Capital One Reports First Quarter 2010 Net Income of $636.3 million, or $1.40 per share (diluted), up from a Loss of $(0.44) in the First Quarter of 2009
Capital One Reports First Quarter 2010 Net Income of $636.3 million, or $1.40 per share (diluted), up from a Loss of $(0.44) in the First Quarter of 2009
Printer Friendly Version of the Press Release (pdf format)
Printer Friendly Version of the Financial Supplement (pdf format)
Printer Friendly Version of the Earnings Conference Call Presentation
MCLEAN, Va., April 22, 2010 /PRNewswire via COMTEX/ --Capital One Financial Corporation (NYSE: COF) today announced net income for the first quarter of 2010 of $636.3 million, or $1.40 per common share (diluted), versus fourth quarter 2009 net income of $375.6 million, or $0.83 per common share (diluted). This compares with a loss in the first quarter of 2009 of $(172.3) million, or $(0.44) per share (diluted).
Highlights compared to Fourth Quarter 2009
- Revenue declined $79.3 million, or 1.8 percent, due to a $4.0 billion, or 2.9 percent, decline in average loans
- Provision expense declined $368.6 million driven by improving charge-offs and an allowance release
- Tangible common equity to tangible managed assets, or "TCE ratio," increased to 5.5 percent, up 78 basis points from the pro-forma December 31, 2009 ratio of 4.8 percent.
"We've demonstrated our resilience through the most challenging economic cycle we've seen in generations, and we believe that charge-offs in our consumer lending businesses likely peaked in the first quarter," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "While legislative and regulatory uncertainty remains, we believe that we are well-positioned to ramp up our businesses as we emerge from the recession, and to deliver strong and sustainable returns over the long term."
Total Company Managed Results
- Total revenue in the first quarter of 2010 declined $79.3 million, or 1.8 percent, from the fourth quarter of 2009 to $4.3 billion as an improvement in margin partially offset a 2.9 percent decline in average loans. Non-interest income decreased $137.4 million in the first quarter, or 11.5 percent relative to the prior quarter, while net interest income increased $58.1 million, or 1.8 percent.
- Net interest margin increased 20 basis points in the quarter to 7.1 percent, driven by a 17 basis point decrease in the cost of funds and a 3 basis point increase in loan yields.
- Provision expense decreased $368.6 million from the prior quarter, or 20.0 percent, driven by lower charge-offs and an allowance release of $566 million. Total charge-offs in the quarter fell as improvements in the company's commercial, auto finance, and retail banking businesses more than offset a slight increase in domestic card charge-offs.
- The company released $566 million of allowance through provision expense in the first quarter of 2010. On January 1, 2010, the company built its allowance by $4.3 billion resulting in a $2.9 billion after-tax impact to retained earnings and the creation of a $1.6 billion deferred tax asset as a result of the adoption of FAS 167. This compares to a release of $386 million in the fourth quarter of 2009. The allowance as a percentage of outstanding loans was 5.96 percent at the end of the first quarter of 2010 as compared with 4.55 percent at the end of the prior quarter.
- Average total deposits during the quarter were $117.5 billion, an increase of $2.9 billion, or 2.6 percent, over the prior quarter. Period-end total deposits increased by $2.0 billion to $117.8 billion.
- The cost of interest-bearing liabilities decreased to 1.96 percent in the first quarter from 2.16 percent in the prior quarter. The overall cost of funds declined 17 basis points to 1.76 percent in the first quarter.
- Period-end total managed assets decreased by 5.4 percent from the fourth quarter of 2009 to $200.7 billion at the end of the first quarter of 2010. The decline was driven primarily by reductions in loans held for investment. Loans declined $6.7 billion, or 4.9 percent, during the first quarter primarily as a result of charge-offs and the expected run-off of loans in businesses the company exited or repositioned earlier in the recession. Run-off businesses include Installment Loans in the Credit Card segment and Mortgages in the Consumer Banking segment.
- Non-interest expenses of $1.8 billion decreased $100.3 million in the first quarter of 2010 from the prior quarter, driven primarily by reduced operating expenses across the business.
- The company's TCE ratio increased to 5.5 percent, up 78 basis points from the fourth quarter 2009 pro forma ratio of 4.8 percent after consolidation for FAS 167. The Tier 1 risk-based capital ratio of approximately 9.6 percent decreased 300 basis points relative to the pro forma FAS 167 ratio of 9.9 percent, and remains comfortably above the regulatory well-capitalized minimum.
"Capital One posted strong bottom-line results in the quarter, as modestly improved pre-provision earnings were bolstered by lower provision expenses," said Gary L. Perlin, Capital One's Chief Financial Officer. "As we begin to emerge from the challenging economic environment, our strong and flexible balance sheet continues to position us well to take advantage of profitable growth opportunities."
Impacts from Consolidation on Reported Balance Sheet
Effective January 1, 2010, Capital One adopted two new accounting standards (FAS 166 and 167) that resulted in the consolidation of the company's credit card securitization trusts. The adoption of these new accounting standards resulted in the addition of approximately $41.9 billion of assets, consisting primarily of credit card loan receivables, and a reduction of $2.9 billion in stockholders' equity as of January 1, 2010.
The adoption of these new accounting standards does not have a significant impact on the ability to compare the company's results to prior periods on a "managed" basis; however, it does limit the comparability of the company's reported financial results subsequent to January 1, 2010 with its reported financial results prior to January 1, 2010. Because of the January 1, 2010, adoption of the new consolidation accounting standards, the company's reported results subsequent to January 1, 2010 will be comparable with its results on a "managed" basis.
Segment Results
The company reports the results of its business through three operating segments: Credit Card, Commercial Banking, and Consumer Banking. Please refer to the Financial Supplement for additional details.
Credit Card Highlights
For details on the sub-segments' results, please refer to the Financial Supplement.
- Revenues relative to the prior quarter:
- Domestic Card - down $91.7 million, or 3.6 percent
- International Card - down $2.8 million, or 0.8 percent
- Revenue margin in the Domestic Card sub-segment was 17.1 percent in the first quarter, compared to 17.0 percent in the prior quarter. The company expects quarterly Domestic Card revenue margin to decline over the next several quarters to around 15 percent by early 2011.
- Period-end loans in the Domestic Card segment were $56.2 billion in the first quarter, a decline of $4.1 billion, or 6.8 percent, from the prior quarter.
- International credit card loans declined in the quarter by $645.7 million, or 7.9 percent, to $7.6 billion.
- Domestic Card provision expense increased $62.9 million in the first quarter, or 6.1 percent, relative to the prior quarter. Net charge-offs increased $74.0 million relative to the prior quarter, partially offset by an increase in allowance release of $11 million. International card provision expense decreased $92.4 million, or 53.9 percent.
- Net charge-off rates relative to the prior quarter:
- Domestic Card - increased 89 basis points to 10.48 percent from 9.59 percent
- International Card - decreased 69 basis points to 8.83 percent from 9.52 percent
- Delinquency rates relative to the prior quarter:
- Domestic Card - decreased 48 basis points to 5.30 percent from 5.78 percent
- International Card - decreased 16 basis points to 6.39 percent from 6.55 percent
Commercial Banking Highlights
For more lending information and statistics on the segment results, please refer to the Financial Supplement.
The Commercial Banking segment consists of commercial and multi-family real-estate, middle market lending, and specialty lending, which are summarized under Commercial Lending, and small ticket commercial real estate.
- Period-end loans in Commercial Banking were $29.6 billion, essentially even with the prior quarter
- Average deposits increased $2.4 billion, or 12.6 percent, to $21.9 billion during the first quarter from $19.4 billion during the prior quarter, while the deposit interest expense rate declined to 72 basis points.
- Provision expense decreased $130.3 million relative to the prior quarter. Net charge-offs decreased $115.7 million in the first quarter, and the level of allowance build relative to the prior quarter was reduced by $11.9 million.
- Non-performing asset rate relative to the prior quarter:
- Total Commercial Banking - 2.64 percent, an increase of 12 basis points
- Commercial lending - 2.52 percent, an increase of 19 basis points
- Small ticket commercial real estate - 4.18 percent, a decrease of 69 basis points
Consumer Banking highlights
For more lending information and statistics on the segment's results, please refer to the Financial Supplement.
- Period-end loans relative to the prior quarter:
- Auto - declined $739.6 million, or 4.1 percent, to $17.4 billion. The decline reflects continued impact of repositioning the business earlier in the recession.
- Mortgage - declined $926.7 million, or 6.2 percent, to $14.0 billion. Mortgage loans continued to reflect expected run off in the portfolio.
- Retail banking - declined $165.5 million, or 3.2 percent, to $5.0 billion.
- Average deposits in Consumer Banking increased $2.1 billion, or 2.9 percent, to 75.1 billion during the first quarter from $73.0 billion in the prior quarter. Improved deposit mix, disciplined deposit pricing and favorable interest rates drove a 14 basis point improvement in the deposit interest expense rate in the fourth quarter.
- Net charge-off rates relative to the prior quarter:
- Auto - 2.97 percent, a decrease of 1.58 basis points
- Mortgage - 0.94 percent, an increase of 22 basis points
- Retail banking - 2.11 percent, a decrease of 82 basis points
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). The reconciliation of such measures to the comparable GAAP figures are included in the Company's Form 10-K for the fiscal year ended December 31, 2009, and in its current report on Form 8-K filed April 22, 2010, which are available on Capital One's homepage, http://www.capitalone.com/
Forward looking statements
The company cautions that its current expectations in this release dated April 22, 2010; and the company's plans, objectives, expectations, and intentions, are forward-looking statements. 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 consumer income, confidence, spending, and savings which may affect consumer bankruptcies, defaults, charge-offs, deposit activity, and interest rates; 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 report on Form 10-K for the fiscal year ended December 31, 2009.
About Capital One
Capital One Financial Corporation (http://www.capitalone.com/) is a financial holding company whose subsidiaries, which include Capital One, N.A. and Capital One Bank (USA), N. A., had $117.8 billion in deposits and $200.7 billion in total managed assets outstanding as of March 31, 2010. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients. Capital One, N.A. has approximately 1,000 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia, and the District of Columbia. 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: First quarter 2010 financial results, SEC Filings, and earnings conference call slides are accessible on Capital One's home page (http://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
GAAP BASIS *
2010 2009 2009
(in millions, except per share
data and as noted) Q1 Q4 Q1 (5)
------------------------------ --- --- ------
Earnings
Net Interest Income $3,228.2 $1,954.2 $1,793.0
(6)
Non-Interest Income (1) 1,061.5 (8) 1,411.7 1,089.8
------- ------- -------
Total Revenue (2) 4,289.7 3,365.9 2,882.8
Provision for Loan Losses 1,478.2 843.7 1,279.1
Marketing Expenses 180.5 188.0 162.7
Restructuring Expenses - 32.0 17.6
Operating Expenses (3) 1,667.2 1,728.0 1,565.0
------- ------- -------
Income (Loss) Before Taxes 963.8 574.2 (141.6)
Effective Tax Rate 25.3% 29.7% 41.3%
Income (Loss) From Continuing
Operations, Net of Tax $719.5 $403.9 $(83.1)
Loss From Discontinued Operations,
Net of Tax (83.2) (6) (28.3) (25.0)
----- ----- -----
Net Income (Loss) $636.3 $375.6 $(108.1)
------ ------ -------
Net Income (Loss) Available to
Common Shareholders (F) $636.3 $375.6 $(172.3)
------------------------------ ------ ------ -------
Common Share Statistics
Basic EPS: (G)
Income (Loss) From Continuing
Operations $1.59 $0.90 $(0.38)
Loss From Discontinued Operations $(0.18) $(0.07) $(0.06)
------ ------ ------
Net Income (Loss) $1.41 $0.83 $(0.44)
Diluted EPS: (G)
Income (Loss) From Continuing
Operations $1.58 $0.89 $(0.38)
Loss From Discontinued Operations $(0.18) $(0.06) $(0.06)
------ ------ ------
Net Income (Loss) $1.40 $0.83 $(0.44)
Dividends Per Common Share $0.05 $0.05 $0.38
Tangible Book Value Per Common
Share (period end) (I) $22.86 $27.72 $23.91
Stock Price Per Common Share
(period end) $41.41 $38.34 $12.24
Total Market Capitalization
(period end) $18,713.2 $17,268.3 $4,806.6
Common Shares Outstanding (period
end) 451.9 450.4 392.7
Shares Used to Compute Basic EPS 451.0 450.0 390.5
Shares Used to Compute Diluted EPS 455.4 454.9 390.5
---------------------------------- ----- ----- -----
Reported Balance Sheet Statistics
(period average) (A)
Average Loans Held for Investment $134,206 $94,732 $103,242
Average Earning Assets $181,881 $143,663 $145,172
Total Average Assets $207,207 $169,856 $168,489
Average Interest Bearing Deposits $104,017 $101,144 $100,886
Total Average Deposits $117,530 $114,597 $112,137
Average Equity $23,681 $26,518 $27,004
Return on Average Assets (ROA) 1.39% 0.95% (0.20)%
Return on Average Equity (ROE) 12.15% 6.09% (1.23)%
Return on Average Tangible Common
Equity (J) 29.96% 13.02% (3.06)%
--------------------------------- ----- ----- ------
Reported Balance Sheet Statistics
(period end) (A)
Loans Held for Investment $130,115 $90,619 $104,921
Total Assets $200,691 $169,376 $177,431
Interest Bearing Deposits $104,013 $102,370 $108,792
Total Deposits $117,787 $115,809 $121,116
Tangible Assets(D) $186,647 $155,270 $163,230
Tangible Common Equity (TCE) (E) $10,330 $12,483 $9,388
Tangible Common Equity to Tangible
Assets Ratio (H) 5.53% 8.04% 5.75%
---------------------------------- ---- ---- ----
Performance Statistics (Reported)
Quarter over Quarter (A)
Net Interest Income Growth (7) 65% (3)% (1)%
Non Interest Income Growth (7) (25)% (9)% (20)%
Revenue Growth (7) 27% (5)% (9)%
Net Interest Margin 7.10% 5.44% 4.94%
Revenue Margin 9.43% 9.37% 7.94%
Risk-Adjusted Margin (B) 5.00% 6.07% 4.81%
Non-Interest Expense as a % of
Average Loans Held for Investment
(annualized) 5.51% 8.23% 6.76%
Efficiency Ratio (C) 43.07% 56.92% 59.93%
-------------------- ----- ----- -----
Asset Quality Statistics
(Reported) (A)
Allowance (4) $7,752 $4,127 $4,648
Allowance as a % of Reported Loans
Held for Investment (4) 5.96% 4.55% 4.43%
Net Charge-Offs (4) $2,018 $1,185 $1,138
Net Charge-Off Rate (4) 6.01% 5.00% 4.41%
30+ day performing delinquency
rate (4) 4.22% 4.13% 3.65%
---- ---- ----
Full-time equivalent employees
(in thousands) 25.9 25.9 27.5
------------------------------ ---- ---- ----
* Effective January 1, 2010, Capital One adopted two new accounting
standards that resulted in the consolidation of the majority of the
Company's credit card securitization trusts. The adoption of these
new accounting standards resulted in the addition of approximately
$41.9 billion of assets, consisting primarily of credit card loan
receivables, and a reduction of $2.9 billion in stockholders' equity
as of January 1, 2010. Prior periods have not been adjusted as the
impacts of the new standard are on a prospective basis. See the
accompanying schedule "Impact of Adopting New Accounting Guidance".
While the adoption of these new accounting standards has a
significant impact on the comparability of the Company's GAAP
financial results subsequent to adoption, it is now comparable to
the Company's results on a "managed" basis.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY
MANAGED BASIS * (for 2009 data)
2010 2009 2009
(in millions) Q1 Q4 Q1 (5)
------------- --- --- ------
Earnings
Net Interest Income $3,228.2 $3,170.1 $2,750.0
(6)
Non-Interest Income (1) 1,061.5 (8) 1,198.9 985.7
------- ------- -----
Total Revenue (2) $4,289.7 $4,369.0 $3,735.7
Provision for Loan Losses 1,478.2 1,846.8 2,132.0
Marketing Expenses 180.5 188.0 162.7
Restructuring Expenses - 32.0 17.6
Operating Expenses (3) 1,667.2 1,728.0 1,565.0
------- ------- -------
Income (Loss) Before Taxes 963.8 574.2 (141.6)
Effective Tax Rate 25.3% 29.7% 41.3%
Income (Loss) From
Continuing Operations, Net
of Tax $719.5 $403.9 $(83.1)
Loss From Discontinued
Operations, Net of Tax (83.2) (6) (28.3) (25.0)
----- ----- -----
Net Income (Loss) $636.3 $375.6 $(108.1)
------ ------ -------
Net Income (Loss) Available
to Common Shareholders (F) $636.3 $375.6 $(172.3)
--------------------------- ------ ------ -------
Common Share Statistics
Basic EPS: (G)
Income (Loss) From
Continuing Operations $1.59 $0.90 $(0.38)
Loss From Discontinued
Operations $(0.18) $(0.07) $(0.06)
------ ------ ------
Net Income (Loss) $1.41 $0.83 $(0.44)
Diluted EPS: (G)
Income (Loss) From
Continuing Operations $1.58 $0.89 $(0.38)
Loss From Discontinued
Operations $(0.18) $(0.06) $(0.06)
------ ------ ------
Net Income (Loss) $1.40 $0.83 $(0.44)
Dividends Per Common Share $0.05 $0.05 $0.38
Tangible Book Value Per
Common Share (period end)
(I) $22.86 $27.72 $23.91
Stock Price Per Common Share
(period end) $41.41 $38.34 $12.24
Total Market Capitalization
(period end) $18,713.2 $17,268.3 $4,806.6
Common Shares Outstanding
(period end) 451.9 450.4 392.7
Shares Used to Compute Basic
EPS 451.0 450.0 390.5
Shares Used to Compute
Diluted EPS 455.4 454.9 390.5
---------------------- ----- ----- -----
Managed Balance Sheet
Statistics (period average)
(A)
Average Loans Held for
Investment $134,206 $138,184 $147,182
Average Earning Assets $181,881 $183,899 $186,614
Total Average Assets $207,207 $210,425 $210,169
Average Interest Bearing
Deposits $104,017 $101,144 $100,886
Total Average Deposits $117,530 $114,597 $112,137
Average Equity $23,681 $26,518 $27,004
Return on Average Assets
(ROA) 1.39% 0.77% (0.16)%
Return on Average Equity
(ROE) 12.15% 6.09% (1.23)%
Return on Average Tangible
Common Equity (J) 29.96% 13.02% (3.06)%
-------------------------- ----- ----- ------
Managed Balance Sheet
Statistics (period end) (A)
Loans Held for Investment $130,115 $136,803 $149,730
Total Assets $200,691 $212,143 $219,958
Interest Bearing Deposits $104,013 $102,370 $108,792
Total Deposits $117,787 $115,809 $121,116
Tangible Assets(D) $186,647 $198,037 $205,756
Tangible Common Equity (TCE)
(E) $10,330 $12,483 $9,388
Tangible Common Equity to
Tangible Assets Ratio (H) 5.53% 6.30% 4.56%
-------------------------- ---- ---- ----
Performance Statistics
(Managed) Quarter over
Quarter(A)
Net Interest Income Growth
(12) 2% (1)% (1)%
Non Interest Income Growth
(12) (11)% (13)% (17)%
Revenue Growth (12) (2)% (5)% (5)%
Net Interest Margin 7.10% 6.90% 5.89%
Revenue Margin 9.43% 9.50% 8.01%
Risk-Adjusted Margin (B) 5.00% 4.74% 3.74%
Non-Interest Expense as a %
of Average Loans Held for
Investment (annualized) 5.51% 5.64% 4.74%
Efficiency Ratio (C) 43.07% 43.85% 46.25%
-------------------- ----- ----- -----
Asset Quality Statistics
(Managed) (A)
Net Charge-Offs (4) $2,018 $2,188 $1,991
Net Charge-Off Rate (4) 6.01% 6.33% 5.41%
30+ day performing
delinquency rate (4) 4.22% 4.73% 4.10%
--------------------- ---- ---- ----
Full-time equivalent
employees (in thousands) 25.9 25.9 27.5
------------------------- ---- ---- ----
* In addition to analyzing the Company's results on a reported basis,
management evaluates Capital One's results on a "managed" basis,
which is a non-GAAP financial measure. Capital One also analyzes
the results of each of its lines of business on a "managed" basis.
Capital One's managed results reflect the Company's reported
results, adjusted to reflect the consolidation of the majority of
the Company's credit securitization trusts. Because of the January
1, 2010, adoption of the new consolidation accounting standards, the
Company's consolidated reported results subsequent to January 1,
2010 will be comparable to its consolidated results on a "managed"
basis. See the accompanying schedule "Impact of Adopting New
Accounting Guidance" for additional information on the impact of new
accounting standards.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY NOTES
Includes the impact from the change in fair value of retained
interests, including the interest-only strips, which
totaled $(35.7) million in Q1 2010, $55.3 million in Q4
2009, and $(128.0) million in Q1 2009. For Q1 2010, the
amounts relate solely to the deconsolidation of certain
mortgage related investments as all other retained interests
and interest only strips were eliminated with the adoption
(1) of the new accounting standards.
In accordance with the Company's finance charge and fee
revenue recognition policy, amounts billed to customers but
not recorded as revenue totaled: $354.4 million in Q1 2010,
(2) $490.4 million in Q4 2009, and $544.4 million in Q1 2009.
Includes core deposit intangible amortization expense of
$52.1 million in Q1 2010, $53.8 million in Q4 2009, $49.4
million in Q1 2009, and integration costs of $16.7 million
in Q1 2010, $22.1 million in Q4 2009, $23.6 million in Q1
(3) 2009.
Allowance as a % of Loans Held for Investment, Net Charge-
off Rate and 30+ Day Performing Delinquency Rate include
period end loans held for investment and average loans held
for investment acquired as part of the Chevy Chase Bank, FSB
(CCB) acquisition. The metrics excluding such loans are as
(4) follows. The net charge-off dollars were unchanged.
Q1 2010 Q4 2009 Q1 2009
------- ------- -------
CCB period end acquired loan
portfolio (in millions) $6,799.4 $7,250.5 $8,858.9
CCB average acquired loan
portfolio (in millions) $7,037.3 $7,511.9 $3,072.8
Allowance as a % of loans held
for investment 6.29% 4.95% 4.84%
Net charge-off rate (GAAP) 6.35% 5.44% 4.54%
Net charge-off rate (Managed) 6.35% 6.70% 5.53%
30+ day performing delinquency
rate (GAAP) 4.46% 4.49% 3.99%
30+ day performing delinquency
rate (Managed) 4.46% 4.99% 4.36%
Effective February 27, 2009, the Company acquired Chevy Chase
Bank, FSB for $475.9 million, which included $9.8 billion in
loans and $13.6 billion in deposits. The Company paid cash
of $445.0 million and issued 2.6 million common shares
(5) valued at $30.9 million.
During Q1 2010, the Company recorded charges of $224.4
million related to representation and warranty matters. A
portion of this expense is recorded in Discontinued
(6) Operations and the remainder is in Non-Interest Income.
Prior period amounts have been recalculated to conform with
(7) current period presentation.
During Q1 2010, certain mortgage trusts were deconsolidated
based on the sale of interest-only bonds associated with
the trusts. The net effect of the deconsolidation of $127
(8) million of income is included in non interest income.
STATISTICS / METRIC CALCULATIONS
Calculated based on continuing operations, except for Average
equity and Return on Average Equity (ROE), which are based on
(A) the Company's average stockholders' equity.
Calculated based on total revenue less net charge-offs divided
(B) by average earning assets, expressed as a percentage.
Calculated based on non-interest expense less restructuring
(C) expense divided by total revenue.
Consists of reported or managed assets less intangible assets,
which is considered a non-GAAP measure. See the
Reconciliation To GAAP Financial Measures for a reconciliation
(D) of this measure to the reported GAAP measure.
Consists of stockholders' equity less preferred shares and
(E) intangible assets and the related deferred tax liabilities.
Consists of net income (loss) less dividends on preferred
(F) shares.
Calculated based on net income (loss) available to common
(G) shareholders.
Tangible Common Equity to Tangible Assets Ratio ("TCE Ratio")
is considered a non-GAAP measure. See the Reconciliation To
GAAP Financial Measures for a reconciliation of this measure
(H) to the reported GAAP measure.
Calculated based on tangible common equity divided by common
(I) shares outstanding.
Calculated based on income from continuing operations divided
by average tangible common equity. See the Reconciliation To
GAAP Financial Measures for a reconciliation of average equity
(J) to average tangible common equity.
CAPITAL ONE FINANCIAL CORPORATION
Reconciliation to GAAP Financial Measures
(dollars in millions) (unaudited)
The table below presents a reconciliation of tangible common equity
and tangible assets, which are the components used to calculate the
reconciliation of the non-GAAP tangible common equity "TCE" ratio,
to the comparable GAAP measures. The Company believes the non-GAAP
TCE ratio is an important measure for investors to use in assessing
the Company's capital strength. This measure may not be comparable
to similarly titled measures used by other companies.
2010 2009 2009
Q1 Q4 Q1
--- --- ---
Reconciliation of Average Equity
to Average Tangible Common
Equity
Average equity $23,681 $26,518 $27,004
Less: preferred stock - - (3,154)
Less: intangible assets (1) (14,075) (14,105) (13,001)
Average Tangible Common Equity $9,606 $12,413 $10,849
====== ======= =======
Reconciliation of Period End
Equity to Tangible Common Equity
Equity $24,374 $26,589 $26,748
Less: preferred stock - - (3,159)
Less: intangible assets (1) (14,044) (14,106) (14,201)
Period End Tangible Common Equity $10,330 $12,483 $9,388
======= ======= ======
Reconciliation of Period End
Assets to Tangible Assets
Total assets 200,707 169,646 177,462
Less: discontinued ops assets (16) (24) (31)
--- --- ---
Total assets- continuing ops 200,691 169,622 177,431
Less: intangible assets (1) (14,044) (14,106) (14,201)
Period End Tangible Assets $186,647 $155,516 $163,230
======== ======== ========
TCE ratio (2) 5.53% 8.03% 5.75%
Reconciliation of Period End
Assets to Tangible Assets on a
Managed Basis (for 2009) *
Total assets 200,707 169,646 177,462
Securitization adjustment - 42,767 42,526
--- ------ ------
Total assets on a managed basis
(for 2009) 200,707 212,413 219,988
Less: Assets-discontinued
operations (16) (24) (31)
--- --- ---
Total assets- continuing ops 200,691 212,389 219,957
Less: Intangible assets (1) (14,044) (14,106) (14,201)
Period End Tangible Assets $186,647 $198,283 $205,756
======== ======== ========
TCE ratio (2) 5.53% 6.30% 4.56%
(1) Includes impact from related deferred taxes.
(2) Calculated based on tangible common equity divided by respective
tangible assets.
* In addition to analyzing the Company's results on a reported basis,
management evaluates Capital One's results on a "managed" basis,
which is a non-GAAP financial measure. Capital One also analyzes
the results of each of its lines of business on a "managed" basis.
Capital One's managed results reflect the Company's reported
results, adjusted to reflect the consolidation of the majority of
the Company's credit securitization trusts. Because of the January
1, 2010, adoption of the new consolidation accounting standards, the
Company's consolidated reported results subsequent to January 1,
2010 will be comparable to its consolidated results on a "managed"
basis.
Capital One Financial Corporation
Impact of Adopting New Accounting Guidance
Consolidation of VIEs
VIE
Opening Consolidation Ending
Balance
Sheet Balance Sheet
(dollars in January 1, December 31,
millions)(unaudited) 2010 Impact 2009
--------------------- ----------- ------ ------------
Assets:
Cash and due from banks $12,683 $3,998 $8,685
Loans held for investment 138,184 47,565 90,619
Allowance for loan and
lease losses (8,391) (4,264) (4,127)
------ ------ ------
Net loans held for
investment 129,793 43,301 86,492
Accounts receivable from
securitizations 166 (7,463) 7,629
Other assets 68,869 (1) 2,029 66,840
------ ----- ------
Total assets 211,511 41,865 169,646
------- ------ -------
Liabilities:
Securitization liability 48,300 44,346 3,954
Other liabilities 139,561 458 139,103
------- --- -------
Total liabilities 187,861 44,804 143,057
Stockholders' equity 23,650 (2,939) 26,589
------ ------ ------
Total liabilities and
stockholders' equity $211,511 $41,865 $169,646
-------- ------- --------
Allocation of the Allowance by Segment
(dollars in January
millions)(unaudited) March 31, 1, Consolidation December 31,
--------------------- --------- -------- ------------- ------------
2010 2010 Impact 2009
---- ---- ------ ----
Domestic credit card $5,162 $5,590 $3,663 $1,927
International credit
card 612 727 528 199
Total credit card 5,774 6,317 4,191 2,126
----- ----- ----- -----
Commercial and multi-
family real estate 537 471 - 471
Middle Market 172 131 - 131
Specialty Lending 108 90 - 90
Total commercial
lending 817 692 - 692
--- --- --- ---
Small ticket commercial
real estate 98 93 - 93
Total commercial
Banking 915 785 - 785
--- --- --- ---
Automobile 523 665 - 665
Mortgage (inc all new
CCB originations) 153 (2) 248 73 175
Other Retail 259 236 - 236
Total Consumer Banking 935 1,149 73 1,076
--- ----- --- -----
Other 128 140 - 140
--- --- --- ---
Total Company $7,752 $8,391 $4,264 $4,127
------ ------ ------ ------
(1) Included within the "Other assets" line item is a deferred tax
asset of $3.9 billion, of which $1.6 billion related to the adoption
of ASU 2009-17 (SFAS 167).
(2) $73 million of the reduction in the allowance for the first
quarter is associated with the deconsolidation of certain mortgage
trusts. This reduction in the allowance is recorded in non-interest
income.
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Balance Sheets
(in thousands) (unaudited)
As of As of As of
March 31 December 31 March 31
2010 2009 (1) 2009 (1)
---- ------- -------
Assets:
Cash and due from banks $2,931,943 $3,100,110 $3,076,926
Restricted cash for
securitization investors 3,286,002 501,113 716,224
Federal funds sold and resale
agreements 477,108 541,570 663,721
Interest-bearing deposits at
other banks 4,089,315 5,042,944 4,013,678
--------- --------- ---------
Cash and cash equivalents 10,784,368 9,185,737 8,470,549
Securities available for sale 38,251,017 38,829,562 36,326,951
Securities held to maturity - 80,577 90,990
Loans held for sale 247,445 268,307 289,337
Loans held for investment 72,591,272 75,097,329 87,133,282
Restricted loans for
securitization investors 57,523,249 15,521,670 17,788,154
Less: Allowance for loan and
lease losses (7,751,745) (4,127,395) (4,648,031)
---------- ---------- ----------
Net loans held for investment 122,362,776 86,491,604 100,273,405
Accounts receivable from
securitizations 205,960 7,128,484 4,134,284
Premises and equipment, net 2,735,192 2,735,623 2,823,364
Interest receivable 1,134,751 936,146 815,738
Goodwill 13,589,339 13,596,368 13,554,580
Other 11,396,739 10,393,955 10,682,889
---------- ---------- ----------
Total assets $200,707,587 $169,646,363 $177,462,087
============ ============ ============
Liabilities:
Non-interest-bearing deposits $13,773,082 $13,438,659 $12,324,224
Interest-bearing deposits 104,013,477 102,370,437 108,792,100
Senior and subordinated notes 9,134,292 9,045,470 8,258,212
Other borrowings 5,708,279 8,014,969 8,064,605
Borrowings owed to
securitization investors 37,829,527 3,953,492 6,545,487
Interest payable 521,875 509,105 656,769
Other 5,352,673 5,724,821 6,072,714
--------- --------- ---------
Total liabilities 176,333,205 143,056,953 150,714,111
Stockholders' Equity:
Preferred stock - - 3,115,722
Common stock 5,041 5,024 4,425
Paid-in capital, net 18,990,863 18,954,823 17,348,217
Retained earnings and cumulative
other comprehensive income 8,576,735 10,810,022 9,448,454
Less: Treasury stock, at cost (3,198,257) (3,180,459) (3,168,842)
---------- ---------- ----------
Total stockholders' equity 24,374,382 26,589,410 26,747,976
---------- ---------- ----------
Total liabilities and
stockholders' equity $200,707,587 $169,646,363 $177,462,087
============ ============ ============
(1) Certain prior period amounts have been revised to confirm to the
current period presentation.
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income
(in thousands, except per share data)(unaudited)
Three Months Ended
March December March
31, 31, 31,
2010 2009 (1) 2009 (1)
---- ------- -------
Interest Income:
Loans held for investment,
including past-due fees $3,657,735 $2,108,325 $2,191,618
Investment securities 348,715 403,750 395,274
Other 23,379 83,013 63,117
------ ------ ------
Total interest income 4,029,829 2,595,088 2,650,009
Interest Expense:
Deposits 398,730 426,415 627,392
Securitized debt 232,078 51,423 86,141
Senior and subordinated notes 68,224 71,093 58,044
Other borrowings 102,644 91,944 85,444
------- ------ ------
Total interest expense 801,676 640,875 857,021
------- ------- -------
Net interest income 3,228,153 1,954,213 1,792,988
Provision for loan and lease
losses 1,478,200 843,728 1,279,137
--------- ------- ---------
Net interest income after
provision for loan and lease
losses 1,749,953 1,110,485 513,851
Non-Interest Income:
Servicing and securitizations (36,368) 743,075 453,144
Service charges and other
customer-related fees 584,973 502,721 506,129
Interchange 311,407 112,421 140,090
Net other-than-temporary
impairment losses recognized in
earnings(2) (31,256) (10,384) (363)
Other 232,702 63,919 (9,156)
------- ------ ------
Total non-interest income 1,061,458 1,411,752 1,089,844
Non-Interest Expense:
Salaries and associate benefits 646,436 641,225 554,431
Marketing 180,459 187,958 162,712
Communications and data
processing 169,327 171,286 199,104
Supplies and equipment 123,624 129,422 118,900
Occupancy 119,779 121,822 100,185
Restructuring expense (3) - 32,037 17,627
Other 607,976 664,243 592,330
------- ------- -------
Total non-interest expense 1,847,601 1,947,993 1,745,289
--------- --------- ---------
Income (loss) from continuing
operations before income taxes 963,810 574,244 (141,594)
Income taxes (benefit) 244,359 170,359 (58,490)
------- ------- -------
Income from continuing
operations, net of tax 719,451 403,885 (83,104)
Loss from discontinued
operations, net of tax (83,188) (28,293) (24,958)
Net income (loss) $636,263 $375,592 $(108,062)
======== ======== =========
Net income (loss) available to
common shareholders $636,263 $375,592 $(172,252)
======== ======== =========
Basic earnings per common share
Income (loss) from continuing
operations $1.59 $0.90 $(0.38)
Loss from discontinued operations (0.18) (0.07) (0.06)
Net Income (loss) per common
share $1.41 $0.83 $(0.44)
===== ===== ======
Diluted earnings per common share
Income (loss) from continuing
operations $1.58 $0.89 $(0.38)
Loss from discontinued operations (0.18) (0.06) (0.06)
Net Income (loss) per common
share $1.40 $0.83 $(0.44)
===== ===== ======
Dividends paid per common share $0.05 $0.05 $0.38
===== ===== =====
(1) Certain prior period amounts have been revised to confirm to the
current period presentation.
(2) For the three months ended March 31, 2010, the Company recorded
other-than-temporary impairment losses of $31.3 million.
Additional unrealized losses of $106.3 million on these securities
was recognized in other comprehensive income as a component of
stockholders' equity at March 31, 2010.
(3) The Company completed its 2007 restructuring initiative during
2009.
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates (1)
(dollars in thousands)(unaudited)
Quarter Ended 03/31/10 (3)
--------------------------
GAAP Basis Average Income/ Yield/
Balance Expense Rate
------- ------- ----
Interest-earning assets:
Loans held for investment $134,206,161 $3,657,734 10.90%
Investment securities (2) 38,086,936 348,715 3.66%
Other 9,587,759 23,379 0.98%
--------- ------ ----
Total interest-earning assets $181,880,856 $4,029,828 8.86%
============ ========== ====
Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts 12,276,325 16,420 0.54%
Money market deposit accounts 39,364,028 95,966 0.98%
Savings accounts 18,627,038 41,454 0.89%
Other consumer time deposits 24,252,934 173,938 2.87%
Public fund CD's of $100,000 or more 399,703 1,627 1.63%
CD's of $100,000 or more 8,179,641 68,061 3.33%
Foreign time deposits 917,656 1,264 0.55%
------- ----- ----
Total interest-bearing deposits $104,017,325 $398,730 1.53%
Senior and subordinated notes 8,757,477 68,224 3.12%
Other borrowings 7,430,999 92,987 5.01%
Securitization liability 43,764,248 241,735 2.21%
---------- ------- ----
Total interest-bearing liabilities $163,970,049 $801,676 1.96%
============ ======== ====
Net interest spread 6.90%
====
Interest income to average interest-
earning assets 8.86%
Interest expense to average
interest-earning assets 1.76%
Net interest margin 7.10%
====
Quarter Ended 12/31/09 (4)
--------------------------
GAAP Basis Average Income/ Yield/
Balance Expense Rate
------- ------- ----
Interest-earning assets:
Loans held for investment $94,731,990 $2,108,325 8.90%
Investment securities (2) 38,486,624 403,750 4.20%
Other 10,444,494 83,013 3.18%
---------- ------ ----
Total interest-earning assets $143,663,108 $2,595,088 7.23%
============ ========== ====
Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts 10,587,851 13,696 0.52%
Money market deposit accounts 37,460,109 96,583 1.03%
Savings accounts 15,416,242 35,326 0.92%
Other consumer time deposits 27,273,129 200,499 2.94%
Public fund CD's of $100,000 or more 753,764 2,201 1.17%
CD's of $100,000 or more 8,633,998 76,692 3.55%
Foreign time deposits 1,019,090 1,418 0.56%
--------- ----- ----
Total interest-bearing deposits $101,144,183 $426,415 1.69%
Senior and subordinated notes 8,759,304 71,093 3.25%
Other borrowings 9,907,611 89,892 3.63%
Securitization liability 4,248,892 53,475 5.03%
--------- ------ ----
Total interest-bearing liabilities $124,059,990 $640,875 2.07%
============ ======== ====
Net interest spread 5.16%
====
Interest income to average interest-
earning assets 7.23%
Interest expense to average
interest-earning assets 1.79%
Net interest margin 5.44%
====
Quarter Ended 03/31/09 (4)
--------------------------
GAAP Basis Average Income/ Yield/
Balance Expense Rate
------- ------- ----
Interest-earning assets:
Loans held for investment $103,242,406 $2,191,618 8.49%
Investment securities (2) 34,209,102 395,274 4.62%
Other 7,720,249 63,117 3.27%
--------- ------ ----
Total interest-earning assets $145,171,757 $2,650,009 7.30%
============ ========== ====
Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts 10,842,552 19,440 0.72%
Money market deposit accounts 30,839,817 115,017 1.49%
Savings accounts 7,631,999 7,210 0.38%
Other consumer time deposits 37,132,194 358,852 3.87%
Public fund CD's of $100,000 or more 1,209,348 5,146 1.70%
CD's of $100,000 or more 10,673,089 107,215 4.02%
Foreign time deposits 2,557,479 14,512 2.27%
--------- ------ ----
Total interest-bearing deposits $100,886,478 $627,392 2.49%
Senior and subordinated notes 7,771,343 58,044 2.99%
Other borrowings 8,650,535 80,852 3.74%
Securitization liability 7,046,543 90,733 5.15%
--------- ------ ----
Total interest-bearing liabilities $124,354,899 $857,021 2.76%
============ ======== ====
Net interest spread 4.54%
====
Interest income to average interest-
earning assets 7.30%
Interest expense to average interest-
earning assets 2.36%
Net interest margin 4.94%
====
Managed Basis *
Interest-earning assets:
Loans held for investment $134,206,161 $3,657,734 10.90%
Investment securities (2) 38,086,936 348,715 3.66%
Other 9,587,759 23,379 0.98%
--------- ------ ----
Total interest-earning assets $181,880,856 $4,029,828 8.86%
============ ========== ====
Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts $12,276,325 $16,420 0.54%
Money market deposit accounts 39,364,028 95,966 0.98%
Savings accounts 18,627,038 41,454 0.89%
Other consumer time deposits 24,252,934 173,938 2.87%
Public fund CD's of $100,000
or more 399,703 1,627 1.63%
CD's of $100,000 or more 8,179,641 68,061 3.33%
Foreign time deposits 917,656 1,264 0.55%
-------- ------ ----
Total interest-bearing
deposits $104,017,325 $398,730 1.53%
Senior and subordinated notes 8,757,477 68,224 3.12%
Other borrowings 7,430,999 92,987 5.01%
Securitization liability 43,764,248 241,735 2.21%
---------- ------- ----
Total interest-bearing
liabilities $163,970,049 $801,676 1.96%
============ ======== ====
Net interest spread 6.90%
====
Interest income to average
interest-earning assets 8.86%
Interest expense to average
interest-earning assets 1.76%
Net interest margin 7.10%
====
Interest-earning assets:
Loans held for investment $138,184,181 $3,638,071 10.53%
Investment securities (2) 38,486,624 403,750 4.20%
Other 7,228,402 16,832 0.93%
--------- ------ ----
Total interest-earning assets $183,899,207 $4,058,653 8.83%
============ ========== ====
Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts $10,587,851 $13,696 0.52%
Money market deposit accounts 37,460,109 96,583 1.03%
Savings accounts 15,416,242 35,326 0.92%
Other consumer time deposits 27,273,129 200,499 2.94%
Public fund CD's of $100,000 or more 753,764 2,201 1.17%
CD's of $100,000 or more 8,633,998 76,692 3.55%
Foreign time deposits 1,019,090 1,418 0.56%
--------- ----- ----
Total interest-bearing deposits $101,144,183 $426,415 1.69%
Senior and subordinated notes 8,759,304 71,093 3.25%
Other borrowings 9,907,611 89,892 3.63%
Securitization liability 44,836,907 301,139 2.69%
---------- ------- ----
Total interest-bearing liabilities $164,648,005 $888,539 2.16%
============ ======== ====
Net interest spread 6.67%
====
Interest income to average interest-
earning assets 8.83%
Interest expense to average interest-
earning assets 1.93%
Net interest margin 6.90%
====
Interest-earning assets:
Loans held for investment $147,182,092 $3,479,649 9.46%
Investment securities (2) 34,209,102 395,274 4.62%
Other 5,222,716 15,743 1.21%
--------- ------ ----
Total interest-earning assets $186,613,910 $3,890,666 8.34%
============ ========== ====
Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts $10,842,552 $19,440 0.72%
Money market deposit accounts 30,839,817 115,017 1.49%
Savings accounts 7,631,999 7,210 0.38%
Other consumer time deposits 37,132,194 358,852 3.87%
Public fund CD's of $100,000 or
More 1,209,348 5,146 1.70%
CD's of $100,000 or more 10,673,089 107,215 4.02%
Foreign time deposits 2,557,479 14,512 2.27%
--------- ------ ----
Total interest-bearing deposits $100,886,478 $627,392 2.49%
Senior and subordinated notes 7,771,343 58,044 2.99%
Other borrowings 8,650,535 80,852 3.74%
Securitization liability 48,813,159 374,388 3.07%
---------- ------- ----
Total interest-bearing liabilities $166,121,515 $1,140,676 2.75%
============ ========== ====
Net interest spread 5.59%
====
Interest income to average interest-earning assets 8.34%
Interest expense to average interest-earning assets 2.45%
Net interest margin 5.89%
====
(1) Reflects amounts based on continuing operations.
(2) Consists of available-for-sale and held to maturity securities.
(3) Reflects the impact of adopting the new consolidation accounting
standard on January 1, 2010, which was not retroactively applied. This
presentation is consistent with what was previously reported as managed.
(4) Certain prior period amounts have been revised to confirm to the
current period presentation.
* In addition to analyzing the Company's results on a reported basis,
management evaluates Capital One's results on a "managed" basis, which is
a non-GAAP financial measure. Because of the January 1, 2010, adoption of
the new consolidation accounting standards. The Company's reported or GAAP
results subsequent to January 1, 2010 will be comparable to its results on
a "managed" basis.
CAPITAL ONE FINANCIAL CORPORATION (COF)
LENDING INFORMATION AND STATISTICS
MANAGED BASIS (1)
2010 2009 2009
Q1 Q4 Q1 (2)
--- --- ------
Period end loans held
for investment
(in thousands)
Domestic credit card $56,228,012 $60,299,827 $67,015,166
International credit
card 7,578,110 8,223,835 8,069,961
Total Credit Card $63,806,122 $68,523,662 $75,085,127
----------- ----------- -----------
Commercial and multi
family real estate $13,617,900 $13,843,158 $13,522,154
Middle market 10,310,156 10,061,819 9,850,735
Specialty lending 3,618,987 3,554,563 3,489,813
--------- --------- ---------
Total Commercial
Lending $27,547,043 $27,459,540 $26,862,702
Small-ticket
commercial real
estate 2,065,095 2,153,510 (8) 2,568,395
--------- --------- ---------
Total Commercial
Banking $29,612,138 $29,613,050 $29,431,097
----------- ----------- -----------
Automobile $17,446,430 $18,186,064 $20,795,291
Mortgages 13,966,471 14,893,187 9,648,271
Retail banking 4,969,775 5,135,242 5,499,070
Total Consumer Banking $36,382,676 $38,214,493 $35,942,632
----------- ----------- -----------
Other loans (3) $464,347 $451,697 $9,270,663
-------- -------- ----------
Total $130,265,283 $136,802,902 $149,729,519
============ ============ ============
Average loans held for
investment
(in thousands)
Domestic credit card $58,107,647 $60,443,441 $69,187,704
International credit
card 7,814,411 8,299,895 8,382,679
Total Credit Card $65,922,058 $68,743,336 $77,570,383
----------- ----------- -----------
Commercial and multi-
family real estate $13,716,376 $13,926,098 $13,437,351
Middle market 10,323,528 10,052,406 10,003,213
Specialty lending 3,609,231 3,534,537 3,504,544
--------- --------- ---------
Total Commercial
Lending $27,649,135 $27,513,041 $26,945,108
Small-ticket
commercial real
estate 2,073,539 2,354,204 2,600,169
--------- --------- ---------
Total Commercial
Banking $29,722,674 $29,867,245 $29,545,277
----------- ----------- -----------
Automobile $17,768,721 $18,767,555 $21,123,000
Mortgages 15,433,825 15,169,985 9,860,646
Retail banking 5,042,814 5,176,583 5,559,451
Total Consumer Banking $38,245,360 $39,114,123 $36,543,097
----------- ----------- -----------
Other loans (3) $488,594 $459,477 $3,523,335
-------- -------- ----------
Total $134,378,686 $138,184,181 $147,182,092
============ ============ ============
Net Charge-off Rates
Domestic credit card 10.48% 9.59% 8.39%
International credit
card 8.83% 9.52% 7.30%
Total Credit Card 10.29% 9.58% 8.27%
----- ---- ----
Commercial and multi
family real estate
(4) 1.45% 3.02% 0.63%
Middle market (4) 0.82% 0.75% 0.07%
Specialty lending 0.90% 1.85% 0.86%
---- ---- ----
Total Commercial
Lending (4) 1.14% 2.04% 0.45%
Small-ticket
commercial real
estate 4.43% 13.08% (8) 1.74%
---- ----- ----
Total Commercial
Banking (4) 1.37% 2.91% 0.56%
---- ---- ----
Automobile 2.97% 4.55% 4.88%
Mortgages (4) 0.94% 0.72% 0.45%
Retail banking (4) 2.11% 2.93% 2.35%
Total Consumer Banking
(4) 2.03% 2.85% 3.30%
---- ---- ----
Other loans 18.82% 28.25% 4.58%
----- ----- ----
Total 6.02% 6.33% 5.41%
==== ==== ====
30+ day performing
delinquency rate
Domestic credit card 5.30% 5.78% 5.08%
International credit
card 6.39% 6.55% 6.25%
Total Credit Card 5.43% 5.88% 5.20%
---- ---- ----
Automobile (5) 7.58% 10.03% 7.48%
Mortgages (4) 0.93% 1.26% 1.91%
Retail banking (4) 1.02% 1.23% 1.16%
Total Consumer Banking
(4) 4.13% 5.43% 5.01%
==== ==== ====
Nonperforming Asset
Rates (6) (7)
Commercial and multi
family real estate
(4) 3.65% 3.25% 2.00%
Middle market (4) 1.15% 1.09% 0.57%
Specialty lending 2.18% 2.25% 1.16%
---- ---- ----
Total Commercial
Lending (4) 2.52% 2.33% 1.37%
Small-ticket
commercial real
estate 4.18% 4.87% (8) 8.00%
---- ---- ----
Total Commercial
Banking (4) 2.64% 2.52% 1.95%
---- ---- ----
Automobile (5) 0.55% 0.92% 0.69%
Mortgages (4) 3.17% 2.24% 1.89%
Retail banking (4) 2.07% 2.11% 1.68%
Total Consumer Banking
(4) 1.76% 1.60% 1.16%
==== ==== ====
CAPITAL ONE FINANCIAL CORPORATION (COF)
CREDIT CARD SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING
OPERATIONS
MANAGED BASIS (1)
2010 2009 2009
(in thousands) Q1 Q4 Q1
-------------- --- --- ---
Credit Card:
------------
Earnings
Net interest income $2,113,075 $2,029,221 $1,691,688
Non-interest income 718,632 897,006 985,481
------- ------- -------
Total revenue $2,831,707 $2,926,227 $2,677,169
Provision for loan and lease
losses 1,175,217 1,204,693 1,682,786
Non-interest expenses 914,052 942,428 988,652
------- ------- -------
Income (loss) before taxes 742,438 779,106 5,731
Income taxes (benefit) 252,853 269,182 2,402
------- ------- -----
Net income (loss) $489,585 $509,924 $3,329
======== ======== ======
Selected Metrics
Period end loans held for
investment $63,806,122 $68,523,662 $75,085,127
Average loans held for
investment $65,922,058 $68,743,336 $77,570,383
Loans held for investment
yield 14.88% 14.21% 11.51%
Revenue margin 17.18% 17.03% 13.81%
Net charge-off rate 10.29% 9.58% 8.27%
30+ day performing
delinquency rate 5.43% 5.88% 5.20%
Purchase volume (9) $23,923,514 $26,865,498 $23,473,560
Domestic Card Sub-segment
Earnings
Net interest income $1,865,280 $1,781,573 $1,504,695
Non-interest income 618,507 793,934 883,891
------- ------- -------
Total revenue $2,483,787 $2,575,507 $2,388,586
Provision for loan and lease
losses 1,096,215 1,033,341 1,521,997
Non-interest expenses 809,423 832,878 865,460
------- ------- -------
Income (loss) before taxes 578,149 709,288 1,129
Income taxes (benefit) 205,937 248,251 396
------- ------- ---
Net income (loss) $372,212 $461,037 $733
======== ======== ====
Selected Metrics
Period end loans held for
investment $56,228,012 $60,299,827 $67,015,166
Average loans held for
investment $58,107,647 $60,443,441 $69,187,704
Loans held for investment
yield 14.78% 14.08% 11.40%
Revenue margin 17.10% 17.04% 13.81%
Net charge-off rate 10.48% 9.59% 8.39%
30+ day performing
delinquency rate 5.30% 5.78% 5.08%
Purchase volume (9) $21,987,661 $24,592,679 $21,601,837
International Card Sub-
segment
Earnings
Net interest income $247,795 $247,648 $186,993
Non-interest income 100,125 103,072 101,590
------- ------- -------
Total revenue $347,920 $350,720 $288,583
Provision for loan and lease
losses 79,002 171,352 160,789
Non-interest expenses 104,629 109,550 123,192
------- ------- -------
Income (loss) before taxes 164,289 69,818 4,602
Income taxes (benefit) 46,916 20,931 2,006
------ ------ -----
Net income (loss) $117,373 $48,887 $2,596
======== ======= ======
Selected Metrics
Period end loans held for
investment $7,578,110 $8,223,835 $8,069,961
Average loans held for
investment $7,814,411 $8,299,895 $8,382,679
Loans held for investment
yield 15.65% 15.19% 12.41%
Revenue margin 17.81% 16.90% 13.77%
Net charge-off rate 8.83% 9.52% 7.30%
30+ day performing
delinquency rate 6.39% 6.55% 6.25%
Purchase volume (9) $1,935,853 $2,272,819 $1,871,723
CAPITAL ONE FINANCIAL CORPORATION (COF)
COMMERCIAL BANKING SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR
CONTINUING OPERATIONS
MANAGED BASIS (1)
2010 2009 2009
(in thousands) Q1 Q4 Q1
-------------- --- --- ---
Commercial Banking:
-------------------
Earnings
Net interest income $311,401 $318,576 $245,459
Non-interest income 42,375 37,992 41,214
------ ------ ------
Total revenue $353,776 $356,568 $286,673
Provision for loan and lease
losses 238,209 368,493 117,304
Non-interest expenses 192,420 197,355 141,805
------- ------- -------
Income (loss) before taxes (76,853) (209,280) 27,564
Income taxes (benefit) (27,375) (73,248) 9,647
------- ------- -----
Net income (loss) $(49,478) $(136,032) $17,917
======== ========= =======
Selected Metrics
Period end loans held for
investment $29,612,138 $29,613,050 $29,431,097
Average loans held for investment $29,722,674 $29,867,245 $29,545,277
Loans held for investment yield 5.03% 5.11% 4.92%
Period end deposits $21,605,482 $20,480,297 $15,691,679
Average deposits $21,858,792 $19,420,005 $16,045,943
Deposit interest expense rate 0.72% 0.80% 0.92%
Core deposit intangible
amortization $14,389 $13,847 $9,092
Net charge-off rate (4) 1.37% 2.91% 0.56%
Nonperforming loans as a
percentage of loans held for
investment (4) 2.48% 2.37% 1.85%
Nonperforming asset rate (4) 2.64% 2.52% 1.95%
CAPITAL ONE FINANCIAL CORPORATION (COF)
CONSUMER BANKING SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR
CONTINUING OPERATIONS
MANAGED BASIS (1)
2010 2009 2009
(in thousands) Q1 Q4 Q1
-------------- --- --- ---
Consumer Banking:
-----------------
Earnings
Net interest income $896,588 $833,369 $723,654
Non-interest income 315,612 153,099 163,257
------- ------- -------
Total revenue $1,212,200 $986,468 $886,911
Provision for loan and lease
losses 49,526 249,309 268,233
Non-interest expenses 688,381 749,021 579,724
------- ------- -------
Income (loss) before taxes 474,293 (11,862) 38,954
Income taxes (benefit) 168,943 (4,152) 13,634
------- ------ ------
Net income (loss) $305,350 $(7,710) $25,320
======== ======= =======
Selected Metrics
Period end loans held for
investment $36,382,676 $38,214,493 $35,942,632
Average loans held for
investment $38,245,360 $39,114,123 $36,543,097
Loans held for investment
yield 8.96% 8.83% 9.43%
Auto loan originations 1,343,463 1,018,125 1,463,402
Period end deposits $76,883,450 $74,144,805 $63,422,760
Average deposits $75,115,342 $72,975,666 $62,730,380
Deposit interest expense
rate 1.27% 1.41% 2.04%
Core deposit intangible
amortization $37,735 $39,974 $35,593
Net charge-off rate (4) 2.03% 2.85% 3.30%
Nonperforming loans as a
percentage of loans held 1.62% 1.45% 0.98%
for investment (4) (5)
Nonperforming asset rate (4)
(5) 1.76% 1.60% 1.16%
30+ day performing
delinquency rate (4) (5) 4.13% 5.43% 5.01%
Period end loans serviced
for others $26,777,607 $30,283,326 $22,270,797
CAPITAL ONE FINANCIAL CORPORATION (COF)
OTHER AND TOTAL SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR
CONTINUING OPERATIONS
MANAGED BASIS (1)
2010 2009 2009
(in thousands) Q1 Q4 Q1 (2)
-------------- --- --- ------
Other:
------
Earnings
Net interest income $(90,933) $(11,051) $89,189
Non-interest income (13,935) 110,829 (204,290)
------- ------- --------
Total revenue $(104,868) $99,778 $(115,101)
Provision for loan and
lease losses 18,452 24,309 63,634
Restructuring expenses(10) - 32,036 17,627
Non-interest expenses 52,748 27,152 17,481
------ ------ ------
Income (loss) before taxes (176,068) 16,281 (213,843)
Income taxes (benefit) (150,062) (21,423) (84,173)
-------- ------- -------
Net income (loss) $(26,006) $37,704 $(129,670)
======== ======= =========
Selected Metrics
Period end loans held for
investment (3) $464,347 $451,697 $9,270,663
Average loans held for
investment (3) $488,594 $459,477 $3,523,335
Period end deposits $19,297,627 $21,183,994 $42,001,885
Average deposits $20,556,290 $22,201,746 $33,360,422
Total:
------
Earnings
Net interest income $3,230,131 $3,170,115 $2,749,990
Non-interest income 1,062,684 1,198,926 985,662
--------- --------- -------
Total revenue $4,292,815 $4,369,041 $3,735,652
Provision for loan and
lease losses 1,481,404 1,846,804 2,131,957
Restructuring expenses
(10) - 32,036 17,627
Non-interest expenses 1,847,601 1,915,956 1,727,662
--------- --------- ---------
Income (loss) before taxes 963,810 574,245 (141,594)
Income taxes (benefit) 244,359 170,359 (58,490)
------- ------- -------
Net income (loss) $719,451 $403,886 $(83,104)
======== ======== ========
Selected Metrics
Period end loans held for
investment $130,265,283 $136,802,902 $149,729,519
Average loans held for
investment $134,378,686 $138,184,181 $147,182,092
Period end deposits $117,786,559 $115,809,096 $121,116,324
Average deposits $117,530,424 $114,597,417 $112,136,745
CAPITAL ONE FINANCIAL CORPORATION (COF)
LOAN DISCLOSURES AND SEGMENT
FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS NOTES
In addition to analyzing the Company's results on a reported
basis, management evaluates Capital One's results on a
"managed" basis, which is a non-GAAP financial measure.
Capital One also analyzes the results of each of its lines of
business on a "managed" basis. Capital One's managed results
reflect the Company's reported results, adjusted to reflect
the consolidation of the majority of the Company's credit
card securitization trusts. Because of the January 1, 2010,
adoption of the new consolidation accounting standards, the
Company's consolidated reported results subsequent to January
1, 2010 will be comparable to its consolidated results on a
"managed" basis. However, the Company's total segment results
differs from its reported consolidated results because our
segment results include the loans underlying one of our
securitization trusts that remains unconsolidated. The
outstanding balance of the loans in this off-balance sheet
trust are reflected in our segment results was $150.8 million
(1) as of March 31, 2010.
The Impact and balances from the Chevy Chase Bank acquisition
are included in the Other category for the first quarter of
(2) 2009.
Other loans held for investment includes unamortized premiums
and discounts on loans acquired as part of North Fork and
(3) Hibernia acquisitions.
Loans acquired as part of the Chevy Chase Bank, FSB (CCB)
acquisition are included in the total period end and average
loans held for investment used in calculating the net charge-
off and the 30+ day performing delinquency ratios. The loan
balances and ratios excluding these loans are presented
(4) below.
Q1 2010 Q4 2009
------- -------
CCB period end acquired loan portfolio
(in millions) $6,799.4 $7,250.5
CCB average acquired loan portfolio (in
millions) $7,037.3 $7,511.9
Net charge-off rate
Commercial and Multi-Family Real Estate 1.48% 3.05%
Middle Market 0.87% 0.75%
---- ----
Total Commercial Lending 1.48% 2.05%
---- ----
Total Commercial Banking 1.41% 2.93%
Mortgage 1.02% 1.24%
Retail Banking 2.22% 3.20%
---- ----
Total Consumer Banking 2.28% 3.45%
30+ day performing delinquency rate
Mortgage 1.58% 2.18%
Retail Banking 1.07% 1.30%
---- ----
Total Consumer Banking 4.95% 6.56%
Nonperforming asset rate
Commercial and Multi-Family Real Estate 3.71% 3.34%
Middle Market 1.23% 1.13%
---- ----
Total Commercial Lending 2.60% 2.39%
---- ----
Total Commercial Banking 2.72% 2.62%
Mortgage 5.36% 3.88%
Retail Banking 2.17% 2.23%
---- ----
Total Consumer Banking 2.11% 1.93%
Nonperforming loans as a percentage of
loans held for investment
Commercial Banking 2.55% 2.43%
Consumer Banking 1.93% 1.75%
Includes non accrual consumer auto loans 90+ days past
(5) due.
Nonperforming assets is comprised of nonperforming loans
and other real estate owned (OREO). The nonperforming
asset ratios are calculated based on nonperforming assets
divided by the combined total of loans held for
(6) investment and OREO.
The Company's policy is not to reclassify credit card
loans as nonperforming loans. Credit card loans continue
to accrue finance charges and fees until charged off. The
amount of finance charges and fees considered
uncollectible are suppressed and are not recognized in
(7) income.
During Q4 2009, the Company reclassified $127.5 million of
small ticket commercial real estate from loans held for
investment to loans held for sale and recognized charge-
(8) offs of $79.5 million.
Includes all purchase transactions net of returns and
(9) excludes cash advance transactions.
The company completed its 2007 restructuring initiative
(10) during 2009.
SOURCE Capital One Financial Corporation