Exhibit 99.1
FOR IMMEDIATE RELEASE: Contact: Paul Paquin Tatiana Stead
------------------------ V.P., Investor Relations Corporate Media
October 16, 2001 (703) 205-1039 (703) 205-1070
Capital One Reports Record Third Quarter Earnings
Earnings Per Share Rise 29% Over Year Ago Period
Falls Church, Va. (October 16, 2001) - Capital One Financial Corporation (NYSE:
COF) today announced its 17th consecutive quarter of record earnings, driven by
a 38 percent increase in total revenues, and another quarter of the best credit
performance of any of the major credit card institutions in the country.
Earnings for the third quarter of 2001 were $165.3 million, or $0.75 per
share, versus earnings of $122.1 million, or $0.58 per share, for the comparable
period in the prior year. Earnings in the second quarter of 2001 were $155.3
million, or $0.70 per share.
"Capital One's 17/th/ consecutive quarter of record-breaking earnings was
driven by a 38 percent increase in total revenues over last year," said Richard
D. Fairbank, Capital One's Chairman and Chief Executive Officer. "Our stringent
risk management practices again place us in the lead with the best credit
performance of any of the major credit card institutions - with a charge-off
rate of 3.92 percent. We remain firmly on track to deliver this year's target of
30 percent earnings per share growth."
Third quarter 2001 revenue, defined as managed net interest income and non-
interest income, rose to $1.8 billion versus $1.6 billion in the second quarter
of 2001 and $1.3 billion for the comparable period in the prior year. For the
quarter, Capital One added 2.0 million net new accounts, bringing total accounts
to 40.1 million. The company's managed consumer loan balances increased by $3.2
billion in the third quarter to $38.5 billion.
"This quarter's strong performance continues to illustrate the power of our
unique information-based strategy and our ability to consistently deliver value
to our more than 40 million customers," said Nigel W. Morris, Capital One's
President and Chief Operating Officer. "Capital One's complete integration of
marketing and technology continues to fuel our robust loan growth - a 36 percent
annualized increase in managed loans this quarter."
-more-
Capital One Reports Record Third Quarter Earnings
Page 2
The managed net charge-off rate decreased to 3.92 percent for the third
quarter of 2001 compared with 3.98 percent for the second quarter of 2001. The
managed delinquency rate (30+ days) increased to 5.20 percent as of September
30, 2001, compared with 4.92 percent as of June 30, 2001.
The company's managed net interest margin was 9.27 percent in the third
quarter of 2001 versus 9.11 percent in the second quarter of 2001 and 10.75
percent in the comparable period of 2000.
Marketing expense for the third quarter of 2001 increased $13.2 million to
$281.9 million from $268.7 million in the second quarter of 2001, and increased
$48.7 million over the $233.2 million spent in the comparable period of the
prior year. Other non-interest expenses (excluding marketing) for the third
quarter of 2001 were $793.0 million versus $721.6 million for the second quarter
of 2001 and $585.8 million in the comparable period of the prior year.
Annualized operating expenses per account, which included one-time expenses of
$38.8 million, increased to $81.03 for the third quarter of 2001. Excluding the
one-time expenses, annualized operating expenses per account would have been
$77.06, down from $77.38 for the second quarter of 2001 and $82.84 for the
comparable period in the prior year.
The company cautioned that its current expectations for 2001 earnings and
future growth are forward looking statements and actual results could differ
materially from current expectations due to a number of factors, including:
competition in the credit card industry; the actual account and balance growth
achieved by the company; the company's ability to access the capital markets at
attractive rates and terms to fund its operations and future growth; and general
economic conditions affecting consumer income and spending, which may affect
consumer bankruptcies, defaults and charge-offs. A discussion of these and
other factors can be found in Capital One's annual and other reports filed with
the Securities and Exchange Commission, including, but not limited to, Capital
One's report on Form 10-K for the year ended December 31, 2000.
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 40.1 million customers and $38.5 billion in
managed loans outstanding as of September 30, 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.
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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.