UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
December 11, 2007
Date of Report (Date of earliest event reported)
CAPITAL ONE FINANCIAL CORPORATION
(Exact name of registrant as specified in its chapter)
| Delaware | 1-13300 | 54-1719854 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| 1680 Capital One Drive, McLean, Virginia |
22102 | |
| (Address of principal executive offices) | (Zip Code) |
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):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 7.01 | Regulation FD Disclosure. |
The Company hereby furnishes the information in Exhibit 99.1 hereto, Monthly Charge-off and Delinquency Statistics, as of and for each of the thirty four months ended October 31, 2007.
Note: Information in this report (including the exhibit) 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 99.1 shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933.
| Item 9.01 | Financial Statements and Exhibits. |
(c) Exhibits
| Exhibit | Description | |
| 99.1 | Monthly Charge-off and Delinquency Statistics—January 2005 – October 2007 |
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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.
| CAPITAL ONE FINANCIAL CORPORATION | ||||
| Dated: December 11, 2007 | By: | /s/ Gary L. Perlin | ||
| Gary L. Perlin | ||||
| Chief Financial Officer | ||||
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EXHIBIT INDEX
| 99.1 | Monthly Charge-off and Delinquency Statistics—January 2005 – October 2007 |
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Exhibit 99.1
Capital One Financial Corporation
Monthly Charge-off and Delinquency Statistics
As of and for each of the months ended January 31, 2005 through October 31, 2007
| January 2005 |
February 2005 (1) |
March 2005 |
April 2005 |
May 2005 |
June 2005 |
July 2005 |
August 2005 |
September 2005 |
October 2005(2) |
November 2005(3) |
December 2005(3) |
|||||||||||||||||||||||||
| Net Charge-Off Rate | ||||||||||||||||||||||||||||||||||||
| Reported |
3.58 | % | 3.31 | % | 3.52 | % | 3.39 | % | 3.31 | % | 3.47 | % | 3.46 | % | 3.29 | % | 3.90 | % | 6.60 | % | 2.87 | % | 2.43 | % | ||||||||||||
| Managed |
4.19 | % | 3.96 | % | 4.35 | % | 4.22 | % | 4.10 | % | 3.96 | % | 4.02 | % | 3.77 | % | 4.62 | % | 7.93 | % | 3.27 | % | 2.89 | % | ||||||||||||
| Reportable Segments |
||||||||||||||||||||||||||||||||||||
| National Lending |
4.11 | % | 3.94 | % | 4.46 | % | 4.23 | % | 4.10 | % | 3.97 | % | 4.02 | % | 3.77 | % | 4.64 | % | 7.92 | % | 3.51 | % | 3.30 | % | ||||||||||||
| Local Banking |
||||||||||||||||||||||||||||||||||||
| National Lending Sub-Segments |
||||||||||||||||||||||||||||||||||||
| US Card |
4.63 | % | 4.46 | % | 5.10 | % | 5.16 | % | 4.91 | % | 4.63 | % | 4.56 | % | 4.05 | % | 5.47 | % | 10.81 | % | 3.37 | % | 3.06 | % | ||||||||||||
| Auto |
3.33 | % | 2.60 | % | 3.28 | % | 1.54 | % | 1.66 | % | 2.02 | % | 2.27 | % | 2.65 | % | 2.70 | % | 3.03 | % | 3.49 | % | 3.42 | % | ||||||||||||
| GFS |
3.30 | % | 3.58 | % | 3.77 | % | 3.91 | % | 3.94 | % | 3.83 | % | 4.05 | % | 3.95 | % | 4.25 | % | 5.49 | % | 3.79 | % | 3.72 | % | ||||||||||||
| 30 Days + Delinquency Rate | ||||||||||||||||||||||||||||||||||||
| Reported |
3.78 | % | 3.63 | % | 3.47 | % | 3.34 | % | 3.50 | % | 3.62 | % | 3.84 | % | 3.88 | % | 3.85 | % | 4.02 | % | 3.11 | % | 3.14 | % | ||||||||||||
| Managed |
3.84 | % | 3.65 | % | 3.45 | % | 3.37 | % | 3.43 | % | 3.49 | % | 3.66 | % | 3.69 | % | 3.73 | % | 3.74 | % | 3.26 | % | 3.24 | % | ||||||||||||
| Reportable Segments |
||||||||||||||||||||||||||||||||||||
| National Lending |
3.87 | % | 3.67 | % | 3.47 | % | 3.39 | % | 3.45 | % | 3.51 | % | 3.68 | % | 3.71 | % | 3.75 | % | 3.76 | % | 3.71 | % | 3.70 | % | ||||||||||||
| Local Banking |
||||||||||||||||||||||||||||||||||||
| National Lending Sub-Segments |
||||||||||||||||||||||||||||||||||||
| US Card |
4.02 | % | 3.92 | % | 3.66 | % | 3.52 | % | 3.54 | % | 3.60 | % | 3.74 | % | 3.78 | % | 3.86 | % | 3.64 | % | 3.56 | % | 3.44 | % | ||||||||||||
| Auto |
5.03 | % | 3.59 | % | 3.51 | % | 3.56 | % | 3.89 | % | 4.09 | % | 4.64 | % | 4.68 | % | 4.65 | % | 5.39 | % | 5.44 | % | 5.71 | % | ||||||||||||
| GFS |
3.00 | % | 3.17 | % | 3.04 | % | 2.99 | % | 2.97 | % | 2.93 | % | 2.92 | % | 2.91 | % | 2.93 | % | 2.86 | % | 2.81 | % | 2.83 | % |
| (1) | Effective February 2005, the operations and balances of Onyx Acceptance Corporation, acquired by the company in January 2005, are included in the statistics. |
| (2) | October 2005 charge-offs include the majority of the unusually high volume of bankruptcy petitions filed in the weeks preceding the October 17, 2005 effective date of The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. |
| (3) | November 2005 and December 2005 Managed and Reported data includes the operations and balances of Hibernia Corporation acquired by the Company in November 2005. Hibernia was included in the Other category for November and December 2005. The Other category results are not included in the above table. |
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| January 2006(4) |
February 2006(5) |
March 2006(5) |
April 2006 |
May 2006 |
June 2006 |
July 2006 |
August 2006 |
September 2006 |
October 2006 |
November 2006 |
December 2006(6) |
|||||||||||||||||||||||||
| Net Charge-Off Rate |
||||||||||||||||||||||||||||||||||||
| Reported |
2.33 | % | 1.73 | % | 2.14 | % | 1.82 | % | 2.03 | % | 2.18 | % | 2.27 | % | 2.32 | % | 2.50 | % | 2.59 | % | 2.72 | % | 2.00 | % | ||||||||||||
| Managed |
2.80 | % | 2.25 | % | 2.89 | % | 2.67 | % | 2.73 | % | 2.85 | % | 2.84 | % | 2.87 | % | 3.04 | % | 3.11 | % | 3.27 | % | 2.70 | % | ||||||||||||
| Reportable Segments |
||||||||||||||||||||||||||||||||||||
| National Lending |
3.13 | % | 2.59 | % | 3.25 | % | 3.01 | % | 3.03 | % | 3.18 | % | 3.19 | % | 3.19 | % | 3.36 | % | 3.48 | % | 3.65 | % | 3.77 | % | ||||||||||||
| Local Banking |
0.45 | % | 0.21 | % | 0.47 | % | 0.29 | % | 0.62 | % | 0.45 | % | 0.30 | % | 0.46 | % | 0.68 | % | 0.31 | % | 0.43 | % | 0.45 | % | ||||||||||||
| National Lending Sub-Segments |
||||||||||||||||||||||||||||||||||||
| US Card |
2.99 | % | 2.27 | % | 3.55 | % | 3.31 | % | 3.24 | % | 3.31 | % | 3.34 | % | 3.17 | % | 3.66 | % | 3.54 | % | 3.79 | % | 4.14 | % | ||||||||||||
| Auto |
2.99 | % | 2.35 | % | 1.72 | % | 1.23 | % | 1.48 | % | 1.90 | % | 2.31 | % | 2.28 | % | 2.43 | % | 2.78 | % | 2.76 | % | 3.02 | % | ||||||||||||
| GFS |
3.55 | % | 3.42 | % | 3.91 | % | 3.90 | % | 3.86 | % | 3.94 | % | 3.61 | % | 3.97 | % | 3.51 | % | 3.93 | % | 4.11 | % | 3.65 | % | ||||||||||||
| 30 Days + Delinquency Rate |
||||||||||||||||||||||||||||||||||||
| Reported |
3.03 | % | 2.86 | % | 2.68 | % | 2.81 | % | 2.99 | % | 2.92 | % | 3.14 | % | 3.27 | % | 3.24 | % | 3.44 | % | 3.49 | % | 2.74 | % | ||||||||||||
| Managed |
3.22 | % | 3.09 | % | 2.92 | % | 3.04 | % | 3.09 | % | 3.05 | % | 3.22 | % | 3.27 | % | 3.29 | % | 3.47 | % | 3.49 | % | 3.02 | % | ||||||||||||
| Reportable Segments |
||||||||||||||||||||||||||||||||||||
| National Lending |
3.61 | % | 3.45 | % | 3.26 | % | 3.38 | % | 3.44 | % | 3.44 | % | 3.61 | % | 3.66 | % | 3.70 | % | 3.89 | % | 3.92 | % | 4.09 | % | ||||||||||||
| Local Banking |
0.65 | % | 0.78 | % | 0.75 | % | 0.76 | % | 0.73 | % | 0.38 | % | 0.56 | % | 0.51 | % | 0.36 | % | 0.48 | % | 0.38 | % | 0.31 | % | ||||||||||||
| National Lending Sub-Segments |
||||||||||||||||||||||||||||||||||||
| US Card |
3.56 | % | 3.55 | % | 3.31 | % | 3.29 | % | 3.23 | % | 3.30 | % | 3.37 | % | 3.42 | % | 3.53 | % | 3.71 | % | 3.75 | % | 3.74 | % | ||||||||||||
| Auto |
4.57 | % | 3.75 | % | 3.57 | % | 4.08 | % | 4.58 | % | 4.55 | % | 5.05 | % | 5.20 | % | 5.18 | % | 5.52 | % | 5.63 | % | 6.35 | % | ||||||||||||
| GFS |
2.93 | % | 3.00 | % | 2.90 | % | 2.97 | % | 2.92 | % | 2.82 | % | 2.92 | % | 2.90 | % | 2.86 | % | 2.92 | % | 2.90 | % | 2.97 | % | ||||||||||||
| Non Performing Loans as a % of Loans Held for Investment |
||||||||||||||||||||||||||||||||||||
| Local Banking |
0.78 | % | 0.80 | % | 0.79 | % | 0.78 | % | 0.80 | % | 0.69 | % | 0.71 | % | 0.60 | % | 0.59 | % | 0.72 | % | 0.68 | % | 0.48 | % |
| (4) | Effective January 2006, the operations and balances of Hibernia Corporation’s indirect auto loans are included in the Auto sub-segment and all other Hibernia banking operations and balances are included in Local Banking. |
| (5) | February 2006 charge-offs do not include charge-offs for the last cycle of the calendar month. These charge-offs are included in March 2006 statistics. |
| (6) | December 2006 Managed and Reported data includes the operations and balances of North Fork Bancorporation acquired by the Company in December 2006. North Fork was included in the Other category for December 2006. The Other category results are not included in the above table. |
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| January 2007(7) |
February 2007 |
March 2007 |
April 2007(8) |
May 2007(8) |
June 2007(8) (9) |
July 2007(8) |
August 2007(8) |
September 2007(8) |
October 2007(10) |
|||||||||||||||||||||
| Net Charge-Off Rate |
||||||||||||||||||||||||||||||
| Reported |
1.97 | % | 1.78 | % | 1.76 | % | 1.60 | % | 1.92 | % | 1.76 | % | 2.06 | % | 2.00 | % | 2.22 | % | 2.50 | % | ||||||||||
| Managed |
2.70 | % | 2.53 | % | 2.67 | % | 2.47 | % | 2.73 | % | 2.30 | % | 2.84 | % | 2.78 | % | 2.95 | % | 3.36 | % | ||||||||||
| Reportable Segments |
||||||||||||||||||||||||||||||
| National Lending |
3.74 | % | 3.51 | % | 3.69 | % | 3.46 | % | 3.80 | % | 3.15 | % | 3.94 | % | 3.89 | % | 4.05 | % | 4.61 | % | ||||||||||
| Local Banking |
0.13 | % | 0.14 | % | 0.18 | % | 0.13 | % | 0.18 | % | 0.27 | % | 0.20 | % | 0.11 | % | 0.27 | % | 0.15 | % | ||||||||||
| National Lending Sub-Segments |
||||||||||||||||||||||||||||||
| US Card |
4.01 | % | 3.84 | % | 4.13 | % | 3.98 | % | 4.26 | % | 2.97 | % | 4.15 | % | 3.98 | % | 4.26 | % | 5.11 | % | ||||||||||
| Auto |
2.94 | % | 2.11 | % | 1.81 | % | 2.10 | % | 2.31 | % | 2.63 | % | 3.32 | % | 3.70 | % | 3.67 | % | 3.95 | % | ||||||||||
| GFS |
3.90 | % | 4.10 | % | 4.54 | % | 3.71 | % | 4.28 | % | 3.95 | % | 4.10 | % | 3.88 | % | 4.02 | % | 4.32 | % | ||||||||||
| 30 Days + Delinquency Rate |
||||||||||||||||||||||||||||||
| Reported |
2.63 | % | 2.48 | % | 2.30 | % | 2.43 | % | 2.71 | % | 2.60 | % | 2.89 | % | 3.12 | % | 3.25 | % | 3.39 | % | ||||||||||
| Managed |
2.96 | % | 2.84 | % | 2.68 | % | 2.77 | % | 2.94 | % | 2.86 | % | 3.10 | % | 3.32 | % | 3.50 | % | 3.64 | % | ||||||||||
| Reportable Segments |
||||||||||||||||||||||||||||||
| National Lending |
3.97 | % | 3.79 | % | 3.63 | % | 3.72 | % | 3.93 | % | 3.89 | % | 4.17 | % | 4.40 | % | 4.70 | % | 4.87 | % | ||||||||||
| Local Banking |
0.51 | % | 0.54 | % | 0.44 | % | 0.51 | % | 0.59 | % | 0.42 | % | 0.54 | % | 0.72 | % | 0.64 | % | 0.75 | % | ||||||||||
| National Lending Sub-Segments |
||||||||||||||||||||||||||||||
| US Card |
3.79 | % | 3.74 | % | 3.48 | % | 3.45 | % | 3.52 | % | 3.41 | % | 3.74 | % | 4.15 | % | 4.46 | % | 4.75 | % | ||||||||||
| Auto |
5.46 | % | 4.72 | % | 4.64 | % | 5.13 | % | 5.87 | % | 6.00 | % | 6.47 | % | 6.67 | % | 7.15 | % | 7.24 | % | ||||||||||
| GFS |
2.98 | % | 3.05 | % | 2.99 | % | 2.99 | % | 2.97 | % | 2.93 | % | 2.95 | % | 2.91 | % | 3.02 | % | 3.07 | % | ||||||||||
| Non Performing Loans as a % of Loans Held for Investment |
||||||||||||||||||||||||||||||
| Local Banking |
0.20 | % | 0.23 | % | 0.19 | % | 0.24 | % | 0.23 | % | 0.19 | % | 0.21 | % | 0.25 | % | 0.27 | % | 0.31 | % |
| (7) | Effective January 2007, the operations and balances of North Fork’s auto loans are included in the Auto sub-segment and all other North Fork banking operations and balances are included in Local Banking. |
| (8) | Charge-off and Delinquency data for April 2007 through September 2007 is presented on a continuing operations basis and does not include the operations and balances of GreenPoint mortgage loans held for investment for these periods. These results were included in the Company’s discontinued operations. |
| (9) | June 2007 US Card charge-offs were impacted by the implementation of a change in customer statement generation from a 30 day to a 25 day grace period. |
| (10) | October 2007 Reported, Managed and Local Banking data has been restated to reflect the inclusion of net charge-offs from GreenPoint’s held for investment consumer mortgage portfolio in the Other category and the classification of GreenPoint’s commercial mortgage portfolio in Local Banking. The Other category results are not included in the above table. |
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Reconciliation to GAAP Measures
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and are referred to as our “reported” financial statements. Loans included in securitization transactions which qualify as sales under GAAP have been removed from our “reported” balance sheet. However, servicing fees, finance charges, and other fees, net of charge-offs, and interest paid to investors of securitizations are recognized as servicing and securitizations income on the “reported” income statement.
Our “managed” consolidated financial statements reflect adjustments made related to effects of securitization transactions qualifying as sales under GAAP. We generate earnings from our “managed” loan portfolio which includes both the on-balance sheet loans and off-balance sheet loans. Our “managed” income statement takes the components of the servicing and securitizations income generated from the securitized portfolio and distributes the revenue and expense to appropriate income statement line items from which it originated. For this reason, we believe the “managed” consolidated financial statements and related managed metrics to be useful to stakeholders.
Reportable Segments
We manage our business as two distinct operating segments: Local Banking and National Lending. The Local Banking and National Lending segments are considered reportable segments based on quantitative thresholds applied to the managed loan portfolio for reportable segments provided by SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information. The National Lending segment consists of the following three sub-segments: US Card, Auto Finance and Global Financial Services.
As management makes decisions on a managed basis within each segment, information about reportable segments is provided on a managed basis.
Net Charge-Off Rate
Average Loans Outstanding used in the calculation of the Net Charge-Offs Rate includes an estimate of the uncollectible portion of finance charge and fee receivables. We recognize earned finance charges and fee income on open ended loans according to the contractual provisions of the credit arrangements. When we do not expect full payment of finance charges and fees, we do not accrue the estimated uncollectible portion as income. Prior to May 2007, the estimated uncollectible portion of finance charges and fees was adjusted monthly. Effective May 2007, the estimated uncollectible portion of finance charges and fees is adjusted quarterly.
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