Capital One Reports First Quarter Earnings
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Company Reaffirms EPS Guidance for 2005 of $6.60 to $7.00
MCLEAN, Va., April 20, 2005 /PRNewswire-FirstCall via COMTEX/ -- Capital One Financial Corporation (NYSE: COF) today announced that its earnings for the first quarter of 2005 were $506.6 million, or $1.99 per share (diluted), compared with $450.8 million, or $1.84 per share, for the first quarter of 2004, and $195.1 million, or $.77 per share, in the fourth quarter of 2004.
"The company's first quarter results reflect strong performance in our US Card business as well as continued success in our Auto Finance and Global Financial Services businesses," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "Additionally, the acquisition of Hibernia Corporation, which we announced in March, will enhance our diversification efforts and growth prospects, while lowering our funding costs and overall risk profile."
Managed loans grew to $81.6 billion as of March 31, 2005, up $1.7 billion, or 9 percent annualized, from the previous quarter, and up $9.8 billion, or 14 percent, from the first quarter of 2004. The company continues to expect that managed loans will grow at a rate of between 12 and 15 percent during 2005, excluding the impact of the Hibernia transaction.
The managed charge-off rate decreased to 4.13 percent in the first quarter of 2005 from 4.37 percent in the previous quarter, and from 4.83 percent in the first quarter of 2004. The company now expects its quarterly managed charge-off rate to stay below 4.25 percent in 2005, with seasonal variations and excluding the impact of the Hibernia transaction. The company decreased its allowance for loan losses in the first quarter of 2005 by $65.0 million. The reduction was driven largely by seasonality of loan growth and credit metrics. The company continues to expect a net increase in its allowance for loan losses in the full year 2005, inclusive of the first quarter reduction and excluding the impact of the Hibernia transaction. The managed delinquency rate (30+ days) decreased to 3.45 percent as of March 31, 2005 from 3.82 percent as of the end of the previous quarter. The managed delinquency rate as of March 31, 2004 was 3.80 percent.
"Solid revenue growth, improvements in operating efficiency, and strong credit performance across our business keeps us on track to deliver diluted earnings of between $6.60 and $7.00 per share in 2005," said Gary L. Perlin, Capital One's Chief Financial Officer. This earnings guidance incorporates the expected impact of completing the acquisition of Hibernia Corporation in the third quarter of 2005, and includes pro rata 2005 earnings for Hibernia Corporation as estimated by I/B/E/S as of March 4, 2005.
Capital One's managed revenue margin decreased to 12.50 percent in the first quarter of 2005 from 12.66 percent in the previous quarter, in line with our bias towards lower loss assets. The company's managed revenue margin was 13.38 percent in the first quarter of 2004.
Marketing expenses for the first quarter of 2005 were $311.8 million, down $199.3 million from the $511.1 million spent in the fourth quarter of 2004. Marketing expenses were $255.1 million in the comparable quarter of the prior year. The company continues to expect annual marketing spend for 2005 to be similar to 2004, excluding the impact of the Hibernia transaction.
Annualized operating expenses as a percentage of average managed loans decreased to 4.98 percent in the first quarter of 2005, down from 5.44 percent in the previous quarter and 5.45 percent in the first quarter of 2004. Included in first quarter 2005 operating expenses were charges totaling $23.7 million for a combination of employee termination benefits and continued facility consolidations, as well as an $18.8 million reversal of a previously recognized impairment related to the sale of the Tampa, FL facility. The company expects about $40 million in additional restructuring charges in 2005 related to programs initiated in 2004.
The company continues to expect a return on managed assets of between 1.7 and 1.8 percent in 2005, with some quarterly variability, excluding the impact of the Hibernia transaction. The company expects that modest declines in its managed revenue margin will be more than offset by improvements in expenses as a percentage of managed loans.
During the first quarter of 2005, Capital One completed the acquisitions of Hfs Group, Onyx, InsLogic, and eSmartloan. Capital One also announced a definitive agreement to acquire Hibernia Corporation (NYSE: HIB) in a stock and cash transaction valued at approximately $5.3 billion. The transaction is subject to regulatory and Hibernia shareholder approvals and is expected to be completed in the third quarter of 2005.
The company generates earnings from its managed loan portfolio, which includes both on-balance sheet loans and securitized (off-balance sheet) loans. For this reason, the company believes managed financial measures to be useful to stakeholders. In compliance with Regulation G of the Securities and Exchange Commission, the company is providing a numerical reconciliation of managed financial measures to comparable measures calculated on a reported basis using generally accepted accounting principles (GAAP). Please see the schedule titled "Reconciliation to GAAP Financial Measures" attached to this release for more information.
The company cautions that its current expectations in this release, in the presentation slides available on the company's website and on its Form 8-K dated April 20, 2005 for 2005 earnings, charge-off rates, revenue margins, return on assets, allowance for loan losses, loan growth rates, marketing, the composition of loan growth, restructuring charges, the benefits of the business combination transaction involving Capital One and Hibernia, including future financial and operating results, and the new company's plans, objectives, expectations and intentions are forward-looking statements and actual results could differ materially from current expectations due to a number of factors, including: continued intense competition from numerous providers of products and services which compete with our businesses; changes in our aggregate accounts and balances, and the growth rate and composition thereof; the company's ability to continue to diversify its assets; the company's ability to access the capital markets at attractive rates and terms to fund its operations and future growth; changes in the reputation of the credit card industry and/or the company with respect to practices or products; the success of the company's marketing efforts; the company's ability to execute effective tax planning strategies; the company's ability to execute on its strategic and operating plans; and general economic conditions affecting consumer income and spending, which may affect consumer bankruptcies, defaults, and charge-offs; the ability to obtain regulatory approvals of the proposed Capital One -- Hibernia transaction on the proposed terms and schedule; the failure of Hibernia stockholders to approve the transaction; the risk that the businesses will not be integrated successfully; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; and disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers.
A discussion of these and other factors can be found in Capital One's annual report and other reports filed with the Securities and Exchange Commission, including, but not limited to, Capital One's report on Form 10-K for the fiscal year ended December 31, 2004.
Additional Information About the Capital One - Hibernia Transaction
In connection with the proposed merger between Capital One and Hibernia, Capital One and Hibernia will file with the Securities and Exchange Commission (the "SEC") a Registration Statement on Form S-4 that will include a proxy statement of Hibernia that also constitutes a prospectus of Capital One. Hibernia will mail the proxy statement/prospectus to its stockholders. Investors and security holders are urged to read the proxy statement/prospectus regarding the proposed merger when it becomes available because it will contain important information. A free copy of the proxy statement/prospectus (when available) and other related documents filed by Capital One and Hibernia with the SEC may be obtained at the SEC's website at http://www.sec.gov. The proxy statement/prospectus (when it is available) and the other documents may also be obtained for free by accessing Capital One's website at http://www.capitalone.com under the tab "Investors" and then under the heading "SEC & Regulatory Filings" or by accessing Hibernia's website at http://www.hibernia.com under the tab "About Hibernia" and then under the heading "Investor Relations-SEC Filings."
Capital One, Hibernia and their respective directors, executive officers and certain other members of management and employees may be soliciting proxies from Hibernia stockholders in favor of the merger. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the Hibernia stockholders in connection with the proposed merger will be set forth in the proxy statement/prospectus when it is filed with the SEC. You can find information about Capital One's executive officers and directors in its definitive proxy statement filed with the SEC on March 21, 2005. You can find information about Hibernia's executive officers and directors in its definitive proxy statement filed with the SEC on March 15, 2005. You can obtain free copies of these documents from Capital One and Hibernia using the contact information above.
About Capital One
Headquartered in McLean, Virginia, Capital One Financial Corporation (http://www.capitalone.com) is a bank holding company whose principal subsidiaries, Capital One Bank, Capital One, F.S.B. and Capital One Auto Finance, Inc. offer a variety of consumer lending products. Capital One's subsidiaries collectively had 49.1 million accounts and $81.6 billion in managed loans outstanding as of March 31, 2005. Capital One is a Fortune 500 company and, through its subsidiaries, 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
NOTE: First quarter 2005 financial results, SEC Filings, and first quarter earnings conference call slides are accessible on Capital One's home page (http://www.capitalone.com). Choose "Investors" on the bottom right corner of the home page to view and download the earnings press release, slides, and other financial information. Additionally, a webcast of today's 5:00 pm (EDT) earnings conference call is accessible through the same link.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY REPORTED BASIS
2005 2004 2004
(in millions, except per share
data and as noted) Q1 Q4 Q1
Earnings (Reported Basis)
Net Interest Income $860.5 $784.6 $732.0
Non-Interest Income 1,516.0 1,521.5 (1) 1,443.1
Total Revenue(2) 2,376.5 2,306.1 2,175.1
Provision for Loan Losses 259.6 467.1 243.7
Marketing Expenses 311.8 511.1 255.1
Operating Expenses 1,016.1 (3) 1,045.4 (3) 969.7
Income Before Taxes 789.0 282.5 706.6
Tax Rate 35.8 % 30.9 % 36.2 %
Net Income $506.6 $195.1 $450.8
Common Share Statistics
Basic EPS $2.08 $0.82 $1.94
Diluted EPS $1.99 $0.77 $1.84
Dividends Per Share $0.03 $0.03 $0.03
Book Value Per Share
(period end) $35.62 $33.99 $28.54
Stock Price Per Share
(period end) $74.77 $84.21 $75.43
Total Market Capitalization
(period end) $18,849.5 $20,783.0 $18,084.9
Shares Outstanding (period end) 252.1 246.8 239.8
Shares Used to Compute Basic EPS 244.0 239.2 232.0
Shares Used to Compute
Diluted EPS 255.2 253.0 245.4
Reported Balance Sheet
Statistics (period avg.)
Average Loans $38,204 $36,096 $32,878
Average Earning Assets $50,898 $49,500 $44,112
Average Assets $56,288 $53,339 $47,699
Average Equity $8,568 $8,221 $6,443
Return on Average Assets (ROA) 3.60 % 1.46 % 3.78 %
Return on Average Equity (ROE) 23.65 % 9.49 % 27.99 %
Reported Balance Sheet
Statistics (period end)
Loans $37,959 $38,216 $33,172
Total Assets $55,632 $53,747 $49,146
Capital (4) $9,839 $9,231 $7,675
Loan growth $(257) $3,055 $321
% Loan Growth Q Over Q
(annualized) (3)% 35 % 4 %
% Loan Growth Y Over Y 14 % 16 % 20 %
Capital to Assets Ratio 17.69 % 17.17 % 15.62 %
Capital plus Allowance to Assets
Ratio 20.27 % 19.98 % 18.66 %
Revenue & Expense Statistics
(Reported)
Net Interest Income Growth
(annualized) 39 % 5 % 41 %
Non Interest Income Growth
(annualized) (1)% (5)% 2 %
Revenue Growth (annualized) 12 % (2)% 14 %
Net Interest Margin 6.76 % 6.34 % 6.64 %
Revenue Margin 18.68 % 18.64 % 19.72 %
Risk Adjusted Margin (5) 16.08 % 15.85 % 16.62 %
Operating Expense as a % of
Revenues 42.76 % 45.33 % 44.58 %
Operating Expense as a % of Avg
Loans (annualized) 10.64 % 11.58 % 11.80 %
Asset Quality Statistics
(Reported)
Allowance $1,440 $1,505 $1,495
30+ Day Delinquencies $1,319 $1,472 $1,266
Net Charge-Offs $330 $345 $342
Allowance as a % of Reported
Loans 3.79 % 3.94 % 4.51 %
Delinquency Rate (30+ days) 3.47 % 3.85 % 3.82 %
Net Charge-Off Rate 3.46 % 3.82 % 4.17 %
(1) Includes a $41.1 million gain resulting from the sale of the French
loan portfolio in Q4 2004 and a $31.5 million gain resulting from the
sale of a joint venture investment in South Africa in Q3 2004.
(2) In accordance with the Company's finance charge and fee revenue
recognition policy, the amounts billed to customers but not recognized
as revenue were as follows: Q1 2005 - $243.9, Q4 2004 - $276.8, Q3
2004 - $269.7, Q2 2004 - $263.5 million, and Q1 2004 - $285.5
million.
(3) Includes employee termination benefits and charges for facility
consolidation related to corporate-wide cost reduction initiatives of
$23.7 million, $42.1 million, $26.7 million and $56.0 million for Q1
2005, Q4 2004, Q3 2004 and Q2 2004, respectively. In addition, Q1 2005
includes a $18.8 million reversal of a previously recognized
impairment related to the sale of the Tampa, FL facility and Q3 2004
had charges of $20.6 million related to a change in the fixed asset
capitalization thresholds and $15.8 million related to impairment of
internally developed software.
(4) Includes preferred interests and mandatory convertible securities.
(5) 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 MANAGED BASIS(1)
2005 2004 2004
(in millions) Q1 Q4 Q1
Earnings (Managed Basis)
Net Interest Income $1,818.8 $1,701.8 $1,677.1
Non-Interest Income 1,071.4 1,099.0 (2) 1,014.5
Total Revenue (3) 2,890.2 2,800.8 2,691.6
Provision for Loan Losses 773.3 961.8 760.1
Marketing Expenses 311.8 511.1 255.1
Operating Expenses 1,016.1 (4) 1,045.4 (4) 969.7
Income Before Taxes 789.0 282.5 706.6
Tax Rate 35.8 % 30.9 % 36.2 %
Net Income $506.6 $195.1 $450.8
Managed Balance Sheet Statistics
(period avg.)
Average Loans $81,652 $76,930 $71,148
Average Earning Assets $92,477 $88,461 $80,495
Average Assets $99,283 $93,574 $85,324
Return on Average Assets (ROA) 2.04 % 0.83 % 2.11 %
Managed Balance Sheet Statistics
(period end)
Loans $81,592 $79,861 $71,817
Total Assets $98,724 $94,792 $87,197
Loan Growth $1,731 $4,404 $572
% Loan Growth Q over Q (annualized) 9 % 23 % 3 %
% Loan Growth Y over Y 14 % 12 % 21 %
Capital to Assets Ratio 9.97 % 9.74 % 8.80 %
Capital plus Allowance to Assets
Ratio 11.42 % 11.33 % 10.52 %
Number of Accounts (000's) 49,062 48,573 46,712
% Off-Balance Sheet Securitizations 53 % 52 % 53 %
% at Introductory Rate 6 % 7 % 8 %
Revenue & Expense Statistics
(Managed)
Net Interest Income Growth
(annualized) 28 % 8 % 27 %
Non Interest Income Growth
(annualized) (10)% 0 % (23)%
Revenue Growth (annualized) 13 % 4 % 6 %
Net Interest Margin 7.87 % 7.70 % 8.33 %
Revenue Margin 12.50 % 12.66 % 13.38 %
Risk Adjusted Margin (5) 8.85 % 8.87 % 9.11 %
Operating Expense as a % of Revenues 35.16 % 37.33 % 36.03 %
Operating Expense as a % of Avg
Loans (annualized) 4.98 % 5.44 % 5.45 %
Asset Quality Statistics (Managed)
30+ Day Delinquencies $2,812 $3,054 $2,731
Net Charge-Offs $844 $840 $859
Delinquency Rate (30+ days) 3.45 % 3.82 % 3.80 %
Net Charge-Off Rate 4.13 % 4.37 % 4.83 %
(1) The information in this statistical summary reflects the adjustment to
add back the effect of securitization transactions qualifying as sales
under generally accepted accounting principles. See accompanying
schedule - "Reconciliation to GAAP Financial Measures."
(2) Includes a $41.1 million gain resulting from the sale of the French
loan portfolio in Q4 2004 and a $31.5 million gain resulting from the
sale of a joint venture investment in South Africa in Q3 2004.
(3) In accordance with the Company's finance charge and fee revenue
recognition policy, the amounts billed to customers but not recognized
as revenue were as follows: Q1 2005 - $243.9, Q4 2004 - $276.8, Q3
2004 - $269.7, Q2 2004 - $263.5 million, and Q1 2004 - $285.5 million.
(4) Includes employee termination benefits and charges for facility
consolidation related to corporate-wide cost reduction initiatives of
$23.7 million, $42.1 million, $26.7 million and $56.0 million for Q1
2005, Q4 2004, Q3 2004 and Q2 2004, respectively. In addition, Q1 2005
includes a $18.8 million reversal of a previously recognized
impairment related to the sale of the Tampa, FL facility and Q3 2004
had charges of $20.6 million related to a change in the fixed asset
capitalization thresholds and $15.8 million related to impairment of
internally developed software.
(5) Risk adjusted margin is total revenue less net charge-offs as a
percentage of average earning assets.
CAPITAL ONE FINANCIAL CORPORATION (COF)
SEGMENT FINANCIAL & STATISTICAL SUMMARY - MANAGED BASIS(1)
2005 2004 2004
(in thousands) Q1 Q4 Q1
Segment Statistics
US Card:
Net interest income 1,250,638 $1,158,773 $1,200,577
Non-interest income 779,415 823,012 769,056
Provision for loan losses 489,036 649,862 535,279
Non-interest expenses 836,142 1,016,384 829,925
Income tax provision (benefit) 246,706 113,594 217,594
Net income (loss) $458,169 $201,945 $386,835
Loans receivable $46,629,763 $48,609,571 $45,297,959
Net charge-off rate 4.73% 4.93% 5.41%
Delinquency Rate (30+ days) 3.66% 3.97% 3.99%
Auto Finance:
Net interest income 249,507 $207,379 $189,199
Non-interest income 11,339 13,690 23,430
Provision for loan losses 92,313 88,408 80,182
Non-interest expenses 113,765 93,482 84,533
Income tax provision (benefit) 19,169 14,104 17,249
Net income (loss) $35,599 $25,075 $30,665
Loans receivable $13,292,953 $9,997,497 $8,833,929
Net charge-off rate 2.89% 3.87% 4.13%
Delinquency Rate (30+ days) 3.51% 5.50% 5.44%
Global Financial Services:
Net interest income $412,733 $390,262 $331,889
Non-interest income 233,841 240,781 177,326
Provision for loan losses 188,316 220,253 153,436
Non-interest expenses 351,476 368,020 279,860
Income tax provision (benefit) 36,309 13,561 24,984
Net income (loss) $70,473 $29,209 $50,935
Loans receivable $21,683,102 $21,240,325 $17,642,995
Net charge-off rate 3.55% 3.30% 3.60%
Delinquency Rate (30+ days) 3.04% 2.81% 2.63%
Other:
Net interest income $(94,118) $(54,587) $(44,587)
Non-interest income 46,806 21,496 44,724
Provision for loan losses 3,627 3,277 (8,771)
Non-interest expenses 26,449 78,641 30,578
Income tax provision (benefit) (19,709) (53,908) (4,041)
Net income (loss) $(57,679) $(61,101) $(17,629)
Loans receivable $(13,826) $13,906 $42,019
Total:
Net interest income $1,818,760 $1,701,827 $1,677,078
Non-interest income 1,071,401 1,098,979 1,014,536
Provision for loan losses 773,292 961,800 760,126
Non-interest expenses 1,327,832 1,556,527 1,224,896
Income tax provision (benefit) 282,475 87,351 255,786
Net income (loss) $506,562 $195,128 $450,806
Loans receivable $81,591,992 $79,861,299 $71,816,902
Net charge-off rate 4.13% 4.37% 4.83%
Delinquency Rate (30+ days) 3.45% 3.82% 3.80%
(1) The information in this statistical summary reflects the adjustment to
add back the effect of securitization transactions qualifying as sales
under generally accepted accounting principles. See accompanying
schedule - "Reconciliation to GAAP Financial Measures."
CAPITAL ONE FINANCIAL CORPORATION
Reconciliation to GAAP Financial Measures
For the Three Months Ended March 31, 2005
(dollars in thousands)(unaudited)
The Company's consolidated financial statements prepared in accordance with generally accepted accounting principles ("GAAP") are referred to as its "reported" financial statements. Loans included in securitization transactions which qualified as sales under GAAP have been removed from the Company's "reported" balance sheet. However, servicing fees, finance charges, and other fees, net of charge-offs, and interest paid to investors of securitizations are recognized as servicing and securitizations income on the "reported" income statement.
The Company's "managed" consolidated financial statements reflect
adjustments made related to effects of securitization transactions qualifying
as sales under GAAP. The Company generates earnings from its "managed" loan
portfolio which includes both the on-balance sheet loans and off-balance sheet
loans. The Company's "managed" income statement takes the components of the
servicing and securitizations income generated from the securitized portfolio
and distributes the revenue and expense to appropriate income statement line
items from which it originated. For this reason the Company believes the
"managed" consolidated financial statements and related managed metrics to be
useful to stakeholders.
Total Adjustments(1) Total
Reported Managed(2)
Income Statement Measures
Net interest income $860,521 $958,239 $1,818,760
Non-interest income $1,515,979 $(444,578) $1,071,401
Total revenue $2,376,500 $513,661 $2,890,161
Provision for loan losses $259,631 $513,661 $773,292
Net charge-offs $330,270 $513,661 $843,931
Balance Sheet Measures
Consumer loans $37,959,203 $43,632,789 $81,591,992
Total assets $55,631,566 $43,092,298 $98,723,864
Average consumer loans $38,203,914 $43,448,571 $81,652,485
Average earning assets $50,897,655 $41,579,833 $92,477,488
Average total assets $56,287,734 $42,995,109 $99,282,843
Delinquencies $1,318,958 $1,493,153 $2,812,111
(1) Includes adjustments made related to the effects of securitization
transactions qualifying as sales under GAAP and adjustments made to
reclassify to "managed" loans outstanding the collectible portion of
billed finance charge and fee income on the investors' interest in
securitized loans excluded from loans outstanding on the "reported"
balance sheet in accordance with Financial Accounting Standards Board
Staff Position, "Accounting for Accrued Interest Receivable Related to
Securitized and Sold Receivables under FASB Statement 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities", issued April 2003.
(2) The Managed loan portfolio does not include auto loans which have been
sold in whole loan sale transactions where the Company has retained
servicing rights.
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Balance Sheets
(in thousands)(unaudited)
March 31 December 31 March 31
2005 2004 2004
Assets:
Cash and due from banks $761,234 $327,517 323,346
Federal funds sold and resale
agreements 12,283 773,695 1,257,666
Interest-bearing deposits at other
banks 446,793 309,999 188,237
Cash and cash equivalents 1,220,310 1,411,211 1,769,249
Securities available for sale 9,460,688 9,300,454 9,149,440
Consumer loans 37,959,203 38,215,591 33,171,516
Less: Allowance for loan losses (1,440,000) (1,505,000) (1,495,000)
Net loans 36,519,203 36,710,591 31,676,516
Accounts receivable from
securitizations 5,605,009 4,081,271 4,008,809
Premises and equipment, net 806,411 817,704 898,802
Interest receivable 259,350 252,857 236,852
Other 1,760,595 1,173,167 1,406,757
Total assets $55,631,566 $53,747,255 49,146,425
Liabilities:
Interest-bearing deposits $25,854,025 $25,636,802 23,610,851
Senior and subordinated notes 6,876,432 6,874,790 7,224,798
Other borrowings 10,243,235 9,637,019 8,254,383
Interest payable 242,464 237,227 245,172
Other 3,435,680 2,973,228 2,968,993
Total liabilities 46,651,836 45,359,066 42,304,197
Stockholders' Equity:
Common stock 2,536 2,484 2,411
Paid-in capital, net 2,878,237 2,711,327 2,218,861
Retained earnings and cumulative
other comprehensive income 6,166,070 5,741,131 4,670,384
Less: Treasury stock, at cost (67,113) (66,753) (49,428)
Total stockholders' equity 8,979,730 8,388,189 6,842,228
Total liabilities and
stockholders' equity $55,631,566 $53,747,255 49,146,425
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income
(in thousands, except per share data)(unaudited)
Three Months Ended
March 31 December 31 March 31
2005 2004 2004
Interest Income:
Consumer loans, including past-due fees $1,184,036 $1,097,041 1,035,017
Securities available for sale 90,164 88,085 63,716
Other 62,068 64,204 65,998
Total interest income 1,336,268 1,249,330 1,164,731
Interest Expense:
Deposits 264,025 267,706 239,512
Senior and subordinated notes 114,480 116,419 124,418
Other borrowings 97,242 80,641 68,779
Total interest expense 475,747 464,766 432,709
Net interest income 860,521 784,564 732,022
Provision for loan losses 259,631 467,133 243,668
Net interest income after provision
for loan losses 600,890 317,431 488,354
Non-Interest Income:
Servicing and securitizations 951,602 915,511 917,669
Service charges and other customer-
related fees 401,186 374,048 354,493
Interchange 123,440 135,843 105,595
Other 39,751 96,173 65,377
Total non-interest income 1,515,979 1,521,575 1,443,134
Non-Interest Expense:
Salaries and associate benefits 433,501 382,646 424,392
Marketing 311,759 511,142 255,147
Communications and data processing 142,819 137,867 117,106
Supplies and equipment 86,446 92,827 88,321
Occupancy 17,901 55,994 38,719
Other 335,406 376,051 301,211
Total non-interest expense 1,327,832 1,556,527 1,224,896
Income before income taxes 789,037 282,479 706,592
Income taxes 282,475 87,351 255,786
Net income $506,562 $195,128 $450,806
Basic earnings per share $2.08 $0.82 $1.94
Diluted earnings per share $1.99 $0.77 $1.84
Dividends paid per share $0.03 $0.03 $0.03
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Reported Quarter Ended 3/31/05
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $38,203,914 $1,184,036 12.40%
Securities available for sale 9,654,437 90,164 3.74%
Other 3,039,304 62,068 8.17%
Total earning assets $50,897,655 $1,336,268 10.50%
Interest-bearing liabilities:
Deposits $25,654,741 $264,025 4.12%
Senior and subordinated notes 6,908,505 114,480 6.63%
Other borrowings 10,698,085 97,242 3.64%
Total interest-bearing liabilities $43,261,331 $475,747 4.40%
Net interest spread 6.10%
Interest income to average
earning assets 10.50%
Interest expense to average
earning assets 3.74%
Net interest margin 6.76%
Reported Quarter Ended 12/31/04
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $36,096,481 $1,097,041 12.16%
Securities available for sale 9,741,355 88,085 3.62%
Other 3,662,512 64,204 7.01%
Total earning assets $49,500,348 $1,249,330 10.10%
Interest-bearing liabilities:
Deposits $25,580,044 $267,706 4.19%
Senior and subordinated notes 6,946,109 116,419 6.70%
Other borrowings 9,076,531 80,641 3.55%
Total interest-bearing liabilities $41,602,684 $464,766 4.47%
Net interest spread 5.63%
Interest income to average
earning assets 10.10%
Interest expense to average
earning assets 3.76%
Net interest margin 6.34%
Reported Quarter Ended 3/31/04
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $32,877,525 $1,035,017 12.59%
Securities available for sale 7,098,951 63,716 3.59%
Other 4,135,065 65,998 6.38%
Total earning assets $44,111,541 $1,164,731 10.56%
Interest-bearing liabilities:
Deposits $22,992,712 $239,512 4.17%
Senior and subordinated notes 7,270,889 124,418 6.84%
Other borrowings 7,834,046 68,779 3.51%
Total interest-bearing liabilities $38,097,647 $432,709 4.54%
Net interest spread 6.02%
Interest income to average
earning assets 10.56%
Interest expense to average
earning assets 3.92%
Net interest margin 6.64%
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Managed (1) Quarter Ended 3/31/05
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $81,652,485 $2,631,751 12.89%
Securities available for sale 9,654,437 90,164 3.74%
Other 1,170,566 17,672 6.04%
Total earning assets $92,477,488 $2,739,587 11.85%
Interest-bearing liabilities:
Deposits $25,654,741 $264,025 4.12%
Senior and subordinated notes 6,908,505 114,480 6.63%
Other borrowings 10,698,085 97,242 3.64%
Securitization liability 43,215,671 445,080 4.12%
Total interest-bearing liabilities $86,477,002 $920,827 4.26%
Net interest spread 7.59%
Interest income to average
earning assets 11.85%
Interest expense to average
earning assets 3.98%
Net interest margin 7.87%
Managed (1) Quarter Ended 12/31/04
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $76,929,973 $2,476,365 12.88%
Securities available for sale 9,741,355 88,085 3.62%
Other 1,789,742 16,940 3.79%
Total earning assets $88,461,070 $2,581,390 11.67%
Interest-bearing liabilities:
Deposits $25,580,044 $267,706 4.19%
Senior and subordinated notes 6,946,109 116,419 6.70%
Other borrowings 9,076,531 80,641 3.55%
Securitization liability 40,291,395 414,797 4.12%
Total interest-bearing liabilities $81,894,079 $879,563 4.30%
Net interest spread 7.37%
Interest income to average
earning assets 11.67%
Interest expense to average
earning assets 3.97%
Net interest margin 7.70%
Managed (1) Quarter Ended 3/31/04
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $71,148,287 $2,405,738 13.53%
Securities available for sale 7,098,951 63,716 3.59%
Other 2,247,996 13,056 2.32%
Total earning assets $80,495,234 $2,482,510 12.34%
Interest-bearing liabilities:
Deposits $22,992,712 $239,512 4.17%
Senior and subordinated notes 7,270,889 124,418 6.84%
Other borrowings 7,834,046 68,779 3.51%
Securitization liability 37,669,211 372,723 3.96%
Total interest-bearing liabilities $75,766,858 $805,432 4.25%
Net interest spread 8.09%
Interest income to average
earning assets 12.34%
Interest expense to average
earning assets 4.01%
Net interest margin 8.33%
(1) The information in this table reflects the adjustment to add back the
effect of securitized loans.
SOURCE Capital One Financial Corporation
Media Relations: Tatiana Stead, +1-703-720-2352, or Julie Rakes, +1-804-284-5800, or Investor Relations: Mike Rowen, +1-703-720-3203, all of Capital One Financial Corporation