SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
April 21, 2011
Date of Report (Date of earliest event reported)
Commission File No. 1-13300
CAPITAL ONE FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware
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54-1719854
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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1680 Capital One Drive McLean, Virginia
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22102
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant’s telephone number, including area code: (703) 720-1000
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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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.Results of Operations and Financial Condition.
On April 21, 2011, the Company issued a press release announcing its financial results for the first quarter ended March 31, 2011. Copies of the Company’s press release and the financial supplement are attached and filed herewith as Exhibits 99.1 and 99.2 to this Form 8-K and are incorporated herein by reference.
Item 7.01.Regulation FD Disclosure.
The Company hereby furnishes the information in Exhibit 99.3 hereto, Earnings Release Slides - First Quarter 2011 for the quarter ended March 31, 2011.
Note: Information in Exhibit 99.3 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 99.3 shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933.
Item 8.01.Other Events.
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(a)
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See attached press release and financial supplement at Exhibits 99.1 and 99.2.
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(b)
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Cautionary Factors.
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The attached press release and information provided pursuant to Items 2.02, 7.01 and 9.01 contain forward-looking statements, which involve a number of risks and uncertainties. The Company cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information as a result of various factors including, but not limited to, the following:
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•
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general economic and business conditions in the U.S., the U.K., Canada, 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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financial, legal, regulatory, tax or accounting changes or actions, including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder;
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developments, changes or actions relating to any litigation matter involving the Company;
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increases or decreases in interest rates;
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the ability of the Company to 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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the success of the Company’s marketing efforts in attracting and retaining customers;
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•
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increases or decreases in the Company’s aggregate loan balances 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 the Company incurs 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 mortgage loans relating to such requests, the success rates of claimants against the Company, any developments in litigation and the actual recoveries the Company may make on any collateral relating to claims against it;
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the amount and rate of deposit growth;
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changes in the reputation of or expectations regarding the financial services industry or the Company with respect to practices, products or financial condition;
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any significant disruption in the Company’s operations or technology platform;
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the Company’s ability to maintain a compliance infrastructure suitable for its size and complexity;
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the Company’s ability to control costs;
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the amount of, and rate of growth in, the Company’s expenses as its business develops or changes or as it expands into new market areas;
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the Company’s ability to execute on its strategic and operational plans;
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any significant disruption of, or loss of public confidence in, the United States Mail service affecting the Company’s response rates and consumer payments;
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the ability of the Company to recruit and retain experienced personnel to assist in the management and operations of new products and services;
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changes in the labor and employment markets;
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the risk that 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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disruptions from the Company’s acquisitions negatively impacting its ability to maintain relationships with customers, employees or suppliers;
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fraud or misconduct by the Company’s customers, employees or business partners;
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competition from providers of products and services that compete with the Company’s businesses; and
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other risk factors listed from time to time in the Company’s SEC reports including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2010.
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Item 9.01.Financial Statements, Pro Forma Financial Information and Exhibits.
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(c)
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Exhibits.
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Exhibit
No.
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Description of Exhibit
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Press release dated April 21, 2011 - First Quarter 2011
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Financial Supplement - First Quarter 2011
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| 99.3 | Earnings Release Slides - First Quarter 2011 |
Earnings Conference Call Webcast Information.
Capital One will hold an earnings conference call on April 21, 2011, 8:30 AM Eastern Daylight Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via Capital One’s home page (http://www.capitalone.com). Choose “Investors” to access the Investor Center and view and/or download the earnings press release, a reconciliation to GAAP financial measures and other relevant financial information. The replay of the webcast will be archived on Capital One’s website through May 5, 2011.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned, hereunto duly authorized.
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CAPITAL ONE FINANCIAL CORPORATION
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Dated: April 21, 2011
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By:
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/s/ Gary L. Perlin
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Gary L. Perlin
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Chief Financial Officer
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Exhibit 99.1
FOR IMMEDIATE RELEASE: April 21, 2011
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Contacts:
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Jeff Norris
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Danielle Dietz
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Tatiana Stead
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Julie Rakes
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Investor Relations
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Investor Relations
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Media Relations
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Media Relations
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703-720-2455
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703-720-2455
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703-720-2352
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804-284-5800
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Capital One Reports First Quarter 2011 Net Income of $1.0 billion, or $2.21 per share
Net Income improved $380 million, or 60 percent, from Q1 2010 and $319 million, or 46 percent, from Q4 2010
Results driven by positive credit trends and strong revenues
Card loan volumes declined consistent with historical seasonal trends; purchase volumes and account originations remain strong
Growth emerging in Auto and Commercial
Continued strong deposit growth
Strong capital generation: TCE increased to 7.3 percent from 6.9 percent; Tier 1 common dipped to 8.4 percent from 8.8 percent with the final phase-in of FAS 166/167
McLean, Va. (April 21, 2011) – Capital One Financial Corporation (NYSE: COF) today announced net income for the first quarter of 2011 of $1.0 billion, or $2.21 per common share, compared with net income of $636 million, or $1.40 per common share, in the first quarter of 2010 and net income of $697 million, or $1.52 per common share, in the fourth quarter of 2010.
"We are gaining momentum across our businesses, and the period of shrinking loans through the Great Recession came to an end in the first quarter," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "Our solid first quarter results and our strong and resilient balance sheet put us in a good position to continue to generate capital and deliver strong and sustainable returns to our shareholders."
Capital One – First Quarter 2011 Results
Page 2
Total Company Results
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Total revenue in the first quarter of 2011 of $4.1 billion increased $120 million, or 3.0 percent, from the fourth quarter of 2010, as a result of increasing margins and relatively stable average loans.
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o
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Net interest income increased $117 million, or 3.9 percent, from the prior quarter.
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Net interest margin increased to 7.24 percent from 6.95 percent, driven by higher asset yields in the company’s Card and Auto businesses and a nine basis point decrease in the company’s cost of funds.
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The cost of funds decreased to 1.41 percent in the first quarter from 1.50 percent in the prior quarter, driven by the mix shift toward lower-cost deposits.
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Non-interest expense of $2.2 billion in the first quarter of 2011 increased $71 million, or 3.4 percent, from the prior quarter. One-time operating costs were partially offset by seasonally lower marketing expense.
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Provision expense of $534 million in the first quarter decreased $305 million from the prior quarter, driven by a $249 million reduction in net charge-offs.
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Net charge-offs as a percentage of average loans was 3.66 percent in the first quarter of 2011 compared with 4.45 percent in the prior quarter and 6.02 percent in first quarter of 2010.
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Period-end loans held for investment declined $1.9 billion, or 1.5 percent, in the first quarter to $124.1 billion at March 31, 2011.
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Excluding the expected run-off in the company’s Installment Loan portfolio in Domestic Card, Home Loan portfolio in Consumer Banking and Small-Ticket Commercial Real Estate portfolio in Commercial Banking, total company loan balances declined approximately $824 million in the first quarter of 2011.
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Average total deposits increased $2.4 billion, or 2.0 percent, during the quarter to $124.2 billion. Period-end total deposits increased by $3.2 billion, or 2.6 percent, to $125.4 billion.
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The company’s Tier 1 common equity ratio of 8.4 percent dipped 40 basis points from 8.8 percent in the prior quarter. The first quarter of 2011 marked the final quarter of the regulatory phase-in of the implementation of FAS 166/167.
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The tangible common equity (TCE) ratio increased to 7.3 percent in the first quarter from 6.9 percent in the fourth quarter of 2010.
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Capital One – First Quarter 2011 Results
Page 3
“We expect that our strong capital and capital generation will enable us to deploy substantial capital for the benefit of our shareholders," said Gary L. Perlin, Capital One’s Chief Financial Officer.
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 more lending information and statistics on the segment results, please refer to the Financial Supplement.
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Period-end loans in the Domestic Card segment were $50.6 billion in the first quarter, a decline of 6.1 percent from the prior quarter, as a result of the expected run-off of the Installment Loan portfolio and seasonal declines. Average loan balances in the quarter declined by 2.4 percent.
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Excluding the run-off of the Installment Loans, loans declined $2.7 billion, or 5.3 percent, in Domestic Card compared to the fourth quarter of 2010.
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First quarter Domestic Card purchase volumes grew $3.0 billion, or 13.8 percent, from the first quarter of 2010 but declined by $2.0 billion, or 7.3 percent, compared to the fourth quarter of 2010 due to seasonal patterns.
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Domestic Card revenue margin increased 56 basis points to 17.22 percent in the first quarter from 16.66 percent in the prior quarter driven by continued favorable credit impacts and mix shifts within the portfolio.
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Domestic Card provision expense decreased $275 million in the first quarter from the prior quarter. Strong underlying credit improvement trends, lower bankruptcy losses and higher recoveries more than offset expected seasonal headwinds.
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International Card results were driven primarily by the acquisition of the Hudson’s Bay Company (HBC) private label credit card portfolio in the quarter.
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Credit card loans increased by $1.2 billion, or 16.1 percent, to $8.7 billion
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Inclusion of HBC drove non-interest expense higher by approximately $30 million for the quarter
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–
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Higher provision was due primarily to a one-time allowance build for the HBC portfolio of $105 million
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Capital One – First Quarter 2011 Results
Page 4
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Net charge-off rates relative to the prior quarter:
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–
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Domestic Card – improved 108 basis points to 6.20 percent from 7.28 percent
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–
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International Card – improved 94 basis points to 5.74 percent from 6.68 percent
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·
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Delinquency rates relative to the prior quarter:
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–
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Domestic Card – improved 50 basis points to 3.59 percent from 4.09 percent
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–
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International Card – improved 20 basis points to 5.55 percent from 5.75 percent
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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.
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Revenues of $392 million and period-end loans of $30.0 billion grew modestly compared to the fourth quarter.
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Provision expense decreased $49 million from the fourth quarter to a negative provision of $15 million as a result of an allowance release and improving net charge-offs in the quarter.
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Period-end deposits grew $1.6 billion, or 7.1 percent, from the fourth quarter to $24.2 billion. The deposit interest expense rate improved 6 basis points to 55 basis points.
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Net charge-off rate relative to the prior quarter:
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–
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Total Commercial Banking – improved 64 basis points to 0.79 percent from 1.43 percent
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–
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Commercial lending – improved 62 basis points to 0.38 percent from 1.0 percent
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·
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Nonperforming asset rate relative to the prior quarter:
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–
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Total Commercial Banking – 1.95 percent, an increase of 15 basis points
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–
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Commercial lending – 1.86 percent, an increase of 10 basis points
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Consumer Banking Highlights
For more lending information and statistics on the segment results, please refer to the Financial Supplement.
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Revenues increased $23 million in the first quarter to $1.2 billion, driven by higher margins in the Auto Finance business. Non-interest expense decreased $30 million during the quarter, due primarily to reduced marketing expenditures.
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Provision expense decreased $94 million, or nearly 50 percent, from the prior quarter as a result of better credit performance in Auto Finance, Home Loans and Retail Banking.
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Capital One – First Quarter 2011 Results
Page 5
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Net charge-off rates relative to the prior quarter:
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–
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Auto – 1.98 percent, a decline of 67 basis points
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–
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Home Loans – 0.71 percent, a decline of 18 basis points
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–
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Retail Banking – 2.24 percent, a decline of 16 basis points
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Period-end loans were relatively stable in the first quarter with an increase in auto loans offset by continued run-off in home loans. Period-end loans relative to the prior quarter:
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–
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Auto – growth of $475 million, or 2.7 percent, to $18.3 billion
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–
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Home Loans – a decline of $362 million, or 3.0 percent, to $11.7 billion, due to continued run-off of the portfolio
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–
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Retail Banking – a decline of $190 million, or 4.3 percent, to $4.2 billion
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Deposits in Consumer Banking showed strong growth in the quarter, with period-end deposits increasing $3.4 billion, or 4.1 percent from the fourth quarter, to $86.4 billion.
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Tier 1 common equity ratio and related ratios, as used throughout this release, are non-GAAP financial measures. For additional information, see Table 12 in the Financial Supplement.
Forward looking statements
The company cautions that its current expectations in this release dated April 21, 2011, and the company's plans, objectives, expectations, and intentions, are forward-looking statements which speak only as of the date hereof. The company 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. Actual results could differ materially from current expectations due to a number of factors, including: general economic conditions in the U.S., the UK, Canada 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; financial, legal, regulatory, tax or accounting changes or actions, including the impact of the Dodd-Frank Act and the regulations promulgated thereunder; developments, changes or actions relating to any litigation matter involving the company; increases or decreases in interest rates; the success of the company's marketing efforts in attracting or retaining customers; changes in the credit environment; increases or decreases in the company's aggregate loan balances or the number of customers and the growth rate and composition thereof; the level of future repurchase or indemnification requests the company may receive, the actual future performance of mortgage 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; changes in the reputation of or expectations regarding the financial services industry 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 execute on its strategic and operational plans; changes in the labor and employment market; and competition from providers of products and services that compete with the company's businesses. A discussion of these and other factors can be found in the company's annual report and other reports filed with the Securities and Exchange Commission, including, but not limited to, the company's report on Form 10-K for the fiscal year ended December 31, 2010.
Capital One – First Quarter 2011 Results
Page 6
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 $125.4 billion in deposits and $199.3 billion in total assets outstanding as of March 31, 2011. 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.
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NOTE:
First quarter 2011 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 the earnings conference call is accessible through the same link.
Exhibit 99.2
Capital One Financial Corporation
Financial Supplement
First Quarter 2011
Table of Contents
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Page
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Capital One Financial Consolidated
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Table 1:
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Financial & Statistical Summary―Consolidated
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1
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Table 2:
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Notes to Consolidated Financial & Statistical Summary (Table 1)
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2
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Table 3:
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Consolidated Statements of Income
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3
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Table 4:
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Consolidated Balance Sheets
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4
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Table 5:
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Average Balances, Net Interest Income and Net Interest Margin
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5
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Table 6:
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Loan Information and Performance Statistics
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6
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Business Segment Detail
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Table 7:
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Financial & Statistical Summary―Credit Card Business
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7
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Table 8:
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Financial & Statistical Summary―Consumer Banking Business
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8
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Table 9:
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Financial & Statistical Summary―Commercial Banking Business
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9
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Table 10:
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Financial & Statistical Summary―Other and Total
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10
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Table 11:
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Notes to Loan and Business Segment Disclosures (Tables 6 — 10)
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11
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Other
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Table 12:
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Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures
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12
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Table 1: Financial & Statistical Summary—Consolidated
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(Dollars in millions, except per share data and as noted) (unaudited)
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2011
Q1 |
2010
Q4 |
2010
Q3 |
2010
Q2 |
2010
Q1 |
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Earnings
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Net interest income
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$ | 3,140 | $ | 3,023 | $ | 3,109 | $ | 3,097 | $ | 3,228 | ||||||||||
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Non-interest income (1)(2)
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942 | 939 | 907 | 807 | 1,061 | (3) | ||||||||||||||
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Total revenue (4)
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$ | 4,082 | $ | 3,962 | $ | 4,016 | $ | 3,904 | $ | 4,289 | ||||||||||
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Provision for loan and lease losses
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534 | 839 | 867 | 723 | 1,478 | |||||||||||||||
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Marketing expenses
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276 | 308 | 250 | 219 | 180 | |||||||||||||||
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Operating expenses (5)
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1,886 | 1,783 | 1,746 | 1,781 | 1,667 | |||||||||||||||
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Income from continuing operations before income taxes
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$ | 1,386 | $ | 1,032 | $ | 1,153 | $ | 1,181 | $ | 964 | ||||||||||
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Income tax provision
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354 | 331 | 335 | 369 | 244 | |||||||||||||||
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Income from continuing operations, net of tax
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1,032 | 701 | 818 | 812 | 720 | |||||||||||||||
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Loss from discontinued operations, net of tax (2)
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(16 | ) | (4 | ) | (15 | ) | (204 | ) | (84 | ) | ||||||||||
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Net income
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$ | 1,016 | $ | 697 | $ | 803 | $ | 608 | $ | 636 | ||||||||||
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Common Share Statistics
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Basic EPS:
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Income from continuing operations, net of tax
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$ | 2.27 | $ | 1.55 | $ | 1.81 | $ | 1.79 | $ | 1.59 | ||||||||||
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Loss from discontinued operations, net of tax
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(0.03 | ) | (0.01 | ) | (0.03 | ) | (0.45 | ) | (0.18 | ) | ||||||||||
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Net income per common share
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$ | 2.24 | $ | 1.54 | $ | 1.78 | $ | 1.34 | $ | 1.41 | ||||||||||
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Diluted EPS:
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Income from continuing operations, net of tax
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$ | 2.24 | $ | 1.53 | $ | 1.79 | $ | 1.78 | $ | 1.58 | ||||||||||
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Loss from discontinued operations, net of tax
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(0.03 | ) | (0.01 | ) | (0.03 | ) | (0.45 | ) | (0.18 | ) | ||||||||||
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Net income per common share
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$ | 2.21 | $ | 1.52 | $ | 1.76 | $ | 1.33 | $ | 1.40 | ||||||||||
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Weighted average common shares outstanding:
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Basic EPS
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454.1 | 452.7 | 452.5 | 452.1 | 451.0 | |||||||||||||||
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Diluted EPS
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460.3 | 457.2 | 456.6 | 456.4 | 455.4 | |||||||||||||||
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Common shares outstanding (period end)
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455.2 | 452.8 | 452.6 | 452.3 | 451.9 | |||||||||||||||
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Dividends per common share
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$ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | ||||||||||
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Tangible book value per common share (period end) (6)
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29.70 | 27.73 | 26.60 | 24.89 | 22.86 | |||||||||||||||
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Stock price per common share (period end)
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51.96 | 42.56 | 39.55 | 40.30 | 41.41 | |||||||||||||||
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Total market capitalization (period end)
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23,652 | 19,271 | 17,900 | 18,228 | 18,713 | |||||||||||||||
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Balance Sheet (Period End)
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Loans held for investment
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$ | 124,092 | $ | 125,947 | $ | 126,334 | $ | 127,140 | $ | 130,115 | ||||||||||
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Interest-earning assets
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172,849 | 172,024 | 170,520 | 170,547 | 174,237 | |||||||||||||||
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Total assets
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199,300 | 197,503 | 196,933 | 197,489 | 200,708 | |||||||||||||||
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Tangible assets (7)
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184,928 | 183,158 | 182,904 | 183,474 | 186,647 | |||||||||||||||
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Interest-bearing deposits
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109,097 | 107,162 | 104,741 | 103,172 | 104,013 | |||||||||||||||
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Total deposits
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125,446 | 122,210 | 119,212 | 117,331 | 117,787 | |||||||||||||||
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Borrowings
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39,797 | 41,796 | 44,333 | 48,018 | 52,672 | |||||||||||||||
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Stockholders' equity
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27,550 | 26,541 | 26,061 | 25,270 | 24,374 | |||||||||||||||
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Tangible common equity (TCE) (8)
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13,520 | 12,558 | 12,037 | 11,259 | 10,330 | |||||||||||||||
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Balance Sheet (Quarterly Average Balances)
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Average loans held for investment
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$ | 125,077 | $ | 125,441 | $ | 126,307 | $ | 128,203 | $ | 134,206 | ||||||||||
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Average interest-earning assets
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173,540 | 173,992 | 172,473 | 174,672 | 181,902 | |||||||||||||||
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Average total assets
|
198,075 | 197,704 | 196,598 | 199,357 | 207,232 | |||||||||||||||
|
Average interest-bearing deposits
|
108,633 | 106,597 | 104,186 | 104,163 | 104,018 | |||||||||||||||
|
Average total deposits
|
124,158 | 121,736 | 118,255 | 118,484 | 117,530 | |||||||||||||||
|
Average borrowings
|
40,538 | 42,428 | 45,910 | 50,404 | 59,973 | |||||||||||||||
|
Average stockholders' equity
|
27,009 | 26,255 | 25,307 | 24,526 | 23,681 | |||||||||||||||
|
Performance Metrics
|
||||||||||||||||||||
|
Net interest income growth (quarter over quarter)
|
4 | % | (3 | )% | 0 | % | (4 | )% | 65 | % | ||||||||||
|
Non-interest income growth (quarter over quarter)
|
0 | 4 | 12 | (24 | ) | (25 | ) | |||||||||||||
|
Revenue growth (quarter over quarter)
|
3 | (1 | ) | 3 | (9 | ) | 27 | |||||||||||||
|
Revenue margin (9)
|
9.41 | 9.11 | 9.31 | 8.94 | 9.43 | |||||||||||||||
|
Net interest margin (10)
|
7.24 | 6.95 | 7.21 | 7.09 | 7.10 | |||||||||||||||
|
Risk-adjusted margin (11)
|
6.77 | 5.90 | 5.78 | 5.01 | 4.99 | |||||||||||||||
|
Return on average assets (12)
|
2.08 | 1.42 | 1.66 | 1.63 | 1.39 | |||||||||||||||
|
Return on average equity (13)
|
15.28 | 10.68 | 12.93 | 13.24 | 12.16 | |||||||||||||||
|
Return on average tangible common equity (14)
|
31.73 | 22.90 | 28.95 | 30.97 | 29.98 | |||||||||||||||
|
Non-interest expense as a % of average loans held for investment (15)
|
6.91 | 6.67 | 6.32 | 6.24 | 5.50 | |||||||||||||||
|
Efficiency ratio (16)
|
52.96 | 52.78 | 49.70 | 51.23 | 43.06 | |||||||||||||||
|
Effective income tax rate
|
25.5 | 32.1 | 29.1 | 31.2 | 25.3 | |||||||||||||||
|
Full-time equivalent employees (in thousands)
|
27.9 | 25.7 | 25.7 | 25.7 | 25.9 | |||||||||||||||
|
Credit Quality Metrics (17)
|
||||||||||||||||||||
|
Allowance for loan and lease losses
|
$ | 5,067 | $ | 5,628 | $ | 6,175 | $ | 6,799 | $ | 7,752 | ||||||||||
|
Allowance as a % of loans held for investment
|
4.08 | % | 4.47 | % | 4.89 | % | 5.35 | % | 5.96 | % | ||||||||||
|
Net charge-offs
|
$ | 1,145 | $ | 1,394 | $ | 1,522 | $ | 1,717 | $ | 2,018 | ||||||||||
|
Net charge-off rate (18)
|
3.66 | % | 4.45 | % | 4.82 | % | 5.36 | % | 6.02 | % | ||||||||||
|
30+ day performing delinquency rate
|
3.11 | 3.60 | 3.71 | 3.81 | 4.22 | |||||||||||||||
|
Capital Ratios
|
||||||||||||||||||||
|
Tier 1 risk-based capital ratio (19)
|
10.9 | % | 11.6 | % | 11.1 | % | 9.9 | % | 9.6 | % | ||||||||||
|
Tier 1 common equity ratio (20)
|
8.4 | 8.8 | 8.2 | 7.0 | 6.5 | |||||||||||||||
|
Total risk-based capital ratio (21)
|
14.2 | 16.8 | 16.4 | 17.0 | 16.9 | |||||||||||||||
|
Tangible common equity (TCE) ratio (22)
|
7.3 | 6.9 | 6.6 | 6.1 | 5.5 | |||||||||||||||
Page 1
Table 2: Notes to Consolidated Financial & Statistical Summary (Table 1)
|
(1)
|
Includes the impact from the change in fair value of retained interests, including interest-only strips, which totaled $7 million in Q1 2011, $8 million in Q4 2010, $6 million in Q3 2010, $17 million in Q2 2010 and $(36) million in Q1 2010.
|
|
(2)
|
The mortgage representation and warranty reserve increased to $846 million as of March 31, 2011, from $816 million as of December 31, 2010. We recorded a provision for repurchase losses of $44 million in Q1 2011, $(7) million in Q4 2010, $16 million in Q3 2010, $404 million in Q2 2010 and $224 million in Q1 2010. The majority of the provision for repurchase losses is included in discontinued operations, with the remaining portion included in non-interest income.
|
|
(3)
|
During Q1 2010, certain mortgage trusts were deconsolidated as a result of the sale of interest-only bonds associated with the trusts. The net effect of the deconsolidation resulted in a gain of $128 million, which is included in non-interest income.
|
|
(4)
|
The estimated uncollectible portion of billed finance charges and fees excluded from revenue totaled $105 million in Q1 2011, $144 million in Q4 2010, $190 million in Q3 2010, $261 million in Q2 2010 and $354 million in Q1 2010.
|
|
(5)
|
Includes core deposit intangible amortization expense of $45 million in Q1 2011, $47 million in Q4 2010, $49 million in Q3 2010, $50 million in Q2 2010 and $52 million in Q1 2010 and integration costs of $2 million in Q1 2011, $15 million in Q4 2010, $27 million in Q3 2010, $22 million in Q2 2010 and $17 million in Q1 2010.
|
|
(6)
|
Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this measure.
|
|
(7)
|
Tangible assets is a non-GAAP measure consisting of total assets less assets from discontinued operations and intangible assets. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this measure.
|
|
(8)
|
Tangible common equity is a non-GAAP measure consisting of total stockholders' equity less intangible assets. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this measure.
|
|
(9)
|
Calculated based on annualized total revenue for the period divided by average interest-earning assets for the period.
|
|
(10)
|
Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.
|
|
(11)
|
Calculated based on annualized total revenue less net charge-offs for the period divided by average interest-earning assets for the period.
|
|
(12)
|
Calculated based on annualized income from continuing operations, net of tax, for the period divided by average total assets for the period.
|
|
(13)
|
Calculated based on annualized income from continuing operations, net of tax, for the period divided by average stockholders' equity for the period.
|
|
(14)
|
Calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible common equity for the period.
|
|
(15)
|
Calculated based on annualized non-interest expense, excluding restructuring and goodwill impairment charges, for the period divided by average loans held for investment for the period.
|
|
(16)
|
Calculated based on non-interest expense, excluding restructuring and goodwill impairment charges, for the period divided by total revenue for the period.
|
|
(17)
|
Purchased credit impaired (PCI) loans acquired as part of the Chevy Chase Bank (CCB) acquisition are included in the denominator used in calculating the credit quality metrics presented in Table 1. These metrics excluding the impact of loans acquired from CCB from the denominator are presented below:
|
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
(Dollars in millions) (unaudited)
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|||||||||||||||
|
CCB period-end acquired loan portfolio
|
$ | 5,351 | $ | 5,532 | $ | 5,891 | $ | 6,381 | $ | 6,799 | ||||||||||
|
CCB average acquired loan portfolio
|
5,305 | 5,633 | 6,014 | 6,541 | 7,037 | |||||||||||||||
|
Allowance as a % of loans held for investment, excluding CCB loans
|
4.27 | % | 4.67 | % | 5.12 | % | 5.63 | % | 6.29 | % | ||||||||||
|
Net charge-off rate, excluding CCB loans
|
3.82 | 4.65 | 5.06 | 5.64 | 6.35 | |||||||||||||||
|
30+ day performing delinquency rate, excluding CCB
|
3.25 | 3.76 | 3.89 | 4.01 | 4.46 | |||||||||||||||
|
(18)
|
Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period. Average loans held for investment include purchased credit impaired loans acquired as part of the Chevy Chase Bank acquisition.
|
|
(19)
|
Tier 1 risk-based capital ratio is a regulatory measure calculated based on Tier 1 capital divided by risk-weighted assets. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this ratio.
|
|
(20)
|
Tier 1 common equity ratio is a non-GAAP measure calculated based on Tier 1 common equity divided by risk-weighted assets. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this ratio and non-GAAP reconciliation.
|
|
(21)
|
Total risk-based capital ratio is regulatory capital measure calculated based on total risk-based capital divided by risk-weighted assets. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this ratio.
|
|
(22)
|
Tangible common equity ratio ("TCE ratio") is a non-GAAP measure calculated based on tangible common equity divided by tangible assets. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this ratio and non-GAAP reconciliation.
|
Page 2
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 3: Consolidated Statements of Income
|
Three Months Ended
|
||||||||||||
|
March 31,
|
December 31,
|
March 31,
|
||||||||||
|
(Dollars in millions, except per share data) (unaudited)
|
2011
|
2010
|
2010
|
|||||||||
|
Interest income:
|
||||||||||||
|
Loans held for investment, including past-due fees
|
$ | 3,417 | $ | 3,352 | $ | 3,658 | ||||||
|
Investment securities
|
316 | 305 | 349 | |||||||||
|
Other
|
19 | 17 | 23 | |||||||||
|
Total interest income
|
3,752 | 3,674 | 4,030 | |||||||||
|
Interest expense:
|
||||||||||||
|
Deposits
|
322 | 340 | 399 | |||||||||
|
Securitized debt obligations
|
146 | 165 | 242 | |||||||||
|
Senior and subordinated notes
|
64 | 65 | 68 | |||||||||
|
Other borrowings
|
80 | 81 | 93 | |||||||||
|
Total interest expense
|
612 | 651 | 802 | |||||||||
|
Net interest income
|
3,140 | 3,023 | 3,228 | |||||||||
|
Provision for loan and lease losses
|
534 | 839 | 1,478 | |||||||||
|
Net interest income after provision for loan and lease losses
|
2,606 | 2,184 | 1,750 | |||||||||
|
Non-interest income:
|
||||||||||||
|
Servicing and securitizations
|
11 | 12 | (36 | ) | ||||||||
|
Service charges and other customer-related fees
|
525 | 496 | 585 | |||||||||
|
Interchange
|
320 | 350 | 311 | |||||||||
|
Net other-than-temporary impairment losses recognized in earnings
|
(3 | ) | (3 | ) | (31 | ) | ||||||
|
Other
|
89 | 84 | 232 | |||||||||
|
Total non-interest income
|
942 | 939 | 1,061 | |||||||||
|
Non-interest expense:
|
||||||||||||
|
Salaries and associate benefits
|
741 | 657 | 646 | |||||||||
|
Marketing
|
276 | 308 | 180 | |||||||||
|
Communications and data processing
|
164 | 182 | 169 | |||||||||
|
Supplies and equipment
|
135 | 139 | 124 | |||||||||
|
Occupancy
|
119 | 114 | 120 | |||||||||
|
Other
|
727 | 691 | 608 | |||||||||
|
Total non-interest expense
|
2,162 | 2,091 | 1,847 | |||||||||
|
Income from continuing operations before income taxes
|
1,386 | 1,032 | 964 | |||||||||
|
Income tax provision
|
354 | 331 | 244 | |||||||||
|
Income from continuing operations, net of tax
|
1,032 | 701 | 720 | |||||||||
|
Loss from discontinued operations, net of tax
|
(16 | ) | (4 | ) | (84 | ) | ||||||
|
Net income
|
$ | 1,016 | $ | 697 | $ | 636 | ||||||
|
Basic earnings per common share:
|
||||||||||||
|
Income from continuing operations, net of tax
|
$ | 2.27 | $ | 1.55 | $ | 1.59 | ||||||
|
Loss from discontinued operations, net of tax
|
(0.03 | ) | (0.01 | ) | (0.18 | ) | ||||||
|
Net income per common share
|
$ | 2.24 | $ | 1.54 | $ | 1.41 | ||||||
|
Diluted earnings per common share:
|
||||||||||||
|
Income from continuing operations
|
$ | 2.24 | $ | 1.53 | $ | 1.58 | ||||||
|
Loss from discontinued operations
|
(0.03 | ) | (0.01 | ) | (0.18 | ) | ||||||
|
Net income per common share
|
$ | 2.21 | $ | 1.52 | $ | 1.40 | ||||||
|
Weighted average common shares outstanding (in millions):
|
||||||||||||
|
Basic EPS
|
454.1 | 452.7 | 451.0 | |||||||||
|
Diluted EPS
|
460.3 | 457.2 | 455.4 | |||||||||
|
Dividends per common share
|
$ | 0.05 | $ | 0.05 | $ | 0.05 | ||||||
Page 3
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 4: Consolidated Balance Sheets
|
March 31,
|
December 31,
|
March 31,
|
||||||||||
|
(Dollars in millions)(unaudited)
|
2011
|
2010
|
2010
|
|||||||||
|
Assets:
|
||||||||||||
|
Cash and due from banks
|
$ | 2,028 | $ | 2,067 | $ | 2,929 | ||||||
|
Interest-bearing deposits with banks
|
5,397 | 2,776 | 4,092 | |||||||||
|
Federal funds sold and repurchase agreements
|
546 | 406 | 477 | |||||||||
|
Cash and cash equivalents
|
7,971 | 5,249 | 7,498 | |||||||||
|
Restricted cash for securitization investors
|
2,556 | 1,602 | 3,286 | |||||||||
|
Securities available for sale, at fair value
|
41,566 | 41,537 | 38,251 | |||||||||
|
Loans held for investment:
|
||||||||||||
|
Unsecuritized loans held for investment, at amortized cost
|
75,184 | 71,921 | 72,592 | |||||||||
|
Restricted loans for securitization investors
|
48,908 | 54,026 | 57,523 | |||||||||
|
Total loans held for investment
|
124,092 | 125,947 | 130,115 | |||||||||
|
Less: Allowance for loan and lease losses
|
(5,067 | ) | (5,628 | ) | (7,752 | ) | ||||||
|
Net loans held for investment
|
119,025 | 120,319 | 122,363 | |||||||||
|
Loans held for sale, at lower-of-cost-or-fair-value
|
117 | 228 | 248 | |||||||||
|
Accounts receivable from securitizations
|
112 | 118 | 206 | |||||||||
|
Premises and equipment, net
|
2,739 | 2,749 | 2,735 | |||||||||
|
Interest receivable
|
1,025 | 1,070 | 1,135 | |||||||||
|
Goodwill
|
13,597 | 13,591 | 13,589 | |||||||||
|
Other
|
10,592 | 11,040 | 11,397 | |||||||||
|
Total assets
|
$ | 199,300 | $ | 197,503 | $ | 200,708 | ||||||
|
Liabilities:
|
||||||||||||
|
Interest payable
|
$ | 411 | $ | 488 | $ | 522 | ||||||
|
Customer deposits:
|
||||||||||||
|
Non-interest bearing deposits
|
16,349 | 15,048 | 13,773 | |||||||||
|
Interest-bearing deposits
|
109,097 | 107,162 | 104,013 | |||||||||
|
Total customer deposits
|
125,446 | 122,210 | 117,786 | |||||||||
|
Securitized debt obligations
|
24,506 | 26,915 | 37,830 | |||||||||
|
Other debt:
|
||||||||||||
|
Federal funds purchased and securities loaned or sold under agreements to repurchase
|
1,970 | 1,517 | 840 | |||||||||
|
Senior and subordinated notes
|
8,545 | 8,650 | 9,134 | |||||||||
|
Other borrowings
|
4,776 | 4,714 | 4,868 | |||||||||
|
Total other debt
|
15,291 | 14,881 | 14,842 | |||||||||
|
Other liabilities
|
6,096 | 6,468 | 5,353 | |||||||||
|
Total liabilities
|
171,750 | 170,962 | 176,333 | |||||||||
|
Stockholders' equity:
|
||||||||||||
|
Common stock
|
5 | 5 | 5 | |||||||||
|
Paid-in capital, net
|
19,141 | 19,084 | 18,991 | |||||||||
|
Retained earnings and accumulated other comprehensive income
|
11,644 | 10,654 | 8,577 | |||||||||
|
Less: Treasury stock, at cost
|
(3,240 | ) | (3,202 | ) | (3,198 | ) | ||||||
|
Total stockholders' equity
|
27,550 | 26,541 | 24,375 | |||||||||
|
Total liabilities and stockholders' equity
|
$ | 199,300 | $ | 197,503 | $ | 200,708 | ||||||
Page 4
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 5: Average Balances, Net Interest Income and Net Interest Margin
|
Quarter Ended 03/31/11
|
Quarter Ended 12/31/10
|
Quarter Ended 03/31/10
|
||||||||||||||||||||||||||||||||||
|
(Dollars in millions)(unaudited)
|
Average
Balance |
Interest
Income/
Expense |
Yield/
Rate |
Average
Balance |
Interest
Income/
Expense |
Yield/
Rate |
Average
Balance |
Interest
Income/
Expense |
Yield/
Rate |
|||||||||||||||||||||||||||
|
Interest-earning assets:
|
||||||||||||||||||||||||||||||||||||
|
Loans held for investment
|
$ | 125,077 | $ | 3,417 | 10.93 | % | $ | 125,441 | $ | 3,352 | 10.69 | % | $ | 134,206 | $ | 3,658 | 10.90 | % | ||||||||||||||||||
|
Investment securities
|
41,532 | 316 | 3.04 | 41,004 | 305 | 2.98 | 38,087 | 349 | 3.67 | |||||||||||||||||||||||||||
|
Other
|
6,931 | 19 | 1.10 | 7,547 | 17 | 0.90 | 9,609 | 23 | 0.96 | |||||||||||||||||||||||||||
|
Total interest-earning assets
|
$ | 173,540 | $ | 3,752 | 8.65 | % | $ | 173,992 | $ | 3,674 | 8.45 | % | $ | 181,902 | $ | 4,030 | 8.86 | % | ||||||||||||||||||
|
Interest-bearing liabilities:
|
||||||||||||||||||||||||||||||||||||
|
Interest-bearing deposits
|
||||||||||||||||||||||||||||||||||||
|
NOW accounts
|
$ | 13,648 | $ | 9 | 0.26 | % | $ | 12,918 | $ | 8 | 0.25 | % | $ | 12,276 | $ | 16 | 0.52 | % | ||||||||||||||||||
|
Money market deposit accounts
|
45,613 | 110 | 0.96 | 43,822 | 110 | 1.00 | 39,364 | 96 | 0.98 | |||||||||||||||||||||||||||
|
Savings accounts
|
26,801 | 55 | 0.82 | 25,121 | 54 | 0.86 | 18,627 | 42 | 0.90 | |||||||||||||||||||||||||||
|
Other consumer time deposits
|
15,344 | 99 | 2.58 | 16,941 | 112 | 2.64 | 24,253 | 174 | 2.87 | |||||||||||||||||||||||||||
|
Public fund CD's of $100,000 or more
|
149 | 1 | 2.68 | 204 | 1 | 1.96 | 400 | 2 | 2.00 | |||||||||||||||||||||||||||
|
CD's of $100,000 or more
|
6,097 | 47 | 3.08 | 6,696 | 54 | 3.23 | 8,180 | 68 | 3.33 | |||||||||||||||||||||||||||
|
Foreign time deposits
|
981 | 1 | 0.41 | 895 | 1 | 0.45 | 918 | 1 | 0.44 | |||||||||||||||||||||||||||
|
Total interest-bearing deposits
|
$ | 108,633 | $ | 322 | 1.19 | % | $ | 106,597 | $ | 340 | 1.28 | % | $ | 104,018 | $ | 399 | 1.53 | % | ||||||||||||||||||
|
Securitized debt obligations
|
25,515 | 146 | 2.29 | 27,708 | 165 | 2.38 | 45,581 | 242 | 2.12 | |||||||||||||||||||||||||||
|
Senior and subordinated notes
|
8,090 | 64 | 3.16 | 8,096 | 65 | 3.21 | 8,757 | 68 | 3.11 | |||||||||||||||||||||||||||
|
Other borrowings
|
6,933 | 80 | 4.62 | 6,624 | 81 | 4.89 | 5,634 | 93 | 6.60 | |||||||||||||||||||||||||||
|
Total interest-bearing liabilities
|
$ | 149,171 | $ | 612 | 1.64 | % | $ | 149,025 | $ | 651 | 1.75 | % | $ | 163,990 | $ | 802 | 1.96 | % | ||||||||||||||||||
|
Net interest income/spread
|
$ | 3,140 | 7.01 | % | $ | 3,023 | 6.70 | % | $ | 3,228 | 6.90 | % | ||||||||||||||||||||||||
|
Interest income to average interest-earning assets
|
8.65 | % | 8.45 | % | 8.86 | % | ||||||||||||||||||||||||||||||
|
Interest expense to average interest-earning assets
|
1.41 | 1.50 | 1.76 | |||||||||||||||||||||||||||||||||
|
Net interest margin
|
7.24 | % | 6.95 | 7.10 | % | |||||||||||||||||||||||||||||||
Page 5
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 6: Lending Information and Statistics
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
(Dollars in millions)(unaudited)
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|||||||||||||||
|
Period-end loans held for investment
|
||||||||||||||||||||
|
Credit card:
|
||||||||||||||||||||
|
Domestic credit card
|
$ | 50,570 | $ | 53,849 | $ | 53,839 | $ | 54,628 | $ | 56,228 | ||||||||||
|
International credit card
|
8,735 | 7,522 | 7,487 | 7,269 | 7,578 | |||||||||||||||
|
Total credit card
|
59,305 | 61,371 | 61,326 | 61,897 | 63,806 | |||||||||||||||
|
Consumer banking:
|
||||||||||||||||||||
|
Automobile
|
18,342 | 17,867 | 17,643 | 17,221 | 17,446 | |||||||||||||||
|
Home loan
|
11,741 | 12,103 | 12,763 | 13,322 | 13,967 | |||||||||||||||
|
Retail banking
|
4,223 | 4,413 | 4,591 | 4,770 | 4,970 | |||||||||||||||
|
Total consumer banking
|
34,306 | 34,383 | 34,997 | 35,313 | 36,383 | |||||||||||||||
|
Commercial banking:
|
||||||||||||||||||||
|
Commercial and multifamily real estate
|
13,543 | 13,396 | 13,383 | 13,580 | 13,618 | |||||||||||||||
|
Middle market
|
10,758 | 10,484 | 10,456 | 10,203 | 10,310 | |||||||||||||||
|
Specialty lending
|
3,936 | 4,020 | 3,813 | 3,815 | 3,619 | |||||||||||||||
|
Total commercial lending
|
28,237 | 27,900 | 27,652 | 27,598 | 27,547 | |||||||||||||||
|
Small-ticket commercial real estate
|
1,780 | 1,842 | 1,890 | 1,977 | 2,065 | |||||||||||||||
|
Total commercial banking
|
30,017 | 29,742 | 29,542 | 29,575 | 29,612 | |||||||||||||||
|
Other loans (1)
|
464 | 451 | 469 | 470 | 464 | |||||||||||||||
|
Total
|
$ | 124,092 | $ | 125,947 | $ | 126,334 | $ | 127,255 | $ | 130,265 | ||||||||||
|
Average loans held for investment
|
||||||||||||||||||||
|
Credit card:
|
||||||||||||||||||||
|
Domestic credit card
|
$ | 51,889 | $ | 53,189 | $ | 54,049 | $ | 55,252 | $ | 58,108 | ||||||||||
|
International credit card
|
8,697 | 7,419 | 7,342 | 7,427 | 7,814 | |||||||||||||||
|
Total credit card
|
60,586 | 60,608 | 61,391 | 62,679 | 65,922 | |||||||||||||||
|
Consumer banking:
|
||||||||||||||||||||
|
Automobile
|
18,025 | 17,763 | 17,397 | 17,276 | 17,769 | |||||||||||||||
|
Home loan
|
11,960 | 12,522 | 13,024 | 13,573 | 15,434 | |||||||||||||||
|
Retail banking
|
4,251 | 4,466 | 4,669 | 4,811 | 5,042 | |||||||||||||||
|
Total consumer banking
|
34,236 | 34,751 | 35,090 | 35,660 | 38,245 | |||||||||||||||
|
Commercial banking:
|
||||||||||||||||||||
|
Commercial and multifamily real estate
|
13,345 | 13,323 | 13,411 | 13,543 | 13,716 | |||||||||||||||
|
Middle market
|
10,666 | 10,460 | 10,352 | 10,276 | 10,324 | |||||||||||||||
|
Specialty lending
|
3,964 | 3,947 | 3,715 | 3,654 | 3,609 | |||||||||||||||
|
Total commercial lending
|
27,975 | 27,730 | 27,478 | 27,473 | 27,649 | |||||||||||||||
|
Small-ticket commercial real estate
|
1,818 | 1,887 | 1,957 | 2,060 | 2,074 | |||||||||||||||
|
Total commercial banking
|
29,793 | 29,617 | 29,435 | 29,533 | 29,723 | |||||||||||||||
|
Other loans (1)
|
462 | 465 | 475 | 463 | 489 | |||||||||||||||
|
Total
|
$ | 125,077 | $ | 125,441 | $ | 126,391 | $ | 128,335 | $ | 134,379 | ||||||||||
|
Net charge-off rates
|
||||||||||||||||||||
|
Credit card:
|
||||||||||||||||||||
|
Domestic credit card
|
6.20 | % | 7.28 | % | 8.23 | % | 9.49 | % | 10.48 | % | ||||||||||
|
International credit card
|
5.74 | 6.68 | 7.60 | 8.38 | 8.83 | |||||||||||||||
|
Total credit card
|
6.13 | % | 7.21 | % | 8.16 | % | 9.36 | % | 10.29 | % | ||||||||||
|
Consumer banking:
|
||||||||||||||||||||
|
Automobile
|
1.98 | % | 2.65 | % | 2.71 | % | 2.09 | % | 2.97 | % | ||||||||||
|
Home loan(2)
|
0.71 | 0.89 | 0.41 | 0.46 | 0.94 | |||||||||||||||
|
Retail banking(2)
|
2.24 | 2.40 | 2.20 | 2.11 | 2.11 | |||||||||||||||
|
Total consumer banking(2)
|
1.57 | % | 1.98 | % | 1.79 | % | 1.47 | % | 2.03 | % | ||||||||||
|
Commercial banking:
|
||||||||||||||||||||
|
Commercial and multifamily real estate(2)
|
0.56 | % | 1.15 | % | 1.78 | % | 1.17 | % | 1.45 | % | ||||||||||
|
Middle market (2)
|
0.18 | 0.94 | 0.43 | 0.78 | 0.82 | |||||||||||||||
|
Specialty lending
|
0.30 | 0.63 | 0.64 | 0.87 | 0.90 | |||||||||||||||
|
Total commercial lending(2)
|
0.38 | % | 1.00 | % | 1.11 | % | 0.98 | % | 1.14 | % | ||||||||||
|
Small-ticket commercial real estate
|
7.14 | 7.72 | 3.48 | 4.21 | 4.43 | |||||||||||||||
|
Total commercial banking(2)
|
0.79 | % | 1.43 | % | 1.27 | % | 1.21 | % | 1.37 | % | ||||||||||
|
Other loans
|
19.91 | % | 21.11 | % | 17.63 | % | 27.95 | % | 18.82 | % | ||||||||||
|
Total
|
3.66 | % | 4.45 | % | 4.82 | % | 5.35 | % | 6.01 | % | ||||||||||
|
30+ day performing delinquency rates
|
||||||||||||||||||||
|
Credit card:
|
||||||||||||||||||||
|
Domestic credit card
|
3.59 | % | 4.09 | % | 4.53 | % | 4.79 | % | 5.30 | % | ||||||||||
|
International credit card
|
5.55 | 5.75 | 5.84 | 6.03 | 6.39 | |||||||||||||||
|
Total credit card
|
3.88 | % | 4.29 | % | 4.69 | % | 4.94 | % | 5.43 | % | ||||||||||
|
Consumer banking:
|
||||||||||||||||||||
|
Automobile
|
5.79 | % | 7.58 | % | 7.42 | % | 7.25 | % | 7.10 | % | ||||||||||
|
Home loan(2)
|
0.61 | 0.64 | 0.69 | 0.68 | 0.93 | |||||||||||||||
|
Retail banking(2)
|
0.93 | 0.93 | 1.08 | 0.87 | 1.02 | |||||||||||||||
|
Total consumer banking(2)
|
3.42 | % | 4.28 | % | 4.14 | % | 3.91 | % | 3.90 | % | ||||||||||
|
Nonperforming asset rates(3) (4)
|
||||||||||||||||||||
|
Consumer banking:
|
||||||||||||||||||||
|
Automobile
|
0.39 | % | 0.64 | % | 0.60 | % | 0.56 | % | 0.55 | % | ||||||||||
|
Home loan(2)
|
4.34 | 4.25 | 4.09 | 3.78 | 3.17 | |||||||||||||||
|
Retail banking(2)
|
2.44 | 2.66 | 2.41 | 2.25 | 2.07 | |||||||||||||||
|
Total consumer banking(2)
|
2.00 | % | 2.17 | % | 2.11 | % | 2.00 | % | 1.76 | % | ||||||||||
|
Commercial banking:
|
||||||||||||||||||||
|
Commercial and multifamily real estate(2)
|
2.63 | % | 2.23 | % | 2.44 | % | 2.82 | % | 3.65 | % | ||||||||||
|
Middle market (2)
|
1.14 | 1.33 | 1.36 | 1.20 | 1.15 | |||||||||||||||
|
Specialty lending
|
1.19 | 1.30 | 1.75 | 1.94 | 2.18 | |||||||||||||||
|
Total commercial lending(2)
|
1.86 | % | 1.76 | % | 1.94 | % | 2.10 | % | 2.52 | % | ||||||||||
|
Small-ticket commercial real estate
|
3.39 | 2.38 | 2.04 | 3.57 | 4.18 | |||||||||||||||
|
Total commercial banking(2)
|
1.95 | % | 1.80 | % | 1.94 | % | 2.20 | % | 2.64 | % | ||||||||||
Page 6
Table 7: Financial & Statistical Summary—Credit Card Business
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
(Dollars in millions) (unaudited)
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|||||||||||||||
|
Credit Card
|
||||||||||||||||||||
|
Earnings:
|
||||||||||||||||||||
|
Net interest income
|
$ | 1,941 | $ | 1,870 | $ | 1,934 | $ | 1,976 | $ | 2,113 | ||||||||||
|
Non-interest income
|
674 | 672 | 671 | 659 | 718 | |||||||||||||||
|
Total revenue
|
$ | 2,615 | $ | 2,542 | $ | 2,605 | $ | 2,635 | $ | 2,831 | ||||||||||
|
Provision for loan and lease losses
|
450 | 589 | 660 | 765 | 1,175 | |||||||||||||||
|
Non-interest expense
|
1,178 | 1,056 | 978 | 1,002 | 914 | |||||||||||||||
|
Income from continuing operations before taxes
|
987 | 897 | 967 | 868 | 742 | |||||||||||||||
|
Income tax provision
|
344 | 311 | 336 | 301 | 253 | |||||||||||||||
|
Income from continuing operations, net of tax
|
$ | 643 | $ | 586 | $ | 631 | $ | 567 | $ | 489 | ||||||||||
|
Selected metrics:
|
||||||||||||||||||||
|
Period end loans held for investment
|
$ | 59,305 | $ | 61,371 | $ | 61,326 | $ | 61,897 | $ | 63,806 | ||||||||||
|
Average loans held for investment
|
60,586 | 60,608 | 61,391 | 62,679 | 65,922 | |||||||||||||||
|
Loans held for investment yield
|
14.93 | % | 13.97 | % | 14.27 | % | 14.25 | % | 14.88 | % | ||||||||||
|
Revenue margin
|
17.26 | 16.78 | 16.97 | 16.82 | 17.18 | |||||||||||||||
|
Net charge-off rate
|
6.13 | 7.21 | 8.16 | 9.36 | 10.29 | |||||||||||||||
|
30+ day performing delinquency rate
|
3.88 | 4.29 | 4.69 | 4.94 | 5.43 | |||||||||||||||
|
Purchase volume (5)
|
$ | 27,797 | $ | 29,379 | $ | 27,039 | $ | 26,570 | $ | 23,924 | ||||||||||
|
Domestic Card
|
||||||||||||||||||||
|
Earnings:
|
||||||||||||||||||||
|
Net interest income
|
$ | 1,651 | $ | 1,621 | $ | 1,691 | $ | 1,735 | $ | 1,865 | ||||||||||
|
Non-interest income
|
583 | 594 | 575 | 560 | 618 | |||||||||||||||
|
Total revenue
|
$ | 2,234 | $ | 2,215 | $ | 2,266 | $ | 2,295 | $ | 2,483 | ||||||||||
|
Provision for loan and lease losses
|
230 | 505 | 577 | 675 | 1,096 | |||||||||||||||
|
Non-interest expense
|
990 | 935 | 844 | 869 | 809 | |||||||||||||||
|
Income from continuing operations before taxes
|
1,014 | 775 | 845 | 751 | 578 | |||||||||||||||
|
Income tax provision
|
360 | 276 | 301 | 268 | 206 | |||||||||||||||
|
Income from continuing operations, net of tax
|
$ | 654 | $ | 499 | $ | 544 | $ | 483 | $ | 372 | ||||||||||
|
Selected metrics:
|
||||||||||||||||||||
|
Period end loans held for investment
|
$ | 50,570 | $ | 53,849 | $ | 53,839 | $ | 54,628 | $ | 56,228 | ||||||||||
|
Average loans held for investment
|
51,889 | 53,189 | 54,049 | 55,252 | 58,108 | |||||||||||||||
|
Loans held for investment yield
|
14.65 | % | 13.57 | % | 13.95 | % | 13.98 | % | 14.78 | % | ||||||||||
|
Revenue margin
|
17.22 | 16.66 | 16.77 | 16.61 | 17.09 | |||||||||||||||
|
Net charge-off rate
|
6.20 | 7.28 | 8.23 | 9.49 | 10.48 | |||||||||||||||
|
30+ day performing delinquency rate
|
3.59 | 4.09 | 4.53 | 4.79 | 5.30 | |||||||||||||||
|
Purchase volume (5)
|
$ | 25,024 | $ | 26,985 | $ | 24,858 | $ | 24,513 | $ | 21,988 | ||||||||||
|
International Card
|
||||||||||||||||||||
|
Earnings:
|
||||||||||||||||||||
|
Net interest income
|
$ | 290 | $ | 249 | $ | 243 | $ | 241 | $ | 248 | ||||||||||
|
Non-interest income
|
91 | 78 | 96 | 99 | 100 | |||||||||||||||
|
Total revenue
|
$ | 381 | $ | 327 | $ | 339 | $ | 340 | $ | 348 | ||||||||||
|
Provision for loan and lease losses
|
220 | 84 | 83 | 90 | 79 | |||||||||||||||
|
Non-interest expense
|
188 | 121 | 134 | 133 | 105 | |||||||||||||||
|
Income (loss) from continuing operations before taxes
|
(27 | ) | 122 | 122 | 117 | 164 | ||||||||||||||
|
Income tax provision (benefit)
|
(16 | ) | 35 | 35 | 33 | 47 | ||||||||||||||
|
Income (loss) from continuing operations, net of tax
|
$ | (11 | ) | $ | 87 | $ | 87 | $ | 84 | $ | 117 | |||||||||
|
Selected metrics:
|
||||||||||||||||||||
|
Period end loans held for investment
|
$ | 8,735 | $ | 7,522 | $ | 7,487 | $ | 7,269 | $ | 7,578 | ||||||||||
|
Average loans held for investment
|
8,697 | 7,419 | 7,342 | 7,427 | 7,814 | |||||||||||||||
|
Loans held for investment yield
|
16.65 | % | 16.82 | % | 16.62 | % | 16.21 | % | 15.66 | % | ||||||||||
|
Revenue margin
|
17.52 | 17.63 | 18.47 | 18.31 | 17.81 | |||||||||||||||
|
Net charge-off rate
|
5.74 | 6.68 | 7.60 | 8.38 | 8.83 | |||||||||||||||
|
30+ day performing delinquency rate
|
5.55 | 5.75 | 5.84 | 6.03 | 6.39 | |||||||||||||||
|
Purchase volume (5)
|
$ | 2,773 | $ | 2,394 | $ | 2,181 | $ | 2,057 | $ | 1,936 | ||||||||||
Page 7
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 8: Financial & Statistical Summary—Consumer Banking Business
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
(Dollars in millions) (unaudited)
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|||||||||||||||
|
Consumer Banking
|
||||||||||||||||||||
|
Earnings:
|
||||||||||||||||||||
|
Net interest income
|
$ | 983 | $ | 950 | $ | 946 | $ | 935 | $ | 896 | ||||||||||
|
Non-interest income
|
186 | 196 | 196 | 162 | 316 | |||||||||||||||
|
Total revenue
|
$ | 1,169 | $ | 1,146 | $ | 1,142 | $ | 1,097 | $ | 1,212 | ||||||||||
|
Provision for loan and lease losses
|
95 | 189 | 114 | (112 | ) | 50 | ||||||||||||||
|
Non-interest expense
|
740 | 770 | 757 | 735 | 688 | |||||||||||||||
|
Income from continuing operations before taxes
|
334 | 187 | 271 | 474 | 474 | |||||||||||||||
|
Income tax provision
|
119 | 67 | 96 | 169 | 169 | |||||||||||||||
|
Income from continuing operations, net of tax
|
$ | 215 | $ | 120 | $ | 175 | $ | 305 | $ | 305 | ||||||||||
|
Selected metrics:
|
||||||||||||||||||||
|
Period end loans held for investment
|
$ | 34,306 | $ | 34,383 | $ | 34,997 | $ | 35,313 | $ | 36,383 | ||||||||||
|
Average loans held for investment
|
34,236 | 34,751 | 35,090 | 35,660 | 38,245 | |||||||||||||||
|
Loans held for investment yield
|
9.60 | % | 9.20 | % | 9.28 | % | 8.99 | % | 8.96 | % | ||||||||||
|
Auto loan originations
|
$ | 2,571 | $ | 2,217 | $ | 2,439 | $ | 1,765 | $ | 1,343 | ||||||||||
|
Period end deposits
|
86,355 | 82,959 | 79,506 | 77,407 | 76,883 | |||||||||||||||
|
Average deposits
|
83,884 | 81,834 | 78,224 | 77,082 | 75,115 | |||||||||||||||
|
Deposit interest expense rate
|
1.06 | % | 1.13 | % | 1.18 | % | 1.18 | % | 1.27 | % | ||||||||||
|
Core deposit intangible amortization
|
$ | 35 | $ | 34 | $ | 36 | $ | 36 | $ | 38 | ||||||||||
|
Net charge-off rate (2)
|
1.57 | % | 1.98 | % | 1.79 | % | 1.47 | % | 2.03 | % | ||||||||||
|
Nonperforming loans as a percentage of loans held for investment (2)(3)
|
1.84 | 1.97 | 1.92 | 1.82 | 1.62 | |||||||||||||||
|
Nonperforming asset rate (2) (3)
|
2.00 | 2.17 | 2.11 | 2.00 | 1.76 | |||||||||||||||
|
30+ day performing delinquency rate (2) (3)
|
3.42 | 4.28 | 4.14 | 3.91 | 3.90 | |||||||||||||||
|
Period end loans serviced for others
|
$ | 19,956 | $ | 20,689 | $ | 20,298 | $ | 21,425 | $ | 26,778 | ||||||||||
Page 8
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial & Statistical Summary—Commercial Banking Business
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
(Dollars in millions) (unaudited)
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|||||||||||||||
|
Commercial Banking
|
||||||||||||||||||||
|
Earnings:
|
||||||||||||||||||||
|
Net interest income
|
$ | 321 | $ | 336 | $ | 325 | $ | 319 | $ | 312 | ||||||||||
|
Non-interest income
|
71 | 49 | 30 | 60 | 42 | |||||||||||||||
|
Total revenue
|
$ | 392 | $ | 385 | $ | 355 | $ | 379 | $ | 354 | ||||||||||
|
Provision for loan and lease losses
|
(15 | ) | 34 | 95 | 62 | 238 | ||||||||||||||
|
Non-interest expense
|
177 | 207 | 199 | 198 | 192 | |||||||||||||||
|
Income (loss) from continuing operations before taxes
|
230 | 144 | 61 | 119 | (76 | ) | ||||||||||||||
|
Income tax provision (benefit)
|
82 | 51 | 22 | 42 | (27 | ) | ||||||||||||||
|
Income (loss) from continuing operations, net of tax
|
$ | 148 | $ | 93 | $ | 39 | $ | 77 | $ | (49 | ) | |||||||||
|
Selected metrics:
|
||||||||||||||||||||
|
Period end loans held for investment
|
$ | 30,017 | $ | 29,742 | $ | 29,542 | $ | 29,575 | $ | 29,612 | ||||||||||
|
Average loans held for investment
|
29,793 | 29,617 | 29,435 | 29,533 | 29,723 | |||||||||||||||
|
Loans held for investment yield
|
4.80 | % | 5.13 | % | 5.13 | % | 4.94 | % | 5.03 | % | ||||||||||
|
Period end deposits
|
$ | 24,244 | $ | 22,630 | $ | 22,100 | $ | 21,527 | $ | 21,605 | ||||||||||
|
Average deposits
|
24,138 | 22,808 | 21,899 | 22,171 | 21,859 | |||||||||||||||
|
Deposit interest expense rate
|
0.55 | % | 0.61 | % | 0.67 | % | 0.67 | % | 0.72 | % | ||||||||||
|
Core deposit intangible amortization
|
$ | 11 | $ | 13 | $ | 14 | $ | 14 | $ | 14 | ||||||||||
|
Net charge-off rate (2)
|
0.79 | % | 1.43 | % | 1.27 | % | 1.21 | % | 1.37 | % | ||||||||||
|
Nonperforming loans as a percentage of loans held for investment (2)
|
1.84 | 1.66 | 1.81 | 2.04 | 2.48 | |||||||||||||||
|
Nonperforming asset rate (2)
|
1.95 | 1.80 | 1.94 | 2.20 | 2.64 | |||||||||||||||
|
Internal risk ratings criticized loans: (6)
|
||||||||||||||||||||
|
Noncriticized
|
$ | 26,983 | $ | 26,663 | $ | 26,011 | $ | 25,785 | $ | 25,519 | ||||||||||
|
Criticized performing
|
1,919 | 2,025 | 2,277 | 2,406 | 2,483 | |||||||||||||||
|
Criticized nonperforming
|
553 | 494 | 534 | 603 | 735 | |||||||||||||||
|
Total non-PCI loans
|
29,455 | 29,182 | 28,822 | 28,794 | 28,737 | |||||||||||||||
|
Total PCI loans
|
562 | 560 | 720 | 781 | 875 | |||||||||||||||
|
Total
|
$ | 30,017 | $ | 29,742 | $ | 29,542 | $ | 29,575 | $ | 29,612 | ||||||||||
|
% of period end held for investment commercial loans:
|
||||||||||||||||||||
|
Noncriticized
|
89.89 | % | 89.65 | % | 88.05 | % | 87.19 | % | 86.18 | % | ||||||||||
|
Criticized performing
|
6.39 | 6.81 | 7.71 | 8.14 | 8.39 | |||||||||||||||
|
Criticized nonperforming
|
1.84 | 1.66 | 1.81 | 2.04 | 2.48 | |||||||||||||||
|
Total non-PCI loans
|
98.13 | 98.12 | 97.56 | 97.36 | 97.05 | |||||||||||||||
|
Total PCI loans
|
1.87 | 1.88 | 2.44 | 2.64 | 2.95 | |||||||||||||||
|
Total
|
100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | ||||||||||
Page 9
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10: Financial & Statistical Summary—Other and Total Segment
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
(Dollars in millions) (unaudited)
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|||||||||||||||
|
Other
|
||||||||||||||||||||
|
Earnings:
|
||||||||||||||||||||
|
Net interest income (expense)
|
$ | (105 | ) | $ | (133 | ) | $ | (93 | ) | $ | (132 | ) | $ | (91 | ) | |||||
|
Non-interest income (expense)
|
11 | 22 | 7 | (74 | ) | (14 | ) | |||||||||||||
|
Total revenue
|
$ | (94 | ) | $ | (111 | ) | $ | (86 | ) | $ | (206 | ) | $ | (105 | ) | |||||
|
Provision for loan and lease losses
|
4 | 27 | (2 | ) | 10 | 18 | ||||||||||||||
|
Non-interest expense
|
67 | 58 | 62 | 65 | 53 | |||||||||||||||
|
Income (loss) from continuing operations before taxes
|
(165 | ) | (196 | ) | (146 | ) | (281 | ) | (176 | ) | ||||||||||
|
Income tax benefit
|
(191 | ) | (98 | ) | (119 | ) | (143 | ) | (151 | ) | ||||||||||
|
Income (loss) from continuing operations, net of tax
|
$ | 26 | $ | (98 | ) | $ | (27 | ) | $ | (138 | ) | $ | (25 | ) | ||||||
|
Selected metrics:
|
||||||||||||||||||||
|
Period end loans held for investment (1)
|
$ | 464 | $ | 451 | $ | 469 | $ | 470 | $ | 464 | ||||||||||
|
Average loans held for investment (1)
|
462 | 465 | 475 | 463 | 489 | |||||||||||||||
|
Period end deposits
|
14,847 | 16,621 | 17,606 | 18,397 | 19,299 | |||||||||||||||
|
Average deposits
|
16,136 | 17,094 | 18,132 | 19,231 | 20,556 | |||||||||||||||
|
Total
|
||||||||||||||||||||
|
Earnings:
|
||||||||||||||||||||
|
Net interest income
|
$ | 3,140 | $ | 3,023 | $ | 3,112 | $ | 3,099 | $ | 3,230 | ||||||||||
|
Non-interest income
|
942 | 939 | 904 | 807 | 1,062 | |||||||||||||||
|
Total revenue
|
$ | 4,082 | $ | 3,962 | $ | 4,016 | $ | 3,906 | $ | 4,292 | ||||||||||
|
Provision for loan and lease losses
|
534 | 839 | 867 | 725 | 1,481 | |||||||||||||||
|
Non-interest expense
|
2,162 | 2,091 | 1,996 | 2,000 | 1,847 | |||||||||||||||
|
Income from continuing operations before taxes
|
1,386 | 1,032 | 1,153 | 1,181 | 964 | |||||||||||||||
|
Income tax provision
|
354 | 331 | 335 | 369 | 244 | |||||||||||||||
|
Income from continuing operations, net of tax
|
$ | 1,032 | $ | 701 | $ | 818 | $ | 812 | $ | 720 | ||||||||||
|
Selected metrics:
|
||||||||||||||||||||
|
Period end loans held for investment
|
$ | 124,092 | $ | 125,947 | $ | 126,334 | $ | 127,255 | $ | 130,265 | ||||||||||
|
Average loans held for investment
|
125,077 | 125,441 | 126,391 | 128,335 | 134,379 | |||||||||||||||
|
Period end deposits
|
125,446 | 122,210 | 119,212 | 117,331 | 117,787 | |||||||||||||||
|
Average deposits
|
124,158 | 121,736 | 118,255 | 118,484 | 117,530 | |||||||||||||||
Page 10
Table 11: Notes to Loan and Segment Disclosures (Tables 6 — 10)
|
|
(1)
|
Other loans held for investment includes unamortized premiums and discounts on loans acquired as part of the North Fork and Hibernia acquisitions.
|
|
|
(2)
|
Purchased credit impaired loans acquired as part of the Chevy Chase Bank (CCB) acquisition are included in the denominator used in calculating the credit quality ratios presented in Tables 6-10. These metrics excluding the impact of loans acquired from CCB from the denominator are presented below:
|
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
(Dollars in millions) (unaudited)
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|||||||||||||||
|
CCB period end acquired loan portfolio
|
$ | 5,351 | $ | 5,532 | $ | 5,891 | $ | 6,381 | $ | 6,799 | ||||||||||
|
CCB average acquired loan portfolio
|
5,305 | 5,633 | 6,014 | 6,541 | 7,037 | |||||||||||||||
|
Net charge-off rates
|
||||||||||||||||||||
|
Consumer banking:
|
||||||||||||||||||||
|
Home loan
|
1.16 | % | 1.46 | % | 0.68 | % | 0.77 | % | 1.02 | % | ||||||||||
|
Retail banking
|
2.32 | 2.49 | 2.29 | 2.23 | 2.22 | |||||||||||||||
|
Total consumer banking
|
1.82 | % | 2.32 | % | 2.11 | % | 1.76 | % | 2.28 | % | ||||||||||
|
Commercial banking:
|
||||||||||||||||||||
|
Commercial and multifamily real estate
|
0.57 | % | 1.17 | % | 1.81 | % | 1.19 | % | 1.48 | % | ||||||||||
|
Middle market
|
0.18 | 0.97 | 0.44 | 0.82 | 0.87 | |||||||||||||||
|
Total commercial lending
|
0.38 | % | 1.02 | % | 1.14 | % | 1.01 | % | 1.48 | % | ||||||||||
|
Total commercial banking
|
0.80 | % | 1.45 | % | 1.30 | % | 1.24 | % | 1.41 | % | ||||||||||
|
30+ day performing delinquency rates
|
||||||||||||||||||||
|
Consumer banking:
|
||||||||||||||||||||
|
Home loan
|
1.02 | % | 1.06 | % | 1.16 | % | 1.14 | % | 1.58 | % | ||||||||||
|
Retail banking
|
0.93 | 0.97 | 1.12 | 0.91 | 1.07 | |||||||||||||||
|
Total consumer banking
|
3.98 | % | 5.01 | % | 4.88 | % | 4.65 | % | 4.67 | % | ||||||||||
|
Nonperforming asset rates
|
||||||||||||||||||||
|
Consumer banking:
|
||||||||||||||||||||
|
Home loan
|
7.24 | % | 7.05 | % | 6.83 | % | 6.30 | % | 5.36 | % | ||||||||||
|
Retail banking
|
2.44 | 2.77 | 2.51 | 2.37 | 2.17 | |||||||||||||||
|
Total consumer banking
|
2.32 | % | 2.54 | % | 2.49 | % | 2.38 | % | 2.11 | % | ||||||||||
|
Commercial banking:
|
||||||||||||||||||||
|
Commercial and multifamily real estate
|
2.68 | % | 2.28 | % | 2.47 | % | 2.90 | % | 3.71 | % | ||||||||||
|
Middle market
|
1.17 | 1.36 | 1.42 | 1.25 | 1.23 | |||||||||||||||
|
Total commercial lending
|
1.90 | % | 1.79 | % | 1.98 | % | 2.16 | % | 2.60 | % | ||||||||||
|
Total commercial banking
|
1.99 | % | 1.83 | % | 1.98 | % | 2.26 | % | 2.72 | % | ||||||||||
|
Nonperforming loans as a percentage of loans held for investment
|
||||||||||||||||||||
|
Consumer banking
|
2.14 | % | 2.30 | % | 2.26 | % | 2.16 | % | 1.93 | % | ||||||||||
|
Commercial banking
|
1.88 | 1.69 | 1.84 | 2.09 | 2.55 | |||||||||||||||
|
|
(3)
|
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 each respective segment.
|
|
|
(4)
|
As permitted by regulatory guidance, our policy is generally to exempt delinquent credit card loans from being classified as nonperforming. 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.
|
|
|
(5)
|
Includes credit card purchase transactions net of returns. Excludes cash advance transactions.
|
|
|
(6)
|
Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by banking regulatory authorities.
|
Page 11
Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures
In addition to disclosing required regulatory capital measures, we also report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include average tangible common equity, tangible common equity (TCE), TCE ratio, Tier 1 common equity and Tier 1 common equity ratio. The table below provides the details of the calculation of each of these measures. While these non-GAAP capital measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.
|
2011
|
2010
|
2010
|
2010
|
2010
|
||||||||||||||||
|
(Dollars in millions)(unaudited)
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|||||||||||||||
|
Average Equity to Non-GAAP Average Tangible Common Equity
|
||||||||||||||||||||
|
Average total stockholders' equity
|
$ | 27,009 | $ | 26,255 | $ | 25,307 | $ | 24,526 | $ | 23,681 | ||||||||||
|
Less: Average intangible assets (1)
|
(14,001 | ) | (14,008 | ) | (14,003 | ) | (14,039 | ) | (14,075 | ) | ||||||||||
|
Average tangible common equity
|
$ | 13,008 | $ | 12,247 | $ | 11,304 | $ | 10,487 | $ | 9,606 | ||||||||||
|
Stockholders' Equity to Non-GAAP Tangible Common Equity
|
||||||||||||||||||||
|
Total stockholders' equity
|
$ | 27,550 | $ | 26,541 | $ | 26,061 | $ | 25,270 | $ | 24,374 | ||||||||||
|
Less: Intangible assets (1)
|
(14,030 | ) | (13,983 | ) | (14,024 | ) | (14,011 | ) | (14,044 | ) | ||||||||||
|
Tangible common equity
|
$ | 13,520 | $ | 12,558 | $ | 12,037 | $ | 11,259 | $ | 10,330 | ||||||||||
|
Total Assets to Tangible Assets
|
||||||||||||||||||||
|
Total assets
|
$ | 199,300 | $ | 197,503 | $ | 196,933 | $ | 197,489 | $ | 200,708 | ||||||||||
|
Less: Assets from discontinued operations
|
(342 | ) | (362 | ) | (5 | ) | (4 | ) | (16 | ) | ||||||||||
|
Total assets from continuing operations
|
198,958 | 197,141 | 196,928 | 197,485 | 200,692 | |||||||||||||||
|
Less: Intangible assets (1)
|
(14,030 | ) | (13,983 | ) | (14,024 | ) | (14,011 | ) | (14,044 | ) | ||||||||||
|
Tangible assets
|
$ | 184,928 | $ | 183,158 | $ | 182,904 | $ | 183,474 | $ | 186,648 | ||||||||||
|
Non-GAAP TCE Ratio
|
||||||||||||||||||||
|
Tangible common equity
|
$ | 13,520 | $ | 12,558 | $ | 12,037 | $ | 11,259 | $ | 10,330 | ||||||||||
|
Tangible assets
|
184,928 | 183,158 | 182,904 | 183,474 | 186,648 | |||||||||||||||
|
TCE ratio(2)
|
7.3 | % | 6.9 | % | 6.6 | % | 6.1 | % | 5.5 | % | ||||||||||
|
Non-GAAP Tier 1 Common Equity and Regulatory Capital Ratios
|
||||||||||||||||||||
|
Total stockholders' equity
|
$ | 27,550 | $ | 26,541 | $ | 26,061 | $ | 25,270 | $ | 24,374 | ||||||||||
|
Less: Net unrealized (gains) losses on AFS securities recorded in AOCI (3)
|
(314 | ) | (368 | ) | (580 | ) | (661 | ) | (319 | ) | ||||||||||
|
Net (gains) losses on cash flow hedges recorded in AOCI(3)
|
95 | 86 | 79 | 73 | 80 | |||||||||||||||
|
Disallowed goodwill and other intangible assets
|
(13,993 | ) | (13,953 | ) | (13,993 | ) | (14,023 | ) | (14,078 | ) | ||||||||||
|
Disallowed deferred tax assets
|
(1,377 | ) | (1,150 | ) | (1,324 | ) | (1,977 | ) | (2,183 | ) | ||||||||||
|
Other
|
(2 | ) | (2 | ) | (2 | ) | (2 | ) | (1 | ) | ||||||||||
|
Tier 1 common equity
|
$ | 11,959 | $ | 11,154 | $ | 10,241 | $ | 8,680 | $ | 7,873 | ||||||||||
|
Plus: Tier 1 restricted core capital items(4)
|
3,636 | 3,636 | 3,636 | 3,637 | 3,638 | |||||||||||||||
|
Tier 1 capital
|
$ | 15,595 | $ | 14,790 | $ | 13,877 | $ | 12,317 | $ | 11,511 | ||||||||||
|
Plus: Long-term debt qualifying as Tier 2 capital
|
2,827 | 2,827 | 2,827 | 2,898 | 3,018 | |||||||||||||||
|
Qualifying allowance for loan and lease losses
|
1,825 | 3,748 | 3,726 | 5,836 | 5,802 | |||||||||||||||
|
Other Tier 2 components
|
20 | 29 | 24 | 25 | 4 | |||||||||||||||
|
Tier 2 capital
|
$ | 4,672 | $ | 6,604 | $ | 6,577 | $ | 8,759 | $ | 8,824 | ||||||||||
|
Total risk-based capital(5)
|
$ | 20,267 | $ | 21,394 | $ | 20,454 | $ | 21,076 | $ | 20,335 | ||||||||||
|
Risk-weighted assets(6)
|
$ | 142,495 | $ | 127,043 | $ | 124,726 | $ | 124,038 | $ | 120,330 | ||||||||||
|
Tier 1 common equity ratio (7)
|
8.4 | %(10) | 8.8 | % | 8.2 | % | 7.0 | % | 6.5 | % | ||||||||||
|
Tier 1 risk-based capital ratio (8)
|
10.9 | %(10) | 11.6 | % | 11.1 | % | 9.9 | % | 9.6 | % | ||||||||||
|
Total risk-based capital ratio (9)
|
14.2 | %(10) | 16.8 | % | 16.4 | % | 17.0 | % | 16.9 | % | ||||||||||
___________________
|
(1)
|
Includes impact from related deferred taxes.
|
|
(2)
|
Calculated based on tangible common equity divided by tangible assets.
|
|
(3)
|
Amounts presented are net of tax.
|
|
(4)
|
Consists primarily of trust preferred securities.
|
|
(5)
|
Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital.
|
|
(6)
|
Calculated based on prescribed regulatory guidelines.
|
|
(7)
|
Tier 1 common equity ratio is a non-GAAP measure calculated based on Tier 1 common equity divided by risk-weighted assets.
|
|
(8)
|
Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighed assets.
|
|
(9)
|
Total risk-based capital ratio is a regulatory capital measure calculated based on total risk-based capital divided by risk-weighed assets.
|
|
(10)
|
Regulatory capital ratios as of the end of Q1 2011 are preliminary and therefore subject to change once the calculations have been finalized.
|
Page 12
First Quarter 2011 Results
April 21, 2011
Exhibit 99.3
2
April 21, 2011
Forward-looking statements
Please note that the following materials containing information regarding Capital One’s financial performance speak only as of the particular date or dates
indicated in these materials. Capital One does not undertake any obligation to update or revise any of the information contained herein whether as a result
of new information, future events or otherwise.
indicated in these materials. Capital One does not undertake any obligation to update or revise any of the information contained herein whether as a result
of new information, future events or otherwise.
Certain statements in this presentation and other oral and written statements made by Capital One from time to time are forward-looking statements,
including those that discuss, among other things, strategies, goals, outlook or other non-historical matters; projections, revenues, income, returns,
accruals for claims in litigation and for other claims against Capital One, earnings per share or other financial measures for Capital One; future financial
and operating results; 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 Capital One’s 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 U.K., Canada, 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 the impact of the Dodd-Frank
Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder; developments, changes or actions relating to any litigation
matter involving Capital One; increases or decreases in interest rates; Capital One’s ability to access the capital markets at attractive rates and terms to
capitalize and fund its operations and future growth; the success of Capital One’s marketing efforts in attracting and retaining customers; increases or
decreases in Capital One’s aggregate loan balances 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 Capital One incurs and attrition of loan balances; the
level of future repurchase or indemnification requests Capital One may receive, the actual future performance of mortgage loans relating to such requests,
the success rates of claimants against Capital One, any developments in litigation and the actual recoveries Capital One may make on any collateral
relating to claims against Capital One; the amount and rate of deposit growth; changes in the reputation of or expectations regarding the financial
services industry 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; Capital One’s ability to control costs;
the amount of, and rate of growth in, Capital One’s expenses as its 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
Capital One’s 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; fraud or misconduct by Capital One’s customers, employees or
business partners; 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, 2010. 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 8-K filed April 21, 2011,
available on Capital One’s website at www.capitalone.com under “Investors.”
including those that discuss, among other things, strategies, goals, outlook or other non-historical matters; projections, revenues, income, returns,
accruals for claims in litigation and for other claims against Capital One, earnings per share or other financial measures for Capital One; future financial
and operating results; 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 Capital One’s 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 U.K., Canada, 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 the impact of the Dodd-Frank
Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder; developments, changes or actions relating to any litigation
matter involving Capital One; increases or decreases in interest rates; Capital One’s ability to access the capital markets at attractive rates and terms to
capitalize and fund its operations and future growth; the success of Capital One’s marketing efforts in attracting and retaining customers; increases or
decreases in Capital One’s aggregate loan balances 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 Capital One incurs and attrition of loan balances; the
level of future repurchase or indemnification requests Capital One may receive, the actual future performance of mortgage loans relating to such requests,
the success rates of claimants against Capital One, any developments in litigation and the actual recoveries Capital One may make on any collateral
relating to claims against Capital One; the amount and rate of deposit growth; changes in the reputation of or expectations regarding the financial
services industry 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; Capital One’s ability to control costs;
the amount of, and rate of growth in, Capital One’s expenses as its 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
Capital One’s 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; fraud or misconduct by Capital One’s customers, employees or
business partners; 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, 2010. 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 8-K filed April 21, 2011,
available on Capital One’s website at www.capitalone.com under “Investors.”
3
April 21, 2011
Net Interest Income
Non-Interest Income
Revenue
Marketing Expense
Operating Expense
Pre-Provision Earnings (before tax)
Net Charge-offs
Other
Allowance Build (Release)
Provision Expense
Discontinued Operations, net of tax
Total Company (after tax)
EPS
Tax Expense
Pretax Income
$MM
Operating Earnings (after tax)
First quarter 2011 earnings were $2.21 per share, up 45% from the prior
quarter
quarter
Non-Interest Expense
3,140
942
4,082
276
1,886
2,162
1,920
1,145
(50)
(561)
534
1,016
1,032
(16)
$2.21
1,386
354
Q111
3,023
939
3,962
308
1,783
2,091
1,871
1,394
(8)
(547)
839
697
701
(4)
$1.52
1,032
331
2
Q410
2
4%
0%
3%
10%
(6)%
(3)%
3%
18%
525%
3%
36%
46%
47%
(300)%
34%
(7)%
45%
% Change
Highlights
• Interest income increase driven by
margin expansion
margin expansion
• Non-interest expense increased
modestly as one-time operating
costs were partially offset by
seasonally lower marketing costs
modestly as one-time operating
costs were partially offset by
seasonally lower marketing costs
• Improvement in credit led to lower
charge-offs and continued
allowance release
charge-offs and continued
allowance release
• Tax rate decrease driven by IRS
settlements in the quarter
settlements in the quarter
4
April 21, 2011
Margins increased in the quarter
Q1 Margin Expansion
• Higher asset yields
• Improving credit trends and outlook
• Modest improvement in cost of funds
Drivers of Future Margin Trends
• Competitive dynamics
• Asset mix
• Credit trends
Margins as % of Managed Assets
Revenue Margin
Net Interest Margin
5
April 21, 2011
Our capacity to generate capital remains strong
Tier 1 Common Equity + Allowance Ratio to Risk-Weighted Assets
Allowance
Tier 1 Common
14.2%
13.0%
12.5%
13.2%
13.2%
1
1 Tier 1 common equity ratio is a non-GAAP measure calculated based on Tier 1 common equity divided by risk-
weighted assets. See "Exhibit 99.2—Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory
Capital Measures" for the calculation of this ratio.
weighted assets. See "Exhibit 99.2—Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory
Capital Measures" for the calculation of this ratio.
Disallowed DTA
RWA
EOP Loans
(0)
(2.2)
(2.0)
(1.3)
(1.1)
116
120
124
125
127
137
130
127
126
126
(1.4)
142
124
12.0%
Tier 1 Common excluding
disallowed DTA
disallowed DTA
($B)
12.3
10.1
10.7
11.5
12.3
13.4
Tier 1 Common
12.3
7.9
8.7
10.2
11.2
12.0
6
April 21, 2011
Loan balances declined modestly, reflecting expected seasonal trends
Liability Highlights
Asset Highlights
Total Cost
of Funds 1.76% 1.69% 1.64% 1.50% 1.41%
of Funds 1.76% 1.69% 1.64% 1.50% 1.41%
End of Period Assets
Domestic Card
Commercial
Int’l Card
Consumer
$B
Other
Cash & Cash
Equivalents
Securities
• End of period loans declined ~$1.9 billion
– Run-off portfolios down ~$1.0 billion
– Decline excluding run-off ~$800 million
• Average loans declined ~$400 million
• Cost of funds decreased to 1.41%
• Continued shift in funding to lower priced deposits
• Loan to deposit ratio of 0.99
7
April 21, 2011
Credit improvement in our consumer businesses continues to run
ahead of broader economic indicators
ahead of broader economic indicators
Domestic Credit Card ($51.9B*)
Net Charge-off Rate
Home Loan ($12.0B*)
International Credit Card ($8.7B*)
Net Charge-off Rate
30+ Day Delinquency Rate
Net Charge-off Rate
30+ Day Performing
Delinquency Rate
Delinquency Rate
Net Charge-off Rate
30+ Day Performing
Delinquency Rate
Delinquency Rate
* Average assets for Q1
8
April 21, 2011
Commercial Banking credit metrics have stabilized and improved
modestly over the last four quarters
modestly over the last four quarters
Total Commercial Banking ($29.8B*)
Nonperforming
Asset Rate
Asset Rate
Commercial & Multi-Family Real Estate ($13.3B*)
Nonperforming
Asset Rate
Asset Rate
Charge-off
Rate
Rate
Total Commercial Lending
Excluding Small Ticket CRE ($28.0B*)
Excluding Small Ticket CRE ($28.0B*)
Nonperforming
Asset Rate
Asset Rate
Charge-off
Rate
Rate
Nonperforming
Asset Rate
Asset Rate
Charge-off
Rate
Rate
* Average assets for Q1
9
April 21, 2011
Capital One is well positioned to deliver and sustain attractive returns and
generate capital
generate capital
Local Banking
Commercial
Banking
Banking
Strong and Resilient Balance Sheet
Retail
Banking
• Access to Assets
• Strong ROAs
• Leading Brand Scale
• Low Risk Commercial Assets
• Core Deposit Funding
• Banking Relationships
Card
Auto
National Scale
Brand
Moderate growth
Strong returns
Strong capital generation
10
April 21, 2011
Appendix
11
April 21, 2011
Strong credit continues to drive Domestic Card profits
• Revenue margin increased 56 bps from
Q4 driven by favorable credit trends and a
modest increase in fee revenue
Q4 driven by favorable credit trends and a
modest increase in fee revenue
• Non-interest expenses increased due to
higher legal expenses in Q1 partially offset
by seasonally lower marketing expenses
higher legal expenses in Q1 partially offset
by seasonally lower marketing expenses
• Credit improvement continued
–Lower provision from declining
charge-offs
charge-offs
– Delinquency rate improved 50 bps
from Q4
from Q4
• Ending loans declined by $3.3B driven by
seasonal decreases and closed end loan
run-off
seasonal decreases and closed end loan
run-off
• Purchase volume declined by $2.0B due to
seasonal patterns
seasonal patterns
• Purchase volume increased 14%
from Q1 2010
from Q1 2010
Net interest income
Non-interest income
Total revenue
Provision for loan and lease losses
Non-interest expenses
Income before taxes
Income taxes
Net income
Selected Metrics
Period end loans held for investment
Average loans held for investment
Loans held for investment yield
Revenue margin
Net charge-off rate
30+ day delinquency rate
Purchase volume
Earnings
(in millions)
Q1 2010
Q1 2011
Highlights
583
230
990
2,234
1,014
360
654
14.65%
17.22%
3.59%
1,651
6.20%
618
1,096
809
2,483
578
206
372
56,228
58,108
14.78%
17.09%
5.30%
21,988
1,865
10.48%
Q4 2010
594
505
935
2,215
775
276
499
53,849
53,189
13.57%
16.66%
4.09%
26,985
1,621
7.28%
50,570
51,889
25,024
Domestic Card
12
April 21, 2011
International Card performance was driven primarily by the inclusion of HBC
HBC Acquisition Drove the Following
• $1.2B higher loans and an associated
increase in revenue compared to Q4
increase in revenue compared to Q4
• Inclusion of the HBC business drove non-
interest expense higher by approximately
$30MM for the quarter
interest expense higher by approximately
$30MM for the quarter
• Higher provision expense was due
primarily to a one-time ALLL build for HBC
of $105MM
primarily to a one-time ALLL build for HBC
of $105MM
Net interest income
Non-interest income
Total revenue
Provision for loan and lease losses
Non-interest expenses
Income before taxes
Net income (loss)
Selected Metrics
Period end loans held for investment
Average loans held for investment
Loans held for investment yield
Revenue margin
Net charge-off rate
30+ day delinquency rate
Purchase volume
Earnings
(in million)
Income taxes (benefit)
Q1 2010
Q1 2011
International Card
91
220
188
381
(27)
(16)
(11)
16.65%
17.52%
5.55%
290
5.74%
100
79
105
348
164
47
117
7,578
7,814
15.66%
17.81%
6.39%
1,936
248
8.83%
Q4 2010
78
84
121
327
122
35
87
7,522
7,419
16.82%
17.63%
5.75%
2,394
249
6.68%
8,735
8,697
2,773
Highlights
13
April 21, 2011
Commercial Banking net income was higher in Q1 due to lower provision
expenses
expenses
• Revenue and average loans remained
relatively stable compared to Q4
relatively stable compared to Q4
• Non-interest expenses decreased due in
part to lower legal and foreclosure
expenses
part to lower legal and foreclosure
expenses
• Provision expenses decreased $49MM
from Q4 due to a decline in charge-offs
from lower loss severities
from Q4 due to a decline in charge-offs
from lower loss severities
• Deposits increased by $1.6B from Q4
mainly driven by growth in Money Market /
Savings accounts and DDA
mainly driven by growth in Money Market /
Savings accounts and DDA
Net interest income
Non-interest income
Total revenue
Provision for loan and lease losses
Non-interest expenses
Income (loss) before taxes
Net income (loss)
Selected Metrics
Period end loans held for investment
Average loans held for investment
Loans held for investment yield
Period end deposits
Average deposits
Deposit interest expense rate
Core deposit intangible amortization
Net charge-off rate
Earnings
Nonperforming loans as a % of
loans HFI
loans HFI
Nonperforming asset rate
(in millions)
Income taxes (benefit)
Q1 2010
Q1 2011
Highlights
Commercial Banking
71
(15)
177
392
230
82
148
4.80%
24,244
0.79%
321
0.55%
1.95%
1.84%
42
238
192
354
(76)
(27)
(49)
29,612
29,723
5.03%
21,605
21,859
14
1.37%
312
0.72%
2.64%
2.48%
Q4 2010
49
34
207
385
144
51
93
29,742
29,617
5.13%
22,630
22,808
13
1.43%
336
0.61%
1.80%
1.66%
11
24,138
29,793
30,017
14
April 21, 2011
Consumer Banking net income increased by $95MM in Q1 from Q4
• Revenue increased by $23MM from Q4
driven by higher margins in Auto
driven by higher margins in Auto
• Non-interest expenses decreased by
$30MM due primarily to lower marketing
costs
$30MM due primarily to lower marketing
costs
• Provision expenses decreased by nearly
50% from Q4 due to better credit
performance in auto, mortgage and retail
banking
50% from Q4 due to better credit
performance in auto, mortgage and retail
banking
• Ending loans decreased slightly from Q4
with an increase in auto loans offset by
continued home loan run-off
with an increase in auto loans offset by
continued home loan run-off
• Period end deposits were higher by $3.4B
in Q1 driven by increases in Money
Market/Savings accounts
in Q1 driven by increases in Money
Market/Savings accounts
Net interest income
Non-interest income
Total revenue
Provision for loan and lease losses
Non-interest expenses
Income before taxes
Net income
Selected Metrics
Period end loans held for investment
Average loans held for investment
Loans held for investment yield
Auto loan originations
Period end deposits
Average deposits
Deposit interest expense rate
Core deposit intangible amortization
Earnings
Nonperforming loans as a % of
loans HFI
loans HFI
Nonperforming asset rate
Net charge-off rate
30+ day performing delinquency rate
Period end loans serviced for others
(in millions)
Income taxes
3.42%
1,169
1,212
Q1 2010
Q1 2011
Highlights
Consumer Banking
186
95
740
334
119
215
9.60%
86,355
1.06%
983
83,884
2.00%
1.84%
1.57%
316
50
688
474
169
305
36,383
38,245
8.96%
1,343
76,883
896
75,115
1.62%
3.90%
26,778
1.27%
38
2.03%
1.76%
4.28%
1,146
Q4 2010
196
189
770
187
67
120
34,383
34,751
9.20%
2,217
82,959
1.13%
34
950
81,834
2.17%
1.97%
1.98%
20,689
34,306
34,236
2,571
35
19,956
