Capital One Reports Record First Quarter Earnings; Earnings Per Share Rise 29% Over Year Ago Period
FALLS CHURCH, Va., April 17 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced record first quarter 2001 earnings, driven by a 36 percent increase in total revenues, and the best credit performance of any of the major credit card institutions in the country.
Earnings for the first quarter of 2001 were $143.6 million, or $0.66 per share, versus earnings of $106.7 million, or $0.51 per share, for the comparable period in the prior year. Earnings in the fourth quarter of 2000 were $128.3 million, or $0.61 per share.
"Capital One achieved its fifteenth consecutive quarter of record earnings reflecting the extraordinary capacity of our information-based strategy to deliver consistent growth and performance," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "Our ability to grow and manage the credit quality of our portfolio has put us on track for another year of 30 percent earnings growth."
First quarter 2001 revenue, defined as managed net interest income and non-interest income, rose to $1.5 billion versus $1.4 billion in the fourth quarter of 2000 and $1.1 billion for the comparable period in the prior year. For the quarter, Capital One added 2.7 million net new accounts, bringing total accounts to 36.5 million. The company's managed consumer loan balances increased by $2.0 billion to $31.6 billion.
The managed net charge-off rate declined to 3.75 percent for the first quarter of 2001 compared to 3.98 percent for the fourth quarter of 2000. The managed delinquency rate (30+ days) also declined to 4.72 percent as of March 31, 2001, compared to 5.23 percent as of December 31, 2000.
"Our relentless scientific testing and stringent risk management systems are evident in both our net charge-off rate and our managed delinquency rate. By continuing to deliver the right products to the right customers through a variety of channels, we've grown our customer base to a record 36.5 million worldwide. Our achievements this quarter reflect our absolute commitment to having the flexibility and disciplined marketing strategies necessary to quickly bring to market innovative products that meet our customers' needs," said Nigel W. Morris, Capital One's President and Chief Operating Officer.
The company's managed net interest margin decreased to 9.21 percent in the first quarter of 2001 versus 10.16 percent in the fourth quarter of 2000 and 11.23 percent in the comparable period of 2000, reflecting strong growth in the superprime portfolio and the success of the company's 0% purchase teaser offer. The decreased margin was the primary contributor to the decline in the risk adjusted margin to 14.80 percent, which compares to 16.32 percent for the fourth quarter of 2000 and 16.57 percent for the comparable period in the prior year.
Marketing expense for the first quarter of 2001 decreased to $231.2 million versus $259.5 million in the fourth quarter of 2000, and increased $29 million over the $201.9 million spent in the comparable period of the prior year. Other non-interest expenses (excluding marketing) for the first quarter of 2001 were $687 million versus $617 million for the fourth quarter of 2000 and $508 million in the comparable period of the prior year. Annualized operating expenses per account increased slightly to $78.26 for the first quarter of 2001 from $78.09 for the fourth quarter of 2000 and decreased from $82.93 from the comparable period in the prior year.
The allowance for loan losses increased by $70 million during the first quarter to $597 million or 3.83 percent of on-balance sheet receivables as of March 31, 2001, compared to 3.49 percent as of December 31, 2000. The capital to managed assets ratio was strong as of March 31, 2001, at 6.93 percent, reflecting the issuance of $413 million in equity in January 2001.
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 36.5 million accounts and $31.6 billion in managed loans outstanding as of March 31, 2001. Capital One, a Fortune 500 company, is one of the largest providers of MasterCard and Visa credit cards in the world. Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 500 index.
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CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY
2001 2000
(in millions, except per share data and as noted) Q1 Q4
Earnings (Managed Basis)
Net Interest Income $759.3 $716.1
Non-Interest Income 747.1 696.5
Total Revenue 1,506.4 1,412.5
Provision for Loan Losses 356.5 329.1
Marketing Expenses 231.2 259.5
Operating Expenses 687.0 617.1
Income Before Taxes 231.6 206.9
Tax Rate 38.0% 38.0%
Net Income $143.6 $128.3
Common Share Statistics
Basic EPS $0.70 $0.65
Diluted EPS $0.66 $0.61
Dividends Per Share $0.03 $0.03
Book Value Per Share (period end) $11.81 $9.94
Stock Price Per Share (period end) $55.50 $65.81
Total Market Capitalization (period end) $11,509.1 $12,989.3
Shares Outstanding (period end) 207.4 197.4
Shares Used to Compute Basic EPS 204.8 197.0
Shares Used to Compute Diluted EPS 217.8 210.4
Managed Loan Statistics (period avg.)
Average Loans $30,505 $26,377
Average Earning Assets $32,983 $28,188
Average Assets $35,303 $30,234
Average Equity $2,347 $1,865
Net Interest Margin 9.21% 10.16%
Risk Adjusted Margin(1) 14.80% 16.32%
Return on Average Assets (ROA) 1.63% 1.70%
Return on Average Equity (ROE) 24.47% 27.51%
Net Charge-Off Rate 3.75% 3.98%
Net Charge-Offs $285.9 $262.3
Cost Per Account (in dollars) $78.26 $78.09
Managed Loan Statistics (period end)
Reported Loans $15,572 $15,113
Securitized Loans 15,979 14,411
Total Loans $31,551 $29,524
Delinquency Rate (30+ days) 4.72% 5.23%
Number of Accounts (000's) 36,462 33,774
Total Assets $36,749 $33,286
Capital, Including Preferred Interests $2,547.7 $2,061.0
Capital to Managed Assets Ratio 6.93% 6.19%
(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 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
(in millions, except per share data and as noted) Q1
Earnings (Managed Basis)
Net Interest Income $618.9
Non-Interest Income 489.3
Total Revenue 1,108.2
Provision for Loan Losses 226.1
Marketing Expenses 201.9
Operating Expenses 508.0
Income Before Taxes 172.1
Tax Rate 38.0%
Net Income $106.7
Common Share Statistics
Basic EPS $0.54
Diluted EPS $0.51
Dividends Per Share $0.03
Book Value Per Share (period end) $7.93
Stock Price Per Share (period end) $47.94
Total Market Capitalization (period end) $9,376.5
Shares Outstanding (period end) 195.6
Shares Used to Compute Basic EPS 196.6
Shares Used to Compute Diluted EPS 208.7
Managed Loan Statistics (period avg.)
Average Loans $20,181
Average Earning Assets $22,038
Average Assets $23,497
Average Equity $1,567
Net Interest Margin 11.23%
Risk Adjusted Margin(1) 16.57%
Return on Average Assets (ROA) 1.82%
Return on Average Equity (ROE) 27.24%
Net Charge-Off Rate 3.87%
Net Charge-Offs $195.3
Cost Per Account (in dollars) $82.93
Managed Loan Statistics (period end)
Reported Loans $9,449
Securitized Loans 10,850
Total Loans $20,299
Delinquency Rate (30+ days) 5.26%
Number of Accounts (000's) 25,302
Total Assets $23,361
Capital, Including Preferred Interests $1,649.3
Capital to Managed Assets Ratio 7.06%
(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)
March 31
2001
Assets:
Cash and due from banks $49,842
Federal funds sold and resale agreements 247,676
Interest-bearing deposits at other banks 492,390
Cash and cash equivalents 789,908
Securities available for sale 2,112,180
Consumer loans 15,571,754
Less: Allowance for loan losses (597,000)
Net loans 14,974,754
Premises and equipment, net 709,207
Interest receivable 108,944
Accounts receivable from securitizations 1,492,818
Other 614,194
Total assets $20,802,005
Liabilities:
Interest-bearing deposits $9,390,524
Other borrowings 1,845,509
Senior notes 5,040,761
Interest payable 135,863
Other 1,940,103
Total liabilities 18,352,760
Stockholders' Equity:
Common stock 2,086
Paid-in capital, net 974,503
Retained earnings and cumulative
other comprehensive income 1,519,855
Less: Treasury stock, at cost (47,199)
Total stockholders' equity 2,449,245
Total liabilities and stockholders' equity $20,802,005
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Balance Sheets
(in thousands)(unaudited)
December 31
2000
Assets:
Cash and due from banks $74,493
Federal funds sold and resale agreements 60,600
Interest-bearing deposits at other banks 101,614
Cash and cash equivalents 236,707
Securities available for sale 1,696,815
Consumer loans 15,112,712
Less: Allowance for loan losses (527,000)
Net loans 14,585,712
Premises and equipment, net 664,461
Interest receivable 82,675
Accounts receivable from securitizations 1,143,902
Other 479,069
Total assets $18,889,341
Liabilities:
Interest-bearing deposits $8,379,025
Other borrowings 2,925,938
Senior notes 4,050,597
Interest payable 122,658
Other 1,448,609
Total liabilities 16,926,827
Stockholders' Equity:
Common stock 1,997
Paid-in capital, net 575,179
Retained earnings and cumulative
other comprehensive income 1,474,024
Less: Treasury stock, at cost (88,686)
Total stockholders' equity 1,962,514
Total liabilities and stockholders' equity $18,889,341
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Balance Sheets
(in thousands)(unaudited)
March 31
2000
Assets:
Cash and due from banks $84,084
Federal funds sold and resale agreements 18,000
Interest-bearing deposits at other banks 96,491
Cash and cash equivalents 198,575
Securities available for sale 1,519,027
Consumer loans 9,449,498
Less: Allowance for loan losses (372,000)
Net loans 9,077,498
Premises and equipment, net 501,238
Interest receivable 81,967
Accounts receivable from securitizations 666,972
Other 479,781
Total assets $12,525,058
Liabilities:
Interest-bearing deposits $4,096,241
Other borrowings 1,955,978
Senior notes 3,818,936
Interest payable 88,438
Other 1,014,384
Total liabilities 10,973,977
Stockholders' Equity:
Common stock 1,997
Paid-in capital, net 598,012
Retained earnings and cumulative
other comprehensive income 1,092,021
Less: Treasury stock, at cost (140,949)
Total stockholders' equity 1,551,081
Total liabilities and stockholders' equity $12,525,058
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income
(in thousands, except per share data)(unaudited)
Three Months Ended
March 31 December 31
2001 2000
Interest Income:
Consumer loans, including fees $617,889 $679,079
Securities available for sale 28,234 25,608
Other 3,750 1,548
Total interest income 649,873 706,235
Interest Expense:
Deposits 146,961 118,072
Other borrowings 43,900 57,699
Senior notes 83,293 71,904
Total interest expense 274,154 247,675
Net interest income 375,719 458,560
Provision for loan losses 250,614 247,226
Net interest income after
provision for loan losses 125,105 211,334
Non-Interest Income:
Servicing and securitizations 543,791 291,634
Service charges and other customer-related fees 406,134 504,239
Interchange 74,851 76,207
Total non-interest income 1,024,776 872,080
Non-Interest Expense:
Salaries and associate benefits 325,716 287,742
Marketing 231,200 259,461
Communications and data processing 75,292 74,436
Supplies and equipment 73,603 76,171
Occupancy 31,302 29,404
Other 181,134 149,302
Total non-interest expense 918,247 876,516
Income before income taxes 231,634 206,898
Income taxes 88,021 78,621
Net income $143,613 $128,277
Basic earnings per share $0.70 $0.65
Diluted earnings per share $0.66 $0.61
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
March 31
2000
Interest Income:
Consumer loans, including fees $488,937
Securities available for sale 24,734
Other 1,776
Total interest income 515,447
Interest Expense:
Deposits 52,120
Other borrowings 41,454
Senior notes 68,376
Total interest expense 161,950
Net interest income 353,497
Provision for loan losses 126,525
Net interest income after provision for loan losses 226,972
Non-Interest Income:
Servicing and securitizations 270,758
Service charges and other customer-related fees 341,232
Interchange 43,070
Total non-interest income 655,060
Non-Interest Expense:
Salaries and associate benefits 234,836
Marketing 201,938
Communications and data processing 70,822
Supplies and equipment 52,274
Occupancy 25,292
Other 124,758
Total non-interest expense 709,920
Income before income taxes 172,112
Income taxes 65,403
Net income $106,709
Basic earnings per share $0.54
Diluted earnings per share $0.51
Dividends paid per share $0.03
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Managed (1) Quarter Ended 03/31/01
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $30,505,450 $1,235,002 16.19%
Securities available for sale 1,913,357 28,234 5.90
Other 564,592 3,750 2.66
Total earning assets $32,983,399 $1,266,986 15.37%
Interest-bearing liabilities:
Deposits $8,996,414 $146,961 6.53%
Other borrowings 2,442,200 43,900 7.19
Senior notes 4,678,452 83,293 7.12
Securitization liability 14,948,262 233,524 6.25
Total interest-bearing
liabilities $31,065,328 $507,678 6.54%
Net interest spread 8.83%
Interest income to average earning assets 15.37%
Interest expense to average earning assets 6.16
Net interest margin 9.21%
(1) The 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 12/31/00
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $26,377,427 $1,146,056 17.38%
Securities available for sale 1,688,092 25,608 6.07
Other 122,192 1,548 5.07
Total earning assets $28,187,711 $1,173,212 16.65%
Interest-bearing liabilities:
Deposits $7,155,771 $118,072 6.60%
Other borrowings 3,290,499 57,699 7.01
Senior notes 4,084,761 71,904 7.04
Securitization liability 12,274,193 209,481 6.83
Total interest-bearing
liabilities $26,805,224 $457,156 6.82%
Net interest spread 9.83%
Interest income to average earning assets 16.65%
Interest expense to average earning assets 6.49
Net interest margin 10.16%
(1) The 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 03/31/00
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $20,181,373 $911,418 18.06%
Securities available for sale 1,681,537 24,734 5.88
Other 174,658 1,776 4.07
Total earning assets $22,037,568 $937,928 17.02%
Interest-bearing liabilities:
Deposits $3,894,250 $52,120 5.35%
Other borrowings 2,504,724 41,454 6.62
Senior notes 4,019,484 68,376 6.80
Securitization liability 10,458,226 157,124 6.01
Total interest-bearing
liabilities $20,876,684 $319,074 6.11%
Net interest spread 10.91%
Interest income to average earning assets 17.02%
Interest expense to average earning assets 5.79
Net interest margin 11.23%
(1) The 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/