Print Page | Close Window
News Release

Capital One Reports Record Third Quarter Earnings

FALLS CHURCH, Va., Oct. 11 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced record third quarter 2000 earnings of $0.58 per share, or $122.1 million, versus earnings of $0.45 per share, or $95.4 million, for the comparable period in the prior year, an increase of 29 percent.

"This year continues to be a banner year for Capital One, as our disciplined marketing strategies and investments are creating great value for our customers. This quarter we posted our thirteenth consecutive quarter of record earnings, and we are on track to deliver 30 percent earnings growth for the year," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. Fairbank cited the risk-adjusted margin, which reached an all time record of 17.24 percent, up from the previous record of 17.03 percent set last quarter, as a key measurement of Capital One's success.

During the third quarter, Capital One added 2.3 million net new accounts, bringing total accounts to 29.4 million. For the quarter, Capital One's managed consumer loan balances increased by $2.3 billion to $24.2 billion. On the Internet, online account originations and online account servicing increased to 760 thousand and 1.2 million, respectively, as of the end of the third quarter.

"Our robust growth reflects our ability to bring empowering financial solutions to our more than 29 million customers, while delivering unique products and services to meet their individual needs," said Nigel W. Morris, Capital One's President and Chief Operating Officer. "Our ability to deliver the right product to the right customer allowed us to add more than 25,000 net new customers a day and grow our managed loans during the quarter by an annualized rate of more than 40 percent."

Contributing to the strong account and managed loan growth during the quarter was an increase in marketing expense to a record $233 million compared to $212 million in the second quarter of 2000 and $175 million in the comparable period of the prior year.

The managed net charge-off ratio remained under four percent for the seventh straight quarter and was 3.80 percent for the three months ended September 30, 2000. In addition, the Company added $50 million to the allowance for loan losses during the third quarter of 2000, increasing the allowance to $457 million, or 3.71 percent of reported consumer loans, as of September 30, 2000.

Headquartered in Falls Church, Virginia, Capital One Financial Corporation (www.CapitalOne.com) is a holding company whose principal subsidiaries, Capital One Bank and Capital One, F.S.B., offer consumer lending products. Capital One's subsidiaries collectively had 29.4 million customers and $24.2 billion in managed loans outstanding as of September 30, 2000. Capital One is one of the major financial service providers on the Internet, with online account decisioning, real-time account numbering, online retail deposits and a growing number of customers serviced online. Capital One is a FORTUNE 500 company that trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 500 index.

                      CAPITAL ONE FINANCIAL CORPORATION (COF)
                          FINANCIAL & STATISTICAL SUMMARY

                                                        2000           2000
    (in millions, except per share data and as noted)    Q3             Q2

    Earnings (Managed Basis)
    Net Interest Income                            $   665.1      $   614.4
    Non-Interest Income                                619.9          554.4
    Total Revenue                                    1,285.0        1,168.8
    Provision for Loan Losses                          269.0          245.0
    Marketing Expenses                                 233.2          211.6
    Operating Expenses                                 585.8          530.7
    Income Before Taxes                                197.0          181.5
    Tax Rate                                            38.0%          38.0%
    Net Income                                     $   122.1      $   112.5

    Common Share Statistics
    Basic EPS                                      $    0.62      $    0.57
    Diluted EPS                                    $    0.58      $    0.54
    Dividends Per Share                            $    0.03      $    0.03
    Book Value Per Share (period end)              $    9.02      $    8.39
    Stock Price Per Share (period end)             $   70.06      $   44.63
    Total Market Capitalization (period end)       $13,783.1      $ 8,747.4
    Shares Outstanding (period end)                    196.7          196.0
    Shares Used to Compute Basic EPS                   196.3          196.0
    Shares Used to Compute Diluted EPS                 210.1          208.6

    Managed Loan Statistics (period avg.)
    Average Loans                                  $  23,020      $  20,915
    Average Earning Assets                         $  24,749      $  22,581
    Average Assets                                 $  27,015      $  24,567
    Average Equity                                 $   1,743      $   1,626
    Net Interest Margin                                10.75%         10.88%
    Risk Adjusted Margin(1)                            17.24%         17.03%
    Return on Average Assets (ROA)                      1.81%          1.83%
    Return on Average Equity (ROE)                     28.02%         27.68%
    Net Charge-Off Rate                                 3.80%          3.97%
    Net Charge-Offs                                $   218.4      $   207.6
    Cost Per Account (in dollars)                  $   82.84      $   80.97

    Managed Loan Statistics (period end)
    Reported Loans                                 $  12,331      $  11,383
    Securitized Loans                                 11,821         10,500
    Total Loans                                    $  24,152      $  21,883
    Delinquency Rate (30+ days)                         5.32%          5.35%
    Number of Accounts (000's)                        29,437         27,133
    Total Assets                                   $  28,185      $  25,610
    Capital, Including Preferred Interests         $ 1,873.8      $ 1,743.9
    Capital to Managed Assets Ratio                     6.65%          6.81%

(1) Risk adjusted margin is total revenue less net charge-offs as a

         percentage of average earning assets.


                      CAPITAL ONE FINANCIAL CORPORATION (COF)
                          FINANCIAL & STATISTICAL SUMMARY

                                                        2000        1999
     (in millions, except per share data and as noted)   Q1          Q4

     Earnings (Managed Basis)
     Net Interest Income                            $   618.9   $   574.8
     Non-Interest Income                                489.3       473.6
     Total Revenue                                    1,108.2     1,048.4
     Provision for Loan Losses                          226.1       218.0
     Marketing Expenses                                 201.9       202.4
     Operating Expenses                                 508.0       478.8
     Income Before Taxes                                172.1       149.2
     Tax Rate                                            38.0%       34.4%
     Net Income                                     $   106.7   $    97.9

     Common Share Statistics
     Basic EPS                                      $    0.54   $    0.50
     Diluted EPS                                    $    0.51   $    0.47
     Dividends Per Share                            $    0.03   $    0.03
     Book Value Per Share (period end)              $    7.93   $    7.69
     Stock Price Per Share (period end)             $   47.94   $   48.19
     Total Market Capitalization (period end)       $ 9,376.5   $ 9,495.2
     Shares Outstanding (period end)                    195.6       197.0
     Shares Used to Compute Basic EPS                   196.6       197.3
     Shares Used to Compute Diluted EPS                 208.7       210.3

     Managed Loan Statistics (period avg.)
     Average Loans                                  $  20,181   $  18,974
     Average Earning Assets                         $  22,038   $  21,323
     Average Assets                                 $  23,497   $  22,714
     Average Equity                                 $   1,567   $   1,493
     Net Interest Margin                                11.23%      10.78%
     Risk Adjusted Margin(1)                            16.57%      16.24%
     Return on Average Assets (ROA)                      1.82%       1.72%
     Return on Average Equity (ROE)                     27.24%      26.22%
     Net Charge-Off Rate                                 3.87%       3.86%
     Net Charge-Offs                                $   195.3   $   182.9
     Cost Per Account (in dollars)                  $   82.93   $   85.98

     Managed Loan Statistics (period end)
     Reported Loans                                 $   9,449   $   9,914
     Securitized Loans                                 10,850      10,323
     Total Loans                                    $  20,299   $  20,237
     Delinquency Rate (30+ days)                         5.26%       5.23%
     Number of Accounts (000's)                        25,302      23,705
     Total Assets                                   $  23,361   $  23,638
     Capital, Including Preferred Interests         $ 1,649.3   $ 1,613.7
     Capital to Managed Assets Ratio                     7.06%       6.83%

(1) Risk adjusted margin is total revenue less net charge-offs as a

         percentage of average earning assets.


                      CAPITAL ONE FINANCIAL CORPORATION (COF)
                          FINANCIAL & STATISTICAL SUMMARY

                                                        1999
     (in millions, except per share data and as noted)   Q3

     Earnings (Managed Basis)
     Net Interest Income                            $   558.9
     Non-Interest Income                                438.6
     Total Revenue                                      997.5
     Provision for Loan Losses                          214.3
     Marketing Expenses                                 175.2
     Operating Expenses                                 454.3
     Income Before Taxes                                153.8
     Tax Rate                                            38.0%
     Net Income                                     $    95.4

     Common Share Statistics
     Basic EPS                                      $    0.48
     Diluted EPS                                    $    0.45
     Dividends Per Share                            $    0.03
     Book Value Per Share (period end)              $    7.29
     Stock Price Per Share (period end)             $   39.00
     Total Market Capitalization (period end)       $ 7,686.9
     Shares Outstanding (period end)                    197.1
     Shares Used to Compute Basic EPS                   197.4
     Shares Used to Compute Diluted EPS                 210.1

     Managed Loan Statistics (period avg.)
     Average Loans                                  $  18,162
     Average Earning Assets                         $  20,060
     Average Assets                                 $  21,563
     Average Equity                                 $   1,461
     Net Interest Margin                                11.14%
     Risk Adjusted Margin(1)                            16.38%
     Return on Average Assets (ROA)                      1.77%
     Return on Average Equity (ROE)                     26.12%
     Net Charge-Off Rate                                 3.88%
     Net Charge-Offs                                $   176.0
     Cost Per Account (in dollars)                  $   90.72

     Managed Loan Statistics (period end)
     Reported Loans                                 $   8,286
     Securitized Loans                                 10,231
     Total Loans                                    $  18,517
     Delinquency Rate (30+ days)                         5.06%
     Number of Accounts (000's)                        20,845
     Total Assets                                   $  21,577
     Capital, Including Preferred Interests         $ 1,535.3
     Capital to Managed Assets Ratio                     7.12%

(1) Risk adjusted margin is total revenue less net charge-offs as a

         percentage of average earning assets.


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

                                                         September 30
                                                             2000

     Assets:
     Cash and due from banks                               $    81,403
     Federal funds sold and resale agreements                   12,688
     Interest-bearing deposits at other banks                  128,377
       Cash and cash equivalents                               222,468
     Securities available for sale                           1,652,330
     Consumer loans                                         12,331,088
       Less:  Allowance for loan losses                       (457,000)
     Net loans                                              11,874,088
     Premises and equipment, net                               560,974
     Interest receivable                                        93,817
     Accounts receivable from securitizations                1,403,377
     Other                                                     571,771
        Total assets                                       $16,378,825

     Liabilities:
     Interest-bearing deposits                             $ 6,323,924
     Other borrowings                                        2,820,533
     Senior notes                                            4,119,101
     Interest payable                                          109,842
     Other                                                   1,230,037
        Total liabilities                                   14,603,437

     Stockholders' Equity:
     Common stock                                                1,997
     Paid-in capital, net                                      559,595
     Retained earnings and cumulative
       other comprehensive income                            1,322,744
        Less:              Treasury stock, at cost

(108,948)

        Total stockholders' equity                           1,775,388
        Total liabilities and stockholders' equity         $16,378,825


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

                                                            June 30
                                                              2000

     Assets:
     Cash and due from banks                               $   100,999
     Federal funds sold and resale agreements                   10,000
     Interest-bearing deposits at other banks                   78,226
       Cash and cash equivalents                               189,225
     Securities available for sale                           1,507,770
     Consumer loans                                         11,382,780
       Less:  Allowance for loan losses                       (407,000)
     Net loans                                              10,975,780
     Premises and equipment, net                               545,262
     Interest receivable                                        51,799
     Accounts receivable from securitizations                1,302,424
     Other                                                     554,631
        Total assets                                       $15,126,891


     Liabilities:
     Interest-bearing deposits                             $ 5,288,927
     Other borrowings                                        2,773,050
     Senior notes                                            4,176,394
     Interest payable                                           96,493
     Other                                                   1,146,451
        Total liabilities                                   13,481,315

     Stockholders' Equity:
     Common stock                                                1,997
     Paid-in capital, net                                      578,915
     Retained earnings and cumulative
       other comprehensive income                            1,197,370
        Less: Treasury stock, at cost                         (132,706)
        Total stockholders' equity                           1,645,576
        Total liabilities and stockholders' equity         $15,126,891


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

                                                           September 30
                                                               1999

     Assets:
     Cash and due from banks                               $    59,934
     Federal funds sold and resale agreements
     Interest-bearing deposits at other banks                   53,493
       Cash and cash equivalents                               113,427
     Securities available for sale                           1,708,609
     Consumer loans                                          8,286,210
       Less:  Allowance for loan losses                       (306,000)
     Net loans                                               7,980,210
     Premises and equipment, net                               429,504
     Interest receivable                                        65,350
     Accounts receivable from securitizations                  614,962
     Other                                                     460,847
     Total assets                                          $11,372,909

     Liabilities:
     Interest-bearing deposits                             $ 3,576,400
     Other borrowings                                        1,016,868
     Senior notes                                            4,328,237
     Interest payable                                           87,688
     Other                                                     926,535
     Total liabilities                                       9,935,728

     Stockholders' Equity:
     Common stock                                                1,997
     Paid-in capital, net                                      625,771
     Retained earnings and cumulative
       other comprehensive income                              897,353
        Less: Treasury stock, at cost                          (87,940)
        Total stockholders' equity                           1,437,181
        Total liabilities and stockholders' equity         $11,372,909


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

                                                        Three Months Ended
                                                    September 30    June 30
                                                        2000         2000

     Interest Income:
     Consumer loans, including fees                    $606,872    $511,886
     Securities available for sale                       23,367      22,845
     Other                                                1,474       1,776
       Total interest income                            631,713     536,507

     Interest Expense:
     Deposits                                            90,197      63,619
     Other borrowings                                    55,967      46,914
     Senior notes                                        72,679      62,016
       Total interest expense                           218,843     172,549
     Net interest income                                412,870     363,958
     Provision for loan losses                          193,409     151,010
     Net interest income after
      provision for loan losses                         219,461     212,948

     Non-Interest Income:
     Servicing and securitizations                      307,343     282,640
     Service charges and other fees                     424,087     374,706
     Interchange                                         65,039      53,461
       Total non-interest income                        796,469     710,807

     Non-Interest Expense:
     Salaries and associate benefits                    264,171     236,618
     Marketing                                          233,188     211,560
     Communications and data processing                  78,064      72,933
     Supplies and equipment                              66,325      58,167
     Occupancy                                           30,721      27,250
     Other                                              146,488     135,736
       Total non-interest expense                       818,957     742,264
     Income before income taxes                         196,973     181,491
     Income taxes                                        74,850      68,966
     Net income                                        $122,123    $112,525

     Basic earnings per share                          $   0.62    $   0.57
     Diluted earnings per share                        $   0.58    $   0.54
     Dividends paid per share                          $   0.03    $   0.03


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

                                                   Three Months Ended
                                                     September 30
                                                          1999

     Interest Income:
     Consumer loans, including fees                    $386,727
     Securities available for sale                       24,256
     Other                                                1,053
       Total interest income                            412,036

     Interest Expense:
     Deposits                                            38,003
     Other borrowings                                    20,824
     Senior notes                                        76,980
       Total interest expense                           135,807
     Net interest income                                276,229
     Provision for loan losses                          114,061
     Net interest income after
      provision for loan losses                         162,168

     Non-Interest Income:
     Servicing and securitizations                      311,217
     Service charges and other fees                     275,900
     Interchange                                         33,946
       Total non-interest income                        621,063

     Non-Interest Expense:
     Salaries and associate benefits                    199,048
     Marketing                                          175,163
     Communications and data processing                  68,755
     Supplies and equipment                              48,076
     Occupancy                                           19,117
     Other                                              119,262
       Total non-interest expense                       629,421
     Income before income taxes                         153,810
     Income taxes                                        58,448
     Net income                                        $ 95,362

     Basic earnings per share                          $   0.48
     Diluted earnings per share                        $   0.45
     Dividends paid per share                          $   0.03


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

                                                        Nine Months Ended
                                                   September 30  September 30
                                                        2000         1999

     Interest Income:
     Consumer loans, including fees                  $1,607,695  $1,064,987
     Securities available for sale                       70,946      74,001
     Other                                                5,026       3,892
       Total interest income                          1,683,667   1,142,880

     Interest Expense:
     Deposits                                           205,936      88,383
     Other borrowings                                   144,335      67,572
     Senior notes                                       203,071     230,129
       Total interest expense                           553,342     386,084
     Net interest income                              1,130,325     756,796
     Provision for loan losses                          470,944     262,948
     Net interest income after
      provision for loan losses                         659,381     493,848

     Non-Interest Income:
     Servicing and securitizations                      860,741     876,777
     Service charges and other fees                   1,140,025     743,227
     Interchange                                        161,570      97,732
       Total non-interest income                      2,162,336   1,717,736

     Non-Interest Expense:
     Salaries and associate benefits                    735,625     572,703
     Marketing                                          646,686     529,493
     Communications and data processing                 221,819     189,305
     Supplies and equipment                             176,766     127,083
     Occupancy                                           83,263      49,412
     Other                                              406,982     315,815
       Total non-interest expense                     2,271,141   1,783,811
     Income before income taxes                         550,576     427,773
     Income taxes                                       209,219     162,554
     Net income                                      $  314,357  $  265,219

     Basic earnings per share                        $     1.73  $     1.34
     Diluted earnings per share                      $     1.63  $     1.26
     Dividends paid per share                        $     0.08  $     0.08


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

     Managed(1)                                    Quarter Ended 09/30/00

                                                Average    Income/  Yield/
                                                Balance    Expense  Rate
     Earning assets:
     Consumer loans                         $23,020,158 $1,039,473   18.06%
     Securities available for sale            1,557,088     23,367    6.00
     Other                                      171,881      1,474    3.43
     Total earning assets                   $24,749,127 $1,064,314   17.20%

     Interest-bearing liabilities:
     Deposits                               $ 5,787,748 $   90,197    6.23%
     Other borrowings                         3,084,407     55,967    7.26
     Senior notes                             4,139,665     72,679    7.02
     Securitization liability                10,908,397    180,412    6.62
     Total interest-bearing liabilities     $23,920,217 $  399,255    6.68%

     Net interest spread                                             10.52%

     Interest income to average earning assets                       17.20%
     Interest expense to average earning assets                       6.45
     Net interest margin                                             10.75%

(1) Information in this table reflects the adjustment to add back the

effect of securitized loans.

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

     Managed(1)                                    Quarter Ended 06/30/00

                                                Average    Income/  Yield/
                                                Balance    Expense  Rate
     Earning assets:
     Consumer loans                         $20,915,125   $937,935   17.94%
     Securities available for sale            1,519,369     22,845    6.01
     Other                                      146,760      1,776    4.84
     Total earning assets                   $22,581,254   $962,556   17.05%

     Interest-bearing liabilities:
     Deposits                               $ 4,495,242   $ 63,619    5.66%
     Other borrowings                         2,687,569     46,914    6.98
     Senior notes                             3,659,603     62,016    6.78
     Securitization liability                10,870,733    175,655    6.46
     Total interest-bearing liabilities     $21,713,147   $348,204    6.41%

     Net interest spread                                             10.64%

     Interest income to average earning assets                       17.05%
     Interest expense to average earning assets                       6.17
     Net interest margin                                             10.88%

(1) Information in this table reflects the adjustment to add back the

effect of securitized loans.

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

     Managed(1)                                    Quarter Ended 09/30/99

                                                Average    Income/  Yield/
                                                Balance    Expense  Rate
     Earning assets:
     Consumer loans                         $18,161,975   $813,643   17.92%
     Securities available for sale            1,683,839     24,256    5.76
     Other                                      213,784        845    1.58
     Total earning assets                   $20,059,598   $838,744   16.72%

     Interest-bearing liabilities:
     Deposits                               $ 3,001,711   $ 38,003    5.06%
     Other borrowings                         1,333,434     20,824    6.25
     Senior notes                             4,494,440     76,980    6.85
     Securitization liability                10,343,724    144,048    5.57
     Total interest-bearing liabilities     $19,173,309   $279,855    5.84%

     Net interest spread                                             10.88%

     Interest income to average earning assets                       16.72%
     Interest expense to average earning assets                       5.58
     Net interest margin                                             11.14%

(1) Information in this table reflects the adjustment to add back the

effect of securitized loans. SOURCE Capital One Financial Corporation

CONTACT: Paul Paquin, V.P., Investor Relations, 703-205-1039, or Tatiana Stead, Media Relations, 703-205-1070, both of Capital One Financial Corporation/