UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

(Mark One)
[ X ]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
             For the quarterly period ended June 30, 2001

[    ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
             For the transition period from _________ to _________.

Commission file number 1-13300

CAPITAL ONE FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)

Delaware                                                                                                                                      54-1719854
(State or other jurisdiction of                                                                                                    (I.R.S. Employer
incorporation or organization)                                                                                                  Identification No.)

2980 Fairview Park Drive, Suite 1300, Falls Church, Virginia                                                22042-4525
(Address of principal executive offices)                                                                                  (Zip Code) 

(703) 205-1000
(Registrant's telephone number, including area code)

(Not Applicable)
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes    X    No         

As of July 31, 2001 there were 210,744,387 shares of the registrant's Common Stock, par value $.01 per share, outstanding.

              Item 1.         Financial Statements (unaudited):

CAPITAL ONE FINANCIAL CORPORATION
Notes to Condensed Consolidated Financial Statements
June 30, 2001
(in thousands, except per share data) (unaudited)

        The consolidated financial statements include the accounts of Capital One Financial Corporation (the "Corporation") and its subsidiaries. The Corporation is a holding company whose subsidiaries provide a variety of products and services to consumers. The principal subsidiaries are Capital One Bank (the "Bank"), which offers credit card products, and Capital One, F.S.B. (the "Savings Bank"), which offers consumer lending (including credit cards) and deposit products. The Corporation and its subsidiaries are collectively referred to as the "Company."

        The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. Operating results for the three and six months ended June 30, 2001 are not necessarily indicative of the results for the year ending December 31, 2001. The notes to the consolidated financial statements contained in the Annual Report on Form 10-K for the year ended December 31, 2000 should be read in conjunction with these condensed consolidated financial statements. All significant intercompany balances and transactions have been eliminated.

        Cash paid for interest for the six months ended June 30, 2001 and 2000 was $532,529 and $354,411, respectively. Cash paid for income taxes for the six months ended June 30, 2001 and 2000 was $70,274 and $152,500, respectively.

        On April 1, 2001, the Company adopted the requirements of Statement of Financial Accounting Standards ("SFAS") No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities", ("SFAS 140"), a replacement of SFAS 125, which applies prospectively to all securitization transactions occurring after March 31, 2001. Adoption of SFAS 140 did not have a material impact on the operations or financial position of the Company.

        The Company maintains two distinct business segments: lending and non-lending. Lending is the Company's only reportable business segment, based on the definitions provided in SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." Substantially all of the Company's reported assets, revenues and income are derived from the lending segment in all periods presented. All revenue is generated from external customers and is predominantly derived in the United States.

        In June 2001, the Financial Accounting Standards Board issued SFAS No. 141, "Business Combinations," effective for business combinations initiated after June 30, 2001, and SFAS No. 142, "Goodwill and Other Intangible Assets," effective for fiscal years beginning after December 15, 2001. Under SFAS No. 141, the pooling of interests method of accounting for business combinations is eliminated. Under SFAS No. 142, goodwill and intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to annual impairment tests in accordance with the pronouncements. Other intangible assets will continue to be amortized over their useful lives. Application of the nonamortization provisions of SFAS No. 142 in 2002 is not expected to have a material impact on the earnings and financial position of the Company. During 2002, the Company will perform the first of the required impairment tests of goodwill and indefinite-lived intangible asset s and has not yet determined what the effect of these tests will be on the earnings and financial position of the Company.

        In May 2001, the Company acquired AmeriFee Corporation ("AmeriFee"). AmeriFee is a financial services firm based in Southborough, Massachusetts that provides financing solutions for consumers seeking elective medical and dental procedures. The acquisition was accounted for as a purchase business combination. The initial acquisition price for AmeriFee was $81,500, paid through approximately $64,500 of cash and approximately 257 shares of the Company's common stock. This purchase combination created approximately $80,000 in goodwill, which will be amortized on a straight-line basis over 20 years. The terms of the acquisition agreement provide for additional consideration to be paid annually if AmeriFee's results of operations exceed certain targeted levels over the next three years. The additional consideration, up to a maximum of $454,500, may be paid either in cash or with shares of the Company's common stock.

        Comprehensive income for the three months ended June 30, 2001and 2000 was as follows:

Note F: Earnings Per Share

        Basic earnings per share is based on the weighted average number of common shares outstanding, excluding any dilutive effects of options. Diluted earnings per share is based on the weighted average number of common and common equivalent shares, dilutive stock options or other dilutive securities outstanding during the year.

        In May 2001, the Company's Board of Directors approved an amendment to the April 1999 stock option grant to senior management ("EntrepreneurGrant IV") that provides additional vesting criteria. Previously, all options under this grant were to vest on April 29, 2008, or earlier if the Company's common stock price reached a fair market value of at least $100 per share for at least ten trading days in any 30 day calendar period on or before June 15, 2002, or upon a change of control of the Company. Now, EntrepreneurGrant IV will also vest if the Company's common stock price reaches a fair market value of at least $120 per share or $144 per share for ten trading days within 30 calendar days prior to June 15, 2003 or June 15, 2004, respectively. In addition, 50% of the EntrepreneurGrant IV stock options held by middle management as of the grant date will vest on April 29, 2005, regardless of stock performance.

        In connection with the transfer of substantially all of Signet Bank's credit card business to the Bank in November 1994, the Company and the Bank agreed to indemnify Signet Bank (which was acquired by First Union Bank on November 30, 1997) for certain liabilities incurred in litigation arising from that business, which may include liabilities, if any, incurred in the purported class action case described below.

        During 1995, the Company and the Bank became involved in a purported class action suit relating to certain collection practices engaged in by Signet Bank and, subsequently, by the Bank. The complaint in this case alleges that Signet Bank and/or the Bank violated a variety of California state statutes and constitutional and common law duties by filing collection lawsuits, obtaining judgments, and pursuing garnishment proceedings in the Virginia state courts against defaulted credit card customers who were not residents of Virginia. This case was filed in the Superior Court of California in the County of Alameda, Southern Division, on behalf of a class of California residents. The complaint in this case seeks unspecified statutory damages, compensatory damages, punitive damages, restitution, attorneys' fees and costs, a permanent injunction and other equitable relief.

        In early 1997, the California court entered judgment in favor of the Bank on all of the plaintiffs' claims. The plaintiffs appealed the ruling to the California Court of Appeals. In early 1999, the Court of Appeals affirmed the trial court's ruling in favor of the Bank on six counts, but reversed the trial court's ruling on two counts of the plaintiffs' complaint. The California Supreme Court rejected the Bank's Petition for Review of the remaining two counts and remitted them to the trial court for further proceedings. In August 1999, the trial court denied without prejudice plaintiffs' motion to certify a class on the one remaining common law claim. In November 1999, the United States Supreme Court denied the Bank's writ of certiorari on the remaining two counts, declining to exercise its discretionary power to review these issues.

        Subsequently, the Bank moved for summary judgment on the two remaining counts and for a ruling that a class could not be certified in this case. The motion for summary judgment was granted in favor of the Bank on both counts, but the plaintiffs were granted leave to amend the complaint. Plaintiffs then filed an Amended Complaint, to which the Bank filed demurrers and motions to strike. In early 2001, the Bank's demurrer was granted by the court and plaintiff's Amended Complaint was dismissed with prejudice. Plaintiff filed a notice of appeal regarding this ruling, and briefing on appeal is ongoing.

        Because no specific measure of damages is demanded in the complaint of the California case and the trial court entered judgement in favor of the Bank relatively early in the case, an informed assessment of the ultimate outcome of this case cannot be made at this time. Management believes, however, that there are substantive defenses to this lawsuit and intends to defend it vigorously.

        In the ordinary course of business, the Company and its subsidiaries are routinely defendants in or parties to a number of pending and threatened legal actions and proceedings, including actions brought on behalf of various classes of claimants. In certain of these actions and proceedings, substantial money damages are asserted against the Company and its subsidiaries.

        Due to the uncertainties of litigation, there can be no assurance that the Company will prevail on all the claims made against it in the lawsuits or that similar proceedings will not be brought. However, management believes that the Company has substantive defenses and intends to defend the actions vigorously.

        In the opinion of management, the ultimate aggregate liability, if any, arising out of any pending or threatened action will not have a material adverse effect on the consolidated financial condition of the Company. At the present time, however, management is not in a position to determine whether the resolution of pending or threatened litigation will have a material effect on the Company's results of operations in any future reporting period.

In July 2001, the Bank issued $750,000 aggregate principal amount of three-year fixed rate senior bank notes under its global senior and subordinated bank note program.

        Capital One Financial Corporation (the "Corporation") is a holding company whose subsidiaries provide a variety of products and services to consumers using its Information-Based Strategy ("IBS"). The principal subsidiaries are Capital One Bank (the "Bank"), which offers credit card products, and Capital One, F.S.B. (the "Savings Bank"), which offers consumer lending products (including credit cards) and deposit products. The Corporation and its subsidiaries are collectively referred to as the "Company." As of June 30, 2001, the Company had 38.1 million customers and $35.3 billion in managed consumer loans outstanding and was one of the largest providers of MasterCard and Visa credit cards in the world. The Company's profitability is affected by the net interest income and non-interest income earned on earning assets, consumer usage patterns, credit quality, the level of marketing expense and operating efficiency.

        Net income for the three months ended June 30, 2001 of $155.3 million, or $0.70 per share, compares to net income of $112.5 million, or $.54 per share, for the same period in 2000. The increase in net income is primarily a result of an increase in asset and account volumes. Net interest income increased $6.1 million, or 2%, as the net interest margin decreased to 7.63% from 12.45% and average earning assets increased by 66%. The provision for loan losses increased $51.9 million, or 34%, as average reported loans increased by 66% and the reported net charge-off rate decreased 78 basis points, or 17%. Non-interest income increased $362.9 million, or 51%, primarily as a result of an increase in average accounts of 43%, a shift in the mix of the reported loan portfolio and an increase in the frequency of certain fees charged driven by increased purchase volume. Marketing expense increased $57.1 million, or 27%, to $268.7 million as the Company continues to i nvest in new product opportunities. Increases in salaries and associate benefits expense of $105.5 million, or 45%, and other non-interest expense (excluding marketing) of $190.9 million, or 36%, primarily resulted from increased staff and cost of operations, and the building of infrastructure to manage the growth in accounts and products offered. Each component is discussed in further detail in subsequent sections of this analysis.

        Net income for the six months ended June 30, 2001 was $298.9 million, or $1.36 per share, compared to $219.2 million, or $1.05 per share, for the same period in 2000. This 36% increase in net income primarily reflected the increases in asset and account volumes as discussed above. Each component is discussed in further detail in subsequent sections of this analysis.

        The Company analyzes its financial performance on a managed consumer loan portfolio basis. Managed consumer loan data adds back the effect of off-balance sheet consumer loans. The Company also evaluates its interest rate exposure on a managed portfolio basis.

        The Company's managed consumer loan portfolio is comprised of reported and off-balance sheet loans. Off-balance sheet loans are those which have been securitized and accounted for as sales in accordance with SFAS 140, and are not assets of the Company. Therefore, those loans are not shown on the balance sheet. The Company adopted the accounting provisions of SFAS 140 for various transfers of consumer loans that occurred during the three month period ended June 30, 2001. SFAS 140 revises the standards for accounting for securitizations and other transfers of financial assets and collateral and requires certain additional disclosures; however, most of the provisions of SFAS 125 have been carried forward without amendment. Accordingly, the Company has modified or implemented several of its securitization trust agreements, and may modify or implement others, to meet the new requirements to continue recognizing transfers of consumer loans to special-purpose entit ies as sales. The adoption of SFAS 140 did not have a material effect on the results of the Company's operations. 

Table 1 summarizes the Company's managed consumer loan portfolio.

        The Company actively engages in consumer loan securitization transactions. Securitization involves the transfer by the Company of a pool of loan receivables to an entity created for securitizations, generally a trust or other special purpose entity (the "trusts"). The credit quality of the receivables is supported by credit enhancements, which may be in various forms including a letter of credit, a cash collateral guaranty or account, or a subordinated interest in the receivables in the pool. Securities representing debt or beneficial interests in the receivables are sold to the public through an underwritten offering or to private investors in private placement transactions. The Company receives the proceeds of the sale. The Company retains an interest in the trusts ("seller's interest") equal to the amount of the receivables transferred to the trust in excess of the principal balance of the securities outstanding. For revolving securitizations, the Company's interest in the trusts varies as the amount of the excess receivables in the trusts fluctuates as the accountholders make principal payments and incur new charges on the selected accounts. A securitization of amortizing assets, such as auto loans, generally does not include a seller's interest. A securitization may result in the removal of the receivables, other than any applicable seller's interest, from the Company's balance sheet for financial and regulatory accounting purposes.

        The Company's relationship with its customers is not affected by the securitization. The Company acts as a servicing agent and receives a fee.

        Collections received from securitized receivables are used to pay interest to security holders, servicing and other fees, and are available to absorb the investors' share of credit losses. For revolving securitizations, amounts collected in excess of that needed to pay the above amounts are remitted to the Company, as described in Servicing and Securitizations Income. For amortizing securitizations, amounts in excess of the amount that is used to pay interest, fees and principal are generally remitted to the Company, but may be paid to security holders in further reduction of their outstanding principal as described below.

        Security holders in the Company's revolving securitization programs are generally entitled to receive principal payments either through monthly payments during an amortization period or in one lump sum after an accumulation period. Amortization may begin sooner in certain circumstances, including if the annualized portfolio yield (consisting, generally, of interest and fees) for a three-month period drops below the sum of the security rate payable to investors, loan servicing fees and net credit losses during the period.

        In a revolving securitization, prior to the commencement of the amortization or accumulation period, all principal payments received on the trusts' receivables are reinvested in new receivables to maintain the principal balance of securities. During the amortization period, the investors' share of principal payments is paid to the security holders until they are paid in full. During the accumulation period, the investors' share of principal payments is paid into a principal funding account designed to accumulate amounts so that the securities can be paid in full on the expected final payment date.

        In an amortizing securitization, principal payments received in a given month and principal losses covered by other collections are paid to the security holders as a principal reduction on the related distribution date. In certain circumstances, where delinquencies or defaults exceed certain prescribed levels, excess amounts of collections may be used to pay additional principal to the security holders.

        Table 2 indicates the impact of the consumer loan securitizations on average earning assets, net interest margin and loan yield for the periods presented. The Company intends to continue to securitize consumer loans.

        The Company markets its card products to specific consumer populations. The terms of each card product are actively managed to achieve a balance between risk and expected performance, while obtaining the expected return. For example, card product terms typically include the ability to reprice individual accounts upwards or downwards based on the consumer's performance. In addition, since 1998, the Company has aggressively marketed low non-introductory rate cards to consumers with the best established credit profiles to take advantage of the favorable risk return characteristics of this consumer type. Industry competitors have continuously solicited the Company's customers with similar interest rate strategies. Management believes the competition has put, and will continue to put, additional pressure on the Company's pricing strategies.

        By applying its IBS and in response to dynamic competitive pressures, the Company also targets a significant amount of its marketing expense to other credit card product opportunities. Examples of such products include secured cards, lifestyle cards, co-branded cards, student cards and other cards targeted to certain markets which the Company feels are underserved by the Company's competitors. These products do not have a significant, immediate impact on managed loan balances; rather, they typically consist of lower credit limit accounts and balances that build over time. The terms of these customized card products tend to include membership fees and higher annual finance charge rates. The profile of the consumers targeted for these products, in some cases, may also tend to result in higher account delinquency rates and consequently higher past-due and overlimit fees as a percentage of loan receivables outstanding than the low non-introductory rate products.

        Table 3 provides income statement data and ratios for the Company's managed consumer loan portfolio. The causes of increases and decreases in the various components of risk adjusted revenue are discussed in further detail in subsequent sections of this analysis.

        Net interest income is interest and past-due fees earned from the Company's consumer loans and securities less interest expense on borrowings, which includes interest-bearing deposits, other borrowings and borrowings from senior notes.

        Reported net interest income for the three months ended June 30, 2001 was $370.1 million, compared to $364.0 million for the same period in the prior year, representing an increase of $6.1 million, or 2%. For the six months ended June 30, 2001, net interest income was $745.8 million compared to $717.5 million for the same period in 2000, representing an increase of $28.3 million, or 4%. Net interest margin decreased 482 and 437 basis points for the three and six months ended June 30, 2001, respectively, compared to the same periods in the prior year. These decreases in net interest margin were primarily a result of the decreases in the yield on earning assets of 480 and 412 basis points for the three and six months ended June 30, 2001, respectively, to 13.55% from 18.35% and to 13.98% from 18.10%, as compared to the same periods in the prior year. The decrease in the yield on earning assets was primarily attributable to a decrease in the yield on consumer lo ans. The yield on consumer loans decreased 552 and 489 basis points for the three and six months ended June 30,2001, respectively, as a result of a shift in the mix of the reported portfolio toward a greater composition of lower yielding, higher credit quality loans as compared to the same periods in the prior year. These lower yields on the portfolio, combined with the 66% and 63% increase in the consumer loan portfolio for the three and six months ended June 30, 2001, respectively, resulted in the 2% and 4% increases in reported net interest income for the same periods.

        Managed net interest income increased $209.3 million and $349.8 million, or 34% and 28%, for the three and six months ended June 30, 2001, respectively, compared to the same periods in the prior year. The increases in managed net interest income resulted from the combination of an increase of 60% and 55% in managed average earning assets and a decrease in managed net interest margin of 177 and 191 basis points to 9.11% and 9.15% for the three and six months ended June 30, 2001, respectively. The decreases in managed net interest margin results primarily from a decrease in the managed loan yield of 13% and 12%, for the three and six months ended June 30, 2001, respectively, from the same periods in the prior year. This decrease is a result of the shift in the mix of the managed portfolio toward a greater composition of lower yielding, higher credit quality loans, as well as an increase in low introductory rate balances as compared to the prior year.

        Table 4 provides average balance sheet data, an analysis of net interest income, net interest spread (the difference between the yield on earning assets and the cost of interest-bearing liabilities) and net interest margin for the three and six months ended June 30, 2001 and 2000.

        Servicing and securitization income represents servicing fees, excess spread and other fees relating to consumer loan receivables sold through securitization transactions, as well as gains and losses recognized as a result of the securitization transactions. Servicing and securitizations income increased $290.0 million, or 103% to $572.6 million for the three months ended June 30, 2001, from $282.6 million in the same period in the prior year. Servicing and securitizations income increased $563.0 million, or 102% to $1.1 billion for the six months ended June 30, 2001, from $553.4 million in the same period in the prior year. These increases were primarily due to increased securitization volume and a shift in the mix of the off-balance sheet portfolio.

        Certain estimates inherent in the determination of the fair value of the I/O strip are influenced by factors outside the Company's control, and as a result, such estimates could materially change in the near term. Any future gains that may be recognized in accordance with SFAS 140 will be dependent on the timing and amount of future securitizations. The Company intends to continuously assess the performance of new and existing securitization transactions as estimates of future cash flows change.

        Interchange income increased to $93.7 million and $168.5 million, or 75%, and 75%, for the three and six months ended June 30, 2001, respectively, compared to $53.5 million and $96.5 million for the same periods in the prior year. These increases are primarily attributable to increased purchase volume and new account growth for the three and six months ended June 30, 2001. Service charges and other customer-related fees increased $32.7 million and $97.6 million, or 9%, and 14% to $407.4 million and $813.5 million for the three and six months ended June 30, 2001, respectively, compared to the same periods in the prior year. These increases were primarily due to the increase in average accounts of 43% for both the three and six months ended June 30, 2001, respectively, compared to the same periods in the prior year, offset by the shift in the mix of the reported loan portfolio toward a greater composition of lower fee-generating loans.

        Non-interest expense for the three and six months ended June 30, 2001 was $990.3 million and $1.9 billion, respectively, an increase of 33% and 31% over $742.3 million and $1.5 billion, respectively, for the same periods in the prior year. Contributing to the increase in non-interest expense for the three and six months ended June 30, 2001 was salaries and associate benefits expense which increased $105.5 million, or 45%, and $196.3 million, or 42%, respectively. Marketing expense increased $57.1 million and $86.4 million, or 27% and 21%, to $268.7 million and $499.9 million for the three and six months ended June 30, 2001, respectively, as the Company continued to invest in new and existing product opportunities. All other non-interest expenses increased $85.4 million and $173.7 million, or 29% and 31%, to $379.5 million and $740.9 million for the three and six months ended June 30, 2001, respectively, from $294.1 million and $567.2 million for the same periods in the prior year. These increases were primarily a result of a 43% increase in the average number of accounts for both the three and six months ended June 30, 2001, as compared to the same periods in the prior year, as well as the Company's continued exploration and testing of new products and markets.

        The Company's effective income tax rate was 38% for the three months ended June 30, 2001 and 2000 and includes both state and federal income tax components.

        The asset quality of a portfolio is generally a function of the initial underwriting criteria used, seasoning of the accounts, levels of competition, account management activities and demographic concentration, as well as general economic conditions. The seasoning of the accounts is also an important factor in the delinquency and loss levels of the portfolio. Accounts tend to exhibit a rising trend of delinquency and credit losses as they season.

        Table 6 shows the Company's consumer loan delinquency trends for the periods presented on a reported and managed basis. The entire balance of an account is contractually delinquent if the minimum payment is not received by the payment due date. Delinquencies not only have the potential to impact earnings if the account charges off, they also result in additional costs in terms of the personnel and other resources dedicated to resolving the delinquencies.

        Net charge-offs include the principal amount of losses (excluding accrued and unpaid finance charges, fees and fraud losses) less current period recoveries. Table 7 shows the Company's net charge-offs for the periods presented on a reported and managed basis.

        Net charge-offs of managed loans increased $125.2 million, or 60%, while average managed consumer loans grew 60% for the three months ended June 30, 2001, compared to the same period in the prior year. Net charge-offs of managed loans increased $215.8 million, or 54%, while average managed consumer loans grew 56% for the six months ended June 30, 2001, compared to the same period in the prior year. For the three and six months ended June 30, 2001, the Company's net charge-offs as a percentage of average managed loans outstanding were 3.98% and 3.87%, respectively, compared to 3.97% and 3.92% for the same periods in the prior year.

        The allowance for loan losses is maintained at an amount estimated to be sufficient to absorb probable future losses, net of recoveries (including recovery of collateral), inherent in the existing reported loan portfolio. The provision for loan losses is the periodic cost of maintaining an adequate allowance. Management believes that the allowance for loan losses is adequate to cover anticipated losses in the reported homogeneous consumer loan portfolio under current conditions. There can be no assurance as to future credit losses that may be incurred in connection with the Company's consumer loan portfolio, nor can there be any assurance that the loan loss allowance that has been established by the Company will be sufficient to absorb such future credit losses. The allowance is a general allowance applicable to the reported homogeneous consumer loan portfolio. The amount of allowance necessary is determined primarily based on a migration analysis of del inquent and current accounts. In evaluating the sufficiency of the allowance for loan losses, management also takes into consideration the following factors: recent trends in delinquencies and charge-offs including bankrupt, deceased and recovered amounts; historical trends in loan volume; forecasting uncertainties and size of credit risks; the degree of risk inherent in the composition of the loan portfolio; economic conditions; credit evaluations and underwriting policies.

        Table 8 sets forth the activity in the allowance for loan losses for the periods indicated. See "Asset Quality," "Delinquencies" and "Net Charge-Offs" for a more complete analysis of asset quality.

        For the three and six months ended June 30, 2001, the provision for loan losses increased to $202.9 million and $453.5 million, or 34% and 63%, respectively, from $151.0 million and $277.5 million for the comparable periods in the prior year. This increase is primarily a result of the 38% increase in the dollar amount of net charge-offs, as well as the 66% increase in reported loans from June 30, 2000 to June 30, 2001.

        The Company has established access to a variety of funding alternatives, in addition to securitization of its consumer loans. In June 2000, the Company established a $5.0 billion global senior and subordinated bank note program, of which $2.2 billion was outstanding as of June 30, 2001 with original terms of three to five years. In July 2001, the Company issued a $750 million three-year fixed rate senior bank note under the global bank note program. The Company has historically issued senior unsecured debt of the Bank through its $8.0 billion domestic bank note program, of which $2.0 billion was outstanding as of June 30, 2001, with original terms of one to ten years. The Company did not renew such program and it is no longer available for future issuances. Internationally, the Company has funding programs designed for foreign investors or to raise funds in foreign currencies allowing the Bank to borrow from both U.S. and non-U. S. lenders, including two committed revolving credit facilities offering foreign currency funding options. The Company did not renew its $1.0 billion Euro Medium Term Note program. As of June 30, 2001, the Company had no outstandings under such program and it is no longer available for future issuances. The Company funds its foreign assets by directly or synthetically borrowing or securitizing in the local currency to mitigate the financial statement effect of currency translation.

        In August 2000, the Bank entered into a multicurrency revolving credit facility (the "Multicurrency Facility"). The Multicurrency Facility is intended to finance the Bank's business in the United Kingdom and was comprised of two Tranches, each in the amount of Euro 300 million ($270.8 million equivalent based on the exchange rate at closing). The Tranche A facility was intended for general corporate purposes and terminated on August 9, 2001. The Tranche B facility replaced and extended the Corporation's prior credit facility for U.K. pounds sterling and Canadian dollars, which matured on August 29, 2000. The Tranche B facility terminates August 9, 2004. The Corporation serves as guarantor of all borrowings under the Multicurrency Facility. In October 2000, the Bank's subsidiary, Capital One Bank (Europe) plc, replaced the Bank as a borrower under the Bank's guarantee.

        In May 1999, the Company entered into a four-year, $1.2 billion unsecured revolving credit arrangement (the "Credit Facility"). The Credit Facility is comprised of two tranches: a $810 million Tranche A facility available to the Bank and the Savings Bank, including an option for up to $250 million in multicurrency availability, and a $390 million Tranche B facility available to the Corporation, the Bank and the Savings Bank, including an option for up to $150 million in multicurrency availability. Each tranche under the facility is structured as a four-year commitment and is available for general corporate purposes. All borrowings under the Credit Facility are based on varying terms of LIBOR. The Bank has irrevocably undertaken to honor any demand by the lenders to repay any borrowings which are due and payable by the Savings Bank but have not been paid. Any borrowings under the Credit Facility will mature on May 24, 2003; however, the final maturity of each tranche may be extended for three additional one-year periods with the lenders' consent.

        The Corporation has a shelf registration statement under which the Corporation from time to time may offer and sell (i) senior or subordinated debt securities, consisting of debentures, notes and/or other unsecured evidences, (ii) preferred stock, which may be issued in the form of depository shares evidenced by depository receipts and (iii) common stock. The available amount of securities registered is limited to $587.2 million aggregate public offering price or its equivalent (based on the applicable exchange rate at the time of sale) in one or more foreign currencies, currency units or composite currencies as shall be designated by the Corporation. As of June 30, 2001, the Corporation had existing unsecured senior debt outstanding of $550 million, including $125 million maturing in 2003, $225 million maturing in 2006, and $200 million maturing in 2008. Additionally, the Corporation has $412.8 million outstanding related to the issuance of 6,750,390 shares of common stock in a public offering under the shelf registration statement used for general corporate purposes.

        Table 9 shows the Company's unsecured funding availability and outstandings as of June 30, 2001.