Capital One Reports Third Quarter Earnings per Share (diluted) of $1.00
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MCLEAN, Va., Oct. 16 /PRNewswire-FirstCall/ -- Capital One Financial Corporation (NYSE: COF) today announced earnings for the third quarter of 2008 of $374.1 million, or $1.00 per share (diluted). Earnings from continuing operations in the third quarter of 2008 were $385.8 million, or $1.03 per share. In the third quarter of 2007, the company reported a net loss of $81.6 million, or $.21 per share (diluted), and earnings from continuing operations of $816.4 million, or $2.09 per share (diluted). Earnings per share from continuing operations in the third quarter of 2008 were down $1.06 from the year ago quarter, driven primarily by higher provision expense, and down $0.21 from the second quarter of 2008 with higher revenues and lower non-interest expense being offset by higher provision expense.
Earnings from continuing operations exclude the loss from discontinued operations related to the shutdown of GreenPoint Mortgage in August 2007.
HIGHLIGHTS
-- Credit performance in the third quarter was largely in line with prior expectations and reflects both normal seasonal trends and continued pressure from the weakening economy.
-- The managed charge-off rate for the company increased 15 basis
points to 4.30 percent from the second quarter of 2008. The managed
delinquency rate increased in the third quarter by 35 basis points
from the second quarter of 2008 to 3.99 percent.
-- As expected, the company built its allowance for loan losses in the
third quarter by $208.6 million. At $3.5 billion, this is consistent
with an outlook for $7.2 billion in managed charge-offs through the
end of the third quarter of 2009.
-- Balance sheet and diversified funding remain sources of strength in a volatile market
-- The company issued approximately $750 million in common stock during
the quarter. Coupled with continued capital generation from its
businesses, the company's tangible common equity to tangible managed
assets ratio (TCE) increased to 6.47 percent, above the high end of
the company's target range of 5.5 to 6.0 percent.
-- At the end of the third quarter, the company had readily available
and committed liquidity of $32.0 billion.
-- Total ending deposits increased $6.5 billion to $98.9 billion. The
cost of deposits declined six basis points in the quarter.
"Against the backdrop of increasing economic headwinds and unprecedented change in the financial services landscape, Capital One continues to deliver profits and generate capital," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "But we are not complacent. Based on what we're seeing in the world around us, we are significantly increasing the intensity of our efforts to aggressively manage the company for the benefit of investors and customers through the current downturn."
Total Company Results
-- Managed loans held for investment of $147.3 billion were essentially even with the second quarter of 2008, and increased from the year ago quarter by $2.6 billion, or 1.8 percent.
-- Total revenue increased $124.9 million, or 3.1 percent, compared to the second quarter of 2008, but declined $106.5 million, or 2.5 percent, relative to the third quarter of 2007.
-- Managed revenue margin of 9.38 percent in the third quarter of 2008 was up 26 basis points compared to 9.12 percent in the second quarter of 2008, but down 89 basis points from 10.27 percent in the third quarter of 2007.
-- Managed provision expense was $1.8 billion. The company added $208.6 million to its allowance in the third quarter of 2008. At $3.5 billion, this is consistent with an outlook for $7.2 billion in managed charge-offs through the third quarter of 2009.
-- Total deposits were $98.9 billion at September 30, 2008, an increase of $6.5 billion, or 7.0 percent, relative to June 30, 2008 and an increase of $15.8 billion, or 19.0 percent relative to September 30, 2007.
-- Operating expenses increased $9.6 million relative to the second quarter of 2008. The managed efficiency ratio for the third quarter of 2008 was 42.6 percent, down from 44.2 percent in the second quarter of 2008. The company expects full year operating expenses to be around $6.2 billion. It also expects its operating efficiency ratio to be in the mid-forty percent range or lower for the full year 2008, with seasonally higher expenses in the fourth quarter.
"Given the volatility and strains in the financial system and global economy, we are more committed than ever to supporting our business with a rock solid balance sheet through the recession," said Gary L. Perlin, Capital One's Chief Financial Officer. "Our capital ratios are comfortably above our targets and our readily available liquidity is more than four times our debt refinancing needs for the next year, positioning us not only to navigate this storm but also to capitalize on financially attractive opportunities when they arise."
Segment Results
Local Banking Segment highlights
The Local Banking segment delivered solid and steady results in the third quarter. Higher revenues and lower provision expense drove the growth in profits relative to the second quarter of 2008. Deposits grew in the quarter and deposit pricing and margins improved. Charge-offs and non-performing loans increased modestly in the third quarter, consistent with the continuing deterioration in the economy. Despite these increases, the credit quality and trends in the Local Banking loan portfolio continue to outperform competitors nationally and in the banking footprint. The company expects loans to remain basically flat for the remainder of 2008, while it expects further growth in deposits.
-- Net income of $88.2 million increased $21.1 million, or 31.5 percent, from $67.1 million in the second quarter of 2008.
-- Loans held for investment of $44.7 billion were up slightly relative to the second quarter of 2008.
-- Local Banking deposits increased $800.1 million from the second quarter of 2008 to $75.0 billion.
-- The net charge-off rate of 46 basis points increased from 34 basis points in the second quarter of 2008, while non-performing loans as a percent of loans held for investment of 96 basis points increased from 81 basis points in the second quarter of 2008.
National Lending Segment
The National Lending segment contains the results of the company's U.S. Card, Auto Finance and International lending businesses.
-- Net income for the National Lending segment was down $36.0 million, or 8.8 percent, compared to the second quarter of 2008, and $298.8 million, or 44.6 percent, relative to the third quarter of 2007.
-- The managed charge-off rate for the National Lending segment increased 18 basis points to 5.85 percent in the third quarter of 2008 from 5.67 percent in the second quarter of 2008.
-- The delinquency rate of 5.43 percent in the third quarter of 2008 for the National Lending segment increased 56 basis points from 4.87 percent as of June 30, 2008.
U.S. Card highlights
U.S. Card results in the third quarter reflect the company's continued actions to navigate ongoing economic and cyclical headwinds. The business remains cautious on loan growth and continues to focus its marketing and originations on the parts of the U.S. Card market that the company believes provide the best combination of risk-adjusted returns and losses. Credit performance in the quarter was largely in line with expectations. The U.S. Card business remains well positioned to successfully navigate near-term challenges and to deliver solid results through the economic cycle.
-- U.S. Card reported net income of $345.0 million, a 1.3 percent increase relative to the second quarter of 2008 but a 45.0 percent decrease relative to the third quarter of 2007.
-- Total revenues increased $110.2 million, or 4.3 percent, compared to the second quarter of 2008, but decreased $84.2 million, or 3.1 percent, relative to the prior year's same quarter.
-- Non-interest expenses declined 4.2 percent over the previous quarter and 9.6 percent relative to the third quarter of 2007.
-- Managed loans increased from the second quarter of 2008 by 1.9 percent, or $1.3 billion, to $69.4 billion at September 30, 2008, and increased 4.0 percent from the year ago quarter.
-- Charge-offs declined in the third quarter of 2008 to 6.13 percent from 6.26 percent in the second quarter of 2008, but increased from 3.85 percent in the third quarter of 2007. The company expects the charge-off rate to rise to around seven percent for the fourth quarter, and to the mid-seven percent range for the first quarter of 2009. Delinquencies increased in the third quarter of 2008 to 4.20 percent from 3.85 percent in the previous quarter and from 3.80 percent in the year ago quarter.
Auto Finance highlights
Auto Finance results in the quarter were driven by solid and stable revenue margin and operating efficiency, as well as a lower provision for loan losses as the overall portfolio continues to shrink as a result of the aggressive steps taken by the business to retrench and reposition the business at the beginning of 2008. Credit metrics in the short term will continue to be impacted by seasonality, the seasoning of earlier vintages and broader cyclical economic challenges.
-- Auto Finance posted net income of $14.5 million in the third quarter, compared to $33.6 million last quarter, and a loss of $3.8 million in the third quarter of 2007.
-- Net charge-offs of 5.00 percent increased 116 basis points from 3.84 percent in the second quarter of 2008, while delinquencies increased 170 basis points from 7.62 percent in the second quarter of 2008 to 9.32 percent.
-- Originations in the third quarter of $1.4 billion were down 55.5 percent, or $1.8 billion, compared to the third quarter of 2007.
-- Managed loans of $22.3 billion as of September 30, 2008 were down 4.7 percent relative to the second quarter of 2008 and down 8.3 percent from the third quarter of 2007.
International highlights
The International businesses posted $12.1 million in net income in the third quarter, a decline from both the second quarter of 2008 and the prior year quarter. The main driver of the decline in profitability was an increase in allowance in light of growing economic weakness in the UK. The company remains cautious on the UK business and continues to shrink the portfolio. The Canadian credit card business continues to perform well, with stable credit performance and solid returns.
-- International's net income of $12.1 million declined $21.6 million compared to $33.7 million in the second quarter of 2008, and declined $35.3 million compared to $47.4 million from the third quarter of 2007.
-- Charge-offs of 5.90 percent decreased 17 basis points from 6.07 percent in the second quarter of 2008, but increased 45 basis points from 5.45 percent in the third quarter of 2007.
-- Delinquencies decreased 11 basis points to 5.24 percent from 5.35 percent in the second quarter of 2007 but increased 55 basis points from 4.69 percent in the third quarter of 2007.
-- Managed loans of $10.3 billion as of September 30, 2008 were down 4.5 percent relative to the second quarter of 2008 and down 11.1 percent from the third quarter of 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 October 16, 2008, for loan and deposit growth, the projected charge-off rate in the U.S. Card subsegment for the fourth quarter of 2008 and the first quarter of 2009, estimated loss levels for the 12 months ending September 30, 2009 underlying the provision expense in the third quarter of 2008, credit performance and trends, operating expense and operating efficiency ratios for the full year 2008, dividends, including future financial and operating results, 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; the risk that the benefits of the company's cost savings initiative may not be fully realized; 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, reports on Form 10-Q for the quarters ended March 31, 2008 and June 30, 2008, and report on Form 8-K filed September 24, 2008.
About Capital One
Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries collectively had $98.9 billion in deposits and $147.3 billion in managed loans outstanding as of September 30, 2008. Headquartered in McLean, VA, Capital One has 739 locations primarily in New York, New Jersey, Texas, and Louisiana. It is a diversified bank whose 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: Third quarter 2008 financial results, SEC Filings, and second quarter 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
2008 2008 2007
(in millions, except per
share data and as noted) Q3 Q2 Q3
Earnings (Reported Basis)
Net Interest Income $1,806.6 $1,727.8 $1,624.5
Non-Interest Income 1,696.9 (2) 1,622.3 (2),(5) 2,149.7
Total Revenue (1) 3,503.5 3,350.1 3,774.2
Provision for Loan Losses 1,093.9 829.1 595.5
Marketing Expenses 267.4 288.1 332.7
Restructuring Expenses 15.3 13.6 19.4
Operating Expenses (3) 1,527.5 1,517.9 1,582.2
Income Before Taxes 599.4 701.4 1,244.4
Tax Rate 35.6 % 34.1 % 34.4 %
Income From Continuing
Operations, Net of Tax $385.8 $462.5 $816.4
Loss From Discontinued
Operations, Net of Tax (4) (11.7) (9.6) (898.0)
Net Income (Loss) $374.1 $452.9 $(81.6)
Common Share Statistics
Basic EPS:
Income From Continuing
Operations $1.03 $1.24 $2.11
Loss From Discontinued
Operations $(0.03) $(0.03) $(2.32)
Net Income (Loss) $1.00 $1.21 $(0.21)
Diluted EPS:
Income From Continuing
Operations $1.03 $1.24 $2.09
Loss From Discontinued
Operations $(0.03) $(0.03) $(2.30)
Net Income (Loss) $1.00 $1.21 $(0.21)
Dividends Per Share $0.375 $0.375 $0.03
Tangible Book Value Per Share
(period end) $31.63 $30.77 $28.88
Stock Price Per Share
(period end) $51.00 $38.01 $66.43
Total Market Capitalization
(period end) $19,833.9 $14,280.4 $25,602.1
Shares Outstanding
(period end) 388.9 375.7 385.4
Shares Used to Compute
Basic EPS 372.9 372.3 386.1
Shares Used to Compute
Diluted EPS 374.3 373.7 390.8
Reported Balance Sheet
Statistics (period average) (A)
Average Loans Held for
Investment $98,778 $97,950 $91,745
Average Earning Assets $133,277 $131,629 $118,354
Average Assets $156,958 $154,288 $143,291
Average Interest Bearing
Deposits $84,655 $78,675 $73,338
Total Average Deposits $95,328 $89,522 $84,667
Average Equity $25,046 $24,839 $25,344
Return on Average Assets (ROA) 0.98 % 1.20 % 2.28 %
Return on Average Equity (ROE) 6.16 % 7.45 % 12.89 %
Reported Balance Sheet
Statistics (period end) (A)
Loans Held for Investment $97,965 $97,065 $93,789
Total Assets $154,783 $150,978 $143,884
Interest Bearing Deposits $88,248 $81,655 $72,285
Total Deposits $98,913 $92,407 $83,125
Performance Statistics
(Reported) (A)
Net Interest Income Growth
(annualized) 18 % (19)% 22 %
Non Interest Income Growth
(annualized) 18 % (84)% 36 %
Revenue Growth (annualized) 18 % (54)% 30 %
Net Interest Margin 5.42 % 5.25 % 5.49 %
Revenue Margin 10.51 % 10.18 % 12.76 %
Risk Adjusted Margin (B) 7.90 % 7.77 % 11.13 %
Non Interest Expense as a % of
Average Loans Held for
Investment (annualized) 7.33 % 7.43 % 8.43 %
Efficiency Ratio (C) 51.23 % 53.91 % 50.74 %
Asset Quality Statistics
(Reported) (A)
Allowance $3,520 $3,311 $2,237
Allowance as a % of Reported
Loans Held for Investment 3.59 % 3.41 % 2.39 %
Net Charge-Offs $872 $793 $480
Net Charge-Off Rate 3.53 % 3.24 % 2.09 %
Full-time equivalent employees
(in thousands) 23.5 24.0 27.5
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY
MANAGED BASIS (*)
2008 2008 2007
(in millions) Q3 Q2 Q3
Earnings (Managed Basis)
Net Interest Income $2,889.3 $2,788.0 $2,803.4
Non-Interest Income 1,325.6 (2) 1,302.0 (2),(5) 1,518.0
Total Revenue (1) 4,214.9 4,090.0 4,321.4
Provision for Loan Losses 1,805.3 1,569.0 1,142.7
Marketing Expenses 267.4 288.1 332.7
Restructuring Expenses 15.3 13.6 19.4
Operating Expenses (3) 1,527.5 1,517.9 1,582.2
Income Before Taxes 599.4 701.4 1,244.4
Tax Rate 35.6 % 34.1 % 34.4 %
Income From Continuing
Operations, Net of Tax $385.8 $462.5 $816.4
Loss From Discontinued
Operations, Net of Tax (4) (11.7) (9.6) (898.0)
Net Income (Loss) $374.1 $452.9 $(81.6)
Managed Balance Sheet
Statistics (period average) (A)
Average Loans Held for
Investment $147,247 $147,716 $143,781
Average Earning Assets $179,752 $179,421 $168,238
Average Assets $204,694 $203,308 $194,528
Return on Average Assets
(ROA) 0.75 % 0.91 % 1.68 %
Managed Balance Sheet
Statistics (period end) (A)
Loans Held for Investment $147,346 $147,247 $144,769
Total Assets $203,452 $200,420 $194,019
Tangible Assets(D) $190,141 $187,059 $180,363
Tangible Common Equity (E) $12,301 $11,560 $11,131
Tangible Common Equity to
Tangible Assets Ratio 6.47 %(6) 6.18 % 6.17 %
% Off-Balance Sheet
Securitizations 34 % 34 % 35 %
Performance Statistics
(Managed) (A)
Net Interest Income Growth
(annualized) 15 % (25)% 29 %
Non Interest Income Growth
(annualized) 7 % (76)% 38 %
Revenue Growth (annualized) 12 % (43)% 32 %
Net Interest Margin 6.43 % 6.22 % 6.67 %
Revenue Margin 9.38 % 9.12 % 10.27 %
Risk Adjusted Margin (B) 5.86 % 5.70 % 7.83 %
Non Interest Expense as a %
of Average Loans Held for
Investment (annualized) 4.92 % 4.93 % 5.38 %
Efficiency Ratio ( C ) 42.58 % 44.16 % 44.31 %
Asset Quality Statistics
(Managed) (A)
Net Charge-Offs $1,583 $1,533 $1,027
Net Charge-Off Rate 4.30 % 4.15 % 2.86 %
(*) 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: Q3 2008 - $445.7 million, Q2
2008 - $476.0 million, and Q3 2007 - $310.5 million.
(2) The Company recorded a decrease to its interest-only strips of
$66.7 million in Q3 2008 and $71.0 million in Q2 2008.
(3) Includes core deposit intangible amortization expense of
$47.3 million in Q3 2008, $48.5 million in Q2 2008, and
$52.4 million in Q3 2007 and integration costs of $10.3 million in
Q3 2008, $27.4 million in Q2 2008, and $30.3 million in Q3 2007.
(4) 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.
(5) In Q2 2008 the Company elected to convert and sell 154,991 shares of
MasterCard class B common stock. The Company recognized gains of
$44.9 million in non-interest income from this transaction.
(6) The Q3 2008 TCE ratio reflects the issuance of 15,527,000 shares on
September 30, 2008 at $49 per share.
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 and preferred interests less
intangible assets and related deferred tax liabilities. Tangible
Common Equity on a reported and managed basis is the same.
CAPITAL ONE FINANCIAL CORPORATION (COF)
SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS
MANAGED BASIS (1)
2008 2008 2007
(in thousands) Q3 Q2 Q3 (6)
Local Banking:
Interest Income $1,519,217 $1,489,612 $1,751,898
Interest Expense 895,481 899,907 1,165,594
Net interest income $623,736 $589,705 $586,304
Non-interest income 215,701 192,758 232,662
Provision for loan losses 81,052 92,043 (58,192)
Other non-interest expenses 622,697 587,211 577,309
Income tax provision 47,491 36,123 104,353
Net income $88,197 $67,086 $195,496
Loans Held for Investment $44,662,818 $44,270,734 $42,233,665
Average Loans Held for
Investment $44,319,475 $44,250,451 $41,992,618
Core Deposits (2) $64,386,336 $63,407,571 $62,494,588
Total Deposits $75,045,812 $74,245,677 $72,795,566
Loans Held for Investment
Yield 6.25% 6.35% 7.13%
Net Interest Margin -
Loans (3) 1.98% 1.99% 1.79%
Net Interest Margin -
Deposits (4) 2.18% 2.04% 2.09%
Efficiency Ratio (5) 74.18% 75.05% 70.49%
Net charge-off rate 0.46% 0.34% 0.20%
Non Performing Loans $430,211 $359,017 $112,794
Foreclosed Assets 41,290 29,607 14,083
Non Performing Assets (9) $471,501 $388,624 $126,877
Non Performing Loans as a %
of Loans Held for Investment 0.96% 0.81% 0.27%
Non Performing Asset
Rate (9) 1.05% 0.88% 0.30%
Non-Interest Expenses as a
% of Average Loans Held
for Investment 5.62% 5.31% 5.50%
Number of Active ATMs 1,310 1,303 1,282
Number of Locations 739 740 732
National Lending (8):
Interest Income $3,251,446 $3,181,773 $3,504,019
Interest Expense 1,019,911 1,014,244 1,228,280
Net interest income $2,231,535 $2,167,529 $2,275,739
Non-interest income 1,195,622 1,164,810 1,274,688
Provision for loan losses 1,678,513 1,470,642 1,195,995
Other non-interest expenses 1,176,396 1,236,567 1,333,688
Income tax provision 200,626 217,496 350,277
Net income $371,622 $407,634 $670,467
Loans Held for Investment $101,922,850 $102,201,802 $102,556,271
Average Loans Held for
Investment $102,142,752 $102,629,246 $101,805,584
Core Deposits (2) $2,171 $1,954 $470
Total Deposits $1,650,507 $1,644,241 $2,295,131
Loans Held for Investment
Yield 12.73% 12.40% 13.77%
Net Interest Margin 8.74% 8.45% 8.94%
Revenue Margin 13.42% 12.99% 13.95%
Risk Adjusted Margin 7.57% 7.31% 9.99%
Non-Interest Expenses as a
% of Average Loans Held
for Investment 4.61% 4.82% 5.24%
Efficiency Ratio (5) 34.33% 37.11% 37.56%
Net charge-off rate 5.85% 5.67% 3.96%
Delinquency Rate (30+ days) 5.43% 4.87% 4.70%
Number of Loan Accounts (000s) 45,314 45,812 48,473
Other:
Net interest income $34,060 $30,761 $(58,605)
Non-interest income (85,764) (55,594) 10,639
Provision for loan losses 45,705 6,342 5,022
Restructuring expenses 15,345 13,560 19,354
Other non-interest expenses (4,230) (17,737) 3,870
Income tax provision
(benefit) (34,494) (14,776) (26,620)
Net income (loss) $(74,030) $(12,222) $(49,592)
Loans Held for Investment $760,078 $774,724 $(21,375)
Core Deposits (2) $20,800,890 $14,800,701 $6,373,515
Total Deposits $22,216,655 $16,517,143 $8,034,332
Total:
Interest Income $4,346,262 $4,270,572 $4,646,431
Interest Expense 1,456,931 1,482,577 1,842,993
Net interest income $2,889,331 $2,787,995 $2,803,438
Non-interest income 1,325,559 1,301,974 1,517,989
Provision for loan losses 1,805,270 1,569,027 1,142,825
Restructuring expenses 15,345 13,560 19,354
Other non-interest expenses 1,794,863 1,806,041 1,914,867
Income tax provision 213,623 238,843 428,010
Net income $385,789 $462,498 $816,371
Loans Held for Investment $147,345,746 $147,247,260 $144,768,561
Core Deposits (2) $85,189,397 $78,210,226 $68,868,573
Total Deposits $98,912,974 $92,407,061 $83,125,029
CAPITAL ONE FINANCIAL CORPORATION (COF)
LOCAL BANKING SEGMENT FINANCIAL & STATISTICAL INFORMATION
2008 2008 2007
(in thousands) Q3 Q2 Q3
Loans Held for Investment:
Commercial Lending
Commercial and Multi-Family
Real Estate $13,043,369 $12,948,037 $11,961,400
Middle Market 9,768,420 8,923,233 7,544,926
Small Ticket Commercial Real
Estate 2,695,570 2,746,931 2,335,012
Specialty Lending 3,634,212 3,693,532 3,019,100
Total Commercial Lending $29,141,571 $28,311,733 $24,860,438
Small Business Lending $4,580,299 $4,555,432 $4,612,400
Consumer Lending
Mortgages $7,402,290 $7,803,032 $8,902,468
Branch Based Home Equity & Other
Consumer 3,782,342 3,887,936 4,075,828
Total Consumer Lending $11,184,632 $11,690,968 $12,978,296
Other $(243,684) $(287,399) $(217,469)
Total Loans Held for Investment $44,662,818 $44,270,734 $42,233,665
Non Performing Asset Rates (9):
Commercial Lending
Commercial and Multi-Family Real
Estate 1.06% 0.87% 0.08%
Middle Market 0.26% 0.31% 0.29%
Small Ticket Commercial Real
Estate 4.49% 2.74% 0.27%
Specialty Lending 0.38% 0.25% 0.19%
Total Commercial Lending 1.03% 0.79% 0.17%
Small Business Lending 1.14% 1.17% 0.93%
Consumer Lending
Mortgages 1.41% 1.22% 0.35%
Branch Based Home Equity & Other
Consumer 0.40% 0.39% 0.25%
Total Consumer Lending 1.07% 0.95% 0.32%
Total Non Performing Asset Rate 1.05% 0.88% 0.30%
Net Charge Off Rates:
Commercial Lending
Commercial and Multi-Family Real
Estate 0.14% 0.10% 0.00%
Middle Market 0.15% 0.05% (0.04)%
Small Ticket Commercial Real
Estate 0.10% (0.03)% 0.35%
Specialty Lending 0.26% 0.16% 0.14%
Total Commercial Lending 0.16% 0.08% 0.04%
Small Business Lending 1.17% 0.91% 0.47%
Consumer Lending
Mortgages 0.50% 0.35% 0.08%
Branch Based Home Equity & Other
Consumer 1.01% 1.02% 0.79%
Total Consumer Lending 0.67% 0.57% 0.31%
Total Net Charge Off Rate 0.46% 0.34% 0.20%
CAPITAL ONE FINANCIAL CORPORATION (COF)
NATIONAL LENDING SUBSEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING
OPERATIONS
MANAGED BASIS (1), (8)
2008 2008 2007
(in thousands) Q3 Q2 Q3 (6)
US Card:
Interest Income $2,240,896 $2,132,284 $2,418,890
Interest Expense 624,858 608,655 798,493
Net interest income $1,616,038 $1,523,629 $1,620,397
Non-interest income 1,027,918 1,010,177 1,107,801
Provision for loan losses 1,240,580 1,099,453 807,318
Non-interest expenses 872,588 910,619 965,351
Income tax provision 185,775 183,307 328,702
Net income $345,013 $340,427 $626,827
Loans Held for Investment $69,361,743 $68,059,998 $66,687,232
Average Loans Held for
Investment $68,581,983 $67,762,384 $66,472,124
Loans Held for Investment Yield 13.07% 12.59% 14.56%
Net Interest Margin 9.43% 8.99% 9.75%
Revenue Margin 15.42% 14.96% 16.42%
Risk Adjusted Margin 9.29% 8.70% 12.56%
Non-Interest Expenses as a % of
Average Loans Held for
Investment 5.09% 5.38% 5.81%
Efficiency Ratio (5) 33.00% 35.94% 35.38%
Net charge-off rate 6.13% 6.26% 3.85%
Delinquency Rate (30+ days) 4.20% 3.85% 3.80%
Purchase Volume (7) $26,536,070 $26,738,213 $26,628,978
Number of Loan Accounts (000s) 37,916 38,415 41,081
Auto Finance:
Interest Income $635,305 $666,499 $661,471
Interest Expense 265,804 276,911 283,949
Net interest income $369,501 $389,588 $377,522
Non-interest income 14,607 15,672 13,514
Provision for loan losses 244,078 230,614 244,537
Non-interest expenses 117,677 123,021 152,275
Income tax (benefit) provision 7,824 18,069 (1,987)
Net (loss) income $14,529 $33,556 $(3,789)
Loans Held for Investment $22,306,394 $23,401,160 $24,335,242
Average Loans Held for
Investment $22,857,540 $24,098,881 $24,170,047
Loans Held for Investment Yield 11.12% 11.06% 10.95%
Net Interest Margin 6.47% 6.47% 6.25%
Revenue Margin 6.72% 6.73% 6.47%
Risk Adjusted Margin 1.73% 2.88% 2.91%
Non-Interest Expenses as a % of
Average Loans Held for
Investment 2.06% 2.04% 2.52%
Efficiency Ratio (5) 30.64% 30.36% 38.94%
Net charge-off rate 5.00% 3.84% 3.56%
Delinquency Rate (30+ days) 9.32% 7.62% 7.15%
Auto Loan Originations $1,444,291 $1,513,686 $3,248,747
Number of Loan Accounts (000s) 1,665 1,710 1,731
International:
Interest Income $375,245 $382,990 $423,658
Interest Expense 129,249 128,678 145,838
Net interest income $245,996 $254,312 $277,820
Non-interest income 153,097 138,961 153,373
Provision for loan losses 193,855 140,575 144,140
Non-interest expenses 186,131 202,927 216,062
Income tax provision 7,027 16,120 23,562
Net income $12,080 $33,651 $47,429
Loans Held for Investment $10,254,713 $10,740,644 $11,533,797
Average Loans Held for
Investment $10,703,229 $10,767,981 $11,163,413
Loans Held for Investment Yield 14.02% 14.23% 15.18%
Net Interest Margin 9.19% 9.45% 9.95%
Revenue Margin 14.91% 14.61% 15.45%
Risk Adjusted Margin 9.01% 8.54% 10.00%
Non-Interest Expenses as a % of
Average Loans Held for
Investment 6.96% 7.54% 7.74%
Efficiency Ratio (5) 46.64% 51.60% 50.11%
Net charge-off rate 5.90% 6.07% 5.45%
Delinquency Rate (30+ days) 5.24% 5.35% 4.69%
Purchase Volume (7) $2,857,975 $2,879,223 $2,369,696
Number of Loan Accounts (000s) 5,733 5,687 5,661
CAPITAL ONE FINANCIAL CORPORATION (COF) SEGMENT AND NATIONAL LENDING
SUBSEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS NOTES
(1) 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."
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 subsegments
from U.S. Card, Auto Finance and Global Financial Services to U.S.
Card and Other National Lending. The U.S. Card subsegment 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 subsegment are
separately disclosed. Segment and subsegment 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.
CAPITAL ONE FINANCIAL CORPORATION
Reconciliation to GAAP Financial Measures
For the Three Months Ended September 30, 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 $1,806,645 $1,082,685 $2,889,330
Non-interest income 1,696,891 (371,332) 1,325,559
Total revenue 3,503,536 711,353 4,214,889
Provision for loan and lease
losses 1,093,917 711,353 1,805,270
Net charge-offs $872,077 $711,353 $1,583,430
Balance Sheet Measures
Loans held for investment $97,965,351 $49,380,395 $147,345,746
Total assets $154,803,113 $48,668,878 $203,471,991
Average loans held for
investment $98,778,393 $48,469,005 $147,247,398
Average earning assets $133,314,755 $46,475,814 $179,790,569
Average total assets $156,997,954 $47,735,935 $204,733,889
Delinquencies $3,768,339 $2,106,140 $5,874,479
(1) Income statement adjustments reclassify the net of finance charges of
$1,369.0 million, past-due fees of $240.8 million, other interest
income of $(35.3) million and interest expense of $491.8 million; and
net charge-offs of $711.4 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
Sept 30 June 30 Sept 30
2008 2008 2007
Assets:
Cash and due from banks $3,511,558 $2,280,244 $1,819,121
Federal funds sold and resale
agreements 1,435,521 1,526,799 1,922,735
Interest-bearing deposits at
other banks 673,662 717,572 703,805
Cash and cash equivalents 5,620,741 4,524,615 4,445,661
Securities available for sale 26,969,471 25,028,853 19,959,247
Mortgage loans held for sale 98,900 111,824 1,454,457
Loans held for investment 97,965,351 97,065,238 95,405,217
Less: Allowance for loan
and lease losses (3,519,610) (3,311,003) (2,320,000)
Net loans held for investment 94,445,741 93,754,235 93,085,217
Accounts receivable from
securitizations 4,980,823 5,301,906 6,905,859
Premises and equipment, net 2,305,286 2,321,487 2,268,034
Interest receivable 750,717 778,595 793,693
Goodwill 12,815,642 12,826,738 12,952,838
Other 6,815,792 6,466,018 5,289,829
Total assets $154,803,113 $151,114,271 $147,154,835
Liabilities:
Non-interest-bearing deposits $10,665,286 $10,752,059 $10,840,189
Interest-bearing deposits 88,247,688 81,655,001 72,284,840
Senior and subordinated notes 8,278,856 8,506,339 10,784,182
Other borrowings 15,962,072 19,302,185 22,940,304
Interest payable 508,091 621,489 552,674
Other 5,529,580 5,355,733 4,965,794
Total liabilities 129,191,573 126,192,806 122,367,983
Stockholders' Equity:
Common stock 4,383 4,223 4,183
Paid-in capital, net 16,752,078 15,966,810 15,768,525
Retained earnings and
cumulative other
comprehensive income 12,020,490 12,115,480 11,395,226
Less: Treasury stock, at
cost (3,165,411) (3,165,048) (2,381,082)
Total stockholders' equity 25,611,540 24,921,465 24,786,852
Total liabilities and
stockholders' equity $154,803,113 $151,114,271 $147,154,835
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income
(in thousands, except per share data)(unaudited)
Three Months Ended
Sept 30 June 30 Sept 30
2008 2008 2007
Interest Income:
Loans held for investment,
including past-due fees $2,347,480 $2,297,709 $2,381,096
Securities available for sale 317,274 281,089 252,550
Other 107,042 113,059 133,321
Total interest income 2,771,796 2,691,857 2,766,967
Interest Expense:
Deposits 624,319 592,576 740,091
Senior and subordinated notes 96,568 114,797 144,643
Other borrowings 244,264 256,728 257,759
Total interest expense 965,151 964,101 1,142,493
Net interest income 1,806,645 1,727,756 1,624,474
Provision for loan and lease losses 1,093,917 829,130 595,534
Net interest income after provision
for loan and lease losses 712,728 898,626 1,028,940
Non-Interest Income:
Servicing and securitizations 875,718 834,740 1,354,303
Service charges and other customer-
related fees 576,762 524,209 522,374
Mortgage servicing and other 39,183 16,552 52,661
Interchange 148,076 132,730 103,799
Other 57,152 114,085 116,525
Total non-interest income 1,696,891 1,622,316 2,149,662
Non-Interest Expense:
Salaries and associate benefits 571,686 578,572 627,358
Marketing 267,372 288,100 332,693
Communications and data processing 176,720 195,102 194,551
Supplies and equipment 126,781 131,937 134,639
Occupancy 96,483 80,137 77,597
Restructuring expense 15,306 13,560 19,354
Other 555,858 532,193 548,029
Total non-interest expense 1,810,206 1,819,601 1,934,221
Income from continuing operations
before income taxes 599,413 701,341 1,244,381
Income taxes 213,624 238,843 428,010
Income from continuing operations,
net of tax 385,789 462,498 816,371
Loss from discontinued operations,
net of tax (1) (11,650) (9,593) (898,029)
Net income $374,139 $452,905 $(81,658)
Basic earnings per share
Income from continuing operations $1.03 $1.24 $2.11
Loss from discontinued operations (0.03) (0.03) (2.32)
Net income $1.00 $1.21 $(0.21)
Diluted earnings per share
Income from continuing operations $1.03 $1.24 $2.09
Loss from discontinued operations (0.03) (0.03) (2.30)
Net income $1.00 $1.21 $(0.21)
Dividends paid per share $0.375 $0.375 $0.03
Nine Months Ended
Sept 30 Sept 30
2008 2007
Interest Income:
Loans held for investment, including
past-due fees $7,153,582 $6,963,349
Securities available for sale 856,110 694,608
Other 333,486 460,005
Total interest income 8,343,178 8,117,962
Interest Expense:
Deposits 1,827,284 2,220,177
Senior and subordinated notes 352,335 417,250
Other borrowings 817,241 712,937
Total interest expense 2,996,860 3,350,364
Net interest income 5,346,318 4,767,598
Provision for loan and lease losses 3,002,119 1,342,292
Net interest income after provision
for loan and lease losses 2,344,199 3,425,306
Non-Interest Income:
Servicing and securitizations 2,793,520 3,569,281
Service charges and other customer-
related fees 1,675,032 1,484,820
Mortgage servicing and other 90,990 172,476
Interchange 432,708 347,889
Other 383,435 321,417
Total non-interest income 5,375,685 5,895,883
Non-Interest Expense:
Salaries and associate benefits 1,761,538 1,970,433
Marketing 853,265 989,654
Communications and data processing 559,065 569,405
Supplies and equipment 389,649 384,971
Occupancy 264,700 230,835
Restructuring expense 81,625 110,428
Other 1,542,242 1,687,077
Total non-interest expense 5,452,084 5,942,803
Income from continuing operations
before income taxes 2,267,800 3,378,386
Income taxes 786,958 1,108,279
Income from continuing operations,
net of tax 1,480,842 2,270,107
Loss from discontinued operations,
net of tax(1) (105,294) (926,343)
Net income $1,375,548 $1,343,764
Basic earnings per share
Income from continuing operations $3.98 $5.74
Loss from discontinued operations (0.28) (2.34)
Net income $3.70 $3.40
Diluted earnings per share
Income from continuing operations $3.96 $5.66
Loss from discontinued operations (0.28) (2.31)
Net income $3.68 $3.35
Dividends paid per share $1.125 $0.08
(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 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 6/30/08 (2)
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans held for investment $97,949,572 $2,297,709 9.38%
Securities available for sale 24,165,577 281,089 4.65%
Other 9,513,873 113,059 4.75%
Total earning assets $131,629,022 $2,691,857 8.18%
Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts $8,769,608 $24,802 1.13%
Money market deposit accounts 24,881,125 165,871 2.67%
Savings accounts 8,191,586 19,521 0.95%
Other consumer time deposits 22,676,841 243,921 4.30%
Public fund CD's of $100,000 or
more 1,476,155 10,313 2.79%
CD's of $100,000 or more 9,124,586 98,516 4.32%
Foreign time deposits 3,555,189 29,632 3.33%
Total interest-bearing deposits $78,675,090 $592,576 3.01%
Senior and subordinated notes 9,125,017 114,797 5.03%
Other borrowings 24,851,821 256,728 4.13%
Total interest-bearing liabilities $112,651,928 $964,101 3.42%
Net interest spread 4.76%
Interest income to average
earning assets 8.18%
Interest expense to average
earning assets 2.93%
Net interest margin 5.25%
Reported Quarter Ended 9/30/07 (2)
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans held for investment 91,744,846 2,381,096 10.38%
Securities available for sale 20,041,177 252,550 5.04%
Other 6,568,358 133,321 8.12%
Total earning assets $118,354,381 $2,766,967 9.35%
Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts $9,192,861 $59,275 2.58%
Money market deposit accounts 24,046,304 269,628 4.49%
Savings accounts 8,345,638 37,474 1.80%
Other consumer time deposits 17,203,453 194,256 4.52%
Public fund CD's of $100,000 or
more 1,884,767 23,092 4.90%
CD's of $100,000 or more 8,673,860 103,296 4.76%
Foreign time deposits 3,991,056 53,070 5.32%
Total interest-bearing deposits $73,337,939 $740,091 4.04%
Senior and subordinated notes 9,811,821 144,643 5.90%
Other borrowings 19,110,111 257,759 5.40%
Total interest-bearing liabilities $102,259,871 $1,142,493 4.47%
Net interest spread 4.88%
Interest income to average
earning assets 9.35%
Interest expense to average
earning assets 3.86%
Net interest margin 5.49%
(1) Average balances, income and expenses, yields and rates are based on
continuing operations.
(2) Certain prior period amounts have been reclassified to conform with
current period presentation.
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates (2)
(dollars in thousands)(unaudited)
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 6/30/08 (3)
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans held for investment $147,715,693 $3,929,069 10.64%
Securities available for sale 24,165,577 281,089 4.65%
Other 7,539,256 60,414 3.21%
Total earning assets $179,420,526 $4,270,572 9.52%
Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts $8,769,608 $24,802 1.13%
Money market deposit accounts 24,881,125 165,871 2.67%
Savings accounts 8,191,586 19,521 0.95%
Other consumer time deposits 22,676,841 243,921 4.30%
Public fund CD's of $100,000 or
more 1,476,155 10,313 2.79%
CD's of $100,000 or more 9,124,586 98,516 4.32%
Foreign time deposits 3,555,189 29,632 3.33%
Total interest-bearing deposits $78,675,090 $592,576 3.01%
Senior and subordinated notes 9,125,017 114,797 5.03%
Other borrowings 24,851,821 256,728 4.13%
Securitization liability 49,317,336 518,477 4.21%
Total interest-bearing liabilities $161,969,264 $1,482,578 3.66%
Net interest spread 5.86%
Interest income to average
earning assets 9.52%
Interest expense to average
earning assets 3.30%
Net interest margin 6.22%
Managed (1) Quarter Ended 9/30/07 (3)
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans held for investment $143,781,268 $4,324,272 12.03%
Securities available for sale 20,041,177 252,550 5.04%
Other 4,415,978 69,610 6.31%
Total earning assets $168,238,423 $4,646,432 11.05%
Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts $9,192,861 $59,275 2.58%
Money market deposit accounts 24,046,304 $269,628 4.49%
Savings accounts 8,345,638 $37,474 1.80%
Other consumer time deposits 17,203,453 $194,256 4.52%
Public fund CD's of $100,000 or
more 1,884,767 $23,092 4.90%
CD's of $100,000 or more 8,673,860 $103,296 4.76%
Foreign time deposits 3,991,056 $53,070 5.32%
Total interest-bearing deposits $73,337,939 $740,091 4.04%
Senior and subordinated notes 9,811,821 $144,643 5.90%
Other borrowings 19,110,111 $257,759 5.40%
Securitization liability 51,320,446 $700,501 5.46%
Total interest-bearing liabilities $153,580,317 $1,842,994 4.80%
Net interest spread 6.25%
Interest income to average
earning assets 11.05%
Interest expense to average
earning assets 4.38%
Net interest margin 6.67%
(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.
(3) Certain prior period amounts have been reclassified to conform with
current period presentation.
SOURCE Capital One Financial Corporation