Delaware
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54-1719854
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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1680 Capital One Drive, McLean, Virginia
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22102
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(Address of Principal Executive Offices)
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(Zip Code)
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02.
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Results of Operations and Financial Condition
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Item 7.01.
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Regulation FD Disclosure.
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Item 8.01.
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Other Events.
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(a)
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See attached press release, at Exhibit 99.1.
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(b)
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Cautionary Factors.
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•
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general economic and business conditions in the U.S., the UK, or the Company’s local markets, including conditions affecting employment levels, interest rates, consumer income and confidence, spending and savings that may affect consumer bankruptcies, defaults, charge-offs, and deposit activity;
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•
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an increase or decrease in credit losses (including increases due to a worsening of general economic conditions in the credit environment);
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•
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financial, legal, regulatory (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations to be promulgated thereunder), tax or accounting changes or actions, including with respect to any litigation matter involving the Company;
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•
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increases or decreases in interest rates;
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•
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the success of the Company’s marketing efforts in attracting and retaining customers;
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•
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the ability of the Company to securitize its credit cards and consumer loans and to otherwise access the capital markets at attractive rates and terms to capitalize and fund its operations and future growth;
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•
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with respect to financial and other products, increases or decreases in the Company’s aggregate loan balances and/or number of customers and the growth rate and composition thereof, including increases or decreases resulting from factors such as shifting product mix, amount of actual marketing expenses made by the Company and attrition of loan balances;
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•
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the level of future repurchase or indemnification requests the Company may receive, the actual future performance of loans relating to such requests, the success rates of claimants against the Company, any developments in litigation, and the actual recoveries the Company may make on any collateral relating to claims against it;
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•
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the amount and rate of deposit growth;
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•
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the Company’s ability to control costs;
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•
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changes in the reputation of or expectations regarding the financial services industry and/or the Company with respect to practices, products or financial condition;
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•
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any significant disruption in the Company’s operations or technology platform;
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•
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the Company’s ability to maintain a compliance infrastructure suitable for its size and complexity;
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•
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the amount of, and rate of growth in, the Company’s expenses as the Company’s business develops or changes or as it expands into new market areas;
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•
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the Company’s ability to execute on its strategic and operational plans;
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•
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any significant disruption of, or loss of public confidence in, the United States Mail service affecting our response rates and consumer payments;
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•
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the ability of the Company to recruit and retain experienced personnel to assist in the management and operations of new products and services;
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•
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changes in the labor and employment market;
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•
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the risk that the cost savings and any other synergies from the Company’s acquisitions may not be fully realized or may take longer to realize than expected;
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•
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disruption from the acquisitions negatively impacting the Company’s ability to maintain relationships with customers, employees or suppliers;
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•
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competition from providers of products and services that compete with the Company’s businesses; and
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•
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other risk factors listed from time to time in the Company’s SEC reports including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2009.
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Item 9.01.
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Financial Statements, Pro Forma Financial Information and Exhibits.
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(c)
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Exhibits.
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Exhibit No.
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Description of Exhibit
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Press release, dated July 22, 2010.
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||
Second Quarter Earnings Presentation.
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||
Reconciliation to GAAP Financial Measures.
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CAPITAL ONE FINANCIAL CORPORATION
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|||
Dated: July 22, 2010
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By:
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/s/ Gary L. Perlin
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Gary L. Perlin
Chief Financial Officer
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2010
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2010
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2009
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2009
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2009
|
||||||||||||||||
(in millions, except per share data and as noted) (unaudited)
|
Q2 | Q1 | Q4 | Q3 | Q2 | |||||||||||||||
Earnings
|
||||||||||||||||||||
Net Interest Income
|
$ | 3,097 | $ | 3,228 | $ | 1,954 | $ | 2,005 | $ | 1,945 | ||||||||||
Non-Interest Income (1)
|
$ | 807 | (7) | $ | 1,061 | (7)(8) | $ | 1,412 | $ | 1,553 | $ | 1,232 | (9) | |||||||
Total Revenue (2)
|
$ | 3,904 | $ | 4,289 | $ | 3,366 | $ | 3,558 | $ | 3,177 | ||||||||||
Provision for Loan Losses
|
$ | 723 | $ | 1,478 | $ | 844 | $ | 1,173 | $ | 934 | ||||||||||
Marketing Expenses
|
$ | 219 | $ | 180 | $ | 188 | $ | 104 | $ | 134 | ||||||||||
Restructuring Expenses (3)
|
$ | - | $ | - | $ | 32 | $ | 26 | $ | 44 | ||||||||||
Operating Expenses (4)
|
$ | 1,781 | $ | 1,667 | $ | 1,728 | $ | 1,672 | $ | 1,744 | (10) | |||||||||
Income Before Taxes
|
$ | 1,181 | $ | 964 | $ | 574 | $ | 583 | $ | 321 | ||||||||||
Effective Tax Rate
|
31.2 | % | 25.3 | % | 29.6 | % | 25.0 | % | 28.7 | % | ||||||||||
Income From Continuing Operations, Net of Tax
|
$ | 812 | $ | 720 | $ | 404 | $ | 437 | $ | 229 | ||||||||||
Loss From Discontinued Operations, Net of Tax
|
$ | (204 | )(7) | $ | (84 | )(7) | $ | (28 | ) | $ | (43 | ) | $ | (6 | ) | |||||
Net Income
|
$ | 608 | $ | 636 | $ | 376 | $ | 394 | $ | 223 | ||||||||||
Net Income (Loss) Available to Common Shareholders (A)
|
$ | 608 | $ | 636 | $ | 376 | $ | 394 | $ | (277 | ) (11) | |||||||||
Common Share Statistics
|
||||||||||||||||||||
Basic EPS: (B)
|
||||||||||||||||||||
Income (Loss) From Continuing Operations
|
$ | 1.79 | $ | 1.59 | $ | 0.90 | $ | 0.97 | $ | (0.64 | ) | |||||||||
Loss From Discontinued Operations
|
$ | (0.45 | ) | $ | (0.18 | ) | $ | (0.07 | ) | $ | (0.09 | ) | $ | (0.01 | ) | |||||
Net Income (Loss)
|
$ | 1.34 | $ | 1.41 | $ | 0.83 | $ | 0.88 | $ | (0.66 | ) | |||||||||
Diluted EPS: (B)
|
||||||||||||||||||||
Income (Loss) From Continuing Operations
|
$ | 1.78 | $ | 1.58 | $ | 0.89 | $ | 0.96 | $ | (0.64 | ) | |||||||||
Loss From Discontinued Operations
|
$ | (0.45 | ) | $ | (0.18 | ) | $ | (0.06 | ) | $ | (0.09 | ) | $ | (0.01 | ) | |||||
Net Income (Loss)
|
$ | 1.33 | $ | 1.40 | $ | 0.83 | $ | 0.87 | $ | (0.66 | ) | |||||||||
Dividends Per Common Share
|
$ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | ||||||||||
Tangible Book Value Per Common Share (period end) (C)
|
$ | 24.89 | $ | 22.86 | $ | 27.72 | $ | 26.86 | $ | 24.95 | ||||||||||
Stock Price Per Common Share (period end)
|
$ | 40.30 | $ | 41.41 | $ | 38.34 | $ | 35.73 | $ | 21.88 | ||||||||||
Total Market Capitalization (period end)
|
$ | 18,228 | $ | 18,713 | $ | 17,268 | $ | 16,064 | $ | 9,826 | ||||||||||
Common Shares Outstanding (period end)
|
452.3 | 451.9 | 450.4 | 449.6 | 449.1 | |||||||||||||||
Shares Used to Compute Basic EPS
|
452.1 | 451.0 | 450.0 | 449.4 | 421.9 | |||||||||||||||
Shares Used to Compute Diluted EPS
|
456.4 | 455.4 | 454.9 | 453.7 | 421.9 | |||||||||||||||
Reported Balance Sheet Statistics (period average)
|
||||||||||||||||||||
Average Loans Held for Investment
|
$ | 128,203 | $ | 134,206 | $ | 94,732 | $ | 99,354 | $ | 104,682 | ||||||||||
Average Earning Assets
|
$ | 174,650 | $ | 181,881 | $ | 143,663 | $ | 145,280 | $ | 150,804 | ||||||||||
Total Average Assets
|
$ | 199,329 | $ | 207,207 | $ | 169,856 | $ | 173,428 | $ | 177,628 | ||||||||||
Average Interest Bearing Deposits
|
$ | 104,163 | $ | 104,018 | $ | 101,144 | $ | 103,105 | $ | 107,033 | ||||||||||
Total Average Deposits
|
$ | 118,484 | $ | 117,530 | $ | 114,598 | $ | 115,882 | $ | 119,604 | ||||||||||
Average Equity
|
$ | 24,526 | $ | 23,681 | $ | 26,518 | $ | 26,002 | $ | 27,668 | (12), (13) | |||||||||
Return on Average Assets (ROA)
|
1.63 | % | 1.39 | % | 0.95 | % | 1.01 | % | 0.52 | % | ||||||||||
Return on Average Equity (ROE)
|
13.24 | % | 12.16 | % | 6.09 | % | 6.72 | % | 3.31 | % | ||||||||||
Return on Average Tangible Common Equity (D)
|
30.97 | % | 29.98 | % | 13.02 | % | 14.75 | % | 6.75 | % | ||||||||||
Reported Balance Sheet Statistics (period end)
|
||||||||||||||||||||
Loans Held for Investment
|
$ | 127,140 | $ | 130,115 | $ | 90,619 | $ | 96,714 | $ | 100,940 | ||||||||||
Total Assets (E)
|
$ | 197,479 | $ | 200,691 | $ | 169,622 | $ | 168,432 | $ | 171,948 | ||||||||||
Interest Bearing Deposits
|
$ | 103,172 | $ | 104,013 | $ | 102,370 | $ | 101,769 | $ | 104,121 | ||||||||||
Total Deposits
|
$ | 117,331 | $ | 117,787 | $ | 115,809 | $ | 114,503 | $ | 116,725 | ||||||||||
Tangible Assets(E) (F)
|
$ | 183,468 | $ | 186,647 | $ | 155,516 | $ | 154,315 | $ | 157,782 | ||||||||||
Tangible Common Equity (TCE) (E) (G)
|
$ | 11,259 | $ | 10,330 | $ | 12,483 | $ | 12,075 | $ | 11,204 | ||||||||||
Tangible Common Equity to Tangible Assets Ratio (E) (H)
|
6.14 | % | 5.53 | % | 8.03 | % | 7.82 | % | 7.10 | % (12) | ||||||||||
Performance Statistics (Reported) Quarter over Quarter
|
||||||||||||||||||||
Net Interest Income Growth (5)
|
(4 | )% | 65 | % | (3 | )% | 3 | % | 8 | % | ||||||||||
Non- Interest Income Growth (5)
|
(24 | )% | (25 | )% | (9 | )% | 26 | % | 13 | % | ||||||||||
Revenue Growth (5)
|
(9 | )% | 27 | % | (5 | )% | 12 | % | 10 | % | ||||||||||
Net Interest Margin
|
7.09 | % | 7.10 | % | 5.44 | % | 5.52 | % | 5.16 | % | ||||||||||
Revenue Margin
|
8.94 | % | 9.43 | % | 9.37 | % | 9.80 | % | 8.43 | % | ||||||||||
Risk-Adjusted Margin (I)
|
5.01 | % | 4.99 | % | 6.07 | % | 6.69 | % | 5.46 | % | ||||||||||
Non-Interest Expense as a % of Average Loans Held for Investment (annualized)
|
6.24 | % | 5.50 | % | 8.23 | % | 7.25 | % | 7.34 | % | ||||||||||
Efficiency Ratio (J)
|
51.23 | % | 43.06 | % | 56.92 | % | 49.92 | % | 59.11 | % | ||||||||||
Asset Quality Statistics (Reported) (6)
|
||||||||||||||||||||
Allowance
|
$ | 6,799 | $ | 7,752 | $ | 4,127 | $ | 4,513 | $ | 4,482 | ||||||||||
Allowance as a % of Reported Loans Held for Investment
|
5.35 | % | 5.96 | % | 4.55 | % | 4.67 | % | 4.44 | % | ||||||||||
Net Charge-Offs
|
$ | 1,717 | $ | 2,018 | $ | 1,185 | $ | 1,128 | $ | 1,117 | ||||||||||
Net Charge-Off Rate
|
5.36 | % | 6.01 | % | 5.00 | % | 4.54 | % | 4.28 | % | ||||||||||
30+ day performing delinquency rate
|
3.81 | % | 4.22 | % | 4.13 | % | 4.12 | % | 3.71 | % | ||||||||||
Full-time equivalent employees (in thousands)
|
25.7 | 25.9 | 25.9 | 26.0 | 26.6 |
2010
|
2010
|
2009
|
2009
|
2009
|
||||||||||||||||
(in millions, except per share data and as noted) (unaudited)
|
Q2 | Q1 | Q4 | Q3 | Q2 | |||||||||||||||
Earnings
|
||||||||||||||||||||
Net Interest Income
|
$ | 3,097 | $ | 3,228 | $ | 3,170 | $ | 3,212 | $ | 2,957 | ||||||||||
Non-Interest Income (1)
|
$ | 807 | (7) | $ | 1,061 | (7)(8) | $ | 1,199 | $ | 1,373 | $ | 1,190 | (9) | |||||||
Total Revenue (2)
|
$ | 3,904 | $ | 4,289 | $ | 4,369 | $ | 4,585 | $ | 4,147 | ||||||||||
Provision for Loan and Lease Losses
|
$ | 723 | $ | 1,478 | $ | 1,847 | $ | 2,200 | $ | 1,904 | ||||||||||
Marketing Expenses
|
$ | 219 | $ | 180 | $ | 188 | $ | 104 | $ | 134 | ||||||||||
Restructuring Expenses (3)
|
$ | - | $ | - | $ | 32 | $ | 26 | $ | 44 | ||||||||||
Operating Expenses (4)
|
$ | 1,781 | $ | 1,667 | $ | 1,728 | $ | 1,672 | $ | 1,744 | (10) | |||||||||
Income Before Taxes
|
$ | 1,181 | $ | 964 | $ | 574 | $ | 583 | $ | 321 | ||||||||||
Effective Tax Rate
|
31.2 | % | 25.3 | % | 29.6 | % | 25.0 | % | 28.7 | % | ||||||||||
Income From Continuing Operations, Net of Tax
|
$ | 812 | $ | 720 | $ | 404 | $ | 437 | $ | 229 | ||||||||||
Loss From Discontinued Operations, Net of Tax
|
$ | (204 | )(7) | $ | (84 | )(7) | $ | (28 | ) | $ | (43 | ) | $ | (6 | ) | |||||
Net Income
|
$ | 608 | $ | 636 | $ | 376 | $ | 394 | $ | 223 | ||||||||||
Net Income (Loss) Available to Common Shareholders (A)
|
$ | 608 | $ | 636 | $ | 376 | $ | 394 | $ | (277 | )(11) | |||||||||
Common Share Statistics
|
||||||||||||||||||||
Basic EPS: (B)
|
||||||||||||||||||||
Income (Loss) From Continuing Operations
|
$ | 1.79 | $ | 1.59 | $ | 0.90 | $ | 0.97 | $ | (0.64 | ) | |||||||||
Loss From Discontinued Operations
|
$ | (0.45 | ) | $ | (0.18 | ) | $ | (0.07 | ) | $ | (0.09 | ) | $ | (0.01 | ) | |||||
Net Income (Loss)
|
$ | 1.34 | $ | 1.41 | $ | 0.83 | $ | 0.88 | $ | (0.66 | ) | |||||||||
Diluted EPS: (B)
|
||||||||||||||||||||
Income (Loss) From Continuing Operations
|
$ | 1.78 | $ | 1.58 | $ | 0.89 | $ | 0.96 | $ | (0.64 | ) | |||||||||
Loss From Discontinued Operations
|
$ | (0.45 | ) | $ | (0.18 | ) | $ | (0.06 | ) | $ | (0.09 | ) | $ | (0.01 | ) | |||||
Net Income (Loss)
|
$ | 1.33 | $ | 1.40 | $ | 0.83 | $ | 0.87 | $ | (0.66 | ) | |||||||||
Dividends Per Common Share
|
$ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | ||||||||||
Tangible Book Value Per Common Share (period end) (C)
|
$ | 24.89 | $ | 22.86 | $ | 27.72 | $ | 26.86 | $ | 24.95 | ||||||||||
Stock Price Per Common Share (period end)
|
$ | 40.30 | $ | 41.41 | $ | 38.34 | $ | 35.73 | $ | 21.88 | ||||||||||
Total Market Capitalization (period end)
|
$ | 18,228 | $ | 18,713 | $ | 17,268 | $ | 16,064 | $ | 9,826 | ||||||||||
Common Shares Outstanding (period end)
|
452.3 | 451.9 | 450.4 | 449.6 | 449.1 | |||||||||||||||
Shares Used to Compute Basic EPS
|
452.1 | 451.0 | 450.0 | 449.4 | 421.9 | |||||||||||||||
Shares Used to Compute Diluted EPS
|
456.4 | 455.4 | 454.9 | 453.7 | 421.9 | |||||||||||||||
Managed Balance Sheet Statistics (period average)
|
||||||||||||||||||||
Average Loans Held for Investment
|
$ | 128,203 | $ | 134,206 | $ | 138,184 | $ | 143,540 | $ | 148,013 | ||||||||||
Average Earning Assets
|
$ | 174,650 | $ | 181,881 | $ | 183,899 | $ | 185,874 | $ | 191,208 | ||||||||||
Total Average Assets
|
$ | 199,329 | $ | 207,207 | $ | 210,425 | $ | 214,655 | $ | 218,402 | ||||||||||
Average Interest Bearing Deposits
|
$ | 104,163 | $ | 104,018 | $ | 101,144 | $ | 103,105 | $ | 107,033 | ||||||||||
Total Average Deposits
|
$ | 118,484 | $ | 117,530 | $ | 114,598 | $ | 115,882 | $ | 119,604 | ||||||||||
Average Equity
|
$ | 24,526 | $ | 23,681 | $ | 26,518 | $ | 26,002 | $ | 27,668 | (12), (13) | |||||||||
Return on Average Assets (ROA)
|
1.63 | % | 1.39 | % | 0.77 | % | 0.81 | % | 0.42 | % | ||||||||||
Return on Average Equity (ROE)
|
13.24 | % | 12.16 | % | 6.09 | % | 6.72 | % | 3.31 | % | ||||||||||
Return on Average Tangible Common Equity (D)
|
30.97 | % | 29.98 | % | 13.02 | % | 14.75 | % | 6.75 | % | ||||||||||
Managed Balance Sheet Statistics (period end)
|
||||||||||||||||||||
Loans Held for Investment
|
$ | 127,140 | $ | 130,115 | $ | 136,803 | $ | 140,990 | $ | 146,117 | ||||||||||
Total Assets (E)
|
$ | 197,479 | $ | 200,691 | $ | 212,389 | $ | 209,683 | $ | 214,178 | ||||||||||
Interest Bearing Deposits
|
$ | 103,172 | $ | 104,013 | $ | 102,370 | $ | 101,769 | $ | 104,121 | ||||||||||
Total Deposits
|
$ | 117,331 | $ | 117,787 | $ | 115,809 | $ | 114,503 | $ | 116,725 | ||||||||||
Tangible Assets(E) (F)
|
$ | 183,468 | $ | 186,647 | $ | 198,283 | $ | 195,566 | $ | 200,012 | ||||||||||
Tangible Common Equity (TCE) (E) (G)
|
$ | 11,259 | $ | 10,330 | $ | 12,483 | $ | 12,075 | $ | 11,204 | ||||||||||
Tangible Common Equity to Tangible Assets Ratio (E) (H)
|
6.14 | % | 5.53 | % | 6.30 | % | 6.17 | % | 5.60 | % (12) | ||||||||||
Performance Statistics (Managed) Quarter over Quarter
|
||||||||||||||||||||
Net Interest Income Growth (5)
|
(4 | )% | 2 | % | (1 | )% | 9 | % | 8 | % | ||||||||||
Non-Interest Income Growth (5)
|
(24 | )% | (12 | )% | (13 | )% | 15 | % | 21 | % | ||||||||||
Revenue Growth (5)
|
(9 | )% | (2 | )% | (5 | )% | 11 | % | 11 | % | ||||||||||
Net Interest Margin
|
7.09 | % | 7.10 | % | 6.90 | % | 6.91 | % | 6.19 | % | ||||||||||
Revenue Margin
|
8.94 | % | 9.43 | % | 9.50 | % | 9.87 | % | 8.68 | % | ||||||||||
Risk-Adjusted Margin (I)
|
5.01 | % | 4.99 | % | 4.74 | % | 5.23 | % | 4.31 | % | ||||||||||
Non-Interest Expense as a % of Average Loans Held for Investment
|
6.24 | % | 5.50 | % | 5.64 | % | 5.02 | % | 5.19 | % | ||||||||||
Efficiency Ratio (J)
|
51.23 | % | 43.06 | % | 43.85 | % | 38.74 | % | 45.29 | % | ||||||||||
Asset Quality Statistics (Managed) (6)
|
||||||||||||||||||||
Net Charge-Offs
|
$ | 1,717 | $ | 2,018 | $ | 2,188 | $ | 2,155 | $ | 2,087 | ||||||||||
Net Charge-Off Rate
|
5.36 | % | 6.01 | % | 6.33 | % | 6.00 | % | 5.64 | % | ||||||||||
30+ day performing delinquency rate
|
3.81 | % | 4.22 | % | 4.73 | % | 4.55 | % | 4.10 | % | ||||||||||
Full-time equivalent employees (in thousands)
|
25.7 | 25.9 | 25.9 | 26.0 | 26.6 |
(1)
|
Includes the impact from the change in fair value of retained interests, including the interest-only strips, which totaled $17.4 million in Q2 2010, $(35.7) million in Q1 2010, $55.3 million in Q4 2009, $37.3 million in Q3 2009 and $(114.5) million in Q2 2009.
|
(2)
|
In accordance with the Company's finance charge and fee revenue recognition policy, amounts billed not included in revenue totaled: $261.2 million in Q2 2010, $354.4 million in Q1 2010, $490.4 million in Q4 2009, $517.0 million in Q3 2009 and $571.9 million in Q2 2009.
|
(3)
|
The Company completed its 2007 restructuring initiative during 2009.
|
(4)
|
Includes core deposit intangible amortization expense of $50.4 million in Q2 2010, $52.1 million in Q1 2010, $53.8 million in Q4 2009, $55.5 million in Q3 2009 and $57.2 million in Q2 2009 and integration costs of $22.4 million in Q2 2010, $16.7 million in Q1 2010, $22.1 million in Q4 2009, $10.7 million in Q3 2009 and $8.8 million in Q2 2009.
|
(5)
|
Prior period amounts have been reclassified to conform with the current period presentation and adjusted to reflect purchase accounting refinements related to the acquisition of Chevy Chase Bank, FSB ("CCB").
|
(6)
|
The denominator used in calculating the allowance as a % of Loans Held for Investment, Net Charge-off Rate and 30+ Day Performing Delinquency Rate include loans acquired as part of the CCB acquisition. The metrics excluding such loans are as follows.
|
Q2 2010 | Q1 2010 | Q4 2009 | Q3 2009 | Q2 2009 | ||||||||||||||||
CCB period end acquired loan portfolio (in millions)(unaudited)
|
$ | 6,381 | $ | 6,799 | $ | 7,251 | $ | 7,885 | $ | 8,644 | ||||||||||
CCB average acquired loan portfolio (in millions)(unaudited)
|
$ | 6,541 | $ | 7,037 | $ | 7,512 | $ | 8,029 | $ | 8,499 | ||||||||||
Allowance as a % of loans held for investment, excluding CCB
|
5.63 | % | 6.29 | % | 4.95 | % | 5.08 | % | 4.86 | % | ||||||||||
Net charge-off rate (GAAP), excluding CCB
|
5.64 | % | 6.35 | % | 5.44 | % | 4.94 | % | 4.65 | % | ||||||||||
Net charge-off rate (Managed), excluding CCB
|
5.64 | % | 6.35 | % | 6.70 | % | 6.36 | % | 5.98 | % | ||||||||||
30+ day performing delinquency rate (GAAP), excluding CCB
|
4.01 | % | 4.46 | % | 4.49 | % | 4.48 | % | 4.06 | % | ||||||||||
30+ day performing delinquency rate (Managed), excluding CCB
|
4.01 | % | 4.46 | % | 4.99 | % | 4.82 | % | 4.36 | % |
(7)
|
During Q2 and Q1 2010, the Company recorded charges of $403.6 million and $224.4 million, respectively, related to representation and warranty matters. A portion of this expense is included in Discontinued Operations and the remainder is included in Non-Interest Income.
|
(8)
|
During Q1 2010, certain mortgage trusts were deconsolidated based on the sale of interest-only bonds associated with the trusts. The net effect of the deconsolidation resulted in $128 million of income which is included in non-interest income.
|
(9)
|
In Q2 2009, the Company elected to convert and sell 404,508 shares of MasterCard class B common stock, which resulted in a gain of $65.5 million that is included in non-interest income.
|
(10)
|
Includes the FDIC Special Assessment of $80.5 million.
|
(11)
|
Includes the impact from dividends of $38.0 million on preferred shares and from the accretion of $461.7 million of the discount on preferred shares. With the repayment of the preferred shares to the U.S. Treasury as described in note 13 below, the recognition of the remaining accretion was accelerated to Q2 2009 and accounted for as a dividend. Subsequent to this transaction, there is no difference between net income (loss) and net income (loss) available to common shareholders.
|
(12)
|
Includes the impact of the issuance of 56,000,000 common shares at $27.75 per share on May 14, 2009.
|
(13)
|
Average equity includes the impact of the Company's participation in the U.S. Treasury's Capital Purchase Program. On June 17, 2009, the Company repurchased from the U.S. Treasury for approximately $3.57 billion all 3,555,199 preferred shares issued in Q4 2008, 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.
|
(A)
|
Consists of net income (loss) less dividends on preferred shares.
|
(B)
|
Calculated based on net income (loss) available to common shareholders.
|
(C)
|
Calculated based on tangible common equity divided by common shares outstanding.
|
(D)
|
Calculated based on income from continuing operations divided by average tangible common equity, which is a non-GAAP measure. See page 4, Reconciliation To GAAP Financial Measures for a reconciliation of average equity to average tangible common equity.
|
(E)
|
Calculated based on continuing operations, except for Average Equity and Return on Average Equity (ROE), which are based on average stockholders' equity.
|
(F)
|
Consists of reported or managed assets less intangible assets and is a non-GAAP measure. See page 4, Reconciliation To GAAP Financial Measures for a reconciliation of this measure to the reported common equity ratio.
|
(G)
|
Consists of stockholders' equity less preferred shares and intangible assets and the related deferred tax liabilities.
|
(H)
|
Tangible Common Equity to Tangible Assets Ratio ("TCE Ratio") is a non-GAAP measure. See page 4, Reconciliation To GAAP Financial Measures for a reconciliation of this measure to the reported common equity ratio.
|
(I)
|
Calculated based on total revenue less net charge-offs divided by average earning assets, expressed as a percentage.
|
(J)
|
Calculated based on non-interest expense less restructuring expense divided by total revenue.
|
2010
|
2010
|
2009
|
2009
|
2009
|
||||||||||||||||
Q2 | Q1 | Q4 | Q3 | Q2 | ||||||||||||||||
Reconciliation of Average Equity to Average Tangible Common Equity
|
||||||||||||||||||||
Average Equity
|
$ | 24,526 | $ | 23,681 | $ | 26,518 | $ | 26,002 | $ | 27,668 | ||||||||||
Less: Preferred Stock
|
- | - | - | - | 41 | |||||||||||||||
Less: Average Intangible Assets (1)
|
(14,039 | ) | (14,075 | ) | (14,105 | ) | (14,151 | ) | (14,129 | ) | ||||||||||
Average Tangible Common Equity
|
$ | 10,487 | $ | 9,606 | $ | 12,413 | $ | 11,851 | $ | 13,580 | ||||||||||
Reconciliation of Period End Equity to Tangible Common Equity
|
||||||||||||||||||||
Stockholders' Equity
|
$ | 25,270 | $ | 24,374 | $ | 26,589 | $ | 26,192 | $ | 25,332 | ||||||||||
Less: Preferred Stock
|
- | - | - | - | 38 | |||||||||||||||
Less: Intangible Assets (1)
|
(14,011 | ) | (14,044 | ) | (14,106 | ) | (14,117 | ) | (14,166 | ) | ||||||||||
Period End Tangible Common Equity
|
$ | 11,259 | $ | 10,330 | $ | 12,483 | $ | 12,075 | $ | 11,204 | ||||||||||
Reconciliation of Period End Assets to Tangible Assets
|
||||||||||||||||||||
Total Assets
|
$ | 197,489 | $ | 200,707 | $ | 169,646 | $ | 168,463 | $ | 171,994 | ||||||||||
Less: Discontinued Operations Assets
|
(10 | ) | (16 | ) | (24 | ) | (31 | ) | (46 | ) | ||||||||||
Total Assets- Continuing Operations
|
197,479 | 200,691 | 169,622 | 168,432 | 171,948 | |||||||||||||||
Less: Intangible Assets (1)
|
(14,011 | ) | (14,044 | ) | (14,106 | ) | (14,117 | ) | (14,166 | ) | ||||||||||
Period End Tangible Assets
|
$ | 183,468 | $ | 186,647 | $ | 155,516 | $ | 154,315 | $ | 157,782 | ||||||||||
TCE ratio (2)
|
6.14 | % | 5.53 | % | 8.03 | % | 7.82 | % | 7.10 | % | ||||||||||
Reconciliation of Period End Assets to Tangible Assets on a Managed Basis (for 2009) *
|
||||||||||||||||||||
Total Assets
|
$ | 197,489 | $ | 200,707 | $ | 169,646 | $ | 168,463 | $ | 171,994 | ||||||||||
Securitization Adjustment (3)
|
- | - | 42,767 | 41,251 | 42,230 | |||||||||||||||
Total Assets on a Managed Basis
|
197,489 | 200,707 | 212,413 | 209,714 | 214,224 | |||||||||||||||
Less: Assets-Discontinued Operations
|
(10 | ) | (16 | ) | (24 | ) | (31 | ) | (46 | ) | ||||||||||
Total Assets- Continuing Operations
|
197,479 | 200,691 | 212,389 | 209,683 | 214,178 | |||||||||||||||
Less: Intangible Assets (1)
|
(14,011 | ) | (14,044 | ) | (14,106 | ) | (14,117 | ) | (14,166 | ) | ||||||||||
Period End Tangible Assets
|
$ | 183,468 | $ | 186,647 | $ | 198,283 | $ | 195,566 | $ | 200,012 | ||||||||||
TCE ratio (2)
|
6.14 | % | 5.53 | % | 6.30 | % | 6.17 | % | 5.60 | % |
Consolidation of VIEs
|
||||||||||||
(dollars in millions)(unaudited)
|
Opening Balance Sheet
January 1, 2010 |
VIE Consolidation
Impact |
Ending Balance Sheet
December 31, 2009 |
|||||||||
Assets:
|
||||||||||||
Cash and due from banks
|
$ | 12,683 | $ | 3,998 | $ | 8,685 | ||||||
Loans held for investment
|
138,184 | 47,565 | 90,619 | |||||||||
Allowance for loan and lease losses
|
(8,391 | ) | (4,264 | ) (3) | (4,127 | ) | ||||||
Net loans held for investment
|
129,793 | 43,301 | 86,492 | |||||||||
Accounts receivable from securitizations
|
166 | (7,463 | ) | 7,629 | ||||||||
Other assets
|
68,869 | (1) | 2,029 | 66,840 | ||||||||
Total assets
|
211,511 | 41,865 | 169,646 | |||||||||
Liabilities:
|
||||||||||||
Securitization liability
|
48,300 | 44,346 | 3,954 | |||||||||
Other liabilities
|
139,561 | 458 | 139,103 | |||||||||
Total liabilities
|
187,861 | 44,804 | 143,057 | |||||||||
Stockholders' equity
|
23,650 | (2,939 | ) (3) | 26,589 | ||||||||
Total liabilities and stockholders' equity
|
$ | 211,511 | $ | 41,865 | $ | 169,646 |
(dollars in millions)(unaudited)
|
January 1, 2010
|
Consolidation Impact
|
December 31, 2009
|
|||||||||
Domestic credit card
|
$ | 5,590 | $ | 3,663 | (3) | $ | 1,927 | |||||
International credit card
|
727 | 528 | 199 | |||||||||
Total credit card
|
6,317 | 4,191 | 2,126 | |||||||||
Commercial and multi-family real estate
|
471 | - | 471 | |||||||||
Middle market
|
131 | - | 131 | |||||||||
Specialty lending
|
90 | - | 90 | |||||||||
Total commercial lending
|
692 | - | 692 | |||||||||
Small ticket commercial real estate
|
93 | - | 93 | |||||||||
Total commercial banking
|
785 | - | 785 | |||||||||
Automobile
|
665 | - | 665 | |||||||||
Mortgage (inc all new CCB originations)
|
248 | 73 | (2) | 175 | ||||||||
Other retail
|
236 | - | 236 | |||||||||
Total consumer banking
|
1,149 | 73 | 1,076 | |||||||||
Other
|
140 | - | 140 | |||||||||
Total company
|
$ | 8,391 | $ | 4,264 | $ | 4,127 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||
June 30,
|
March 31,
|
June 30,
|
June 30,
|
June 30,
|
||||||||||||||||
2010
|
2010
|
2009 (1)
|
2010
|
2009 (1)
|
||||||||||||||||
Interest Income:
|
||||||||||||||||||||
Loans held for investment, including past-due fees
|
$ | 3,476 | $ | 3,658 | $ | 2,237 | $ | 7,134 | $ | 4,428 | ||||||||||
Investment securities
|
342 | 349 | 412 | 691 | 808 | |||||||||||||||
Other
|
17 | 23 | 68 | 40 | 131 | |||||||||||||||
Total interest income
|
3,835 | 4,030 | 2,717 | 7,865 | 5,367 | |||||||||||||||
Interest Expense:
|
||||||||||||||||||||
Deposits
|
368 | 399 | 560 | 767 | 1,187 | |||||||||||||||
Securitized debt
|
212 | 242 | 74 | 454 | 165 | |||||||||||||||
Senior and subordinated notes
|
72 | 68 | 57 | 140 | 115 | |||||||||||||||
Other borrowings
|
86 | 93 | 81 | 179 | 162 | |||||||||||||||
Total interest expense
|
738 | 802 | 772 | 1,540 | 1,629 | |||||||||||||||
Net interest income
|
3,097 | 3,228 | 1,945 | 6,325 | 3,738 | |||||||||||||||
Provision for loan and lease losses
|
723 | 1,478 | 934 | 2,201 | 2,213 | |||||||||||||||
Net interest income after provision for loan and lease losses
|
2,374 | 1,750 | 1,011 | 4,124 | 1,525 | |||||||||||||||
Non-Interest Income:
|
||||||||||||||||||||
Servicing and securitizations
|
21 | (36 | ) | 363 | (15 | ) | 816 | |||||||||||||
Service charges and other customer-related fees
|
496 | 585 | 492 | 1,081 | 998 | |||||||||||||||
Interchange
|
333 | 311 | 126 | 644 | 267 | |||||||||||||||
Net other-than-temporary impairment losses recognized in earnings(2)
|
(26 | ) | (31 | ) | (10 | ) | (57 | ) | (10 | ) | ||||||||||
Other
|
(17 | ) | 232 | 261 | 215 | 251 | ||||||||||||||
Total non-interest income
|
807 | 1,061 | 1,232 | 1,868 | 2,322 | |||||||||||||||
Non-Interest Expense:
|
||||||||||||||||||||
Salaries and associate benefits
|
650 | 646 | 634 | 1,296 | 1,188 | |||||||||||||||
Marketing
|
219 | 180 | 134 | 399 | 297 | |||||||||||||||
Communications and data processing
|
164 | 169 | 195 | 333 | 394 | |||||||||||||||
Supplies and equipment
|
129 | 124 | 128 | 253 | 247 | |||||||||||||||
Occupancy
|
117 | 120 | 115 | 237 | 215 | |||||||||||||||
Restructuring expense (3)
|
- | - | 43 | - | 61 | |||||||||||||||
Other
|
721 | 608 | 673 | 1,329 | 1,265 | |||||||||||||||
Total non-interest expense
|
2,000 | 1,847 | 1,922 | 3,847 | 3,667 | |||||||||||||||
Income from continuing operations before income taxes
|
1,181 | 964 | 321 | 2,145 | 180 | |||||||||||||||
Income tax provision
|
369 | 244 | 92 | 613 | 34 | |||||||||||||||
Income from continuing operations, net of tax
|
812 | 720 | 229 | 1,532 | 146 | |||||||||||||||
Loss from discontinued operations, net of tax
|
(204 | ) | (84 | ) | (6 | ) | (288 | ) | (31 | ) | ||||||||||
Net income
|
$ | 608 | $ | 636 | $ | 223 | $ | 1,244 | $ | 115 | ||||||||||
Preferred stock dividends
|
- | - | (500 | ) | - | (564 | ) | |||||||||||||
Net income (loss) available to common shareholders
|
$ | 608 | $ | 636 | $ | (277 | ) | $ | 1,244 | $ | (449 | ) | ||||||||
Basic earnings per common share:
|
||||||||||||||||||||
Income (loss) from continuing operations
|
$ | 1.79 | $ | 1.59 | $ | (0.64 | ) | $ | 3.38 | $ | (1.03 | ) | ||||||||
Loss from discontinued operations
|
(0.45 | ) | (0.18 | ) | (0.01 | ) | (0.63 | ) | (0.07 | ) | ||||||||||
Net Income (loss) per common share
|
$ | 1.34 | $ | 1.41 | $ | (0.66 | ) | $ | 2.75 | $ | (1.11 | ) | ||||||||
Diluted earnings per common share:
|
||||||||||||||||||||
Income (loss) from continuing operations
|
$ | 1.78 | $ | 1.58 | $ | (0.64 | ) | $ | 3.36 | $ | (1.03 | ) | ||||||||
Loss from discontinued operations
|
(0.45 | ) | (0.18 | ) | (0.01 | ) | (0.63 | ) | (0.07 | ) | ||||||||||
Net Income (loss) per common share
|
$ | 1.33 | $ | 1.40 | $ | (0.66 | ) | $ | 2.73 | $ | (1.11 | ) | ||||||||
Dividends paid per common share
|
$ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.10 | $ | 0.43 |
As of
|
As of
|
As of
|
||||||||||
June 30
|
December 31
|
June 30
|
||||||||||
2010
|
2009 (1)
|
2009 (1)
|
||||||||||
Assets:
|
||||||||||||
Cash and due from banks
|
$ | 2,668 | $ | 3,100 | $ | 2,432 | ||||||
Federal funds sold and repurchase agreements
|
384 | 542 | 604 | |||||||||
Interest-bearing deposits at other banks
|
2,147 | 5,043 | 1,166 | |||||||||
Cash and cash equivalents
|
5,199 | 8,685 | 4,202 | |||||||||
Restricted cash for securitization investors
|
3,446 | 501 | 570 | |||||||||
Securities available for sale
|
39,424 | 38,830 | 37,667 | |||||||||
Securities held to maturity
|
- | 80 | 88 | |||||||||
Loans held for sale
|
249 | 268 | 320 | |||||||||
Loans held for investment
|
71,491 | 75,097 | 81,838 | |||||||||
Restricted loans for securitization investors
|
55,649 | 15,522 | 19,102 | |||||||||
Less: Allowance for loan and lease losses
|
(6,799 | ) | (4,127 | ) | (4,482 | ) | ||||||
Net loans held for investment
|
120,341 | 86,492 | 96,458 | |||||||||
Accounts receivable from securitizations
|
206 | 7,128 | 5,220 | |||||||||
Premises and equipment, net
|
2,730 | 2,736 | 2,827 | |||||||||
Interest receivable
|
1,077 | 936 | 951 | |||||||||
Goodwill
|
13,588 | 13,596 | 13,568 | |||||||||
Other
|
11,229 | 10,394 | 10,123 | |||||||||
Total assets
|
$ | 197,489 | $ | 169,646 | $ | 171,994 | ||||||
Liabilities:
|
||||||||||||
Non-interest-bearing deposits
|
$ | 14,159 | $ | 13,439 | $ | 12,604 | ||||||
Interest-bearing deposits
|
103,172 | 102,370 | 104,121 | |||||||||
Senior and subordinated notes
|
9,424 | 9,045 | 10,092 | |||||||||
Other borrowings
|
5,585 | 8,015 | 7,990 | |||||||||
Securitized debt obligations
|
33,009 | 3,954 | 5,270 | |||||||||
Interest payable
|
543 | 509 | 660 | |||||||||
Other
|
6,327 | 5,725 | 5,925 | |||||||||
Total liabilities
|
172,219 | 143,057 | 146,662 | |||||||||
Stockholders' Equity:
|
||||||||||||
Preferred stock
|
- | - | - | |||||||||
Common stock
|
5 | 5 | 5 | |||||||||
Paid-in capital, net
|
19,029 | 18,955 | 18,891 | |||||||||
Retained earnings and accumulated other comprehensive income
|
9,436 | 10,809 | 9,605 | |||||||||
Less: Treasury stock, at cost
|
(3,200 | ) | (3,180 | ) | (3,169 | ) | ||||||
Total stockholders' equity
|
25,270 | 26,589 | 25,332 | |||||||||
Total liabilities and stockholders' equity
|
$ | 197,489 | $ | 169,646 | $ | 171,994 |
Quarter Ended 06/30/10
|
Quarter Ended 3/31/10
|
Quarter Ended 06/30/09 (3)
|
||||||||||||||||||||||||||||||||||
GAAP Basis
|
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
|||||||||||||||||||||||||||
Balance
|
Expense
|
Rate
|
Balance
|
Expense
|
Rate
|
Balance
|
Expense
|
Rate
|
||||||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||||||||||||||
Loans held for investment
|
$ | 128,203 | $ | 3,476 | 10.85 | % | $ | 134,206 | $ | 3,658 | 10.90 | % | $ | 104,682 | $ | 2,237 | 8.55 | % | ||||||||||||||||||
Investment securities (2)
|
39,022 | 342 | 3.51 | % | 38,087 | 349 | 3.67 | % | 37,499 | 412 | 4.39 | % | ||||||||||||||||||||||||
Other
|
7,425 | 17 | 0.92 | % | 9,588 | 23 | 0.96 | % | 8,623 | 68 | 3.15 | % | ||||||||||||||||||||||||
Total interest-earning assets
|
$ | 174,650 | $ | 3,835 | 8.78 | % | $ | 181,881 | $ | 4,030 | 8.86 | % | $ | 150,804 | $ | 2,717 | 7.21 | % | ||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||||||||||||||
Interest-bearing deposits
|
||||||||||||||||||||||||||||||||||||
NOW accounts
|
$ | 11,601 | $ | 10 | 0.34 | % | $ | 12,276 | $ | 16 | 0.52 | % | $ | 10,915 | $ | 15 | 0.55 | % | ||||||||||||||||||
Money market deposit accounts
|
42,127 | 99 | 0.94 | % | 39,364 | 96 | 0.98 | % | 35,751 | 104 | 1.16 | % | ||||||||||||||||||||||||
Savings accounts
|
21,017 | 44 | 0.84 | % | 18,627 | 41 | 0.88 | % | 9,931 | 13 | 0.52 | % | ||||||||||||||||||||||||
Other consumer time deposits
|
20,744 | 150 | 2.89 | % | 24,253 | 174 | 2.87 | % | 35,834 | 305 | 3.40 | % | ||||||||||||||||||||||||
Public fund CD's of $100,000 or more
|
240 | 1 | 1.67 | % | 400 | 2 | 2.00 | % | 1,117 | 3 | 1.07 | % | ||||||||||||||||||||||||
CD's of $100,000 or more
|
7,601 | 63 | 3.32 | % | 8,180 | 68 | 3.33 | % | 11,098 | 108 | 3.89 | % | ||||||||||||||||||||||||
Foreign time deposits
|
833 | 1 | 0.48 | % | 918 | 2 | 0.87 | % | 2,387 | 12 | 2.01 | % | ||||||||||||||||||||||||
Total interest-bearing deposits
|
$ | 104,163 | $ | 368 | 1.41 | % | $ | 104,018 | $ | 399 | 1.53 | % | $ | 107,033 | $ | 560 | 2.09 | % | ||||||||||||||||||
Senior and subordinated notes
|
8,760 | 72 | 3.29 | % | 8,757 | 68 | 3.11 | % | 8,323 | 57 | 2.74 | % | ||||||||||||||||||||||||
Other borrowings
|
6,375 | 86 | 5.40 | % | 7,431 | 93 | 5.01 | % | 10,399 | 81 | 3.12 | % | ||||||||||||||||||||||||
Securitization liability
|
35,248 | 212 | 2.41 | % | 43,764 | 242 | 2.21 | % | 5,876 | 74 | 5.04 | % | ||||||||||||||||||||||||
Total interest-bearing liabilities
|
$ | 154,546 | $ | 738 | 1.91 | % | $ | 163,970 | $ | 802 | 1.96 | % | $ | 131,631 | $ | 772 | 2.35 | % | ||||||||||||||||||
Net interest spread
|
6.87 | % | 6.90 | % | 4.86 | % | ||||||||||||||||||||||||||||||
Interest income to average interest-earning assets
|
8.78 | % | 8.86 | % | 7.21 | % | ||||||||||||||||||||||||||||||
Interest expense to average interest-earning assets
|
1.69 | % | 1.76 | % | 2.05 | % | ||||||||||||||||||||||||||||||
Net interest margin
|
7.09 | % | 7.10 | % | 5.16 | % | ||||||||||||||||||||||||||||||
Managed Basis *
|
||||||||||||||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||||||||||||||
Loans held for investment
|
$ | 128,203 | $ | 3,476 | 10.85 | % | $ | 134,206 | $ | 3,658 | 10.90 | % | $ | 148,013 | $ | 3,568 | 9.64 | % | ||||||||||||||||||
Investment securities (2)
|
$ | 39,022 | $ | 342 | 3.51 | % | 38,087 | 349 | 3.67 | % | 37,499 | 412 | 4.39 | % | ||||||||||||||||||||||
Other
|
$ | 7,425 | $ | 17 | 0.92 | % | 9,588 | 23 | 0.96 | % | 5,696 | 17 | 1.19 | % | ||||||||||||||||||||||
Total interest-earning assets
|
$ | 174,650 | $ | 3,835 | 8.78 | % | $ | 181,881 | $ | 4,030 | 8.86 | % | $ | 191,208 | $ | 3,997 | 8.36 | % | ||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||||||||||||||
Interest-bearing deposits
|
||||||||||||||||||||||||||||||||||||
NOW accounts
|
$ | 11,601 | $ | 10 | 0.34 | % | $ | 12,276 | $ | 16 | 0.52 | % | $ | 10,915 | $ | 15 | 0.55 | % | ||||||||||||||||||
Money market deposit accounts
|
$ | 42,127 | $ | 99 | 0.94 | % | 39,364 | 96 | 0.98 | % | 35,751 | 104 | 1.16 | % | ||||||||||||||||||||||
Savings accounts
|
$ | 21,017 | $ | 44 | 0.84 | % | 18,627 | 41 | 0.88 | % | 9,931 | 13 | 0.52 | % | ||||||||||||||||||||||
Other consumer time deposits
|
$ | 20,744 | $ | 150 | 2.89 | % | 24,253 | 174 | 2.87 | % | 35,834 | 305 | 3.40 | % | ||||||||||||||||||||||
Public fund CD's of $100,000 or more
|
$ | 240 | $ | 1 | 1.67 | % | 400 | 2 | 2.00 | % | 1,117 | 3 | 1.07 | % | ||||||||||||||||||||||
CD's of $100,000 or more
|
$ | 7,601 | $ | 63 | 3.32 | % | 8,180 | 68 | 3.33 | % | 11,098 | 108 | 3.89 | % | ||||||||||||||||||||||
Foreign time deposits
|
$ | 833 | $ | 1 | 0.48 | % | 918 | 2 | 0.87 | % | 2,387 | 12 | 2.01 | % | ||||||||||||||||||||||
Total interest-bearing deposits
|
$ | 104,163 | $ | 368 | 1.41 | % | $ | 104,018 | $ | 399 | 1.53 | % | $ | 107,033 | $ | 560 | 2.09 | % | ||||||||||||||||||
Senior and subordinated notes
|
$ | 8,760 | 72 | 3.29 | % | 8,757 | 68 | 3.11 | % | 8,323 | 57 | 2.74 | % | |||||||||||||||||||||||
Other borrowings
|
$ | 6,375 | 86 | 5.40 | % | 7,431 | 93 | 5.01 | % | 10,399 | 81 | 3.12 | % | |||||||||||||||||||||||
Securitization liability
|
$ | 35,248 | 212 | 2.41 | % | 43,764 | 242 | 2.21 | % | 46,682 | 342 | 2.93 | % | |||||||||||||||||||||||
Total interest-bearing liabilities
|
$ | 154,546 | $ | 738 | 1.91 | % | $ | 163,970 | $ | 802 | 1.96 | % | $ | 172,437 | $ | 1,040 | 2.41 | % | ||||||||||||||||||
Net interest spread
|
6.87 | % | 6.90 | % | 5.95 | % | ||||||||||||||||||||||||||||||
Interest income to average interest-earning assets
|
8.78 | % | 8.86 | % | 8.36 | % | ||||||||||||||||||||||||||||||
Interest expense to average interest-earning assets
|
1.69 | % | 1.76 | % | 2.17 | % | ||||||||||||||||||||||||||||||
Net interest margin
|
7.09 | % | 7.10 | % | 6.19 | % |
2010
|
2010
|
2009
|
2009
|
2009
|
||||||||||||||||
(Dollars in millions) (unaudited)
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
|||||||||||||||
Period end loans held for investment
|
||||||||||||||||||||
Domestic credit card
|
$ | 54,628 | $ | 56,228 | $ | 60,300 | $ | 61,892 | $ | 64,760 | ||||||||||
International credit card
|
7,269 | 7,578 | 8,224 | 8,477 | 8,639 | |||||||||||||||
Total Credit Card
|
$ | 61,897 | $ | 63,806 | $ | 68,524 | $ | 70,369 | $ | 73,399 | ||||||||||
Commercial and multifamily real estate
|
$ | 13,580 | $ | 13,618 | $ | 13,843 | $ | 13,978 | $ | 14,225 | ||||||||||
Middle market
|
10,203 | 10,310 | 10,062 | 10,023 | 10,219 | |||||||||||||||
Specialty lending
|
3,815 | 3,619 | 3,555 | 3,399 | 3,228 | |||||||||||||||
Total Commercial Lending
|
$ | 27,598 | $ | 27,547 | $ | 27,460 | $ | 27,400 | $ | 27,672 | ||||||||||
Small-ticket commercial real estate
|
1,977 | 2,065 | 2,153 | (7) | 2,413 | 2,503 | ||||||||||||||
Total Commercial Banking
|
$ | 29,575 | $ | 29,612 | $ | 29,613 | $ | 29,813 | $ | 30,175 | ||||||||||
Automobile
|
$ | 17,221 | $ | 17,446 | $ | 18,186 | $ | 19,295 | $ | 19,902 | ||||||||||
Mortgages
|
13,322 | 13,967 | 14,893 | 15,639 | 16,579 | |||||||||||||||
Retail banking
|
4,770 | 4,970 | 5,135 | 5,215 | 5,367 | |||||||||||||||
Total Consumer Banking
|
$ | 35,313 | $ | 36,383 | $ | 38,214 | $ | 40,149 | $ | 41,848 | ||||||||||
Other loans (2)
|
$ | 470 | $ | 464 | $ | 452 | $ | 659 | $ | 695 | ||||||||||
Total
|
$ | 127,255 | $ | 130,265 | $ | 136,803 | $ | 140,990 | $ | 146,117 | ||||||||||
Average loans held for investment
|
||||||||||||||||||||
Domestic credit card
|
$ | 55,252 | $ | 58,108 | $ | 60,443 | $ | 63,299 | $ | 65,862 | ||||||||||
International credit card
|
7,427 | 7,814 | 8,300 | 8,609 | 8,328 | |||||||||||||||
Total Credit Card
|
$ | 62,679 | $ | 65,922 | $ | 68,743 | $ | 71,908 | $ | 74,190 | ||||||||||
Commercial and multifamily real estate
|
$ | 13,543 | $ | 13,716 | $ | 13,926 | $ | 13,938 | $ | 14,122 | ||||||||||
Middle market
|
10,276 | 10,324 | 10,052 | 9,911 | 10,429 | |||||||||||||||
Specialty lending
|
3,654 | 3,609 | 3,535 | 3,753 | 3,472 | |||||||||||||||
Total Commercial Lending
|
$ | 27,473 | $ | 27,649 | $ | 27,513 | $ | 27,602 | $ | 28,023 | ||||||||||
Small-ticket commercial real estate
|
2,060 | 2,074 | 2,354 | 2,471 | 2,542 | |||||||||||||||
Total Commercial Banking
|
$ | 29,533 | $ | 29,723 | $ | 29,867 | $ | 30,073 | $ | 30,565 | ||||||||||
Automobile
|
$ | 17,276 | $ | 17,769 | $ | 18,768 | $ | 19,636 | $ | 20,303 | ||||||||||
Mortgages
|
13,573 | 15,434 | 15,170 | 15,925 | 16,707 | |||||||||||||||
Retail banking
|
4,811 | 5,042 | 5,176 | 5,515 | 5,712 | |||||||||||||||
Total Consumer Banking
|
$ | 35,660 | $ | 38,245 | $ | 39,114 | $ | 41,076 | $ | 42,722 | ||||||||||
Other loans (2)
|
$ | 464 | $ | 489 | $ | 460 | $ | 483 | $ | 536 | ||||||||||
Total
|
$ | 128,336 | $ | 134,379 | $ | 138,184 | $ | 143,540 | $ | 148,013 | ||||||||||
Net charge-off rates
|
||||||||||||||||||||
Domestic credit card
|
9.49 | % | 10.48 | % | 9.59 | % | 9.64 | % | 9.23 | % | ||||||||||
International credit card
|
8.38 | % | 8.83 | % | 9.52 | % | 9.19 | % | 9.32 | % | ||||||||||
Total Credit Card
|
9.36 | % | 10.29 | % | 9.58 | % | 9.59 | % | 9.24 | % | ||||||||||
Commercial and multifamily real estate (3)
|
1.17 | % | 1.45 | % | 3.02 | % | 1.37 | % | 0.92 | % | ||||||||||
Middle market (3)
|
0.78 | % | 0.82 | % | 0.75 | % | 0.56 | % | 0.58 | % | ||||||||||
Specialty lending
|
0.87 | % | 0.90 | % | 1.85 | % | 1.39 | % | 0.99 | % | ||||||||||
Total Commercial Lending (3)
|
0.98 | % | 1.14 | % | 2.04 | % | 1.08 | % | 0.80 | % | ||||||||||
Small-ticket commercial real estate
|
4.21 | % | 4.43 | % | 13.08 | %(7) | 5.19 | % | 1.86 | % | ||||||||||
Total Commercial Banking (3)
|
1.21 | % | 1.37 | % | 2.91 | % | 1.42 | % | 0.89 | % | ||||||||||
Automobile
|
2.09 | % | 2.97 | % | 4.55 | % | 4.38 | % | 3.65 | % | ||||||||||
Mortgages (3)
|
0.46 | % | 0.94 | % | 0.72 | % | 0.69 | % | 0.43 | % | ||||||||||
Retail banking (3)
|
2.11 | % | 2.11 | % | 2.93 | % | 2.44 | % | 2.42 | % | ||||||||||
Total Consumer Banking (3)
|
1.47 | % | 2.03 | % | 2.85 | % | 2.69 | % | 2.23 | % | ||||||||||
Other loans
|
27.95 | % | 18.82 | % | 28.25 | % | 28.53 | % | 37.00 | % | ||||||||||
Total
|
5.36 | % | 6.02 | % | 6.33 | % | 6.00 | % | 5.64 | % | ||||||||||
30+ day performing delinquency rate
|
||||||||||||||||||||
Domestic credit card
|
4.79 | % | 5.30 | % | 5.78 | % | 5.38 | % | 4.77 | % | ||||||||||
International credit card
|
6.03 | % | 6.39 | % | 6.55 | % | 6.63 | % | 6.69 | % | ||||||||||
Total Credit Card
|
4.94 | % | 5.43 | % | 5.88 | % | 5.53 | % | 4.99 | % | ||||||||||
Automobile
|
7.74 | % | 7.58 | % | 10.03 | % | 9.52 | % | 8.89 | % | ||||||||||
Mortgages (3)
|
0.68 | % | 0.93 | % | 1.26 | % | 1.17 | % | 0.97 | % | ||||||||||
Retail banking (3)
|
0.87 | % | 1.02 | % | 1.23 | % | 1.26 | % | 0.91 | % | ||||||||||
Total Consumer Banking (3)
|
4.15 | % | 4.13 | % | 5.43 | % | 5.19 | % | 4.73 | % | ||||||||||
Nonperforming asset rates (5) (6)
|
||||||||||||||||||||
Commercial and multifamily real estate (3)
|
2.82 | % | 3.65 | % | 3.25 | % | 2.66 | % | 2.15 | % | ||||||||||
Middle market (3)
|
1.20 | % | 1.15 | % | 1.09 | % | 1.25 | % | 1.15 | % | ||||||||||
Specialty lending
|
1.94 | % | 2.18 | % | 2.25 | % | 2.12 | % | 2.11 | % | ||||||||||
Total Commercial Lending (3)
|
2.10 | % | 2.52 | % | 2.33 | % | 2.08 | % | 1.78 | % | ||||||||||
Small-ticket commercial real estate
|
3.57 | % | 4.18 | % | 4.87 | %(7) | 11.39 | % | 10.08 | % | ||||||||||
Total Commercial Banking (3)
|
2.20 | % | 2.64 | % | 2.52 | % | 2.84 | % | 2.47 | % | ||||||||||
Automobile (4)
|
0.56 | % | 0.55 | % | 0.92 | % | 0.87 | % | 0.78 | % | ||||||||||
Mortgages (3)
|
3.78 | % | 3.17 | % | 2.24 | % | 1.83 | % | 1.51 | % | ||||||||||
Retail banking (3)
|
2.25 | % | 2.07 | % | 2.11 | % | 1.98 | % | 1.88 | % | ||||||||||
Total Consumer Banking (3)
|
2.00 | % | 1.76 | % | 1.60 | % | 1.39 | % | 1.21 | % |
2010
|
2010
|
2009
|
2009
|
2009
|
||||||||||||||||
(Dollars in millions) (unaudited)
|
Q2 | Q1 | Q4 | Q3 | Q2 | |||||||||||||||
Credit Card:
|
||||||||||||||||||||
Earnings
|
||||||||||||||||||||
Interest income
|
$ | 2,232 | $ | 2,453 | $ | 2,442 | $ | 2,472 | $ | 2,283 | ||||||||||
Interest expense
|
255 | 340 | 413 | 448 | 486 | |||||||||||||||
Net interest income
|
$ | 1,977 | $ | 2,113 | $ | 2,029 | $ | 2,024 | $ | 1,797 | ||||||||||
Non-interest income
|
659 | 718 | 897 | 967 | 898 | |||||||||||||||
Total revenue
|
$ | 2,636 | $ | 2,831 | $ | 2,926 | $ | 2,991 | $ | 2,695 | ||||||||||
Provision for loan and lease losses
|
765 | 1,175 | 1,204 | 1,644 | 1,520 | |||||||||||||||
Non-interest expense
|
1,002 | 914 | 943 | 897 | 910 | |||||||||||||||
Income before taxes
|
869 | 742 | 779 | 450 | 265 | |||||||||||||||
Income tax provision
|
301 | 253 | 269 | 158 | 92 | |||||||||||||||
Net income
|
$ | 568 | $ | 489 | $ | 510 | $ | 292 | $ | 173 | ||||||||||
Selected Metrics
|
||||||||||||||||||||
Period end loans held for investment
|
$ | 61,897 | $ | 63,806 | $ | 68,524 | $ | 70,369 | $ | 73,399 | ||||||||||
Average loans held for investment
|
$ | 62,679 | $ | 65,922 | $ | 68,743 | $ | 71,908 | $ | 74,190 | ||||||||||
Loans held for investment yield
|
14.24 | % | 14.88 | % | 14.21 | % | 13.75 | % | 12.31 | % | ||||||||||
Revenue margin
|
16.82 | % | 17.18 | % | 17.03 | % | 16.64 | % | 14.53 | % | ||||||||||
Net charge-off rate
|
9.36 | % | 10.29 | % | 9.58 | % | 9.59 | % | 9.24 | % | ||||||||||
30+ day performing delinquency rate
|
4.94 | % | 5.43 | % | 5.88 | % | 5.53 | % | 4.99 | % | ||||||||||
Purchase volume (8)
|
$ | 26,570 | $ | 23,924 | $ | 26,866 | $ | 25,982 | $ | 25,747 | ||||||||||
Domestic Card Sub-segment
|
||||||||||||||||||||
Earnings
|
||||||||||||||||||||
Net interest income
|
$ | 1,735 | $ | 1,865 | $ | 1,781 | $ | 1,797 | $ | 1,586 | ||||||||||
Non-interest income
|
560 | 618 | 794 | 856 | 795 | |||||||||||||||
Total revenue
|
$ | 2,295 | $ | 2,483 | $ | 2,575 | $ | 2,653 | $ | 2,381 | ||||||||||
Provision for loan and lease losses
|
675 | 1,096 | 1,033 | 1,437 | 1,336 | |||||||||||||||
Non-interest expense
|
869 | 809 | 833 | 770 | 788 | |||||||||||||||
Income before taxes
|
751 | 578 | 709 | 446 | 257 | |||||||||||||||
Income tax provision
|
268 | 206 | 248 | 156 | 90 | |||||||||||||||
Net income
|
$ | 483 | $ | 372 | $ | 461 | $ | 290 | $ | 167 | ||||||||||
Selected Metrics
|
||||||||||||||||||||
Period end loans held for investment
|
$ | 54,628 | $ | 56,228 | $ | 60,300 | $ | 61,892 | $ | 64,760 | ||||||||||
Average loans held for investment
|
$ | 55,252 | $ | 58,108 | $ | 60,443 | $ | 63,299 | $ | 65,862 | ||||||||||
Loans held for investment yield
|
13.98 | % | 14.78 | % | 14.08 | % | 13.74 | % | 12.17 | % | ||||||||||
Revenue margin
|
16.61 | % | 17.09 | % | 17.04 | % | 16.76 | % | 14.46 | % | ||||||||||
Net charge-off rate
|
9.49 | % | 10.48 | % | 9.59 | % | 9.64 | % | 9.23 | % | ||||||||||
30+ day performing delinquency rate
|
4.79 | % | 5.30 | % | 5.78 | % | 5.38 | % | 4.77 | % | ||||||||||
Purchase volume (8)
|
$ | 24,513 | $ | 21,988 | $ | 24,593 | $ | 23,761 | $ | 23,611 | ||||||||||
International Card Sub-segment
|
||||||||||||||||||||
Earnings
|
||||||||||||||||||||
Net interest income
|
$ | 242 | $ | 248 | $ | 248 | $ | 227 | $ | 211 | ||||||||||
Non-interest income
|
99 | 100 | 103 | 111 | 103 | |||||||||||||||
Total revenue
|
$ | 341 | $ | 348 | $ | 351 | $ | 338 | $ | 314 | ||||||||||
Provision for loan and lease losses
|
90 | 79 | 171 | 207 | 184 | |||||||||||||||
Non-interest expense
|
133 | 105 | 110 | 127 | 122 | |||||||||||||||
Income before taxes
|
118 | 164 | 70 | 4 | 8 | |||||||||||||||
Income tax provision
|
33 | 47 | 21 | 2 | 2 | |||||||||||||||
Net income
|
$ | 85 | $ | 117 | $ | 49 | $ | 2 | $ | 6 | ||||||||||
Selected Metrics
|
||||||||||||||||||||
Period end loans held for investment
|
$ | 7,269 | $ | 7,578 | $ | 8,224 | $ | 8,477 | $ | 8,639 | ||||||||||
Average loans held for investment
|
$ | 7,427 | $ | 7,814 | $ | 8,300 | $ | 8,609 | $ | 8,328 | ||||||||||
Loans held for investment yield
|
16.21 | % | 15.66 | % | 15.18 | % | 13.80 | % | 13.40 | % | ||||||||||
Revenue margin
|
18.37 | % | 17.81 | % | 16.92 | % | 15.70 | % | 15.08 | % | ||||||||||
Net charge-off rate
|
8.38 | % | 8.83 | % | 9.52 | % | 9.19 | % | 9.32 | % | ||||||||||
30+ day performing delinquency rate
|
6.03 | % | 6.39 | % | 6.55 | % | 6.63 | % | 6.69 | % | ||||||||||
Purchase volume (8)
|
$ | 2,057 | $ | 1,936 | $ | 2,273 | $ | 2,221 | $ | 2,136 |
2010
|
2010
|
2009
|
2009
|
2009
|
||||||||||||||||
(Dollars in millions) (unaudited)
|
Q2 | Q1 | Q4 | Q3 | Q2 | |||||||||||||||
Commercial Banking:
|
||||||||||||||||||||
Earnings
|
||||||||||||||||||||
Net interest income
|
$ | 319 | $ | 312 | $ | 318 | $ | 301 | $ | 279 | ||||||||||
Non-interest income
|
60 | 42 | 38 | 43 | 49 | |||||||||||||||
Total revenue
|
$ | 379 | $ | 354 | $ | 356 | $ | 344 | $ | 328 | ||||||||||
Provision for loan and lease losses
|
62 | 238 | 368 | 375 | 122 | |||||||||||||||
Non-interest expense
|
198 | 192 | 197 | 166 | 156 | |||||||||||||||
Income (loss) before taxes
|
119 | (76 | ) | (209 | ) | (197 | ) | 50 | ||||||||||||
Income tax provision (benefit)
|
42 | (27 | ) | (73 | ) | (69 | ) | 17 | ||||||||||||
Net income (loss)
|
$ | 77 | $ | (49 | ) | $ | (136 | ) | $ | (128 | ) | $ | 33 | |||||||
Selected Metrics
|
||||||||||||||||||||
Period end loans held for investment
|
$ | 29,575 | $ | 29,612 | $ | 29,613 | $ | 29,813 | $ | 30,175 | ||||||||||
Average loans held for investment
|
$ | 29,533 | $ | 29,723 | $ | 29,867 | $ | 30,073 | $ | 30,565 | ||||||||||
Loans held for investment yield
|
4.94 | % | 5.03 | % | 5.11 | % | 5.06 | % | 5.01 | % | ||||||||||
Period end deposits
|
$ | 21,527 | $ | 21,605 | $ | 20,480 | $ | 18,617 | $ | 16,897 | ||||||||||
Average deposits
|
$ | 22,171 | $ | 21,859 | $ | 19,420 | $ | 17,761 | $ | 17,021 | ||||||||||
Deposit interest expense rate
|
0.67 | % | 0.72 | % | 0.80 | % | 0.75 | % | 0.77 | % | ||||||||||
Core deposit intangible amortization
|
$ | 14 | $ | 14 | $ | 14 | $ | 10 | $ | 10 | ||||||||||
Net charge-off rate (3)
|
1.21 | % | 1.37 | % | 2.91 | % | 1.42 | % | 0.89 | % | ||||||||||
Nonperforming loans as a percentage of loans held for investment (3)
|
2.04 | % | 2.48 | % | 2.37 | % | 2.65 | % | 2.33 | % | ||||||||||
Nonperforming asset rate (3)
|
2.20 | % | 2.64 | % | 2.52 | % | 2.84 | % | 2.47 | % |
2010
|
2010
|
2009
|
2009
|
2009
|
||||||||||||||||
(Dollars in millions) (unaudited)
|
Q2 | Q1 | Q4 | Q3 | Q2 | |||||||||||||||
Consumer Banking:
|
||||||||||||||||||||
Earnings
|
||||||||||||||||||||
Net interest income
|
$ | 935 | $ | 896 | $ | 833 | $ | 848 | $ | 826 | ||||||||||
Non-interest income
|
162 | 316 | 153 | 212 | 226 | |||||||||||||||
Total revenue
|
$ | 1,097 | $ | 1,212 | $ | 986 | $ | 1,060 | $ | 1,052 | ||||||||||
Provision for loan and lease losses
|
(112 | ) | 50 | 249 | 156 | 202 | ||||||||||||||
Non-interest expenses
|
735 | 688 | 749 | 681 | 725 | |||||||||||||||
Income (loss) before taxes
|
474 | 474 | (12 | ) | 223 | 125 | ||||||||||||||
Income tax provision (benefit)
|
169 | 169 | (4 | ) | 78 | 44 | ||||||||||||||
Net income (loss)
|
$ | 305 | $ | 305 | $ | (8 | ) | $ | 145 | $ | 81 | |||||||||
Selected Metrics
|
||||||||||||||||||||
Period end loans held for investment
|
$ | 35,313 | $ | 36,383 | $ | 38,214 | $ | 40,149 | $ | 41,848 | ||||||||||
Average loans held for investment
|
$ | 35,660 | $ | 38,245 | $ | 39,114 | $ | 41,076 | $ | 42,722 | ||||||||||
Loans held for investment yield
|
8.99 | % | 8.96 | % | 8.83 | % | 8.89 | % | 8.69 | % | ||||||||||
Auto loan originations
|
1,765 | 1,343 | 1,018 | 1,513 | 1,342 | |||||||||||||||
Period end deposits
|
$ | 77,407 | $ | 76,883 | $ | 74,145 | $ | 72,253 | $ | 73,883 | ||||||||||
Average deposits
|
$ | 77,082 | $ | 75,115 | $ | 72,976 | $ | 73,284 | $ | 74,321 | ||||||||||
Deposit interest expense rate
|
1.18 | % | 1.27 | % | 1.41 | % | 1.58 | % | 1.76 | % | ||||||||||
Core deposit intangible amortization
|
$ | 36 | $ | 38 | $ | 40 | $ | 46 | $ | 47 | ||||||||||
Net charge-off rate (3)
|
1.47 | % | 2.03 | % | 2.85 | % | 2.69 | % | 2.23 | % | ||||||||||
Nonperforming loans as a percentage of loans held for investment (3) (4)
|
1.82 | % | 1.62 | % | 1.45 | % | 1.26 | % | 1.08 | % | ||||||||||
Nonperforming asset rate (3) (4)
|
2.00 | % | 1.76 | % | 1.60 | % | 1.39 | % | 1.21 | % | ||||||||||
30+ day performing delinquency rate (3) (4)
|
4.15 | % | 4.13 | % | 5.43 | % | 5.19 | % | 4.73 | % | ||||||||||
Period end loans serviced for others
|
$ | 23,730 | $ | 26,778 | $ | 30,283 | $ | 30,659 | $ | 31,492 |
2010
|
2010
|
2009
|
2009
|
2009
|
||||||||||||||||
(Dollars in millions) (unaudited)
|
Q2 | Q1 | Q4 | Q3 | Q2 | |||||||||||||||
Other:
|
||||||||||||||||||||
Earnings
|
||||||||||||||||||||
Net interest income (expense)
|
$ | (132 | ) | $ | (91 | ) | $ | (11 | ) | $ | 39 | $ | 55 | |||||||
Non-interest income (expense)
|
(74 | ) | (14 | ) | 111 | 150 | 17 | |||||||||||||
Total revenue
|
$ | (206 | ) | $ | (105 | ) | $ | 100 | $ | 189 | $ | 72 | ||||||||
Provision for loan and lease losses
|
10 | 18 | 24 | 26 | 60 | |||||||||||||||
Restructuring expenses (9)
|
- | - | 32 | 26 | 43 | |||||||||||||||
Non-interest expense
|
65 | 53 | 27 | 31 | 88 | |||||||||||||||
Income (loss) before taxes
|
(281 | ) | (176 | ) | 17 | 106 | (119 | ) | ||||||||||||
Income tax benefit
|
(143 | ) | (151 | ) | (21 | ) | (22 | ) | (61 | ) | ||||||||||
Net income (loss)
|
$ | (138 | ) | $ | (25 | ) | $ | 38 | $ | 128 | $ | (58 | ) | |||||||
Selected Metrics
|
||||||||||||||||||||
Period end loans held for investment (2)
|
$ | 470 | $ | 464 | $ | 452 | $ | 659 | $ | 695 | ||||||||||
Average loans held for investment (2)
|
$ | 464 | $ | 489 | $ | 460 | $ | 483 | $ | 536 | ||||||||||
Period end deposits
|
$ | 18,397 | $ | 19,299 | $ | 21,184 | $ | 23,633 | $ | 25,945 | ||||||||||
Average deposits
|
$ | 19,231 | $ | 20,556 | $ | 22,202 | $ | 24,837 | $ | 28,262 | ||||||||||
Total:
|
||||||||||||||||||||
Earnings
|
||||||||||||||||||||
Net interest income
|
$ | 3,099 | $ | 3,230 | $ | 3,169 | $ | 3,212 | $ | 2,957 | ||||||||||
Non-interest income
|
807 | 1,062 | 1,199 | 1,372 | 1,190 | |||||||||||||||
Total revenue
|
$ | 3,906 | $ | 4,292 | $ | 4,368 | $ | 4,584 | $ | 4,147 | ||||||||||
Provision for loan and lease losses
|
725 | 1,481 | 1,845 | 2,201 | 1,904 | |||||||||||||||
Restructuring expenses (9)
|
- | - | 32 | 26 | 43 | |||||||||||||||
Non-interest expense
|
2,000 | 1,847 | 1,916 | 1,775 | 1,879 | |||||||||||||||
Income before taxes
|
1,181 | 964 | 575 | 582 | 321 | |||||||||||||||
Income tax provision
|
369 | 244 | 171 | 145 | 92 | |||||||||||||||
Net income
|
$ | 812 | $ | 720 | $ | 404 | $ | 437 | $ | 229 | ||||||||||
Selected Metrics
|
||||||||||||||||||||
Period end loans held for investment
|
$ | 127,255 | $ | 130,265 | $ | 136,803 | $ | 140,990 | $ | 146,117 | ||||||||||
Average loans held for investment
|
$ | 128,336 | $ | 134,379 | $ | 138,184 | $ | 143,540 | $ | 148,013 | ||||||||||
Period end deposits
|
$ | 117,331 | $ | 117,787 | $ | 115,809 | $ | 114,503 | $ | 116,725 | ||||||||||
Average deposits
|
$ | 118,484 | $ | 117,530 | $ | 114,598 | $ | 115,882 | $ | 119,604 |
(1)
|
Prior to the adoption of the new consolidation accounting standards management evaluated the Company and each of its lines of business results on a "managed' basis, which is a non-GAAP measure. With the adoption of the new consolidation accounting standards, the Companys reported results are comparable to the "managed" basis, which now reflect the consolidation of the majority of the Company's credit card securitization trusts. However, the Company's total segment results differs from its reported consolidated results because our segment results include the loans underlying one of our securitization trusts that remains unconsolidated. The outstanding balance of the loans in this off-balance sheet trust are reflected in our segment results was $114.8 million as of June 30, 2010.The accompanying Exhibit "Reconciliation to GAAP Financial Measures" presents a reconciliation of the Company's non-GAAP "managed
" results to its GAAP results for periods prior to January 1, 2010.
|
(2)
|
Other loans held for investment includes unamortized premiums and discounts on loans acquired as part of North Fork and Hibernia acquisitions.
|
(3)
|
The denominator used in calculating the allowance as a % of Loans Held for Investment, Net Charge-off Rate and 30+ Day Performing Delinquency Rate include loans acquired as part of the Chevy Chase Bank, FSB ("CCB") acquisition. The metrics excluding such loans are as follows.
|
Q2 2010 | Q1 2010 | Q4 2009 | Q3 2009 | Q2 2009 | ||||||||||||||||
CCB period end acquired loan portfolio (in millions)(unaudited)
|
$ | 6,381 | $ | 6,799 | $ | 7,251 | $ | 7,885 | $ | 8,644 | ||||||||||
CCB average acquired loan portfolio (in millions)(unaudited)
|
$ | 6,541 | $ | 7,037 | $ | 7,512 | $ | 8,029 | $ | 8,499 | ||||||||||
Net charge-off rate
|
||||||||||||||||||||
Commercial and Multifamily Real Estate
|
1.19 | % | 1.48 | % | 3.05 | % | 1.38 | % | 0.95 | % | ||||||||||
Middle Market
|
0.82 | % | 0.87 | % | 0.75 | % | 0.56 | % | 0.61 | % | ||||||||||
Total Commercial Lending
|
1.01 | % | 1.48 | % | 2.05 | % | 1.08 | % | 0.83 | % | ||||||||||
Total Commercial Banking
|
1.24 | % | 1.41 | % | 2.93 | % | 1.43 | % | 0.92 | % | ||||||||||
Mortgage
|
0.77 | % | 1.02 | % | 1.24 | % | 1.24 | % | 0.77 | % | ||||||||||
Retail Banking
|
2.23 | % | 2.22 | % | 3.20 | % | 2.57 | % | 2.56 | % | ||||||||||
Total Consumer Banking
|
1.76 | % | 2.28 | % | 3.45 | % | 3.28 | % | 2.72 | % | ||||||||||
30+ day performing delinquency rate
|
||||||||||||||||||||
Mortgage
|
1.14 | % | 1.58 | % | 2.18 | % | 2.06 | % | 1.76 | % | ||||||||||
Retail Banking
|
0.91 | % | 1.07 | % | 1.30 | % | 1.33 | % | 0.96 | % | ||||||||||
Total Consumer Banking
|
4.93 | % | 4.95 | % | 6.56 | % | 6.27 | % | 5.61 | % | ||||||||||
Nonperforming asset rate
|
||||||||||||||||||||
Commercial and Multifamily Real Estate
|
2.90 | % | 3.71 | % | 3.34 | % | 2.79 | % | 2.25 | % | ||||||||||
Middle Market
|
1.25 | % | 1.23 | % | 1.13 | % | 1.30 | % | 1.21 | % | ||||||||||
Total Commercial Lending
|
2.16 | % | 2.60 | % | 2.39 | % | 2.15 | % | 1.85 | % | ||||||||||
Total Commercial Banking
|
2.26 | % | 2.72 | % | 2.62 | % | 2.95 | % | 2.54 | % | ||||||||||
Mortgage
|
6.30 | % | 5.36 | % | 3.88 | % | 3.24 | % | 2.73 | % | ||||||||||
Retail Banking
|
2.37 | % | 2.17 | % | 2.23 | % | 2.09 | % | 1.88 | % | ||||||||||
Total Consumer Banking
|
2.38 | % | 2.11 | % | 1.93 | % | 1.68 | % | 1.47 | % | ||||||||||
Nonperforming loans as a percentage of loans held for investment
|
||||||||||||||||||||
Commercial Banking
|
2.09 | % | 2.55 | % | 2.43 | % | 2.72 | % | 2.41 | % | ||||||||||
Consumer Banking
|
2.16 | % | 1.93 | % | 1.75 | % | 1.53 | % | 1.32 | % |
(4)
|
Includes nonaccrual consumer auto loans 90+ days past due.
|
(5)
|
Nonperforming assets consist of nonperforming loans and real estate owned ("REO") and foreclosed assets. The nonperforming asset ratios are calculated based on nonperforming assets for each segment divided by the combined total of loans held for investment, REO and foreclosed assets for the segment.
|
(6)
|
The Company's policy is not to classify delinquent credit card loans as nonperforming as permitted by regulatory guidance. Instead, we continue to accrue finance charges and fees on credit card loans until the loan is charged off, typically when the account becomes 180 days past due. Billed finance charges and fees considered uncollectible are not recognized in income.
|
(7)
|
During Q4 2009, the Company reclassified $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.
|
(8)
|
Includes all purchase transactions net of returns. Excludes cash advance transactions.
|
(9)
|
The Company completed its 2007 restructuring initiative during 2009.
|
Contacts:
|
Jeff Norris
|
Danielle Dietz
|
Tatiana Stead
|
Julie Rakes
|
||||
Investor Relations
|
Investor Relations
|
Media Relations
|
Media Relations
|
|||||
703-720-2455
|
703-720-2455
|
703-720-2352
|
804-284-5800
|
·
|
Total revenue in the second quarter of 2010 declined $385 million, or 9.0 percent, from the first quarter of 2010 to $3.9 billion as average loans declined 4.5 percent with no offsetting increase in margin. Non-interest income decreased $254 million in the second quarter, or 23.9 percent relative to the prior quarter, due to the absence of one-time benefits experienced in the first quarter and an expected decline in overlimit fees in the Domestic Card business. Net interest income decreased $131 million, or 4.1 percent.
|
·
|
Net interest margin was stable at 7.09 percent, driven by a 7 basis point decrease in the cost of funds, partially offset by a 5 basis point decrease in loan yields.
|
·
|
Provision expense decreased $755 million from the prior quarter, or 51.1 percent, driven by lower charge-offs and a reduction in allowance balance of $1.0 billion. Charge-offs and delinquencies improved across our consumer businesses, with the exception of an expected seasonal up-tick in auto delinquencies. Commercial Banking charge-offs and non-performing asset rates improved in the quarter.
|
·
|
The continued improvement in credit drove allowance releases in all of the company’s businesses in the second quarter, totaling $1.0 billion for the company. This compares to an allowance release of $566 million in the first quarter of 2010. The Card segment released $665 million, with the majority of that coming from the Domestic Card sub-segment. Better than expected loss performance in the portfolio and a lower level of delinquencies were the primary drivers of the second quarter allowance release. In addition, the $1.9 billion of lower period-end loans require lower allowance, all else being equal. The allowance as a percentage of outstanding loans was 5.35 percent at the end of the second quarter of 2010 as compared with 6.0 percent at the end of the prior quarter.
|
·
|
Period-end total assets decreased by $3.2 billion, or 1.6 percent, from the first quarter of 2010 to $197.5 billion at the end of the second quarter of 2010, with $3.0 billion of the decline coming from loans held for investment. Expected run-off continues in our Installment Loan portfolio in Domestic Card, our Mortgage portfolio in Consumer Banking, and our Small Ticket CRE portfolio in Commercial Banking. Loans held for investment at June 30, 2010 were $127.1 billion, a decline of 2.3 percent from the prior quarter.
|
·
|
Average total deposits during the quarter were $118.5 billion, an increase of $1.0 billion, or 0.8 percent, over the prior quarter. Period-end total deposits decreased by $0.5 billion, or 0.4 percent, to $117.3 billion.
|
·
|
The cost of funds decreased to 1.69 percent in the second quarter from 1.76 percent in the prior quarter.
|
·
|
Non-interest expenses of $2.0 billion increased $153 million in the second quarter of 2010 from the prior quarter, driven primarily by one-time expenses and infrastructure expenses, as well as an increase in marketing.
|
·
|
The company’s TCE ratio increased to 6.1 percent, up 60 basis points from the first quarter 2010 ratio of 5.5 percent. The Tier 1 risk-based capital ratio of 9.9 percent increased 30 basis points relative to the ratio of 9.6 percent in the prior quarter. The recent enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act may have an impact on the Tier 1 treatment of the company’s approximately $3.5 billion of trust preferred securities and provides for a phase-in period expected to begin in 2013. Given the potential change in capital treatment of these securities, the company anticipates that it will determine whether to exercise its rights to redeem its trust preferred securities at or near the beginning of the phase-in period. The company looks forward to receiving clarity on
these issues through rule-making and other regulatory action.
|
·
|
Revenues relative to the prior quarter:
|
|
–
|
Domestic Card – declined $188.0 million, or 7.6 percent
|
|
–
|
International Card – declined $7.0 million, or 2.0 percent
|
·
|
Period-end loans in the Domestic Card segment were $54.6 billion in the second quarter, a decline of $1.6 billion, or 2.9 percent, from the prior quarter as the Installment Loan portfolio continued to run off. International credit card loans declined in the quarter by $309 million, or 4.1 percent, to $7.3 billion.
|
·
|
As expected, revenue margin in the Domestic Card sub-segment declined in the quarter. Revenue margin fell 48 basis points to16.61 percent in the second quarter from 17.09 percent in the prior quarter. The company expects quarterly Domestic Card revenue margin to decline over the next several quarters to around 15 percent by the end of 2010 or early 2011.
|
·
|
Non-interest expense increased $88 million, or 9.6 percent, in the second quarter primarily due to higher marketing expense in Domestic Card and tax accruals in International Card.
|
·
|
Domestic Card provision expense decreased $421 million in the second quarter, or 38.4 percent, relative to the prior quarter. The lower provision expense resulted from both lower charge-offs and an allowance release in the quarter.
|
·
|
Net charge-off rates relative to the prior quarter:
|
|
–
|
Domestic Card – improved 99 basis points to 9.49 percent from 10.48 percent
|
|
–
|
International Card – improved 45 basis points to 8.38 percent from 8.83 percent
|
·
|
Delinquency rates relative to the prior quarter:
|
|
–
|
Domestic Card – improved 51 basis points to 4.79 percent from 5.30 percent
|
|
–
|
International Card – improved 36 basis points to 6.03 percent from 6.39 percent
|
·
|
Purchase volumes in Domestic Card increased $2.6 billion, or 11.0 percent, relative to the prior quarter.
|
·
|
Commercial Banking reported net income improved to $77 million in the second quarter compared to a net loss in of $49 million in the first quarter, largely as a result of improving credit.
|
·
|
Total revenue increased $25 million, or 7.1 percent, during the quarter to $379 million.
|
·
|
Period-end loans in Commercial Banking were $29.6 billion, essentially even with the prior quarter.
|
·
|
Average deposits increased by $312 million, or 1.4 percent, to $22.2 billion during the second quarter, while the deposit interest expense rate improved 5 basis points to 67 basis points.
|
·
|
Provision expense decreased $176 million relative to the prior quarter as a result of lower charge-offs and an allowance release in the quarter.
|
·
|
Charge-off rate relative to the prior quarter:
|
|
–
|
Total Commercial Banking –1.21percent, a decline of 16 basis points
|
|
–
|
Commercial lending – 0.98 percent, a decline of 16 basis points
|
|
–
|
Small ticket commercial real estate – 4.21 percent, a decline of 22 basis points
|
·
|
Non-performing asset rate relative to the prior quarter:
|
|
–
|
Total Commercial Banking – 2.20 percent, a decline of 44 basis points
|
|
–
|
Commercial lending – 2.10 percent, a decline of 42 basis points
|
|
–
|
Small ticket commercial real estate – 3.57 percent, a decline of 61 basis points
|
·
|
Total revenue decreased $115 million, or 9.5 percent, during the quarter to $1.1 billion.
|
·
|
Provision expense decreased $162 million relative to the prior quarter as a result of lower charge-offs and a larger allowance release relative to the prior quarter.
|
·
|
Period-end loans relative to the prior quarter:
|
|
–
|
Auto – declined $225 million, or 1.3 percent, to $17.2 billion.
|
|
–
|
Mortgage – declined $645 million, or 4.6 percent, to $13.3 billion. Mortgage loans continued to reflect expected run-off in the portfolio.
|
|
–
|
Retail banking – declined $200 million, or 4.0 percent, to $4.8 billion.
|
·
|
Auto loan originations increased 31.4 percent over the prior quarter to $1.8 billion in the second quarter.
|
·
|
Average deposits in Consumer Banking increased $2.0 billion, or 2.6 percent, to $77.1 billion during the second quarter. Improving interest rates and disciplined pricing drove a 9 basis point decline in the deposit interest expense rate in the quarter.
|
·
|
Net charge-off rates relative to the prior quarter:
|
|
–
|
Auto – 2.09 percent, a decrease of 88 basis points
|
|
–
|
Mortgage – 0.46 percent, an decrease of 48 basis points
|
|
–
|
Retail banking – 2.11 percent, even with the prior quarter
|
● |
Table 1: Reported GAAP Measures
|
—
|
Reflects selected financial measures from our consolidated GAAP financial statements or metrics calculated based on our consolidated GAAP financial statements.
|
● |
Table 2: Non GAAP Securitization Reconciliation Adjustments
|
—
|
Presents the reconciling differences between our reported GAAP financial measures and our non-GAAP managed basis financial measures. These differences include certain reclassifications that assume loans securitized by Capital One and accounted for as sales and off-balance sheet transactions in our GAAP financial statements remain on our balance sheet. These adjustments do not impact net income as reported by our lines of business or the company as a whole.
|
● |
Table 3: Non GAAP Managed Basis Measures
|
—
|
Reflects selected financial measures and related metrics based on our non-GAAP managed basis results.
|
● |
Table 4: Financial & Statistical Summary Explanatory Footnotes
|
—
|
Includes explanatory footnotes that provide additional information for certain financial and statistical measures presented in Tables 1, 2 and 3.
|
● |
Table 5: Average Balances and Net Interest Margin Non-GAAP Reconciliation
|
—
|
Presents a reconciliation of our average balances and net interest margin on a reported basis to our average balances and net interest margin on a non-GAAP managed basis.
|
● |
Table 6: Tangible Common Equity Non-GAAP Reconciliation
|
—
|
Presents a reconciliation of tangible common equity ratios calculated based on our reported results to our tangible common equity ratios calculated on a non-GAAP managed basis.
|
2009
|
||||||||||||||||
(Dollars in millions, except per share data and as noted)
|
Q4
|
Q3
|
Q2
|
Q1(7)
|
||||||||||||
Earnings (Reported Basis)
|
||||||||||||||||
Net interest income
|
$ | 1,954 | $ | 2,005 | $ | 1,945 | $ | 1,793 | ||||||||
Non-interest Income (1)
|
1,412 | 1,553 | 1,232 | (5) | 1,090 | |||||||||||
Total revenue (2)
|
3,366 | 3,558 | 3,177 | 2,883 | ||||||||||||
Provision for loan and lease losses
|
844 | 1,173 | 934 | 1,279 | ||||||||||||
Reported Balance Sheet Statistics (Period Average)
|
||||||||||||||||
Average loans held for investment
|
$ | 94,732 | $ | 99,354 | $ | 104,682 | $ | 103,242 | ||||||||
Average earning assets
|
143,663 | 145,280 | 150,804 | 145,172 | ||||||||||||
Average assets
|
169,856 | 173,428 | 177,628 | 168,489 | ||||||||||||
Return on average assets (ROA)
|
0.95 | % | 1.01 | % | 0.52 | % | (0.20 | )% | ||||||||
Reported Balance Sheet Statistics (Period End)
|
||||||||||||||||
Loans held for investment
|
$ | 90,619 | $ | 96,714 | $ | 100,940 | $ | 104,921 | ||||||||
Total assets
|
169,622 | 168,432 | 171,948 | 177,431 | ||||||||||||
Tangible assets (A)
|
155,516 | 154,315 | 157,782 | 163,230 | ||||||||||||
Tangible common equity to tangible assets ratio (B)
|
8.03 | % | 7.82 | % | 7.10 | % (6) | 5.75 | % | ||||||||
Reported Performance Statistics (Quarter over Quarter)
|
||||||||||||||||
Net interest income growth (3)
|
(3 | )% | 3 | % | 8 | % | (1 | )% | ||||||||
Non-interest income growth (3)
|
(9 | )% | 26 | % | 13 | % | (20 | )% | ||||||||
Revenue growth
|
(5 | )% | 12 | % | 10 | % | (9 | )% | ||||||||
Net interest margin
|
5.44 | % | 5.52 | % | 5.16 | % | 4.94 | % | ||||||||
Revenue margin
|
9.37 | % | 9.80 | % | 8.43 | % | 7.94 | % | ||||||||
Risk-adjusted margin (C)
|
6.07 | % | 6.69 | % | 5.46 | % | 4.81 | % | ||||||||
Non-interest expense as a % of average loans held for investment (annualized)
|
8.23 | % | 7.25 | % | 7.34 | % | 6.76 | % | ||||||||
Efficiency ratio (D)
|
56.92 | % | 49.92 | % | 59.11 | % | 59.93 | % | ||||||||
Reported Asset Quality Statistics
|
||||||||||||||||
Net charge-offs (4)
|
$ | 1,185 | $ | 1,128 | $ | 1,117 | $ | 1,138 | ||||||||
Net charge-off rate (4)
|
5.00 | % | 4.54 | % | 4.28 | % | 4.41 | % | ||||||||
30+ day performing delinquency rate (4)
|
4.13 | % | 4.12 | % | 3.71 | % | 3.65 | % |
2009
|
||||||||||||||||
(Dollars in millions, except per share data and as noted)
|
Q4
|
Q3
|
Q2
|
Q1
|
||||||||||||
Earnings
|
||||||||||||||||
Net interest income
|
$ | 1,216 | $ | 1,207 | $ | 1,013 | $ | 957 | ||||||||
Non-interest Income (1)
|
(213 | ) | (180 | ) | (43 | ) | (104 | ) | ||||||||
Total revenue (2)
|
1,003 | 1,027 | 970 | 853 | ||||||||||||
Provision for loan and lease losses
|
1,003 | 1,027 | 970 | 853 | ||||||||||||
Balance Sheet Statistics (Period Average)
|
||||||||||||||||
Average loans held for investment
|
$ | 43,452 | $ | 44,186 | $ | 43,331 | $ | 43,940 | ||||||||
Average earning assets
|
40,236 | 40,594 | 40,404 | 41,442 | ||||||||||||
Average assets
|
40,569 | 41,227 | 40,774 | 41,680 | ||||||||||||
Return on average assets (ROA)
|
(0.18 | )% | (0.20 | )% | (0.10 | )% | 0.04 | % | ||||||||
Balance Sheet Statistics (Period End)
|
||||||||||||||||
Loans held for investment
|
$ | 46,184 | $ | 44,275 | $ | 45,177 | $ | 44,809 | ||||||||
Total assets
|
42,767 | 41,251 | 42,230 | 42,527 | ||||||||||||
Tangible assets (A)
|
42,767 | 41,251 | 42,230 | 42,526 | ||||||||||||
Tangible common equity to tangible assets ratio (B)
|
(1.73 | )% | (1.65 | )% | (1.50 | )% | (1.19 | )% | ||||||||
Performance Statistics
|
||||||||||||||||
Net interest income growth
|
2 | % | 6 | % | - | % | - | % | ||||||||
Non-interest income growth
|
(4 | ) % | (11 | ) % | 8 | % | 3 | % | ||||||||
Revenue growth
|
- | % | (1 | ) % | 1 | % | 4 | % | ||||||||
Net interest margin
|
1.46 | % | 1.39 | % | 1.03 | % | 0.95 | % | ||||||||
Revenue margin
|
0.13 | % | 0.07 | % | 0.25 | % | 0.07 | % | ||||||||
Risk-adjusted margin
|
(1.33 | )% | (1.46 | )% | (1.15 | )% | (1.07 | )% | ||||||||
Non-interest expense as a % of average loans held for investment
|
(2.59 | )% | (2.23 | )% | (2.15 | )% | (2.02 | )% | ||||||||
Efficiency ratio
|
(13.07 | )% | (11.19 | )% | (13.82 | )% | (13.68 | )% | ||||||||
Asset Quality Statistics
|
||||||||||||||||
Net charge-offs
|
$ | 1,003 | $ | 1,027 | $ | 970 | $ | 853 | ||||||||
Net charge-off rate
|
1.33 | % | 1.46 | % | 1.36 | % | 1.00 | % | ||||||||
30+ day performing delinquency rate
|
0.60 | % | 0.43 | % | 0.39 | % | 0.45 | % |
2009
|
||||||||||||||||
(Dollars in millions, except per share data and as noted)
|
Q4
|
Q3
|
Q2
|
Q1(7)
|
||||||||||||
Earnings (Managed Basis)
|
||||||||||||||||
Net interest income
|
$ | 3,170 | $ | 3,212 | $ | 2,957 | $ | 2,750 | ||||||||
Non-interest income (1)
|
1,199 | 1,373 | 1,190 | (5) | 986 | |||||||||||
Total revenue (2)
|
4,369 | 4,585 | 4,147 | 3,736 | ||||||||||||
Provision for loan and lease losses
|
1,847 | 2,200 | 1,904 | 2,132 | ||||||||||||
Managed Balance Sheet Statistics (Period Average)
|
||||||||||||||||
Average loans held for investment
|
$ | 138,184 | $ | 143,540 | $ | 148,013 | $ | 147,182 | ||||||||
Average earning assets
|
183,899 | 185,874 | 191,208 | 186,614 | ||||||||||||
Average assets
|
210,425 | 214,655 | 218,402 | 210,169 | ||||||||||||
Return on average assets (ROA)
|
0.77 | % | 0.81 | % | 0.42 | % | (0.16 | )% | ||||||||
Managed Balance Sheet Statistics (Period End)
|
||||||||||||||||
Loans held for investment
|
$ | 136,803 | $ | 140,990 | $ | 146,117 | $ | 149,730 | ||||||||
Total assets
|
212,389 | 209,683 | 214,178 | 219,958 | ||||||||||||
Tangible assets (A)
|
198,283 | 195,566 | 200,012 | 205,756 | ||||||||||||
Tangible common equity to tangible assets ratio (B)
|
6.30 | % | 6.17 | % | 5.60 | % (6) | 4.56 | % | ||||||||
Managed Performance Statistics (Quarter over Quarter)
|
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Net interest income growth (3)
|
(1 | )% | 9 | % | 8 | % | (1 | )% | ||||||||
Non-interest income growth (3)
|
(13 | )% | 15 | % | 21 | % | (17 | )% | ||||||||
Revenue growth
|
(5 | )% | 11 | % | 11 | % | (5 | )% | ||||||||
Net interest margin
|
6.90 | % | 6.91 | % | 6.19 | % | 5.89 | % | ||||||||
Revenue margin
|
9.50 | % | 9.87 | % | 8.68 | % | 8.01 | % | ||||||||
Risk-adjusted margin (C)
|
4.74 | % | 5.23 | % | 4.31 | % | 3.74 | % | ||||||||
Non-interest expense as a % of average loans held for investment (annualized)
|
5.64 | % | 5.02 | % | 5.19 | % | 4.74 | % | ||||||||
Efficiency ratio (D)
|
43.85 | % | 38.73 | % | 45.29 | % | 46.25 | % | ||||||||
Asset Quality Statistics
|
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Net charge-offs (4)
|
$ | 2,188 | $ | 2,155 | $ | 2,087 | $ | 1,991 | ||||||||
Net charge-off rate (4)
|
6.33 | % | 6.00 | % | 5.64 | % | 5.41 | % | ||||||||
30+ day performing delinquency rate (4)
|
4.73 | % | 4.55 | % | 4.10 | % | 4.10 | % |
(1)
|
Includes the impact from the change in fair value of retained interests, including the interest-only strips, which totaled $55 million in Q4 2009, $37 million in Q3 2009, $(115) million in Q2 2009 and $(128) million in Q1 2009.
|
(2)
|
Billed finance charges and fees not included in revenue totaled: $490 million in Q4 2009, $517 million in Q3 2009, $572 million in Q2 2009 and $544 million in Q1 2009.
|
(3)
|
Prior period amounts have been reclassified to conform with the current period presentation and adjusted to reflect purchase accounting refinements related to the acquisition of Chevy Chase Bank, FSB ("CCB").
|
(4)
|
The denominator used in calculating the allowance as a % of loans held for investment, the net charge-off rate and the 30+ day performing delinquency rate includes loans acquired as part of the CCB acquisition. These metrics, calculated excluding CCB loans, are presented below.
|
(Dollars in millions)
|
Q4 2009 | Q3 2009 | Q2 2009 | Q1 2009 | ||||||||||||
CCB period end acquired loan portfolio (unaudited)
|
$ | 7,251 | $ | 7,885 | $ | 8,644 | $ | 8,859 | ||||||||
CCB average acquired loan portfolio (unaudited)
|
$ | 7,512 | $ | 8,029 | $ | 8,499 | $ | 3,073 | ||||||||
Allowance as a % of loans held for investment, excluding CCB
|
4.95 | % | 5.08 | % | 4.86 | % | 4.84 | % | ||||||||
Net charge-off rate (Reported), excluding CCB
|
5.44 | % | 4.94 | % | 4.65 | % | 4.54 | % | ||||||||
Net charge-off rate (Managed), excluding CCB
|
6.70 | % | 6.36 | % | 5.98 | % | 5.53 | % | ||||||||
30+ day performing delinquency rate (Reported), excluding CCB
|
4.49 | % | 4.48 | % | 4.06 | % | 3.99 | % | ||||||||
30+ day performing delinquency rate (Managed), excluding CCB
|
4.99 | % | 4.82 | % | 4.36 | % | 4.36 | % |
(5)
|
In Q2 2009, the Company elected to convert and sell 404,508 shares of MasterCard class B common stock, which resulted in a gain of $66 million that is included in non-interest income.
|
(6)
|
Includes the impact of the issuance of 56,000,000 common shares at $27.75 per share on May 14, 2009.
|
(7)
|
Effective February 27, 2009, the Company acquired Chevy Chase Bank, FSP for $476 million, which included a cash payment of $445 million and the issuance of 2.6 million common shares valued at $31 million. The acquistion of Chevy Chase Bank included $10 billion in loans and $13.6 billion in deposits.
|
(A)
|
Tangible assets represents total assets from continuing operations less identifiable intangible assets and goodwill. See Table 6: Tangible Common Equity Non-GAAP Reconciliation.
|
(B)
|
Tangible common equity ("TCE") represents common stockholders' equity (total stockholders' equity less preferred stock) less identifable intangible assets and goodwill. See Table 6: Tangible Common Equity Non-GAAP Reconciliation.
|
(C)
|
Calculated based on total revenue less net charge-offs divided by average earning assets, expressed as a percentage.
|
(D)
|
Calculated based on non-interest expense less restructuring expense divided by total revenue.
|
(Dollars in millions)
|
Quarter Ended 06/30/09
|
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Reported Basis
|
Average
|
Income/
|
Yield/
|
|||||||||
Balance
|
Expense
|
Rate
|
||||||||||
Interest-earning assets:
|
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Loans held for investment
|
$ | 104,682 | $ | 2,237 | 8.55 | % | ||||||
Other
|
8,623 | 68 | 3.15 | % | ||||||||
Total interest-earning assets
|
$ | 150,804 | $ | 2,717 | 7.21 | % | ||||||
Interest-bearing liabilities:
|
||||||||||||
Securitization liability
|
5,876 | 74 | 5.04 | % | ||||||||
Total interest-bearing liabilities
|
$ | 131,631 | $ | 772 | 2.35 | % | ||||||
Net interest spread
|
4.86 | % | ||||||||||
Interest income to average interest-earning assets
|
7.21 | % | ||||||||||
Interest expense to average interest-earning assets
|
2.05 | % | ||||||||||
Net interest margin
|
5.16 | % |
Non-GAAP Securitization Reconciliation Adjustments
|
Quarter Ended 06/30/09
|
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Average
|
Income/
|
Yield/
|
||||||||||
Interest-earning assets:
|
Balance
|
Expense
|
Rate
|
|||||||||
Loans held for investment
|
$ | 43,331 | $ | 1,331 | 1.09 | % | ||||||
Other
|
(2,927 | ) | (51 | ) | (1.96 | )% | ||||||
Total interest-earning assets
|
$ | 40,404 | $ | 1,280 | 1.15 | % | ||||||
Interest-bearing liabilities:
|
||||||||||||
Securitization liability
|
40,806 | 268 | (2.11 | )% | ||||||||
Total interest-bearing liabilities
|
$ | 40,806 | $ | 268 | 0.06 | % | ||||||
Net interest spread
|
1.09 | % | ||||||||||
Interest income to average interest-earning assets
|
1.15 | % | ||||||||||
Interest expense to average interest-earning assets
|
0.12 | % | ||||||||||
Net interest margin
|
1.03 | % |
Non-GAAP Managed Basis
|
Quarter Ended 06/30/09
|
|||||||||||
Average
|
Income/
|
Yield/
|
||||||||||
Interest-earning assets:
|
Balance
|
Expense
|
Rate
|
|||||||||
Loans held for investment
|
$ | 148,013 | $ | 3,568 | 9.64 | % | ||||||
Other
|
5,696 | 17 | 1.19 | % | ||||||||
Total interest-earning assets
|
$ | 191,208 | $ | 3,997 | 8.36 | % | ||||||
Interest-bearing liabilities:
|
||||||||||||
Securitization liability
|
46,682 | 342 | 2.93 | % | ||||||||
Total interest-bearing liabilities
|
$ | 172,437 | $ | 1,040 | 2.41 | % | ||||||
Net interest spread
|
5.95 | % | ||||||||||
Interest income to average interest-earning assets
|
8.36 | % | ||||||||||
Interest expense to average interest-earning assets
|
2.17 | % | ||||||||||
Net interest margin
|
6.19 | % |
2010
|
2010
|
2009
|
2009
|
2009
|
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(Dollars in millions)
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
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Reconciliation of Average Equity to Average Tangible Common Equity
|
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Average equity
|
$ | 24,526 | $ | 23,681 | $ | 26,518 | $ | 26,002 | $ | 27,668 | ||||||||||
Less: Preferred stock
|
- | - | - | - | 41 | |||||||||||||||
Less: Average intangible assets (1)
|
(14,039 | ) | (14,075 | ) | (14,105 | ) | (14,151 | ) | (14,129 | ) | ||||||||||
Average Tangible Common Equity
|
$ | 10,487 | $ | 9,606 | $ | 12,413 | $ | 11,851 | $ | 13,580 | ||||||||||
Reconciliation of Period End Equity to Tangible Common Equity
|
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Stockholders' equity
|
$ | 25,270 | $ | 24,374 | $ | 26,589 | $ | 26,192 | $ | 25,332 | ||||||||||
Less: Preferred stock
|
- | - | - | - | 38 | |||||||||||||||
Less: Intangible assets (1)
|
(14,011 | ) | (14,044 | ) | (14,106 | ) | (14,117 | ) | (14,166 | ) | ||||||||||
Period End Tangible Common Equity
|
$ | 11,259 | $ | 10,330 | $ | 12,483 | $ | 12,075 | $ | 11,204 | ||||||||||
Reconciliation of Period End Assets to Tangible Assets
|
||||||||||||||||||||
Total assets
|
$ | 197,489 | $ | 200,707 | $ | 169,646 | $ | 168,463 | $ | 171,994 | ||||||||||
Less: Assets—discontinued operations
|
(10 | ) | (16 | ) | (24 | ) | (31 | ) | (46 | ) | ||||||||||
Total assets—continuing operations
|
197,479 | 200,691 | 169,622 | 168,432 | 171,948 | |||||||||||||||
Less: Intangible assets (1)
|
(14,011 | ) | (14,044 | ) | (14,106 | ) | (14,117 | ) | (14,166 | ) | ||||||||||
Period End Tangible Assets
|
$ | 183,468 | $ | 186,647 | $ | 155,516 | $ | 154,315 | $ | 157,782 | ||||||||||
TCE ratio (2)
|
6.14 | % | 5.53 | % | 8.03 | % | 7.82 | % | 7.10 | % | ||||||||||
Reconciliation of Period End Assets to Tangible Assets on a Managed Basis
|
||||||||||||||||||||
Total reported assets
|
$ | 197,489 | $ | 200,707 | $ | 169,646 | $ | 168,463 | $ | 171,994 | ||||||||||
Securitization adjustments (3)
|
- | - | 42,767 | 41,251 | 42,230 | |||||||||||||||
Total non-GAAP managed assets
|
197,489 | 200,707 | 212,413 | 209,714 | 214,224 | |||||||||||||||
Less: Assets—discontinued operations
|
(10 | ) | (16 | ) | (24 | ) | (31 | ) | (46 | ) | ||||||||||
Total assets—continuing operations
|
197,479 | 200,691 | 212,389 | 209,683 | 214,178 | |||||||||||||||
Less: Intangible Assets (1)
|
(14,011 | ) | (14,044 | ) | (14,106 | ) | (14,117 | ) | (14,166 | ) | ||||||||||
Period End Tangible Assets
|
$ | 183,468 | $ | 186,647 | $ | 198,283 | $ | 195,566 | $ | 200,012 | ||||||||||
TCE ratio (2)
|
6.14 | % | 5.53 | % | 6.30 | % | 6.17 | % | 5.60 | % |