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Capital One Reports 2008 Net Loss of $.21 Per Common Share (Diluted), Including Goodwill Impairment; 2008 Earnings of $2.28 Per Common Share From Continuing Operations

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Fourth quarter net loss of $3.74 per common share, including goodwill impairment; fourth quarter net loss of $1.59 per common share from continuing operations

MCLEAN, Va., Jan. 22 /PRNewswire-FirstCall/ -- Capital One Financial Corporation (NYSE: COF) today announced a net loss for the full year 2008 of $46.0 million, or $.21 per common share (diluted), compared with earnings of $1.6 billion, or $3.97 per common share (diluted) in 2007. Net income from continuing operations, excluding the non-cash goodwill impairment, was $895.4 million, or $2.28 per common share (diluted) for 2008. For the fourth quarter of 2008, the company reported a net loss of $1.4 billion, or $3.74 per common share (diluted), compared with net income of $226.6 million, or $0.60 earnings per common share (diluted), in the fourth quarter of 2007, and compared to net income in the third quarter of 2008 of $374.1 million, or $1.00 per common share (diluted).

Net income from continuing operations excludes the loss from discontinued operations related to the shutdown of GreenPoint Mortgage in August 2007.

  • The company added $1.0 billion to allowance for loan losses in anticipation of increasing charge-offs in 2009. Allowance as a percent of reported loans increased 90 basis points in the fourth quarter of 2008 to 4.5 percent.
  • The company recognized an $810.9 million non-cash impairment of goodwill in conjunction with its revised outlook for its Auto Finance business.
  • Total deposits at December 31, 2008 were $108.6 billion, up 31.2 percent from the prior year and up 9.8 percent from the third quarter of 2008, with stable deposit margins.
  • Readily available liquidity increased to $40 billion, up from $32 billion at the end of the third quarter.
  • Capital ratios remain strong -- tangible common equity to tangible managed assets, or "TCE ratio", of 5.57 percent; Tier 1 risk-based capital ratio of 13.6 percent.

"The economic downturn was the key driver of our fourth quarter and full year results, and we expect that the recession will continue to impact our results throughout 2009," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "Our solid balance sheet positions us to continue navigating through these increasing cyclical headwinds and deliver value over the cycle."

Total Company Results

  • The company added $1.0 billion to allowance for loan losses in anticipation of increasing charge-offs in 2009. The fourth quarter allowance was built on the assumption that the U.S. unemployment rate will increase to 8.7 percent by the end of 2009 and that, on average; home prices in the U.S. will decline an additional 10 percent by the end of the year. The total allowance for loan losses is now $4.5 billion, which is consistent with an outlook for $8.6 billion in managed net charge-offs for the next twelve months through the fourth quarter of 2009, and brings the coverage ratio for reported loans up significantly to 4.5 percent at the end of the fourth quarter of 2008.
  • Total managed revenues of $16.8 billion in 2008 were essentially even with 2007, while fourth quarter 2008 managed revenues were 6.3 percent lower as compared to the third quarter of 2008.
  • Total deposits at December 31, 2008 were $108.6 billion, up 31.2 percent from the prior year and up 9.8 percent from the third quarter of 2008, with stable deposit margins.
  • Managed loans held for investment of $146.9 billion at December 31, 2008 declined 0.3 percent, from the third quarter of 2008, and were down 2.9 percent from December 31, 2007.
  • Ongoing efficiency efforts lowered non-interest expense for continuing operations, excluding non-cash goodwill impairment, by $676 million in 2008 versus 2007, which drove the efficiency ratio down from 47.30 percent in 2007 to 43.14 percent in 2008.
  • Tangible common equity to tangible managed assets or "TCE ratio" remains strong at 5.57 percent, and the Tier 1 risk-based capital ratio of 13.6 percent continues to be well above the regulatory minimum.

"We have built our allowance in anticipation of further degradation in the economy, grown readily available liquidity to record levels, and are maintaining healthy capital ratios that are resilient to a range of economic outcomes," said Gary L. Perlin, Capital One's Chief Financial Officer. "These factors make our balance sheet the financial bedrock of our company and bolster our capacity to operate through this challenging economy."

Segment Results

Local Banking Segment highlights

Credit performance worsened in the quarter as the widening recession took hold in the company's local markets, impacting the New York metro region to a greater degree than Louisiana and Texas. Deposit growth accelerated in the fourth quarter as deposit strategies gained traction. Our deposit strategies focus on strong customer relationships, new products like our "rewards checking," and the company's well-known brand gained traction. The company will continue to focus on building and maintaining deposit-led relationships with its commercial, small business and consumer customers across its branch network. Local Banking managed loans grew by approximately $420.2 million in the fourth quarter, as the expected run off of residential mortgage loans was partially offset by growth in the middle market commercial franchise.

The expected addition of Chevy Chase Bank in the first quarter will expand the portfolio of attractive local banking franchises and further improve the company's core deposit funding base.

  • Local Banking reported a net loss for the fourth quarter of 2008 of $6.5 million, down $94.7 million from net income of $88.2 million in the third quarter of 2008. Local Banking for 2008 was $224.6 million.
  • The net charge-off rate increased 44 basis points to 90 basis points in the fourth quarter of 2008 from 46 basis points in the third quarter of 2008, while non-performing loans as a percent of loans held for investment of 1.25 percent increased from 0.96 percent at the end of the third quarter of 2008.
  • Loans held for investment of $45.1 billion were up slightly relative to the third quarter of 2008, and up 2.5 percent over year end 2007.
  • Local Banking deposits increased $3.9 billion, or 5 percent, from the third quarter of 2008 to $78.9 billion at December 31, 2008, and increased $5.8 billion, or 8.0 percent, from year end 2007.

National Lending Segment highlights

The National Lending segment contains the results of the company's U.S. Card, Auto Finance and International Lending businesses. For details on each of these subsegments' results, please refer to the Financial Supplement.

Economic deterioration intensified during the fourth quarter, driving increasing delinquency and charge-off rates across all of our lending businesses. The fourth quarter charge-off rate in the U.S. Card business was 7.08%, in line with the expectations conveyed last quarter. The company now expects that the U.S. Card charge-off rate for the first quarter of 2009 will be around 8.1%, rather than the mid 7% range previously communicated. The change in outlook is primarily the result of declining balances and adverse credit performance of closed-end, unsecured loans that are included in the U.S. Card subsegment. Auto Finance delinquencies and charge-off rates increased in the quarter as a result of seasonality, economic worsening, declining loan balances, and the impact of sharply falling used car auction prices. Credit trends in the International business reflect increasing economic deterioration in the UK, and relative stability in the Canadian business.

National Lending managed loans did not grow in the fourth quarter, and declined modestly as compared to the prior year. Fourth quarter loan growth in the U.S. Card business was weaker than usual as a result of weak holiday spending. Managed loans in the International business declined by more than $1.5 billion, as a result of foreign exchange rate impacts, as well as lower originations in the UK as the economy there continues to weaken. Managed loans in the Auto Finance business declined by $824.5 million in the quarter as a result of the ongoing repositioning of the business.

The decisions made over the course of the last year to scale back origination volume in the Auto business have led to a reduced estimate of the fair value of the Auto business, and, in turn, recognition that the business can no longer support the full carrying value of goodwill. As a result, the business recorded a $810.9 million non-cash impairment to goodwill.

  • Despite significant credit pressures, the U.S. Card business delivered $1.0 billion in net income for the year, the International businesses remained profitable for the full year 2008, with net income of $67.9 million. As a result of the non-cash goodwill write-down, the Auto Finance business reported a net loss of $958.9 million. In total, the National Lending segment reported net income of $110.0 million.
  • National Lending segment revenues of $3.3 billion were down $92.9 million, or 2.7 percent, in the fourth quarter of 2008 compared to the third quarter of 2008, and down $474.8 million, or 12.5 percent, relative to the fourth quarter of 2007. For the full year 2008, revenues of $13.7 billion were essentially flat compared to 2007.
  • The delinquency rate was 5.93 percent as of December 31, 2008, an increase of 50 basis points from 5.43 percent as of September 30, 2008.
  • The managed net charge-off rate for the National Lending segment increased 81 basis points in the fourth quarter of 2008 to 6.66 percent from 5.85 percent in the third quarter of 2008. The company expects the U.S. Card charge-off rate to be around 8.1 percent for the first quarter of 2009.
  • Loans held for investment of $101.1 billion were essentially flat relative to the third quarter of 2008 and down 5.0 percent relative to year end 2007.

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 January 22, 2009 for estimated loss levels for the twelve months ending December 31, 2009 underlying the provision expense in the fourth quarter of 2008, the projected charge-off rate in the U.S. Card subsegment for the first quarter of 2009 and continued degradation in the economy, and the company's plans, objectives, expectations, and intentions, are forward-looking statements and 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 interest rates and consumer income and confidence, spending, and savings which may affect consumer bankruptcies, defaults, charge-offs and deposit activity; changes in the labor and employment market; changes in the credit environment; the company's ability to execute on its strategic and 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, 2007, and reports on Form 10-Q for the quarters ended March 31, 2008, June 30, 2008, and September 30, 2008.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries collectively had $109 billion in deposits and $147 billion in managed loans outstanding as of December 31, 2008. Headquartered in McLean, VA, Capital One has 738 locations primarily in New York, New Jersey, Texas, and Louisiana. Its principal subsidiaries, Capital One, N.A. and Capital One Bank (USA), N. A., offer a broad spectrum of financial products and services to consumers, small businesses and commercial clients. 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.

NOTE: Fourth quarter 2008 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.



                     CAPITAL ONE FINANCIAL CORPORATION (COF)
                         FINANCIAL & STATISTICAL SUMMARY
                                  REPORTED BASIS

    (in millions, except per         2008          2008          2007
     share data and as noted)         Q4            Q3            Q4

    Earnings (Reported Basis)
    Net Interest Income           $1,802.4      $1,806.6      $1,762.3
    Non-Interest Income            1,368.3 (2)   1,696.9 (2)   2,158.3 (6)
    Total Revenue (1)              3,170.7       3,503.5       3,920.6
    Provision for Loan Losses      2,098.9       1,093.9       1,294.2
    Marketing Expenses               264.9         267.4         358.2
    Restructuring Expenses            52.8          15.3          27.8
    Goodwill Impairment Charge       810.9 (8)       -             -
    Operating Expenses (3)         1,629.3       1,527.5       1,749.2 (4)
    Income (Loss) Before Taxes    (1,686.1)        599.4         491.2
    Tax Rate                          17.2 %        35.6 %        34.5 %
    Income (Loss) From Continuing
     Operations, Net of Tax      $(1,396.3)       $385.8        $321.6
    Loss From Discontinued
     Operations, Net of Tax (5)      (25.2)        (11.7)        (95.0)
    Net Income (Loss)            $(1,421.5)       $374.1        $226.6
    Net Income (Loss)
     Available to Common
     Shareholders (F)            $(1,454.3)       $374.1        $226.6

    Common Share Statistics
    Basic EPS: (G)
      Income (Loss) From
       Continuing Operations        $(3.67)        $1.03         $0.85
      Loss From Discontinued
       Operations                   $(0.07)       $(0.03)       $(0.25)
      Net Income (Loss)             $(3.74)        $1.00         $0.60
    Diluted EPS: (G)
      Income (Loss) From
       Continuing Operations        $(3.67)        $1.03         $0.85
      Loss From Discontinued
       Operations                   $(0.07)       $(0.03)       $(0.25)
      Net Income (Loss)             $(3.74)        $1.00         $0.60
    Dividends Per Common Share      $0.375        $0.375         $0.03
    Tangible Book Value Per
     Common Share (period end)      $28.24        $31.63        $29.00
    Stock Price Per Common
     Share (period end)             $31.89        $51.00        $47.26
    Total Market Capitalization
     (period end)                $12,411.6     $19,833.9     $17,623.3
    Common Shares Outstanding
     (period end)                    389.2         388.9         372.9
    Shares Used to Compute
     Basic EPS                       389.0         372.9         375.6
    Shares Used to Compute
     Diluted EPS                     389.0         374.3         378.4

    Reported Balance Sheet Statistics
     (period average) (A)
    Average Loans Held for
     Investment                    $99,335       $98,778       $97,785
    Average Earning Assets        $137,799      $133,277      $127,242
    Average Assets                $161,976      $156,958      $150,926
    Average Interest Bearing
     Deposits                      $93,144       $84,655       $72,074
    Total Average Deposits        $104,093       $95,328       $83,813
    Average Equity                 $26,658 (10)  $25,046       $24,733
    Return on Average Assets (ROA)   (3.45)%        0.98 %        0.85 %
    Return on Average Equity (ROE)  (20.95)%        6.16 %        5.20 %

    Reported Balance Sheet Statistics
     (period end) (A)
    Loans Held for Investment     $101,018       $97,965      $101,805
    Total Assets                  $165,945      $154,783      $150,202
    Interest Bearing Deposits      $97,327       $88,248       $71,715
    Total Deposits                $108,621       $98,913       $82,761

    Performance Statistics
     (Reported) (A)
    Net Interest Income Growth
     (annualized)                       (1)%          18 %          34 %
    Non Interest Income Growth
     (annualized)                      (77)%          18 %           2 %
    Revenue Growth (annualized)        (38)%          18 %          16 %
    Net Interest Margin               5.23 %        5.42 %        5.54 %
    Revenue Margin                    9.20 %       10.51 %       12.32 %
    Risk Adjusted Margin (B)          6.17 %        7.90 %       10.28 %
    Non Interest Expense as a
     % of Average Loans Held
     for Investment (annualized)      7.84 % (9)    7.33 %        8.73 %
    Efficiency Ratio (C)             59.74 % (9)   51.23 %       53.75 %

    Asset Quality Statistics
     (Reported) (A)
    Allowance                       $4,524        $3,520        $2,963
    Allowance as a % of Reported
     Loans Held for Investment        4.48 %        3.59 %        2.91 %
    Net Charge-Offs                 $1,045          $872          $650
    Net Charge-Off Rate               4.21 %        3.53 %        2.66 %
    Delinquency Rate (30+ days)       4.37 %        3.85 %        3.66 %
    Full-time equivalent
     employees (in thousands)         23.7          23.5          27.0



                     CAPITAL ONE FINANCIAL CORPORATION (COF)
                         FINANCIAL & STATISTICAL SUMMARY
                                MANAGED BASIS (*)

                                    2008          2008         2007
    (in millions)                    Q4            Q3           Q4

    Earnings (Managed Basis)
    Net Interest Income          $2,767.9     $2,889.3     $3,000.5
    Non-Interest Income           1,183.2 (2)  1,325.6 (2)  1,566.2 (6)
    Total Revenue (1)             3,951.1      4,214.9      4,566.7
    Provision for Loan Losses     2,879.3      1,805.3      1,940.3
    Marketing Expenses              264.9        267.4        358.2
    Restructuring Expenses           52.8         15.3         27.8
    Goodwill Impairment Charge      810.9 (8)      -            -
    Operating Expenses (3)        1,629.3      1,527.5      1,749.2 (4)
    Income (Loss) Before Taxes   (1,686.1)       599.4        491.2
    Tax Rate                         17.2 %       35.6 %       34.5 %
    Income (Loss) From Continuing
     Operations, Net of Tax     $(1,396.3)      $385.8       $321.6
    Loss From Discontinued
     Operations, Net of Tax (5)     (25.2)       (11.7)       (95.0)
    Net Income (Loss)           $(1,421.5)      $374.1       $226.6
    Net Income (Loss) Available
     to Common Shareholders (F) $(1,454.3)      $374.1       $226.6

    Managed Balance Sheet Statistics
     (period average) (A)
    Average Loans Held for
     Investment                  $146,586     $147,247     $148,362
    Average Earning Assets       $182,660     $179,753     $175,652
    Average Assets               $207,240     $204,694     $200,658
    Return on Average Assets
     (ROA)                          (2.70)%       0.75 %       0.64 %

    Managed Balance Sheet Statistics
     (period end) (A)
    Loans Held for Investment    $146,937     $147,346     $151,362
    Total Assets                 $209,907     $203,452     $198,908
    Tangible Assets (D)          $197,404     $190,141     $185,428
    Tangible Common Equity (E)    $10,990      $12,301      $10,814
    Tangible Common Equity to
     Tangible Assets Ratio           5.57 %       6.47 % (7)   5.83 %
    % Off-Balance Sheet
     Securitizations                   31 %         34 %         33 %

    Performance Statistics
     (Managed) (A)
    Net Interest Income Growth
     (annualized)                     (17)%         15 %         28 %
    Non Interest Income Growth
     (annualized)                     (43)%          7 %         13 %
    Revenue Growth (annualized)       (25)%         12 %         23 %
    Net Interest Margin              6.06 %       6.43 %       6.83 %
    Revenue Margin                   8.65 %       9.38 %      10.40 %
    Risk Adjusted Margin (B)         4.65 %       5.86 %       7.45 %
    Non Interest Expense as a % of
     Average Loans Held for
     Investment (annualized)         5.31 % (9)   4.92 %       5.76 %
    Efficiency Ratio (C)            47.94 % (9)  42.58 %      46.15 %

    Asset Quality Statistics
     (Managed) (A)
    Net Charge-Offs                $1,826       $1,583       $1,296
    Net Charge-Off Rate              4.98 %       4.30 %       3.49 %
    Delinquency Rate (30+ days)      4.49 %       3.99 %       3.87 %

    (*) 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".



                   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: Q4 2008 - $591.0 million, Q3 2008 - $445.7
        million and Q4 2007 - $379.4 million.

    (2) Includes the impact from the decrease in fair value of the
        interest-only strips of $131.0 million in Q4 2008 and $66.7 million in
        Q3 2008.

    (3) Includes core deposit intangible amortization expense of $46.0 million
        in Q4 2008, $47.3 million in Q3 2008 and $51.1 million in Q4 2007 and
        integration costs of $3.2 million in Q4 2008, $10.3 million in Q3 2008
        and $28.6 million in Q4 2007.

    (4) In Q4 2007, the Company recognized a pre-tax charge of approximately
        $140 million for liabilities in connection with the Visa antitrust
        lawsuit settlement with American Express and estimated possible
        damages in connection with other pending Visa litigation. In Q1 2008,
        the Company, in connection with the Visa initial public offering
        (IPO), reversed approximately $91 million of these legal liabilities.

    (5) In Q3 2007, the Company shutdown the mortgage origination operations
        of its wholesale mortgage banking unit, GreenPoint Mortgage, realizing
        an after tax loss of $898.0 million. The results of the mortgage
        origination operation of GreenPoint have been accounted for as a
        discontinued operation and have been removed from the Company's
        results of continuing operations for all periods presented. The
        results of GreenPoint's mortgage servicing business are reported in
        continuing operations for all periods presented. Effective Q4 2007,
        GreenPoint's held for investment commercial and consumer loan
        portfolio results are included in continuing operations.

    (6) During the fourth quarter 2007, the Company completed the sale of its
        interest in a relationship agreement to develop and market consumer
        credit products in the Spanish Market and recorded a gain related to
        this sale of approximately $30 million in non-interest income.

    (7) The Q3 2008 TCE ratio reflects the issuance of 15,527,000 shares on
        September 30, 2008 at $49 per share.

    (8) In Q4 2008 the Company recorded impairment of goodwill in its Auto
        Finance sub-segment of $810.9 million.

    (9) Excludes the impact of the goodwill impairment of $810.9 million.

    (10) Average equity includes the impact of the Company's participation in
         the U.S. Treasury's Capital Purchase Program. 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. The
         warrants to purchase common shares are included in paid-in capital on
         the balance sheet.

    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.

    (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.

    (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.



                    CAPITAL ONE FINANCIAL CORPORATION (COF)
       SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS
                               MANAGED BASIS (1)

                                     2008            2008          2007
    (in thousands)                    Q4              Q3            Q4 (6)

    Local Banking:
      Interest Income             $1,512,139      $1,519,217    $1,707,377
      Interest Expense               869,723         895,481     1,122,841
      Net interest income           $642,416        $623,736      $584,536
      Non-interest income            189,814         215,701       206,002
      Provision for loan losses      214,154          81,052        42,665
      Other non-interest expenses    628,110         622,697       589,943
      Income tax provision            (3,512)         47,491        54,328
      Net income (loss)              $(6,522)        $88,197      $103,602

      Loans Held for Investment  $45,082,981     $44,662,818   $43,972,795
      Average Loans Held for
       Investment                $44,810,117     $44,319,475   $43,128,767
      Core Deposits (2)          $67,546,102     $64,386,336   $62,977,637
      Total Deposits             $78,938,391     $75,045,812   $73,089,284

      Loans Held for Investment
       Yield                           6.08%           6.25%         7.02%
      Net Interest Margin -
       Loans (3)                       2.11%           1.98%         1.87%
      Net Interest Margin -
       Deposits (4)                    2.12%           2.18%         2.05%
      Efficiency Ratio (5)            75.47%          74.18%        74.63%
      Net charge-off rate              0.90%           0.46%         0.29%
      Non Performing Loans          $565,791        $430,211      $178,385
      Foreclosed Assets               63,970          41,290        14,058
      Non Performing Assets (9)     $629,761        $471,501      $192,443
      Non Performing Loans as a
       % of Loans Held for
       Investment                      1.25%           0.96%         0.41%
      Non Performing Asset Rate (9)    1.40%           1.06%         0.44%
      Non-Interest Expenses as a
       % of Average Loans Held
       for Investment                  5.61%           5.62%         5.47%

      Number of Active ATMs            1,311           1,310         1,288
      Number of Locations                738             739           742


    National Lending (8):
      Interest Income             $3,104,769      $3,251,446    $3,670,404
      Interest Expense               921,542       1,019,911     1,231,978
      Net interest income         $2,183,227      $2,231,535    $2,438,426
      Non-interest income          1,151,066       1,195,622     1,370,655
      Provision for loan losses    2,602,101       1,678,513     1,777,327
      Goodwill impairment charge     810,876 (10)        -             -
      Other non-interest expenses  1,201,764       1,176,396     1,361,709
      Income tax provision          (169,060)        200,626       229,084
      Net income (loss)          $(1,111,388)       $371,622      $440,961

      Loans Held for Investment $101,147,134    $101,922,850  $106,508,443
      Average Loans Held for
       Investment               $101,038,849    $102,142,752  $104,321,485
      Core Deposits (2)               $2,219          $2,171        $1,599
      Total Deposits              $1,459,131      $1,650,507    $2,050,861

      Loans Held for Investment
       Yield                          12.29%          12.73%        14.07%
      Net Interest Margin              8.64%           8.74%         9.35%
      Revenue Margin                  13.20%          13.42%        14.61%
      Risk Adjusted Margin             6.54%           7.57%         9.88%
      Non-Interest Expenses as a
       % of Average Loans Held
       for Investment                  4.76% (11)      4.61%         5.22%
      Efficiency Ratio (5)            36.04% (11)     34.33%        35.75%
      Net charge-off rate              6.66%           5.85%         4.73%
      Delinquency Rate (30+ days)      5.93%           5.43%         5.17%

      Number of Loan Accounts (000s)  44,816          45,314        48,537

    Other:
      Net interest income           $(57,763)        $34,059      $(22,449)
      Non-interest income           (157,700)        (85,764)      (10,425)
      Provision for loan losses       63,043          45,705       120,376
      Restructuring expenses          52,839          15,306        27,809
      Other non-interest expenses     64,354          (4,193)      155,746
      Income tax provision
       (benefit)                    (117,284)        (34,493)     (113,854)
      Net income (loss)            $(278,415)       $(74,030)    $(222,951)

      Loans Held for Investment     $706,639        $760,078      $881,179
      Core Deposits (2)          $27,067,784     $20,800,890    $6,107,779
      Total Deposits             $28,223,267     $22,216,655    $7,621,031

    Total:
      Interest Income             $4,205,821      $4,346,261    $4,863,246
      Interest Expense             1,437,941       1,456,931     1,862,733
      Net interest income         $2,767,880      $2,889,330    $3,000,513
      Non-interest income          1,183,180       1,325,559     1,566,232
      Provision for loan losses    2,879,298       1,805,270     1,940,368
      Restructuring expenses          52,839          15,306        27,809
      Goodwill impairment charge     810,876             -             -
      Other non-interest expenses  1,894,228       1,794,900     2,107,398
      Income tax provision          (289,856)        213,624       169,558
      Net income (loss)          $(1,396,325)       $385,789      $321,612

      Loans Held for Investment $146,936,754    $147,345,746  $151,362,417
      Core Deposits (2)          $94,616,105     $85,189,397   $69,087,015
      Total Deposits            $108,620,789     $98,912,974   $82,761,176



                     CAPITAL ONE FINANCIAL CORPORATION (COF)
            LOCAL BANKING SEGMENT FINANCIAL & STATISTICAL INFORMATION

                                            2008         2008         2007
    (in thousands)                           Q4           Q3           Q4

    Loans Held for Investment:

      Commercial Lending
        Commercial and Multi-Family
         Real Estate                    $13,382,909  $13,043,369  $12,414,263
        Middle Market                    10,081,823    9,768,420    8,288,476
        Small Ticket Commercial Real
         Estate                           2,609,123    2,695,570    2,948,402
        Specialty Lending                 3,547,287    3,634,212    3,396,100
          Total Commercial Lending      $29,621,142  $29,141,571  $27,047,241

      Small Business Lending             $4,747,783   $4,580,299   $4,612,500

      Consumer Lending
        Mortgages                        $7,187,805   $7,402,290   $8,513,216
        Branch Based Home Equity &
         Other Consumer                   3,773,397    3,782,342    4,095,228
          Total Consumer Lending        $10,961,202  $11,184,632  $12,608,444

        Other                             $(247,146)   $(243,684)   $(295,390)

      Total Loans Held for Investment   $45,082,981  $44,662,818  $43,972,795


    Non Performing Asset Rates (9):

      Commercial Lending
        Commercial and Multi-Family
         Real Estate                          1.20%        1.06%        0.24%
        Middle Market                         0.43%        0.26%        0.41%
        Small Ticket Commercial Real
         Estate                               6.67%        4.49%        0.54%
        Specialty Lending                     1.05%        0.38%        0.18%
          Total Commercial Lending            1.40%        1.03%        0.32%

      Small Business Lending                  1.79%        1.14%        1.06%

      Consumer Lending
        Mortgages                             1.55%        1.41%        0.54%
        Branch Based Home Equity &
         Other Consumer                       0.46%        0.40%        0.30%
          Total Consumer Lending              1.18%        1.07%        0.46%

      Total Non Performing Asset Rate         1.40%        1.06%        0.44%

    Net Charge Off Rates:

      Commercial Lending
        Commercial and Multi-Family
         Real Estate                          1.15%        0.14%        0.02%
        Middle Market                         0.48%        0.15%        0.12%
        Small Ticket Commercial Real
         Estate                               0.90%        0.10%        0.21%
        Specialty Lending                     0.47%        0.26%        0.15%
          Total Commercial Lending            0.82%        0.16%        0.09%

      Small Business Lending                  1.12%        1.17%        0.63%

      Consumer Lending
        Mortgages                             0.48%        0.50%        0.19%
        Branch Based Home Equity &
         Other Consumer                       1.34%        1.01%        1.04%
          Total Consumer Lending              0.78%        0.67%        0.46%

      Total Net Charge Off Rate               0.90%        0.46%        0.29%



                    CAPITAL ONE FINANCIAL CORPORATION (COF)
       NATIONAL LENDING SUB-SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR
                             CONTINUING OPERATIONS
                            MANAGED BASIS (1), (8)



                                       2008           2008         2007
   (in thousands)                       Q4             Q3           Q4 (6)

    US Card:
      Interest Income               $2,179,456     $2,240,896   $2,548,929
      Interest Expense                 570,751        624,858      780,985
      Net interest income           $1,608,705     $1,616,038   $1,767,944
      Non-interest income            1,018,689      1,027,918    1,163,795
      Provision for loan losses      2,000,928      1,240,580    1,195,469
      Non-interest expenses            896,572        872,588      976,118
      Income tax provision             (94,537)       185,775      261,492
      Net income (loss)              $(175,569)      $345,013     $498,660

      Loans Held for Investment    $70,944,581    $69,361,743  $69,723,169
      Average Loans Held for
       Investment                  $69,643,290    $68,581,983  $67,727,632

      Loans Held for Investment
       Yield                            12.52%         13.07%       15.05%
      Net Interest Margin                9.24%          9.43%       10.44%
      Revenue Margin                    15.09%         15.42%       17.31%
      Risk Adjusted Margin               8.01%          9.29%       12.47%
      Non-Interest Expenses as a %
       of Average Loans Held for
       Investment                        5.15%          5.09%        5.76%
      Efficiency Ratio (5)              34.12%         33.00%       33.29%
      Net charge-off rate                7.08%          6.13%        4.84%
      Delinquency Rate (30+ days)        4.78%          4.20%        4.28%

      Purchase Volume (7)          $25,217,781    $26,536,070  $28,230,725
      Number of Loan Accounts
       (000s)                           37,436         37,916       41,044

    Auto Finance:
      Interest Income                 $622,244       $635,305     $687,389
      Interest Expense                 255,501        265,804      300,133
      Net interest income             $366,743       $369,501     $387,256
      Non-interest income               12,846         14,607       14,888
      Provision for loan losses        437,572        244,078      429,247
      Goodwill impairment charge       810,876 (10)         -            -
      Non-interest expenses            127,075        117,677      144,301
      Income tax (benefit) provision   (71,290)         7,824      (58,963)
      Net income (loss)              $(924,644)       $14,529    $(112,441)

      Loans Held for Investment    $21,481,911    $22,306,394  $25,128,352
      Average Loans Held for
       Investment                  $21,954,587    $22,857,540  $24,920,380

      Loans Held for Investment
       Yield                            11.34%         11.12%       11.03%
      Net Interest Margin                6.68%          6.47%        6.22%
      Revenue Margin                     6.92%          6.72%        6.45%
      Risk Adjusted Margin               1.24%          1.73%        2.46%
      Non-Interest Expenses as a %
       of Average Loans Held for
       Investment                        2.32% (11)     2.06%        2.32%
      Efficiency Ratio (5)              33.48% (11)    30.64%       35.88%
      Net charge-off rate                5.67%          5.00%        4.00%
      Delinquency Rate (30+ days)        9.91%          9.32%        7.84%

      Auto Loan Originations        $1,476,136     $1,444,291   $3,623,491
      Number of Loan Accounts (000s)     1,634          1,665        1,771

    International:
      Interest Income                 $303,069       $375,245     $434,086
      Interest Expense                  95,290        129,249      150,860
      Net interest income             $207,779       $245,996     $283,226
      Non-interest income              119,531        153,097      191,972
      Provision for loan losses        163,601        193,855      152,611
      Non-interest expenses            178,117        186,131      241,290
      Income tax provision              (3,233)         7,027       26,555
      Net income (loss)               $(11,175)       $12,080      $54,742

      Loans Held for Investment     $8,720,642    $10,254,713  $11,656,922
      Average Loans Held for
       Investment                   $9,440,972    $10,703,229  $11,673,473

      Loans Held for Investment
       Yield                            12.84%         14.02%       14.87%
      Net Interest Margin                8.80%          9.19%        9.70%
      Revenue Margin                    13.87%         14.91%       16.28%
      Risk Adjusted Margin               8.02%          9.01%       10.67%
      Non-Interest Expenses as a %
       of Average Loans Held for
       Investment                        7.55%          6.96%        8.27%
      Efficiency Ratio (5)              54.42%         46.64%       50.78%
      Net charge-off rate                5.84%          5.90%        5.61%
      Delinquency Rate (30+ days)        5.51%          5.24%        4.79%

      Purchase Volume (7)           $2,346,969     $2,857,975   $2,966,350
      Number of Loan Accounts (000s)     5,747          5,733        5,722



                    CAPITAL ONE FINANCIAL CORPORATION (COF)
                   SEGMENT AND NATIONAL LENDING SUB-SEGMENT
         FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS NOTES

    (1) The information in this financial and 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." In Q3 2007, the Company shutdown the mortgage origination
        operations of its wholesale mortgage banking unit, GreenPoint
        Mortgage. The results of the mortgage origination operation of
        GreenPoint have been accounted for as a discontinued operation and
        have been removed from the Company's results of continuing operations
        for all periods presented. The results of GreenPoint's mortgage
        servicing business are reported in continuing operations for all
        periods presented. Effective Q4 2007, GreenPoint's held for investment
        commercial and consumer loan portfolio results are included in
        continuing operations.

    (2) Includes domestic non-interest bearing deposits, NOW accounts, money
        market deposit accounts, savings accounts, certificates of deposit of
        less than $100,000 and other consumer time deposits.

    (3) Net Interest Margin - Loans equals net interest income earned on loans
        divided by average managed loans.

    (4) Net Interest Margin - Deposits equals net interest income earned on
        deposits divided by average deposits.

    (5) Efficiency Ratio equals non-interest expenses divided by total managed
        revenue.

    (6) Certain prior period amounts have been reclassified to conform with
        current period presentation.

    (7) Includes all purchase transactions net of returns and excludes cash
        advance transactions.

    (8) In Q1 2008 the Company reorganized its National Lending sub-segments
        from U.S. Card, Auto Finance and Global Financial Services to U.S.
        Card and Other National Lending. The U.S. Card sub-segment contains
        the results of the Company's domestic credit card business, small
        business lending and the installment loan business. The Other National
        Lending subsegment contains the results of the Company's auto finance
        business and the Company's international lending businesses.
        Components of the Other National Lending sub-segment are separately
        disclosed. Segment and sub-segment results have been restated for all
        periods presented.

    (9) Non performing assets is comprised of non performing loans and
        foreclosed assets. The non performing asset rate equals non performing
        assets divided by the sum of loans held for investment plus foreclosed
        assets.

    (10) In Q4 2008 the Company recorded impairment of goodwill in its Auto
         Finance sub-segment of $810.9 million.

    (11) Excludes the impact of the goodwill impairment of $810.9 million
         recorded in the Auto Finance component of National Lending.



    CAPITAL ONE FINANCIAL CORPORATION
    Reconciliation to GAAP Financial Measures
    For the Three Months Ended December 31, 2008
    (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 it originated. For this reason the Company believes the "managed" consolidated financial statements and related managed metrics to be useful to stakeholders.

                                       Total                         Total
                                     Reported     Adjustments (1)  Managed (2)
    Income Statement Measures (3)
    Net interest income              $1,802,397       $965,483      $2,767,880
    Non-interest income               1,368,286       (185,106)      1,183,180
    Total revenue                     3,170,683        780,377       3,951,060
    Provision for loan and lease
     losses                           2,098,921        780,377       2,879,298
    Net charge-offs                  $1,045,912       $780,377      $1,826,289
    Balance Sheet Measures
    Loans held for investment      $101,017,771    $45,918,983    $146,936,754
    Total assets                   $165,980,505    $43,961,156    $209,941,661
    Average loans held for
     investment                     $99,334,890    $47,251,262    $146,586,152
    Average earning assets         $137,818,202    $44,861,288    $182,679,490
    Average total assets           $162,035,538    $45,264,163    $207,299,701
    Delinquencies                    $4,417,823     $2,178,400      $6,596,223

    (1) Income statement adjustments reclassify the net of finance charges of
        $1,285.1 million, past-due fees of $200.1 million, other interest
        income of $(48.2) million and interest expense of $471.5 million; and
        net charge-offs of $780.4 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 which have been
        sold in whole loan sale transactions where the Company has retained
        servicing rights.

    (3) Based on continuing operations.



                      CAPITAL ONE FINANCIAL CORPORATION
                         Consolidated Balance Sheets
                          (in thousands)(unaudited)

                                      As of         As of         As of
                                      Dec 31       Sept 30        Dec 31
                                       2008          2008          2007

    Assets:
    Cash and due from banks          $2,047,839    $3,511,558    $2,377,287
    Federal funds sold and resale
     agreements                         636,752     1,435,521     1,766,762
    Interest-bearing deposits at
     other banks                      4,806,752       673,662       677,360
      Cash and cash equivalents       7,491,343     5,620,741     4,821,409
    Securities available for sale    31,003,271    26,969,471    19,781,587
    Mortgage loans held for sale         68,462        98,900       315,863
    Loans held for investment       101,017,771    97,965,351   101,805,027
      Less:  Allowance for loan
       and lease losses              (4,523,960)   (3,519,610)   (2,963,000)
    Net loans held for investment    96,493,811    94,445,741    98,842,027
    Accounts receivable from
     securitizations                  6,342,754     4,980,823     4,717,879
    Premises and equipment, net       2,313,106     2,305,286     2,299,603
    Interest receivable                 827,909       750,717       839,317
    Goodwill                         12,022,577    12,815,642    12,830,740
    Other                             9,417,272     6,815,792     6,141,944
      Total assets                 $165,980,505  $154,803,113  $150,590,369

    Liabilities:
    Non-interest-bearing deposits   $11,293,852   $10,665,286   $11,046,549
    Interest-bearing deposits        97,326,937    88,247,688    71,714,627
    Senior and subordinated notes     8,308,843     8,278,856    10,712,706
    Other borrowings                 14,869,648    15,962,072    26,812,969
    Interest payable                    676,398       508,091       631,609
    Other                             6,892,394     5,529,580     5,377,797
      Total liabilities             139,368,072   129,191,573   126,296,257

    Stockholders' Equity:
    Preferred stock                   3,096,466           -             -
    Common stock                          4,384         4,383         4,192
    Paid-in capital, net             17,278,102    16,752,078    15,860,490
    Retained earnings and
     cumulative other
     comprehensive income             9,399,368    12,020,490    11,582,816
      Less:  Treasury stock, at cost (3,165,887)   (3,165,411)   (3,153,386)
      Total stockholders' equity     26,612,433    25,611,540    24,294,112
      Total liabilities and
       stockholders' equity        $165,980,505  $154,803,113  $150,590,369



    CAPITAL ONE FINANCIAL CORPORATION
    Consolidated Statements of Income
    (in thousands, except per share data)(unaudited)

                                                    Three Months Ended
                                              Dec 31     Sept 30      Dec 31
                                               2008        2008        2007

    Interest Income:
    Loans held for investment, including
     past-due fees                         $2,306,796  $2,347,480  $2,536,779
    Securities available for sale             367,902     317,274     256,364
    Other                                      94,123     107,042     167,051
      Total interest income                 2,768,821   2,771,796   2,960,194

    Interest Expense:
    Deposits                                  684,756     624,319     686,174
    Senior and subordinated notes              92,519      96,568     159,878
    Other borrowings                          189,149     244,264     351,895
      Total interest expense                  966,424     965,151   1,197,947
    Net interest income                     1,802,397   1,806,645   1,762,247
    Provision for loan and lease losses     2,098,921   1,093,917   1,294,210
    Net interest income (loss) after
     provision for loan and lease losses     (296,524)    712,728     468,037

    Non-Interest Income:
    Servicing and securitizations             590,948     875,718   1,271,396
    Service charges and other customer-
     related fees                             557,331     576,762     573,034
    Mortgage servicing and other               14,048      39,183      (5,700)
    Interchange                               129,409     148,076     152,595
    Other                                      76,550      57,152     167,015
      Total non-interest income             1,368,286   1,696,891   2,158,340

    Non-Interest Expense:
    Salaries and associate benefits           574,199     571,686     622,101
    Marketing                                 264,943     267,372     358,182
    Communications and data processing        196,924     176,720     189,415
    Supplies and equipment                    130,038     126,781     146,267
    Occupancy                                 112,492      96,483      91,675
    Restructuring expense                      52,839      15,306      27,809
    Goodwill impairment charge                810,876         -           -
    Other                                     615,632     555,858     699,758
      Total non-interest expense            2,757,943   1,810,206   2,135,207
    Income (loss) from continuing
     operations before Income taxes        (1,686,181)    599,413     491,170
    Income taxes                             (289,856)    213,624     169,558
    Income (loss) from continuing
     operations, net of tax                (1,396,325)    385,789     321,612
    Loss from discontinued operations,
     net of tax (1)                           (25,221)    (11,650)    (95,044)
    Net income (loss)                     $(1,421,546)   $374,139    $226,568
    Net income (loss) available to
     common shareholders                  $(1,454,269)   $374,139    $226,568


    Basic earnings per common share
    Income (loss) from continuing operations   $(3.67)      $1.03       $0.85
    Loss from discontinued operations           (0.07)      (0.03)      (0.25)
    Net Income (loss) per common share         $(3.74)      $1.00       $0.60

    Diluted earnings per common share
    Income (loss) from continuing operations   $(3.67)      $1.03       $0.85
    Loss from discontinued operations           (0.07)      (0.03)      (0.25)
    Net Income (loss) per common share         $(3.74)      $1.00       $0.60

    Dividends paid per common share            $0.375      $0.375       $0.03


                                                           Year Ended
                                                    Dec 31            Dec 31
                                                     2008              2007

    Interest Income:
    Loans held for investment, including
     past-due fees                               $9,460,378       $9,500,128
    Securities available for sale                 1,224,012          950,972
    Other                                           427,609          627,056
      Total interest income                      11,111,999       11,078,156

    Interest Expense:
    Deposits                                      2,512,040        2,906,351
    Senior and subordinated notes                   444,854          577,128
    Other borrowings                              1,006,390        1,064,832
      Total interest expense                      3,963,284        4,548,311
    Net interest income                           7,148,715        6,529,845
    Provision for loan and lease losses           5,101,040        2,636,502
    Net interest income (loss) after
     provision for loan and lease losses          2,047,675        3,893,343

    Non-Interest Income:
    Servicing and securitizations                 3,384,468        4,840,677
    Service charges and other customer-
     related fees                                 2,232,363        2,057,854
    Mortgage servicing and other                    105,038          166,776
    Interchange                                     562,117          500,484
    Other                                           459,985          488,432
      Total non-interest income                   6,743,971        8,054,223

    Non-Interest Expense:
    Salaries and associate benefits               2,335,737        2,592,534
    Marketing                                     1,118,208        1,347,836
    Communications and data processing              755,989          758,820
    Supplies and equipment                          519,687          531,238
    Occupancy                                       377,192          322,510
    Restructuring expense                           134,464          138,237
    Goodwill impairment charge                      810,876              -
    Other                                         2,157,874        2,386,835
      Total non-interest expense                  8,210,027        8,078,010
    Income (loss) from continuing
     operations before Income taxes                 581,619        3,869,556
    Income taxes                                    497,102        1,277,837
    Income (loss) from continuing
     operations, net of tax                          84,517        2,591,719
    Loss from discontinued operations,
     net of tax (1)                                (130,515)      (1,021,387)
    Net income (loss)                              $(45,998)      $1,570,332
    Net income (loss) available to common
     shareholders                                  $(78,721)      $1,570,332


    Basic earnings per common share
    Income (loss) from continuing operations          $0.14            $6.64
    Loss from discontinued operations                 (0.35)           (2.62)
    Net Income (loss) per common share               $(0.21)           $4.02

    Diluted earnings per common share
    Income (loss) from continuing operations          $0.14            $6.55
    Loss from discontinued operations                 (0.35)           (2.58)
    Net Income (loss) per common share               $(0.21)           $3.97

    Dividends paid per common share                   $1.50            $0.11


    (1) In Q3 2007, the Company shutdown the mortgage origination operations
        of its wholesale mortgage banking unit, GreenPoint Mortgage. The
        results of the mortgage origination operation of GreenPoint have been
        accounted for as a discontinued operation and have been removed from
        the Company's results of continuing operations for all periods
        presented.



    CAPITAL ONE FINANCIAL CORPORATION
    Statements of Average Balances, Income and Expense, Yields and Rates (1)
    (dollars in thousands)(unaudited)

    Reported                                   Quarter Ended 12/31/08
                                             Average       Income/    Yield/
                                             Balance       Expense    Rate
    Earning assets:

      Loans held for investment            $99,334,890   $2,306,796   9.29%
      Securities available for sale         28,961,247      367,902   5.08%
      Other                                  9,502,781       94,123   3.96%
    Total earning assets                  $137,798,918   $2,768,821   8.04%

    Interest-bearing liabilities:
      Interest-bearing deposits
        NOW accounts                        $9,874,696      $28,460   1.15%
        Money market deposit accounts       28,556,264      171,891   2.41%
        Savings accounts                     7,275,816       11,774   0.65%
        Other consumer time deposits        33,712,504      337,651   4.01%
        Public fund CD's of $100,000
         or more                             1,213,364        7,323   2.41%
        CD's of $100,000 or more             9,508,463      104,134   4.38%
        Foreign time deposits                3,002,402       23,523   3.13%
      Total interest-bearing deposits      $93,143,509     $684,756   2.94%
      Senior and subordinated notes          8,034,423       92,519   4.61%
      Other borrowings                      16,428,096      189,149   4.61%
    Total interest-bearing liabilities    $117,606,028     $966,424   3.29%

    Net interest spread                                               4.75%

    Interest income to average earning assets                         8.04%
    Interest expense to average earning assets                        2.81%
    Net interest margin                                               5.23%


    Reported                                      Quarter Ended 9/30/08
                                              Average       Income/    Yield/
                                              Balance       Expense     Rate
    Earning assets:

      Loans held for investment             $98,778,393   $2,347,480   9.51%
      Securities available for sale          25,780,669      317,274   4.92%
      Other                                   8,717,921      107,042   4.91%
    Total earning assets                   $133,276,983   $2,771,796   8.32%

    Interest-bearing liabilities:
      Interest-bearing deposits
        NOW accounts                         $9,292,819      $30,263   1.30%
        Money market deposit accounts        26,914,607      187,740   2.79%
        Savings accounts                      7,759,024       16,243   0.84%
        Other consumer time deposits         26,733,531      262,101   3.92%
        Public fund CD's of $100,000
         or more                              1,305,438        8,233   2.52%
        CD's of $100,000 or more              9,084,740       89,192   3.93%
        Foreign time deposits                 3,564,449       30,547   3.43%
      Total interest-bearing deposits       $84,654,608     $624,319   2.95%
      Senior and subordinated notes           8,282,536       96,568   4.66%
      Other borrowings                       22,368,976      244,264   4.37%
    Total interest-bearing liabilities     $115,306,120     $965,151   3.35%

    Net interest spread                                                4.97%

    Interest income to average earning assets                          8.32%
    Interest expense to average earning assets                         2.90%
    Net interest margin                                                5.42%


    Reported                                      Quarter Ended 12/31/07
                                              Average       Income/    Yield/
                                              Balance       Expense     Rate
    Earning assets:

      Loans held for investment             $97,784,813   $2,536,779   10.38%
      Securities available for sale          20,102,440      256,364    5.10%
      Other                                   9,355,161      167,051    7.14%
    Total earning assets                   $127,242,414   $2,960,194    9.31%

    Interest-bearing liabilities:
      Interest-bearing deposits
        NOW accounts                         $4,674,490      $30,443    2.61%
        Money market deposit accounts        28,745,701      270,943    3.77%
        Savings accounts                      8,172,510       32,520    1.59%
        Other consumer time deposits         16,374,958      183,570    4.48%
        Public fund CD's of $100,000
         or more                              1,902,442       23,126    4.86%
        CD's of $100,000 or more              8,335,941       97,335    4.67%
        Foreign time deposits                 3,868,444       48,237    4.99%
      Total interest-bearing deposits       $72,074,486     $686,174    3.81%
      Senior and subordinated notes          10,682,635      159,878    5.99%
      Other borrowings                       26,671,101      351,895    5.28%
    Total interest-bearing liabilities     $109,428,222   $1,197,947    4.38%

    Net interest spread                                                 4.93%

    Interest income to average earning assets                           9.31%
    Interest expense to average earning assets                          3.77%
    Net interest margin                                                 5.54%

    (1) Average balances, income and expenses, yields and rates are based on
        continuing operations.



                       CAPITAL ONE FINANCIAL CORPORATION
    Statements of Average Balances, Income and Expense, Yields and Rates (2)
                       (dollars in thousands)(unaudited)

    Managed (1)                                   Quarter Ended 12/31/08
                                              Average       Income/    Yield/
                                              Balance       Expense     Rate
    Earning assets:

      Loans held for investment            $146,586,152   $3,808,363   10.39%
      Securities available for sale          28,961,247      367,902    5.08%
      Other                                   7,112,807       29,558    1.66%
    Total earning assets                   $182,660,206   $4,205,823    9.21%

    Interest-bearing liabilities:
      Interest-bearing deposits
        NOW accounts                         $9,874,696      $28,460    1.15%
        Money market deposit accounts        28,556,264      171,891    2.41%
        Savings accounts                      7,275,816       11,774    0.65%
        Other consumer time deposits         33,712,504      337,651    4.01%
        Public fund CD's of $100,000
         or more                              1,213,364        7,323    2.41%
        CD's of $100,000 or more              9,508,463      104,134    4.38%
        Foreign time deposits                 3,002,402       23,523    3.13%
      Total interest-bearing deposits       $93,143,509     $684,756    2.94%
      Senior and subordinated notes           8,034,423       92,519    4.61%
      Other borrowings                       16,428,096      189,149    4.61%
      Securitization liability               45,610,272      471,517    4.14%
    Total interest-bearing liabilities     $163,216,300   $1,437,941    3.52%

    Net interest spread                                                 5.69%

    Interest income to average earning assets                           9.21%
    Interest expense to average earning assets                          3.15%
    Net interest margin                                                 6.06%


    Managed (1)                                    Quarter Ended 9/30/08
                                              Average       Income/    Yield/
                                              Balance       Expense     Rate
    Earning assets:

      Loans held for investment            $147,247,398   $3,974,375   10.80%
      Securities available for sale          25,780,669      317,274    4.92%
      Other                                   6,724,730       54,612    3.25%
    Total earning assets                   $179,752,797   $4,346,261    9.67%

    Interest-bearing liabilities:
      Interest-bearing deposits
        NOW accounts                         $9,292,819      $30,263    1.30%
        Money market deposit accounts        26,914,607      187,740    2.79%
        Savings accounts                      7,759,024       16,243    0.84%
        Other consumer time deposits         26,733,531      262,101    3.92%
        Public fund CD's of $100,000
         or more                              1,305,438        8,233    2.52%
        CD's of $100,000 or more              9,084,740       89,192    3.93%
        Foreign time deposits                 3,564,449       30,547    3.43%
      Total interest-bearing deposits       $84,654,608     $624,319    2.95%
      Senior and subordinated notes           8,282,536       96,568    4.66%
      Other borrowings                       22,368,976      244,264    4.37%
      Securitization liability               48,069,177      491,780    4.09%
    Total interest-bearing liabilities     $163,375,297   $1,456,931    3.57%

    Net interest spread                                                 6.10%

    Interest income to average earning assets                           9.67%
    Interest expense to average earning assets                          3.24%
    Net interest margin                                                 6.43%


    Managed (1)                                  Quarter Ended 12/31/07
                                             Average       Income/    Yield/
                                             Balance       Expense     Rate
    Earning assets:

      Loans held for investment            $148,362,338   $4,512,219   12.17%
      Securities available for sale          20,102,440      256,364    5.10%
      Other                                   7,186,892       94,663    5.27%
    Total earning assets                   $175,651,670   $4,863,246   11.07%

    Interest-bearing liabilities:
      Interest-bearing deposits
        NOW accounts                         $4,674,490      $30,443    2.61%
        Money market deposit accounts        28,745,701      270,943    3.77%
        Savings accounts                      8,172,510       32,520    1.59%
        Other consumer time deposits         16,374,958      183,570    4.48%
        Public fund CD's of $100,000
         or more                              1,902,442       23,126    4.86%
        CD's of $100,000 or more              8,335,941       97,335    4.67%
        Foreign time deposits                 3,868,444       48,237    4.99%
      Total interest-bearing deposits       $72,074,486     $686,174    3.81%
      Senior and subordinated notes          10,682,635      159,878    5.99%
      Other borrowings                       26,671,101      351,895    5.28%
      Securitization liability               49,847,555      664,786    5.33%
    Total interest-bearing liabilities     $159,275,777   $1,862,733    4.68%

    Net interest spread                                                 6.40%

    Interest income to average earning assets                          11.07%
    Interest expense to average earning assets                          4.24%
    Net interest margin                                                 6.83%

    (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.

SOURCE Capital One Financial Corporation
01/22/2009
/CONTACT: Investor Relations, Jeff Norris, +1-703-720-2455, or Danielle
Dietz
, +1-703-720-2455, or Media Relations, Tatiana Stead, +1-703-720-2352, or
Julie Rakes, +1-804-284-5800, all of Capital One Financial Corporation
/Web site: http://www.capitalone.com
(COF)