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4th QTR Earnings Report 8-K

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

January 21, 2010

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 2.02.

Results of Operations and Financial Condition

On January 21, 2010, the Company issued a press release announcing its financial results for the fourth quarter ended December 31, 2009. A copy of the Company’s press release is attached and filed herewith as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

The Company’s consolidated financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) are referred to as its “reported” financial statements. Loans included in securitization transactions which qualified as sales under GAAP have been removed from the Company’s “reported” balance sheet. However, servicing fees, finance charges, and other fees, net of charge-offs, and interest paid to investors of securitizations are recognized as servicing and securitizations income on the “reported” income statement.

The Company’s “managed” consolidated financial statements reflect adjustments made related to effects of securitization transactions qualifying as sales under GAAP. The Company generates earnings from its “managed” loan portfolio which includes both the on-balance sheet loans and off-balance sheet loans. The Company’s “managed” income statement takes the components of the servicing and securitizations income generated from the securitized portfolio and distributes the revenue and expense to appropriate income statement line items from which it originated. For this reason the Company believes the “managed” consolidated financial statements and related managed metrics to be useful to stakeholders.

Item 7.01.

Regulation FD Disclosure.

The Company hereby furnishes the information in Exhibit 99.2 hereto, Fourth Quarter Earnings Presentation for the quarter ended December 31, 2009.

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.

(a)

See attached press release, at Exhibit 99.1.

(b)

Cautionary Factors.

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:

•

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;

•

an increase or decrease in credit losses (including increases due to a worsening of general economic conditions in the credit environment);

•

financial, legal, regulatory, tax or accounting changes or actions, including with respect to any litigation matter involving the Company;

•

increases or decreases in interest rates;

•

the success of the Company’s marketing efforts in attracting and retaining customers;

•

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;

•

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;

•

the amount and rate of deposit growth;

•

the Company’s ability to control costs;

•

changes in the reputation of or expectations regarding the financial services industry and/or the Company with respect to practices, products or financial condition;

•

any significant disruption in the Company’s operations or technology platform;

•

the Company’s ability to maintain a compliance infrastructure suitable for its size and complexity;

•

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;

•

the Company’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;

•

the ability of the Company to recruit and retain experienced personnel to assist in the management and operations of new products and services;

•

changes in the labor and employment market;

•

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;

•

disruption from the acquisitions negatively impacting the Company’s ability to maintain relationships with customers, employees or suppliers;

•

competition from providers of products and services that compete with the Company’s businesses; and

•

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, 2008, and the Quarterly Report on Form 10-Q for the quarters ended March 31, 2009, June 30, 2009 and September 30, 2009.

Item 9.01.

Financial Statements, Pro Forma Financial Information and Exhibits.

(c)

Exhibits.


Exhibit No.		Description of Exhibit
99.1		Press release, dated January 21, 2010.
99.2		Fourth Quarter Earnings Presentation.

Earnings Conference Call Webcast Information.

Capital One will hold an earnings conference call on January 21, 2010, 4:30 PM Eastern time. The conference call will be accessible through live webcast. Interested investors and other interested 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 March 31, 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.


	CAPITAL ONE FINANCIAL CORPORATION

Dated: January 21, 2010	By:	/s/ Gary L. Perlin
		Gary L. Perlin Chief Financial Officer

Exhibit 99.1

Exhibit 99.1

CAPITAL ONE FINANCIAL CORPORATION (COF)

FINANCIAL & STATISTICAL SUMMARY

REPORTED BASIS


*(in millions, except per share data and as noted)*	2009 Q4			2009 Q3 ⁽¹⁴⁾			2009 Q2 ⁽¹⁴⁾			2009 Q1 ^(10)(14)			2008 Q4
Earnings (Reported Basis)
Net Interest Income	$	1,954.2		$	2,005.2		$	1,944.7		$	1,793.0		$	1,802.4
Non-Interest Income ⁽²⁾		1,411.7			1,552.4			1,232.2	⁽⁵⁾		1,089.8			1,368.3

Total Revenue ⁽¹⁾		3,365.9			3,557.6			3,176.9			2,882.8			3,170.7
Provision for Loan Losses		843.7			1,173.2			934.0			1,279.1			2,098.9
Marketing Expenses		188.0			103.7			134.0			162.7			264.9
Restructuring Expenses		32.0			26.4			43.4			17.6			52.8
Goodwill Impairment Charge		—			—			—			—			810.9	⁽⁷⁾
Operating Expenses ⁽³⁾		1,728.0			1,672.0			1,744.3	⁽¹¹⁾		1,565.0			1,629.3

Income (Loss) Before Taxes		574.2			582.3			321.2			(141.6	)		(1,686.1	)
Tax Rate		29.7	%		24.9	%		28.8	%		41.3	%		17.2
Income (Loss) From Continuing Operations, Net of Tax	$	403.9		$	437.1		$	228.8		$	(83.1	)	$	(1,396.3	)
Loss From Discontinued Operations, Net of Tax		(28.3	)		(43.6	)		(6.0	)		(25.0	)		(25.2	)

Net Income (Loss)	$	375.6		$	393.5		$	222.8		$	(108.1	)	$	(1,421.5	)

Net Income (Loss) Available to Common Shareholders ^(F)	$	375.6		$	393.5		$	(276.9	)⁽¹³⁾	$	(172.3	)	$	(1,454.3	)


Common Share Statistics
Basic EPS:^(G)
Income (Loss) From Continuing Operations	$	0.90		$	0.97		$	(0.64	)	$	(0.38	)	$	(3.67	)
Loss From Discontinued Operations	$	(0.07	)	$	(0.09	)	$	(0.01	)	$	(0.06	)	$	(0.07	)

Net Income (Loss)	$	0.83		$	0.88		$	(0.66	)	$	(0.44	)	$	(3.74	)
Diluted EPS:^(G)
Income (Loss) From Continuing Operations	$	0.89		$	0.96		$	(0.64	)	$	(0.38	)	$	(3.67	)
Loss From Discontinued Operations	$	(0.06	)	$	(0.09	)	$	(0.01	)	$	(0.06	)	$	(0.07	)

Net Income (Loss)	$	0.83		$	0.87		$	(0.66	)	$	(0.44	)	$	(3.74	)
Dividends Per Common Share	$	0.05		$	0.05		$	0.05		$	0.375		$	0.375
Tangible Book Value Per Common Share (period end)	$	27.72		$	26.86		$	24.94		$	23.91		$	28.23
Stock Price Per Common Share (period end)	$	38.34		$	35.73		$	21.88		$	12.24		$	31.89
Total Market Capitalization (period end)	$	17,268.3		$	16,064.2		$	9,826.3		$	4,806.6		$	12,411.6
Common Shares Outstanding (period end)		450.4			449.6			449.1			392.7			389.2
Shares Used to Compute Basic EPS		450.0			449.4			421.9			390.5			389.0
Shares Used to Compute Diluted EPS		454.9			453.7			421.9			390.5			389.0


Reported Balance Sheet Statistics (period average) ^(A)
Average Loans Held for Investment	$	94,732		$	99,354		$	104,682		$	103,242		$	99,335
Average Earning Assets	$	143,663		$	145,280		$	150,804		$	145,172		$	137,799
Average Assets	$	169,856		$	173,428		$	177,628		$	168,489		$	161,968
Average Interest Bearing Deposits	$	101,144		$	103,105		$	107,033		$	100,886		$	93,144
Total Average Deposits	$	114,597		$	115,883		$	119,604		$	112,137		$	104,093
Average Equity	$	26,518		$	26,002		$	27,668	^(9),(12)	$	27,004		$	26,658	⁽⁹⁾
Return on Average Assets (ROA)		0.95	%		1.01	%		0.52	%		(0.20	)%		(3.45	)%
Return on Average Equity (ROE)		6.09	%		6.72	%		3.31	%		(1.23	)%		(20.95	)%


Reported Balance Sheet Statistics (period end) ^(A)
Loans Held for Investment	$	90,619		$	96,714		$	100,940		$	104,921		$	101,018
Total Assets	$	169,376		$	168,432		$	171,944		$	177,431		$	165,878
Interest Bearing Deposits	$	102,370		$	101,769		$	104,121		$	108,792		$	97,327
Total Deposits	$	115,809		$	114,503		$	116,724		$	121,116		$	108,621


Performance Statistics (Reported) ^(A)
Net Interest Income Growth (annualized)		(10	)%		12	%		34	%		(2	)%		(1	)%
Non Interest Income Growth (annualized)		(36	)%		104	%		52	%		(81	)%		(77	)%
Revenue Growth (annualized)		(22	)%		48	%		41	%		(36	)%		(38	)%
Net Interest Margin		5.44	%		5.52	%		5.16	%		4.94	%		5.23	%
Revenue Margin		9.37	%		9.80	%		8.43	%		7.94	%		9.20	%
Risk Adjusted Margin ^(B)		6.07	%		6.69	%		5.46	%		4.81	%		6.17	%
Non Interest Expense as a % of Average Loans Held for Investment (annualized)		8.23	%		7.26	%		7.34	%		6.76	%		7.84	%⁽⁸⁾
Efficiency Ratio ^(C)		56.92	%		49.91	%		59.12	%		59.93	%		59.74	%⁽⁸⁾


Asset Quality Statistics (Reported) ^(A)
Allowance	$	4,127		$	4,513		$	4,482		$	4,648		$	4,524
Allowance as a % of Reported Loans Held for Investment		4.55	%⁽⁴⁾		4.67	%⁽⁴⁾		4.44	%⁽⁴⁾		4.43	%⁽⁴⁾		4.48	%
Net Charge-Offs	$	1,185	⁽⁴⁾	$	1,127	⁽⁴⁾	$	1,119	⁽⁴⁾	$	1,138	⁽⁴⁾	$	1,045
Net Charge-Off Rate		5.00	%⁽⁴⁾		4.54	%⁽⁴⁾		4.28	%⁽⁴⁾		4.41	%⁽⁴⁾		4.21	%
30+ day performing delinquency rate		4.13	%⁽⁴⁾		4.12	%⁽⁴⁾		3.71	%⁽⁴⁾		3.65	%⁽⁴⁾		4.37	%

Full-time equivalent employees (in thousands)		25.9			26.0			26.6			27.5			23.7

CAPITAL ONE FINANCIAL CORPORATION (COF)

FINANCIAL & STATISTICAL SUMMARY

MANAGED BASIS (*)


*(in millions)*	2009 Q4			2009 Q3 ⁽¹⁴⁾			2009 Q2 ⁽¹⁴⁾			2009 Q1 ^(10)(14)			2008 Q4
Earnings (Managed Basis)
Net Interest Income	$	3,170.1		$	3,212.0		$	2,957.4		$	2,750.0		$	2,767.9
Non-Interest Income⁽²⁾		1,198.9			1,372.7			1,189.5	⁽⁵⁾		985.7			1,183.2

Total Revenue ⁽¹⁾		4,369.0			4,584.7			4,146.9			3,735.7			3,951.1
Provision for Loan Losses		1,846.8			2,200.3			1,904.0			2,132.0			2,879.3
Marketing Expenses		188.0			103.7			134.0			162.7			264.9
Restructuring Expenses		32.0			26.4			43.4			17.6			52.8
Goodwill Impairment Charge		—			—			—			—			810.9	⁽⁷⁾
Operating Expenses ⁽³⁾		1,728.0			1,672.0			1,744.3	⁽¹¹⁾		1,565.0			1,629.3

Income (Loss) Before Taxes		574.2			582.3			321.2			(141.6	)		(1,686.1	)
Tax Rate		29.7	%		24.9	%		28.8	%		41.3	%		17.2	%
Income (Loss) From Continuing Operations, Net of Tax	$	403.9		$	437.1		$	228.8		$	(83.1	)	$	(1,396.3	)
Loss From Discontinued Operations, Net of Tax		(28.3	)		(43.6	)		(6.0	)		(25.0	)		(25.2	)

Net Income (Loss)	$	375.6		$	393.5		$	222.8		$	(108.1	)	$	(1,421.5	)

Net Income (Loss) Available to Common Shareholders^(F)	$	375.6		$	393.5		$	(276.9	)⁽¹³⁾	$	(172.3	)	$	(1,454.3	)


Managed Balance Sheet Statistics (period average) ^(A)
Average Loans Held for Investment	$	138,184		$	143,540		$	148,013		$	147,182		$	146,586
Average Earning Assets	$	183,899		$	185,874		$	191,208		$	186,614		$	182,660
Average Assets	$	210,425		$	214,655		$	218,402		$	210,169		$	207,232
Return on Average Assets (ROA)		0.77	%		0.81	%		0.42	%		(0.16	)%		(2.70	)%


Managed Balance Sheet Statistics (period end) ^(A)
Loans Held for Investment	$	136,803		$	140,990		$	146,117		$	149,730		$	146,937
Total Assets	$	212,143		$	209,683		$	214,174		$	219,958		$	209,840
Tangible Assets^(D)	$	198,037		$	195,566		$	200,008		$	205,756		$	197,337
Tangible Common Equity ^(E)	$	12,483		$	12,075		$	11,200		$	9,388		$	10,989
Tangible Common Equity to Tangible Assets Ratio^(H)		6.30	%		6.17	%		5.60	%⁽⁶⁾		4.56	%		5.57	%
% Off-Balance Sheet Securitizations		34	%		31	%		31	%		30	%		31	%


Performance Statistics (Managed) ^(A)
Net Interest Income Growth (annualized)		(5	)%		34	%		30	%		(3	)%		(17	)%
Non Interest Income Growth (annualized)		(51	)%		62	%		83	%		(67	)%		(43	)%
Revenue Growth (annualized)		(19	)%		42	%		44	%		(22	)%		(25	)%
Net Interest Margin		6.90	%		6.91	%		6.19	%		5.89	%		6.06	%
Revenue Margin		9.50	%		9.87	%		8.68	%		8.01	%		8.65	%
Risk Adjusted Margin ^(B)		4.74	%		5.23	%		4.31	%		3.74	%		4.65	%
Non Interest Expense as a % of Average Loans Held for Investment (annualized)		5.64	%		5.02	%		5.19	%		4.74	%		5.31	%⁽⁸⁾
Efficiency Ratio ^(C)		43.85	%		38.73	%		45.29	%		46.25	%		47.94	%⁽⁸⁾


Asset Quality Statistics (Managed) ^(A)
Net Charge-Offs	$	2,188	⁽⁴⁾	$	2,155	⁽⁴⁾	$	2,087	⁽⁴⁾	$	1,991	⁽⁴⁾	$	1,826
Net Charge-Off Rate		6.33	%⁽⁴⁾		6.00	%⁽⁴⁾		5.64	%⁽⁴⁾		5.41	%⁽⁴⁾		4.98	%
30+ day performing delinquency rate		4.73	%⁽⁴⁾		4.55	%⁽⁴⁾		4.10	%⁽⁴⁾		4.10	%⁽⁴⁾		4.49	%

(*)	The information in this statistical summary reflects the adjustment to add back the effect of securitization transactions qualifying as sales under generally accepted accounting principles. See accompanying schedule—“Reconciliation to GAAP Financial Measures”.

CAPITAL ONE FINANCIAL CORPORATION (COF)

FINANCIAL & STATISTICAL SUMMARY NOTES

(1)	In accordance with the Company’s finance charge and fee revenue recognition policy, the amounts billed to customers but not recognized as revenue were as follows: Q4 2009—$490.4 million, Q3 2009—$517.0 million, Q2 2009—$571.9 million, Q1 2009—$544.4 million and Q4 2008—$591.0 million.

(2)	Includes the impact from the change in fair value of retained interests, including the interest-only strips, of increases of $55.3 million in Q4 2009 and $37.3 million in Q3 2009, and decreases of $114.5 million in Q2 2009, $128.0 million in Q1 2009 and $158.2 million in Q4 2008.

(3)

Includes core deposit intangible amortization expense of $53.8 million in Q4 2009, $55.5 million in Q3 2009, $57.2 million in Q2 2009, $49.4 million in Q1 2009 and $46.0 million in Q4 2008, and integration costs of $22.1 million in Q4 2009, $10.7 million in Q3 2009, $8.8 million in Q2 2009, $23.6 million in Q1 2009 and $3.2 million in Q4 2008.

(4)

Allowance as a % of Reported Loans Held for Investment, Net Charge-off Rate and 30+ Day Performing Delinquency Rate on both a Reported and Managed basis include period end loans held for investment and average loans held for investment acquired as part of the Chevy Chase Bank, FSB (CCB) acquisition. The reported and managed metrics excluding such loans are as follows. The net charge-off dollars were unchanged.


	Q4 2009			Q3 2009⁽¹⁴⁾			Q2 2009⁽¹⁴⁾			Q1 2009⁽¹⁴⁾
CCB period end acquired loan portfolio (in millions)	$	7,250.5		$	7,885.0		$	8,643.5		$	8,858.9
CCB average acquired loan portfolio (in millions)	$	7,511.9		$	8,028.8		$	8,498.9		$	3,072.8
Allowance as a % of reported loans held for investment		4.95	%		5.08	%		4.86	%		4.84	%
Net charge-off rate (Reported)		5.44	%		4.94	%		4.65	%		4.54	%
Net charge-off rate (Managed)		6.70	%		6.36	%		5.98	%		5.53	%
30+ day performing delinquency rate (Reported)		4.49	%		4.48	%		4.06	%		3.99	%
30+ day performing delinquency rate (Managed)		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 and recognized a gain of $65.5 million in non-interest income from the transaction.

(6)	The Q2 2009 TCE ratio reflects the issuance of 56,000,000 common shares on May 14, 2009 at $27.75 per share.

(7)	In Q4 2008 the Company recorded impairment of goodwill in its automobile business of $810.9 million.

(8)	Excludes the impact of the goodwill impairment of $810.9 million.

(9)

Average equity includes the impact of the Company’s participation in the U.S. Treasury’s Capital Purchase Program. On November 14, 2008, the Company issued 3,555,199 preferred shares and 12,657,960 warrants to purchase common shares at $42.13 per share, while receiving proceeds of $3.56 billion. The allocated fair value for the preferred shares and the warrants to purchase common shares was $3.06 billion and $491.5 million, respectively. On June 17, 2009, the Company repurchased all 3,555,199 preferred shares issued in Q4 2008 for approximately $3.57 billion, including accrued dividends. The warrants to purchase common shares were sold by the U.S. Treasury on December 11, 2009 at a price of $11.75 per warrant. The sale by the US Treasury had no impact on the company’s equity. The warrants remain outstanding and are included in paid-in capital on the balance sheet.

(10)	Effective February 27, 2009 the Company acquired Chevy Chase Bank, FSB for $475.9 million, which included $9.8 billion in loans and $13.6 billion in deposits. The Company paid cash of $445.0 million and issued 2.6 million shares valued at $30.9 million.

(11)	Includes the FDIC Special Assessment of $80.5 million.

(12)	Average equity includes the impact of the issuance of 56,000,000 common shares on May 14, 2009 at $27.75 per share.

(13)

The calculation of net income (loss) available to common shareholders includes the impact from dividends on preferred shares of $38.0 million and from the accretion of the discount on preferred shares of $461.7 million. With the repayment of the preferred shares to the U.S. Treasury, the remaining accretion was acelerated to Q2 2009 and treated as a dividend. Subsequent to this transaction thre is no difference between net income (loss) and net income (loss) available to common shareholders.

(14)

Results and balances have been recast to reflect the impact of purchase accounting adjustments from the Chevy Chase Bank acquisition as if those adjustments had been recorded at the acquisition date as the purchase accounting has been finalized during Q4 2009. The following highlights the changes to key line items from what was previously disclosed.


(in millions)	Q3 2009			Q2 2009			Q1 2009
Net income increase (decrease)	$	(32.1	)	$	(1.4	)	$	3.8
Loans held for investment (decrease)		(68.7	)		(134.1	)		(606.0	)
Goodwill increase		40.0			187.0			478.0
Other assets (including deferred taxes) increase		25.7			23.3			169.6

STATISTICS / METRIC DEFINITIONS

(A)	Based on continuing operations. Average equity and return on equity are based on the Company’s stockholders’ equity.

(B)	Risk adjusted margin equals total revenue less net charge-offs as a percentage of average earning assets.

(C)	Efficiency ratio equals non-interest expense less restructuring expense divided by total revenue.

(D)	Tangible assets include managed assets less intangible assets and is considered a non-GAAP measure. See accompanying schedule Reconciliation to GAAP Financial Measures for a reconciliation of tangible assets.

(E)

Includes stockholders’ equity less preferred shares less intangible assets and related deferred tax liabilities. Tangible Common Equity on a reported and managed basis is the same and is considered a non-GAAP measure. See accompanying schedule Reconciliation To GAAP Financial Measures for a reconciliation of tangible common equity.

(F)	Net income (loss) available to common shareholders equals net income (loss) less dividends on preferred shares.

(G)	Earnings per share is based on net income (loss) available to common shareholders.

(H)	Tangible Common Equity to Tangible Assets Ratio (“TCE Ratio”) is considered a non-GAAP measure. See accompanying schedule Reconciliation To GAAP Financial Measures for a reconciliation of the TCE Ratio.

CAPITAL ONE FINANCIAL CORPORATION

Reconciliation to GAAP Financial Measures

(dollars in thousands)(unaudited)

The Company’s “managed” consolidated financial statements reflect adjustments made related to effects of securitization transactions qualifying as sales under GAAP. The Company generates earnings from its “managed” loan portfolio which includes both the on-balance sheet loans and off-balance sheet loans. The Company’s “managed” income statement takes the components of the servicing and securitizations income generated from the securitized portfolio and distributes the revenue and expense to appropriate income statement line items from which they originated. For this reason the Company believes the “managed” consolidated financial statements and related managed metrics to be useful to stakeholders.


	For the Three Months Ended December 31, 2009
	Total Reported		Adjustments⁽¹⁾			Total Managed⁽²⁾
Income Statement Measures⁽³⁾
Net interest income	$	1,954,213	$	1,215,901		$	3,170,114
Non-interest income		1,411,752		(212,824	)		1,198,928

Total revenue		3,365,965		1,003,077			4,369,042
Provision for loan and lease losses		843,728		1,003,077			1,846,805
Net charge-offs	$	1,184,894	$	1,003,077		$	2,187,971

Balance Sheet Measures
Loans held for investment	$	90,618,999	$	46,183,903		$	136,802,902
Total assets	$	169,400,094	$	42,767,131		$	212,167,225
Total liabilities	$	142,810,684	$	42,767,131		$	185,577,815
Average loans held for investment	$	94,731,990	$	43,452,191		$	138,184,181
Average earning assets	$	143,682,608	$	40,236,099		$	183,918,707
Average total assets	$	169,885,959	$	40,568,925		$	210,454,884
Average total liabilities	$	143,368,047	$	40,568,925		$	183,936,972
Delinquencies	$	3,746,264	$	2,718,895		$	6,465,159

The table below presents a reconciliation of tangible common equity and tangible assets, which are the components used to calculate the tangible common equity “TCE” ratio. The Company believes the TCE ratio is an important financial measure of capital strength to our investors and readers even though it is considered to be a non-GAAP measure.


*(dollars in millions)(unaudited)*	2009 Q4			2009 Q3⁽⁵⁾			2009 Q2⁽⁵⁾			2009 Q1⁽⁵⁾			2008 Q4
Equity	$	26,589		$	26,192		$	25,328		$	26,748		$	26,612
Less: preferred stock		—			—			38			(3,159	)		(3,120	)
Less: intangible assets⁽⁴⁾		(14,106	)		(14,117	)		(14,166	)		(14,201	)		(12,503	)

Tangible common equity	$	12,483		$	12,075		$	11,200		$	9,388		$	10,989


Total assets		212,167			209,714			214,220			219,988			209,875
Less: discontinued ops assets		(24	)		(31	)		(46	)		(31	)		(35	)

Total assets- continuing ops		212,143			209,683			214,174			219,957			209,840
Less: intangible assets⁽⁴⁾		(14,106	)		(14,117	)		(14,166	)		(14,201	)		(12,503	)

Tangible assets	$	198,037		$	195,566		$	200,008		$	205,756		$	197,337


TCE ratio		6.30			6.17			5.60			4.56			5.57

(1)

Income statement adjustments reclassify the net of finance charges of $1,320.8 million, past-due fees of $193.5 million, other interest income of $(50.7) million and interest expense of $247.7 million; and net charge-offs of $1,003.1 million from non-interest income to net interest income and provision for loan and lease losses, respectively.

(2)	The managed loan portfolio does not include auto loans or mortgage loans which have been sold in whole loan sale transactions or securitizations where the Company has retained servicing rights.

(3)	Based on continuing operations.

(4)	Includes impact from related deferred taxes.

(5)	Amounts have been recast to reflect the impact of purchase accounting adjustments from the Chevy Chase Bank acquisition as if those adjustments had been recorded at the acquisition date as the purchase accounting has been finalized during Q4 2009.

CAPITAL ONE FINANCIAL CORPORATION

Consolidated Balance Sheets

(in thousands)(unaudited)


	As of December 31 2009			As of September 30 2009⁽¹⁾			As of December 31 2008
Assets:
Cash and due from banks	$	3,100,110		$	2,719,100		$	2,047,839
Federal funds sold and resale agreements		541,570			544,793			636,752
Interest-bearing deposits at other banks		5,042,944			863,310			4,806,752

Cash and cash equivalents		8,684,624			4,127,203			7,491,343
Securities available for sale		38,829,562			37,693,001			31,003,271
Securities held to maturity		80,577			83,608			—
Loans held for sale		268,307			141,158			68,462
Loans held for investment		90,618,999			96,714,341			101,017,771
Less: Allowance for loan and lease losses		(4,127,395	)		(4,513,493	)		(4,523,960	)

Net loans held for investment		86,491,604			92,200,848			96,493,811
Accounts receivable from securitizations		7,629,597			6,985,200			6,342,754
Premises and equipment, net		2,735,623			2,773,173			2,313,106
Interest receivable		936,146			910,642			827,909
Goodwill		13,596,368			13,564,807			11,964,487
Other		10,147,686			9,983,892			9,408,309

Total assets	$	169,400,094		$	168,463,532		$	165,913,452


Liabilities:
Non-interest-bearing deposits	$	13,438,659		$	12,734,589		$	11,293,852
Interest-bearing deposits		102,370,437			101,768,522			97,326,937
Senior and subordinated notes		9,045,470			9,208,769			8,308,843
Other borrowings		11,968,461			12,126,181			14,869,648
Interest payable		509,105			582,969			676,398
Other		5,478,552			5,850,124			6,825,341

Total liabilities		142,810,684			142,271,154			139,301,019

Stockholders’ Equity:
Preferred stock		—			—			3,096,466
Common stock		5,024			5,021			4,384
Paid-in capital, net		18,954,823			18,928,719			17,278,102
Retained earnings and cumulative other comprehensive income		10,810,022			10,431,005			9,399,368
Less: Treasury stock, at cost		(3,180,459	)		(3,172,367	)		(3,165,887	)

Total stockholders’ equity		26,589,410			26,192,378			26,612,433

Total liabilities and stockholders’ equity	$	169,400,094		$	168,463,532		$	165,913,452

(1)	Amounts have been recast to reflect the impact of purchase accounting adjustments from the Chevy Chase Bank acquisition as if those adjustments had been recorded at the acquisition date as the purchase accounting has been finalized during Q4 2009.

CAPITAL ONE FINANCIAL CORPORATION

Consolidated Statements of Income

(in thousands, except per share data)(unaudited)


	Three Months Ended									Year Ended
	December 31 2009			September 30 2009⁽²⁾			December 31 2008			December 31 2009			December 31 2008
Interest Income:
Loans held for investment, including past-due fees	$	2,108,325		$	2,220,208		$	2,306,796		$	8,757,066		$	9,460,378
Investment securities		403,750			398,835			367,902			1,610,210			1,224,012
Other		83,013			83,195			94,123			297,309			427,609

Total interest income		2,595,088			2,702,238			2,768,821			10,664,585			11,111,999

Interest Expense:
Deposits		426,415			479,178			684,756			2,093,019			2,512,040
Senior and subordinated notes		71,093			74,032			92,519			260,282			444,854
Other borrowings		143,367			143,860			189,149			614,169			1,006,390

Total interest expense		640,875			697,070			966,424			2,967,470			3,963,284

Net interest income		1,954,213			2,005,168			1,802,397			7,697,115			7,148,715
Provision for loan and lease losses		843,728			1,173,208			2,098,921			4,230,111			5,101,040

Net interest income (loss) after provision for loan and lease losses		1,110,485			831,960			(296,524	)		3,467,004			2,047,675

Non-Interest Income:
Servicing and securitizations		743,075			720,698			590,948			2,279,826			3,384,468
Service charges and other customer-related fees		502,721			496,392			557,331			1,997,013			2,232,363
Mortgage servicing and other		(30,470	)		8,656			14,048			14,729			105,038
Interchange		112,421			122,585			129,409			501,798			562,117
Net impairment losses recognized in earnings⁽¹⁾		(10,384	)		(11,173	)		(4,808	)		(31,951	)		(10,916	)
Other		94,389			215,210			81,358			524,737			470,901

Total non-interest income		1,411,752			1,552,368			1,368,286			5,286,152			6,743,971

Non-Interest Expense:
Salaries and associate benefits		641,225			648,180			574,199			2,477,655			2,335,737
Marketing		187,958			103,698			264,943			588,338			1,118,208
Communications and data processing		171,286			175,575			196,924			740,543			755,989
Supplies and equipment		129,422			122,777			130,038			499,582			519,687
Occupancy		121,822			113,913			112,492			450,871			377,192
Restructuring expense		32,037			26,357			52,839			119,395			134,464
Goodwill impairment charge		—			—			810,876			—			810,876
Other		664,243			611,558			615,632			2,540,670			2,157,874

Total non-interest expense		1,947,993			1,802,058			2,757,943			7,417,054			8,210,027

Income from continuing operations before income taxes		574,244			582,270			(1,686,181	)		1,336,102			581,619
Income taxes		170,359			145,212			(289,856	)		349,485			497,102

Income from continuing operations, net of tax		403,885			437,058			(1,396,325	)		986,617			84,517
Loss from discontinued operations, net of tax		(28,293	)		(43,587	)		(25,221	)		(102,836	)		(130,515	)

Net income	$	375,592		$	393,471		$	(1,421,546	)	$	883,781		$	(45,998	)

Net income (loss) available to common shareholders	$	375,592		$	393,471		$	(1,454,269	)	$	319,873		$	(78,721	)


Basic earnings per common share
Income (loss) from continuing operations	$	0.90		$	0.97		$	(3.67	)	$	0.99		$	0.14
Loss from discontinued operations		(0.07	)		(0.09	)		(0.07	)		(0.24	)		(0.35	)

Net Income (loss) per common share	$	0.83		$	0.88		$	(3.74	)	$	0.75		$	(0.21	)


Diluted earnings per common share
Income (loss) from continuing operations	$	0.89		$	0.96		$	(3.67	)	$	0.98		$	0.14
Loss from discontinued operations		(0.06	)		(0.09	)		(0.07	)		(0.24	)		(0.35	)

Net Income (loss) per common share	$	0.83		$	0.87		$	(3.74	)	$	0.74		$	(0.21	)

Dividends paid per common share	$	0.05		$	0.05		$	0.375		$	0.525		$	1.50

(1)

For the three months and year ended December 31, 2009, the Company recorded other-than-temporary impairment losees of $10.4 million and $31.6 million, respectively. Total unrealized losess on these securities recognized in other comprehensive income as a component of stockholders’ equity at December 31, 2009 was $181.3 million.

(2)	Amounts have been recast to reflect the impact of purchase accounting adjustments from the Chevy Chase Bank acquisition as if those adjustments had been recorded at the acquisition date as the purchase accounting has been finalized during Q4 2009.

CAPITAL ONE FINANCIAL CORPORATION

Statements of Average Balances, Income and Expense, Yields and Rates⁽¹⁾

(dollars in thousands)(unaudited)


Reported	Quarter Ended 12/31/09						Quarter Ended 09/30/09⁽³⁾						Quarter Ended 12/31/08
	Average Balance		Income/ Expense		Yield/ Rate		Average Balance		Income/ Expense		Yield/ Rate		Average Balance		Income/ Expense		Yield/ Rate
Earning assets:
Loans held for investment	$	94,731,990	$	2,108,325	8.90	%	$	99,354,028	$	2,220,208	8.94	%	$	99,334,890	$	2,306,796	9.29	%
Investment Securities⁽²⁾		38,486,624		403,750	4.20	%		37,376,895		398,835	4.27	%		28,961,247		367,902	5.08	%
Other		10,444,494		83,013	3.18	%		8,548,610		83,195	3.89	%		9,502,781		94,123	3.96	%

Total earning assets	$	143,663,108	$	2,595,088	7.23	%	$	145,279,533	$	2,702,238	7.44	%	$	137,798,918	$	2,768,821	8.04	%

Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts		10,587,851		13,696	0.52	%		10,418,557		12,745	0.49	%	$	9,874,696	$	28,460	1.15	%
Money market deposit accounts		37,460,109		96,583	1.03	%		36,036,826		96,477	1.07	%		28,556,264		171,891	2.41	%
Savings accounts		15,416,242		35,326	0.92	%		12,266,254		22,772	0.74	%		7,275,816		11,774	0.65	%
Other consumer time deposits		27,273,129		200,499	2.94	%		32,075,905		248,272	3.10	%		33,712,504		337,651	4.01	%
Public fund CD’s of $100,000 or more		753,764		2,201	1.17	%		1,061,134		2,789	1.05	%		1,213,364		7,323	2.41	%
CD’s of $100,000 or more		8,633,998		76,692	3.55	%		9,764,172		92,681	3.80	%		9,508,463		104,134	4.38	%
Foreign time deposits		1,019,090		1,418	0.56	%		1,482,519		3,442	0.93	%		3,002,402		23,523	3.13	%

Total interest-bearing deposits	$	101,144,183	$	426,415	1.69	%	$	103,105,367	$	479,178	1.86	%	$	93,143,509	$	684,756	2.94	%
Senior and subordinated notes		8,759,304		71,093	3.25	%		9,553,950		74,032	3.10	%		8,034,423		92,519	4.61	%
Other borrowings		14,156,503		143,367	4.05	%		13,480,527		143,860	4.27	%		16,428,096		189,149	4.61	%

Total interest-bearing liabilities	$	124,059,990	$	640,875	2.07	%	$	126,139,844	$	697,070	2.21	%	$	117,606,028	$	966,424	3.29	%

Net interest spread					5.16	%					5.23	%					4.75	%

Interest income to average earning assets					7.23	%					7.44	%					8.04	%
Interest expense to average earning assets					1.78	%					1.92	%					2.81	%

Net interest margin					5.44	%					5.52	%					5.23	%

(1)	Average balances, income and expenses, yields and rates are based on continuing operations.

(2)	Includes securities available for sale and securities held to maturity.

(3)	Amounts have been recast to reflect the impact of purchase accounting adjustments from the Chevy Chase Bank acquisition as if those adjustments had been recorded at the acquisition date as the purchase accounting has been finalized during Q4 2009.

CAPITAL ONE FINANCIAL CORPORATION

Statements of Average Balances, Income and Expense, Yields and Rates ⁽²⁾

(dollars in thousands)(unaudited)


Managed ⁽¹⁾	Quarter Ended 12/31/09						Quarter Ended 09/30/09⁽⁴⁾						Quarter Ended 12/31/08
	Average Balance		Income/ Expense		Yield/ Rate		Average Balance		Income/ Expense		Yield/ Rate		Average Balance		Income/ Expense		Yield/ Rate
Earning assets:
Loans held for investment	$	138,184,181	$	3,638,071	10.53	%	$	143,539,902	$	3,749,876	10.45	%	$	146,586,152	$	3,808,363	10.39	%
Investment Securities⁽³⁾		38,486,624		403,750	4.20	%		37,376,895		398,835	4.27	%		28,961,247		367,902	5.08	%
Other		7,228,402		16,832	0.93	%		4,957,393		18,038	1.46	%		7,112,807		29,558	1.66	%

Total earning assets	$	183,899,207	$	4,058,653	8.83	%	$	185,874,190	$	4,166,749	8.97	%	$	182,660,206	$	4,205,823	9.21	%

Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts	$	10,587,851	$	13,696	0.52	%	$	10,418,557	$	12,745	0.49	%	$	9,874,696	$	28,460	1.15	%
Money market deposit accounts		37,460,109		96,583	1.03	%		36,036,826		96,477	1.07	%		28,556,264		171,891	2.41	%
Savings accounts		15,416,242		35,326	0.92	%		12,266,254		22,772	0.74	%		7,275,816		11,774	0.65	%
Other consumer time deposits		27,273,129		200,499	2.94	%		32,075,905		248,272	3.10	%		33,712,504		337,651	4.01	%
Public fund CD’s of $100,000 or more		753,764		2,201	1.17	%		1,061,134		2,789	1.05	%		1,213,364		7,323	2.41	%
CD’s of $100,000 or more		8,633,998		76,692	3.55	%		9,764,172		92,681	3.80	%		9,508,463		104,134	4.38	%
Foreign time deposits		1,019,090		1,418	0.56	%		1,482,519		3,442	0.93	%		3,002,402		23,523	3.13	%

Total interest-bearing deposits	$	101,144,183	$	426,415	1.69	%	$	103,105,367	$	479,178	1.86	%	$	93,143,509	$	684,756	2.94	%
Senior and subordinated notes		8,759,304		71,093	3.25	%		9,553,950		74,032	3.10	%		8,034,423		92,519	4.61	%
Other borrowings		14,156,503		143,367	4.05	%		13,480,527		143,860	4.27	%		16,428,096		189,149	4.61	%
Securitization liability		40,588,015		247,664	2.44	%		41,251,788		257,642	2.50	%		45,610,272		471,517	4.14	%

Total interest-bearing liabilities	$	164,648,005	$	888,539	2.16	%	$	167,391,632	$	954,712	2.28	%	$	163,216,300	$	1,437,941	3.52	%

Net interest spread					6.67	%					6.69	%					5.69	%

Interest income to average earning assets					8.83	%					8.97	%					9.21	%
Interest expense to average earning assets					1.93	%					2.05	%					3.15	%

Net interest margin					6.90	%					6.91	%					6.06	%

(1)	The information in this table reflects the adjustment to add back the effect of securitized loans.

(2)	Average balances, income and expenses, yields and rates are based on continuing operations.

(3)	Includes securities available for sale and securities held to maturity.

(4)	Amounts have been recast to reflect the impact of purchase accounting adjustments from the Chevy Chase Bank acquisition as if those adjustments had been recorded at the acquisition date as the purchase accounting has been finalized during Q4 2009.

CAPITAL ONE FINANCIAL CORPORATION (COF)

LENDING INFORMATION AND STATISTICS

MANAGED BASIS ^{(1) (10)}


	2009 Q4			2009 Q3⁽¹¹⁾			2009 Q2⁽¹¹⁾			2009 Q1^{(7) (11)}			2008 Q4
Period end loans held for investment
(in thousands)
Domestic credit card	$	60,299,827		$	61,891,573		$	64,760,128		$	67,015,166		$	70,944,581
International credit card		8,223,835			8,477,236			8,638,441			8,069,961			8,720,642

Total Credit Card	$	68,523,662		$	70,368,809		$	73,398,569		$	75,085,127		$	79,665,223


Commercial and multi-family real estate	$	13,843,158		$	13,977,873		$	14,224,950		$	13,522,154		$	13,303,081
Middle market		10,061,819			10,022,822			10,219,728			9,850,735			10,081,823
Specialty lending		3,554,563			3,399,432			3,227,772			3,489,813			3,547,287

Total Commercial Lending	$	27,459,540		$	27,400,127		$	27,672,450		$	26,862,702		$	26,932,191
Small ticket commercial real estate		2,153,510	⁽¹²⁾		2,412,400			2,503,035			2,568,395			2,609,123

Total Commercial Banking	$	29,613,050		$	29,812,527		$	30,175,485		$	29,431,097		$	29,541,314


Automobile	$	18,186,064		$	19,295,218		$	19,902,401		$	20,795,291		$	21,494,436
Mortgages		14,893,187			15,638,974			16,579,176			9,648,271			10,098,430
Retail banking		5,135,242			5,215,155			5,366,597			5,499,070			5,603,696

Total Consumer Banking	$	38,214,493		$	40,149,347		$	41,848,174		$	35,942,632		$	37,196,562


Other loans⁽⁹⁾	$	451,697		$	659,008		$	694,750		$	9,270,663		$	533,655

Total	$	136,802,902		$	140,989,691		$	146,116,978		$	149,729,519		$	146,936,754


Average loans held for investment
(in thousands)
Domestic credit card	$	60,443,441		$	63,298,525		$	65,862,569		$	69,187,704		$	69,643,290
International credit card		8,299,895			8,609,235			8,327,859			8,382,679			9,440,972

Total Credit Card	$	68,743,336		$	71,907,760		$	74,190,428		$	77,570,383		$	79,084,262


Commercial and multi-family real estate	$	13,926,098		$	13,938,037		$	14,122,348		$	13,437,351		$	13,082,096
Middle market		10,052,406			9,911,314			10,428,398			10,003,213			10,093,083
Specialty lending		3,534,537			3,753,054			3,472,258			3,504,544			3,584,963

Total Commercial Lending	$	27,513,041		$	27,602,405		$	28,023,004		$	26,945,108		$	26,760,142
Small ticket commercial real estate		2,354,204			2,470,961			2,542,082			2,600,169			2,655,883

Total Commercial Banking	$	29,867,245		$	30,073,366		$	30,565,086		$	29,545,277		$	29,416,025


Automobile	$	18,767,555		$	19,635,979		$	20,303,296		$	21,123,000		$	21,967,154
Mortgages		15,345,635			15,926,662			16,715,061			9,897,086			10,201,024
Retail banking		5,000,933			5,513,230			5,703,274			5,523,011			5,366,737

Total Consumer Banking	$	39,114,123		$	41,075,871		$	42,721,631		$	36,543,097		$	37,534,915


Other loans⁽⁹⁾	$	459,477		$	482,905		$	535,681		$	3,523,335		$	550,950

Total	$	138,184,181		$	143,539,902		$	148,012,826		$	147,182,092		$	146,586,152


Net Charge-off Rates
Domestic credit card		9.59	%		9.64	%		9.23	%		8.39	%		7.08	%
International credit card		9.52	%		9.19	%		9.32	%		7.30	%		5.84	%

Total Credit Card		9.58	%		9.59	%		9.24	%		8.27	%		6.93	%


Commercial and multi-family real estate⁽⁵⁾		3.02	%		1.37	%		0.92	%		0.63	%		1.16	%
Middle market⁽⁵⁾		0.75	%		0.56	%		0.58	%		0.07	%		0.47	%
Specialty lending		1.85	%		1.39	%		0.99	%		0.86	%		0.47	%

Total Commercial Lending⁽⁵⁾		2.04	%		1.08	%		0.80	%		0.45	%		0.81	%
Small ticket commercial real estate		13.08	% ⁽¹²⁾		5.19	%		1.86	%		1.74	%		0.90	%

Total Commercial Banking⁽⁵⁾		2.91	%		1.42	%		0.89	%		0.56	%		0.82	%


Automobile		4.55	%		4.38	%		3.65	%		4.88	%		5.67	%
Mortgages⁽⁵⁾		0.71	%		0.69	%		0.43	%		0.45	%		0.46	%
Retail banking⁽⁵⁾		3.03	%		2.44	%		2.42	%		2.37	%		2.15	%

Total Consumer Banking⁽⁵⁾		2.85	%		2.69	%		2.23	%		3.30	%		3.75	%


Other loans		28.26	%		28.53	%		37.00	%		4.47	%		21.65	%

Total		6.33	%		6.00	%		5.64	%		5.41	%		4.98	%


30+ day performing delinquency rate
Domestic credit card		5.78	%		5.38	%		4.77	%		5.08	%		4.78	%
International credit card		6.55	%		6.63	%		6.69	%		6.25	%		5.51	%

Total Credit Card		5.88	%		5.53	%		4.99	%		5.20	%		4.86	%


Automobile ⁽⁸⁾		10.03	%		9.52	%		8.89	%		7.48	%		9.90	%
Mortgages⁽⁵⁾		1.26	%		1.17	%		0.97	%		1.91	%		1.57	%
Retail banking⁽⁵⁾		1.23	%		1.26	%		0.91	%		1.16	%		1.06	%

Total Consumer Banking⁽⁵⁾		5.43	%		5.19	%		4.73	%		5.01	%		6.31	%


Non Performing Asset Rates^(2) (6)
Commercial and multi-family real estate⁽⁵⁾		3.25	%		2.66	%		2.15	%		2.00	%		1.21	%
Middle market⁽⁵⁾		1.09	%		1.25	%		1.15	%		0.57	%		0.43	%
Specialty lending		2.25	%		2.12	%		2.11	%		1.16	%		1.05	%

Total Commercial Lending⁽⁵⁾		2.33	%		2.08	%		1.78	%		1.37	%		0.89	%
Small ticket commercial real estate		4.87	% ⁽¹²⁾		11.39	%		10.08	%		8.00	%		6.67	%

Total Commercial Banking⁽⁵⁾		2.52	%		2.84	%		2.47	%		1.95	%		1.41	%


Automobile ⁽⁸⁾		0.92	%		0.87	%		0.78	%		0.69	%		1.06	%
Mortgages⁽⁵⁾		2.24	%		1.83	%		1.51	%		1.89	%		1.28	%
Retail banking ⁽⁵⁾		2.11	%		1.98	%		1.88	%		1.68	%		1.51	%

Total Consumer Banking ⁽⁵⁾		1.60	%		1.39	%		1.21	%		1.16	%		1.19	%

CAPITAL ONE FINANCIAL CORPORATION (COF)

CREDIT CARD SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS

MANAGED BASIS ^{(1) (10)}


*(in thousands)*	2009 Q4			2009 Q3			2009 Q2			2009 Q1			2008 Q4
*Credit Card:*
Earnings
Net interest income	$	2,029,221		$	2,024,250		$	1,797,303		$	1,691,688		$	1,816,484
Non-interest income		897,006			966,862			897,440			985,481			1,138,220

Total revenue	$	2,926,227		$	2,991,112		$	2,694,743		$	2,677,169		$	2,954,704
Provision for loan and lease losses		1,204,693			1,643,721			1,520,292			1,682,786			2,164,529
Non-interest expenses		942,428			897,578			909,572			988,652			1,075,446

Income (loss) before taxes		779,106			449,813			264,879			5,731			(285,271	)
Income taxes (benefit)		269,182			158,074			92,251			2,402			(98,053	)

Net income (loss)	$	509,924		$	291,739		$	172,628		$	3,329		$	(187,218	)


Selected Metrics
Period end loans held for investment	$	68,523,662		$	70,368,809		$	73,398,569		$	75,085,127		$	79,665,223
Average loans held for investment	$	68,743,336		$	71,907,760		$	74,190,428		$	77,570,383		$	79,084,262
Loans held for investment yield		14.21	%		13.75	%		12.31	%		11.51	%		12.56	%
Revenue margin		17.03	%		16.64	%		14.53	%		13.81	%		14.94	%
Net charge-off rate		9.58	%		9.59	%		9.24	%		8.27	%		6.93	%
30+ day performing delinquency rate		5.88	%		5.53	%		4.99	%		5.20	%		4.86	%
Purchase Volume⁽³⁾	$	26,865,498		$	25,982,259		$	25,746,799		$	23,473,560		$	27,564,750

Domestic Card Sub-segment
Earnings
Net interest income	$	1,781,573		$	1,797,173		$	1,586,686		$	1,504,695		$	1,608,705
Non-interest income		793,934			855,571			794,440			883,891			1,018,689

Total revenue	$	2,575,507		$	2,652,744		$	2,381,126		$	2,388,586		$	2,627,394
Provision for loan and lease losses		1,033,341			1,436,959			1,336,736			1,521,997			2,000,928
Non-interest expenses		832,878			769,995			787,624			865,460			897,687

Income (loss) before taxes		709,288			445,790			256,766			1,129			(271,221	)
Income taxes (benefit)		248,251			156,027			89,868			396			(94,928	)

Net income (loss)	$	461,037		$	289,763		$	166,898		$	733		$	(176,293	)


Selected Metrics
Period end loans held for investment	$	60,299,827		$	61,891,573		$	64,760,128		$	67,015,166		$	70,944,581
Average loans held for investment	$	60,443,441		$	63,298,525		$	65,862,569		$	69,187,704		$	69,643,290
Loans held for investment yield		14.08	%		13.74	%		12.17	%		11.40	%		12.52	%
Revenue margin		17.04	%		16.76	%		14.46	%		13.81	%		15.09	%
Net charge-off rate		9.59	%		9.64	%		9.23	%		8.39	%		7.08	%
30+ day performing delinquency rate		5.78	%		5.38	%		4.77	%		5.08	%		4.78	%
Purchase Volume⁽³⁾	$	24,592,679		$	23,760,963		$	23,610,760		$	21,601,837		$	25,217,781

International Card Sub-segment
Earnings
Net interest income	$	247,648		$	227,077		$	210,617		$	186,993		$	207,779
Non-interest income		103,072			111,291			103,000			101,590			119,531

Total revenue	$	350,720		$	338,368		$	313,617		$	288,583		$	327,310
Provision for loan and lease losses		171,352			206,762			183,556			160,789			163,601
Non-interest expenses		109,550			127,583			121,948			123,192			177,759

Income (loss) before taxes		69,818			4,023			8,113			4,602			(14,050	)
Income taxes (benefit)		20,931			2,047			2,383			2,006			(3,125	)

Net income (loss)	$	48,887		$	1,976		$	5,730		$	2,596		$	(10,925	)


Selected Metrics
Period end loans held for investment	$	8,223,835		$	8,477,236		$	8,638,441		$	8,069,961		$	8,720,642
Average loans held for investment	$	8,299,895		$	8,609,235		$	8,327,859		$	8,382,679		$	9,440,972
Loans held for investment yield		15.19	%		13.81	%		13.42	%		12.41	%		12.84	%
Revenue margin		16.90	%		15.72	%		15.06	%		13.77	%		13.87	%
Net charge-off rate		9.52	%		9.19	%		9.32	%		7.30	%		5.84	%
30+ day performing delinquency rate		6.55	%		6.63	%		6.69	%		6.25	%		5.51	%
Purchase Volume⁽³⁾	$	2,272,819		$	2,221,296		$	2,136,039		$	1,871,723		$	2,346,969

CAPITAL ONE FINANCIAL CORPORATION (COF)

COMMERCIAL BANKING SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS

MANAGED BASIS ^{(1) (10)}


*(in thousands)*	2009 Q4			2009 Q3 ⁽¹¹⁾			2009 Q2 ⁽¹¹⁾			2009 Q1 ⁽¹¹⁾			2008 Q4
*Commercial Banking:*
Earnings
Net interest income	$	318,576		$	301,308		$	279,045		$	245,459		$	248,913
Non-interest income		37,992			43,299			49,043			41,214			42,803

Total revenue	$	356,568		$	344,607		$	328,088		$	286,673		$	291,716
Provision for loan and lease losses		368,493			375,095			122,497			117,304			133,154
Non-interest expenses		197,355			166,043			155,574			141,805			121,420

Income (loss) before taxes		(209,280	)		(196,531	)		50,017			27,564			37,142
Income taxes (benefit)		(73,248	)		(68,786	)		17,506			9,647			13,000

Net income (loss)	$	(136,032	)	$	(127,745	)	$	32,511		$	17,917		$	24,142


Selected Metrics
Period end loans held for investment	$	29,613,050		$	29,812,527		$	30,175,485		$	29,431,097		$	29,541,314
Average loans held for investment	$	29,867,245		$	30,073,366		$	30,565,086		$	29,545,277		$	29,416,025
Loans held for investment yield		5.11	%		5.06	%		5.01	%		4.92	%		5.72	%
Period end deposits	$	20,480,297		$	18,617,112		$	16,897,441		$	15,691,679		$	16,483,361
Average deposits	$	19,420,005		$	17,760,860		$	17,020,998		$	16,045,943		$	15,103,199
Deposit interest expense rate		0.80	%		0.75	%		0.77	%		0.92	%		1.42	%
Core deposit intangible amortization	$	13,847		$	9,664		$	9,959		$	9,092		$	9,353
Net charge-off rate ⁽⁵⁾		2.91	%		1.42	%		0.89	%		0.56	%		0.82	%
Non-performing loans as a percentage of loans held for investment⁽⁵⁾		2.37	%		2.65	%		2.33	%		1.85	%		1.31	%
Non-performing asset rate ⁽⁵⁾		2.52	%		2.84	%		2.47	%		1.95	%		1.41	%

CAPITAL ONE FINANCIAL CORPORATION (COF)

CONSUMER BANKING SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS

MANAGED BASIS ^{(1) (10)}


*(in thousands)*	2009 Q4			2009 Q3 ⁽¹¹⁾			2009 Q2 ⁽¹¹⁾			2009 Q1 ⁽¹¹⁾			2008 Q4
*Consumer Banking:*
Earnings
Net interest income	$	833,369		$	847,651		$	825,923		$	723,654		$	759,716
Non-interest income		153,099			212,704			226,128			163,257			159,831

Total revenue	$	986,468		$	1,060,355		$	1,052,051		$	886,911		$	919,547
Provision for loan and lease losses		249,309			156,052			202,055			268,233			518,572
Goodwill impairment⁽⁴⁾		—			—			—			—			810,876
Non-interest expenses		749,021			680,970			724,735			579,724			629,257

Income (loss) before taxes		(11,862	)		223,333			125,261			38,954			(1,039,158	)
Income taxes (benefit)		(4,152	)		78,166			43,842			13,634			(86,457	)

Net income (loss)	$	(7,710	)	$	145,167		$	81,419		$	25,320		$	(952,701	)


Selected Metrics
Period end loans held for investment	$	38,214,493		$	40,149,347		$	41,848,174		$	35,942,632		$	37,196,562
Average loans held for investment	$	39,114,123		$	41,075,871		$	42,721,631		$	36,543,097		$	37,534,915
Loans held for investment yield		8.83	%		8.89	%		8.69	%		9.02	%		9.22	%
Auto loan originations		1,018,125			1,512,707			1,341,583			1,463,402			1,476,136
Period end deposits	$	74,144,805		$	72,252,596		$	73,882,639		$	63,422,760		$	61,763,503
Average deposits	$	72,975,666		$	73,284,397		$	74,320,889		$	62,730,380		$	60,747,850
Deposit interest expense rate		1.41	%		1.58	%		1.76	%		2.04	%		2.45	%
Core deposit intangible amortization	$	39,974		$	45,856		$	47,259		$	35,593		$	36,615
Net charge-off rate⁽⁵⁾		2.85	%		2.69	%		2.23	%		3.30	%		3.75	%
Non-performing loans as a percentage of loans held for investment^{(5) (8)}		1.45	%		1.26	%		1.08	%		0.98	%		0.93	%
Non-performing asset rate ^{(5) (8)}		1.60	%		1.39	%		1.21	%		1.16	%		1.19	%
30+ day performing delinquency rate ^{(5) (8)}		5.43	%		5.19	%		4.73	%		5.01	%		6.31	%
Period end loans serviced for others	$	30,283,326		$	30,659,074		$	31,491,554		$	22,270,797		$	22,926,037

CAPITAL ONE FINANCIAL CORPORATION (COF)

OTHER AND TOTAL SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS

MANAGED BASIS ^{(1) (10)}


*(in thousands)*	2009 Q4			2009 Q3 ⁽¹¹⁾			2009 Q2 ⁽¹¹⁾			2009 Q1 ^{(7) (11)}			2008 Q4
*Other:*
Earnings
Net interest income	$	(11,051	)	$	38,828		$	55,083		$	89,189		$	(57,233	)
Non-interest income		110,829			149,802			16,905			(204,290	)		(157,674	)

Total revenue	$	99,778		$	188,630		$	71,988		$	(115,101	)	$	(214,907	)
Provision for loan and lease losses		24,309			25,508			59,129			63,634			63,043
Restructuring expenses		32,036			26,356			43,374			17,627			52,839
Non-interest expenses		27,152			31,111			88,457			17,481			68,105

Income (loss) before taxes		16,281			105,655			(118,972	)		(213,843	)		(398,894	)
Income taxes (benefit)		(21,423	)		(22,242	)		(61,194	)		(84,173	)		(118,346	)

Net income (loss)	$	37,704		$	127,897		$	(57,778	)	$	(129,670	)	$	(280,548	)


Selected Metrics
Period end loans held for investment⁽⁹⁾	$	451,697		$	659,008		$	694,750		$	9,270,663		$	533,655
Average loans held for investment⁽⁹⁾	$	459,477		$	482,905		$	535,681		$	3,523,335		$	550,950
Period end deposits	$	21,183,994		$	23,633,403		$	25,944,110		$	42,001,885		$	30,373,925
Average deposits	$	22,201,746		$	24,837,483		$	28,262,122		$	33,360,422		$	28,242,075

*Total:*
Earnings
Net interest income	$	3,170,115		$	3,212,037		$	2,957,354		$	2,749,990		$	2,767,880
Non-interest income		1,198,926			1,372,667			1,189,516			985,662			1,183,180

Total revenue	$	4,369,041		$	4,584,704		$	4,146,870		$	3,735,652		$	3,951,060
Provision for loan and lease losses		1,846,804			2,200,376			1,903,973			2,131,957			2,879,298
Restructuring expenses		32,036			26,356			43,374			17,627			52,839
Goodwill impairment ⁽⁴⁾		—			—			—			—			810,876
Non-interest expenses		1,915,956			1,775,702			1,878,338			1,727,662			1,894,228

Income (loss) before taxes		574,245			582,270			321,185			(141,594	)		(1,686,181	)
Income taxes (benefit)		170,359			145,212			92,405			(58,490	)		(289,856	)

Net income (loss)	$	403,886		$	437,058		$	228,780		$	(83,104	)	$	(1,396,325	)


Selected Metrics
Period end loans held for investment	$	136,802,902		$	140,989,691		$	146,116,978		$	149,729,519		$	146,936,754
Average loans held for investment	$	138,184,181		$	143,539,902		$	148,012,826		$	147,182,092		$	146,586,152
Period end deposits	$	115,809,096		$	114,503,111		$	116,724,190		$	121,116,324		$	108,620,789
Average deposits	$	114,597,417		$	115,882,740		$	119,604,009		$	112,136,745		$	104,093,124

CAPITAL ONE FINANCIAL CORPORATION (COF)

LOAN DISCLOSURES AND SEGMENT

FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS NOTES

(1)	The information in this report reflects the adjustment to add back the effect of securitization transactions qualifying as sales under generally accepted accounting principles. See accompanying schedule - “Reconciliation to GAAP Financial Measures”.

(2)	Non performing assets is comprised of non performing loans and other real estate owned (OREO). The non performing asset rate equals non performing assets divided by the sum of loans held for investment and OREO.

(3)	Includes all purchase transactions net of returns and excludes cash advance transactions.

(4)	In the fourth quarter of 2008 the Company recorded impairment of goodwill in its automobile business of $810.9 million.

(5)

Net charge-off rates and 30+ day performing delinquency rates include period end loans held for investment and average loans held for investment acquired as part of the Chevy Chase Bank, FSB (CCB) acquisition. The period end and average loans held for investment and metrics excluding such loans are as follows. Net charge-off dollars were unchanged.


	Q4 2009			Q3 2009⁽¹¹⁾			Q2 2009⁽¹¹⁾
CCB period end acquired loan portfolio (in millions)	$	7,250.5		$	7,885.0		$	8,643.5
CCB average acquired loan portfolio (in millions)	$	7,511.9		$	8,028.8		$	8,498.9
Net charge-off rate
Commercial and Multi-Family Real Estate		3.05	%		1.38	%		0.95	%
Middle Market		0.75	%		0.56	%		0.61	%

Total Commercial Lending		2.05	%		1.08	%		0.83	%

Total Commercial Banking		2.93	%		1.43	%		0.92	%

Mortgage		1.24	%		1.24	%		0.77	%
Retail Banking		3.20	%		2.57	%		2.56	%

Total Consumer Banking		3.45	%		3.28	%		2.72	%

30+ day performing delinquency rate
Mortgage		2.18	%		2.06	%		1.76	%
Retail Banking		1.30	%		1.33	%		0.96	%

Total Consumer Banking		6.56	%		6.27	%		5.61	%

Non performing asset rate
Commercial and Multi-Family Real Estate		3.34	%		2.79	%		2.25	%
Middle Market		1.13	%		1.30	%		1.21	%

Total Commercial Lending		2.39	%		2.15	%		1.85	%

Total Commercial Banking		2.62	%		2.95	%		2.54	%

Mortgage		3.88	%		3.24	%		2.73	%
Retail Banking		2.23	%		2.09	%		1.88	%

Total Consumer Banking		1.93	%		1.68	%		1.47	%

Non performing loans as a percentage of loans held for investment
Commercial Banking		2.43	%		2.73	%		2.40	%
Consumer Banking		1.75	%		1.53	%		1.32	%

(6)	The Company’s policy is not to reclassify credit card loans as nonperforming loans. Credit card loans continue to accrue finance charges and fees until charged off. The amount of finance charges and fees considered uncollectible are suppressed and are not recognized in income.

(7)	The impact and balances from the Chevy Chase Bank acquisition are included in the Other category for the first quarter of 2009.

(8)	Includes non accrual consumer auto loans 90+ days past due.

(9)	Other loans held for investment includes unamortized premiums and discounts on loans acquired in the North Fork and Hibernia acquisitions.

(10)

During the third quarter of 2009, the Company realigned its business segment reporting structure to better reflect the manner in which the performance of the Company’s operations are evaluated. The Company now reports the results of its business through three operating segments: Credit Card, Commercial Banking, and Consumer Banking. Segment and certain sub-segment results have been recasted for all periods presented. The three segments consist of the following:

•

Credit Card includes the Company’s domestic consumer and small business card lending, domestic national small business lending, national closed end installment lending and the international card lending businesses in Canada and the United Kingdom.

•

Commercial Banking includes the Company’s lending, deposit gathering and treasury management services to commercial real estate and middle market customers. The Commercial segment also includes the financial results of a national portfolio of small ticket commercial real estate loans that are in run-off mode.

•

Consumer Banking includes the Company’s branch based lending and deposit gathering activities for small business customers as well as its branch-based consumer deposit gathering and lending activities, national deposit gathering, consumer mortgage lending and servicing activities and national automobile lending.

The segment reorganization includes the allocation of Chevy Chase Bank to the appropriate segments. Chevy Chase Bank’s operations are included in the Commercial Banking and Consumer Banking segments beginning in the second quarter 2009. Chevy Chase Bank’s operations for the first quarter of 2009 remain in the Other category. Chevy Chase Bank’s operations are impacted by the Company’s analysis of the fair values and purchase price allocation of Chevy Chase Bank’s assets and liabilities which was finalized during the fourth quarter of 2009.

(11)


	Commercial Banking							Consumer Banking							Other
(in millions)	Q3 2009			Q2 2009			Q1 2009	Q3 2009			Q2 2009			Q1 2009	Q3 2009		Q2 2009		Q1 2009
Net income increase (decrease)	$	2.5		$	2.7		—	$	(39.4	)	$	(8.3	)	—	$	4.8	$	4.2	$	3.8
Loans held for investment increase (decrease)	$	(49.8	)	$	(141.9	)	—	$	(330.4	)	$	(335.5	)	—	$	311.5	$	343.3	$	(606.0	)

(12)	During Q4 2009, the Company reclassified $127.5 million of small ticket commercial real estate from loans held for investment to loans held for sale and recognized charge-offs of $79.5 million.

FOR IMMEDIATE RELEASE: January 21, 2010

Capital One Reports Fourth Quarter 2009 Net Income of $375.6 million, or

$0.83 per share (diluted)

Earnings for full year 2009 of $319.9 million, or $0.74 per share (diluted) including the

($563.9) million, or ($1.31) per share, impact to net income from the repayment of the

government’s TARP preferred share investment

Highlights

•

Managed net interest margin of 6.90 percent and revenue margin of 9.50 percent remained stable in the fourth quarter relative to the prior quarter.

•

Managed provision expense decreased $353.5 million from the prior quarter and was essentially flat in 2009 as compared to 2008 at $8.0 billion.

•

Non-interest expenses were up 8.1 percent in the quarter as marketing began to increase from unusually low levels earlier in 2009, and operating expenses increased as expected.

•

Tangible common equity to tangible managed assets, or “TCE ratio,” increased to 6.3 percent, up 10 basis points from the September 30, 2009 ratio of 6.2 percent, and Tier 1 capital to risk-weighted assets, or Tier 1 ratio, rose to 13.8 percent.

McLean, Va. (January 21, 2010) – Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2009 of $375.6 million, or $0.83 per common share (diluted), versus third quarter 2009 net income of $393.5 million, or $0.88 per common share (diluted). For the full year of 2009, net income was $319.9 million, or $0.74 per share (diluted), including the ($563.9) million, or ($1.31) per share, impact to net income from the repayment of the government’s TARP preferred share investment. This compares to a loss in 2008 of $78.7 million, or ($0.21) per share (diluted), which included a pre-tax goodwill impairment charge of $810.9 million in the automobile business.

“Capital One posted solid results as our domestic credit card and auto finance businesses delivered strong profits and resilience during the quarter despite challenging economic and credit headwinds,” said Richard D. Fairbank, Capital One’s Chairman and Chief Executive Officer. “Given our balance sheet strength and the stabilizing economy, we are well-positioned to take advantage of emerging opportunities to drive shareholder value in 2010.”

Total Company Results

Capital One – Fourth Quarter and Full Year 2009 Results

Page 2

•

Total managed revenue in the fourth quarter of 2009 declined $215.7 million, or 4.7 percent, to $4.4 billion. The main driver of lower revenue was fewer gains from securities sales compared to the prior quarter. Managed non-interest income decreased $173.8 million in the fourth quarter, or 12.7 percent, relative to the prior quarter, while net interest income decreased $41.9 million, or 1.3 percent. Managed revenue in 2009 was flat compared to 2008 at approximately $16.8 billion as a 2.9 percent decrease in average loans year over year was offset by slightly higher margins.

•

Managed provision expense decreased $353.5 million from the prior quarter. A $386.1 million allowance release in the quarter more than offset an increase in charge-offs, driving the decrease in provision expense. The fourth quarter allowance releases in both Credit Card and Auto more than offset the allowance builds in Commercial and Consumer Banking.

•

Allowance as a percentage of reported loans was 4.55 percent in the fourth quarter of 2009 as compared to 4.67 percent in the prior quarter.

•

Average total deposits decreased by $1.3 billion, or 1.1 percent, over the prior quarter, to $114.6 billion. Period-end total deposits increased by $1.3 billion to $115.8 billion as a result of the increase in deposits late in the quarter.

•

The cost of managed interest-bearing liabilities decreased to 2.16 percent from 2.28 percent in the prior quarter as the company replaced higher-cost time deposits with money market and savings accounts, and increased the amount of non-interest bearing deposits. The overall cost of funds declined 12 basis points to 2.00 percent in the fourth quarter.

•

Average managed assets decreased $4.2 billion, or 2.0 percent, relative to the prior quarter, to $210.4 billion, driven primarily by reductions in loans held for investment. Period-end total managed assets increased by 1.2 percent over the prior quarter to $212.1 billion.

•

Non-interest expenses increased $145.9 million in the fourth quarter of 2009 from the prior quarter, driven primarily by increased marketing. Marketing increased $84.3 million, or 81.3 percent from the prior quarter. The managed efficiency ratio of 43.85 percent in the fourth quarter of 2009 was up 5.1 percentage points from 38.73 percent in the prior quarter.

•

Non-interest expenses for the full year 2009 were essentially flat compared to 2008 at $7.4 billion, excluding goodwill impairment. In response to lower loan demand and economic uncertainty, the company decreased marketing spend in 2009. This decrease was offset by the addition of Chevy Chase Bank operating expenses.

Capital One – Fourth Quarter and Full Year 2009 Results

Page 3

•

The company’s TCE ratio increased to 6.3 percent on December 31, 2009, from 6.2 percent in the prior quarter. The Tier 1 risk-based capital ratio of approximately 13.8 percent increased 200 basis points relative to the prior quarter, and continues to be well above the regulatory well-capitalized minimum.

“We navigated a very challenging 2009, produced solid results and strengthened our position with additional capital and historically high allowance coverage ratios,” said Gary Perlin. “The strength of our balance sheet will continue to enable us to make the investments necessary to generate profitable growth into the future.”

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.

Credit Card Highlights

For details on the sub-segments’ results, please refer to the Financial Supplement.

The Credit Card segment reported net income in the fourth quarter of $509.9 million, an increase of $218.2 million, or 74.8 percent, from the prior quarter’s net income of $291.7 million. Lower provision expense in the quarter was the key driver of the improved profitability.

•

Revenues of $2.9 billion were down $64.9 million, or 2.2 percent, relative to the prior quarter.

–

Domestic Card – revenues down $77.2 million, or 2.9 percent.

–

International Card – revenues up $12.4 million, or 3.7 percent.

•

Revenue margin in the Domestic Card sub-segment improved to approximately 17.0 percent in the fourth quarter, up from 16.8 percent in the prior quarter. In 2010, we expect quarterly revenue margin to moderate, but remain close to its fourth quarter 2009 level.

•

Period-end loans in the Credit Card segment were $68.5 billion, a decline of $1.8 billion, or 2.6 percent, from the prior quarter.

–

Domestic Card – loans declined $1.6 billion, or 2.6 percent, to $60.3 billion at the end of the fourth quarter. Approximately $1.0 billion of the decline came from the continued run-off of the company’s nationally-originated Installment Loans.

–

International Card – loans declined $0.3 billion, or 3.0 percent, to $8.2 billion.

Capital One – Fourth Quarter and Full Year 2009 Results

Page 4

•

The managed net charge-off rate for the Credit Card segment remained essentially flat at 9.58 percent in the fourth quarter of 2009.

–

Domestic Card – net charge-offs decreased 5 basis points to 9.59 percent in the fourth quarter from 9.64 percent in the prior quarter.

–

International Card – net charge-offs increased 33 basis points to 9.52 percent from 9.19 percent in the prior quarter.

•

The 30+ day performing delinquency rate for the Credit Card segment increased 35 basis points to 5.88 percent in the fourth quarter of 2009 from 5.53 percent in the prior quarter.

–

Domestic Card – delinquencies increased 40 basis points to 5.78 percent from 5.38 percent in the prior quarter.

–

International Card – delinquencies decreased 8 basis points to 6.55 percent from 6.63 percent in the prior quarter.

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. The total segment reported a net loss of $136.0 million in the fourth quarter, relative to a net loss of $127.7 million in the prior quarter. Commercial Banking revenue increased $12.0 million, or 3.5 percent, to $356.6 million in the fourth quarter of 2009, while non-interest expense increased $31.3 million, or 18.9 percent, to $197.4 million. Increases in non-interest expense were driven by rising costs associated with managing loss mitigation and continuing infrastructure investments.

•

Average loans of $29.9 billion declined $206.1 million, or 0.7 percent, during the fourth quarter from $30.1 billion during the prior quarter.

–

Commercial lending – declined $89.4 million, or 0.3 percent, to $27.5 billion.

–

Small ticket commercial real estate – declined $116.8 million, or 4.7 percent, to $2.4 billion.

•

Average deposits increased $1.7 billion, or 9.3 percent, to $19.4 billion during the fourth quarter from $17.8 billion during the prior quarter, while the deposit interest expense rose to 80 basis points.

•

Provision expense decreased $6.6 million relative to the prior quarter.

•

The managed net charge-off rate for Commercial Banking increased 149 basis points in the fourth quarter of 2009 to 2.91 percent from 1.42 percent in the prior quarter.

–

Commercial lending – 2.04 percent, an increase of 96 basis points over the prior quarter.

Capital One – Fourth Quarter and Full Year 2009 Results

Page 5

–

Small ticket commercial real estate – 13.08 percent, an increase of 789 basis points over the prior quarter. The increase in the charge-of rate is primarily related to the write-down of a portfolio of small ticket CRE non-performing loans as the company moved them to held-for-sale. This move also resulted in a drop in the non-performing asset rate for small ticket CRE from 11.39 percent in the third quarter to 4.87 percent in the fourth quarter.

–

Non-performing loans as a percentage of loans held for investment for Commercial Banking was 2.37 percent, a decrease of 28 basis points from 2.65 percent at the end of the prior quarter.

Consumer Banking highlights

For more lending information and statistics on the segment’s results, please refer to the Financial Supplement.

Consumer Banking reported a net loss for the fourth quarter of $7.7 million compared to net income of $145.2 million in the third quarter. Revenue declined $73.9 million in the quarter. Provision expense increased $93.3 million, driven by seasonal increases in Auto Finance and continued deterioration in mortgage and home equity credit trends. Non-interest expense increased $68.1 million, or 10 percent relative to the prior quarter, as a result of several factors including planned expenses related to the integration of Chevy Chase Bank and investments to build a scalable banking infrastructure to ensure that the company is well positioned to take advantage of opportunities to grow our banking business.

•

Average loans declined $2.0 billion, or 4.8 percent, to $39.1 billion compared to average loans of $41.1 billion in the prior quarter. Auto finance loans declined as a result of the company’s earlier efforts to retrench the auto finance business. Mortgage loans declined as the company continued to experience expected run off in the portfolio.

–

Auto – declined $868.4 million, or 4.4 percent, to $18.8 billion.

–

Mortgage – declined $581.0 million, or 3.6 percent, to $15.3 billion.

–

Retail banking – declined $512.3 million, or 9.3 percent, to $5.0 billion.

•

Average deposits in the Consumer Banking segment declined $0.3 billion, or 0.4 percent, to $73.0 billion during the fourth quarter from $73.3 billion in the prior quarter. Improved deposit mix and favorable interest rates drove a 17 basis point improvement in the deposit interest expense rate in the fourth quarter.

•

The managed net charge-off rate for Consumer Banking increased 16 basis points in the fourth quarter of 2009 to 2.85 percent from 2.69 percent in the prior quarter. The increase in Auto charge-offs resulted primarily from expected seasonal patterns and the impact of the decline in the denominator. Mortgage charge-offs were essentially flat.

–

Auto – 4.55 percent, an increase of 17 basis points

Capital One – Fourth Quarter and Full Year 2009 Results

Page 6

–

Mortgage – 0.71 percent, an increase of 2 basis points

–

Retail banking – 3.03 percent, an increase of 59 basis points

The company generates earnings from its managed loan portfolio, which includes both on-balance sheet loans and securitized (off-balance sheet) loans. For this reason, the company believes managed financial measures to be useful to stakeholders. In compliance with Regulation G of the Securities and Exchange Commission, the company is providing a numerical reconciliation of managed financial measures to comparable measures calculated on a reported basis using generally accepted accounting principles (GAAP). Please see the schedule titled “Reconciliation to GAAP Financial Measures” attached to this release for more information.

Forward looking statements

The company cautions that its current expectations in this release dated January 21, 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 decreases 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, 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 reports on Form 10-K for the fiscal year ended December 31, 2008 and reports on Form 10-Q for the quarters ended March 31, 2009, June 30, 2009, and September 30, 2009.

Capital One – Fourth Quarter and Full Year 2009 Results

Page 7

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 $115.8 billion in deposits and $212.0 billion in total managed assets outstanding as of December 31, 2009. 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.

###

NOTE: Fourth quarter 2009 financial results, SEC Filings, and earnings conference call slides 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 today’s 4:30 pm (ET) earnings conference call is accessible through the same link.

Exhibit 99.2

Fourth Quarter 2009 Results

January 21, 2010

Exhibit 99.2

January 21, 2010

Forward looking statements

website

www.capitalone.com

under

“Investors”.

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.

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, 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, 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 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; 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 shifting product mix, amount of

actual marketing expenses made by Capital One and attrition of loan balances; 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, 2008 and the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009, June

30, 2009 and September 30, 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, available on Capital One’s

January 21, 2010

Q409 earnings were $376MM or $0.83 per share; 2009 earnings were

$884MM or

$0.75 per share

Revenue excl. Retained Interest & Suppression

Retained Interests Valuation Changes

Revenue Suppression

Revenue

Marketing Expense

Operating Expense

Restructuring Expense

Non-Interest 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

2008

2009

Q409

Pretax Income

$MM

4,804

(490)

4,369

188

1,728

1,948

2,421

2,188

(386)

1,847

376

404

(28)

$0.90

$0.83

574

170

134

18,984

(225)

(1,920)

16,839

1,118

6,147

7,399

9,440

6,424

1,561

8,048

(46)

(131)

$0.14

($0.21)

582

497

120

19,111

(152)

(2,123)

16,836

588

6,709

7,417

9,419

8,421

(397)

8,083

884

987

(103)

$0.99

$0.75

1,336

349

Q309

5,065

(517)

4,585

104

1,672

1,802

2,783

2,155

2,201

393

437

(44)

$0.97

$0.88

582

145

Goodwill Impairment

includes

($1.31)

impact

dividend

and

repayment

expense

the

government’s

preferred

investment

includes ($0.08) impact of dividend expense of the government’s preferred share investment

Operating Earnings (after tax)

EPS

811

January 21, 2010

Allowance coverage ratios continue to reflect historically high loss rates and

a cautious outlook

Allowance as % of

Reported 30+ Delinquencies

9.7%

10.0%

8.2%

1.0%

2.3%

2.7%

3.4%

3.5%

10%

12%

Q408

Q109

Q209

Q309

Q409

181%

198%

182%

36%

41%

52%

147%

145%

131%

40%

80%

120%

160%

200%

240%

Q408

Q109

Q209

Q309

Q409

Allowance as % of

Reported Loans

Total Company: 4.48%

4.43% 4.44%

4.67% 4.55%

Consumer

Banking

Credit Card

Commercial Banking

Dom. Card

Int’l Card

Auto Finance

Allowance

Balance

Q3 '09

Q4 '09

Build/(Release)

Credit Card

Domestic

2,343

1,927

(416)

International

222

199

(23)

Total Credit Card

2,565

2,126

(439)

Consumer Banking

Auto

761

665

(96)

Other Consumer Banking

357

411

Total Consumer Banking

1,118

1,076

(42)

Commercial Banking

671

786

115

Other

160

140

(20)

Total Allowance

4,513

4,127

(386)

Total Reported Loans

96,714

90,619

Commercial Lending Allowance as % of

Non-Performing Loans

85%

78%

112%

108%

114%

112%

50%

100%

150%

200%

Q408

Q109

Q209

Q309

Q409

Commercial Allowance

excluding Small

Ticket CRE

$MM

January 21, 2010

End of period assets were up despite declining loan balances

End of Period Assets

$35.5

$27.6

$28.3

$36.3

$37.7

$38.8

$7.8

$8.7

$61.9

$64.8

$67.0

$60.3

$8.6

$8.5

$8.1

$8.2

$30.2

$29.4

$29.8

$29.6

$41.8

$40.1

$35.9

$38.2

$26.3

$4.1

$4.8

100

120

140

160

180

200

220

Q109

Q209

Q309

Q409

Domestic

Card

Commercial

Int’l Card

Consumer

Securities

Other

End of Period Liabilities

Cash & Cash

Equivalents

$108.8

$104.1

$101.8

$102.4

$12.7

$13.4

$49.1

$47.5

$45.9

$46.7

$16.3

$18.1

$16.7

$17.1

$6.6

$6.0

$12.3

$12.6

$6.7

$6.4

100

120

140

160

180

200

220

Q109

Q209

Q309

Q409

Securitization

Interest

Bearing

Deposits

Other

Borrowings

Non-Interest

Bearing

Deposits

Other

Liabilities

January 21, 2010

8.01%

8.68%

9.87%

9.50%

6.19%

6.91%

5.89%

6.90%

10%

12%

14%

16%

Q109

Q209

Q309

Q409

Margins as % of Managed Assets

Efficiency Ratio

Margins remain relatively stable

Revenue Margin

Net Interest Margin

43.9%

38.7%

45.3%

46.3%

10%

20%

30%

40%

50%

60%

Q109

Q209

Q309

Q409

Weighted Avg

Asset Yield

8.34% 8.36% 8.97%

8.83%

Cost of Interest

Bearing Liabilities

2.75% 2.41% 2.28%

2.16%

Total Cost

of Funds

2.57% 2.25% 2.12%

2.00%

$MM

Revenue

3,736 4,147 4,585

4,369

Operating

Expense

1,565

1,744

1,672

1,728

Marketing

Expense

163 134

104 188

January 21, 2010

Tangible Common Equity + Allowance to

Tangible Managed Assets

Tier 1 Capital to

Risk Weighted Assets

10%

12%

14%

Q109

Q209

Q309

Q409

Our capacity to absorb risk remains high

Other

Tier 1

Common

11.9%

10%

12%

Q109

Q209

Q309

Q409

5.6%

6.2%

Allowance

TCE

7.8%

8.5%

6.3%

8.4%

13.8%

4.6%

6.9%

9.7%

11.4%

8.5%

TARP

January 21, 2010

We are implementing FAS 166/167 at book value in Q1 2010

Assets

Liabilities

Stockholders’

Equity

Loans held for investment

90.6

47.8

138.4

Less: Allowance for loan

& lease losses

(4.1)

(4.3)

(8.4)

Net loans (HFI)

86.5

43.5

130.0

Accounts receivable from

securitizations

7.6

(7.6)

Other

66.6

2.1

68.7

Total assets

169.4

42.0

211.4

Other

138.8

0.6

139.4

Total Liabilities

142.8

45.1

187.9

Total stockholders’

equity

26.6

(3.1)

23.5

Total liabilities &

stockholders’

equity

169.4

42.0

211.4

Securitization liability

4.0

44.5

48.5

Cash and cash equivalents

8.7

4.0

12.7

($B)

Reported

12/31/09

Estimated

Adjustments for

FAS 166/167

Estimated

Opening 1/1/10

January 21, 2010

Consolidation will impact both the balance sheet and the income statement

10%

12%

Q209

Q309

Q409

Q409 Pro-Forma

Capital Ratios as of 12/31/09

Tangible Common Equity + Allowance to

Tangible Managed Assets

Income Statement Impact from Securitized Accounts Previously Treated as Off Balance Sheet

5.6%

6.2%

7.8%

8.5%

6.3%

8.4%

4.8%

9.1%

TCE:

6.3%

4.8%

Tier 1:

13.8%

9.8%

Tier 1 Common:

10.7%

6.7%

Total RBC:

17.8%

17.5%

Actual

Pro-forma upon

Consolidation

Allowance:

I/O Strip &

Other Retained

Interests:

Pre-

FAS 166/167

Post-

FAS 166/167

•

N/A

•

Upfront gains recognized upon

securitization

•

Changes in expected losses as one input

to valuation estimates

•

Changes in valuation flow through Non

Interest Income

•

Initial build through retained earnings

•

Subsequent ALLL changes through income statement

•

No upfront gains; allowance established at loan

origination

•

Changes in expected losses all flow through provision

and allowance; typically much larger impact than

previous changes in valuation estimates

Allowance

TCE

January 21, 2010

Net Income (Loss) from Continuing Operations ($MM)

Capital One delivered a profit from continuing operations of $403.9 MM in the

fourth quarter of 2009

Credit Card

Domestic

International

SUBTOTAL

Commercial Banking

Consumer Banking

Total Company

Q408

(176.3)

(10.9)

(187.2)

24.1

(952.7)

(1,396.3)

Other

(280.5)

Q409

461.0

48.9

509.9

(136.0)

(7.7)

403.9

37.7

Q309

289.8

1.9

291.7

(127.7)

145.2

437.1

127.9

includes $811M goodwill impairment

January 21, 2010

Domestic Card charge-off rate improved modestly in the fourth quarter,

while delinquency rate increased

8.39%

9.23%

9.64%

7.08%

9.59%

5.08%

4.78%

4.77%

5.38%

5.78%

10%

Q408

Q109

Q209

Q309

Q409

7.30%

9.32%

9.19%

5.84%

9.52%

6.25%

5.51%

6.69%

6.63%

6.55%

10%

Q408

Q109

Q209

Q309

Q409

Domestic Card Credit

International Card Credit

Net Charge-off Rate

30+ Delinquency Rate

Net Charge-off Rate

30+ Delinquency Rate

January 21, 2010

The Domestic Credit Card business delivered strong and resilient

profitability,

despite elevated charge-offs

70.9

67.0

64.8

61.9

60.3

68.5

70.4

73.4

75.1

79.7

100

Q408

Q109

Q209

Q309

Q409

Int’l

Domestic

Loans Held for Investment

$MM

January 21, 2010

Domestic Card Revenue Margins have been stable in the last 6 years

15.4%

15.5%

15.6%

14.5%

15.7%

15.8%

10%

12%

14%

16%

18%

2004

2005

2006

2007

2008

2009

Domestic Card Annual Revenue Margin and its Components

Revenue Margin

January 21, 2010

Continuing economic deterioration drove another quarter of worsening

credit trends in Commercial Banking

2.91%

0.82%

1.42%

0.89%

0.56%

2.52%

2.84%

2.47%

1.41%

1.95%

Q408

Q109

Q209

Q309

Q409

Total Commercial Banking ($29.9 B)

Non Performing

Asset Rate

Charge-off Rate

Commercial & Multi Family ($13.9 B)

3.02%

0.63%

1.37%

1.16%

0.92%

3.25%

1.21%

2.00%

2.66%

2.15%

Middle Market ($10.1 B)

Q408

Q109

Q209

Q309

Q409

Non Performing

Asset Rate

Charge-off Rate

0.45%

0.80%

1.08%

0.81%

2.04%

1.37%

0.89%

1.78%

2.08%

2.33%

Q408

Q109

Q209

Q309

Q409

Total Commercial Lending

Excluding Small Ticket CRE ($27.5 B)

Non Performing

Asset Rate

Charge-off Rate

0.75%

0.07%

0.56%

0.47%

0.58%

1.09%

0.43%

0.57%

1.25%

1.15%

Q408

Q109

Q209

Q309

Q409

Non Performing

Asset Rate

Charge-off Rate

January 21, 2010

0.43%

0.69%

0.45%

0.46%

0.71%

1.57%

1.91%

0.97%

1.17%

1.26%

Q408

Q109

Q209

Q309

Q409

The Mortgage Portfolio and the Auto Finance business were the key drivers

of Consumer Banking credit results

Net Charge-off Rate

30+ Delinquency Rate

Mortgage Credit

Auto Credit

7.48%

10.03%

3.65%

4.38%

4.88%

5.67%

4.55%

9.90%

9.52%

8.89%

10%

12%

Q408

Q109

Q209

Q309

Q409

Net Charge-off Rate

30+ Delinquency Rate

January 21, 2010

We expect near-term trends to reflect the mechanics of delivering

value over the cycle

•

Loans continue to decline in 2010 driven largely by continuing run off

from businesses we’ve stopped originating or repositioned

•

NIM and Revenue margin for full year 2010 similar to full year 2009

•

Domestic card charge-off dollars expected to peak in first quarter 2010

•

Potential for significant allowance releases, consistent with decline in

loans and moderating charge-off outlook

•

Allowance release coincides with investments in future growth and

returns

–

Marketing expense begins to ramp toward more normal levels in 2010

–

2010 Operating expense similar to 2009, as ongoing efficiency improvements

are offset by investments in infrastructure

•

Growth and returns lag investments, but are attractive and sustainable

over the long-term

•

Strong and resilient balance sheet to support growth