
Net interest income 427,821 370,070 412,870 1,173,610 1,130,325
Provision for loan losses 230,433 202,900 193,409 683,947 470,944
------------ ----------- ---------- ------------ -------------
Net interest income after provision for loan losses 197,388 167,170 219,461 489,663 659,381
Non-Interest Income:
Servicing and securitizations 618,633 572,591 307,343 1,735,015 860,741
Service charges and other customer-related fees 428,855 407,412 424,087 1,242,401 1,140,025
Interchange 96,702 93,673 65,039 265,226 161,570
------------ ----------- ---------- ------------ -------------
Total non-interest income 1,144,190 1,073,676 796,469 3,242,642 2,162,336
Non-Interest Expense:
Salaries and associate benefits 349,487 342,076 264,171 1,017,279 735,625
Marketing 281,910 268,709 233,188 781,819 646,686
Communications and data processing 92,735 72,906 78,064 240,933 221,819
Supplies and equipment 77,497 74,780 66,325 225,880 176,766
Occupancy 32,151 31,349 30,721 94,802 83,263
Other 241,117 200,496 146,488 622,747 406,982
------------ ----------- ---------- ------------ -------------
Total non-interest expense 1,074,897 990,316 818,957 2,983,460 2,271,141
------------ ----------- ---------- ------------ -------------
Income before income taxes 266,681 250,530 196,973 748,845 550,576
Income taxes 101,337 95,203 74,850 284,561 209,219
------------ ----------- ---------- ------------ -------------
Net income $ 165,344 $ 155,327 $122,123 $ 464,284 $ 341,357
============ =========== ========== ============ =============
Basic earnings per share $ 0.78 $ 0.74 $ 0.62 $ 2.23 $ 1.73
============ =========== ========== ============ =============
Diluted earnings per share $ 0.75 $ 0.70 $ 0.58 $ 2.11 $ 1.63
============ =========== ========== ============ =============
Dividends paid per share $ 0.03 $ 0.03 $ 0.03 $ 0.08 $ 0.08
============ =========== ========== ============ =============
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CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Managed (1) Quarter Ended 9/30/01 Quarter Ended 6/30/01
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Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
------- ------- ------- ------- ------- -------
Earning assets:
Consumer loans $ 37,017,405 1,437,367 15.53 % $ 33,439,690 1,307,819 15.64 %
Securities available for sale 2,645,982 37,032 5.60 2,344,047 33,942 5.79
Other 330,863 2,646 3.20 396,659 2,408 2.43
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Total earning assets $ 39,994,250 1,477,045 14.77 % $ 36,180,396 1,344,169 14.86 %
========================= ==========================
Interest-bearing liabilities:
Deposits $ 10,537,193 161,411 6.13 % $ 9,685,882 155,479 6.42 %
Other borrowings 3,103,263 43,233 5.57 2,915,245 43,825 6.01
Senior notes 5,280,860 90,225 6.83 4,899,045 87,842 7.17
Securitization liability 19,472,058 255,508 5.25 16,741,276 233,322 5.57
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Total interest-bearing liabilities $ 38,393,374 550,377 5.73 % $ 34,241,448 520,468 6.08 %
========================= =========================
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Net interest spread 9.04 % 8.78 %
========= ========
Interest income to average earning assets 14.77 % 14.86 %
Interest expense to average earning assets 5.50 5.75
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Net interest margin 9.27 % 9.11 %
========= ========
Managed (1) Quarter Ended 9/30/00
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Average Income/ Yield/
Balance Expense Rate
------- -------- ------
Earning assets:
Consumer loans $ 23,020,158 $ 1,039,473 18.06 %
Securities available for sale 1,557,088 23,367 6.00
Other 171,881 1,474 3.43
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Total earning assets $ 24,749,127 $ 1,064,314 17.20 %
=============================
Interest-bearing liabilities:
Deposits $ 5,787,748 $ 90,197 6.23 %
Other borrowings 3,084,407 55,967 7.26
Senior notes 4,139,665 72,679 7.02
Securitization liability 10,908,397 180,412 6.62
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Total interest-bearing liabilities $ 23,920,217 $ 399,255 6.68 %
==============================
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Net interest spread 10.52 %
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Interest income to average earning assets 17.20 %
Interest expense to average earning assets 6.45
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Net interest margin 10.75 %
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(1) The information in this table reflects the adjustment to add back the effect
of securitized loans.
8