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Capital One Reports Earnings for 2004; 28% EPS Growth Year Over Year

January 19, 2005 at 4:04 PM EST
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MCLEAN, Va., Jan. 19 /PRNewswire-FirstCall/ -- Capital One Financial Corporation (NYSE: COF) today announced 28 percent earnings per share growth for 2004. The company reaffirmed its earnings per share guidance for 2005 to be between $6.60 and $7.00 per share (fully diluted).

Earnings were $1.5 billion, or $6.21 per share (fully diluted), for the year compared with $1.1 billion, or $4.85 per share, in 2003. Earnings for the fourth quarter of 2004 were $195.1 million, or $.77 per share (fully diluted), compared with $265.7 million, or $1.11 per share, for the fourth quarter of 2003, and $490.2 million, or $1.97 per share, in the previous quarter. Higher marketing and provision expenses in the fourth quarter accounted for the lower earnings compared to the previous quarter and fourth quarter of 2003.

"Capital One generated strong earnings and loan growth again in 2004, as it has each year since its initial public offering ten years ago," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "The company is well positioned for continued success in 2005 in both our US credit card and our growing and profitable diversification businesses."

During the fourth quarter, managed loans grew $4.4 billion from $75.5 billion to $79.9 billion. Annual growth in managed loans was $8.6 billion, or 12 percent, from December 31, 2003. The company continues to expect that managed loans will grow at a rate of between 12 and 15 percent during 2005.

The managed charge-off rate increased to 4.37 percent in the fourth quarter of 2004 from 4.05 percent in the previous quarter, but decreased from 5.32 percent in the fourth quarter of 2003. The increase in the managed charge-off rate in the fourth quarter of 2004 included a one-time 10 basis point effect from a change in our charge-off recognition policy for auto loans in bankruptcy. The company continues to expect its quarterly managed charge- off rate to stay between 4.0 and 4.5 percent in 2005, with seasonal variations. Additionally, the company increased its allowance for loan losses by $110 million in the fourth quarter of 2004, largely driven by the growth in reported loans. The company expects a seasonal reduction in its allowance for loan losses in the first quarter of 2005, and a likely increase for full year 2005.

The managed delinquency rate (30+ days) decreased to 3.82 percent as of December 31, 2004 from 3.90 percent as of the end of the previous quarter. The managed delinquency rate as of December 31, 2003 was 4.46 percent. Capital One's managed revenue margin decreased to 12.66 percent in the fourth quarter of 2004 from 13.03 percent in the previous quarter. The company's managed revenue margin was 13.89 percent in the fourth quarter of 2003.

"Return on managed assets for 2004 increased to 1.73 percent from 1.52 percent in 2003," said Gary L. Perlin, Capital One's Chief Financial Officer. "Although we expect to see a modest decline in our revenue margin in 2005 from our ongoing diversification and bias towards lower loss assets, we expect to continue to improve our operating efficiency and thus maintain a return on managed assets of between 1.7 and 1.8 percent in 2005, with some quarterly variability."

Fourth quarter marketing expenses increased $193.4 million to $511.1 million from $317.7 million in the previous quarter, largely due to the launch of several new programs. Marketing expenses were $290.1 million in the fourth quarter of 2003. Marketing expenses for 2004 were $1.3 billion, a 20 percent increase over the $1.1 billion in 2003. The company expects annual marketing spend for 2005 to be similar to 2004.

Annualized operating expenses as a percentage of average managed loans increased to 5.44 percent in the fourth quarter of 2004, from 5.35 percent in the previous quarter and decreased from 5.82 percent in the fourth quarter of 2003. Included in fourth quarter 2004 operating expenses were charges totaling $42.1 million for a combination of employee termination benefits and continued facility consolidations. The company expects about $50 million in additional restructuring charges in 2005 related to programs initiated in 2004.

In the fourth quarter of 2004, the company completed the sale of its French loan portfolio and recorded a gain of $41.1 million, which is included in non-interest income. As announced during the second half of 2004, the company signed definitive agreements to acquire HFS Group, Onyx Acceptance Corporation, and eSmartloan. During the first quarter of 2005, Capital One completed the HFS and Onyx transactions, as well as the acquisition of InsLogic, a small insurance brokerage firm. The company expects to close the eSmartloan acquisition later in the first quarter of 2005.

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

The company cautions that its current expectations in this release, in the presentation slides available on the company's website and on its Form 8-K dated January 19, 2005 for 2005 earnings, charge-off rates, revenue margins, return on assets, allowance for loan losses, loan growth rates, marketing, the composition of loan growth, restructuring charges, and tax rate are forward- looking statements and actual results could differ materially from current expectations due to a number of factors, including: continued intense competition from numerous providers of products and services which compete with our businesses; changes in our aggregate accounts and balances, and the growth rate and composition thereof; the company's ability to continue to diversify its assets; the company's ability to access the capital markets at attractive rates and terms to fund its operations and future growth; changes in the reputation of the credit card industry and/or the company with respect to practices or products; the success of the company's marketing efforts; the company's ability to execute effective tax planning strategies; the company's ability to execute on its strategic and operating plans; and general economic conditions affecting consumer income and spending, which may affect consumer bankruptcies, defaults, and charge-offs.

A discussion of these and other factors can be found in Capital One's annual report and other reports filed with the Securities and Exchange Commission, including, but not limited to, Capital One's report on Form 10-Q for the quarter ended September 30, 2004.

About Capital One

Headquartered in McLean, Virginia, Capital One Financial Corporation (http://www.capitalone.com) is a bank holding company whose principal subsidiaries, Capital One Bank and Capital One, F.S.B., offer consumer lending products and Capital One Auto Finance, Inc., offers automobile and other motor vehicle financing products. Capital One's subsidiaries collectively had 48.6 million accounts and $79.9 billion in managed loans outstanding as of December 31, 2004. Capital One, a Fortune 500 company, is one of the largest providers of MasterCard and Visa credit cards in the world. Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 500 index.

NOTE: Fourth quarter 2004 financial results, SEC Filings, and fourth quarter earnings conference call slides are accessible on Capital One's home page (http://www.capitalone.com). Choose "Investors" on the bottom right corner of the home page to view and download the earnings press release, slides, and other financial information. Additionally, a webcast of today's 5:00pm (EST) earnings conference call is accessible through the same link.



                   CAPITAL ONE FINANCIAL CORPORATION (COF)
                FINANCIAL & STATISTICAL SUMMARY REPORTED BASIS

                                        2004          2004          2003
    (in millions, except per share
     data and as noted)                  Q4            Q3            Q4
    Earnings (Reported Basis)
    Net Interest Income                  $784.6        $775.4        $664.1
    Non-Interest Income                 1,521.5 (1)   1,539.4 (1)   1,437.5
    Total Revenue (2)                   2,306.1       2,314.8       2,101.6
    Provision for Loan Losses             467.1         267.8         390.4
    Marketing Expenses                    511.1         317.7         290.1
    Operating Expenses                  1,045.4 (3)     994.3 (3)     999.3
    Income Before Taxes                   282.5         735.0         421.7
    Tax Rate                               30.9 %        33.3 %        37.0 %
    Net Income                           $195.1        $490.2        $265.7
    Common Share Statistics
    Basic EPS                             $0.82         $2.07         $1.16
    Diluted EPS                           $0.77         $1.97         $1.11
    Dividends Per Share                   $0.03         $0.03         $0.03
    Book Value Per Share (period end)    $33.99        $32.67        $25.75
    Stock Price Per Share (period
     end)                                $84.21        $73.90        $61.29
    Total Market Capitalization
     (period end)                     $20,783.0     $17,936.8     $14,405.7
    Shares Outstanding (period end)       246.8         242.7         235.0
    Shares Used to Compute Basic EPS      239.2         236.4         228.1
    Shares Used to Compute Diluted
     EPS                                  253.0         249.0         239.2
    Reported Balance Sheet Statistics
     (period avg.)
    Average Loans                       $36,096       $34,772       $31,297
    Average Earning Assets              $49,500       $47,267       $40,792
    Average Assets                      $53,339       $51,496       $45,002
    Average Equity                       $8,221        $7,561        $5,887
    Return on Average Assets (ROA)         1.46 %        3.81 %        2.36 %
    Return on Average Equity (ROE)         9.49 %       25.93 %       18.05 %
    Reported Balance Sheet Statistics
     (period end)
    Loans                               $38,216       $35,161       $32,850
    Total Assets                        $53,747       $51,960       $46,284
    Capital (4)                          $9,231        $8,769        $6,882
    Loan growth                          $3,055          $610        $2,232
    % Loan Growth Q Over Q
     (annualized)                            35 %           7 %          29 %
    % Loan Growth Y Over Y                   16 %          15 %          20 %
    Capital to Assets Ratio               17.17 %       16.88 %       14.87 %
    Capital plus Allowance to Assets
     Ratio                                19.98 %       19.56 %       18.31 %
    Revenue & Expense Statistics
     (Reported)
    Net Interest Income Growth
     (annualized)                             5 %          36 %         (23)%
    Non Interest Income Growth
     (annualized)                            (5)%          41 %          22 %
    Revenue Growth (annualized)              (2)%          39 %           7 %
    Net Interest Margin                    6.34 %        6.56 %        6.51 %
    Revenue Margin                        18.64 %       19.59 %       20.61 %
    Risk Adjusted Margin (5)              15.85 %       17.07 %       17.02 %
    Operating Expense as a % of
     Revenues                             45.33 %       42.95 %       47.55 %
    Operating Expense as a % of Avg
     Loans (annualized)                   11.58 %       11.44 %       12.77 %
    Asset Quality Statistics
     (Reported)
    Allowance                            $1,505        $1,395        $1,595
    30+ Day Delinquencies                $1,472        $1,407        $1,573
    Net Charge-Offs                        $345          $298          $366
    Allowance as a % of Reported
     Loans                                 3.94 %        3.97 %        4.86 %
    Delinquency Rate (30+ days)            3.85 %        4.00 %        4.79 %
    Net Charge-Off Rate                    3.82 %        3.43 %        4.68 %

    (1) Includes a $41.1 million gain resulting from the sale of the French
        loan portfolio in Q4 2004 and a $31.5 million gain resulting from the
        sale of a joint venture investment in South Africa in Q3 2004.
    (2) In accordance with the Company's finance charge and fee revenue
        recognition policy, the amounts billed to customers but not recognized
        as revenue were as follows:  Q4 2004 - $276.8, Q3 2004 - $269.7, Q2
        2004 - $263.5 million, Q1 2004 - $285.5 million and Q4 2003 - $454.8
        million.
    (3) Includes employee termination benefits and charges for facility
        consolidation related to corporate-wide cost reduction initiatives of
        $42.1 million, $26.7 million and $56.0 million for Q4 2004, Q3 2004
        and Q2 2004, respectively.  In addition, Q3 2004 had charges of $20.6
        million related to a change in fixed asset capitalization thresholds
        and $15.8 million related to impairment of internally developed
        software.
    (4) Includes preferred interests and mandatory convertible securities.
    (5) Risk adjusted margin is total revenue less net charge-offs as a
        percentage of average earning assets.



                   CAPITAL ONE FINANCIAL CORPORATION (COF)
              FINANCIAL & STATISTICAL SUMMARY MANAGED BASIS (1)

                                           2004         2004         2003
    (in millions)                           Q4           Q3           Q4
    Earnings (Managed Basis)
    Net Interest Income                  $1,701.8     $1,670.4     $1,571.7
    Non-Interest Income                   1,099.0 (2)  1,099.8 (2)  1,077.5
    Total Revenue (3)                     2,800.8      2,770.2      2,649.2
    Provision for Loan Losses               961.8        723.2        938.0
    Marketing Expenses                      511.1        317.7        290.1
    Operating Expenses                    1,045.4 (4)    994.3 (4)    999.3
    Income Before Taxes                     282.5        735.0        421.7
    Tax Rate                                 30.9 %       33.3 %       37.0 %
    Net Income                             $195.1       $490.2       $265.7
    Managed Balance Sheet Statistics
     (period avg.)
    Average Loans                         $76,930      $74,398      $68,679
    Average Earning Assets                $88,461      $85,045      $76,277
    Average Assets                        $93,574      $90,543      $81,733
    Return on Average Assets (ROA)           0.83 %       2.17 %       1.30 %
    Managed Balance Sheet Statistics
     (period end)
    Loans                                 $79,861      $75,457      $71,245
    Total Assets                          $94,792      $91,665      $83,999
    Loan Growth                            $4,404       $2,090       $3,985
    % Loan Growth Q over Q (annualized)        23 %         11 %         24 %
    % Loan Growth Y over Y                     12 %         12 %         19 %
    Capital to Assets Ratio                  9.74 %       9.57 %       8.19 %
    Capital plus Allowance to Assets
     Ratio                                  11.33 %      11.09 %      10.09 %
    Number of Accounts (000's)             48,573       47,224       47,038
    % Off-Balance Sheet Securitizations        52 %         53 %         53 %
    % at Introductory Rate                      7 %          6 %         10 %
    Revenue & Expense Statistics
     (Managed)
    Net Interest Income Growth
     (annualized)                               8 %         21 %         19 %
    Non Interest Income Growth
     (annualized)                               0 %         35 %         11 %
    Revenue Growth (annualized)                 4 %         27 %         16 %
    Net Interest Margin                      7.70 %       7.86 %       8.24 %
    Revenue Margin                          12.66 %      13.03 %      13.89 %
    Risk Adjusted Margin (5)                 8.87 %       9.48 %       9.10 %
    Operating Expense as a % of Revenues    37.33 %      35.89 %      37.72 %
    Operating Expense as a % of Avg
     Loans (annualized)                      5.44 %       5.35 %       5.82 %
    Asset Quality Statistics (Managed)
    30+ Day Delinquencies                  $3,054       $2,944       $3,178
    Net Charge-Offs                          $840         $754         $914
    Delinquency Rate (30+ days)              3.82 %       3.90 %       4.46 %
    Net Charge-Off Rate                      4.37 %       4.05 %       5.32 %

    (1) The information in this statistical summary reflects the adjustment to
        add back the effect of securitization transactions qualifying as sales
        under generally accepted accounting principles.  See accompanying
        schedule - "Reconciliation to GAAP Financial Measures."
    (2) Includes a $41.1 million gain resulting from the sale of the French
        loan portfolio in Q4 2004 and a $31.5 million gain resulting from the
        sale of a joint venture investment in South Africa in Q3 2004.
    (3) In accordance with the Company's finance charge and fee revenue
        recognition policy, the amounts billed to customers but not recognized
        as revenue were as follows:  Q4 2004 - $276.8, Q3 2004 - $269.7
        million, Q2 2004 - $263.5 million, Q1 2004 - $285.5 million and Q4
        2003 - $454.8 million.
    (4) Includes employee termination benefits and charges for facility
        consolidation related to corporate-wide cost reduction initiatives of
        $42.1 million, $26.7 million and $56.0 million for Q4 2004, Q3 2004
        and Q2 2004, respectively.  In addition, Q3 2004 had charges of $20.6
        million related to a change in fixed asset capitalization thresholds
        and $15.8 million related to impairment of internally developed
        software.
    (5) Risk adjusted margin is total revenue less net charge-offs as a
        percentage of average earning assets.



                   CAPITAL ONE FINANCIAL CORPORATION (COF)
         SEGMENT FINANCIAL & STATISTICAL SUMMARY - MANAGED BASIS (1)

                                            2004        2004        2003
    (in millions)                            Q4          Q3          Q4
    Segment Statistics
    US Card:
      Loans receivable                     $48,610     $46,082     $46,279
      Net income (loss)                     $201.9      $414.4      $322.7
      Net charge-off rate                     4.93 %      4.68 %      6.16 %
      Delinquency Rate (30+ days)             3.97 %      4.14 %      4.60 %
    Auto Finance:
      Loans receivable                      $9,997      $9,734      $8,467
      Net income (loss)                      $25.1       $55.3       $34.4
      Net charge-off rate                     3.87 %      2.63 %      4.30 %
      Delinquency Rate (30+ days)             5.50 %      5.54 %      7.55 %
    Global Financial Services:
      Loans receivable                     $21,240     $19,615     $16,508
      Net income (loss)                      $29.2       $86.8        $3.3
      Net charge-off rate                     3.30 %      3.26 %      3.69 %
      Delinquency Rate (30+ days)             2.81 %      2.65 %      2.70 %

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



                      CAPITAL ONE FINANCIAL CORPORATION
                  Reconciliation to GAAP Financial Measures
                 For the Three Months Ended December 31, 2004
                      (dollars in thousands)(unaudited)

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

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

                                          Total                      Total
                                        Reported   Adjustments (1) Managed (2)
    Income Statement Measures
    Net interest income                   $784,564     $917,263   $1,701,827
    Non-interest income                 $1,521,575    $(422,596)  $1,098,979
    Total revenue                       $2,306,139     $494,667   $2,800,806
    Provision for loan losses             $467,133     $494,667     $961,800
    Net charge-offs                       $345,073     $494,667     $839,740
    Balance Sheet Measures
    Consumer loans                     $38,215,591  $41,645,708  $79,861,299
    Total assets                       $53,747,255  $41,044,776  $94,792,031
    Average consumer loans             $36,096,481  $40,833,492  $76,929,973
    Average earning assets             $49,500,348  $38,960,722  $88,461,070
    Average total assets               $53,338,621  $40,235,616  $93,574,237
    Delinquencies                       $1,472,194   $1,581,884   $3,054,078

    (1) Includes adjustments made related to the effects of securitization
        transactions qualifying as sales under GAAP and adjustments made to
        reclassify to "managed" loans outstanding the collectible portion of
        billed finance charge and fee income on the investors' interest in
        securitized loans excluded from loans outstanding on the "reported"
        balance sheet in accordance with Financial Accounting Standards Board
        Staff Position, "Accounting for Accrued Interest Receivable Related to
        Securitized and Sold Receivables under FASB Statement 140, Accounting
        for Transfers and Servicing of Financial Assets and Extinguishments of
        Liabilities," issued April 2003.

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



                      CAPITAL ONE FINANCIAL CORPORATION
                         Consolidated Balance Sheets
                          (in thousands)(unaudited)

                                        December 31  September 30  December 31
                                           2004          2004         2003

    Assets:
    Cash and due from banks                $327,517     $454,843     $382,212
    Federal funds sold and resale
     agreements                             773,695      449,700    1,010,319
    Interest-bearing deposits at other
     banks                                  309,999      538,324      587,751
      Cash and cash equivalents           1,411,211    1,442,867    1,980,282
    Securities available for sale         9,300,454    9,519,089    5,866,628
    Consumer loans                       38,215,591   35,160,635   32,850,269
      Less:  Allowance for loan losses   (1,505,000)  (1,395,000)  (1,595,000)
    Net loans                            36,710,591   33,765,635   31,255,269
    Accounts receivable from
     securitizations                      4,081,271    4,955,739    4,748,962
    Premises and equipment, net             817,704      812,724      902,600
    Interest receivable                     252,857      232,808      214,295
    Other                                 1,173,167    1,230,693    1,315,670
      Total assets                      $53,747,255  $51,959,555  $46,283,706


    Liabilities:
    Interest-bearing deposits           $25,636,802  $25,354,323  $22,416,332
    Senior and subordinated notes         6,874,790    6,968,182    7,016,020
    Other borrowings                      9,637,019    8,490,631    7,796,613
    Interest payable                        237,227      250,227      256,015
    Other                                 2,973,228    2,966,132    2,746,915
      Total liabilities                  45,359,066   44,029,495   40,231,895

    Stockholders' Equity:
    Common stock                              2,484        2,440        2,364
    Paid-in capital, net                  2,711,327    2,463,629    1,937,302
    Retained earnings and cumulative
     other comprehensive income           5,741,131    5,513,694    4,161,666
      Less:  Treasury stock, at cost        (66,753)     (49,703)     (49,521)
      Total stockholders' equity          8,388,189    7,930,060    6,051,811
      Total liabilities and
       stockholders' equity             $53,747,255  $51,959,555  $46,283,706



                      CAPITAL ONE FINANCIAL CORPORATION
                      Consolidated Statements of Income
               (in thousands, except per share data)(unaudited)


                                                    Three Months Ended
                                          December 31 September 30 December 31
                                              2004        2004         2003

    Interest Income:
    Consumer loans, including past-due fees $1,097,041  $1,083,286   $969,571
    Securities available for sale               88,085      84,492     52,328
    Other                                       64,204      60,635     65,884
      Total interest income                  1,249,330   1,228,413  1,087,783

    Interest Expense:
    Deposits                                   267,706     257,349    237,624
    Senior and subordinated notes              116,419     121,166    117,791
    Other borrowings                            80,641      74,523     68,267
      Total interest expense                   464,766     453,038    423,682
    Net interest income                        784,564     775,375    664,101
    Provision for loan losses                  467,133     267,795    390,405
    Net interest income after provision
     for loan losses                           317,431     507,580    273,696

    Non-Interest Income:
    Servicing and securitizations              915,511     942,587    918,762
    Service charges and other customer-
     related fees                              374,048     385,648    380,925
    Interchange                                135,843     117,043    106,414
    Other                                       96,173      94,106     31,390
      Total non-interest income              1,521,575   1,539,384  1,437,491

    Non-Interest Expense:
    Salaries and associate benefits            382,646     415,988    408,884
    Marketing                                  511,142     317,653    290,145
    Communications and data processing         137,867     112,191    116,217
    Supplies and equipment                      92,827      94,190     83,804
    Occupancy                                   55,994      41,407     51,645
    Other                                      376,051     330,555    338,777
      Total non-interest expense             1,556,527   1,311,984  1,289,472
    Income before income taxes and
     cumulative effect of accounting
     change                                    282,479     734,980    421,715
    Income taxes                                87,351     244,819    156,034
    Income before cumulative effect of
     accounting change                         195,128     490,161    265,681
    Cumulative effect of accounting change,
     net of taxes of $8,832                          -           -
    Net income                                $195,128    $490,161   $265,681


    Basic earnings per share before
     cumulative effect of accounting
     change                                      $0.82       $2.07      $1.16
    Basic earnings per share after
     cumulative effect of accounting
     change                                      $0.82       $2.07      $1.16

    Diluted earnings per share before
     cumulative effect of accounting
     change                                      $0.77       $1.97      $1.11
    Diluted earnings per share after
     cumulative effect of accounting
     change                                      $0.77       $1.97      $1.11

    Dividends paid per share                     $0.03       $0.03      $0.03


                      CAPITAL ONE FINANCIAL CORPORATION
                      Consolidated Statements of Income
               (in thousands, except per share data)(unaudited)

                                                       Year Ended
                                              December 31       December 31
                                                  2004              2003

    Interest Income:
    Consumer loans, including past-due fees     $4,234,420        $3,932,295
    Securities available for sale                  312,374           192,594
    Other                                          247,626           242,765
      Total interest income                      4,794,420         4,367,654

    Interest Expense:
    Deposits                                     1,009,545           891,650
    Senior and subordinated notes                  486,812           423,826
    Other borrowings                               295,085           267,089
      Total interest expense                     1,791,442         1,582,565
    Net interest income                          3,002,978         2,785,089
    Provision for loan losses                    1,220,852         1,517,497
    Net interest income after provision
     for loan losses                             1,782,126         1,267,592

    Non-Interest Income:
    Servicing and securitizations                3,643,808         3,211,662
    Service charges and other customer-
     related fees                                1,482,658         1,630,185
    Interchange                                    475,810           376,785
    Other                                          297,881           197,292
      Total non-interest income                  5,900,157         5,415,924

    Non-Interest Expense:
    Salaries and associate benefits              1,642,721         1,570,415
    Marketing                                    1,337,780         1,118,422
    Communications and data processing             475,355           448,110
    Supplies and equipment                         349,920           344,049
    Occupancy                                      206,614           185,179
    Other                                        1,309,829         1,190,548
      Total non-interest expense                 5,322,219         4,856,723
    Income before income taxes and
     cumulative effect of accounting change      2,360,064         1,826,793
    Income taxes                                   816,582           675,914
    Income before cumulative effect of
     accounting change                           1,543,482         1,150,879
    Cumulative effect of accounting
     change, net of taxes of $8,832                      -            15,037
    Net income                                  $1,543,482        $1,135,842


    Basic earnings per share before
     cumulative effect of accounting
     change                                          $6.55             $5.12
    Basic earnings per share after
     cumulative effect of accounting
     change                                          $6.55             $5.05

    Diluted earnings per share before
     cumulative effect of accounting
     change                                          $6.21             $4.92
    Diluted earnings per share after
     cumulative effect of accounting
     change                                          $6.21             $4.85

    Dividends paid per share                         $0.11             $0.11



                      CAPITAL ONE FINANCIAL CORPORATION
     Statements of Average Balances, Income and Expense, Yields and Rates
                      (dollars in thousands)(unaudited)

    Reported                                    Quarter Ended 12/31/04
                                            Average       Income/    Yield/
                                            Balance       Expense     Rate
    Earning assets:
     Consumer loans                        $36,096,481   $1,097,041   12.16%
     Securities available for sale           9,741,355       88,085     3.62
     Other                                   3,662,512       64,204     7.01
    Total earning assets                   $49,500,348   $1,249,330   10.10%

    Interest-bearing liabilities:
     Deposits                              $25,580,044     $267,706    4.19%
     Senior and subordinated notes           6,946,109      116,419     6.70
     Other borrowings                        9,076,531       80,641     3.55
    Total interest-bearing liabilities     $41,602,684     $464,766    4.47%

    Net interest spread                                                5.63%

    Interest income to average earning
     assets                                                           10.10%
    Interest expense to average earning
     assets                                                             3.76
    Net interest margin                                                6.34%


                      CAPITAL ONE FINANCIAL CORPORATION
     Statements of Average Balances, Income and Expense, Yields and Rates
                      (dollars in thousands)(unaudited)

    Reported                                    Quarter Ended 9/30/04
                                            Average       Income/    Yield/
                                            Balance       Expense     Rate
    Earning assets:
     Consumer loans                        $34,772,489   $1,083,286   12.46%
     Securities available for sale           9,372,713       84,492     3.61
     Other                                   3,122,208       60,635     7.77
    Total earning assets                   $47,267,410   $1,228,413   10.40%

    Interest-bearing liabilities:
     Deposits                              $24,713,924     $257,349    4.17%
     Senior and subordinated notes           7,218,916      121,166     6.71
     Other borrowings                        8,674,298       74,523     3.44
    Total interest-bearing liabilities     $40,607,138     $453,038    4.46%

    Net interest spread                                                5.94%

    Interest income to average earning
     assets                                                           10.40%
    Interest expense to average earning
     assets                                                             3.84
    Net interest margin                                                6.56%


                      CAPITAL ONE FINANCIAL CORPORATION
     Statements of Average Balances, Income and Expense, Yields and Rates
                      (dollars in thousands)(unaudited)

    Reported                                     Quarter Ended 12/31/03
                                            Average       Income/    Yield/
                                            Balance       Expense     Rate
    Earning assets:
     Consumer loans                        $31,297,123     $969,571   12.39%
     Securities available for sale           5,816,001       52,328     3.60
     Other                                   3,679,088       65,884     7.16
    Total earning assets                   $40,792,212   $1,087,783   10.67%

    Interest-bearing liabilities:
     Deposits                              $21,604,968     $237,624    4.40%
     Senior and subordinated notes           6,734,569      117,791     7.00
     Other borrowings                        7,661,016       68,267     3.56
    Total interest-bearing liabilities     $36,000,553     $423,682    4.71%

    Net interest spread                                                5.96%

    Interest income to average earning
     assets                                                           10.67%
    Interest expense to average earning
     assets                                                             4.16
    Net interest margin                                                6.51%



                      CAPITAL ONE FINANCIAL CORPORATION
     Statements of Average Balances, Income and Expense, Yields and Rates
                      (dollars in thousands)(unaudited)

    Managed (1)                                 Quarter Ended 12/31/04
                                            Average       Income/    Yield/
                                            Balance       Expense     Rate
    Earning assets:
     Consumer loans                        $76,929,973   $2,476,365   12.88%
     Securities available for sale           9,741,355       88,085     3.62
     Other                                   1,789,742       16,940     3.79
    Total earning assets                   $88,461,070   $2,581,390   11.67%

    Interest-bearing liabilities:
     Deposits                              $25,580,044     $267,706    4.19%
     Senior and subordinated notes           6,946,109      116,419     6.70
     Other borrowings                        9,076,531       80,641     3.55
     Securitization liability               40,291,395      414,797     4.12
    Total interest-bearing liabilities     $81,894,079     $879,563    4.30%

    Net interest spread                                                7.37%

    Interest income to average earning
     assets                                                           11.67%
    Interest expense to average earning
     assets                                                             3.97
    Net interest margin                                                7.70%


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


                      CAPITAL ONE FINANCIAL CORPORATION
     Statements of Average Balances, Income and Expense, Yields and Rates
                      (dollars in thousands)(unaudited)

    Managed (1)                                 Quarter Ended 9/30/04
                                            Average       Income/    Yield/
                                            Balance       Expense     Rate
    Earning assets:
     Consumer loans                        $74,398,301   $2,419,685   13.01%
     Securities available for sale           9,372,713       84,492     3.61
     Other                                   1,273,583       12,587     3.95
    Total earning assets                   $85,044,597   $2,516,764   11.84%

    Interest-bearing liabilities:
     Deposits                              $24,713,924     $257,349    4.17%
     Senior and subordinated notes           7,218,916      121,166     6.71
     Other borrowings                        8,674,298       74,523     3.44
     Securitization liability               39,101,228      393,359     4.02
    Total interest-bearing liabilities     $79,708,366     $846,397    4.25%

    Net interest spread                                                7.59%

    Interest income to average earning
     assets                                                           11.84%
    Interest expense to average earning
     assets                                                             3.98
    Net interest margin                                                7.86%


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


                      CAPITAL ONE FINANCIAL CORPORATION
     Statements of Average Balances, Income and Expense, Yields and Rates
                      (dollars in thousands)(unaudited)

    Managed (1)                                 Quarter Ended 12/31/03
                                            Average       Income/    Yield/
                                            Balance       Expense     Rate
    Earning assets:
     Consumer loans                        $68,678,877   $2,295,802   13.37%
     Securities available for sale           5,816,001       52,328     3.60
     Other                                   1,782,263       11,326     2.54
    Total earning assets                   $76,277,141   $2,359,456   12.37%

    Interest-bearing liabilities:
     Deposits                              $21,604,968     $237,624    4.40%
     Senior and subordinated notes           6,734,569      117,791     7.00
     Other borrowings                        7,661,016       68,267     3.56
     Securitization liability               36,766,829      364,092     3.96
    Total interest-bearing liabilities     $72,767,382     $787,774    4.33%

    Net interest spread                                                8.04%

    Interest income to average earning
     assets                                                           12.37%
    Interest expense to average earning
     assets                                                             4.13
    Net interest margin                                                8.24%


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

SOURCE Capital One Financial Corporation

CONTACT: Mike Rowen, V.P., Investor Relations, +1-703-720-3203 or
Tatiana Stead, Director, Corporate Media, +1-703-720-2352, both of Capital One
Financial Corporation
Web site: http://www.capitalone.com
(COF)