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Capital One to Acquire eSmartloan, an Online Home Equity Loan Originator

MCLEAN, Va.--(BUSINESS WIRE)--Dec. 14, 2004--Capital One Financial Corporation (NYSE:COF) today announced a definitive agreement under which it will acquire eSmartloan, a leading online originator of home equity loans and mortgages, from the National Bank of Kansas City and eSmartloan management for $155 million in an all-cash transaction. This agreement includes the purchase of a related escrow company from eSmartloan management.

The transaction will enhance Capital One's capabilities in the growing US home equity market. Founded in January 2001, eSmartloan is an online home equity originator with a diverse set of product offerings. eSmartloan expects to originate more than 12,000 loans representing more than $1 billion in volume in 2004.

"The acquisition of eSmartloan is another step in Capital One's diversification and provides an attractive opportunity to further broaden our consumer finance product offerings," said Richard D. Fairbank, Chairman and Chief Executive Officer of Capital One.

eSmartloan's Chief Executive Officer, Lance Melber, will lead Capital One's US home equity business after the transaction has been finalized and report to Larry Klane, Capital One's Executive Vice President, Global Financial Services.

Melber said, "This is the natural next step for our company to continue to build on the success we have enjoyed over the past four years. We believe that our superior technology and proven consultative sales model makes us unrivaled in originating and processing our home equity products. We look forward to driving our business to the next level as an important part of Capital One's growing home equity business."

Klane said, "eSmartloan has succeeded in building a scalable technology platform, a highly skilled sales team, and an outstanding reputation for customer service and speed to close. By combining these strengths with Capital One's powerful national brand, access to 47 million accounts, and expertise in direct marketing, we will enhance the growth of our home equity lending business."

Under the terms of the agreement, eSmartloan will become a subsidiary of Capital One, F.S.B. The transaction, which was approved by the board of directors of Capital One and NBKC, is subject to customary regulatory approvals and is expected to close in the first quarter of 2005. The transaction, including the associated integration costs, is not expected to have a material effect on Capital One's earnings in 2005.

The company cautions that current expectations in this release for earnings, synergies and strategy are forward-looking statements and actual results could differ materially from current expectations due to a number of factors, including competition in the secured mortgage business, the company's ability to integrate operational and strategic platforms, and general economic conditions affecting consumer income and spending. A discussion of these and other factors can be found in Capital One's annual reports and other reports filed with the Securities and Exchange Commission, including, but not limited to, Capital One's report on Form 10-K for the fiscal year ended December 31, 2003.

About Capital One

Headquartered in McLean, Virginia, Capital One Financial Corporation (www.capitalone.com) is a bank holding company whose principal subsidiaries, Capital One Bank and Capital One, F.S.B., offer consumer lending products and Capital One Auto Finance, Inc., offers automobile and other motor vehicle financing products. Capital One's subsidiaries collectively had 47.2 million accounts and $75.5 billion in managed loans outstanding as of September 30, 2004. Capital One, a Fortune 500 company, is one of the largest providers of MasterCard and Visa credit cards in the world. Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 500 index.

About eSmartloan

Based in Overland Park, Kansas, eSmartloan (www.esmartloan.com) provides a diversified offering of full-service mortgage and home equity products through its knowledgeable sales staff and innovative website. eSmartloan is FDIC insured and operates as a division of National Bank of Kansas City.

CONTACT: Capital One Financial Corporation
Mike Rowen
VP, Investor Relations
703-720-2456
or
Tatiana Stead
Director, Corporate Media
703-720-2352

SOURCE: Capital One Financial Corporation