UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
October 19, 2010
Date of Report (Date of earliest event reported)
Commission File No. 1-13300
CAPITAL ONE FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware
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54-1719854
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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1680 Capital One Drive McLean, Virginia
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22102
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant’s telephone number, including area code: (703) 720-1000
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02.Results of Operations and Financial Condition
On October 18, 2010, the Company issued a press release announcing its financial results for the third quarter ended September 30, 2010. A copy of the Company’s press release is attached and filed herewith as Exhibit 99.1 and 99.3 to this Form 8-K and is incorporated herein by reference.
Item 7.01.Regulation FD Disclosure.
The Company hereby furnishes the information in Exhibit 99.2 hereto, Third Quarter Earnings Presentation for the quarter ended September 30, 2010.
Note: Information in Exhibit 99.2 furnished pursuant to Item 7.01 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. This report will not be deemed an admission as to the materiality of any information in the report that is required to be disclosed solely by Regulation FD. Furthermore, the information provided in Exhibit 99.2 shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933.
Item 8.01.Other Events.
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(a)
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See attached press release, at Exhibit 99.1.
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(b)
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Cautionary Factors.
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The attached press release and information provided pursuant to Items 2.02, 7.01 and 9.01 contain forward-looking statements, which involve a number of risks and uncertainties. The Company cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information as a result of various factors including, but not limited to, the following:
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general economic and business conditions in the U.S., the UK, or the Company’s local markets, including conditions affecting employment levels, interest rates, consumer income and confidence, spending and savings that may affect consumer bankruptcies, defaults, charge-offs, and deposit activity;
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an increase or decrease in credit losses (including increases due to a worsening of general economic conditions in the credit environment);
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financial, legal, regulatory (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations to be promulgated thereunder), tax or accounting changes or actions, including with respect to any litigation matter involving the Company;
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increases or decreases in interest rates;
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the success of the Company’s marketing efforts in attracting and retaining customers;
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the ability of the Company to continue to securitize its credit cards and consumer loans and to otherwise access the capital markets at attractive rates and terms to capitalize and fund its operations and future growth;
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with respect to financial and other products, increases or decreases in the Company’s aggregate loan balances and/or number of customers and the growth rate and composition thereof, including increases or decreases resulting from factors such as shifting product mix, amount of actual marketing expenses made by the Company and attrition of loan balances;
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the level of future repurchase or indemnification requests the Company may receive, the actual future performance of loans relating to such requests, the success rates of claimants against the Company, any developments in litigation, and the actual recoveries the Company may make on any collateral relating to claims against it;
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the amount and rate of deposit growth;
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the Company’s ability to control costs;
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changes in the reputation of or expectations regarding the financial services industry and/or the Company with respect to practices, products or financial condition;
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any significant disruption in the Company’s operations or technology platform;
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the Company’s ability to maintain a compliance infrastructure suitable for its size and complexity;
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the amount of, and rate of growth in, the Company’s expenses as the Company’s business develops or changes or as it expands into new market areas;
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the Company’s ability to execute on its strategic and operational plans;
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any significant disruption of, or loss of public confidence in, the United States Mail service affecting our response rates and consumer payments;
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the ability of the Company to recruit and retain experienced personnel to assist in the management and operations of new products and services;
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changes in the labor and employment market;
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the risk that the cost savings and any other synergies from the Company’s acquisitions may not be fully realized or may take longer to realize than expected;
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disruption from the acquisitions negatively impacting the Company’s ability to maintain relationships with customers, employees or suppliers;
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competition from providers of products and services that compete with the Company’s businesses; and
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other risk factors listed from time to time in the Company’s SEC reports including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2009.
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Item 9.01.Financial Statements, Pro Forma Financial Information and Exhibits.
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(c)
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Exhibits.
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Exhibit No.
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Description of Exhibit
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Press release, dated October 18, 2010.
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Third Quarter Earnings Presentation.
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Reconciliation to GAAP Financial Measures.
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Earnings Conference Call Webcast Information.
Capital One will hold an earnings conference call on October 19, 2010, 8:15 AM Eastern Daylight time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via Capital One’s home page (http://www.capitalone.com). Choose “Investors” to access the Investor Center and view and/or download the earnings press release, a reconciliation to GAAP financial measures and other relevant financial information. The replay of the webcast will be archived on Capital One’s website through November 2, 2010.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned, hereunto duly authorized.
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CAPITAL ONE FINANCIAL CORPORATION
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Dated: October 19, 2010
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By:
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/s/ Gary L. Perlin
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Gary L. Perlin
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Chief Financial Officer
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Exhibit 99.1
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY
GAAP BASIS *
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(in millions, except per share data and as noted) (unaudited)
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2010
Q3 |
2010
Q2 |
2010
Q1 |
2009
Q4 |
2009
Q3 |
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Earnings
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Net Interest Income
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$ | 3,109 | $ | 3,097 | $ | 3,228 | $ | 1,954 | $ | 2,005 | ||||||||||
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Non-Interest Income (1)(7)
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$ | 907 | $ | 807 | $ | 1,061 | (8) | $ | 1,412 | $ | 1,553 | |||||||||
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Total Revenue (2)
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$ | 4,016 | $ | 3,904 | $ | 4,289 | $ | 3,366 | $ | 3,558 | ||||||||||
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Provision for Loan and Lease Losses
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$ | 867 | $ | 723 | $ | 1,478 | $ | 844 | $ | 1,173 | ||||||||||
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Marketing Expenses
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$ | 250 | $ | 219 | $ | 180 | $ | 188 | $ | 104 | ||||||||||
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Restructuring Expenses (3)
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$ | - | $ | - | $ | - | $ | 32 | $ | 26 | ||||||||||
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Operating Expenses (4)
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$ | 1,746 | $ | 1,781 | $ | 1,667 | $ | 1,728 | $ | 1,672 | ||||||||||
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Income Before Taxes
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$ | 1,153 | $ | 1,181 | $ | 964 | $ | 574 | $ | 583 | ||||||||||
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Effective Tax Rate
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29.1 | % | 31.2 | % | 25.3 | % | 29.6 | % | 25.0 | % | ||||||||||
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Income From Continuing Operations, Net of Tax
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$ | 818 | $ | 812 | $ | 720 | $ | 404 | $ | 437 | ||||||||||
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Loss From Discontinued Operations, Net of Tax (7)
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$ | (15 | ) | $ | (204 | ) | $ | (84 | ) | $ | (28 | ) | $ | (43 | ) | |||||
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Net Income
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$ | 803 | $ | 608 | $ | 636 | $ | 376 | $ | 394 | ||||||||||
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Net Income Available to Common Shareholders (A)
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$ | 803 | $ | 608 | $ | 636 | $ | 376 | $ | 394 | ||||||||||
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Common Share Statistics
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Basic EPS: (B)
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Income From Continuing Operations
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$ | 1.81 | $ | 1.79 | $ | 1.59 | $ | 0.90 | $ | 0.97 | ||||||||||
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Loss From Discontinued Operations
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$ | (0.03 | ) | $ | (0.45 | ) | $ | (0.18 | ) | $ | (0.07 | ) | $ | (0.09 | ) | |||||
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Net Income
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$ | 1.78 | $ | 1.34 | $ | 1.41 | $ | 0.83 | $ | 0.88 | ||||||||||
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Diluted EPS: (B)
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Income From Continuing Operations
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$ | 1.79 | $ | 1.78 | $ | 1.58 | $ | 0.89 | $ | 0.96 | ||||||||||
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Loss From Discontinued Operations
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$ | (0.03 | ) | $ | (0.45 | ) | $ | (0.18 | ) | $ | (0.06 | ) | $ | (0.09 | ) | |||||
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Net Income
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$ | 1.76 | $ | 1.33 | $ | 1.40 | $ | 0.83 | $ | 0.87 | ||||||||||
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Dividends Per Common Share
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$ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | ||||||||||
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Tangible Book Value Per Common Share (period end) (C)
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$ | 26.60 | $ | 24.89 | $ | 22.86 | $ | 27.72 | $ | 26.86 | ||||||||||
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Stock Price Per Common Share (period end)
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$ | 39.55 | $ | 40.30 | $ | 41.41 | $ | 38.34 | $ | 35.73 | ||||||||||
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Total Market Capitalization (period end)
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$ | 17,900 | $ | 18,228 | $ | 18,713 | $ | 17,268 | $ | 16,064 | ||||||||||
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Common Shares Outstanding (period end)
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452.6 | 452.3 | 451.9 | 450.4 | 449.6 | |||||||||||||||
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Shares Used to Compute Basic EPS
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452.5 | 452.1 | 451.0 | 450.0 | 449.4 | |||||||||||||||
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Shares Used to Compute Diluted EPS
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456.6 | 456.4 | 455.4 | 454.9 | 453.7 | |||||||||||||||
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Reported Balance Sheet Statistics (period average)
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Average Loans Held for Investment
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$ | 126,307 | $ | 128,203 | $ | 134,206 | $ | 94,732 | $ | 99,354 | ||||||||||
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Average Earning Assets
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$ | 172,473 | $ | 174,650 | $ | 181,881 | $ | 143,663 | $ | 145,280 | ||||||||||
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Total Average Assets
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$ | 196,586 | $ | 199,329 | $ | 207,207 | $ | 169,856 | $ | 173,428 | ||||||||||
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Average Interest Bearing Deposits
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$ | 104,186 | $ | 104,163 | $ | 104,018 | $ | 101,144 | $ | 103,105 | ||||||||||
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Total Average Deposits
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$ | 118,255 | $ | 118,484 | $ | 117,530 | $ | 114,598 | $ | 115,882 | ||||||||||
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Average Equity
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$ | 25,307 | $ | 24,526 | $ | 23,681 | $ | 26,518 | $ | 26,002 | ||||||||||
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Return on Average Assets (ROA)
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1.66 | % | 1.63 | % | 1.39 | % | 0.95 | % | 1.01 | % | ||||||||||
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Return on Average Equity (ROE)
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12.93 | % | 13.24 | % | 12.16 | % | 6.09 | % | 6.72 | % | ||||||||||
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Return on Average Tangible Common Equity (D)
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28.95 | % | 30.97 | % | 29.98 | % | 13.02 | % | 14.75 | % | ||||||||||
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Reported Balance Sheet Statistics (period end)
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Loans Held for Investment
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$ | 126,334 | $ | 127,140 | $ | 130,115 | $ | 90,619 | $ | 96,714 | ||||||||||
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Total Assets (E)
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$ | 196,928 | $ | 197,485 | $ | 200,691 | $ | 169,622 | $ | 168,433 | ||||||||||
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Interest Bearing Deposits
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$ | 104,741 | $ | 103,172 | $ | 104,013 | $ | 102,370 | $ | 101,769 | ||||||||||
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Total Deposits
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$ | 119,212 | $ | 117,331 | $ | 117,787 | $ | 115,809 | $ | 114,504 | ||||||||||
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Tangible Assets(E) (F)
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$ | 182,904 | $ | 183,474 | $ | 186,647 | $ | 155,516 | $ | 154,316 | ||||||||||
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Tangible Common Equity (TCE) (E) (G)
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$ | 12,037 | $ | 11,259 | $ | 10,330 | $ | 12,483 | $ | 12,075 | ||||||||||
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Tangible Common Equity to Tangible Assets Ratio (E) (H)
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6.58 | % | 6.14 | % | 5.53 | % | 8.03 | % | 7.82 | % | ||||||||||
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Performance Statistics (Reported) Quarter over Quarter
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Net Interest Income Growth
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0 | % | (4 | )% | 65 | % | (3 | )(5)% | 3 | (5)% | ||||||||||
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Non- Interest Income Growth
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12 | % | (24 | )% | (25 | )% | (9 | )(5)% | 26 | (5)% | ||||||||||
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Revenue Growth
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3 | % | (9 | )% | 27 | % | (5 | )(5)% | 12 | (5)% | ||||||||||
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Net Interest Margin
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7.21 | % | 7.09 | % | 7.10 | % | 5.44 | % | 5.52 | % | ||||||||||
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Revenue Margin
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9.31 | % | 8.94 | % | 9.43 | % | 9.37 | % | 9.80 | % | ||||||||||
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Risk-Adjusted Margin (I)
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5.78 | % | 5.01 | % | 4.99 | % | 6.07 | % | 6.69 | % | ||||||||||
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Non-Interest Expense as a % of Average Loans Held for Investment (annualized)
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6.32 | % | 6.24 | % | 5.50 | % | 8.23 | % | 7.25 | % | ||||||||||
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Efficiency Ratio (J)
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49.70 | % | 51.23 | % | 43.06 | % | 56.92 | % | 49.92 | % | ||||||||||
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Asset Quality Statistics (Reported) (6)
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Allowance
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$ | 6,175 | $ | 6,799 | $ | 7,752 | $ | 4,127 | $ | 4,513 | ||||||||||
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Allowance as a % of Reported Loans Held for Investment
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4.89 | % | 5.35 | % | 5.96 | % | 4.55 | % | 4.67 | % | ||||||||||
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Net Charge-Offs
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$ | 1,522 | $ | 1,717 | $ | 2,018 | $ | 1,185 | $ | 1,128 | ||||||||||
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Net Charge-Off Rate
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4.82 | % | 5.36 | % | 6.02 | % | 5.00 | % | 4.54 | % | ||||||||||
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30+ day performing delinquency rate
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3.71 | % | 3.81 | % | 4.22 | % | 4.13 | % | 4.12 | % | ||||||||||
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Full-time equivalent employees (in thousands)
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25.7 | 25.7 | 25.9 | 25.9 | 26.0 | |||||||||||||||
* Effective January 1, 2010, Capital One prospectively 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 $2.9 billion in stockholders' equity as of January 1, 2010. As the new accounting standards were adopted prospectivley, prior period results have not been adjusted. See the accompanying schedule "Impact of Adopting New Accounting Guidance." While the adoption of these new accounting standards has a significant impact on the comparability of the Company's GAAP financial results prior to and subsequent to adoption, the Company's reported GAAP results afte
r adoption are now comparable to the prior "managed" results.
Page 1
FINANCIAL & STATISTICAL SUMMARY
MANAGED BASIS * (for 2009 data)
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(in millions, except per share data and as noted) (unaudited)
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2010
Q3 |
2010
Q2 |
2010
Q1 |
2009
Q4 |
2009
Q3 |
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Earnings
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Net Interest Income
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$ | 3,109 | $ | 3,097 | $ | 3,228 | $ | 3,170 | $ | 3,212 | ||||||||||
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Non-Interest Income (1)(7)
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$ | 907 | $ | 807 | $ | 1,061 | (8) | $ | 1,199 | $ | 1,373 | |||||||||
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Total Revenue (2)
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$ | 4,016 | $ | 3,904 | $ | 4,289 | $ | 4,369 | $ | 4,585 | ||||||||||
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Provision for Loan and Lease Losses
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$ | 867 | $ | 723 | $ | 1,478 | $ | 1,847 | $ | 2,200 | ||||||||||
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Marketing Expenses
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$ | 250 | $ | 219 | $ | 180 | $ | 188 | $ | 104 | ||||||||||
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Restructuring Expenses (3)
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$ | - | $ | - | $ | - | $ | 32 | $ | 26 | ||||||||||
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Operating Expenses (4)
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$ | 1,746 | $ | 1,781 | $ | 1,667 | $ | 1,728 | $ | 1,672 | ||||||||||
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Income Before Taxes
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$ | 1,153 | $ | 1,181 | $ | 964 | $ | 574 | $ | 583 | ||||||||||
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Effective Tax Rate
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29.1 | % | 31.2 | % | 25.3 | % | 29.6 | % | 25.0 | % | ||||||||||
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Income From Continuing Operations, Net of Tax
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$ | 818 | $ | 812 | $ | 720 | $ | 404 | $ | 437 | ||||||||||
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Loss From Discontinued Operations, Net of Tax (7)
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$ | (15 | ) | $ | (204 | ) | $ | (84 | ) | $ | (28 | ) | $ | (43 | ) | |||||
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Net Income
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$ | 803 | $ | 608 | $ | 636 | $ | 376 | $ | 394 | ||||||||||
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Net Income Available to Common Shareholders (A)
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$ | 803 | $ | 608 | $ | 636 | $ | 376 | $ | 394 | ||||||||||
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Common Share Statistics
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Basic EPS: (B)
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Income From Continuing Operations
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$ | 1.81 | $ | 1.79 | $ | 1.59 | $ | 0.90 | $ | 0.97 | ||||||||||
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Loss From Discontinued Operations
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$ | (0.03 | ) | $ | (0.45 | ) | $ | (0.18 | ) | $ | (0.07 | ) | $ | (0.09 | ) | |||||
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Net Income
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$ | 1.78 | $ | 1.34 | $ | 1.41 | $ | 0.83 | $ | 0.88 | ||||||||||
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Diluted EPS: (B)
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Income From Continuing Operations
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$ | 1.79 | $ | 1.78 | $ | 1.58 | $ | 0.89 | $ | 0.96 | ||||||||||
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Loss From Discontinued Operations
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$ | (0.03 | ) | $ | (0.45 | ) | $ | (0.18 | ) | $ | (0.06 | ) | $ | (0.09 | ) | |||||
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Net Income
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$ | 1.76 | $ | 1.33 | $ | 1.40 | $ | 0.83 | $ | 0.87 | ||||||||||
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Dividends Per Common Share
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$ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | ||||||||||
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Tangible Book Value Per Common Share (period end) (C)
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$ | 26.60 | $ | 24.89 | $ | 22.86 | $ | 27.72 | $ | 26.86 | ||||||||||
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Stock Price Per Common Share (period end)
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$ | 39.55 | $ | 40.30 | $ | 41.41 | $ | 38.34 | $ | 35.73 | ||||||||||
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Total Market Capitalization (period end)
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$ | 17,900 | $ | 18,228 | $ | 18,713 | $ | 17,268 | $ | 16,064 | ||||||||||
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Common Shares Outstanding (period end)
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452.6 | 452.3 | 451.9 | 450.4 | 449.6 | |||||||||||||||
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Shares Used to Compute Basic EPS
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452.5 | 452.1 | 451.0 | 450.0 | 449.4 | |||||||||||||||
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Shares Used to Compute Diluted EPS
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456.6 | 456.4 | 455.4 | 454.9 | 453.7 | |||||||||||||||
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Managed Balance Sheet Statistics (period average)
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Average Loans Held for Investment
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$ | 126,307 | $ | 128,203 | $ | 134,206 | $ | 138,184 | $ | 143,540 | ||||||||||
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Average Earning Assets
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$ | 172,473 | $ | 174,650 | $ | 181,881 | $ | 183,899 | $ | 185,874 | ||||||||||
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Total Average Assets
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$ | 196,586 | $ | 199,329 | $ | 207,207 | $ | 210,425 | $ | 214,655 | ||||||||||
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Average Interest Bearing Deposits
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$ | 104,186 | $ | 104,163 | $ | 104,018 | $ | 101,144 | $ | 103,105 | ||||||||||
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Total Average Deposits
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$ | 118,255 | $ | 118,484 | $ | 117,530 | $ | 114,598 | $ | 115,882 | ||||||||||
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Average Equity
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$ | 25,307 | $ | 24,526 | $ | 23,681 | $ | 26,518 | $ | 26,002 | ||||||||||
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Return on Average Assets (ROA)
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1.66 | % | 1.63 | % | 1.39 | % | 0.77 | % | 0.81 | % | ||||||||||
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Return on Average Equity (ROE)
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12.93 | % | 13.24 | % | 12.16 | % | 6.09 | % | 6.72 | % | ||||||||||
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Return on Average Tangible Common Equity (D)
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28.95 | % | 30.97 | % | 29.98 | % | 13.02 | % | 14.75 | % | ||||||||||
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Managed Balance Sheet Statistics (period end)
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Loans Held for Investment
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$ | 126,334 | $ | 127,140 | $ | 130,115 | $ | 136,803 | $ | 140,990 | ||||||||||
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Total Assets (E)
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$ | 196,928 | $ | 197,485 | $ | 200,691 | $ | 212,389 | $ | 209,684 | ||||||||||
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Interest Bearing Deposits
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$ | 104,741 | $ | 103,172 | $ | 104,013 | $ | 102,370 | $ | 101,769 | ||||||||||
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Total Deposits
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$ | 119,212 | $ | 117,331 | $ | 117,787 | $ | 115,809 | $ | 114,504 | ||||||||||
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Tangible Assets(E) (F)
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$ | 182,904 | $ | 183,474 | $ | 186,647 | $ | 198,283 | $ | 195,567 | ||||||||||
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Tangible Common Equity (TCE) (E) (G)
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$ | 12,037 | $ | 11,259 | $ | 10,330 | $ | 12,483 | $ | 12,075 | ||||||||||
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Tangible Common Equity to Tangible Assets Ratio (E) (H)
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6.58 | % | 6.14 | % | 5.53 | % | 6.30 | % | 6.17 | % | ||||||||||
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Performance Statistics (Managed) Quarter over Quarter
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Net Interest Income Growth (5)
|
0 | % | (4 | )% | 2 | % | (1 | )(5)% | 9 | (5)% | ||||||||||
|
Non-Interest Income Growth (5)
|
12 | % | (24 | )% | (12 | )% | (13 | )(5)% | 15 | (5)% | ||||||||||
|
Revenue Growth (5)
|
3 | % | (9 | )% | (2 | )% | (5 | )(5)% | 11 | (5)% | ||||||||||
|
Net Interest Margin
|
7.21 | % | 7.09 | % | 7.10 | % | 6.90 | % | 6.91 | % | ||||||||||
|
Revenue Margin
|
9.31 | % | 8.94 | % | 9.43 | % | 9.50 | % | 9.87 | % | ||||||||||
|
Risk-Adjusted Margin (I)
|
5.78 | % | 5.01 | % | 4.99 | % | 4.74 | % | 5.23 | % | ||||||||||
|
Non-Interest Expense as a % of Average Loans Held for Investment (annualized)
|
6.32 | % | 6.24 | % | 5.50 | % | 5.64 | % | 5.02 | % | ||||||||||
|
Efficiency Ratio (J)
|
49.70 | % | 51.23 | % | 43.06 | % | 43.85 | % | 38.74 | % | ||||||||||
|
Asset Quality Statistics (Managed) (6)
|
||||||||||||||||||||
|
Net Charge-Offs
|
$ | 1,522 | $ | 1,717 | $ | 2,018 | $ | 2,188 | $ | 2,155 | ||||||||||
|
Net Charge-Off Rate
|
4.82 | % | 5.36 | % | 6.02 | % | 6.33 | % | 6.00 | % | ||||||||||
|
30+ day performing delinquency rate
|
3.71 | % | 3.81 | % | 4.22 | % | 4.73 | % | 4.55 | % | ||||||||||
|
Full-time equivalent employees (in thousands)
|
25.7 | 25.7 | 25.9 | 25.9 | 26.0 | |||||||||||||||
*Prior to the adoption of the new consolidation accounting standards, management evaluated the Company and each of its lines of business results on a "managed" basis, which is a non-GAAP measure. With the adoption of the new consolidation accounting standards, the Company's reported results are comparable to the "managed" basis, which reflect the consolidation of the majority of the Company's credit card securitization trusts. The accompanying Exhibit "Reconciliation to GAAP Financial Measures" presents a reconciliation of the Company's non-GAAP "managed" results to its GAAP results for periods prior to January 1, 2010. See the accompanying schedule "Impact of Adopting New Accounting Guidance" for additional information on the impact of new accounting standards.
Page 2
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY NOTES
|
(1)
|
Includes the impact from the change in fair value of retained interests, including the interest-only strips, which totaled $6 million in Q3 2010, $17 million in Q2 2010, $(36) million in Q1 2010, $55 million in Q4 2009 and $37 million in Q3 2009.
|
|
(2)
|
In accordance with the Company's finance charge and fee revenue recognition policy, amounts billed but not included in revenue totaled: $190 million in Q3 2010, $261 million in Q2 2010, $354 million in Q1 2010, $490 million in Q4 2009 and $517 million in Q3 2009.
|
|
(3)
|
The Company completed its 2007 restructuring initiative during 2009.
|
|
(4)
|
Includes core deposit intangible amortization expense of $50 million in Q3 2010, $50 million in Q2 2010, $52 million in Q1 2010, $54 million in Q4 2009 and $56 million in Q3 2009 and integration costs of $27 million in Q3 2010, $22 million in Q2 2010, $17 million in Q1 2010, $22 million in Q4 2009 and $11 million in Q3 2009.
|
|
(5)
|
Prior period amounts have been reclassified to conform with the current period presentation and adjusted to reflect purchase accounting refinements related to the acquisition of Chevy Chase Bank, FSB ("CCB").
|
|
(6)
|
The ratios excluding the impact of loans acquired as part of the CCB acquistion are as follows. |
| Q3 2010 | Q2 2010 | Q1 2010 | Q4 2009 | Q3 2009 | ||||||||||||||||
|
CCB period end acquired loan portfolio (in millions)(unaudited)
|
$ | 5,891 | $ | 6,381 | $ | 6,799 | $ | 7,251 | $ | 7,885 | ||||||||||
|
CCB average acquired loan portfolio (in millions)(unaudited)
|
$ | 6,014 | $ | 6,541 | $ | 7,037 | $ | 7,512 | $ | 8,029 | ||||||||||
|
Allowance as a % of loans held for investment, excluding CCB
|
5.12 | % | 5.63 | % | 6.29 | % | 4.95 | % | 5.08 | % | ||||||||||
|
Net charge-off rate (GAAP), excluding CCB
|
5.06 | % | 5.64 | % | 6.35 | % | 5.44 | % | 4.94 | % | ||||||||||
|
Net charge-off rate (Managed), excluding CCB
|
5.06 | % | 5.64 | % | 6.35 | % | 6.70 | % | 6.36 | % | ||||||||||
|
30+ day performing delinquency rate (GAAP), excluding CCB
|
3.89 | % | 4.01 | % | 4.46 | % | 4.49 | % | 4.48 | % | ||||||||||
|
30+ day performing delinquency rate (Managed), excluding CCB
|
3.89 | % | 4.01 | % | 4.46 | % | 4.99 | % | 4.82 | % | ||||||||||
|
(7)
|
During Q3 2010, Q2 2010, Q1 2010, Q4 2009 and Q3 2009, the Company recorded charges of $16 million, $404 million, $224 million, $47 million and $91 million, respectively, related to representation and warranty matters. A portion of this expense is included in Discontinued Operations and the remainder is included in Non-Interest Income.
|
|
(8)
|
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 resulted in $128 million of income which is included in non-interest income.
|
STATISTICS / METRIC CALCULATIONS
|
(A)
|
Consists of net income (loss) less dividends on preferred shares.
|
|
(B)
|
Calculated based on net income (loss) available to common shareholders.
|
|
(C)
|
Calculated based on tangible common equity divided by common shares outstanding, which is a non-GAAP measure. See page 4 for a reconciliation of our tangible common equity.
|
|
(D)
|
Calculated based on income from continuing operations divided by average tangible common equity, which is a non-GAAP measure. See page 4, Reconciliation To GAAP Financial Measures for a reconciliation of average equity to average tangible common equity.
|
|
(E)
|
Calculated based on continuing operations, except for Average Equity and Return on Average Equity (ROE), which are based on average stockholders' equity.
|
|
(F)
|
Consists of reported or managed assets less intangible assets and is a non-GAAP measure. See page 4, Reconciliation To GAAP Financial Measures for a reconciliation of this measure to the reported common equity ratio.
|
|
(G)
|
Consists of stockholders' equity, intangible assets and the related deferred tax liabilities.
|
|
(H)
|
Tangible Common Equity to Tangible Assets Ratio ("TCE Ratio") is a non-GAAP measure. See page 4, Reconciliation To GAAP Financial Measures for a reconciliation of this measure to the reported common equity ratio.
|
|
(I)
|
Calculated based on total revenue less net charge-offs divided by average earning assets, expressed as a percentage.
|
|
(J)
|
Calculated based on non-interest expense less restructuring expense divided by total revenue.
|
Page 3
CAPITAL ONE FINANCIAL CORPORATION
REGULATORY AND NON-GAAP CAPITAL MEASURES
In addition to disclosing required regulatory measures, the Company also reports certain non-GAAP capital measures that management uses in assessing its capital adequacy. These measures include average tangible common equity, tangible common equity (TCE), TCE ratio, Tier 1 common equity and Tier 1 common equity ratio. The table below provides the details of the calculation of each of these measures. While these non-GAAP capital measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.
|
2010
|
2010
|
2010
|
2009
|
2009
|
||||||||||||||||
|
(dollars in millions)(unaudited)
|
Q3* | Q2* | Q1* | Q4 | Q3 | |||||||||||||||
|
Average Equity to Average Tangible Common Equity
|
||||||||||||||||||||
|
Average Equity
|
$ | 25,307 | $ | 24,526 | $ | 23,681 | $ | 26,518 | $ | 26,002 | ||||||||||
|
Less: Average Intangible Assets (1)
|
(14,003 | ) | (14,039 | ) | (14,075 | ) | (14,105 | ) | (14,151 | ) | ||||||||||
|
Average Tangible Common Equity
|
$ | 11,304 | $ | 10,487 | $ | 9,606 | $ | 12,413 | $ | 11,851 | ||||||||||
|
Period End Equity Tangible Common Equity
|
||||||||||||||||||||
|
Stockholders' Equity
|
$ | 26,061 | $ | 25,270 | $ | 24,374 | $ | 26,589 | $ | 26,192 | ||||||||||
|
Less: Intangible Assets (1)
|
(14,024 | ) | (14,011 | ) | (14,044 | ) | (14,106 | ) | (14,117 | ) | ||||||||||
|
Period End Tangible Common Equity
|
$ | 12,037 | $ | 11,259 | $ | 10,330 | $ | 12,483 | $ | 12,075 | ||||||||||
|
Tangible Assets
|
||||||||||||||||||||
|
Total Assets
|
$ | 196,933 | $ | 197,489 | $ | 200,707 | $ | 169,646 | $ | 168,464 | ||||||||||
|
Less: Discontinued Operations Assets
|
(5 | ) | (4 | ) | (16 | ) | (24 | ) | (31 | ) | ||||||||||
|
Total Assets-Continuing Operations
|
196,928 | 197,485 | 200,691 | 169,622 | 168,433 | |||||||||||||||
|
Less: Intangible Assets (1)
|
(14,024 | ) | (14,011 | ) | (14,044 | ) | (14,106 | ) | (14,117 | ) | ||||||||||
|
Period End Tangible Assets
|
$ | 182,904 | $ | 183,474 | $ | 186,647 | $ | 155,516 | $ | 154,316 | ||||||||||
|
TCE ratio (2)
|
6.58 | % | 6.14 | % | 5.53 | % | 8.03 | % | 7.82 | % | ||||||||||
|
Reconciliation of Period End Assets to Tangible Assets on a Managed Basis (for 2009) *
|
||||||||||||||||||||
|
Total Assets
|
$ | 196,933 | $ | 197,489 | $ | 200,707 | $ | 169,646 | $ | 168,464 | ||||||||||
|
Securitization Adjustment (3)
|
- | - | - | 42,767 | 41,251 | |||||||||||||||
|
Total Assets on a Managed Basis
|
196,933 | 197,489 | 200,707 | 212,413 | 209,715 | |||||||||||||||
|
Less: Assets-Discontinued Operations
|
(5 | ) | (4 | ) | (16 | ) | (24 | ) | (31 | ) | ||||||||||
|
Total Assets-Continuing Operations
|
196,928 | 197,485 | 200,691 | 212,389 | 209,684 | |||||||||||||||
|
Less: Intangible Assets (1)
|
(14,024 | ) | (14,011 | ) | (14,044 | ) | (14,106 | ) | (14,117 | ) | ||||||||||
|
Period End Tangible Assets
|
$ | 182,904 | $ | 183,474 | $ | 186,647 | $ | 198,283 | $ | 195,567 | ||||||||||
|
TCE ratio (2)
|
6.58 | % | 6.14 | % | 5.53 | % | 6.30 | % | 6.17 | % | ||||||||||
|
Tier 1 Common Equity AND Tier 1 Capital
|
||||||||||||||||||||
|
Common Stockholders' Equity
|
$ | 26,061 | $ | 25,270 | $ | 24,374 | $ | 26,589 | $ | 26,192 | ||||||||||
|
Less: Net Unrealized Gains (Losses) on Available-For-Sale Securities (7)
|
580 | 661 | 319 | 200 | 230 | |||||||||||||||
|
Less: Accumulated Net Gains (Losses) on Cash Flow Hedges (7)
|
(79 | ) | (73 | ) | (80 | ) | (92 | ) | (127 | ) | ||||||||||
|
Less: Disallowed Goodwill and Other Intangibles
|
13,993 | 14,023 | 14,078 | 14,125 | 14,103 | |||||||||||||||
|
Less: Disallowed DeferredTtax Assets
|
1,326 | 1,977 | 2,183 | - | - | |||||||||||||||
|
Less: Other
|
2 | 2 | 1 | 9 | (20 | ) | ||||||||||||||
|
Tier 1 Common Equity
|
10,239 | 8,680 | 7,873 | 12,347 | 12,006 | |||||||||||||||
|
Tier 1 Restricted Core Capital Items (4)
|
3,636 | 3,637 | 3,638 | 3,642 | 2,641 | |||||||||||||||
|
Total Tier 1 Capital
|
$ | 13,875 | $ | 12,317 | $ | 11,511 | $ | 15,989 | $ | 14,647 | ||||||||||
|
Risk-Weighted Assets
|
$ | 124,431 | $ | 124,038 | $ | 120,330 | $ | 116,309 | $ | 123,227 | ||||||||||
|
Tier 1 Common Equity Ratio: (5) (6)
|
8.23 | % | 7.00 | % | 6.54 | % | 10.62 | % | 9.74 | % | ||||||||||
|
Tier 1 Risk Based Captial Ratio (5) (8)
|
11.15 | % | 9.93 | % | 9.57 | % | 13.75 | % | 11.89 | % | ||||||||||
|
(1)
|
Includes impact from related deferred taxes.
|
|
(2)
|
Calculated based on tangible common equity divided by tangible assets.
|
|
(3)
|
Adjustments to our GAAP results to reflect loans that have been securitized and sold as though the loans remained on our consolidated balance sheet.
|
|
(4)
|
Consists primarily of trust preferred sercurities.
|
|
(5)
|
Ratios as of the end of Q3 2010 are preliminary.
|
|
(6)
|
Calculated based on Tier 1 common equity divided by risk-weighted assets.
|
|
(7)
|
Amounts are net of Tax impacts.
|
|
(8)
|
Calculated based on Tier 1 capital divided by risk-weighted assets.
|
* In addition to analyzing the Company's results on a reported basis, management previously evaluated Capital One's results on a "managed" basis, which consisted of non-GAAP financial measures. Capital One's managed results reflected 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 are comparable to its "managed" results. The accompanying Exhibit "Reconciliation to GAAP Financial Measures" presents a reconciliation of the Company's non-GAAP "managed" results to its GAAP results for periods prior to January 1, 2010.
Page 4
Impact of Adopting New Accounting Guidance
Consolidation of VIEs
|
(dollars in millions)(unaudited)
|
Opening Balance Sheet January 1, 2010
|
VIE Consolidation Impact
|
Ending Balance Sheet December 31, 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 | )(2) | (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 | )(2) | 26,589 | ||||||||
|
Total liabilities and stockholders' equity
|
$ | 211,511 | $ | 41,865 | $ | 169,646 | ||||||
Allocation of the Allowance by Segment
|
(dollars in millions)(unaudited)
|
January 1, 2010
|
Consolidation Impact
|
December 31, 2009
|
|||||||||
|
Domestic credit card
|
$ | 5,590 | $ | 3,663 | (2) | $ | 1,927 | |||||
|
International credit card
|
727 | 528 | 199 | |||||||||
|
Total credit card
|
6,317 | 4,191 | 2,126 | |||||||||
|
Commercial and multi-family real estate
|
471 | - | 471 | |||||||||
|
Middle market
|
131 | - | 131 | |||||||||
|
Specialty lending
|
90 | - | 90 | |||||||||
|
Total commercial lending
|
692 | - | 692 | |||||||||
|
Small ticket commercial real estate
|
93 | - | 93 | |||||||||
|
Total commercial banking
|
785 | - | 785 | |||||||||
|
Automobile
|
665 | - | 665 | |||||||||
|
Mortgage (includes all new CCB originations)
|
248 | 73 | (3) | 175 | ||||||||
|
Other retail
|
236 | - | 236 | |||||||||
|
Total consumer banking
|
1,149 | 73 | 1,076 | |||||||||
|
Other
|
140 | - | 140 | |||||||||
|
Total company
|
$ | 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 January 1, 2010, adoption of the new consolidation accounting standards.
(2) An adjustment of $34 million to retained earnings and the allowance for loan and lease losses was made in the second quarter of 2010 for the impact of impairment on consolidated loans accounted for troubled debt restructurings. These adjustments are not reflected in the above table.
(3) $73 million of the reduction in the allowance for the first quarter of 2010 is associated with the deconsolidation of certain mortgage trusts. This reduction in the allowance is recorded in non-interest income.
Page 5
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income
(in millions, except per share data)(unaudited)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||
|
September 30,
|
June 30,
|
September 30,
|
September 30,
|
September 30,
|
||||||||||||||||
|
2010
|
2010
|
2009 (1)
|
2010
|
2009 (1)
|
||||||||||||||||
|
Interest Income:
|
||||||||||||||||||||
|
Loans held for investment, including past-due fees
|
$ | 3,447 | $ | 3,476 | $ | 2,220 | $ | 10,582 | $ | 6,649 | ||||||||||
|
Investment securities
|
347 | 342 | 399 | 1,037 | 1,206 | |||||||||||||||
|
Other
|
21 | 17 | 83 | 60 | 214 | |||||||||||||||
|
Total interest income
|
3,815 | 3,835 | 2,702 | 11,679 | 8,069 | |||||||||||||||
|
Interest Expense:
|
||||||||||||||||||||
|
Deposits
|
358 | 368 | 479 | 1,125 | 1,666 | |||||||||||||||
|
Securitized debt
|
191 | 212 | 63 | 644 | 228 | |||||||||||||||
|
Senior and subordinated notes
|
72 | 72 | 74 | 211 | 189 | |||||||||||||||
|
Other borrowings
|
85 | 86 | 81 | 265 | 243 | |||||||||||||||
|
Total interest expense
|
706 | 738 | 697 | 2,245 | 2,326 | |||||||||||||||
|
Net interest income
|
3,109 | 3,097 | 2,005 | 9,434 | 5,743 | |||||||||||||||
|
Provision for loan and lease losses
|
867 | 723 | 1,173 | 3,069 | 3,386 | |||||||||||||||
|
Net interest income after provision for loan and lease losses
|
2,242 | 2,374 | 832 | 6,365 | 2,357 | |||||||||||||||
|
Non-Interest Income:
|
||||||||||||||||||||
|
Servicing and securitizations
|
9 | 21 | 721 | (6 | ) | 1,537 | ||||||||||||||
|
Service charges and other customer-related fees
|
496 | 496 | 496 | 1,577 | 1,494 | |||||||||||||||
|
Interchange
|
346 | 333 | 123 | 991 | 389 | |||||||||||||||
|
Net other-than-temporary impairment losses recognized in earnings
|
(1 | ) | (26 | ) | (11 | ) | (59 | ) | (22 | ) | ||||||||||
|
Other
|
57 | (17 | ) | 224 | 272 | 476 | ||||||||||||||
|
Total non-interest income
|
907 | 807 | 1,553 | 2,775 | 3,874 | |||||||||||||||
|
Non-Interest Expense:
|
||||||||||||||||||||
|
Salaries and associate benefits
|
641 | 650 | 648 | 1,937 | 1,837 | |||||||||||||||
|
Marketing
|
250 | 219 | 104 | 650 | 400 | |||||||||||||||
|
Communications and data processing
|
178 | 164 | 176 | 512 | 569 | |||||||||||||||
|
Supplies and equipment
|
129 | 129 | 123 | 381 | 370 | |||||||||||||||
|
Occupancy
|
135 | 117 | 114 | 371 | 329 | |||||||||||||||
|
Restructuring expense (2)
|
- | - | 26 | - | 87 | |||||||||||||||
|
Other
|
663 | 721 | 611 | 1,992 | 1,877 | |||||||||||||||
|
Total non-interest expense
|
1,996 | 2,000 | 1,802 | 5,843 | 5,469 | |||||||||||||||
|
Income from continuing operations before income taxes
|
1,153 | 1,181 | 583 | 3,297 | 762 | |||||||||||||||
|
Income tax provision
|
335 | 369 | 146 | 948 | 179 | |||||||||||||||
|
Income from continuing operations, net of tax
|
818 | 812 | 437 | 2,349 | 583 | |||||||||||||||
|
Loss from discontinued operations, net of tax
|
(15 | ) | (204 | ) | (43 | ) | (303 | ) | (75 | ) | ||||||||||
|
Net income
|
$ | 803 | $ | 608 | $ | 394 | $ | 2,046 | $ | 508 | ||||||||||
|
Preferred stock dividends
|
- | - | - | - | (564 | ) | ||||||||||||||
|
Net income (loss) available to common shareholders
|
$ | 803 | $ | 608 | $ | 394 | $ | 2,046 | $ | (56 | ) | |||||||||
|
Basic earnings per common share:
|
||||||||||||||||||||
|
Income (loss) from continuing operations
|
$ | 1.81 | $ | 1.79 | $ | 0.97 | $ | 5.19 | $ | 0.04 | ||||||||||
|
Loss from discontinued operations
|
(0.03 | ) | (0.45 | ) | (0.09 | ) | (0.66 | ) | (0.18 | ) | ||||||||||
|
Net Income (loss) per common share
|
$ | 1.78 | $ | 1.34 | $ | 0.88 | $ | 4.53 | $ | (0.13 | ) | |||||||||
|
Diluted earnings per common share:
|
||||||||||||||||||||
|
Income (loss) from continuing operations
|
$ | 1.79 | $ | 1.78 | $ | 0.96 | $ | 5.15 | $ | 0.04 | ||||||||||
|
Loss from discontinued operations
|
(0.03 | ) | (0.45 | ) | (0.09 | ) | (0.66 | ) | (0.18 | ) | ||||||||||
|
Net Income (loss) per common share
|
$ | 1.76 | $ | 1.33 | $ | 0.87 | $ | 4.49 | $ | (0.13 | ) | |||||||||
|
Dividends paid per common share
|
$ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.15 | $ | 0.48 | ||||||||||
(1) Certain prior period amounts have been revised to conform to the current period presentation.
(2) The Company completed its 2007 restructuring initiative during 2009.
Page 6
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Balance Sheets
(in millions)(unaudited)
|
As of
|
As of
|
As of
|
||||||||||
|
September 30
|
December 31
|
September 30
|
||||||||||
|
2010
|
2009 (1)
|
2009 (1)
|
||||||||||
|
Assets:
|
||||||||||||
|
Cash and due from banks
|
$ | 2,015 | $ | 3,100 | $ | 2,719 | ||||||
|
Interest-bearing deposits with banks
|
2,391 | 5,043 | 863 | |||||||||
|
Federal funds sold and repurchase agreements
|
536 | 542 | 545 | |||||||||
|
Cash and cash equivalents
|
4,942 | 8,685 | 4,127 | |||||||||
|
Restricted cash for securitization investors
|
2,686 | 501 | 547 | |||||||||
|
Investment in securities:
|
||||||||||||
|
Available for sale, at fair value
|
39,926 | 38,830 | 37,693 | |||||||||
|
Held to maturity, at amortized cost
|
- | 80 | 84 | |||||||||
|
Total investment in securities
|
39,926 | 38,910 | 37,777 | |||||||||
|
Loans held for investment:
|
||||||||||||
|
Unsecuritized loans held for investment, at amortized cost
|
74,719 | 75,097 | 78,392 | |||||||||
|
Restricted loans for securitization investors
|
51,615 | 15,522 | 18,322 | |||||||||
|
Total loans held for investment
|
126,334 | 90,619 | 96,714 | |||||||||
|
Less: Allowance for loan and lease losses
|
(6,175 | ) | (4,127 | ) | (4,513 | ) | ||||||
|
Net loans held for investment
|
120,159 | 86,492 | 92,201 | |||||||||
|
Loans held for sale, at lower-of-cost-or-fair-value
|
197 | 268 | 141 | |||||||||
|
Accounts receivable from securitizations
|
127 | 7,128 | 6,438 | |||||||||
|
Premises and equipment, net
|
2,722 | 2,736 | 2,773 | |||||||||
|
Interest receivable
|
1,025 | 936 | 911 | |||||||||
|
Goodwill
|
13,593 | 13,596 | 13,565 | |||||||||
|
Other
|
11,556 | 10,394 | 9,984 | |||||||||
|
Total assets
|
$ | 196,933 | $ | 169,646 | $ | 168,464 | ||||||
|
Liabilities:
|
||||||||||||
|
Interest payable
|
$ | 464 | $ | 509 | $ | 583 | ||||||
|
Customer deposits
|
119,212 | 115,809 | 114,504 | |||||||||
|
Securitized debt obligations
|
29,504 | 3,954 | 4,608 | |||||||||
|
Other debt:
|
||||||||||||
|
Federal funds purchased and securities loaned or sold under agreements to repurchase
|
947 | 1,140 | 1,621 | |||||||||
|
Senior and subordinated notes
|
9,083 | 9,045 | 9,209 | |||||||||
|
Other borrowings
|
4,799 | 6,875 | 5,897 | |||||||||
|
Total other debt
|
14,829 | 17,060 | 16,727 | |||||||||
|
Other liabilities
|
6,863 | 5,725 | 5,850 | |||||||||
|
Total liabilities
|
170,872 | 143,057 | 142,272 | |||||||||
|
Stockholders' Equity:
|
||||||||||||
|
Common stock
|
5 | 5 | 5 | |||||||||
|
Paid-in capital, net
|
19,059 | 18,955 | 18,928 | |||||||||
|
Retained earnings and accumulated other comprehensive income
|
10,199 | 10,809 | 10,431 | |||||||||
|
Less: Treasury stock, at cost
|
(3,202 | ) | (3,180 | ) | (3,172 | ) | ||||||
|
Total stockholders' equity
|
26,061 | 26,589 | 26,192 | |||||||||
|
Total liabilities and stockholders' equity
|
$ | 196,933 | $ | 169,646 | $ | 168,464 | ||||||
(1) Certain prior period amounts have been revised to conform to the current period presentation.
Page 7
Statements of Average Balances, Income and Expense, Yields and Rates (1)
(dollars in millions)(unaudited)
|
Quarter Ended 09/30/10
|
Quarter Ended 06/30/10
|
Quarter Ended 09/30/09 (3)
|
||||||||||||||||||||||||||||||||||
|
GAAP Basis
|
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
|||||||||||||||||||||||||||
|
Balance
|
Expense
|
Rate
|
Balance
|
Expense
|
Rate
|
Balance
|
Expense
|
Rate
|
||||||||||||||||||||||||||||
|
Interest-earning assets:
|
||||||||||||||||||||||||||||||||||||
|
Loans held for investment
|
$ | 126,307 | $ | 3,447 | 10.92 | % | $ | 128,203 | $ | 3,476 | 10.85 | % | $ | 99,354 | $ | 2,220 | 8.94 | % | ||||||||||||||||||
|
Investment securities (2)
|
39,872 | 347 | 3.48 | % | 39,022 | 342 | 3.51 | % | 37,377 | 399 | 4.27 | % | ||||||||||||||||||||||||
|
Other
|
6,294 | 21 | 1.33 | % | 7,425 | 17 | 0.92 | % | 8,549 | 83 | 3.88 | % | ||||||||||||||||||||||||
|
Total interest-earning assets
|
$ | 172,473 | $ | 3,815 | 8.85 | % | $ | 174,650 | $ | 3,835 | 8.78 | % | $ | 145,280 | $ | 2,702 | 7.44 | % | ||||||||||||||||||
|
Interest-bearing liabilities:
|
||||||||||||||||||||||||||||||||||||
|
Interest-bearing deposits
|
||||||||||||||||||||||||||||||||||||
|
NOW accounts
|
$ | 11,333 | $ | 10 | 0.35 | % | $ | 11,601 | $ | 10 | 0.34 | % | $ | 10,419 | $ | 13 | 0.50 | % | ||||||||||||||||||
|
Money market deposit accounts
|
43,260 | 104 | 0.96 | % | 42,127 | 99 | 0.94 | % | 36,037 | 96 | 1.07 | % | ||||||||||||||||||||||||
|
Savings accounts
|
22,572 | 49 | 0.87 | % | 21,017 | 44 | 0.84 | % | 12,266 | 23 | 0.75 | % | ||||||||||||||||||||||||
|
Other consumer time deposits
|
18,726 | 133 | 2.84 | % | 20,744 | 150 | 2.89 | % | 32,076 | 248 | 3.09 | % | ||||||||||||||||||||||||
|
Public fund CD's of $100,000 or more
|
220 | 1 | 1.82 | % | 240 | 1 | 1.67 | % | 1,061 | 3 | 1.13 | % | ||||||||||||||||||||||||
|
CD's of $100,000 or more
|
7,256 | 59 | 3.25 | % | 7,601 | 63 | 3.32 | % | 9,764 | 93 | 3.81 | % | ||||||||||||||||||||||||
|
Foreign time deposits
|
819 | 2 | 0.98 | % | 833 | 1 | 0.48 | % | 1,482 | 3 | 0.81 | % | ||||||||||||||||||||||||
|
Total interest-bearing deposits
|
$ | 104,186 | $ | 358 | 1.37 | % | $ | 104,163 | $ | 368 | 1.41 | % | $ | 103,105 | $ | 479 | 1.86 | % | ||||||||||||||||||
|
Senior and subordinated notes
|
8,677 | 72 | 3.32 | % | 8,760 | 72 | 3.29 | % | 9,554 | 74 | 3.10 | % | ||||||||||||||||||||||||
|
Other borrowings
|
6,483 | 85 | 5.24 | % | 6,375 | 86 | 5.40 | % | 8,553 | 81 | 3.79 | % | ||||||||||||||||||||||||
|
Securitization liability
|
30,750 | 191 | 2.48 | % | 35,248 | 212 | 2.41 | % | 4,928 | 63 | 5.11 | % | ||||||||||||||||||||||||
|
Total interest-bearing liabilities
|
$ | 150,096 | $ | 706 | 1.88 | % | $ | 154,546 | $ | 738 | 1.91 | % | $ | 126,140 | $ | 697 | 2.21 | % | ||||||||||||||||||
|
Net interest spread
|
6.97 | % | 6.87 | % | 5.23 | % | ||||||||||||||||||||||||||||||
|
Interest income to average interest-earning assets
|
8.85 | % | 8.78 | % | 7.44 | % | ||||||||||||||||||||||||||||||
|
Interest expense to average interest-earning assets
|
1.64 | % | 1.69 | % | 1.92 | % | ||||||||||||||||||||||||||||||
|
Net interest margin
|
7.21 | % | 7.09 | % | 5.52 | % | ||||||||||||||||||||||||||||||
|
Managed Basis *
|
||||||||||||||||||||||||||||||||||||
|
Interest-earning assets:
|
||||||||||||||||||||||||||||||||||||
|
Loans held for investment
|
$ | 126,307 | $ | 3,447 | 10.92 | % | $ | 128,203 | $ | 3,476 | 10.85 | % | $ | 143,540 | $ | 3,750 | 10.45 | % | ||||||||||||||||||
|
Investment securities (2)
|
39,872 | 347 | 3.48 | % | 39,022 | 342 | 3.51 | % | 37,377 | 399 | 4.27 | % | ||||||||||||||||||||||||
|
Other
|
6,294 | 21 | 1.33 | % | 7,425 | 17 | 0.92 | % | 4,957 | 18 | 1.45 | % | ||||||||||||||||||||||||
|
Total interest-earning assets
|
$ | 172,473 | $ | 3,815 | 8.85 | % | $ | 174,650 | $ | 3,835 | 8.78 | % | $ | 185,874 | $ | 4,167 | 8.97 | % | ||||||||||||||||||
|
Interest-bearing liabilities:
|
||||||||||||||||||||||||||||||||||||
|
Interest-bearing deposits
|
||||||||||||||||||||||||||||||||||||
|
NOW accounts
|
$ | 11,333 | $ | 10 | 0.35 | % | 11,601 | 10 | 0.34 | % | $ | 10,419 | $ | 13 | 0.50 | % | ||||||||||||||||||||
|
Money market deposit accounts
|
43,260 | 104 | 0.96 | % | 42,127 | 99 | 0.94 | % | 36,037 | 96 | 1.07 | % | ||||||||||||||||||||||||
|
Savings accounts
|
22,572 | 49 | 0.87 | % | 21,017 | 44 | 0.84 | % | 12,266 | 23 | 0.75 | % | ||||||||||||||||||||||||
|
Other consumer time deposits
|
18,726 | 133 | 2.84 | % | 20,744 | 150 | 2.89 | % | 32,076 | 248 | 3.09 | % | ||||||||||||||||||||||||
|
Public fund CD's of $100,000 or more
|
220 | 1 | 1.82 | % | 240 | 1 | 1.67 | % | 1,061 | 3 | 1.13 | % | ||||||||||||||||||||||||
|
CD's of $100,000 or more
|
7,256 | 59 | 3.25 | % | 7,601 | 63 | 3.32 | % | 9,764 | 93 | 3.81 | % | ||||||||||||||||||||||||
|
Foreign time deposits
|
819 | 2 | 0.98 | % | 833 | 1 | 0.48 | % | 1,482 | 3 | 0.81 | % | ||||||||||||||||||||||||
|
Total interest-bearing deposits
|
$ | 104,186 | $ | 358 | 1.37 | % | $ | 104,163 | $ | 368 | 1.41 | % | $ | 103,105 | $ | 479 | 1.86 | % | ||||||||||||||||||
|
Senior and subordinated notes
|
8,677 | 72 | 3.32 | % | 8,760 | 72 | 3.29 | % | 9,554 | 74 | 3.10 | % | ||||||||||||||||||||||||
|
Other borrowings
|
6,483 | 85 | 5.24 | % | 6,375 | 86 | 5.40 | % | 8,553 | 81 | 3.79 | % | ||||||||||||||||||||||||
|
Securitization liability
|
30,750 | 191 | 2.48 | % | 35,248 | 212 | 2.41 | % | 46,179 | 320 | 2.77 | % | ||||||||||||||||||||||||
|
Total interest-bearing liabilities
|
$ | 150,096 | $ | 706 | 1.88 | % | $ | 154,546 | $ | 738 | 1.91 | % | $ | 167,391 | $ | 954 | 2.28 | % | ||||||||||||||||||
|
Net interest spread
|
6.97 | % | 6.87 | % | 6.69 | % | ||||||||||||||||||||||||||||||
|
Interest income to average interest-earning assets
|
8.85 | % | 8.78 | % | 8.97 | % | ||||||||||||||||||||||||||||||
|
Interest expense to average interest-earning assets
|
1.64 | % | 1.69 | % | 2.05 | % | ||||||||||||||||||||||||||||||
|
Net interest margin
|
7.21 | % | 7.09 | % | 6.91 | % | ||||||||||||||||||||||||||||||
(1) Reflects amounts based on continuing operations.
(2) Consists of available-for-sale and held-to-maturity securities.
(3) Certain prior period amounts have been revised to conform to the current period presentation.
* Prior to the adoption of the new consolidation accounting standards, management evaluated the Company and each of its lines of business results on a "managed" basis. With the adoption of the new consolidation accounting standards, the Company's reported results are comparable to the "managed" basis which now reflect the consolidation of the majority of the Company's credit card securitization trusts. The accompanying Exhibit "Reconciliation to GAAP Financial Measures" presents a reconciliation of the Company's non-GAAP "managed" results to its reported results for periods prior to January 1, 2010.
Page 8
LENDING INFORMATION AND STATISTICS
MANAGED BASIS (1)
|
(Dollars in millions) (unaudited)
|
2010
Q3 |
2010
Q2 |
2010
Q1 |
2009
Q4 |
2009
Q3 |
|||||||||||||||
|
Period end loans held for investment
|
||||||||||||||||||||
|
Domestic credit card
|
$ | 53,839 | $ | 54,628 | $ | 56,228 | $ | 60,300 | $ | 61,892 | ||||||||||
|
International credit card
|
7,487 | 7,269 | 7,578 | 8,224 | 8,477 | |||||||||||||||
|
Total Credit Card
|
$ | 61,326 | $ | 61,897 | $ | 63,806 | $ | 68,524 | $ | 70,369 | ||||||||||
|
Commercial and multifamily real estate
|
$ | 13,383 | $ | 13,580 | $ | 13,618 | $ | 13,843 | $ | 13,978 | ||||||||||
|
Middle market
|
10,456 | 10,203 | 10,310 | 10,062 | 10,023 | |||||||||||||||
|
Specialty lending
|
3,813 | 3,815 | 3,619 | 3,555 | 3,399 | |||||||||||||||
|
Total Commercial Lending
|
$ | 27,652 | $ | 27,598 | $ | 27,547 | $ | 27,460 | $ | 27,400 | ||||||||||
|
Small-ticket commercial real estate
|
1,890 | 1,977 | 2,065 | 2,153 | (7) | 2,413 | ||||||||||||||
|
Total Commercial Banking
|
$ | 29,542 | $ | 29,575 | $ | 29,612 | $ | 29,613 | $ | 29,813 | ||||||||||
|
Automobile
|
$ | 17,643 | $ | 17,221 | $ | 17,446 | $ | 18,186 | $ | 19,295 | ||||||||||
|
Mortgages
|
12,763 | 13,322 | 13,967 | 14,893 | 15,639 | |||||||||||||||
|
Retail banking
|
4,591 | 4,770 | 4,970 | 5,135 | 5,215 | |||||||||||||||
|
Total Consumer Banking
|
$ | 34,997 | $ | 35,313 | $ | 36,383 | $ | 38,214 | $ | 40,149 | ||||||||||
|
Other loans (2)
|
$ | 469 | $ | 470 | $ | 464 | $ | 452 | $ | 659 | ||||||||||
|
Total
|
$ | 126,334 | $ | 127,255 | $ | 130,265 | $ | 136,803 | $ | 140,990 | ||||||||||
|
Average loans held for investment
|
||||||||||||||||||||
|
Domestic credit card
|
$ | 54,049 | $ | 55,252 | $ | 58,108 | $ | 60,443 | $ | 63,299 | ||||||||||
|
International credit card
|
7,342 | 7,427 | 7,814 | 8,300 | 8,609 | |||||||||||||||
|
Total Credit Card
|
$ | 61,391 | $ | 62,679 | $ | 65,922 | $ | 68,743 | $ | 71,908 | ||||||||||
|
Commercial and multifamily real estate
|
$ | 13,411 | $ | 13,543 | $ | 13,716 | $ | 13,926 | $ | 13,938 | ||||||||||
|
Middle market
|
10,352 | 10,276 | 10,324 | 10,052 | 9,911 | |||||||||||||||
|
Specialty lending
|
3,715 | 3,654 | 3,609 | 3,535 | 3,753 | |||||||||||||||
|
Total Commercial Lending
|
$ | 27,478 | $ | 27,473 | $ | 27,649 | $ | 27,513 | $ | 27,602 | ||||||||||
|
Small-ticket commercial real estate
|
1,957 | 2,060 | 2,074 | 2,354 | 2,471 | |||||||||||||||
|
Total Commercial Banking
|
$ | 29,435 | $ | 29,533 | $ | 29,723 | $ | 29,867 | $ | 30,073 | ||||||||||
|
Automobile
|
$ | 17,397 | $ | 17,276 | $ | 17,769 | $ | 18,768 | $ | 19,636 | ||||||||||
|
Mortgages
|
13,024 | 13,573 | 15,434 | 15,170 | 15,925 | |||||||||||||||
|
Retail banking
|
4,669 | 4,811 | 5,042 | 5,176 | 5,515 | |||||||||||||||
|
Total Consumer Banking
|
$ | 35,090 | $ | 35,660 | $ | 38,245 | $ | 39,114 | $ | 41,076 | ||||||||||
|
Other loans (2)
|
$ | 475 | $ | 463 | $ | 489 | $ | 460 | $ | 483 | ||||||||||
|
Total
|
$ | 126,391 | $ | 128,335 | $ | 134,379 | $ | 138,184 | $ | 143,540 | ||||||||||
|
Net charge-off rates
|
||||||||||||||||||||
|
Domestic credit card
|
8.23 | % | 9.49 | % | 10.48 | % | 9.59 | % | 9.64 | % | ||||||||||
|
International credit card
|
7.60 | % | 8.38 | % | 8.83 | % | 9.52 | % | 9.19 | % | ||||||||||
|
Total Credit Card
|
8.16 | % | 9.36 | % | 10.29 | % | 9.58 | % | 9.59 | % | ||||||||||
|
Commercial and multifamily real estate (3)
|
1.78 | % | 1.17 | % | 1.45 | % | 3.02 | % | 1.37 | % | ||||||||||
|
Middle market (3)
|
0.43 | % | 0.78 | % | 0.82 | % | 0.75 | % | 0.56 | % | ||||||||||
|
Specialty lending
|
0.64 | % | 0.87 | % | 0.90 | % | 1.85 | % | 1.39 | % | ||||||||||
|
Total Commercial Lending (3)
|
1.11 | % | 0.98 | % | 1.14 | % | 2.04 | % | 1.08 | % | ||||||||||
|
Small-ticket commercial real estate
|
3.48 | % | 4.21 | % | 4.43 | % | 13.08 | %(7) | 5.19 | % | ||||||||||
|
Total Commercial Banking (3)
|
1.27 | % | 1.21 | % | 1.37 | % | 2.91 | % | 1.42 | % | ||||||||||
|
Automobile
|
2.71 | % | 2.09 | % | 2.97 | % | 4.55 | % | 4.38 | % | ||||||||||
|
Mortgages (3)
|
0.41 | % | 0.46 | % | 0.94 | % | 0.72 | % | 0.69 | % | ||||||||||
|
Retail banking (3)
|
2.20 | % | 2.11 | % | 2.11 | % | 2.93 | % | 2.44 | % | ||||||||||
|
Total Consumer Banking (3)
|
1.79 | % | 1.47 | % | 2.03 | % | 2.85 | % | 2.69 | % | ||||||||||
|
Other loans
|
17.63 | % | 27.95 | % | 18.82 | % | 28.25 | % | 28.53 | % | ||||||||||
|
Total
|
4.82 | % | 5.36 | % | 6.02 | % | 6.33 | % | 6.00 | % | ||||||||||
|
30+ day performing delinquency rate
|
||||||||||||||||||||
|
Domestic credit card
|
4.53 | % | 4.79 | % | 5.30 | % | 5.78 | % | 5.38 | % | ||||||||||
|
International credit card
|
5.84 | % | 6.03 | % | 6.39 | % | 6.55 | % | 6.63 | % | ||||||||||
|
Total Credit Card
|
4.69 | % | 4.94 | % | 5.43 | % | 5.88 | % | 5.53 | % | ||||||||||
|
Automobile
|
7.95 | % | 7.74 | % | 7.58 | % | 10.03 | % | 9.52 | % | ||||||||||
|
Mortgages (3)
|
0.69 | % | 0.68 | % | 0.93 | % | 1.26 | % | 1.17 | % | ||||||||||
|
Retail banking (3)
|
1.08 | % | 0.87 | % | 1.02 | % | 1.23 | % | 1.26 | % | ||||||||||
|
Total Consumer Banking (3)
|
4.40 | % | 4.15 | % | 4.13 | % | 5.43 | % | 5.19 | % | ||||||||||
|
Nonperforming asset rates (5) (6)
|
||||||||||||||||||||
|
Commercial and multifamily real estate (3)
|
2.44 | % | 2.82 | % | 3.65 | % | 3.25 | % | 2.66 | % | ||||||||||
|
Middle market (3)
|
1.36 | % | 1.20 | % | 1.15 | % | 1.09 | % | 1.25 | % | ||||||||||
|
Specialty lending
|
1.75 | % | 1.94 | % | 2.18 | % | 2.25 | % | 2.12 | % | ||||||||||
|
Total Commercial Lending (3)
|
1.94 | % | 2.10 | % | 2.52 | % | 2.33 | % | 2.08 | % | ||||||||||
|
Small-ticket commercial real estate
|
2.04 | % | 3.57 | % | 4.18 | % | 4.87 | %(7) | 11.39 | % | ||||||||||
|
Total Commercial Banking (3)
|
1.94 | % | 2.20 | % | 2.64 | % | 2.52 | % | 2.84 | % | ||||||||||
|
Automobile (4)
|
0.60 | % | 0.56 | % | 0.55 | % | 0.92 | % | 0.87 | % | ||||||||||
|
Mortgages (3)
|
4.09 | % | 3.78 | % | 3.17 | % | 2.24 | % | 1.83 | % | ||||||||||
|
Retail banking (3)
|
2.41 | % | 2.25 | % | 2.07 | % | 2.11 | % | 1.98 | % | ||||||||||
|
Total Consumer Banking (3)
|
2.11 | % | 2.00 | % | 1.76 | % | 1.60 | % | 1.39 | % | ||||||||||
Page 9
CAPITAL ONE FINANCIAL CORPORATION (COF)
CREDIT CARD SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS
MANAGED BASIS (1)
|
(Dollars in millions) (unaudited)
|
2010
Q3 |
2010
Q2 |
2010
Q1 |
2009
Q4 |
2009
Q3 |
|||||||||||||||
|
Credit Card:
|
||||||||||||||||||||
|
Earnings
|
||||||||||||||||||||
|
Net interest income
|
$ | 1,934 | $ | 1,977 | $ | 2,113 | $ | 2,029 | $ | 2,024 | ||||||||||
|
Non-interest income
|
671 | 659 | 718 | 897 | 967 | |||||||||||||||
|
Total revenue
|
$ | 2,605 | $ | 2,636 | $ | 2,831 | $ | 2,926 | $ | 2,991 | ||||||||||
|
Provision for loan and lease losses
|
660 | 765 | 1,175 | 1,204 | 1,644 | |||||||||||||||
|
Non-interest expense
|
978 | 1,002 | 914 | 943 | 897 | |||||||||||||||
|
Income before taxes
|
967 | 869 | 742 | 779 | 450 | |||||||||||||||
|
Income tax provision
|
336 | 301 | 253 | 269 | 158 | |||||||||||||||
|
Net income
|
$ | 631 | $ | 568 | $ | 489 | $ | 510 | $ | 292 | ||||||||||
|
Selected Metrics
|
||||||||||||||||||||
|
Period end loans held for investment
|
$ | 61,326 | $ | 61,897 | $ | 63,806 | $ | 68,524 | $ | 70,369 | ||||||||||
|
Average loans held for investment
|
$ | 61,391 | $ | 62,679 | $ | 65,922 | $ | 68,743 | $ | 71,908 | ||||||||||
|
Loans held for investment yield
|
14.27 | % | 14.24 | % | 14.88 | % | 14.21 | % | 13.75 | % | ||||||||||
|
Revenue margin
|
16.97 | % | 16.82 | % | 17.18 | % | 17.03 | % | 16.64 | % | ||||||||||
|
Net charge-off rate
|
8.16 | % | 9.36 | % | 10.29 | % | 9.58 | % | 9.59 | % | ||||||||||
|
30+ day performing delinquency rate
|
4.69 | % | 4.94 | % | 5.43 | % | 5.88 | % | 5.53 | % | ||||||||||
|
Purchase volume (8)
|
$ | 27,039 | $ | 26,570 | $ | 23,924 | $ | 26,866 | $ | 25,982 | ||||||||||
|
Domestic Card Sub-segment Earnings
|
||||||||||||||||||||
|
Net interest income
|
$ | 1,691 | $ | 1,735 | $ | 1,865 | $ | 1,781 | $ | 1,797 | ||||||||||
|
Non-interest income
|
575 | 560 | 618 | 794 | 856 | |||||||||||||||
|
Total revenue
|
$ | 2,266 | $ | 2,295 | $ | 2,483 | $ | 2,575 | $ | 2,653 | ||||||||||
|
Provision for loan and lease losses
|
577 | 675 | 1,096 | 1,033 | 1,437 | |||||||||||||||
|
Non-interest expense
|
844 | 869 | 809 | 833 | 770 | |||||||||||||||
|
Income before taxes
|
845 | 751 | 578 | 709 | 446 | |||||||||||||||
|
Income tax provision
|
301 | 268 | 206 | 248 | 156 | |||||||||||||||
|
Net income
|
$ | 544 | $ | 483 | $ | 372 | $ | 461 | $ | 290 | ||||||||||
|
Selected Metrics
|
||||||||||||||||||||
|
Period end loans held for investment
|
$ | 53,839 | $ | 54,628 | $ | 56,228 | $ | 60,300 | $ | 61,892 | ||||||||||
|
Average loans held for investment
|
$ | 54,049 | $ | 55,252 | $ | 58,108 | $ | 60,443 | $ | 63,299 | ||||||||||
|
Loans held for investment yield
|
13.95 | % | 13.98 | % | 14.78 | % | 14.08 | % | 13.74 | % | ||||||||||
|
Revenue margin
|
16.77 | % | 16.61 | % | 17.09 | % | 17.04 | % | 16.76 | % | ||||||||||
|
Net charge-off rate
|
8.23 | % | 9.49 | % | 10.48 | % | 9.59 | % | 9.64 | % | ||||||||||
|
30+ day performing delinquency rate
|
4.53 | % | 4.79 | % | 5.30 | % | 5.78 | % | 5.38 | % | ||||||||||
|
Purchase volume (8)
|
$ | 24,858 | $ | 24,513 | $ | 21,988 | $ | 24,593 | $ | 23,761 | ||||||||||
|
International Card Sub-segment
|
||||||||||||||||||||
|
Earnings
|
||||||||||||||||||||
|
Net interest income
|
$ | 243 | $ | 242 | $ | 248 | $ | 248 | $ | 227 | ||||||||||
|
Non-interest income
|
96 | 99 | 100 | 103 | 111 | |||||||||||||||
|
Total revenue
|
$ | 339 | $ | 341 | $ | 348 | $ | 351 | $ | 338 | ||||||||||
|
Provision for loan and lease losses
|
83 | 90 | 79 | 171 | 207 | |||||||||||||||
|
Non-interest expense
|
134 | 133 | 105 | 110 | 127 | |||||||||||||||
|
Income before taxes
|
122 | 118 | 164 | 70 | 4 | |||||||||||||||
|
Income tax provision
|
35 | 33 | 47 | 21 | 2 | |||||||||||||||
|
Net income
|
$ | 87 | $ | 85 | $ | 117 | $ | 49 | $ | 2 | ||||||||||
|
Selected Metrics
|
||||||||||||||||||||
|
Period end loans held for investment
|
$ | 7,487 | $ | 7,269 | $ | 7,578 | $ | 8,224 | $ | 8,477 | ||||||||||
|
Average loans held for investment
|
$ | 7,342 | $ | 7,427 | $ | 7,814 | $ | 8,300 | $ | 8,609 | ||||||||||
|
Loans held for investment yield
|
16.62 | % | 16.21 | % | 15.66 | % | 15.18 | % | 13.80 | % | ||||||||||
|
Revenue margin
|
18.47 | % | 18.37 | % | 17.81 | % | 16.92 | % | 15.70 | % | ||||||||||
|
Net charge-off rate
|
7.60 | % | 8.38 | % | 8.83 | % | 9.52 | % | 9.19 | % | ||||||||||
|
30+ day performing delinquency rate
|
5.84 | % | 6.03 | % | 6.39 | % | 6.55 | % | 6.63 | % | ||||||||||
|
Purchase volume (8)
|
$ | 2,181 | $ | 2,057 | $ | 1,936 | $ | 2,273 | $ | 2,221 | ||||||||||
Page 10
COMMERCIAL BANKING SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS
MANAGED BASIS (1)
|
(Dollars in millions) (unaudited)
|
2010
Q3 |
2010
Q2 |
2010
Q1 |
2009
Q4 |
2009
Q3 |
|||||||||||||||
|
Commercial Banking:
|
||||||||||||||||||||
|
Earnings
|
||||||||||||||||||||
|
Net interest income
|
$ | 325 | $ | 319 | $ | 312 | $ | 318 | $ | 301 | ||||||||||
|
Non-interest income
|
30 | 60 | 42 | 38 | 43 | |||||||||||||||
|
Total revenue
|
$ | 355 | $ | 379 | $ | 354 | $ | 356 | $ | 344 | ||||||||||
|
Provision for loan and lease losses
|
95 | 62 | 238 | 368 | 375 | |||||||||||||||
|
Non-interest expense
|
199 | 198 | 192 | 197 | 166 | |||||||||||||||
|
Income (loss) before taxes
|
61 | 119 | (76 | ) | (209 | ) | (197 | ) | ||||||||||||
|
Income tax provision (benefit)
|
22 | 42 | (27 | ) | (73 | ) | (69 | ) | ||||||||||||
|
Net income (loss)
|
$ | 39 | $ | 77 | $ | (49 | ) | $ | (136 | ) | $ | (128 | ) | |||||||
|
Selected Metrics
|
||||||||||||||||||||
|
Period end loans held for investment
|
$ | 29,542 | $ | 29,575 | $ | 29,612 | $ | 29,613 | $ | 29,813 | ||||||||||
|
Average loans held for investment
|
$ | 29,435 | $ | 29,533 | $ | 29,723 | $ | 29,867 | $ | 30,073 | ||||||||||
|
Loans held for investment yield
|
5.13 | % | 4.94 | % | 5.03 | % | 5.11 | % | 5.06 | % | ||||||||||
|
Period end deposits
|
$ | 22,100 | $ | 21,527 | $ | 21,605 | $ | 20,480 | $ | 18,617 | ||||||||||
|
Average deposits
|
$ | 21,899 | $ | 22,171 | $ | 21,859 | $ | 19,420 | $ | 17,761 | ||||||||||
|
Deposit interest expense rate
|
0.67 | % | 0.67 | % | 0.72 | % | 0.80 | % | 0.75 | % | ||||||||||
|
Core deposit intangible amortization
|
$ | 14 | $ | 14 | $ | 14 | $ | 14 | $ | 10 | ||||||||||
|
Net charge-off rate (3)
|
1.27 | % | 1.21 | % | 1.37 | % | 2.91 | % | 1.42 | % | ||||||||||
|
Nonperforming loans as a percentage of loans held for investment (3)
|
1.81 | % | 2.04 | % | 2.48 | % | 2.37 | % | 2.65 | % | ||||||||||
|
Nonperforming asset rate (3)
|
1.94 | % | 2.20 | % | 2.64 | % | 2.52 | % | 2.84 | % | ||||||||||
Page 11
CONSUMER BANKING SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS
MANAGED BASIS (1)
|
(Dollars in millions) (unaudited)
|
2010
Q3 |
2010
Q2 |
2010
Q1 |
2009
Q4 |
2009
Q3 |
|||||||||||||||
|
Consumer Banking:
|
||||||||||||||||||||
|
Earnings
|
||||||||||||||||||||
|
Net interest income
|
$ | 946 | $ | 935 | $ | 896 | $ | 833 | $ | 848 | ||||||||||
|
Non-interest income
|
196 | 162 | 316 | 153 | 212 | |||||||||||||||
|
Total revenue
|
$ | 1,142 | $ | 1,097 | $ | 1,212 | $ | 986 | $ | 1,060 | ||||||||||
|
Provision for loan and lease losses
|
114 | (112 | ) | 50 | 249 | 156 | ||||||||||||||
|
Non-interest expenses
|
757 | 735 | 688 | 749 | 681 | |||||||||||||||
|
Income (loss) before taxes
|
271 | 474 | 474 | (12 | ) | 223 | ||||||||||||||
|
Income tax provision (benefit)
|
96 | 169 | 169 | (4 | ) | 78 | ||||||||||||||
|
Net income (loss)
|
$ | 175 | $ | 305 | $ | 305 | $ | (8 | ) | $ | 145 | |||||||||
|
Selected Metrics
|
||||||||||||||||||||
|
Period end loans held for investment
|
$ | 34,997 | $ | 35,313 | $ | 36,383 | $ | 38,214 | $ | 40,149 | ||||||||||
|
Average loans held for investment
|
$ | 35,090 | $ | 35,660 | $ | 38,245 | $ | 39,114 | $ | 41,076 | ||||||||||
|
Loans held for investment yield
|
9.28 | % | 8.99 | % | 8.96 | % | 8.83 | % | 8.89 | % | ||||||||||
|
Auto loan originations
|
$ | 2,439 | $ | 1,765 | $ | 1,343 | $ | 1,018 | $ | 1,513 | ||||||||||
|
Period end deposits
|
$ | 79,506 | $ | 77,407 | $ | 76,883 | $ | 74,145 | $ | 72,253 | ||||||||||
|
Average deposits
|
$ | 78,224 | $ | 77,082 | $ | 75,115 | $ | 72,976 | $ | 73,284 | ||||||||||
|
Deposit interest expense rate
|
1.18 | % | 1.18 | % | 1.27 | % | 1.41 | % | 1.58 | % | ||||||||||
|
Core deposit intangible amortization
|
$ | 36 | $ | 36 | $ | 38 | $ | 40 | $ | 46 | ||||||||||
|
Net charge-off rate (3)
|
1.79 | % | 1.47 | % | 2.03 | % | 2.85 | % | 2.69 | % | ||||||||||
|
Nonperforming loans as a percentage of loans held for investment (3) (4)
|
1.92 | % | 1.82 | % | 1.62 | % | 1.45 | % | 1.26 | % | ||||||||||
|
Nonperforming asset rate (3) (4)
|
2.11 | % | 2.00 | % | 1.76 | % | 1.60 | % | 1.39 | % | ||||||||||
|
30+ day performing delinquency rate (3) (4)
|
4.40 | % | 4.15 | % | 4.13 | % | 5.43 | % | 5.19 | % | ||||||||||
|
Period end loans serviced for others
|
$ | 20,298 | $ | 21,425 | $ | 26,778 | $ | 30,283 | $ | 30,659 | ||||||||||
Page 12
OTHER AND TOTAL SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS
MANAGED BASIS (1)
|
(Dollars in millions) (unaudited)
|
2010
Q3 |
2010
Q2 |
2010
Q1 |
2009
Q4 |
2009
Q3 |
|||||||||||||||
|
Other:
|
||||||||||||||||||||
|
Earnings
|
||||||||||||||||||||
|
Net interest income (expense)
|
$ | (93 | ) | $ | (132 | ) | $ | (91 | ) | $ | (11 | ) | $ | 39 | ||||||
|
Non-interest income (expense)
|
7 | (74 | ) | (14 | ) | 111 | 151 | |||||||||||||
|
Total revenue
|
$ | (86 | ) | $ | (206 | ) | $ | (105 | ) | $ | 100 | $ | 190 | |||||||
|
Provision for loan and lease losses
|
(2 | ) | 10 | 18 | 24 | 25 | ||||||||||||||
|
Restructuring expenses (9)
|
- | - | - | 32 | 26 | |||||||||||||||
|
Non-interest expense
|
62 | 65 | 53 | 27 | 32 | |||||||||||||||
|
Income (loss) before taxes
|
(146 | ) | (281 | ) | (176 | ) | 17 | 107 | ||||||||||||
|
Income tax benefit
|
(119 | ) | (143 | ) | (151 | ) | (21 | ) | (21 | ) | ||||||||||
|
Net income (loss)
|
$ | (27 | ) | $ | (138 | ) | $ | (25 | ) | $ | 38 | $ | 128 | |||||||
|
Selected Metrics
|
||||||||||||||||||||
|
Period end loans held for investment (2)
|
$ | 469 | $ | 470 | $ | 464 | $ | 452 | $ | 659 | ||||||||||
|
Average loans held for investment (2)
|
$ | 475 | $ | 463 | $ | 489 | $ | 460 | $ | 483 | ||||||||||
|
Period end deposits
|
$ | 17,606 | $ | 18,397 | $ | 19,299 | $ | 21,184 | $ | 23,634 | ||||||||||
|
Average deposits
|
$ | 18,132 | $ | 19,231 | $ | 20,556 | $ | 22,202 | $ | 24,837 | ||||||||||
|
Total:
|
||||||||||||||||||||
|
Earnings
|
||||||||||||||||||||
|
Net interest income
|
$ | 3,112 | $ | 3,099 | $ | 3,230 | $ | 3,169 | $ | 3,212 | ||||||||||
|
Non-interest income
|
904 | 807 | 1,062 | 1,199 | 1,373 | |||||||||||||||
|
Total revenue
|
$ | 4,016 | $ | 3,906 | $ | 4,292 | $ | 4,368 | $ | 4,585 | ||||||||||
|
Provision for loan and lease losses
|
867 | 725 | 1,481 | 1,845 | 2,200 | |||||||||||||||
|
Restructuring expenses (9)
|
- | - | - | 32 | 26 | |||||||||||||||
|
Non-interest expense
|
1,996 | 2,000 | 1,847 | 1,916 | 1,776 | |||||||||||||||
|
Income before taxes
|
1,153 | 1,181 | 964 | 575 | 583 | |||||||||||||||
|
Income tax provision
|
335 | 369 | 244 | 171 | 146 | |||||||||||||||
|
Net income
|
$ | 818 | $ | 812 | $ | 720 | $ | 404 | $ | 437 | ||||||||||
|
Selected Metrics
|
||||||||||||||||||||
|
Period end loans held for investment
|
$ | 126,334 | $ | 127,255 | $ | 130,265 | $ | 136,803 | $ | 140,990 | ||||||||||
|
Average loans held for investment
|
$ | 126,391 | $ | 128,335 | $ | 134,379 | $ | 138,184 | $ | 143,540 | ||||||||||
|
Period end deposits
|
$ | 119,212 | $ | 117,331 | $ | 117,787 | $ | 115,809 | $ | 114,504 | ||||||||||
|
Average deposits
|
$ | 118,255 | $ | 118,484 | $ | 117,530 | $ | 114,598 | $ | 115,882 | ||||||||||
Page 13
CAPITAL ONE FINANCIAL CORPORATION (COF)
LOAN DISCLOSURES AND SEGMENT
FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS NOTES
|
(1)
|
Prior to the adoption of the new consolidation accounting standards management evaluated the Company and each of its lines of business results on a "managed' basis, which is a non-GAAP measure. With the adoption of the new consolidation accounting standards, the Company's reported results are comparable to the "managed" basis, which now reflect the consolidation of the majority of the Company's credit card securitization trusts. 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 Company exercised its clean-up call option on this trust effective September 15, 2010. At this time the trust was called, $93 million of loans were moved on-balance sheet.The accompanying Exhibit "Reconciliation to GAAP Financial Measures" presents a re
conciliation of the Company's non-GAAP "managed" results to its GAAP results for periods prior to January 1, 2010.
|
|
(2)
|
Other loans held for investment includes unamortized premiums and discounts on loans acquired as part of North Fork and Hibernia acquisitions.
|
|
(3)
|
The ratios excluding the impact of loans acquired as part of the CCB acquistion are as follows. |
| Q3 2010 | Q2 2010 | Q1 2010 | Q4 2009 | Q3 2009 | ||||||||||||||||
|
CCB period end acquired loan portfolio (in millions)(unaudited)
|
$ | 5,891 | $ | 6,381 | $ | 6,799 | $ | 7,251 | $ | 7,885 | ||||||||||
|
CCB average acquired loan portfolio (in millions)(unaudited)
|
$ | 6,014 | $ | 6,541 | $ | 7,037 | $ | 7,512 | $ | 8,029 | ||||||||||
|
Net charge-off rate
|
||||||||||||||||||||
|
Commercial and Multifamily Real Estate
|
1.81 | % | 1.19 | % | 1.48 | % | 3.05 | % | 1.38 | % | ||||||||||
|
Middle Market
|
0.44 | % | 0.82 | % | 0.87 | % | 0.75 | % | 0.56 | % | ||||||||||
|
Total Commercial Lending
|
1.14 | % | 1.01 | % | 1.48 | % | 2.05 | % | 1.08 | % | ||||||||||
|
Total Commercial Banking
|
1.30 | % | 1.24 | % | 1.41 | % | 2.93 | % | 1.43 | % | ||||||||||
|
Mortgage
|
0.68 | % | 0.77 | % | 1.02 | % | 1.24 | % | 1.24 | % | ||||||||||
|
Retail Banking
|
2.29 | % | 2.23 | % | 2.22 | % | 3.20 | % | 2.57 | % | ||||||||||
|
Total Consumer Banking
|
2.11 | % | 1.76 | % | 2.28 | % | 3.45 | % | 3.28 | % | ||||||||||
|
30+ day performing delinquency rate
|
||||||||||||||||||||
|
Mortgage
|
1.16 | % | 1.14 | % | 1.58 | % | 2.18 | % | 2.06 | % | ||||||||||
|
Retail Banking
|
1.12 | % | 0.91 | % | 1.07 | % | 1.30 | % | 1.33 | % | ||||||||||
|
Total Consumer Banking
|
5.19 | % | 4.93 | % | 4.95 | % | 6.56 | % | 6.27 | % | ||||||||||
|
Nonperforming asset rate
|
||||||||||||||||||||
|
Commercial and Multifamily Real Estate
|
2.47 | % | 2.90 | % | 3.71 | % | 3.34 | % | 2.79 | % | ||||||||||
|
Middle Market
|
1.42 | % | 1.25 | % | 1.23 | % | 1.13 | % | 1.30 | % | ||||||||||
|
Total Commercial Lending
|
1.98 | % | 2.16 | % | 2.60 | % | 2.39 | % | 2.15 | % | ||||||||||
|
Total Commercial Banking
|
1.98 | % | 2.26 | % | 2.72 | % | 2.62 | % | 2.95 | % | ||||||||||
|
Mortgage
|
6.83 | % | 6.30 | % | 5.36 | % | 3.88 | % | 3.24 | % | ||||||||||
|
Retail Banking
|
2.51 | % | 2.37 | % | 2.17 | % | 2.23 | % | 2.09 | % | ||||||||||
|
Total Consumer Banking
|
2.49 | % | 2.38 | % | 2.11 | % | 1.93 | % | 1.68 | % | ||||||||||
|
Nonperforming loans as a percentage of loans held for investment
|
||||||||||||||||||||
|
Commercial Banking
|
1.84 | % | 2.09 | % | 2.55 | % | 2.43 | % | 2.72 | % | ||||||||||
|
Consumer Banking
|
2.26 | % | 2.16 | % | 1.93 | % | 1.75 | % | 1.53 | % | ||||||||||
|
(4)
|
Includes nonaccrual consumer auto loans 90+ days past due.
|
|
(5)
|
Nonperforming assets consist of nonperforming loans and real estate owned ("REO") and foreclosed assets. The nonperforming asset ratios are calculated based on nonperforming assets for each segment divided by the combined total of loans held for investment, REO and foreclosed assets for the segment.
|
|
(6)
|
The Company's policy is not to classify delinquent credit card loans as nonperforming as permitted by regulatory guidance. Instead, we continue to accrue finance charges and fees on credit card loans until the loan is charged off, typically when the account becomes 180 days past due. Billed finance charges and fees considered uncollectible are not recognized in income.
|
|
(7)
|
During Q4 2009, the Company reclassified $128 million of small ticket commercial real estate from loans held for investment to loans held for sale and recognized charge-offs of $80 million.
|
|
(8)
|
Includes all purchase transactions net of returns. Excludes cash advance transactions.
|
|
(9)
|
The Company completed its 2007 restructuring initiative during 2009.
|
Page 14
FOR IMMEDIATE RELEASE: October 18, 2010
|
Contacts:
|
Jeff Norris
|
Danielle Dietz
|
Tatiana Stead
|
Julie Rakes
|
|
Investor Relations
|
Investor Relations
|
Media Relations
|
Media Relations
|
|
|
703-720-2455
|
703-720-2455
|
703-720-2352
|
804-284-5800
|
Capital One Reports Third Quarter 2010 Net Income of $803 million,
or $1.76 per diluted share, up from net income of $0.87 in the third quarter of 2009
The company will host a conference call at 8:15 a.m. ET October 19 to review financial and operating performance for the Third Quarter
Ending loans declined less than 1 percent in the quarter, the slowest pace of contraction since the second quarter of 2009
Excluding the impact of run-off portfolios, total loan balances would have been up modestly in the quarter
Credit performance continues to improve – charge-offs down almost $200 million in the quarter
Domestic Card charge-off rate improved 126 basis points in the quarter to 8.23 percent
Company completed successful conversion to Capital One Bank brand in metro Washington, DC
McLean, Va. (October 18, 2010) – Capital One Financial Corporation (NYSE: COF) today announced net income for the third quarter of 2010 of $803 million, or $1.76 per diluted common share, a 32.1 percent increase compared to second quarter 2010 net income of $608 million, or $1.33 per diluted common share. Third quarter 2010 net income increased 103.8 percent compared to third quarter 2009 net income of $394 million, or $0.87 per diluted share.
Income from continuing operations of $818 million increased $6 million, or 0.7 percent, from $812 million in the second quarter of 2010 and increased $381 million, or 87.2 percent, from $437 million in the third quarter of 2009.
“Strong third quarter revenues, credit results, and profits continue to demonstrate our resilience in the face of ongoing economic and regulatory uncertainty," said Richard D. Fairbank, Capital One’s Chairman and Chief Executive Officer. “We’re well positioned to take advantage of emerging opportunities and deliver shareholder value over the long-term.”
Capital One – Third Quarter 2010 Results
Page 2
Conference Call Details
The company will host a conference call at 8:15 a.m. ET October 19 to review financial and operating performance for the quarter ending September 30, 2010. The call will be webcast live, and the earnings release will be available on the company’s homepage at www.capitalone.com. A replay of the webcast will be available 24 hours a day, beginning 2 hours after the conference call, until 5:00 p.m. ET on November 2, 2010, through the company’s homepage. Capital One will also make an MP3 file available for download the next business day following the conference call.
Total Company Results
|
●
|
Total revenue in the third quarter of 2010 of $4.0 billion increased $112 million, or 2.9 percent, from $3.9 billion in the second quarter of 2010, reflecting a modest increase in net interest income and a $100 million increase in non-interest income.
|
|
|
°
|
Net interest income increased $12 million as net interest margin improved to 7.21 percent from 7.09 percent. This improvement was partially offset by a 1.3 percent decline in average interest-earning assets.
|
|
|
°
|
Non-interest income increased $100 million in the third quarter relative to the prior quarter driven by a smaller addition to the Rep and Warranty reserve.
|
|
●
|
Provision expense increased $144 million from the prior quarter driven by a smaller allowance release in the third quarter compared to the second quarter. The allowance release in the third quarter totaled $624 million for the company, compared with a release of $1.0 billion in the second quarter of 2010. Continued improvement in credit loss and delinquency performance in the portfolio was the primary driver of the third quarter allowance release. The allowance as a percentage of outstanding loans was 4.89 percent at the end of the third quarter of 2010 compared with 5.35 percent at the end of the prior quarter.
|
|
●
|
Period-end total assets decreased by $557 million, or 0.28 percent, during the third quarter, to $196.9 billion at the end of the third quarter of 2010. Loans held for investment at September 30, 2010, were $126.3 billion, a decline of 0.6 percent from the prior quarter. Excluding the expected run-off in our Installment Loan portfolio in Domestic Card, our Mortgage portfolio in Consumer Banking, and our Small-Ticket CRE portfolio in Commercial Banking, loan balances were modestly higher than the prior quarter.
|
Capital One – Third Quarter 2010 Results
Page 3
|
●
|
Average total deposits during the quarter were $118.3 billion, essentially even with the prior quarter. Period-end total deposits increased by $1.9 billion, or 1.6 percent, to $119.2 billion.
|
|
●
|
The cost of funds decreased to 1.64 percent in the third quarter from 1.69 percent in the prior quarter, driven by the continuing replacement of higher cost wholesale funding with lower cost liquid deposits.
|
|
●
|
Non-interest expense of $2.0 billion in the third quarter of 2010 was essentially flat compared with the prior quarter, as declining operating expenses were offset by an increase in marketing expenses.
|
|
●
|
The company’s TCE ratio increased to 6.6 percent, up 50 basis points from the second quarter 2010 ratio of 6.1 percent. The Tier 1 risk-based capital ratio of 11.2 percent increased 130 basis points relative to the ratio of 9.9 percent in the prior quarter.
|
"Our tangible common equity ratio is higher than it was at the end of 2009, even with improving credit and a substantially higher loan loss allowance," said Gary L. Perlin, Capital One’s Chief Financial Officer. "We expect to reach currently defined Basel III levels and definitions in 2011, well ahead of the phase-in requirements.”
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.
Capital One – Third Quarter 2010 Results
Page 4
Credit Card Highlights
For more lending information and statistics on the segment results, please refer to the Financial Supplement.
|
●
|
Period-end loans in the Domestic Card segment were $53.8 billion in the third quarter, a decline of $789 million, or 1.4 percent, from the prior quarter, driven by $746 million in expected run-off from the Installment Loan portfolio. International credit card loans increased in the quarter by $218 million, or 3.0 percent, to $7.5 billion, driven by foreign exchange movements.
|
|
●
|
Domestic Card revenue margin rose 16 basis points to 16.77 percent in the third quarter from 16.61 percent in the prior quarter.
|
|
●
|
Domestic Card provision expense decreased $98 million in the third quarter relative to the prior quarter, driven by lower charge-offs in the quarter.
|
|
●
|
Net charge-off rates relative to the prior quarter:
|
|
|
–
|
Domestic Card – improved 126 basis points to 8.23 percent from 9.49 percent
|
|
|
–
|
International Card – improved 78 basis points to 7.60 percent from 8.38 percent
|
|
|
|
●
|
Delinquency rates relative to the prior quarter:
|
|
|
–
|
Domestic Card – improved 26 basis points to 4.53 percent from 4.79 percent
|
|
|
–
|
International Card – improved 19 basis points to 5.84 percent from 6.03 percent
|
|
●
|
Purchase volumes in Domestic Card increased $345 million, or 1.4 percent, relative to the prior quarter and 4.6 percent relative to the third quarter of 2009.
|
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.
|
●
|
Commercial Banking reported net income of $39 million in the third quarter compared to $77 million in the second quarter. The decline is largely attributable to higher provision expense which resulted from a smaller allowance release.
|
|
●
|
Period-end loans in Commercial Banking were $29.5 billion, essentially even with the prior quarter.
|
|
●
|
Average deposits decreased by $272 million, or 1.2 percent, to $21.9 billion during the third quarter. The deposit interest expense rate remained at 67 basis points.
|
|
●
|
Provision expense increased $33 million primarily due to a smaller allowance release in the third quarter.
|
Capital One – Third Quarter 2010 Results
Page 5
|
●
|
Charge-off rate relative to the prior quarter:
|
|
|
–
|
Total Commercial Banking – 1.27 percent, an increase of 6 basis points
|
|
|
–
|
Commercial lending – 1.11 percent, an increase of 13 basis points
|
|
|
–
|
Small ticket commercial real estate – 3.48 percent, a decline of 73 basis points
|
|
●
|
Non-performing asset rate relative to the prior quarter:
|
|
|
–
|
Total Commercial Banking – 1.94 percent, a decline of 26 basis points
|
|
|
–
|
Commercial lending – 1.94 percent, a decline of 16 basis points
|
|
|
–
|
Small ticket commercial real estate – 2.04 percent, a decline of 153 basis points
|
Consumer Banking highlights
For more lending information and statistics on the segment’s results, please refer to the Financial Supplement.
|
●
|
Provision expense increased $226 million relative to the prior quarter as a result a smaller allowance release in the third quarter and seasonally higher charge-offs in auto finance.
|
|
●
|
Period-end loans relative to the prior quarter:
|
|
|
–
|
Auto – increased $422 million, or 2.5 percent, to $17.6 billion.
|
|
|
–
|
Mortgage – declined $559 million, or 4.2 percent, to $12.8 billion. Mortgage loans continued to reflect expected run-off in the portfolio.
|
|
|
–
|
Retail banking – declined $179 million, or 3.8 percent, to $4.6 billion.
|
|
●
|
Auto loan originations increased 38.2 percent over the prior quarter to $2.4 billion in the third quarter.
|
|
●
|
Average deposits in Consumer Banking increased $1.1 billion, or 1.5 percent, to $78.2 billion during the third quarter.
|
|
●
|
Net charge-off rates relative to the prior quarter:
|
|
|
–
|
Auto – 2.71 percent, an increase of 62 basis points
|
|
|
–
|
Mortgage – 0.41 percent, a decrease of 5 basis points
|
|
|
–
|
Retail banking – 2.20 percent, an increase of 9 basis points
|
TCE and related ratios, as used throughout this release, are non-GAAP financial measures. For additional information, see “Regulatory and Non-GAAP Capital Ratios” in the Financial Supplement.
Capital One – Third Quarter 2010 Results
Page 6
Forward looking statements
The company cautions that its current expectations in this release dated October 18, 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 decrea
ses 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 (including the impact of the Dodd-Frank Act and the regulations to be promulgated thereunder), 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 and report on Form 10-Q for the quarters ended March 31, 2010, and June 30, 2010.
About Capital One
Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A. and Capital One Bank (USA), N. A., had $119.2 billion in deposits and $196.9 billion in total assets outstanding as of September 30, 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.
###
Capital One – Third Quarter 2010 Results
Page 7
NOTE:
Third quarter 2010 financial results, SEC Filings, and earnings conference call slides will are accessible on Capital One’s home page (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 the earnings conference call is accessible through the same link.
Exhibit 99.2
Third Quarter 2010 Results
October 19, 2010
2
October 19, 2010
Please note that the following materials containing information regarding Capital One’s financial performance speak only as of the particular date or dates
indicated in these materials. Capital One does not undertake any obligation to update or revise any of the information contained herein whether as a result
of new information, future events or otherwise.
indicated in these materials. Capital One does not undertake any obligation to update or revise any of the information contained herein whether as a result
of new information, future events or otherwise.
Certain statements in this presentation and other oral and written statements made by Capital One from time to time are forward-looking statements,
including those that discuss, among other things, strategies, goals, outlook or other non-historical matters; projections, revenues, income, returns,
accruals for claims in litigation and for other claims against us, earnings per share or other financial measures for Capital One; future financial and
operating results; and Capital One’s plans, objectives, expectations and intentions; and the assumptions that underlie these matters. To the extent that
any such information is forward-looking, it is intended to fit within the safe harbor for forward-looking information provided by the Private Securities
Litigation Reform Act of 1995. Numerous factors could cause our actual results to differ materially from those described in such forward-looking
statements, including, among other things: general economic and business conditions in the U.S., the UK, or Capital One’s local markets, including
conditions affecting employment levels, interest rates, consumer income and confidence, spending and savings that may affect consumer bankruptcies,
defaults, charge-offs and deposit activity; an increase or decrease in credit losses (including increases due to a worsening of general economic conditions
in the credit environment); financial, legal, regulatory (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the
regulations to be promulgated thereunder), tax or accounting changes or actions, including with respect to any litigation matter involving Capital One;
increases or decreases in interest rates; the success of Capital One’s marketing efforts in attracting and retaining customers; the ability of Capital One to
securitize our credit cards and consumer loans and to otherwise access the capital markets at attractive rates and terms to capitalize and fund its
operations and future growth; with respect to financial and other products, increases or decreases in Capital One’s aggregate loan balances and/or the
number of customers and the growth rate and composition thereof, including increases or decreases resulting from factors such as a shifting product mix,
the amount of actual marketing expenses made by Capital One and attrition of loan balances; the level of future repurchase or indemnification requests
Capital One may receive, the actual future performance of loans relating to such requests, the success rates of claimants against Capital One, any
developments in litigation, and the actual recoveries Capital One may make on any collateral relating to claims against us; the amount and rate of deposit
growth; Capital One’s ability to control costs; changes in the reputation of or expectations regarding the financial services industry and/or Capital One with
respect to practices, products or financial condition; any significant disruption in Capital One’s operations or technology platform; Capital One’s ability to
maintain a compliance infrastructure suitable for its size and complexity; the amount of, and rate of growth in, Capital One’s expenses as Capital One’s
business develops or changes or as it expands into new market areas; Capital One’s ability to execute on its strategic and operational plans; any
significant disruption of, or loss of public confidence in, the United States Mail service affecting our response rates and consumer payments; Capital One’s
ability to recruit and retain experienced personnel to assist in the management and operations of new products and services; changes in the labor and
employment markets; the risk that cost savings and any other synergies from Capital One’s acquisitions may not be fully realized or may take longer to
realize than expected; disruptions from Capital One’s acquisitions negatively impacting Capital One’s ability to maintain relationships with customers,
employees or suppliers; competition from providers of products and services that compete with Capital One’s businesses; and other risk factors listed
from time to time in reports that Capital One files with the Securities and Exchange Commission (the “SEC”), including, but not limited to, the Annual
Report on Form 10-K for the year ended December 31, 2009. You should carefully consider the factors discussed above in evaluating these forward-
looking statements. All information in these slides is based on the consolidated results of Capital One Financial Corporation, unless otherwise noted. A
reconciliation of any non-GAAP financial measures included in this presentation can be found in Capital One’s most recent Form 10-K concerning annual
financial results and in our most recent Form 8-K filed July 22, 2010, available on Capital One’s website at www.capitalone.com under “Investors”.
including those that discuss, among other things, strategies, goals, outlook or other non-historical matters; projections, revenues, income, returns,
accruals for claims in litigation and for other claims against us, earnings per share or other financial measures for Capital One; future financial and
operating results; and Capital One’s plans, objectives, expectations and intentions; and the assumptions that underlie these matters. To the extent that
any such information is forward-looking, it is intended to fit within the safe harbor for forward-looking information provided by the Private Securities
Litigation Reform Act of 1995. Numerous factors could cause our actual results to differ materially from those described in such forward-looking
statements, including, among other things: general economic and business conditions in the U.S., the UK, or Capital One’s local markets, including
conditions affecting employment levels, interest rates, consumer income and confidence, spending and savings that may affect consumer bankruptcies,
defaults, charge-offs and deposit activity; an increase or decrease in credit losses (including increases due to a worsening of general economic conditions
in the credit environment); financial, legal, regulatory (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the
regulations to be promulgated thereunder), tax or accounting changes or actions, including with respect to any litigation matter involving Capital One;
increases or decreases in interest rates; the success of Capital One’s marketing efforts in attracting and retaining customers; the ability of Capital One to
securitize our credit cards and consumer loans and to otherwise access the capital markets at attractive rates and terms to capitalize and fund its
operations and future growth; with respect to financial and other products, increases or decreases in Capital One’s aggregate loan balances and/or the
number of customers and the growth rate and composition thereof, including increases or decreases resulting from factors such as a shifting product mix,
the amount of actual marketing expenses made by Capital One and attrition of loan balances; the level of future repurchase or indemnification requests
Capital One may receive, the actual future performance of loans relating to such requests, the success rates of claimants against Capital One, any
developments in litigation, and the actual recoveries Capital One may make on any collateral relating to claims against us; the amount and rate of deposit
growth; Capital One’s ability to control costs; changes in the reputation of or expectations regarding the financial services industry and/or Capital One with
respect to practices, products or financial condition; any significant disruption in Capital One’s operations or technology platform; Capital One’s ability to
maintain a compliance infrastructure suitable for its size and complexity; the amount of, and rate of growth in, Capital One’s expenses as Capital One’s
business develops or changes or as it expands into new market areas; Capital One’s ability to execute on its strategic and operational plans; any
significant disruption of, or loss of public confidence in, the United States Mail service affecting our response rates and consumer payments; Capital One’s
ability to recruit and retain experienced personnel to assist in the management and operations of new products and services; changes in the labor and
employment markets; the risk that cost savings and any other synergies from Capital One’s acquisitions may not be fully realized or may take longer to
realize than expected; disruptions from Capital One’s acquisitions negatively impacting Capital One’s ability to maintain relationships with customers,
employees or suppliers; competition from providers of products and services that compete with Capital One’s businesses; and other risk factors listed
from time to time in reports that Capital One files with the Securities and Exchange Commission (the “SEC”), including, but not limited to, the Annual
Report on Form 10-K for the year ended December 31, 2009. You should carefully consider the factors discussed above in evaluating these forward-
looking statements. All information in these slides is based on the consolidated results of Capital One Financial Corporation, unless otherwise noted. A
reconciliation of any non-GAAP financial measures included in this presentation can be found in Capital One’s most recent Form 10-K concerning annual
financial results and in our most recent Form 8-K filed July 22, 2010, available on Capital One’s website at www.capitalone.com under “Investors”.
Forward looking statements
3
October 19, 2010
Net Interest Income
Non Interest Income
Revenue
Marketing Expense
Operating Expense
Pre-Provision Earnings (before tax)
Net Charge-offs
Other
Allowance Build (Release)
Provision Expense
Discontinued Operations, net of tax
Total Company (after tax)
EPS Available to Common Shareholders
Tax Expense
Change
Pretax Income
$MM
3,109
907
4,016
250
1,746
1,996
2,020
1,522
(31)
(624)
867
803
818
(15)
$1.76
1,153
335
Q310
Operating Earnings (after tax)
Q210
3,097
807
3,904
219
1,781
2,000
1,904
1,717
12
(1,006)
723
608
812
(204)
$1.33
1,181
369
12
100
112
31
(35)
(4)
116
(195)
(43)
382
144
195
6
189
(28)
(34)
Third quarter 2010 earnings were $803MM or $1.76 per share, compared with
$608MM, or $1.33 per share in the second quarter
$608MM, or $1.33 per share in the second quarter
Highlights
• Revenue increased $112MM, or 3%
– 1.5% decline in average loans
– Net interest margin expansion
– Increase in non-interest income driven by
reduced Rep & Warranty expense and
improved fee reversals
reduced Rep & Warranty expense and
improved fee reversals
• Non-interest expense flat
– Operating expense decreased slightly due to
absence of Q210 one-time expenses
absence of Q210 one-time expenses
– Marketing expenses up $31MM
• Pre-provision earnings up 6.1%
• Provision expense increased $144MM, or 20%, due
to lower allowance release than in Q210
to lower allowance release than in Q210
• Income from Continuing Operations up 1% quarter
over quarter
over quarter
• Loss from Discontinued Operations reduced by lower
Rep & Warranty expense
Rep & Warranty expense
$0.43
Non-Interest Expense
4
October 19, 2010
Sold to GSE
Sold to monoline wrapped
securitizations
securitizations
Sold to unwrapped
securitizations & other
whole loan sales
securitizations & other
whole loan sales
Original principal of home loans originated and sold to others between 2005 & 20081,2
Total
Rep & Warranty Reserve
2 Includes loans originated and sold to others by Greenpoint, Chevy Chase, and Capital One Home Loans (shut down GreenPoint originations August 2007)
3 Wherever possible moved to estimated the total repurchase liability over the full life of the loans sold by our subsidiaries
Significant
majority of
reserve
majority of
reserve
$3B
$3B
$4B
$1B
$9B
$8B
$1B
$0
$33B
$30B
$16B
$3B
$11B
$18B
$82B
3
Our mortgage rep & warranty reserve remains around $850MM
5
October 19, 2010
The pace of loan contraction slowed in the quarter, and funding costs
continued to improve
continued to improve
Liability Highlights
Asset Highlights
• End of period loans down $921MM or ~1%
• Excluding run-off portfolios, loan balances
modestly higher
modestly higher
• $746MM run-off in Installment Loans
• $559MM run-off in Home Loans
• $87MM run-off in Small-Ticket CRE
• Cost of funds decreased to 1.64%
• Continued shift in funding to lower priced deposits
from securitization
from securitization
• Loan to deposit ratio at 1.06
1 Managed portfolio data Q409
Total Cost
of Funds 1.93% 1.76% 1.69% 1.64%
of Funds 1.93% 1.76% 1.69% 1.64%
End of Period Assets1
Domestic Card
Commercial
Int’l Card
Consumer
$B
Other
Cash & Cash
Equivalents
Securities
6
October 19, 2010
Allowance coverage ratios remain high
Allowance Balance
$MM
Allowance as % of
Reported 30+ Delinquencies
Reported 30+ Delinquencies
Commercial Lending Allowance as % of
Non-Performing Loans
Allowance as % of Loans
Total Company*: 4.44% 4.67% 4.55% 5.96% 5.35% 4.89%
Consumer Banking
Credit Card
Commercial Banking
Domestic Card
Int’l Card
Auto Finance
Commercial
*These ratios, other than the Total Company ratio, exclude the impact of loans acquired as part of the CCB acquisition.
7
October 19, 2010
Tier 1 Capital to
Risk Weighted Assets
Risk Weighted Assets
Our capacity to absorb risk remains high
Other
Tier 1
Tier 1
Common
13.8%
6.3%
Allowance
TCE
5.5%
9.7%
9.8%
8.4%
9.6%
6.1%
10.0%
9.9%
6.6%
11.2%
TMA($MM) $198 $187 $184 $183
RWA($MM) $116 $120 $124 $124
8
October 19, 2010
• Tier 1 ratios expected to dip in Q1 2011 due to consolidation impacts:
•Final phase in of RWA
•Impact of disallowed DTA impact due to allowance build
• We expect TCE to continue to accrete; Tier 1 ratios accrete faster
than TCE after Q1 2011 dip
than TCE after Q1 2011 dip
• We expect to reach known BASEL III levels & definitions in 2011, well
ahead of the phase-in requirements
ahead of the phase-in requirements
Comments
1Analyst net income consensus represents mean estimate as available as of October 18, 2010 from ThomsonOne and includes 18 analysts through 2011. Balance sheet assumptions consistent
with current expectations. DTA impact calculated using Y-9 formula on net income consensus; OCI assumed in portfolios as it relates to forward curve. Regulatory changes are assumed to be
incorporated in the analyst estimates. Capital One does not endorse any analyst estimates or projections. The information presented here does not reflect (i) any change in current dividend or
repurchase strategies, (ii) the effect of any acquisitions, divestitures or similar transactions after the date of this presentation or (iii) any changes in laws, regulations or regulatory interpretations
after the date of this presentation. Information presented here relating to future periods constitutes forward-looking statements and is based on our current expectations regarding our outlook for
our financial results and business strategies - see “Forward Looking Statements” in this presentation.
with current expectations. DTA impact calculated using Y-9 formula on net income consensus; OCI assumed in portfolios as it relates to forward curve. Regulatory changes are assumed to be
incorporated in the analyst estimates. Capital One does not endorse any analyst estimates or projections. The information presented here does not reflect (i) any change in current dividend or
repurchase strategies, (ii) the effect of any acquisitions, divestitures or similar transactions after the date of this presentation or (iii) any changes in laws, regulations or regulatory interpretations
after the date of this presentation. Information presented here relating to future periods constitutes forward-looking statements and is based on our current expectations regarding our outlook for
our financial results and business strategies - see “Forward Looking Statements” in this presentation.
2 TCE and Tier 1 Common ratios are non-GAAP financial measures. See “Regulatory and Non-GAAP Capital Measures” in accompanying materials.
Capital Trajectory using Analyst Net Income Consensus
1
The impact on regulatory capital ratios from consolidation will be fully realized in
the first quarter of 2011
the first quarter of 2011
9
October 19, 2010
Margins as % of Managed Assets
Revenue Margin
Net Interest Margin
Revenue Margin
Margins increased in the quarter
Modest NIM expansion
• Lower funding costs with mix shift from wholesale funding
to bank deposits
to bank deposits
• Small increase in asset yields with higher day count vs.
Q2
Q2
Revenue Margin increased
• Lower Rep & Warranty Reserve build
• Higher Domestic Card Revenue Margin
Domestic Card Revenue Margin increased
• Favorable credit drove most of the increase, as improved
collectability enabled us to:
collectability enabled us to:
- Recognize revenue for a greater portion of Q3 billings (“lower
suppression”) vs. Q2
suppression”) vs. Q2
- Recognize Q3 revenue for prior finance charge and fee billings
that had been “suppressed” from revenue in earlier quarters
(“release” of prior suppressions)
that had been “suppressed” from revenue in earlier quarters
(“release” of prior suppressions)
• Higher interchange revenue on purchase volume strength
• Partially offset by:
- Late fee revenue declined, as expected
- Modest attrition of higher margin loans, as expected
10
October 19, 2010
Domestic Credit Card ($54.0B*)
Net Charge-off Rate
30+ Delinquency Rate
Mortgage Credit ($13.0B*)
International Credit Card ($7.3B*)
Net Charge-off Rate
30+ Delinquency Rate
Net Charge-off Rate
30+ Delinquency Rate
Net Charge-off Rate
30+ Delinquency Rate
* Average assets for Q3
Continuing cyclical improvement and expected seasonal patterns drove
credit results in our consumer lending businesses
credit results in our consumer lending businesses
11
October 19, 2010
Total Commercial Banking ($29.5B*)
Nonperforming
Asset Rate
Asset Rate
Commercial & MultiFamily Real Estate ($13.4B*)
Nonperforming
Asset Rate
Asset Rate
Charge-off
Rate
Rate
Total Commercial Lending
Excluding Small Ticket CRE ($27.7B*)
Excluding Small Ticket CRE ($27.7B*)
Nonperforming
Asset Rate
Asset Rate
Charge-off
Rate
Rate
Nonperforming
Asset Rate
Asset Rate
Charge-off
Rate
Rate
* Period end assets for Q3
Commercial Banking credit metrics remain elevated and choppy, but are
showing signs of improvement
showing signs of improvement
12
October 19, 2010
Despite elevated uncertainty, we expect near-term trends to be consistent
with what we’ve articulated for several quarters
with what we’ve articulated for several quarters
Elevated Uncertainty
Near-Term Trends
• Modest and fragile
economic recovery
economic recovery
• Mortgage Industry Issues
• Financial Regulatory
Reform
Reform
• Expect lower pre-
provision earnings into
2011
provision earnings into
2011
• Expect Pre-Provision
Earnings to stabilize in
2011
Earnings to stabilize in
2011
13
October 19, 2010
While loan demand remains weak, we are well positioned for an
extended period of consumer de-leveraging
extended period of consumer de-leveraging
• Significant credit benefits from consumer de-leveraging
enable attractive and sustainable economics, even with very
modest growth
enable attractive and sustainable economics, even with very
modest growth
• Well positioned to tap broad set of growth opportunities if
consumer de-leveraging delays the return of consumer
demand
consumer de-leveraging delays the return of consumer
demand
– Recession has, and will continue, to create opportunities to acquire
businesses, portfolios and origination platforms with attractive economics
businesses, portfolios and origination platforms with attractive economics
– Strong and resilient balance sheet
– Profitable businesses
– Leading Brand
– Improved infrastructure and expertise for broader approach to growth
– Domestic Card Examples: Sony partnership, expected Kohl’s partnership
– Consumer and Commercial Banking Example: Chevy Chase brand
conversion
conversion
• As consumer demand returns, we’re well positioned to take
share organically as well
share organically as well
– New level playing field in Domestic Card
– Product innovation, e.g. Venture Card, Rewards Checking
– Return to growth in repositioned Auto Finance business
14
October 19, 2010
Appendix
15
October 19, 2010
Domestic Card
Commercial Banking
Consumer Banking
Commentary
• Expected run off continues in ILs, Mortgages and
Small-ticket CRE
Small-ticket CRE
• Consumer and Commercial demand remains weak
Partially offset by:
• Lower charge-offs
• Pockets of origination growth in Domestic Card, Auto
Finance
Finance
$B
$B
Commercial
Lending
Lending
Small-Ticket
CRE
CRE
Auto & Retail
Mortgage
$B
Domestic
Card
Card
Installment
Loans
Loan balances continued to decline but at a slower pace
16
October 19, 2010
Q3 2009
Q3 2010
Q2 2010
Domestic Card profits increased from improving credit
Highlights
Domestic Card
• Revenue margin increased 16bps
- Improving credit drove less
suppression in Q3
- Lower late fee revenue from
implementation of new Card Act rules
• Positive credit trends
- Lower provision on declining charge-
offs
- Delinquency rate improved 26bps
from Q210
• Loan decrease of ~ $800M due to
continued run-off of the IL portfolio
continued run-off of the IL portfolio
• Purchase volumes increased vs. Q210
and Q309
and Q309
Net interest income
Non-interest income
Total revenue
Provision for loan and lease losses
Non-interest expenses
Income before taxes
Income taxes
Net income
Selected Metrics
Period end loans held for investment
Average loans held for investment
Loans held for investment yield
Revenue Margin
Net charge-off rate
30+ day performing delinquency rate
Purchase Volume
Earnings
(in millions)
575
577
844
2,266
845
301
544
53,839
54,049
13.95%
16.77%
4.53%
24,858
1,691
8.23%
856
1,437
770
2,653
446
156
290
61,892
63,299
13.74%
16.76%
5.38%
23,761
1,797
9.64%
560
675
869
2,295
751
268
483
54,628
55,252
13.98%
16.61%
4.79%
24,513
1,735
9.49%
17
October 19, 2010
Q3 2009
Q3 2010
Q2 2010
International Card net income was stable in Q3 as positive credit trends
continued
continued
Highlights
International Card
• Revenue and non-interest expenses were
relatively unchanged in Q3 versus Q2
relatively unchanged in Q3 versus Q2
• Continued improving credit
- Lower charge-offs driving less
Provision Expense
- Delinquency rate improved 19bps
from Q210
• Ending Loans increased this quarter driven
by foreign exchange rates
by foreign exchange rates
• Purchase volumes increased modestly
Net interest income
Non-interest income
Total revenue
Provision for loan and lease losses
Non-interest expenses
Income before taxes
Net income
Selected Metrics
Period end loans held for investment
Average loans held for investment
Loans held for investment yield
Revenue Margin
Net charge-off rate
30+ day performing delinquency rate
Purchase Volume
Earnings
(in million)
Income taxes
96
83
134
339
122
35
87
7,487
7,342
16.62%
18.47%
5.84%
2,181
243
7.60%
111
207
127
338
4
2
2
8,477
8,609
13.80%
15.70%
6.63%
2,221
227
9.19%
99
90
133
341
118
33
85
7,269
7,427
16.21%
18.37%
6.03%
2,057
242
8.38%
18
October 19, 2010
Q3 2009
Q3 2010
Q2 2010
Commercial Banking net profits were lower in Q3 driven by a loss on a sale of
loans and higher provision expense
loans and higher provision expense
Highlights
Commercial Banking
• Revenues decreased from Q2 to Q3
- Net Interest Income was higher due
to higher loan yields
to higher loan yields
- Non-interest income decreased due
to a loss on the sale of GreenPoint
HFS loans
to a loss on the sale of GreenPoint
HFS loans
• Provision increased $33M in Q3 primarily
due to the absence of Q2 allowance
release
due to the absence of Q2 allowance
release
• Non-performing loans as a % of loans HFI
improved 26 bps compared to Q210
improved 26 bps compared to Q210
• Stable loan and deposit balances
Net interest income
Non-interest income
Total revenue
Provision for loan and lease losses
Non-interest expenses
Income (loss) before taxes
Net income (loss)
Selected Metrics
Period end loans held for investment
Average loans held for investment
Loans held for investment yield
Period end deposits
Average deposits
Deposit interest expense rate
Core deposit intangible amortization
Net charge-off rate
Earnings
Non-performing loans as a %
of loans HFI
of loans HFI
Non-performing asset rate
(in millions)
Income taxes (benefit)
30
95
199
355
61
22
39
29,542
29,435
5.13%
22,100
21,899
14
1.27%
325
0.67%
1.94%
1.81%
43
375
166
344
(197)
(69)
(128)
29,813
30,073
5.06%
18,617
17,761
10
1.42%
301
0.75%
2.84%
2.65%
60
62
198
379
119
42
77
29,575
29,533
4.94%
21,527
22,171
14
1.21%
319
0.67%
2.20%
2.04%
19
October 19, 2010
4.40%
1,142
1,060
Q3 2009
Q3 2010
Q2 2010
Consumer Banking net income decreased due to a lower allowance release in
Q3 compared to the prior quarter
Q3 compared to the prior quarter
Highlights
Consumer Banking
• Revenue increased in Q3 as Q2 was
reduced by an MSR write-down
reduced by an MSR write-down
• Provision expense increased
- Increase mainly due to lower
allowance release in Q3 versus Q2
- Seasonally higher Auto charge-offs
• Non-interest expenses increased due to
higher retail marketing and higher Home
Loans expenses
higher retail marketing and higher Home
Loans expenses
• Loans continued declined slightly
- Continuing mortgage run off drove
the third quarter decline
the third quarter decline
- Auto originations increased $0.7
billion in the third quarter
billion in the third quarter
Net interest income
Non-interest income
Total revenue
Provision for loan and lease losses
Non-interest expenses
Income (loss) before taxes
Net income (loss)
Selected Metrics
Period end loans held for investment
Average loans held for investment
Loans held for investment yield
Auto loan originations
Period end deposits
Average deposits
Deposit interest expense rate
Core deposit intangible amortization
Earnings
Non-performing loans as a %
of loans HFI
of loans HFI
Non-performing asset rate
Net charge-off rate
30+ day performing delinquency rate
Period end loans serviced for others
(in millions)
Income taxes (benefit)
196
114
757
271
96
175
34,997
35,090
9.28%
2,439
79,506
1.18%
36
946
78,224
2.11%
1.92%
1.79%
20,298
212
156
681
223
78
145
40,149
41,076
8.89%
1,513
72,253
848
73,284
1.26%
5.19%
30,659
1.58%
46
2.69%
1.39%
162
(112)
735
1,097
474
169
305
35,313
35,660
8.99%
1,765
77,407
1.18%
36
935
77,082
2.00%
1.82%
1.47%
4.15%
21,425
Exhibit 99.3
Reconciliation of Reported GAAP Measures to Managed Basis Non-GAAP Measures
We refer to our consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") as our "reported" or GAAP financial statements. Effective January 1, 2010, we prospectively adopted two new consolidation accounting standards that resulted in the conolidation of the substantial majority of our securitization trusts that had been previously treated as off-balance sheet. Prior to our adoption of these new consolidation accounting standards, management evaluated the company's performance on a non-GAAP "managed" basis, which assumed that securitized loans were not sold and the earnings from securitized loans were classified in our results of operations in the same manner as the earnings from loans that we owned. We believed that our managed basis information is usefu
l to investors because it portrays the results of both on- and off-balance sheet loans that we manage, which enables investors to understand and evaluate the credit risks associated with the portfolio of loans reported on our consolidated balance sheet and our retained interests in securitized loans. Our non-GAAP managed basis measures may not be comparable to similarly titled measures used by other companies.
As a result of the January 1, 2010 adoption of the new consolidation accounting standards, the accounting for the loans in our securitization trusts in our reported GAAP financial statements is similar to how we accounted for these loans on a managed basis prior to January 1, 2010. Consequently, we believe our managed basis presentations for periods prior to January 1, 2010 are generally comparable to our reported basis presentations for periods beginning after January 1, 2010. In periods prior to January 1, 2010, certain of our non-GAAP managed basis measures differed from our comparable reported measures because we assumed, for our managed basis presentation, that securitized loans that were accounted for as sales in our GAAP financial statements remained on our balance sheet.
The following tables, which are described below, provide a reconciliation of reported GAAP financial measures for each quarter of 2009 to our non-GAAP managed basis financial measures included in our filing. The year-to-date earnings results for each reported period included in our filing can be derived by adding the respective earnings results for each quarter. We also provide a reconciliation of our tangible common equity ratios calculated based on our reported results to ratios calculated based on our non-GAAP managed results.
| ● |
Table 1: Reported GAAP Measures
|
—
|
Reflects selected financial measures from our consolidated GAAP financial statements or metrics calculated based on our consolidated GAAP financial statements.
|
| ● |
Table 2: Non GAAP Securitization Reconciliation Adjustments
|
—
|
Presents the reconciling differences between our reported GAAP financial measures and our non-GAAP managed basis financial measures. These differences include certain reclassifications that assume loans securitized by Capital One and accounted for as sales and off-balance sheet transactions in our GAAP financial statements remain on our balance sheet. These adjustments do not impact net income as reported by our lines of business or the company as a whole.
|
| ● |
Table 3: Non GAAP Managed Basis Measures
|
—
|
Reflects selected financial measures and related metrics based on our non-GAAP managed basis results.
|
| ● |
Table 4: Financial & Statistical Summary Explanatory Footnotes
|
—
|
Includes explanatory footnotes that provide additional information for certain financial and statistical measures presented in Tables 1, 2 and 3.
|
| ● |
Table 5: Average Balances and Net Interest Margin Non-GAAP Reconciliation
|
—
|
Presents a reconciliation of our average balances and net interest margin on a reported basis to our average balances and net interest margin on a non-GAAP managed basis.
|
| ● |
Table 6: Tangible Common Equity Non-GAAP Reconciliation
|
—
|
Presents a reconciliation of tangible common equity ratios calculated based on our reported results to our tangible common equity ratios calculated on a non-GAAP managed basis.
|
Page 1
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY
TABLE 1: REPORTED GAAP MEASURES
|
2009
|
||||||||||||||||
|
(Dollars in millions, except per share data and as noted)
|
Q4
|
Q3
|
Q2
|
Q1(7)
|
||||||||||||
|
Earnings (Reported Basis)
|
||||||||||||||||
|
Net interest income
|
$ | 1,954 | $ | 2,005 | $ | 1,945 | $ | 1,793 | ||||||||
|
Non-interest Income (1)
|
1,412 | 1,553 | 1,232 | (5) | 1,090 | |||||||||||
|
Total revenue (2)
|
3,366 | 3,558 | 3,177 | 2,883 | ||||||||||||
|
Provision for loan and lease losses
|
844 | 1,173 | 934 | 1,279 | ||||||||||||
|
Reported Balance Sheet Statistics (Period Average)
|
||||||||||||||||
|
Average loans held for investment
|
$ | 94,732 | $ | 99,354 | $ | 104,682 | $ | 103,242 | ||||||||
|
Average earning assets
|
143,663 | 145,280 | 150,804 | 145,172 | ||||||||||||
|
Average assets
|
169,856 | 173,428 | 177,628 | 168,489 | ||||||||||||
|
Return on average assets (ROA)
|
0.95 | % | 1.01 | % | 0.52 | % | (0.20 | )% | ||||||||
|
Reported Balance Sheet Statistics (Period End)
|
||||||||||||||||
|
Loans held for investment
|
$ | 90,619 | $ | 96,714 | $ | 100,940 | $ | 104,921 | ||||||||
|
Total assets
|
169,622 | 168,432 | 171,948 | 177,431 | ||||||||||||
|
Tangible assets (A)
|
155,516 | 154,315 | 157,782 | 163,230 | ||||||||||||
|
Tangible common equity to tangible assets ratio (B)
|
8.03 | % | 7.82 | % | 7.10 | % (6) | 5.75 | % | ||||||||
|
Reported Performance Statistics (Quarter over Quarter)
|
||||||||||||||||
|
Net interest income growth (3)
|
(3 | )% | 3 | % | 8 | % | (1 | )% | ||||||||
|
Non-interest income growth (3)
|
(9 | )% | 26 | % | 13 | % | (20 | )% | ||||||||
|
Revenue growth
|
(5 | )% | 12 | % | 10 | % | (9 | )% | ||||||||
|
Net interest margin
|
5.44 | % | 5.52 | % | 5.16 | % | 4.94 | % | ||||||||
|
Revenue margin
|
9.37 | % | 9.80 | % | 8.43 | % | 7.94 | % | ||||||||
|
Risk-adjusted margin (C)
|
6.07 | % | 6.69 | % | 5.46 | % | 4.81 | % | ||||||||
|
Non-interest expense as a % of average loans held for investment (annualized)
|
8.23 | % | 7.25 | % | 7.34 | % | 6.76 | % | ||||||||
|
Efficiency ratio (D)
|
56.92 | % | 49.92 | % | 59.11 | % | 59.93 | % | ||||||||
|
Reported Asset Quality Statistics
|
||||||||||||||||
|
Net charge-offs (4)
|
$ | 1,185 | $ | 1,128 | $ | 1,117 | $ | 1,138 | ||||||||
|
Net charge-off rate (4)
|
5.00 | % | 4.54 | % | 4.28 | % | 4.41 | % | ||||||||
|
30+ day performing delinquency rate (4)
|
4.13 | % | 4.12 | % | 3.71 | % | 3.65 | % | ||||||||
Page 2
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY
TABLE 2: NON-GAAP SECURITIZATION RECONCILIATION ADJUSTMENTS
|
2009
|
||||||||||||||||
|
(Dollars in millions, except per share data and as noted)
|
Q4
|
Q3
|
Q2
|
Q1
|
||||||||||||
|
Earnings
|
||||||||||||||||
|
Net interest income
|
$ | 1,216 | $ | 1,207 | $ | 1,013 | $ | 957 | ||||||||
|
Non-interest Income (1)
|
(213 | ) | (180 | ) | (43 | ) | (104 | ) | ||||||||
|
Total revenue (2)
|
1,003 | 1,027 | 970 | 853 | ||||||||||||
|
Provision for loan and lease losses
|
1,003 | 1,027 | 970 | 853 | ||||||||||||
|
Balance Sheet Statistics (Period Average)
|
||||||||||||||||
|
Average loans held for investment
|
$ | 43,452 | $ | 44,186 | $ | 43,331 | $ | 43,940 | ||||||||
|
Average earning assets
|
40,236 | 40,594 | 40,404 | 41,442 | ||||||||||||
|
Average assets
|
40,569 | 41,227 | 40,774 | 41,680 | ||||||||||||
|
Return on average assets (ROA)
|
(0.18 | )% | (0.20 | )% | (0.10 | )% | 0.04 | % | ||||||||
|
Balance Sheet Statistics (Period End)
|
||||||||||||||||
|
Loans held for investment
|
$ | 46,184 | $ | 44,275 | $ | 45,177 | $ | 44,809 | ||||||||
|
Total assets
|
42,767 | 41,251 | 42,230 | 42,527 | ||||||||||||
|
Tangible assets (A)
|
42,767 | 41,251 | 42,230 | 42,526 | ||||||||||||
|
Tangible common equity to tangible assets ratio (B)
|
(1.73 | )% | (1.65 | )% | (1.50 | )% | (1.19 | )% | ||||||||
|
Performance Statistics
|
||||||||||||||||
|
Net interest income growth
|
2 | % | 6 | % | - | % | - | % | ||||||||
|
Non-interest income growth
|
(4 | ) % | (11 | ) % | 8 | % | 3 | % | ||||||||
|
Revenue growth
|
- | % | (1 | ) % | 1 | % | 4 | % | ||||||||
|
Net interest margin
|
1.46 | % | 1.39 | % | 1.03 | % | 0.95 | % | ||||||||
|
Revenue margin
|
0.13 | % | 0.07 | % | 0.25 | % | 0.07 | % | ||||||||
|
Risk-adjusted margin
|
(1.33 | )% | (1.46 | )% | (1.15 | )% | (1.07 | )% | ||||||||
|
Non-interest expense as a % of average loans held for investment
|
(2.59 | )% | (2.23 | )% | (2.15 | )% | (2.02 | )% | ||||||||
|
Efficiency ratio
|
(13.07 | )% | (11.19 | )% | (13.82 | )% | (13.68 | )% | ||||||||
|
Asset Quality Statistics
|
||||||||||||||||
|
Net charge-offs
|
$ | 1,003 | $ | 1,027 | $ | 970 | $ | 853 | ||||||||
|
Net charge-off rate
|
1.33 | % | 1.46 | % | 1.36 | % | 1.00 | % | ||||||||
|
30+ day performing delinquency rate
|
0.60 | % | 0.43 | % | 0.39 | % | 0.45 | % | ||||||||
Page 3
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY
TABLE 3: NON-GAAP MANAGED BASIS MEASURES
|
2009
|
||||||||||||||||
|
(Dollars in millions, except per share data and as noted)
|
Q4
|
Q3
|
Q2
|
Q1(7)
|
||||||||||||
|
Earnings (Managed Basis)
|
||||||||||||||||
|
Net interest income
|
$ | 3,170 | $ | 3,212 | $ | 2,957 | $ | 2,750 | ||||||||
|
Non-interest income (1)
|
1,199 | 1,373 | 1,190 | (5) | 986 | |||||||||||
|
Total revenue (2)
|
4,369 | 4,585 | 4,147 | 3,736 | ||||||||||||
|
Provision for loan and lease losses
|
1,847 | 2,200 | 1,904 | 2,132 | ||||||||||||
|
Managed Balance Sheet Statistics (Period Average)
|
||||||||||||||||
|
Average loans held for investment
|
$ | 138,184 | $ | 143,540 | $ | 148,013 | $ | 147,182 | ||||||||
|
Average earning assets
|
183,899 | 185,874 | 191,208 | 186,614 | ||||||||||||
|
Average assets
|
210,425 | 214,655 | 218,402 | 210,169 | ||||||||||||
|
Return on average assets (ROA)
|
0.77 | % | 0.81 | % | 0.42 | % | (0.16 | )% | ||||||||
|
Managed Balance Sheet Statistics (Period End)
|
||||||||||||||||
|
Loans held for investment
|
$ | 136,803 | $ | 140,990 | $ | 146,117 | $ | 149,730 | ||||||||
|
Total assets
|
212,389 | 209,683 | 214,178 | 219,958 | ||||||||||||
|
Tangible assets (A)
|
198,283 | 195,566 | 200,012 | 205,756 | ||||||||||||
|
Tangible common equity to tangible assets ratio (B)
|
6.30 | % | 6.17 | % | 5.60 | % (6) | 4.56 | % | ||||||||
|
Managed Performance Statistics (Quarter over Quarter)
|
||||||||||||||||
|
Net interest income growth (3)
|
(1 | )% | 9 | % | 8 | % | (1 | )% | ||||||||
|
Non-interest income growth (3)
|
(13 | )% | 15 | % | 21 | % | (17 | )% | ||||||||
|
Revenue growth
|
(5 | )% | 11 | % | 11 | % | (5 | )% | ||||||||
|
Net interest margin
|
6.90 | % | 6.91 | % | 6.19 | % | 5.89 | % | ||||||||
|
Revenue margin
|
9.50 | % | 9.87 | % | 8.68 | % | 8.01 | % | ||||||||
|
Risk-adjusted margin (C)
|
4.74 | % | 5.23 | % | 4.31 | % | 3.74 | % | ||||||||
|
Non-interest expense as a % of average loans held for investment (annualized)
|
5.64 | % | 5.02 | % | 5.19 | % | 4.74 | % | ||||||||
|
Efficiency ratio (D)
|
43.85 | % | 38.73 | % | 45.29 | % | 46.25 | % | ||||||||
|
Asset Quality Statistics
|
||||||||||||||||
|
Net charge-offs (4)
|
$ | 2,188 | $ | 2,155 | $ | 2,087 | $ | 1,991 | ||||||||
|
Net charge-off rate (4)
|
6.33 | % | 6.00 | % | 5.64 | % | 5.41 | % | ||||||||
|
30+ day performing delinquency rate (4)
|
4.73 | % | 4.55 | % | 4.10 | % | 4.10 | % | ||||||||
Page 4
TABLE 4: FINANCIAL & STATISTICAL SUMMARY EXPLANATORY NOTES
|
(1)
|
Includes the impact from the change in fair value of retained interests, including the interest-only strips, which totaled $55 million in Q4 2009, $37 million in Q3 2009, $(115) million in Q2 2009 and $(128) million in Q1 2009.
|
|
(2)
|
Billed finance charges and fees not included in revenue totaled: $490 million in Q4 2009, $517 million in Q3 2009, $572 million in Q2 2009 and $544 million in Q1 2009.
|
|
(3)
|
Prior period amounts have been reclassified to conform with the current period presentation and adjusted to reflect purchase accounting refinements related to the acquisition of Chevy Chase Bank, FSB ("CCB").
|
|
(4)
|
The denominator used in calculating the allowance as a % of loans held for investment, the net charge-off rate and the 30+ day performing delinquency rate includes loans acquired as part of the CCB acquisition. These metrics, calculated excluding CCB loans, are presented below.
|
|
(Dollars in millions)
|
Q4 2009 | Q3 2009 | Q2 2009 | Q1 2009 | ||||||||||||
|
CCB period end acquired loan portfolio (unaudited)
|
$ | 7,251 | $ | 7,885 | $ | 8,644 | $ | 8,859 | ||||||||
|
CCB average acquired loan portfolio (unaudited)
|
$ | 7,512 | $ | 8,029 | $ | 8,499 | $ | 3,073 | ||||||||
|
Allowance as a % of loans held for investment, excluding CCB
|
4.95 | % | 5.08 | % | 4.86 | % | 4.84 | % | ||||||||
|
Net charge-off rate (Reported), excluding CCB
|
5.44 | % | 4.94 | % | 4.65 | % | 4.54 | % | ||||||||
|
Net charge-off rate (Managed), excluding CCB
|
6.70 | % | 6.36 | % | 5.98 | % | 5.53 | % | ||||||||
|
30+ day performing delinquency rate (Reported), excluding CCB
|
4.49 | % | 4.48 | % | 4.06 | % | 3.99 | % | ||||||||
|
30+ day performing delinquency rate (Managed), excluding CCB
|
4.99 | % | 4.82 | % | 4.36 | % | 4.36 | % | ||||||||
|
(5)
|
In Q2 2009, the Company elected to convert and sell 404,508 shares of MasterCard class B common stock, which resulted in a gain of $66 million that is included in non-interest income.
|
|
(6)
|
Includes the impact of the issuance of 56,000,000 common shares at $27.75 per share on May 14, 2009.
|
|
(7)
|
Effective February 27, 2009, the Company acquired Chevy Chase Bank, FSP for $476 million, which included a cash payment of $445 million and the issuance of 2.6 million common shares valued at $31 million. The acquistion of Chevy Chase Bank included $10 billion in loans and $13.6 billion in deposits.
|
STATISTICS / METRIC CALCULATIONS
|
(A)
|
Tangible assets represents total assets from continuing operations less identifiable intangible assets and goodwill. See Table 6: Tangible Common Equity Non-GAAP Reconciliation.
|
|
(B)
|
Tangible common equity ("TCE") represents common stockholders' equity (total stockholders' equity less preferred stock) less identifable intangible assets and goodwill. See Table 6: Tangible Common Equity Non-GAAP Reconciliation.
|
|
(C)
|
Calculated based on total revenue less net charge-offs divided by average earning assets, expressed as a percentage.
|
|
(D)
|
Calculated based on non-interest expense less restructuring expense divided by total revenue.
|
Page 5
TABLE 5: AVERAGE BALANCES AND NET INTEREST MARGIN NON-GAAP RECONCILIATION(1)
|
(Dollars in millions)
|
Quarter Ended 06/30/09
|
|||||||||||
|
Reported Basis
|
Average
|
Income/
|
Yield/
|
|||||||||
|
Balance
|
Expense
|
Rate
|
||||||||||
|
Interest-earning assets:
|
||||||||||||
|
Loans held for investment
|
$ | 104,682 | $ | 2,237 | 8.55 | % | ||||||
|
Other
|
8,623 | 68 | 3.15 | % | ||||||||
|
Total interest-earning assets
|
$ | 150,804 | $ | 2,717 | 7.21 | % | ||||||
|
Interest-bearing liabilities:
|
||||||||||||
|
Securitization liability
|
5,876 | 74 | 5.04 | % | ||||||||
|
Total interest-bearing liabilities
|
$ | 131,631 | $ | 772 | 2.35 | % | ||||||
|
Net interest spread
|
4.86 | % | ||||||||||
|
Interest income to average interest-earning assets
|
7.21 | % | ||||||||||
|
Interest expense to average interest-earning assets
|
2.05 | % | ||||||||||
|
Net interest margin
|
5.16 | % | ||||||||||
|
Non-GAAP Securitization Reconciliation Adjustments
|
Quarter Ended 06/30/09
|
|||||||||||
|
Average
|
Income/
|
Yield/
|
||||||||||
|
Interest-earning assets:
|
Balance
|
Expense
|
Rate
|
|||||||||
|
Loans held for investment
|
$ | 43,331 | $ | 1,331 | 1.09 | % | ||||||
|
Other
|
(2,927 | ) | (51 | ) | (1.96 | )% | ||||||
|
Total interest-earning assets
|
$ | 40,404 | $ | 1,280 | 1.15 | % | ||||||
|
Interest-bearing liabilities:
|
||||||||||||
|
Securitization liability
|
40,806 | 268 | (2.11 | )% | ||||||||
|
Total interest-bearing liabilities
|
$ | 40,806 | $ | 268 | 0.06 | % | ||||||
|
Net interest spread
|
1.09 | % | ||||||||||
|
Interest income to average interest-earning assets
|
1.15 | % | ||||||||||
|
Interest expense to average interest-earning assets
|
0.12 | % | ||||||||||
|
Net interest margin
|
1.03 | % | ||||||||||
|
Non-GAAP Managed Basis
|
Quarter Ended 06/30/09
|
|||||||||||
|
Average
|
Income/
|
Yield/
|
||||||||||
|
Interest-earning assets:
|
Balance
|
Expense
|
Rate
|
|||||||||
|
Loans held for investment
|
$ | 148,013 | $ | 3,568 | 9.64 | % | ||||||
|
Other
|
5,696 | 17 | 1.19 | % | ||||||||
|
Total interest-earning assets
|
$ | 191,208 | $ | 3,997 | 8.36 | % | ||||||
|
Interest-bearing liabilities:
|
||||||||||||
|
Securitization liability
|
46,682 | 342 | 2.93 | % | ||||||||
|
Total interest-bearing liabilities
|
$ | 172,437 | $ | 1,040 | 2.41 | % | ||||||
|
Net interest spread
|
5.95 | % | ||||||||||
|
Interest income to average interest-earning assets
|
8.36 | % | ||||||||||
|
Interest expense to average interest-earning assets
|
2.17 | % | ||||||||||
|
Net interest margin
|
6.19 | % | ||||||||||
(1) Reflects amounts based on continuing operations.
Page 6