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Capital One Reports Fourth Quarter 2012 Net Income of $843 million, or $1.41 per share
Earnings for full year 2012 were $3.5 billion, or $6.16 per share

MCLEAN, Va., Jan. 17, 2013 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the full year 2012 of $3.5 billion, or $6.16 per diluted common share, compared with net income of $3.1 billion, or $6.80 per diluted common share, for 2011. Results for 2012 reflect the impacts of acquisition-related accounting and an increase in the number of shares outstanding. Net income for the fourth quarter of 2012 was $843 million, or $1.41 per diluted common share, compared with net income of $1.2 billion, or $2.01 per diluted common share, for the third quarter of 2012, and net income of $407 million, or $0.88 per diluted common share, for the fourth quarter of 2011. 

"Seasonal expense and margin trends led to a reduction in fourth quarter earnings compared to the previous quarter," said Gary L. Perlin, Capital One's Chief Financial Officer. "With a few exceptions largely related to these seasonal patterns, fourth quarter 2012 results give us a good picture of what to expect in terms of pre-provision earnings in 2013, assuming little change in the external environment."

The company expects average quarterly revenue levels in 2013 to be consistent with the fourth quarter of 2012, as a modest decline in earning assets will be offset by a steady to slightly higher net interest margin. Overall, the company expects non-interest expense to be, on average, just over $3.1 billion per quarter, reflecting a modest decline in quarterly expenses relative to seasonally elevated operating and marketing costs in the fourth quarter of 2012.

"Capital One remains well positioned to deliver sustained shareholder value through sure-footed execution, substantial capital generation, and disciplined capital allocation for the benefit of our shareholders," said Richard D. Fairbank, Chairman and Chief Executive Officer. "As a first step, we expect to return to a meaningful dividend in 2013, following the completion of the current CCAR process."

Total Company Results

All comparisons in the following paragraphs are for the fourth quarter of 2012 compared with the third quarter of 2012 unless otherwise noted.   

Loans and Deposits

Period-end loans held for investment increased $2.8 billion to $205.9 billion. Commercial Banking's period-end loans increased $1.6 billion, or 4 percent, to $38.8 billion, and period-end loans in Auto Finance grew  $689 million, or 3 percent, to $27.1 billion due to strong growth in both businesses. Domestic Card period-end loans increased $2.5 billion as seasonal growth at the end of the fourth quarter was partially offset by expected run-off in acquired credit card loans and the continued run-off of installment loans. Period-end loans in Home Loans decreased $2.2 billion, or 5 percent, to $44.1 billion, driven by the continued run-off of acquired portfolios. 

Average loans in the quarter were essentially flat at $202.9 billion. Average loans in Commercial Banking grew $831 million and Auto Finance average loans grew $958 million. Average Domestic Card loan growth of $216 million was modest compared with the growth in period-end loans reflecting the magnitude of the increase in period-end loans driven by our partnerships portfolio.  Average Home Loans decreased by $2.0 billion, driven largely by the continued run-off of acquired portfolios.  

Period-end total deposits decreased $770 million to $212.5 billion, driven by a reduction in deposits in legacy banking segments. Average deposits in the quarter were essentially flat and deposit interest rates declined 5 basis points to 0.72 percent.

Revenues

Total net revenue for the fourth quarter of 2012 was $5.6 billion, a decline of $158 million, or 3 percent, almost entirely driven by higher levels of estimated uncollectible finance charges and fees in the company's Domestic Card business.  This was due to seasonally higher levels of finance charge and fee reversal and a higher portion of the uncollectible finance charges and fees being recognized as a reduction of net revenue instead of being offset against the SOP 03-3 credit mark on acquired delinquent non-revolving credit card loans.

The higher levels of estimated uncollectible finance charges and fees coupled with a substantial increase in the proportion of lower-yielding cash and investment securities in anticipation of the call of high coupon trust securities resulted in a decrease in net interest margin of 45 basis points to 6.52 percent. Cost of funds in the fourth quarter declined 7 basis points to 0.99 percent.  

Non-Interest Expense

Operating expenses were $2.9 billion in the fourth quarter, an increase of $133 million, or 5 percent, driven by higher year-end expense patterns and somewhat higher integration expenses.  Marketing expense increased $77 million in the quarter to $393 million.

Provision for Credit Losses

Provision for credit losses was $1.2 billion in the quarter, up $137 million from the previous quarter, largely caused by an increasingly lower proportion of charge-offs related to acquired delinquent non-revolving credit card loans being absorbed by the SOP 03-3 credit mark than was absorbed in the third quarter and an expected seasonal increase to the underlying Domestic Card portfolio.  

The net charge-off rate was 2.26 percent in the fourth quarter of 2012, an increase of 51 basis points from 1.75 percent in the third quarter, largely because of the diminishing impact of the credit mark discussed above. The net charge-off rate for Domestic Card increased to 4.35 percent from 3.04 percent, also driven by seasonality and the diminishing impact of the credit mark described above. The net charge-off rate for Auto Finance increased 45 basis points, while the rate for Commercial Banking increased 10 basis points.

Net Income

Net income decreased 28 percent in the fourth quarter driven by lower revenue and higher non-interest and credit expenses.

Capital Ratios

The company's estimated Tier 1 common ratio was approximately 11.0 percent as of December 31, 2012, up from 10.7 percent as of September 30, 2012.

Detailed segment information will be available in the company's Annual Report on Form 10-K for the year ended December 31, 2012.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on January 17, 2013 at 5:00 PM, Eastern Standard Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation to GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through January 31, 2013 at 10:00 PM.

Forward-looking Statements

The company cautions that its current expectations in this release dated January 17, 2013 and the company's plans, objectives, expectations and intentions, are forward-looking statements which speak only as of the date hereof. The company does not undertake any obligation to update or revise any of the information contained herein whether as a result of new information, future events or otherwise.

Certain statements in this release are forward-looking statements, including those that discuss, among other things: strategies, goals, outlook or other non-historical matters; projections, revenues, income, returns, expenses, capital measures, accruals for claims in litigation and for other claims against the company, earnings per share or other financial measures for the company; future financial and operating results; the company's plans, objectives, expectations and intentions; the projected impact and benefits of the acquisition of ING Direct and HSBC's U.S. Card business (the "Transactions"); and the assumptions that underlie these matters.  To the extent that any such information is forward-looking, it is intended to fit within the safe harbor for forward-looking information provided by the Private Securities Litigation Reform Act of 1995. Numerous factors could cause the company's actual results to differ materially from those described in such forward-looking statements, including, among other things: general economic and business conditions in the U.S., the U.K., Canada or the company's local markets, including conditions affecting employment levels, interest rates, consumer income and confidence, spending and savings that may affect consumer bankruptcies, defaults, charge-offs and deposit activity; an increase or decrease in credit losses (including increases due to a worsening of general economic conditions in the credit environment); financial, legal, regulatory, tax or accounting changes or actions, including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder and regulations governing bank capital and liquidity standards, including Basel-related initiatives; the possibility that the company may not fully realize the projected cost savings and other projected benefits of the Transactions; difficulties and delays in integrating the assets and businesses acquired in the Transactions; business disruption following the Transactions; diversion of management time on issues related to the Transactions, including integration of the assets and businesses acquired; reputational risks and the reaction of customers and counterparties to the Transactions; disruptions relating to the Transactions negatively impacting the company's ability to maintain relationships with customers, employees and suppliers; changes in asset quality and credit risk as a result of the Transactions; the accuracy of estimates and assumptions the company uses to determine the fair value of assets acquired and liabilities assumed in the Transactions; developments, changes or actions relating to any  litigation matter involving the company; the inability to sustain revenue and earnings growth; increases or decreases in interest rates; the company's ability to access the capital markets at attractive rates and terms to capitalize and fund its operations and future growth; the success of the company's marketing efforts in attracting and retaining customers; increases or decreases in the company's aggregate loan balances or the number of customers and the growth rate and composition thereof, including increases or decreases resulting from factors such as shifting product mix, amount of actual marketing expenses the company incurs and attrition of loan balances; the level of future repurchase or indemnification requests the company may receive, the actual future performance of mortgage loans relating to such requests, the success rates of claimants against the company, any developments in litigation and the actual recoveries the company may make on any collateral relating to claims against the company; the amount and rate of deposit growth; changes in the reputation of or expectations regarding the financial services industry or the company with respect to practices, products or financial condition; any significant disruption in the company's operations or technology platform; the company's ability to maintain a compliance infrastructure suitable for the nature of our business; the company's ability to control costs; the amount of, and rate of growth in, the company's expenses as its business develops or changes or as it expands into new market areas; the company's ability to execute on its strategic and operational plans; any significant disruption of, or loss of public confidence in, the United States Mail service affecting the company's response rates and consumer payments; the company's ability to recruit and retain experienced personnel to assist in the management and operations of new products and services; changes in the labor and employment markets; fraud or misconduct by the company's customers, employees or business partners; competition from providers of products and services that compete with the company's businesses; and other risk factors set forth from time to time in reports that the company files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2011.

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 $212.5 billion in deposits and $312.9 billion in total assets outstanding as of December 31, 2012. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has more than 900 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia. ING DIRECT, a division of Capital One, N.A., offers direct banking products and services to customers nationwide.  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.

 

 










Exhibit 99.2

Capital One Financial Corporation

Financial Supplement

     Fourth Quarter 2012 (1) (2)

    Table of Contents 










Page 

Capital One Financial Corporation Consolidated



Table   1:   


Financial & Statistical Summary―Consolidated

1


Table   2:


Consolidated Statements of Income

2


Table   3:


Consolidated Balance Sheets

3


Table   4:


Notes to Consolidated Financial Statements & Statistical Summary (Tables 1-3)

4


Table   5:


Average Balances, Net Interest Income and Net Interest Margin

5


Table   6:


Loan Information and Performance Statistics

6


Table   7:


Loan Information and Performance Statistics (Excluding Acquired Loans) (3)

7

Business Segment Detail



Table   8:


Financial & Statistical Summary―Credit Card Business

8


Table   9:


Financial & Statistical Summary―Consumer Banking Business

9


Table 10:


Financial & Statistical Summary―Commercial Banking Business

10


Table 11:


Financial & Statistical Summary―Other and Total 

11


Table 12:


Notes to Loan and Business Segment Disclosures (Tables 6 11)

12

Other





Table 13:


Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures

13











(1)

The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation, and investors should refer to our December 31, 2012 Annual Report on Form 10-K once it is filed with the Securities and Exchange Commission. 






(2)

References to ING Direct refer to the business and assets acquired and liabilities assumed in the February 17, 2012 acquisition. References to HSBC refer to the May 1, 2012 transaction in which we acquired substantially all of HSBC's credit card and private-label credit card business in the United States ("HSBC U.S. card").






(3)

We use the term "acquired loans" to refer to a limited portion of the credit card loans acquired in the HSBC U.S. card acquisition and the substantial majority of loans acquired in the ING Direct and Chevy Chase Bank ("CCB") acquisitions, which were recorded at fair value at acquisition and subsequently accounted for based on estimated cash flows expected to be collected over the life of the loans (under the accounting standard formerly known as "SOP 03-3"). Because SOP 03-3 takes into consideration future credit losses expected to be incurred over the life of the loans, there are no charge-offs or an allowance associated with these loans unless the estimated cash flows expected to be collected decrease subsequent to acquisition. In addition, these loans are not classified as delinquent or nonperforming even though the customer may be contractually past due because we expect that we will fully collect the carrying value of these loans. The accounting and classification of these loans may significantly alter some of our reported credit quality metrics. We therefore supplement certain reported credit quality metrics with metrics adjusted to exclude the impact of these acquired loans.

CAPITAL ONE FINANCIAL CORPORATION (COF)






Table 1:  Financial & Statistical Summary—Consolidated (1)(2)(3)





















(Dollars in millions, except per share data and as noted) (unaudited)


2012

Q4


2012

Q3


2011
Q4


Earnings








Net interest income


$            4,528


$            4,646


$              3,182


Non-interest income(4) (5)


1,096


1,136


868


Total net revenue(6)


5,624


5,782


4,050


Provision for credit losses


1,151


1,014


861


Marketing expenses


393


316


420


Operating expenses(7)


2,862


2,729


2,198


Income from continuing operations before income taxes 


1,218


1,723


571


Income tax provision


370


535


160


Income from continuing operations, net of tax


848


1,188


411


Loss from discontinued operations, net of tax(4)


(5)


(10)


(4)


Net income


843


1,178


407


Dividends and undistributed earnings allocated to participating securities (8)


(3)


(5)


(26)


Preferred stock dividends


(15)




Net income available to common stockholders


$              825


$            1,173


$                 381










Common Share Statistics








Basic EPS:(8) 








   Income from continuing operations, net of tax


$             1.43


$             2.05


$                0.89


   Loss from discontinued operations, net of tax


(0.01)


(0.02)


(0.01)


   Net income per common share 


$             1.42


$             2.03


$                0.88


Diluted EPS:(8) 








   Income from continuing operations, net of tax


$             1.42


$             2.03


$                0.89


   Loss from discontinued operations, net of tax


(0.01)


(0.02)


(0.01)


   Net income per common share


$             1.41


$             2.01


$                0.88


Weighted average common shares outstanding (in millions):








   Basic EPS


579.2


578.3


456.2


   Diluted EPS


585.6


584.1


458.5


Common shares outstanding (period end, in millions)


582.2


581.3


459.9


Dividends per common share


$             0.05


$             0.05


$                0.05


Tangible book value per common share (period end)(9) (26)


40.23


38.70


34.26










Balance Sheet (Period End)








Loans held for investment(10)


$        205,889


$        203,132


$           135,892


Interest-earning assets


280,096


270,661


179,878


Total assets


312,918


301,989


206,019


Interest-bearing deposits


190,018


192,488


109,945


Total deposits


212,485


213,255


128,226


Borrowings


49,910


38,377


39,561


Stockholders' equity


40,499


39,672


29,666










Balance Sheet (Quarterly Average Balances)








Average loans held for investment(10)


$        202,944


$        202,856


$           131,581


Average interest-earning assets


277,886


266,803


176,271


Average total assets


308,096


297,154


200,106


Average interest-bearing deposits


192,122


193,700


109,914


Average total deposits


213,494


213,323


128,450


Average borrowings


44,189


36,451


34,811


Average stockholders' equity


40,212


38,535


29,698










Performance Metrics








Net interest income growth (quarter over quarter) 


(3)

%

16

%

(3)

%

Non-interest income growth(quarter over quarter)


(4)


8



Total net revenue growth(quarter over quarter)


(3)


14


(3)


Total net revenue margin(11)


8.10


8.67


9.19


Net interest margin(12)


6.52


6.97


7.22


Return on average assets(13)


1.10


1.60


0.82


Return on average total stockholders' equity(14)


8.44


12.33


5.54


Return on average tangible common equity(15) (26)


14.74


21.93


10.43


Non-interest expense as a % of average loans held for investment(16)


6.42


6.00


7.96


Efficiency ratio(17)


57.88


52.66


64.64


Effective income tax rate


30.4


31.1


28.0


Full-time equivalent employees (in thousands), period end


39.6


37.6


30.5










Credit Quality Metrics(10) (18)








Allowance for loan and lease losses 


$            5,156


$            5,154


$              4,250


Allowance as a % of loans held for investment 


2.50

%

2.54

%

3.13

%

Allowance as a % of loans held for investment (excluding acquired loans) 


3.02


3.11


3.22


Net charge-offs 


$            1,150


$              887


$                 884


Net charge-off rate(19)


2.26

%

1.75

%

2.69

%

Net charge-off rate (excluding acquired loans)(19)


2.78


2.18


2.79


30+ day performing delinquency rate


2.70


2.54


3.35


30+ day performing delinquency rate (excluding acquired loans)


3.29


3.15


3.47


30+ day delinquency rate(20) 


**


2.92


3.95


30+ day delinquency rate (excluding acquired loans)(20) 


**


3.62


4.09










Capital Ratios (21)








Tier 1 common ratio(22)


11.0

%

10.7

%

9.7

%

Tier 1 risk-based capital ratio(23)


11.4


12.7


12.0


Total risk-based capital ratio(24)


13.6


15.0


14.9


Tangible common equity ("TCE") ratio(25) (26)


7.9


7.9


8.2


 

CAPITAL ONE FINANCIAL CORPORATION (COF)








Table 2:  Consolidated Statements of Income (1)(2)(3)





































Three Months Ended


Year Ended




December 31,


September 30,


December 31,



December 31,

(Dollars in millions, except per share data) (unaudited)


2012


2012


2011



2012


2011














Interest income:












Loans held for investment


$              4,726


$              4,901


$              3,440



$            17,537


$            13,774

Investment securities


361


335


244



1,329


1,137

Other


28


18


17



98


76


Total interest income


5,115


5,254


3,701



18,964


14,987














Interest expense:












Deposits


348


371


264



1,403


1,187

Securitized debt obligations


58


64


80



271


422

Senior and subordinated notes


85


85


89



345


300

Other borrowings


96


88


86



356


337


Total interest expense


587


608


519



2,375


2,246














Net interest income


4,528


4,646


3,182



16,589


12,741

Provision for credit losses


1,151


1,014


861



4,415


2,360


Net interest income after provision for credit losses


3,377


3,632


2,321



12,174


10,381














Non-interest income:












Service charges and other customer-related fees


595


557


452



2,106


1,979

Interchange fees, net


459


452


346



1,647


1,318

Net other-than-temporary impairment losses recognized in earnings


(12)


(13)


(6)



(52)


(21)

Bargain purchase gain (5)






594


Other (4)


54


140


76



512


262


Total non-interest income


1,096


1,136


868



4,807


3,538














Non-interest expense:












Salaries and associate benefits


1,039


1,002


817



3,876


3,023

Occupancy and equipment


384


354


268



1,331


1,029

Marketing


393


316


420



1,364


1,337

Professional services


362


307


366



1,270


1,198

Communications and data processing


205


198


177



778


681

Amortization of intangibles (7)


190


197


51



604


216

Merger-related expense (7)


69


48


27



336


45

Other


613


623


492



2,387


1,803


Total non-interest expense


3,255


3,045


2,618



11,946


9,332

Income from continuing operations before income taxes


1,218


1,723


571



5,035


4,587

Income tax provision


370


535


160



1,301


1,334

Income from continuing operations, net of tax


848


1,188


411



3,734


3,253

Loss from discontinued operations, net of tax (4)


(5)


(10)


(4)



(217)


(106)


Net income


843


1,178


407



3,517


3,147

Dividends and undistributed earnings allocated to participating securities (8)


(3)


(5)


(26)



(15)


(26)

Preferred stock dividends


(15)





(15)



Net income available to common stockholders


$                 825


$              1,173


$                 381



$              3,487


$              3,121














Basic earnings per common share: (8)













Income from continuing operations


$                1.43


$                2.05


$                0.89



$                6.60


$                7.08


Loss from discontinued operations


(0.01)


(0.02)


(0.01)



(0.39)


(0.23)


Net income per basic common share


$                1.42


$                2.03


$                0.88



$                6.21


$                6.85














Diluted earnings per common share: (8)













Income from continuing operations


$                1.42


$                2.03


$                0.89



$                6.54


$                7.03


Loss from discontinued operations


(0.01)


(0.02)


(0.01)



(0.38)


(0.23)


Net income per diluted common share


$                1.41


$                2.01


$                0.88



$                6.16


$                6.80














Weighted average common shares outstanding (in millions):













Basic EPS


579.2


578.3


456.2



561.1


455.5


Diluted EPS


585.6


584.1


458.5



566.5


459.1














Dividends paid per common share


$                0.05


$                0.05


$                0.05



$                0.20


$                0.20



























 

CAPITAL ONE FINANCIAL CORPORATION (COF)






Table 3:  Consolidated Balance Sheets


























December 31,


September 30,


December 31,

(Dollars in millions)(unaudited)


2012


2012


2011









Assets:







Cash and due from banks


$             3,440


$             1,855


$             2,097

Interest-bearing deposits with banks


7,617


3,860


3,399

Federal funds sold and securities purchased under agreements to resell


1


254


342


Cash and cash equivalents


11,058


5,969


5,838

Restricted cash for securitization investors


428


760


791

Securities available for sale, at fair value


63,979


61,464


38,759

Loans held for investment:








Unsecuritized loans held for investment


163,341


159,219


88,242


Restricted loans for securitization investors


42,548


43,913


47,650


Total loans held for investment


205,889


203,132


135,892


    Less: Allowance for loan and lease losses


(5,156)


(5,154)


(4,250)


Net loans held for investment


200,733


197,978


131,642

Loans held for sale, at lower-of-cost-or-fair-value


201


187


201

Premises and equipment, net


3,587


3,519


2,748

Interest receivable


1,694


1,614


1,029

Goodwill


13,904


13,901


13,592

Other


17,334


16,597


11,419


Total assets


$         312,918


$         301,989


$         206,019

















Liabilities:







Interest payable


$                450


$                368


$                466

Customer deposits:








Non-interest bearing deposits


22,467


20,767


18,281


Interest-bearing deposits


190,018


192,488


109,945


Total customer deposits


212,485


213,255


128,226

Securitized debt obligations


11,398


12,686


16,527

Other debt:








Federal funds purchased and securities loaned or sold under agreements to repurchase


1,248


967


1,464


Senior and subordinated notes


12,686


11,756


11,034


Other borrowings


24,578


12,968


10,536


Total other debt


38,512


25,691


23,034

Other liabilities


9,574


10,317


8,100


Total liabilities


272,419


262,317


176,353









Stockholders' equity:







Preferred stock


853


853


Common stock


6


6


5

Paid-in capital, net


25,335


25,265


19,274

Retained earnings and accumulated other comprehensive income


17,592


16,835


13,631

Treasury stock, at cost


(3,287)


(3,287)


(3,244)


Total stockholders' equity


40,499


39,672


29,666


Total liabilities and stockholders' equity


$         312,918


$         301,989


$         206,019









 

CAPITAL ONE FINANCIAL CORPORATION (COF)









Table 4: Notes to Consolidated Financial Statements & Statistical Summary (Tables 1-3)





















(1)

Certain prior period amounts have been reclassified to conform to the current period presentation.

















(2)

Results for Q2 2012 and thereafter include the impact of the May 1, 2012 closing of the HSBC transaction, which resulted in the addition of approximately $28.2 billion in credit card receivables at closing.

















(3)

Results for Q1 2012 and thereafter include the impact of the February 17, 2012 acquisition of ING Direct, which resulted in the addition of loans of $40.4 billion, other assets of $53.9 billion and deposits of $84.4 billion at acquisition.

















(4)

We did not record a provision for mortgage representation and warranty losses in Q4 or Q3 2012. We recorded a provision for mortgage representation and warranty losses of $59 million in Q4 2011. The majority of the provision for representation and warranty losses is generally included net of tax in discontinued operations, with the remaining amount included pre-tax in non-interest income. The mortgage representation and warranty reserve decreased to $899 million as of December 31, 2012, from $919 million as of September 30, 2012, due to the settlement of claims in Q4 2012 totaling $20 million.
















(5)

Includes a bargain purchase gain of $594 million recognized in earnings in Q1 2012 attributable to the February 17, 2012 acquisition of ING Direct. Represents the excess of the fair value of the net assets acquired in the ING Direct acquisition as of the acquisition date of February 17, 2012 over the consideration transferred.

















(6)

Total net revenue was reduced by $318 million in Q4 2012, $185 million in Q3 2012 and $130 million in Q4 2011, for the estimated uncollectible amount of billed finance charges and fees. Premium amortization related to the ING Direct and HSBC U.S. card acquisitions reduced revenue by $124 million in Q4 2012 and $133 million in Q3 2012.
















(7)

Includes merger-related expenses, including transaction costs, attributable to acquisitions of $69 million in Q4 2012, $48 million in Q3 2012, and $27 million in Q4 2011. Also includes intangible amortization expense related to purchased credit card relationships ("PCCR") from the HSBC U.S. card acquisition of $122 million in Q4 2012 and $127 million in Q3 2012. Other asset and intangible amortization expense related to the ING Direct and HSBC U.S. Card acquisitions totaled $48 million in Q4 2012 and $42 million in Q3 2012.
















(8)

Dividends and undistributed earnings allocated to participating securities and EPS are computed independently for each period. Accordingly, the sum of each quarter may not agree to the year-to-date total.


















(9)

Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.
















(10)

See "Table 12: Notes to Loan and Business Segment Disclosures (Tables 6 -11)" for information on acquired loans accounted for based on estimated cash flows expected to be collected.
















(11)

Calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.
















(12)

Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.
















(13)

Calculated based on annualized income from continuing operations, net of tax, for the period divided by average total assets for the period.
















(14)

Calculated based on annualized income from continuing operations, net of tax, for the period divided by average stockholders' equity for the period.
















(15)

Calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible common equity for the period. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.
















(16)

Calculated based on annualized non-interest expense for the period divided by average loans held for investment for the period.
















(17)

Calculated based on non-interest expense, excluding goodwill impairment charges, for the period divided by total net revenue for the period.
















(18)

Loans acquired as part of the CCB, ING Direct and HSBC U.S. card acquisitions classified as held for investment are included in the denominator used in calculating our reported credit quality metrics. We supplement certain reported credit quality metrics with metrics adjusted to exclude from the denominator acquired loans accounted for based on estimated expected cash flows to be collected (formerly SOP 03-3). See "Table 7: Loan Information and Performance Statistics (Excluding Acquired Loans)" for additional information.
















(19)

Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
















(20)

The 30+ day total delinquency rate as of the end of Q4 2012 will be provided in the Annual Report on Form 10-K for the year ended December 31, 2012 .
















(21)

Regulatory capital ratios as of the end of Q4 2012 are preliminary and therefore subject to change.


















(22)

Tier 1 common ratio is a regulatory capital measure calculated based on Tier 1 common capital divided by risk-weighted assets. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.
















(23)

Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.
















(24)

Total risk-based capital ratio is a regulatory capital measure calculated based on total risk-based capital divided by risk-weighted assets. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.
















(25)

TCE ratio is a non-GAAP measure calculated based on tangible common equity divided by tangible assets. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.
















(26)

The previously reported TCE as of the end of Q3 2012 has been revised to exclude noncumulative perpetual preferred stock. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.

 


CAPITAL ONE FINANCIAL CORPORATION (COF)


















Table 5:  Average Balances, Net Interest Income and Net Interest Margin



























































2012 Q4



2012 Q3



2011 Q4




Average


Interest Income/


 Yield/ 



Average


Interest Income/


 Yield/ 



Average


Interest Income/


 Yield/ 


(Dollars in millions)(unaudited)

Balance


Expense


Rate



Balance


Expense


Rate



Balance


Expense


Rate


Interest-earning assets:






















Cash equivalents and other

$    10,768


$       28


1.04

%


$      6,019


$       18


1.20

%


$      5,685


$       17


1.20

%


Securities available for sale 

64,174


361


2.25



57,928


335


2.31



39,005


244


2.50



Loans held for investment

202,944


4,726


9.31



202,856


4,901


9.66



131,581


3,440


10.46


Total interest-earning assets 

$  277,886


$  5,115


7.36

%


$  266,803


$  5,254


7.88

%


$  176,271


$  3,701


8.40

%























Interest-bearing liabilities:






















Interest-bearing deposits

$  192,122


$     348


0.72

%


$  193,700


$     371


0.77

%


$  109,914


$     264


0.96

%


Securitized debt obligations

12,119


58


1.91



13,331


64


1.92



16,780


80


1.91



Senior and subordinated notes

11,528


85


2.95



11,035


85


3.08



10,237


89


3.48



Other borrowings

20,542


96


1.87



12,085


88


2.91



7,794


86


4.41


Total interest-bearing liabilities

$  236,311


$     587


0.99

%


$  230,151


$     608


1.06

%


$  144,725


$     519


1.43

%

Net interest income/spread



$  4,528


6.37

%




$  4,646


6.82

%




$  3,182


6.97

%

Impact of non-interest bearing funding





0.15







0.15







0.25


Net interest margin





6.52

%






6.97

%






7.22

%






























































Year Ended  December 31,





2012




2011




Average


Interest Income/


 Yield/ 




Average


Interest Income/


 Yield/ 


(Dollars in millions)(unaudited)

Balance


Expense


Rate




Balance


Expense


Rate


Interest-earning assets:
















Cash equivalents and other

$      9,740


$       98


1.01

%



$      7,328


$       76


1.04

%


Investment securities 

57,424


1,329


2.31




39,513


1,137


2.88



Loans held for investment

187,915


17,537


9.33




128,424


13,774


10.73


Total interest-earning assets 

$  255,079


$18,964


7.43

%



$  175,265


$14,987


8.55

%

















Interest-bearing liabilities:
















Interest-bearing deposits

$  183,314


$  1,403


0.77

%



$  109,644


$  1,187


1.08

%


Securitized debt obligations

14,138


271


1.92




20,715


422


2.04



Senior and subordinated notes

11,012


345


3.13




9,244


300


3.25



Other borrowings

12,875


356


2.77




8,063


337


4.18


Total interest-bearing liabilities

$  221,339


$  2,375


1.07

%



$  147,666


$  2,246


1.52

%

Net interest income/spread



$16,589


6.36

%





$12,741


7.03

%

Impact of non-interest bearing funding





0.14








0.24


Net interest margin





6.50

%







7.27

%

















CAPITAL ONE FINANCIAL CORPORATION (COF)






Table 6: Loan Information and Performance Statistics(1)(2)(3)














2012


2012


2011


(Dollars in millions)(unaudited)


Q4


Q3 


Q4


Period-end Loans Held For Investment








Credit card:








   Domestic credit card 


$           83,141


$           80,621


$           56,609


   International credit card


8,614


8,412


8,466


      Total credit card


91,755


89,033


65,075


Consumer banking:








   Automobile


27,123


26,434


21,779


   Home loan


44,100


46,275


10,433


   Retail banking


3,904


4,029


4,103


      Total consumer banking


75,127


76,738


36,315


Commercial banking:(4)








   Commercial and multifamily real estate


17,732


16,963


15,736


   Commercial and industrial


19,892


18,965


17,088


      Total commercial lending


37,624


35,928


32,824


   Small-ticket commercial real estate


1,196


1,281


1,503


      Total commercial banking


38,820


37,209


34,327


Other loans


187


152


175


     Total 


$         205,889


$         203,132


$         135,892










Average Loans Held For Investment








Credit card:








   Domestic credit card 


$           80,718


$           80,502


$           54,403


   International credit card


8,372


8,154


8,361


      Total credit card


89,090


88,656


62,764


Consumer banking:








   Automobile


26,881


25,923


21,101


   Home loan 


45,250


47,262


10,683


   Retail banking


3,967


4,086


4,007


      Total consumer banking


76,098


77,271


35,791


Commercial banking:(4)








   Commercial and multifamily real estate


17,005


16,654


14,920


   Commercial and industrial


19,344


18,817


16,376


      Total commercial lending


36,349


35,471


31,296


   Small-ticket commercial real estate


1,249


1,296


1,547


      Total commercial banking


37,598


36,767


32,843


Other loans


158


162


183


      Total


$         202,944


$         202,856


$         131,581










Net Charge-off Rates(5)








Credit card:








   Domestic credit card


4.35

%

3.04

%

4.07

%

   International credit card(8)


3.99


4.95


5.77


      Total credit card


4.32


3.22


4.30


Consumer Banking:








   Automobile


2.24


1.79


2.07


   Home loan


(0.06)


0.28


0.90


   Retail banking


2.45


1.20


1.44


      Total consumer banking


0.88


0.83


1.65


Commercial banking:(4)








   Commercial and multifamily real estate


(0.08)


(0.05)


0.75


   Commercial and industrial


0.13


-


0.21


      Total commercial lending


0.03


(0.03)


0.47


   Small-ticket commercial real estate


2.02


0.79


3.73


      Total commercial banking


0.10


-


0.62


Other loans


24.23


30.11


24.08


      Total


2.26

%

1.75

%

2.69

%









30+ Day Performing Delinquency Rates(5)








Credit card:(7)








   Domestic credit card


3.61

%

3.52

%

3.66

%

   International credit card


3.58


4.92


5.18


      Total credit card


3.61

%

3.65

%

3.86

%

Consumer Banking:








   Automobile


7.00

%

6.12

%

6.88

%

   Home loan


0.13


0.15


0.89


   Retail banking


0.76


0.73


0.83


      Total consumer banking


2.65

%

2.23

%

4.47

%









Nonperforming Asset Rates(5)(6)








Credit card:(7)








   International credit card


1.16

%

%

%

      Total credit card


0.11

%

%

%

Consumer banking:








   Automobile


0.63

%

0.52

%

0.58

%

   Home loan


1.00


0.98


4.58


   Retail banking


1.85


2.25


2.50


      Total consumer banking


0.91

%

0.89

%

1.94

%

Commercial banking:(4)








   Commercial and multifamily real estate


0.82

%

1.04

%

1.40

%

   Commercial and industrial


0.72


0.68


0.80


      Total commercial lending


0.77

%

0.85

%

1.09

%

   Small-ticket commercial real estate


0.97


1.49


2.86


      Total commercial banking


0.77

%

0.87

%

1.17

%









CAPITAL ONE FINANCIAL CORPORATION (COF)






Table 7: Loan Information and Performance Statistics (Excluding Acquired Loans)(1)(2)(3)(5)











2012


2012


2011


(Dollars in millions)(unaudited)


Q4


Q3 


Q4


Period-end Loans Held For Investment (Excluding Acquired Loans)








Credit card:








   Domestic credit card 


$           82,853


$           80,250


$           56,609


   International credit card


8,614


8,412


8,466


      Total credit card


91,467


88,662


65,075


Consumer banking:








   Automobile


27,106


26,411


21,732


   Home loan


7,697


7,719


6,321


   Retail banking


3,870


3,990


4,058


      Total consumer banking


38,673


38,120


32,111


Commercial banking:(4)








   Commercial and multifamily real estate


17,605


16,800


15,573


   Commercial and industrial


19,660


18,729


16,770


      Total commercial lending


37,265


35,529


32,343


   Small-ticket commercial real estate


1,196


1,281


1,503


      Total commercial banking


38,461


36,810


33,846


Other loans


154


152


175


     Total 


$         168,755


$         163,744


$         131,207










Average Loans Held For Investment (Excluding Acquired Loans)








Credit card:








   Domestic credit card 


$           80,407


$           80,079


$           54,403


   International credit card


8,372


8,154


8,361


      Total credit card


88,779


88,233


62,764


Consumer banking:








   Automobile


26,861


25,897


21,049


   Home loan 


8,092


7,996


6,483


   Retail banking


3,931


4,046


3,962


      Total consumer banking


38,884


37,939


31,494


Commercial banking:(4)








   Commercial and multifamily real estate


16,871


16,489


14,757


   Commercial and industrial


19,115


18,579


16,055


      Total commercial lending


35,986


35,068


30,812


   Small-ticket commercial real estate


1,249


1,296


1,547


      Total commercial banking


37,235


36,364


32,359


Other loans


147


162


183


      Total


$         165,045


$         162,698


$         126,800










Net Charge-off Rates (Excluding Acquired Loans)








Credit card:








   Domestic credit card


4.37

%

3.06

%

4.07

%

   International credit card(8)


3.99


4.95


5.77


      Total credit card


4.33


3.23


4.30


Consumer Banking:








   Automobile


2.24


1.79


2.07


   Home loan


(0.33)


1.65


1.48


   Retail banking


2.48


1.22


1.46


      Total consumer banking


1.73


1.70


1.87


Commercial banking:(4)








   Commercial and multifamily real estate


(0.08)


(0.05)


0.76


   Commercial and industrial


0.13


-


0.22


      Total commercial lending


0.03


(0.03)


0.48


   Small-ticket commercial real estate


2.02


0.79


3.73


      Total commercial banking


0.10


-


0.63


Other loans


26.05


30.11