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Capital One Reports First Quarter Earnings

April 19, 2007 at 4:07 PM EDT
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Revises earnings guidance to $7.00 to $7.40 per share

MCLEAN, Va., April 19 /PRNewswire-FirstCall/ -- Capital One Financial Corporation (NYSE: COF) today announced earnings for the first quarter of 2007 of $675.1 million, or $1.62 per share (diluted), compared with $883.3 million, or $2.86 per share (diluted), for the first quarter of 2006, and $390.7 million, or $1.14 per share (diluted), for the fourth quarter of 2006. Additionally, the company provided revised earnings guidance for 2007 of $7.00 to $7.40 per share (diluted).

"While we face some earnings headwinds in 2007, underlying credit quality across our businesses continues to be strong. Our national lending businesses are delivering strong returns and our bank is generating solid deposit growth," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "We remain well positioned to drive growth, generate capital, and deliver sustainable and attractive shareholder returns well into the future."

This quarter, the company has changed its primary reportable segments to reflect its strategy of National Lending and Local Banking. National Lending is comprised of the legacy sub-segments: US Card, Auto Finance, and Global Financial Services. It also contains a new sub-segment called Mortgage Banking, which is the legacy business of GreenPoint Mortgage. The Local Banking segment includes the legacy banking business and North Fork Bank, excluding its auto portfolio and GreenPoint Mortgage, the acquisition of which was completed December 1, 2006.

The company decreased its allowance for loan losses by $75.0 million in the first quarter of 2007 largely as a result of a normal seasonal reduction in reported loans.

Managed loans held for investment at March 31, 2007 were $142.0 billion, up $38.1 billion, or 36.7 percent, from March 31, 2006. Managed loans at the end of the quarter were down $4.1 billion, or 2.8 percent from the previous quarter due primarily to normal seasonality of credit card loan balances.

The company's efficiency ratio increased to 51.77 percent in the first quarter of 2007 from 45.51 percent in the first quarter of 2006, but decreased from 55.90 percent in the previous quarter driven primarily by the acquisition of North Fork and continued investments in infrastructure projects.

Capital One's return on managed assets (ROA) for the first quarter of 2007 was 1.36 percent, down from 2.62 percent in the year ago first quarter, and up compared to 0.96 percent in the fourth quarter of 2006. Managed ROA trends reflect the inclusion of North Fork as well as the continued normalization of US consumer credit.

"We've revised our earnings guidance down to $7.00-$7.40 per share for 2007, largely to reflect revised expectations for our mortgage banking business, which posted a modest loss in the first quarter. Assuming no improvement in the unusually weak conditions now present in the secondary market for non-conforming prime mortgage loans, including Alt-A, we expect that reduced volumes and margins would result in our mortgage banking business delivering no incremental earnings for the balance of 2007," said Gary L. Perlin, Capital One's Chief Financial Officer. "Our expectations for consumer credit to return to more normal levels and the yield curve to remain flat are unchanged. The company's core operations remain strong, and infrastructure upgrades completed in the quarter will provide opportunities to generate efficiencies and cost savings benefits in the future."

Segment Results

National Lending (US Card, Auto Finance, Global Financial Services, Mortgage Banking)

Profits for the National Lending segment were down by 23 percent, as compared to the first quarter of 2006, primarily due to the continued return of charge-offs to more normal levels this quarter. The managed charge-off rate for the National Lending segment increased to 3.65 percent in the first quarter of 2007 from 2.99 percent in the first quarter of 2006 reflecting this continued normalization. Risk was solid across the sub-segments of National Lending, and managed charge-offs were relatively stable versus 3.63 percent in the previous quarter. The delinquency rate of 3.63 percent for National Lending increased from 3.26 percent as of March 31, 2006 but decreased from 4.09 percent as of the end of December 31, 2006. The company continues to sees no evidence of the pressures in the mortgage industry spreading into other lending products.

The US Card sub-segment continues to report profitable growth despite a return to more normal credit levels. Net income for the first quarter of 2007 was $495.3 million, down from the record $602.8 million in the first quarter of 2006, but up from $337.2 million in the fourth quarter of 2006, reflecting expected seasonal patterns. The managed charge-off rate increased to 3.99 percent in the first quarter of 2007 from 2.93 percent in the first quarter of 2006 and from 3.82 percent in the previous quarter due to expected seasonality and normalization of credit. Managed loans at March 31, 2007 were $49.7 billion, up $2.5 billion, or 5.4 percent, from March 31, 2006, but down $3.9 billion, or 7.4 percent from the prior quarter.

The Global Financial Services business also delivered profitable loan growth amidst credit normalization in its North American businesses and continued challenges in the UK. The sub-segment's net income for the first quarter of 2007 was $74.8 million, down $38.7 million, or 34 percent, from $113.5 million from the first quarter of 2006. Net income in the fourth quarter of 2006 was $2.1 million. The managed charge-off rate increased to 4.18 percent in the first quarter of 2007 from 3.63 percent in the first quarter of 2006 driven largely by credit normalization in the US and continuing credit challenges in the UK relative to the prior year. The managed charge-off rate increased 29 basis points from 3.89 percent in the fourth quarter of 2006 reflecting continued credit normalization in the US. Managed loans at March 31, 2007 were $26.8 billion, up $3.1 billion from $23.7 billion, or 13.1 percent over the prior year's first quarter but down slightly from $27.0 billion at December 31, 2006.

The Auto Finance business continued to deliver profits and grow originations by taking advantage of its multi-channel, full credit spectrum strategy. The Auto Finance business's net income was $44.4 million, down $25.0 million, or 36.0 percent, from $69.4 million in the first quarter of 2006 but was up $10.6 million, or 31.5 percent from the fourth quarter of 2006. The managed charge-off rate decreased slightly to 2.29 percent in the first quarter of 2007 from 2.35 percent in the first quarter of 2006. The managed charge-off rate decreased from 2.85 percent in the previous quarter, primarily driven by the addition of the North Fork portfolio. Managed loans at March 31, 2007 were $23.9 billion, up $4.1 billion, or 20.6 percent, from March 31, 2006, and up $2.2 billion, or 10.0 percent from the prior quarter.

The Mortgage Banking sub-segment reported a net loss for the first quarter of 2007 of $12.6 million. Due to pressures in the secondary capital markets for loans associated with non-conforming prime mortgage loans, including Alt- A, results in the quarter were adversely impacted by a $19.0 million addition to the reserve related to representations and warranties and a $21.0 million warehouse valuation adjustment. The business originated $6.8 billion in loans during the quarter, down $1.0 billion from first quarter of 2006 originations and down $2.5 billion in originations in the last quarter of 2006.

Local Banking

The Local Banking business delivered solid performance in the first quarter and integration efforts remain on track. The company experienced growth in deposits across geographies and credit performance remains very strong. The company opened 16 new locations across our banking franchise in the first quarter.

The business delivered $129.6 million of net income, including the results of North Fork, which were included in "Other" in the fourth quarter of 2006. The managed charge-off rate for the Local Banking business decreased to 0.15 percent in the first quarter of 2007 from 0.38 percent in the first quarter of 2006, and from 0.40 percent in the previous quarter. Non- performing loans as a percent of managed loans in the Local Banking business decreased to 0.19 percent as of March 31, 2007 from 0.79 percent at March 31, 2006 and from 0.48 percent from December 31, 2006. Total deposits at the end of the quarter were $74.5 billion, while managed loans at March 31, 2007 were $41.6 billion.

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

Forward looking statements

The company cautions that its current expectations in this release, in the presentation slides available on the company's website and in its Form 8-K dated April 19, 2007 for 2007 earnings, the interest rate environment, charge- off rates, mortgage market trends, and operating efficiencies, including future financial and operating results, and the company's plans, objectives, expectations and intentions are forward-looking statements and actual results could differ materially from current expectations due to a number of factors, including: the risk that the company's acquired businesses will not be integrated successfully and that the cost savings and other synergies from such acquisitions may not be fully realized; continued intense competition from numerous providers of products and services which compete with Capital One's businesses; changes in our aggregate accounts and balances, and the growth rate and composition thereof; the success of the company's marketing efforts; general economic conditions affecting interest rates and consumer income, spending, and savings which may affect consumer bankruptcies, defaults, charge-offs and deposit activity; general economic and secondary market conditions in the mortgage industry; and the company's ability to execute on its strategic and operational plans. 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-K for the fiscal year ended December 31, 2006.

About Capital One

Headquartered in McLean, Virginia, Capital One Financial Corporation ( http://www.capitalone.com ) is a financial holding company, with more than 720 locations in New York, New Jersey, Connecticut, Texas and Louisiana that offer a broad spectrum of financial products and services to consumers, small businesses and commercial clients. Its principal subsidiaries, Capital One Bank, Capital One, F.S.B., Capital One Auto Finance, Inc., Capital One, N.A., and North Fork Bank offer a broad spectrum of financial products and services to consumers, small businesses and commercial clients. Capital One's subsidiaries collectively had $87.7 billion in deposits and $142.0 billion in managed loans outstanding as of March 31, 2007. Capital One, a Fortune 500 company, trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

NOTE: First quarter 2007 financial results, SEC Filings, and first quarter earnings conference call slides are accessible on Capital One's home page ( http://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 webcast of today's 5:00 pm (ET) earnings conference call is accessible through the same link.


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

                                        2007          2006          2006
    (in millions, except per share
     data and as noted)                  Q1            Q4            Q1
    Earnings (Reported Basis)
    Net Interest Income               $1,622.8      $1,401.2      $1,206.9
    Non-Interest Income                1,810.5 (1)   1,667.2 (3)   1,858.3
    Total Revenue(5)                   3,433.3       3,068.4       3,065.2 (4)
    Provision for Loan Losses            350.0         513.2         170.3 (4)
    Marketing Expenses                   331.5         395.7         323.8
    Operating Expenses                 1,713.9 (2)   1,590.5       1,249.7
    Income Before Taxes                1,037.9         569.0       1,321.4
    Tax Rate(6)                           35.0 %        31.3 %        33.2 %
    Net Income                          $675.1        $390.7        $883.3

    Common Share Statistics
    Basic EPS                            $1.65         $1.16         $2.95
    Diluted EPS                          $1.62         $1.14         $2.86
    Dividends Per Share                  $0.03         $0.03         $0.03
    Tangible Book Value Per Share
     (period end)                       $28.18        $26.36        $36.31
    Stock Price Per Share (period
     end)                               $75.46        $76.82        $80.52
    Total Market Capitalization
     (period end)                    $31,112.2     $31,488.5     $24,397.6
    Shares Outstanding (period end)      412.3         409.9         303.0
    Shares Used to Compute Basic EPS     408.7         336.5         299.3
    Shares Used to Compute Diluted
     EPS                                 415.5         343.8         309.1

    Reported Balance Sheet
     Statistics (period average)
    Average Loans Held for
     Investment                        $93,466       $74,738       $58,142
    Average Earning Assets            $124,811       $99,416       $78,332
    Average Assets                    $148,657      $113,642       $88,895
    Average Interest Bearing
     Deposits                          $74,867       $53,735       $43,357
    Total Average Deposits             $86,237       $60,382       $47,870
    Average Equity                     $25,610       $18,311       $14,612
    Return on Average Assets (ROA)        1.82 %        1.38 %        3.97 %
    Return on Average Equity (ROE)       10.54 %        8.53 %       24.18 %

    Reported Balance Sheet
     Statistics (period end)
    Loans Held for Investment          $90,869       $96,512       $58,119
    Total Assets                      $148,699      $149,739       $89,273
    Interest Bearing Deposits          $76,306       $74,123       $43,303
    Total Deposits                     $87,664       $85,771       $47,779

    Performance Statistics
     (Reported)
    Net Interest Income Growth
     (annualized)                           63 %          33 %          66 %
    Non Interest Income Growth
     (annualized)                           34 %         (21)%          46 %
    Revenue Growth (annualized)             48 %           2 %          54 %
    Net Interest Margin                   5.20 %        5.64 %        6.16 %
    Revenue Margin                       11.00 %       12.35 %       15.65 %
    Risk Adjusted Margin (9)              9.63 %       10.56 %       14.12 %
    Non Interest Expense as a % of
     Average Loans Held for
     Investment (annualized)              8.75 %       10.63 %       10.83 %
    Efficiency Ratio (10)                59.58 %       64.73 %       51.33 %

    Asset Quality Statistics
     (Reported)
    Allowance                           $2,105        $2,180        $1,675
    Allowance as a % of Reported
     Loans Held for Investment            2.32 %        2.26 %        2.88 %
    Net Charge-Offs                       $430          $443          $301
    Net Charge-Off Rate                   1.84 %        2.37 %        2.07 %
    Full-time equivalent employees
     (in thousands)                       31.1          30.3          20.8



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

                                       2007           2006         2006
    (in millions)                       Q1             Q4           Q1
    Earnings (Managed Basis)
    Net Interest Income               $2,620.8      $2,347.3      $2,235.0
    Non-Interest Income                1,330.2 (1)   1,206.0 (3)   1,222.2
    Total Revenue(5)                   3,951.0       3,553.3       3,457.2 (4)
    Provision for Loan Losses            867.7         998.1         562.3 (4)
    Marketing Expenses                   331.5         395.7         323.8
    Operating Expenses                 1,713.9 (2)   1,590.5       1,249.7
    Income Before Taxes                1,037.9         569.0       1,321.4
    Tax Rate(6)                           35.0 %        31.3 %        33.2 %
    Net Income                          $675.1        $390.7        $883.3

    Managed Balance Sheet Statistics
     (period average)
    Average Loans Held for
     Investment                       $144,113      $123,902      $104,610
    Average Earning Assets            $173,403      $146,680      $122,587
    Average Assets                    $198,561      $162,149      $134,797
    Return on Average Assets (ROA)        1.36 %        0.96 %        2.62 %

    Managed Balance Sheet Statistics
     (period end)
    Loans Held for Investment         $142,005      $146,151      $103,907
    Total Assets                      $199,118      $198,645      $134,530
    Tangible Assets (8)               $184,717      $184,215      $130,364
    Tangible Common Equity (7)         $11,620       $10,805       $11,003
    Tangible Common Equity to
     Tangible Assets Ratio                6.29 %        5.87 %        8.44 %
    % Off-Balance Sheet
     Securitizations                        36 %          34 %          44 %

    Performance Statistics (Managed)
    Net Interest Income Growth
     (annualized)                           47 %          23 %          31 %
    Non Interest Income Growth
     (annualized)                           41 %         (22)%          (7)%
    Revenue Growth (annualized)             45 %           7 %          17 %
    Net Interest Margin                   6.05 %        6.40 %        7.29 %
    Revenue Margin                        9.11 %        9.69 %       11.28 %
    Risk Adjusted Margin (9)              6.93 %        7.16 %        9.02 %
    Non Interest Expense as a % of
     Average Loans Held for
     Investment (annualized)              5.68 %        6.41 %        6.02 %
    Efficiency Ratio (10)                51.77 %       55.90 %       45.51 %

    Asset Quality Statistics
     (Managed)
    Net Charge-Offs                       $947          $927          $693
    Net Charge-Off Rate                   2.63 %        2.99 %        2.65 %


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


                   CAPITAL ONE FINANCIAL CORPORATION (COF)
                    FINANCIAL & STATISTICAL SUMMARY NOTES

    (1)  Includes a $46.2 million gain resulting  from the sale of a 7% stake
         in the privately held company, DealerTrack Holding Inc., a leading
         provider of on-demand software and data solutions for the automotive
         retail industry.

    (2)  Includes core deposit intangible amortization expense of $35.7
         million and integration costs of $9.8 million.

    (3)  Includes a $19.9 million in Q4 2006 related to the derivative entered
         into in April 2006 to mitigate certain exposures we faced as a result
         of our acquisition of North Fork.

    (4)  Includes the impact of the sale of charged-off loans resulting in an
         increase of $76.8 million on reported basis and $66.4 million on
         managed basis, respectively, to various revenue line items, the
         majority of which was recorded to other non-interest income and a
         reduction of $7 million on reported basis and $17.4 million on
         managed basis, respectively, to the provision for loan losses through
         an increase in recoveries for the sale of charged-off loans
         originated by the Company.

    (5)  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: Q1 2007 - $213.6, Q4 2006 -
         $248.3, and Q1 2006 - $170.9.

    (6)  Includes resolution of IRS tax issues resulting in reduction of tax
         expense of $28.8 million in Q4 2006, and $34.9 million in Q1 2006.

    (7)  Includes stockholders' equity and preferred interests less intangible
         assets and related deferred tax liability.  Tangible Common Equity on
         a reported and managed basis is the same.

    (8)  Includes managed assets less intangible assets.

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

    (10) Non-interest expense divided by Total Revenue


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

                                         2007           2006          2006
    (in thousands)                        Q1             Q4            Q1

    Local Banking: (3)
      Interest Income                  $1,740,132      $721,102      $650,985
      Interest Expense                  1,166,563       476,523       406,061
      Net interest income                $573,569      $244,579      $244,924
      Non-interest income                 186,873       112,021       104,485
      Provision for loan losses            23,776       (21,549)        9,821
      Non-interest expenses               539,064       307,810       272,987
      Income tax provision (benefit)       67,975        24,619        23,310
      Net income (loss)                  $129,627       $45,720       $43,291

      Loans Held for Investment       $41,642,594   $12,145,533   $13,169,792
      Average loans Held for
       Investment                     $41,846,678   $13,330,876   $13,283,515
      Core Deposits(2)                $62,962,395   $27,071,324   $27,996,290
      Total Deposits                  $74,509,054   $35,334,610   $35,396,221

      Loan Yield                            7.44%         7.98%         7.38%
      Net Interest Margin - Loans (4)       1.47%         2.78%         2.84%
      Net Interest Margin - Deposits (5)    2.22%         1.75%         1.75%
      Efficiency Ratio                     70.89%        86.32%        78.13%
      Net charge-off rate                   0.15%         0.40%         0.38%
      Non Performing Loans                $80,162       $57,824      $104,080
      Non Performing Loans as a % of
       Loans Held for Investment            0.19%         0.48%         0.79%
      Non-Interest Expenses to
       Managed Loans                        5.15%         9.24%         8.22%

      Number of Active ATMS                 1,236           661           542
      Number of locations                     723           358           317


    National Lending:
      Interest Income                  $3,330,300    $3,182,013    $2,927,635
      Interest Expense                  1,241,685     1,163,106       935,282
      Net interest income              $2,088,615    $2,018,907    $1,992,353
      Non-interest income               1,187,922     1,105,240     1,074,983
      Provision for loan losses           849,216     1,010,837       549,608
      Non-interest expenses             1,509,057     1,534,523     1,309,556
      Income tax provision (benefit)      316,285       205,768       422,459
      Net income (loss)                  $601,979      $373,019      $785,713

      Managed Loans                  $100,371,532  $102,359,180   $90,723,355
      Average Managed Loans          $102,276,581   $99,881,480   $91,326,380
      Core Deposits(2)                     $3,212        $6,061      $148,321
      Total Deposits                   $2,409,291    $2,383,902    $2,417,664

      Loan Yield                           12.70%        12.72%        12.81%
      Net Interest Margin                   8.17%         8.09%         8.73%
      Revenue Margin                       12.81%        12.51%        13.43%
      Risk Adjusted Margin                  9.17%         8.88%        10.45%
      Non-Interest Expenses to
       Managed Loans                        5.90%         6.15%         5.74%
      Efficiency Ratio                     46.06%        49.12%        42.69%
      Net charge-off rate                   3.65%         3.63%         2.99%
      Delinquency Rate (30+ days)           3.63%         4.09%         3.26%

      Number of Loan Accounts (000s)       48,668        49,374        48,751


    Other: (3)
      Net interest income                $(41,427)      $83,770       $(2,307)
      Non-interest income                 (44,564)      (11,207)       42,726
      Provision for loan losses            (5,330)        8,840         2,877
      Non-interest expenses                (2,720)      143,855        (9,064)
      Income tax provision (benefit)      (21,385)      (52,121)       (7,729)
      Net income (loss)                  $(56,556)     $(28,011)      $54,335

      Loans Held for Investment           $(9,084)  $31,646,555       $13,629
      Core Deposits(2)                 $7,532,854   $42,819,710    $5,990,673
      Total Deposits                  $10,745,405   $48,052,380    $9,965,600


    Total:
      Interest Income                  $4,435,367    $3,931,054    $3,436,829
      Interest Expense                  1,814,610     1,583,798     1,201,859
      Net interest income              $2,620,757    $2,347,256    $2,234,970
      Non-interest income               1,330,231     1,206,054     1,222,194
      Provision for loan losses           867,662       998,128       562,306
      Non-interest expenses             2,045,401     1,986,188     1,573,479
      Income tax provision (benefit)      362,875       178,266       438,040
      Net income (loss)                  $675,050      $390,728      $883,339

      Loans Held for Investment      $142,005,042  $146,151,268  $103,906,776
      Core Deposits(2)                $70,498,461   $69,897,095   $34,135,284
      Total Deposits                  $87,663,750   $85,770,892   $47,779,485


    (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 domestic non-interest bearing deposits, NOW accounts, money
        market deposit accounts, savings accounts, certificates of deposit of
        less than $100,000 and other consumer time deposits.
    (3) Results of the North Fork acquisition were included in the Other
        category for Q4 2006
    (4) Interest Income - funds transfer pricing charges divided by average
        managed loans
    (5) Interest Expense - funds transfer pricing credits divided by average
        retail deposits


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

                                           2007         2006         2006
    (in thousands)                          Q1           Q4           Q1

    US Card:
      Interest Income                    $1,813,846   $1,795,345   $1,714,559
      Interest Expense                      602,505      600,821      493,458
      Net interest income                $1,211,341   $1,194,524   $1,221,101
      Non-interest income                   778,606      795,881      775,413
      Provision for loan losses             373,836      554,698      224,438
      Non-interest expenses                 861,020      916,963      844,729
      Income tax provision (benefit)        259,751      181,561      324,573
      Net income (loss)                    $495,340     $337,183     $602,774

      Managed Loans                     $49,681,559  $53,623,680  $47,142,650
      Average Managed Loans             $51,878,104  $51,686,135  $48,217,926

      Loan Yield                             13.99%       13.89%       14.22%
      Net Interest Margin                     9.34%        9.24%       10.13%
      Revenue Margin                         15.34%       15.40%       16.56%
      Risk Adjusted Margin                   11.35%       11.58%       13.63%
      Non-Interest Expenses to Managed
       Loans                                  6.64%        7.10%        7.01%
      Efficiency Ratio (2)                   43.27%       46.07%       42.31%
      Net charge-off rate                     3.99%        3.82%        2.93%
      Delinquency Rate (30+ days)             3.48%        3.74%        3.31%

      Purchase Volume (3)               $19,346,812  $22,782,451  $18,015,669
      Number of Loan Accounts (000s)         36,758       37,630       37,258


    Auto Finance:
      Interest Income                      $637,609     $593,268     $520,830
      Interest Expense                      265,556      242,311      187,827
      Net interest income                  $372,053     $350,957     $333,003
      Non-interest income                    60,586       14,143       16,218
      Provision for loan losses             200,058      151,171      107,805
      Non-interest expenses                 164,948      162,022      134,655
      Income tax provision (benefit)         23,266       18,167       37,366
      Net income (loss)                     $44,367      $33,740      $69,395

      Managed Loans                     $23,930,547  $21,751,827  $19,848,190
      Average Managed Loans             $23,597,675  $21,498,205  $19,440,128

      Loan Yield                             10.81%       11.04%       10.72%
      Net Interest Margin                     6.31%        6.53%        6.85%
      Revenue Margin                          7.33%        6.79%        7.19%
      Risk Adjusted Margin                    5.04%        3.94%        4.84%
      Non-Interest Expenses to Managed
       Loans                                  2.80%        3.01%        2.77%
      Efficiency Ratio (2)                   38.13%       44.38%       38.56%
      Net charge-off rate                     2.29%        2.85%        2.35%
      Delinquency Rate (30+ days)             4.64%        6.35%        3.57%

      Auto Loan Originations             $3,311,868   $3,078,877   $2,940,540
      Number of Loan Accounts (000s)          1,762        1,589        1,480


    Global Financial Services:
      Interest Income                      $803,141     $793,400     $692,246
      Interest Expense                      316,223      319,974      253,997
      Net interest income                  $486,918     $473,426     $438,249
      Non-interest income                   299,307      295,216      283,352
      Provision for loan losses             275,322      304,968      217,365
      Non-interest expenses                 396,201      455,538      330,172
      Income tax provision (benefit)         39,860        6,040       60,520
      Net income (loss)                     $74,842       $2,096     $113,544

      Managed Loans                     $26,759,426  $26,983,673  $23,732,515
      Average Managed Loans             $26,800,802  $26,697,140  $23,668,326

      Loan Yield (4)                         11.88%       11.80%       11.64%
      Net Interest Margin                     7.27%        7.09%        7.41%
      Revenue Margin                         11.73%       11.52%       12.20%
      Risk Adjusted Margin                    7.55%        7.63%        8.57%
      Non-Interest Expenses to Managed
       Loans                                  5.91%        6.83%        5.58%
      Efficiency Ratio (2)                   50.39%       59.27%       45.76%
      Net charge-off rate                     4.18%        3.89%        3.63%
      Delinquency Rate (30+ days)             2.99%        2.97%        2.90%

      Number of Loan Accounts (000s)         10,148       10,155       10,013


    (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) Non-Interest Expenses divided by total Managed Revenue
    (3) Includes all purchase transactions net of returns and excludes cash
        advance transactions.
    (4) Excludes "GFS - Home Loans Originations" and "GFS - Settlement
        Services" from Other Interest Income.


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

                                              2007          2006       2006
    (in thousands)                             Q1            Q4         Q1

    Mortgage Banking: (3)
      Interest Income                         $75,704
      Interest Expense                         57,401
      Net interest income                     $18,303
      Non-interest income                      49,423
      Non-interest expenses                    86,888
      Income tax provision (benefit)           (6,592)
      Net income (loss)                      $(12,570)

      Net Gain on Sale Margin (4)                  51 bps
      Efficiency Ratio (2)                       128%
      Mortgage Loan Originations           $6,795,468


    (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) Non-Interest Expenses divided by total Managed Revenue
    (3) Results of the North Fork acquisition were included in the Other
        category for Q4 2006
    (4) Gain on Sale Margin is net of repurchases and lower of cost or market
        adjustments


    CAPITAL ONE FINANCIAL CORPORATION
    Reconciliation to GAAP Financial Measures
    For the Three Months Ended March 31, 2007
    (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                 $1,622,846     $997,911    $2,620,757
    Non-interest income                 $1,810,525    $(480,294)   $1,330,231
    Total revenue                       $3,433,371     $517,617    $3,950,988
    Provision for loan losses             $350,045     $517,617      $867,662
    Net charge-offs                       $429,648     $517,617      $947,265
    Balance Sheet Measures
    Loans Held for Investment          $90,869,496  $51,135,546  $142,005,042
    Total assets                      $148,698,605  $50,419,697  $199,118,302
    Average loans Held for Investment  $93,465,873  $50,646,916  $144,112,789
    Average earning assets            $124,811,430  $48,591,353  $173,402,783
    Average total assets              $148,656,771  $49,903,892  $198,560,663
    Delinquencies                       $2,093,316   $1,712,659    $3,805,975

    (1) Income statement adjustments reclassify the net of finance charges of
        $1,462.4 million, past-due fees of $218.6 million, other interest
        income of $(62.0) million and interest expense of $649.4 million; and
        net charge-offs of $517.6 million from Non-interest income to Net
        interest income and Provision for loan losses, respectively.

    (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)

                                         As of         As of         As of
                                        March 31    December 31    March 31
                                          2007          2006         2006
    Assets:
    Cash and due from banks             $2,286,913    $2,817,519   $1,434,804
    Federal funds sold and resale
     agreements                          8,293,338     1,099,156    2,763,746
    Interest-bearing deposits at
     other banks                           844,907       743,821    1,099,025
      Cash and cash equivalents         11,425,158     4,660,496    5,297,575
    Securities available for sale       17,657,734    15,452,047   14,551,720
    Mortgage loans held for sale         4,738,765    10,435,295      218,640
    Loans held for investment           90,869,496    96,512,139   58,118,659
      Less:  Allowance for loan and
       lease losses                     (2,105,000)   (2,180,000)  (1,675,000)
    Net loans held for investment       88,764,496    94,332,139   56,443,659
    Accounts receivable from
     securitizations                     5,371,385     4,589,235    5,293,392
    Premises and equipment, net          2,258,861     2,203,280    1,387,302
    Interest receivable                    720,511       816,426      512,136
    Goodwill                            13,619,445    13,635,435    3,941,128
    Other                                4,142,250     3,614,932    1,627,527
      Total assets                    $148,698,605  $149,739,285  $89,273,079


    Liabilities:
    Non-interest-bearing deposits      $11,357,736   $11,648,070   $4,476,351
    Interest-bearing deposits           76,306,014    74,122,822   43,303,134
    Senior and subordinated notes        9,436,021     9,725,470    5,726,109
    Other borrowings                    20,244,842    24,257,007   16,544,698
    Interest payable                       540,160       574,763      353,882
    Other                                4,793,062     4,175,947    3,699,659
      Total liabilities                122,677,835   124,504,079   74,103,833

    Stockholders' Equity:
    Common stock                             4,146         4,122        3,051
    Paid-in capital, net                15,465,341    15,333,137    7,032,073
    Retained earnings and cumulative
     other comprehensive income         10,684,768    10,026,364    8,245,186
      Less:  Treasury stock, at cost      (133,485)     (128,417)    (111,064)
      Total stockholders' equity        26,020,770    25,235,206   15,169,246
      Total liabilities and
       stockholders' equity           $148,698,605  $149,739,285  $89,273,079

    (1) Certain prior period amounts have been reclassified to conform to the
        current period presentation.



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

                                                   Three Months Ended
                                            March 31  December 31   March 31
                                              2007        2006        2006

    Interest Income:
    Loans held for investment, including
     past-due fees                         $2,326,680  $2,002,111  $1,612,622
    Securities available for sale             204,080     185,424     164,110
    Mortgage loans held for sale              144,759      55,896       4,099
    Other                                     112,494     109,988      97,751
       Total interest income                2,788,013   2,353,419   1,878,582

    Interest Expense:
    Deposits                                  730,483     552,385     403,609
    Senior and subordinated notes             138,546     136,282      94,354
    Other borrowings                          296,138     263,596     173,742
       Total interest expense               1,165,167     952,263     671,705
    Net interest income                     1,622,846   1,401,156   1,206,877
    Provision for loan and lease losses       350,045     513,157     170,270
    Net interest income after provision
     for loan and lease losses              1,272,801     887,999   1,036,607

    Non-Interest Income:
    Servicing and securitizations             988,082     959,436   1,153,604
    Service charges and other customer-
     related fees                             479,467     462,086     435,731
    Mortgage banking operations                86,543      54,232      31,671
    Interchange                               118,111     147,571     119,491
    Other                                     138,322      43,858     117,754
       Total non-interest income            1,810,525   1,667,183   1,858,251

    Non-Interest Expense:
    Salaries and associate benefits           724,259     632,355     516,144
    Marketing                                 331,549     395,671     323,771
    Communications and data processing        185,988     188,481     169,204
    Supplies and equipment                    134,602     137,843      98,184
    Occupancy                                  85,845      66,425      49,377
    Other                                     583,158     565,413     416,799
       Total non-interest expense           2,045,401   1,986,188   1,573,479
    Income before income taxes              1,037,925     568,994   1,321,379
    Income taxes                              362,875     178,266     438,040
    Net income                               $675,050    $390,728    $883,339


    Basic earnings per share                    $1.65       $1.16       $2.95

    Diluted earnings per share                  $1.62       $1.14       $2.86

    Dividends paid per share                    $0.03       $0.03       $0.03

    (1) Certain prior period amounts have been reclassified to conform to the
        current period presentation.



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

    Reported                                   Quarter Ended 3/31/07
                                            Average       Income/    Yield/
                                            Balance       Expense     Rate
    Earning assets:
     Mortgage loans held for sale           $9,115,298     $144,759   6.35%
     Loans held for investment              93,465,873    2,326,680   9.96%
     Securities available for sale          16,598,686      204,080   4.92%
     Other                                   5,631,573      112,494   7.99%
    Total earning assets                  $124,811,430   $2,788,013   8.94%

    Interest-bearing liabilities:
     Interest-bearing deposits
       NOW accounts                         $5,066,120      $35,414   2.80%
       Money market deposit accounts        25,486,826      249,654   3.92%
       Savings accounts                      8,384,994       35,529   1.69%
       Other Consumer Time Deposits         19,599,576      213,051   4.35%
       Public Fund CD's of $100,000 or
        more                                 2,038,785       24,897   4.88%
       CD's of $100,000 or more             10,339,958      122,618   4.74%
       Foreign time deposits                 3,950,808       49,320   4.99%
     Total Interest-bearing deposits       $74,867,067     $730,483   3.90%
     Senior and subordinated notes           9,517,209      138,546   5.82%
     Other borrowings                       21,820,513      296,138   5.43%
    Total interest-bearing liabilities    $106,204,789   $1,165,167   4.39%

    Net interest spread                                               4.55%

    Interest income to average earning
     assets                                                           8.94%
    Interest expense to average earning
     assets                                                           3.73%
    Net interest margin                                               5.20%

    (1) Prior period amounts have been reclassified to conform with current
        period presentation.


    Reported                                 Quarter Ended 12/31/06 (1)
                                           Average       Income/    Yield/
                                           Balance       Expense     Rate
    Earning assets:
     Mortgage loans held for sale          $3,480,664      $55,896    6.42%
     Loans held for investment             74,737,753    2,002,111   10.72%
     Securities available for sale         15,090,001      185,424    4.92%
     Other                                  6,107,486      109,988    7.20%
    Total earning assets                  $99,415,904   $2,353,419    9.47%

    Interest-bearing liabilities:
     Interest-bearing deposits
       NOW accounts                         2,094,623      $14,546    2.78%
       Money market deposit accounts       15,762,255      149,831    3.80%
       Savings accounts                     5,425,790       31,386    2.31%
       Other Consumer Time Deposits        16,656,731      190,489    4.57%
       Public Fund CD's of $100,000 or
        more                                1,281,768       16,636    5.19%
       CD's of $100,000 or more             8,682,658      101,535    4.68%
       Foreign time deposits                3,831,401       47,962    5.01%
     Total Interest-bearing deposits      $53,735,226     $552,385    4.11%
     Senior and subordinated notes          9,034,696      136,282    6.03%
     Other borrowings                      20,555,748      263,596    5.13%
    Total interest-bearing liabilities    $83,325,670     $952,263    4.57%

    Net interest spread                                               4.90%

    Interest income to average earning
     assets                                                           9.47%
    Interest expense to average earning
     assets                                                           3.83%
    Net interest margin                                               5.64%

    (1) Prior period amounts have been reclassified to conform with current
        period presentation.


    Reported                                 Quarter Ended 3/31/06 (1)
                                           Average       Income/    Yield/
                                           Balance       Expense     Rate
    Earning assets:
     Mortgage loans held for sale            $184,418       $4,099    8.89%
     Loans held for investment            $58,142,418   $1,612,622   11.09%
     Securities available for sale         14,938,925      164,110    4.39%
     Other                                  5,066,141       97,751    7.72%
    Total earning assets                  $78,331,902   $1,878,582    9.59%

    Interest-bearing liabilities:
     Interest-bearing deposits
       NOW accounts                          $572,181       $3,328    2.33%
       Money market deposit accounts       10,716,774       76,038    2.84%
       Savings accounts                     3,719,994       23,181    2.49%
       Other Consumer Time Deposits        14,647,708      149,393    4.08%
       Public Fund CD's of $100,000 or
        more                                  964,181       10,295    4.27%
       CD's of $100,000 or more             9,407,892      102,714    4.37%
       Foreign time deposits                3,327,788       38,660    4.65%
     Total Interest-bearing deposits      $43,356,518     $403,609    3.72%
     Senior and subordinated notes          6,097,711       94,354    6.19%
     Other borrowings                      16,074,344      173,742    4.32%
    Total interest-bearing liabilities    $65,528,573     $671,705    4.10%

    Net interest spread                                               5.49%

    Interest income to average earning
     assets                                                           9.59%
    Interest expense to average earning
     assets                                                           3.43%
    Net interest margin                                               6.16%

    (1) Prior period amounts have been reclassified to conform with current
        period presentation.


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

    Managed (1)                                  Quarter Ended 3/31/07
                                             Average       Income/    Yield/
                                             Balance       Expense     Rate
    Earning assets:

     Mortgage loans held for sale            $9,115,298     $144,759    6.35%
     Loans held for investment              144,112,789    4,035,997   11.20%
     Securities available for sale           16,598,686      204,080    4.92%
     Other                                    3,576,010       50,531    5.65%
    Total earning assets                   $173,402,783   $4,435,367   10.23%

    Interest-bearing liabilities:
     Interest-bearing deposits
        NOW accounts                         $5,066,120      $35,414    2.80%
        Money market deposit accounts       $25,486,826     $249,654    3.92%
        Savings accounts                     $8,384,994      $35,529    1.69%
        Other Consumer Time Deposits        $19,599,576     $213,051    4.35%
        Public Fund CD's of $100,000 or
         more                                $2,038,785      $24,897    4.88%
        CD's of $100,000 or more            $10,339,958     $122,618    4.74%
        Foreign time deposits                $3,950,808      $49,320    4.99%
     Total Interest-bearing deposits        $74,867,067     $730,483    3.90%
     Senior and subordinated notes           $9,517,209     $138,546    5.82%
     Other borrowings                       $21,820,513     $296,138    5.43%
     Securitization liability                49,999,873      649,443    5.20%
    Total interest-bearing liabilities     $156,204,662   $1,814,610    4.65%

    Net interest spread                                                 5.58%

    Interest income to average earning
     assets                                                            10.23%
    Interest expense to average earning
     assets                                                             4.19%
    Net interest margin                                                 6.05%


    (1) The information in this table reflects the adjustment to add back the
        effect of securitized loans.
    (2) Prior period amounts have been reclassified to conform with current
        period presentation.



    Managed (1)                               Quarter Ended 12/31/06 (2)
                                             Average       Income/    Yield/
                                             Balance       Expense     Rate
    Earning assets:

     Mortgage loans held for sale            $3,480,664      $55,896    6.42%
     Loans held for investment              123,901,960    3,640,588   11.75%
     Securities available for sale           15,090,001      185,424    4.92%
     Other                                    4,207,728       49,145    4.67%
    Total earning assets                   $146,680,353   $3,931,053   10.72%

    Interest-bearing liabilities:
     Interest-bearing deposits
        NOW accounts                         $2,094,623      $14,546    2.78%
        Money market deposit accounts        15,762,255      149,831    3.80%
        Savings accounts                      5,425,790       31,386    2.31%
        Other Consumer Time Deposits         16,656,731      190,489    4.57%
        Public Fund CD's of $100,000 or
         more                                 1,281,768       16,636    5.19%
        CD's of $100,000 or more              8,682,658      101,535    4.68%
        Foreign time deposits                 3,831,401       47,962    5.01%
     Total Interest-bearing deposits        $53,735,226     $552,385    4.11%
     Senior and subordinated notes            9,034,696      136,282    6.03%
     Other borrowings                        20,555,748      263,609    5.13%
     Securitization liability                48,603,831      631,521    5.20%
    Total interest-bearing liabilities     $131,929,501   $1,583,797    4.80%

    Net interest spread                                                 5.92%

    Interest income to average earning
     assets                                                            10.72%
    Interest expense to average earning
     assets                                                             4.32%
    Net interest margin                                                 6.40%


    (1) The information in this table reflects the adjustment to add back the
        effect of securitized loans.
    (2) Prior period amounts have been reclassified to conform with current
        period presentation.



    Managed (1)                                Quarter Ended 3/31/06 (2)
                                             Average       Income/    Yield/
                                             Balance       Expense     Rate
    Earning assets:

     Mortgage loans held for sale              $184,418       $4,099    8.89%
     Loans held for investment             $104,610,200   $3,232,530   12.36%
     Securities available for sale           14,938,925      164,110    4.39%
     Other                                    2,853,377       36,090    5.06%
    Total earning assets                   $122,586,920   $3,436,829   11.21%

    Interest-bearing liabilities:
     Interest-bearing deposits
        NOW accounts                           $572,181       $3,328    2.33%
        Money market deposit accounts        10,716,774       76,038    2.84%
        Savings accounts                      3,719,994       23,181    2.49%
        Other Consumer Time Deposits         14,647,708      149,393    4.08%
        Public Fund CD's of $100,000 or
         more                                   964,181       10,295    4.27%
        CD's of $100,000 or more              9,407,892      102,714    4.37%
        Foreign time deposits                 3,327,788       38,660    4.65%
     Total Interest-bearing deposits        $43,356,518     $403,609    3.72%
     Senior and subordinated notes            6,097,711       94,354    6.19%
     Other borrowings                        16,074,344      173,742    4.32%
     Securitization liability                46,018,001      530,154    4.61%
    Total interest-bearing liabilities     $111,546,574   $1,201,859    4.31%

    Net interest spread                                                 6.90%

    Interest income to average earning
     assets                                                            11.21%
    Interest expense to average earning
     assets                                                             3.92%
    Net interest margin                                                 7.29%


    (1) The information in this table reflects the adjustment to add back the
        effect of securitized loans.
    (2) Prior period amounts have been reclassified to conform with current
        period presentation.


                   CAPITAL ONE FINANCIAL CORPORATION (COF)
      SELECTED PRO FORMA FINANCIAL SUMMARY OF CAPITAL ONE AND NORTH FORK
                                BANCORPORATION
                             MANAGED BASIS (1)(2)

                                              UNAUDITED
                                          2007           2006         2006
    (in thousands)                         Q1             Q4           Q1

    Auto Finance:
      Net interest income                $372,053       $345,277     $326,538
      Non-interest income                  60,587         31,041       31,280
      Provision for loan losses           200,058        153,270      109,205
      Non-interest expenses               164,949        166,176      137,202
      Income tax provision (benefit)       23,266         19,905       38,994
      Net income (loss)                   $44,367        $36,967      $72,417

      Ending Managed Loans            $23,930,547    $23,370,058  $21,212,452

    Mortgage Banking
      Net interest income                 $18,303        $21,155      $18,070
      Non-interest income excluding
       purchase Accounting                 49,423        104,971      117,485
      Non-interest income Purchase
       Accounting                             -           (9,090)         -
      Non-interest expense excluding
       Integration Expenses                86,764         87,541       81,090
      Non-interest expense
       Integration Expenses                   124            205          -
      Income tax provision (benefit)       (6,592)        10,251       19,063
      Net income (loss)                  $(12,570)       $19,039      $35,402

    Banking
      Net interest income excluding
       Purchase Accounting               $564,048       $589,397     $577,889
      Net interest income Purchase
       Accounting                           9,521         14,892       12,622
      Non-interest income                 186,873        168,066      166,830
      Provision for loan losses            23,776         (8,267)      17,421
      Non-interest expense excluding
       Purchase Accounting
       and Integration expenses           469,521        480,408      493,080
      Non-interest expense Purchase
       Accounting                          54,951         35,860       23,188
      Non-interest expense
       Integration Expenses                14,592         16,832       18,118
      Income tax provision (benefit)       67,975         86,633       71,937
      Net income (loss)                  $129,627       $160,889     $133,597

      Ending Loans held for
       investment                     $41,642,594    $42,275,103  $45,953,753
      Ending Total Deposits           $74,509,054    $73,167,877  $71,858,715


    (1) The above schedule reflects the combined legacy Capital One and North
        Fork Bancorporation results, assuming a 1/1/06 acquisition date and
        the application of Capital One management reporting methodologies (FTP
        rates, cost allocations).  Purchase accounting adjustments and
        integration costs reflect the impacts of both the North Fork and
        Hibernia acquisitions.

    (2) 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.

SOURCE Capital One Financial Corporation

CONTACT: Investor Relations, Jeff Norris, +1-703-720-2455, Media Relations, Tatiana Stead, +1-703-720-2352, Julie Rakes, +1-804-284-5800, all of Capital One Financial Corporation