Capital One Reports Fourth Quarter 2009 Net Income of $375.6 million, or $0.83 per share (diluted)
Capital One Reports Fourth Quarter 2009 Net Income of $375.6 million, or $0.83 per share (diluted)
Printer Friendly Version of the Press Release (pdf format) <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Printer Friendly Version of the Financial Supplement (pdf format)
Printer Friendly Version of the Earnings Conference Call Presentation
- Managed net interest margin of 6.90 percent and revenue margin of 9.50 percent remained stable in the fourth quarter relative to the prior quarter.
- Managed provision expense decreased $353.5 million from the prior quarter and was essentially flat in 2009 as compared to 2008 at $8.0 billion.
- Non-interest expenses were up 8.1 percent in the quarter as marketing began to increase from unusually low levels earlier in 2009, and operating expenses increased as expected.
- Tangible common equity to tangible managed assets, or "TCE ratio," increased to 6.3 percent, up 10 basis points from the September 30, 2009 ratio of 6.2 percent, and Tier 1 capital to risk-weighted assets, or Tier 1 ratio, rose to 13.8 percent.
Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2009 of $375.6 million, or $0.83 per common share (diluted), versus third quarter 2009 net income of $393.5 million, or $0.88 per common share (diluted). For the full year of 2009, net income was $319.9 million, or $0.74 per share (diluted), including the ($563.9) million, or ($1.31) per share, impact to net income from the repayment of the government's TARP preferred share investment. This compares to a loss in 2008 of $78.7 million, or ($0.21) per share (diluted), which included a pre-tax goodwill impairment charge of $810.9 million in the automobile business.
"Capital One posted solid results as our domestic credit card and auto finance businesses delivered strong profits and resilience during the quarter despite challenging economic and credit headwinds," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "Given our balance sheet strength and the stabilizing economy, we are well-positioned to take advantage of emerging opportunities to deliver value to our shareholders and customers."
Total Company Results
- Total managed revenue in the fourth quarter of 2009 declined $215.7 million, or 4.7 percent, to $4.4 billion. The main driver of lower revenue was fewer gains from securities sales compared to the prior quarter. Managed non-interest income decreased $173.8 million in the fourth quarter, or 12.7 percent, relative to the prior quarter, while net interest income decreased $41.9 million, or 1.3 percent. Managed revenue in 2009 was flat compared to 2008 at approximately $16.8 billion as a 2.9 percent decrease in average loans year over year was offset by slightly higher margins.
- Managed provision expense decreased $353.5 million from the prior quarter. A $386.1 million allowance release in the quarter more than offset an increase in charge-offs, driving the decrease in provision expense. The fourth quarter allowance releases in both Credit Card and Auto more than offset the allowance builds in Commercial and Consumer Banking.
- Allowance as a percentage of reported loans was 4.55 percent in the fourth quarter of 2009 as compared to 4.67 percent in the prior quarter.
- Average total deposits decreased by $1.3 billion, or 1.1 percent, over the prior quarter, to $114.6 billion. Period-end total deposits increased by $1.3 billion to $115.8 billion as a result of the increase in deposits late in the quarter.
- The cost of managed interest-bearing liabilities decreased to 2.16 percent from 2.28 percent in the prior quarter as the company replaced higher-cost time deposits with money market and savings accounts, and increased the amount of non-interest bearing deposits. The overall cost of funds declined 12 basis points to 2.00 percent in the fourth quarter.
- Average managed assets decreased $4.2 billion, or 2.0 percent, relative to the prior quarter, to $210.4 billion, driven primarily by reductions in loans held for investment. Period-end total managed assets increased by 1.2 percent over the prior quarter to $212.1 billion.
- Non-interest expenses increased $145.9 million in the fourth quarter of 2009 from the prior quarter, driven primarily by increased marketing. Marketing increased $84.3 million, or 81.3 percent from the prior quarter. The managed efficiency ratio of 43.85 percent in the fourth quarter of 2009 was up 5.1 percentage points from 38.73 percent in the prior quarter.
- Non-interest expenses for the full year 2009 were essentially flat compared to 2008 at $7.4 billion, excluding goodwill impairment. In response to lower loan demand and economic uncertainty, the company decreased marketing spend in 2009. This decrease was offset by the addition of Chevy Chase Bank operating expenses.
- The company's TCE ratio increased to 6.3 percent on December 31, 2009, from 6.2 percent in the prior quarter. The Tier 1 risk-based capital ratio of approximately 13.8 percent increased 200 basis points relative to the prior quarter, and continues to be well above the regulatory well-capitalized minimum.
"We navigated a very challenging 2009, produced solid results and strengthened our position with additional capital and historically high allowance coverage ratios," said Gary Perlin. "The strength of our balance sheet will continue to enable us to make the investments necessary to generate profitable growth into the future."
Segment Results
The company reports the results of its business through three operating segments: Credit Card, Commercial Banking, and Consumer Banking. Please refer to the Financial Supplement for additional details.
Credit Card Highlights
For details on the sub-segments' results, please refer to the Financial Supplement.
The Credit Card segment reported net income in the fourth quarter of $509.9 million, an increase of $218.2 million, or 74.8 percent, from the prior quarter's net income of $291.7 million. Lower provision expense in the quarter was the key driver of the improved profitability.
- Revenues of $2.9 billion were down $64.9 million, or 2.2 percent, relative to the prior quarter.
- Domestic Card - revenues down $77.2 million, or 2.9 percent.
- International Card - revenues up $12.4 million, or 3.7 percent.
- Revenue margin in the Domestic Card sub-segment improved to approximately 17.0 percent in the fourth quarter, up from 16.8 percent in the prior quarter. In 2010, we expect quarterly revenue margin to moderate, but remain close to its fourth quarter 2009 level.
- Period-end loans in the Credit Card segment were $68.5 billion, a decline of $1.8 billion, or 2.6 percent, from the prior quarter.
- Domestic Card - loans declined $1.6 billion, or 2.6 percent, to $60.3 billion at the end of the fourth quarter. Approximately $1.0 billion of the decline came from the continued run-off of the company's nationally-originated Installment Loans.
- International Card - loans declined $0.3 billion, or 3.0 percent, to $8.2 billion.
- The managed net charge-off rate for the Credit Card segment remained essentially flat at 9.58 percent in the fourth quarter of 2009.
- Domestic Card - net charge-offs decreased 5 basis points to 9.59 percent in the fourth quarter from 9.64 percent in the prior quarter.
- International Card - net charge-offs increased 33 basis points to 9.52 percent from 9.19 percent in the prior quarter.
- The 30+ day performing delinquency rate for the Credit Card segment increased 35 basis points to 5.88 percent in the fourth quarter of 2009 from 5.53 percent in the prior quarter.
- Domestic Card - delinquencies increased 40 basis points to 5.78 percent from 5.38 percent in the prior quarter.
- International Card - delinquencies decreased 8 basis points to 6.55 percent from 6.63 percent in the prior quarter.
Commercial Banking Highlights
For more lending information and statistics on the segment results, please refer to the Financial Supplement.
The Commercial Banking segment consists of commercial and multi-family real-estate, middle market lending, and specialty lending, which are summarized under Commercial Lending, and small ticket commercial real estate. The total segment reported a net loss of $136.0 million in the fourth quarter, relative to a net loss of $127.7 million in the prior quarter. Commercial Banking revenue increased $12.0 million, or 3.5 percent, to $356.6 million in the fourth quarter of 2009, while non-interest expense increased $31.3 million, or 18.9 percent, to $197.4 million. Increases in non-interest expense were driven by rising costs associated with managing loss mitigation and continuing infrastructure investments.
- Average loans of $29.9 billion declined $206.1 million, or 0.7 percent, during the fourth quarter from $30.1 billion during the prior quarter.
- Commercial lending - declined $89.4 million, or 0.3 percent, to $27.5 billion.
- Small ticket commercial real estate - declined $116.8 million, or 4.7 percent, to $2.4 billion.
- Average deposits increased $1.7 billion, or 9.3 percent, to $19.4 billion during the fourth quarter from $17.8 billion during the prior quarter, while the deposit interest expense rose to 80 basis points.
- Provision expense decreased $6.6 million relative to the prior quarter.
- The managed net charge-off rate for Commercial Banking increased 149 basis points in the fourth quarter of 2009 to 2.91 percent from 1.42 percent in the prior quarter.
- Commercial lending - 2.04 percent, an increase of 96 basis points over the prior quarter.
- Small ticket commercial real estate - 13.08 percent, an increase of 789 basis points over the prior quarter. The increase in the charge-of rate is primarily related to the write-down of a portfolio of small ticket CRE non-performing loans as the company moved them to held-for-sale. This move also resulted in a drop in the non-performing asset rate for small ticket CRE from 11.39 percent in the third quarter to 4.87 percent in the fourth quarter.
- Non-performing loans as a percentage of loans held for investment for Commercial Banking was 2.37 percent, a decrease of 28 basis points from 2.65 percent at the end of the prior quarter.
Consumer Banking highlights
For more lending information and statistics on the segment's results, please refer to the Financial Supplement.
Consumer Banking reported a net loss for the fourth quarter of $7.7 million compared to net income of $145.2 million in the third quarter. Revenue declined $73.9 million in the quarter. Provision expense increased $93.3 million, driven by seasonal increases in Auto Finance and continued deterioration in mortgage and home equity credit trends. Non-interest expense increased $68.1 million, or 10 percent relative to the prior quarter, as a result of several factors including planned expenses related to the integration of Chevy Chase Bank and investments to build a scalable banking infrastructure to ensure that the company is well positioned to take advantage of opportunities to grow our banking business.
- Average loans declined $2.0 billion, or 4.8 percent, to $39.1 billion compared to average loans of $41.1 billion in the prior quarter. Auto finance loans declined as a result of the company's earlier efforts to retrench the auto finance business. Mortgage loans declined as the company continued to experience expected run off in the portfolio.
- Auto - declined $868.4 million, or 4.4 percent, to $18.8 billion.
- Mortgage - declined $581.0 million, or 3.6 percent, to $15.3 billion.
- Retail banking - declined $512.3 million, or 9.3 percent, to $5.0 billion.
- Average deposits in the Consumer Banking segment declined $0.3 billion, or 0.4 percent, to $73.0 billion during the fourth quarter from $73.3 billion in the prior quarter. Improved deposit mix and favorable interest rates drove a 17 basis point improvement in the deposit interest expense rate in the fourth quarter.
- The managed net charge-off rate for Consumer Banking increased 16 basis points in the fourth quarter of 2009 to 2.85 percent from 2.69 percent in the prior quarter. The increase in Auto charge-offs resulted primarily from expected seasonal patterns and the impact of the decline in the denominator. Mortgage charge-offs were essentially flat.
- Auto - 4.55 percent, an increase of 17 basis points
- Mortgage - 0.71 percent, an increase of 2 basis points
- Retail banking - 3.03 percent, an increase of 59 basis points
The company generates earnings from its managed loan portfolio, which includes both on-balance sheet loans and securitized (off-balance sheet) loans. For this reason, the company believes managed financial measures to be useful to stakeholders. In compliance with Regulation G of the Securities and Exchange Commission, the company is providing a numerical reconciliation of managed financial measures to comparable measures calculated on a reported basis using generally accepted accounting principles (GAAP). Please see the schedule titled "Reconciliation to GAAP Financial Measures" attached to this release for more information.
Forward looking statements
The company cautions that its current expectations in this release dated January 21, 2010; and the company's plans, objectives, expectations, and intentions, are forward-looking statements. Actual results could differ materially from current expectations due to a number of factors, including: general economic conditions in the U.S., the UK, or the company's local markets, including conditions affecting consumer income, confidence, spending, and savings which may affect consumer bankruptcies, defaults, charge-offs, deposit activity, and interest rates; changes in the labor and employment market; changes in the credit environment; the company's ability to execute on its strategic and operational plans; competition from providers of products and services that compete with the company's businesses; increases or decreases in the company's aggregate accounts and balances, or the growth rate and/or composition thereof; changes in the reputation of or expectations regarding the financial services industry or the company with respect to practices, products or financial condition; financial, legal, regulatory, tax or accounting changes or actions, including with respect to any litigation matter involving the company; and the success of the company's marketing efforts in attracting or retaining customers. A discussion of these and other factors can be found in the company's annual report and other reports filed with the Securities and Exchange Commission, including, but not limited to, the company's reports on Form 10-K for the fiscal year ended December 31, 2008 and reports on Form 10-Q for the quarters ended March 31, 2009, June 30, 2009, and September 30, 2009.
About Capital One
Capital One Financial Corporation (http://www.capitalone.com/) is a financial holding company whose subsidiaries, which include Capital One, N.A. and Capital One Bank (USA), N. A., had $115.8 billion in deposits and $212.0 billion in total managed assets outstanding as of December 31, 2009. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients. Capital One, N.A. has approximately 1,000 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia, and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.
NOTE: Fourth quarter 2009 financial results, SEC Filings, and earnings conference call slides are accessible on Capital One's home page (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 podcast and webcast of today's 4:30 pm (ET) earnings conference call is accessible through the same link.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY
REPORTED BASIS
(in millions,
except per share
data and as
noted) 2009 2009 2008
----------------- ---- ---- ----
Q4 Q3 (8) Q4
--- ------ ---
Earnings (Reported
Basis)
Net Interest
Income $1,954.2 $2,005.2 $1,802.4
Non-Interest
Income (2) 1,411.7 1,552.4 1,368.3
------- ------- -------
Total Revenue (1) 3,365.9 3,557.6 3,170.7
Provision for Loan
Losses 843.7 1,173.2 2,098.9
Marketing Expenses 188.0 103.7 264.9
Restructuring
Expenses 32.0 26.4 52.8
Goodwill
Impairment Charge - - 810.9 (5)
Operating Expenses
(3) 1,728.0 1,672.0 1,629.3
------- ------- -------
Income (Loss)
Before Taxes 574.2 582.3 (1,686.1)
Tax Rate 29.7 % 24.9 % 17.2
Income (Loss) From
Continuing
Operations, Net
of Tax $403.9 $437.1 $(1,396.3)
Loss From
Discontinued
Operations, Net
of Tax (28.3) (43.6) (25.2)
----- ----- -----
Net Income (Loss) $375.6 $393.5 $(1,421.5)
------ ------ ---------
Net Income (Loss)
Available to
Common
Shareholders (F) $375.6 $393.5 $(1,454.3)
----------------- ------ ------ ---------
Common Share
Statistics
Basic EPS: (G)
Income (Loss) From
Continuing
Operations $0.90 $0.97 $(3.67)
Loss From
Discontinued
Operations $(0.07) $(0.09) $(0.07)
------ ------ ------
Net Income (Loss) $0.83 $0.88 $(3.74)
Diluted EPS: (G)
Income (Loss) From
Continuing
Operations $0.89 $0.96 $(3.67)
Loss From
Discontinued
Operations $(0.06) $(0.09) $(0.07)
------ ------ ------
Net Income (Loss) $0.83 $0.87 $(3.74)
Dividends Per
Common Share $0.05 $0.05 $0.375
Tangible Book
Value Per Common
Share (period
end) $27.72 $26.86 $28.23
Stock Price Per
Common Share
(period end) $38.34 $35.73 $31.89
Total Market
Capitalization
(period end) $17,268.3 $16,064.2 $12,411.6
Common Shares
Outstanding
(period end) 450.4 449.6 389.2
Shares Used to
Compute Basic EPS 450.0 449.4 389.0
Shares Used to
Compute Diluted
EPS 454.9 453.7 389.0
---------------- ----- ----- -----
Reported Balance
Sheet Statistics
(period average)
(A)
Average Loans Held
for Investment $94,732 $99,354 $99,335
Average Earning
Assets $143,663 $145,280 $137,799
Average Assets $169,856 $173,428 $161,968
Average Interest
Bearing Deposits $101,144 $103,105 $93,144
Total Average
Deposits $114,597 $115,883 $104,093
Average Equity $26,518 $26,002 $26,658 (7)
Return on Average
Assets (ROA) 0.95 % 1.01 % (3.45) %
Return on Average
Equity (ROE) 6.09 % 6.72 % (20.95) %
----------------- ---- ---- -------
Reported Balance
Sheet Statistics
(period end) (A)
Loans Held for
Investment $90,619 $96,714 $101,018
Total Assets $169,376 $168,432 $165,878
Interest Bearing
Deposits $102,370 $101,769 $97,327
Total Deposits $115,809 $114,503 $108,621
-------------- -------- -------- --------
Performance
Statistics
(Reported) (A)
Net Interest
Income Growth
(annualized) (10) % 12 % (1) %
Non Interest
Income Growth
(annualized) (36) % 104 % (77) %
Revenue Growth
(annualized) (22) % 48 % (38) %
Net Interest
Margin 5.44 % 5.52 % 5.23 %
Revenue Margin 9.37 % 9.80 % 9.20 %
Risk Adjusted
Margin (B) 6.07 % 6.69 % 6.17 %
Non Interest
Expense as a % of
Average Loans
Held for
Investment
(annualized) 8.23 % 7.26 % 7.84 %(6)
Efficiency Ratio
(C) 56.92 % 49.91 % 59.74 %(6)
---------------- ----- ----- -----
Asset Quality
Statistics
(Reported) (A)
Allowance $4,127 $4,513 $4,524
Allowance as a %
of Reported Loans
Held for
Investment 4.55 %(4) 4.67 %(4) 4.48 %
Net Charge-Offs $1,185 (4) $1,127 (4) $1,045
Net Charge-Off
Rate 5.00 %(4) 4.54 %(4) 4.21 %
30+ day performing
delinquency rate 4.13 %(4) 4.12 %(4) 4.37 %
------------------ ---- ---- ----
Full-time
equivalent
employees (in
thousands) 25.9 26.0 23.7
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY
MANAGED BASIS (*)
(in millions) 2009 2009 2008
------------- Q4 Q3 (8) Q4
--- ------ ---
Earnings (Managed
Basis)
Net Interest Income $3,170.1 $3,212.0 $2,767.9
Non-Interest Income
(2) 1,198.9 1,372.7 1,183.2
------- ------- -------
Total Revenue (1) 4,369.0 4,584.7 3,951.1
Provision for Loan
Losses 1,846.8 2,200.3 2,879.3
Marketing Expenses 188.0 103.7 264.9
Restructuring
Expenses 32.0 26.4 52.8
Goodwill Impairment
Charge - - 810.9 (5)
Operating Expenses
(3) 1,728.0 1,672.0 1,629.3
------- ------- -------
Income (Loss) Before
Taxes 574.2 582.3 (1,686.1)
Tax Rate 29.7 % 24.9 % 17.2 %
Income (Loss) From
Continuing
Operations, Net of
Tax $403.9 $437.1 $(1,396.3)
Loss From
Discontinued
Operations, Net of
Tax (28.3) (43.6) (25.2)
----- ----- -----
Net Income (Loss) $375.6 $393.5 $(1,421.5)
------ ------ ---------
Net Income (Loss)
Available to Common
Shareholders (F) $375.6 $393.5 $(1,454.3)
-------------------- ------ ------ ---------
Managed Balance Sheet
Statistics (period
average) (A)
Average Loans Held
for Investment $138,184 $143,540 $146,586
Average Earning
Assets $183,899 $185,874 $182,660
Average Assets $210,425 $214,654 $207,232
Return on Average
Assets (ROA) 0.77 % 0.81 % (2.70) %
----------------- ---- ---- ------
Managed Balance Sheet
Statistics (period
end) (A)
Loans Held for
Investment $136,803 $140,990 $146,937
Total Assets $212,143 $209,683 $209,840
Tangible Assets(D) $198,037 $195,566 $197,337
Tangible Common
Equity (E) $12,483 $12,075 $10,988
Tangible Common
Equity to Tangible
Assets Ratio (H) 6.30 % 6.17 % 5.57 %
% Off-Balance Sheet
Securitizations 34 % 31 % 31 %
------------------- --- --- ---
Performance
Statistics (Managed)
(A)
Net Interest Income
Growth (annualized) (5) % 34 % (17) %
Non Interest Income
Growth (annualized) (51) % 62 % (43) %
Revenue Growth
(annualized) (19) % 42 % (25) %
Net Interest Margin 6.90 % 6.91 % 6.06 %
Revenue Margin 9.50 % 9.87 % 8.65 %
Risk Adjusted Margin
(B) 4.74 % 5.23 % 4.65 %
Non Interest Expense
as a % of Average
Loans Held for
Investment
(annualized) 5.64 % 5.02 % 5.31 %(6)
43.85 38.73
Efficiency Ratio (C) % % 47.94 %(6)
-------------------- ----- ----- -----
Asset Quality
Statistics (Managed)
(A)
Net Charge-Offs $2,188 (4) $2,155 (4) $1,826
Net Charge-Off Rate 6.33 %(4) 6.00 %(4) 4.98 %
30+ day performing
delinquency rate 4.73 %(4) 4.55 %(4) 4.49 %
------------------ ---- ---- ---- ---- ----
(*) The information in this statistical summary reflects the
adjustment to add back the effect of securitization transactions
qualifying as sales under generally accepted accounting principles.
See accompanying schedule -"Reconciliation to GAAP Financial
Measures".
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY NOTES
(1) In accordance with the Company's finance charge and fee revenue
recognition policy, the amounts billed to customers but not recognized
as revenue were as follows: Q4 2009 -$490.4 million, Q3 2009 -$517.0
million, and Q4 2008 -$591.0 million.
(2) Includes the impact from the change in fair value of retained
interests, including the interest-only strips, of increases of $55.3
million in Q4 2009 and $37.3 million in Q3 2009, and a decrease of
$158.2 million in Q4 2008.
(3) Includes core deposit intangible amortization expense of $53.8
million in Q4 2009, $55.5 million in Q3 2009 and $46.0 million in Q4
2008, and integration costs of $22.1 million in Q4 2009, $10.7 million
in Q3 2009, and $3.2 million in Q4 2008.
(4) Allowance as a % of Reported Loans Held for Investment, Net Charge-
off Rate and 30+ Day Performing Delinquency Rate on both a Reported and
Managed basis include period end loans held for investment and average
loans held for investment acquired as part of the Chevy Chase Bank, FSB
(CCB) acquisition. The reported and managed metrics excluding such loans
are as follows. The net charge-off dollars were unchanged.
Q4 2009 Q3 2009(8)
------- ----------
CCB period end acquired loan portfolio (in
millions) $7,250.5 $7,885.0
CCB average acquired loan portfolio (in millions) $7,511.9 $8,028.8
Allowance as a % of reported loans held for
investment 4.95% 5.08%
Net charge-off rate (Reported) 5.44% 4.94%
Net charge-off rate (Managed) 6.70% 6.36%
30+ day performing delinquency rate (Reported) 4.49% 4.48%
30+ day performing delinquency rate (Managed) 4.99% 4.82%
(5) In Q4 2008 the Company recorded impairment of goodwill in its
automobile business of $810.9 million.
(6) Excludes the impact of the goodwill impairment of $810.9 million.
(7) Average equity includes the impact of the Company's participation in
the U.S. Treasury's Capital Purchase Program. On November 14, 2008, the
Company issued 3,555,199 preferred shares and 12,657,960 warrants to
purchase common shares at $42.13 per share, while receiving proceeds of
$3.56 billion. The allocated fair value for the preferred shares and
the warrants to purchase common shares was $3.06 billion and $491.5
million, respectively. On June 17, 2009, the Company repurchased all
3,555,199 preferred shares issued in Q4 2008 for approximately $3.57
billion, including accrued dividends. The warrants to purchase common
shares were sold by the U.S. Treasury on December 11, 2009 at a price of
$11.75 per warrant. The sale by the US Treasury had no impact on the
company's equity. The warrants remain outstanding and are included in
paid-in capital on the balance sheet.
(8) Results and balances have been recast to reflect the impact of
purchase accounting adjustments from the Chevy Chase Bank acquisition as
if those adjustments had been recorded at the acquisition date as the
purchase accounting has been finalized during Q4 2009. The following
highlights the changes to key line items from what was previously
disclosed.
(in millions) Q3 2009
-------
Net income increase (decrease) $(32.1)
Loans held for investment (decrease) (68.7)
Goodwill increase 40.0
Other assets (including deferred taxes)
increase 25.7
STATISTICS / METRIC DEFINITIONS
-------------------------------
(A) Based on continuing operations. Average equity and return on
equity are based on the Company's stockholders' equity.
(B) Risk adjusted margin equals total revenue less net charge-offs
as a percentage of average earning assets.
(C) Efficiency ratio equals non-interest expense less restructuring
expense divided by total revenue.
(D) Tangible assets include managed assets less intangible assets
and is considered a non-GAAP measure. See accompanying schedule
Reconciliation to GAAP Financial Measures for a reconciliation of
tangible assets
(E) Includes stockholders' equity less preferred shares less
intangible assets and related deferred tax liabilities. Tangible
Common Equity on a reported and managed basis is the same and is
considered a non-GAAP measure. See accompanying schedule
Reconciliation To GAAP Financial Measures for a reconciliation of
tangible common equity.
(F) Net income (loss) available to common shareholders equals net
income (loss) less dividends on preferred shares.
(G) Earnings per share is based on net income (loss) available to
common shareholders.
(H) Tangible Common Equity to Tangible Assets Ratio ("TCE Ratio") is
considered a non-GAAP measure. See accompanying schedule
Reconciliation To GAAP Financial Measures for a reconciliation of
the TCE Ratio.
CAPITAL ONE FINANCIAL CORPORATION
Reconciliation to GAAP Financial Measures
(dollars in thousands)(unaudited)
The Company's 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 they originated. For this reason the Company
believes the "managed" consolidated financial statements and related
managed metrics to be useful to stakeholders.
For the Three Months Ended December 31,
2009
Total Total
Reported Adjustments(1) Managed(2)
-------- -------------- ----------
Income Statement
Measures(3)
Net interest income $1,954,213 $1,215,901 $3,170,114
Non-interest income 1,411,752 (212,824) 1,198,928
--------- -------- ---------
Total revenue 3,365,965 1,003,077 4,369,042
Provision for loan
and lease losses 843,728 1,003,077 1,846,805
Net charge-offs $1,184,894 $1,003,077 $2,187,971
--------------- ---------- ---------- ----------
Balance Sheet
Measures
Loans held for
investment $90,618,999 $46,183,903 $136,802,902
Total assets $169,400,094 $42,767,131 $212,167,225
Total liabilities $142,810,684 $42,767,131 $185,577,815
Average loans held
for investment $94,731,990 $43,452,191 $138,184,181
Average earning
assets $143,682,608 $40,236,099 $183,918,707
Average total assets $169,885,959 $40,568,925 $210,454,884
Average total
liabilities $143,368,047 $40,568,925 $183,936,972
Delinquencies $3,746,264 $2,718,895 $6,465,159
------------- ---------- ---------- ----------
The table below presents a reconciliation of tangible common equity
and tangible assets, which are the components used to calculate the
tangible common equity "TCE" ratio. The Company believes the TCE
ratio is an important financial measure of capital strength to our
investors and readers even though it is considered to be a non-GAAP
measure.
2009 2009 2008
(dollars in
millions)(unaudited) Q4 Q3(5) Q4
--- ----- ---
Equity $26,589 $26,192 $26,612
Less: preferred stock - - (3,120)
Less: intangible assets (4) (14,106) (14,117) (12,503)
------- ------- -------
Tangible common equity $12,483 $12,075 $10,989
======= ======= =======
Total assets 212,167 209,714 209,875
Less: discontinued ops assets (24) (31) (35)
--- --- ---
Total assets- continuing ops 212,143 209,683 209,840
Less: intangible assets (4) (14,106) (14,117) (12,503)
------- ------- -------
Tangible assets $198,037 $195,566 $197,337
======== ======== ========
TCE ratio 6.30 6.17 5.57
(1) Income statement adjustments reclassify the net of finance
charges of $1,320.8 million, past-due fees of $193.5 million, other
interest income of $(50.7) million and interest expense of $247.7
million; and net charge-offs of $1,003.1 million from non-interest
income to net interest income and provision for loan and lease
losses, respectively.
(2) The managed loan portfolio does not include auto loans or
mortgage loans which have been sold in whole loan sale transactions
or securitizations where the Company has retained servicing rights.
(3) Based on continuing operations.
(4) Includes impact from related deferred taxes.
(5) Amounts have been recast to reflect the impact of purchase
accounting adjustments from the Chevy Chase Bank acquisition as if
those adjustments had been recorded at the acquisition date as the
purchase accounting has been completed during Q4 2009.
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Balance Sheets
(in thousands)(unaudited)
As of As of As of
----- ----- -----
September
December 31 30 December 31
----------- ---------- -----------
2009 2009(1) 2008
---- ------ ----
Assets:
Cash and due from banks $3,100,110 $2,719,100 $2,047,839
Federal funds sold and
resale agreements 541,570 544,793 636,752
Interest-bearing deposits
at other banks 5,042,944 863,310 4,806,752
--------- ------- ---------
Cash and cash equivalents 8,684,624 4,127,203 7,491,343
Securities available for
sale 38,829,562 37,693,001 31,003,271
Securities held to
maturity 80,577 83,608 -
Loans held for sale 268,307 141,158 68,462
Loans held for investment 90,618,999 96,714,341 101,017,771
Less: Allowance for loan
and lease losses (4,127,395) (4,513,493) (4,523,960)
---------- ---------- ----------
Net loans held for
investment 86,491,604 92,200,848 96,493,811
Accounts receivable from
securitizations 7,629,597 6,985,200 6,342,754
Premises and equipment,
net 2,735,623 2,773,173 2,313,106
Interest receivable 936,146 910,642 827,909
Goodwill 13,596,368 13,564,807 11,964,487
Other 10,147,686 9,983,892 9,408,309
---------- --------- ---------
Total assets $169,400,094 $168,463,532 $165,913,452
============ ============ ============
Liabilities:
Non-interest-bearing
deposits $13,438,659 $12,734,589 $11,293,852
Interest-bearing deposits 102,370,437 101,768,522 97,326,937
Senior and subordinated
notes 9,045,470 9,208,769 8,308,843
Other borrowings 11,968,461 12,126,181 14,869,648
Interest payable 509,105 582,969 676,398
Other 5,478,552 5,850,124 6,825,341
--------- --------- ---------
Total liabilities 142,810,684 142,271,154 139,301,019
Stockholders' Equity:
Preferred stock - - 3,096,466
Common stock 5,024 5,021 4,384
Paid-in capital, net 18,954,823 18,928,719 17,278,102
Retained earnings and
cumulative other
comprehensive income 10,810,022 10,431,005 9,399,368
Less: Treasury stock, at
cost (3,180,459) (3,172,367) (3,165,887)
---------- ---------- ----------
Total stockholders' equity 26,589,410 26,192,378 26,612,433
---------- ---------- ----------
Total liabilities and
stockholders' equity $169,400,094 $168,463,532 $165,913,452
------------ ------------ ------------
(1) Amounts have been recast to reflect the impact of purchase
accounting adjustments from Chevy Chase Bank acquisition as if those
adjustments had been recorded at the acquisition date as the
purchase accounting has been finalized during Q4 2009.
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income
(in thousands, except per share data)(unaudited)
Three Months Ended
December September December
31 30 31
2009 2009(2) 2008
---- ------ ----
Interest Income:
Loans held for investment,
including past-due fees $2,108,325 $2,220,208 $2,306,796
Investment securities 403,750 398,835 367,902
Other 83,013 83,195 94,123
------ ------ ------
Total interest income 2,595,088 2,702,238 2,768,821
Interest Expense:
Deposits 426,415 479,178 684,756
Senior and subordinated notes 71,093 74,032 92,519
Other borrowings 143,367 143,860 189,149
------- ------- -------
Total interest expense 640,875 697,070 966,424
------- ------- -------
Net interest income 1,954,213 2,005,168 1,802,397
Provision for loan and lease
losses 843,728 1,173,208 2,098,921
------- --------- ---------
Net interest income (loss)
after provision for loan and
lease losses 1,110,485 831,960 (296,524)
Non-Interest Income:
Servicing and securitizations 743,075 720,698 590,948
Service charges and other
customer-related fees 502,721 496,392 557,331
Mortgage servicing and other (30,470) 8,656 14,048
Interchange 112,421 122,585 129,409
Net impairment losses
recognized in earnings(1) (10,384) (11,173) (4,808)
Other 94,389 215,210 81,358
------ ------- ------
Total non-interest income 1,411,752 1,552,368 1,368,286
Non-Interest Expense:
Salaries and associate
benefits 641,225 648,180 574,199
Marketing 187,958 103,698 264,943
Communications and data
processing 171,286 175,575 196,924
Supplies and equipment 129,422 122,777 130,038
Occupancy 121,822 113,913 112,492
Restructuring expense 32,037 26,357 52,839
Goodwill impairment charge - - 810,876
Other 664,243 611,558 615,632
------- ------- -------
Total non-interest expense 1,947,993 1,802,058 2,757,943
--------- --------- ---------
Income from continuing
operations before income
taxes 574,244 582,270 (1,686,181)
Income taxes 170,359 145,212 (289,856)
------- ------- --------
Income from continuing
operations, net of tax 403,885 437,058 (1,396,325)
Loss from discontinued
operations, net of tax (28,293) (43,587) (25,221)
------- ------- -------
Net income $375,592 $393,471 $(1,421,546)
======== ======== ===========
Net income (loss) available to
common shareholders $375,592 $393,471 $(1,454,269)
======== ======== ===========
Basic earnings per common
share
Income (loss) from continuing
operations $0.90 $0.97 $(3.67)
Loss from discontinued
operations (0.07) (0.09) (0.07)
----- ----- -----
Net Income (loss) per common
share $0.83 $0.88 $(3.74)
===== ===== ======
Diluted earnings per common
share
Income (loss) from continuing
operations $0.89 $0.96 $(3.67)
Loss from discontinued
operations (0.06) (0.09) (0.07)
----- ----- -----
Net Income (loss) per common
share $0.83 $0.87 $(3.74)
===== ===== ======
Dividends paid per common
share $0.05 $0.05 $0.375
===== ===== ======
Year Ended
December December
31 31
2009 2008
---- ----
Interest Income:
Loans held for investment,
including past-due fees $8,757,066 $9,460,378
Investment securities 1,610,210 1,224,012
Other 297,309 427,609
------- -------
Total interest income 10,664,585 11,111,999
Interest Expense:
Deposits 2,093,019 2,512,040
Senior and subordinated notes 260,282 444,854
Other borrowings 614,169 1,006,390
------- ---------
Total interest expense 2,967,470 3,963,284
--------- ---------
Net interest income 7,697,115 7,148,715
Provision for loan and lease
losses 4,230,111 5,101,040
--------- ---------
Net interest income (loss)
after provision for loan and
lease losses 3,467,004 2,047,675
Non-Interest Income:
Servicing and securitizations 2,279,826 3,384,468
Service charges and other
customer-related fees 1,997,013 2,232,363
Mortgage servicing and other 14,729 105,038
Interchange 501,798 562,117
Net impairment losses
recognized in earnings(1) (31,951) (10,916)
Other 524,737 470,901
------- -------
Total non-interest income 5,286,152 6,743,971
Non-Interest Expense:
Salaries and associate
benefits 2,477,655 2,335,737
Marketing 588,338 1,118,208
Communications and data
processing 740,543 755,989
Supplies and equipment 499,582 519,687
Occupancy 450,871 377,192
Restructuring expense 119,395 134,464
Goodwill impairment charge - 810,876
Other 2,540,670 2,157,874
--------- ---------
Total non-interest expense 7,417,054 8,210,027
--------- ---------
Income from continuing
operations before income
taxes 1,336,102 581,619
Income taxes 349,485 497,102
------- -------
Income from continuing
operations, net of tax 986,617 84,517
Loss from discontinued
operations, net of tax (102,836) (130,515)
-------- --------
Net income $883,781 $(45,998)
======== ========
Net income (loss) available to
common shareholders $319,873 $(78,721)
======== ========
Basic earnings per common
share
Income (loss) from continuing
operations $0.99 $0.14
Loss from discontinued
operations (0.24) (0.35)
----- -----
Net Income (loss) per common
share $0.75 $(0.21)
===== ======
Diluted earnings per common
share
Income (loss) from continuing
operations $0.98 $0.14
Loss from discontinued
operations (0.24) (0.35)
----- -----
Net Income (loss) per common
share $0.74 $(0.21)
===== ======
Dividends paid per common
share $0.525 $1.50
====== =====
(1) For the three months and year ended December 31, 2009, the
Company recorded other-than-temporary impairment losses of $10.4
million and $31.6 million, respectively. Total unrealized losses on
these securities recognized in other comprehensive income as a
component of stockholders' equity at December 31, 2009 was $181.3
million.
(2) Amounts have been recast to reflect the impact of purchase
accounting adjustments from the Chevy Chase Bank acquisition as if
those adjustments had been recorded at the acquisition date as the
purchase accounting has been finalized during Q4 2009.
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(1)
(dollars in thousands)(unaudited)
Reported Quarter Ended 12/31/09
----------------------
Average Income/ Yield/
Balance Expense Rate
------- ------- ----
Earning assets:
Loans held for investment $94,731,990 $2,108,325 8.90%
Investment Securities (2) 38,486,624 403,750 4.20%
Other 10,444,494 83,013 3.18%
---------- ------ ----
Total earning assets $143,663,108 $2,595,088 7.23%
============ ==========
Interest-bearing
liabilities:
Interest-bearing deposits
NOW accounts 10,587,851 13,696 0.52%
Money market deposit
accounts 37,460,109 96,583 1.03%
Savings accounts 15,416,242 35,326 0.92%
Other consumer time deposits 27,273,129 200,499 2.94%
Public fund CD's of $100,000
or more 753,764 2,201 1.17%
CD's of $100,000 or more 8,633,998 76,692 3.55%
Foreign time deposits 1,019,090 1,418 0.56%
--------- ----- ----
Total interest-bearing
deposits $101,144,183 $426,415 1.69%
Senior and subordinated
notes 8,759,304 71,093 3.25%
Other borrowings 14,156,503 143,367 4.05%
---------- ------- ----
Total interest-bearing
liabilities $124,059,990 $640,875 2.07%
============ ========
Net interest spread 5.16%
====
Interest income to average
earning assets 7.23%
Interest expense to average
earning assets 1.78%
----
Net interest margin 5.44%
====
Reported Quarter Ended 09/30/09(3)
-------------------------
Average Income/ Yield/
Balance Expense Rate
------- ------- ----
Earning assets:
Loans held for investment $99,354,028 $2,220,208 8.94%
Investment Securities (2) 37,376,895 398,835 4.27%
Other 8,548,610 83,195 3.89%
--------- ------ ----
Total earning assets $145,279,533 $2,702,238 7.44%
============ ==========
Interest-bearing
liabilities:
Interest-bearing deposits
NOW accounts 10,418,557 12,745 0.49%
Money market deposit
accounts 36,036,826 96,477 1.07%
Savings accounts 12,266,254 22,772 0.74%
Other consumer time deposits 32,075,905 248,272 3.10%
Public fund CD's of $100,000
or more 1,061,134 2,789 1.05%
CD's of $100,000 or more 9,764,172 92,681 3.80%
Foreign time deposits 1,482,519 3,442 0.93%
--------- ----- ----
Total interest-bearing
deposits $103,105,367 $479,178 1.86%
Senior and subordinated
notes 9,553,950 74,032 3.10%
Other borrowings 13,480,527 143,860 4.27%
---------- ------- ----
Total interest-bearing
liabilities $126,139,844 $697,070 2.21%
============ ========
Net interest spread 5.23%
====
Interest income to average
earning assets 7.44%
Interest expense to average
earning assets 1.92%
----
Net interest margin 5.52%
====
Reported Quarter Ended 12/31/08
----------------------
Average Income/ Yield/
Balance Expense Rate
------- ------- ----
Earning assets:
Loans held for investment $99,334,890 $2,306,796 9.29%
Investment Securities (2) 28,961,247 367,902 5.08%
Other 9,502,781 94,123 3.96%
--------- ------ ----
Total earning assets $137,798,918 $2,768,821 8.04%
============ ==========
Interest-bearing
liabilities:
Interest-bearing deposits
NOW accounts $9,874,696 $28,460 1.15%
Money market deposit
accounts 28,556,264 171,891 2.41%
Savings accounts 7,275,816 11,774 0.65%
Other consumer time deposits 33,712,504 337,651 4.01%
Public fund CD's of $100,000
or more 1,213,364 7,323 2.41%
CD's of $100,000 or more 9,508,463 104,134 4.38%
Foreign time deposits 3,002,402 23,523 3.13%
--------- ------ ----
Total interest-bearing
deposits $93,143,509 $684,756 2.94%
Senior and subordinated
notes 8,034,423 92,519 4.61%
Other borrowings 16,428,096 189,149 4.61%
---------- ------- ----
Total interest-bearing
liabilities $117,606,028 $966,424 3.29%
============ ========
Net interest spread 4.75%
====
Interest income to average
earning assets 8.04%
Interest expense to average
earning assets 2.81%
----
Net interest margin 5.23%
====
(1) Average balances, income and expenses, yields and rates are based
on continuing operations.
(2) Includes securities available for sale and securities held to
maturity.
(3) Amounts have been recast to reflect the impact of purchase
accounting adjustments from the Chevy Chase Bank acquisition as if
those adjustments had been recorded at the acquisition date as the
purchase accounting has been finalized during Q4 2009.
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(2)
(dollars in thousands)(unaudited)
Managed (1) Quarter Ended 12/31/09
----------------------
Average Income/ Yield/
Balance Expense Rate
------- ------- ----
Earning assets:
Loans held for
investment $138,184,181 $3,638,071 10.53%
Investment Securities
(3) 38,486,624 403,750 4.20%
Other 7,228,402 16,832 0.93%
--------- ------ ----
Total earning assets $183,899,207 $4,058,653 8.83%
============ ==========
Interest-bearing
liabilities:
Interest-bearing
deposits
NOW accounts $10,587,851 $13,696 0.52%
Money market deposit
accounts 37,460,109 96,583 1.03%
Savings accounts 15,416,242 35,326 0.92%
Other consumer time
deposits 27,273,129 200,499 2.94%
Public fund CD's of
$100,000 or more 753,764 2,201 1.17%
CD's of $100,000 or more 8,633,998 76,692 3.55%
Foreign time deposits 1,019,090 1,418 0.56%
--------- ----- ----
Total interest-bearing
deposits $101,144,183 $426,415 1.69%
Senior and subordinated
notes 8,759,304 71,093 3.25%
Other borrowings 14,156,503 143,367 4.05%
Securitization liability 40,588,015 247,664 2.44%
---------- ------- ----
Total interest-bearing
liabilities $164,648,005 $888,539 2.16%
============ ========
Net interest spread 6.67%
====
Interest income to
average earning assets 8.83%
Interest expense to
average earning assets 1.93%
----
Net interest margin 6.90%
====
Managed (1) Quarter Ended 09/30/09(4)
-------------------------
Average Income/ Yield/
Balance Expense Rate
------- ------- ----
Earning assets:
Loans held for
investment $143,539,902 $3,749,876 10.45%
Investment Securities
(3) 37,376,895 398,835 4.27%
Other 4,957,393 18,038 1.46%
--------- ------ ----
Total earning assets $185,874,190 $4,166,749 8.97%
============ ==========
Interest-bearing
liabilities:
Interest-bearing
deposits
NOW accounts $10,418,557 $12,745 0.49%
Money market deposit
accounts 36,036,826 96,477 1.07%
Savings accounts 12,266,254 22,772 0.74%
Other consumer time
deposits 32,075,905 248,272 3.10%
Public fund CD's of
$100,000 or more 1,061,134 2,789 1.05%
CD's of $100,000 or more 9,764,172 92,681 3.80%
Foreign time deposits 1,482,519 3,442 0.93%
--------- ----- ----
Total interest-bearing
deposits $103,105,367 $479,178 1.86%
Senior and subordinated
notes 9,553,950 74,032 3.10%
Other borrowings 13,480,527 143,860 4.27%
Securitization liability 41,251,788 257,642 2.50%
---------- ------- ----
Total interest-bearing
liabilities $167,391,632 $954,712 2.28%
============ ========
Net interest spread 6.69%
====
Interest income to
average earning assets 8.97%
Interest expense to
average earning assets 2.05%
----
Net interest margin 6.91%
====
Managed (1) Quarter Ended 12/31/08
----------------------
Average Income/ Yield/
Balance Expense Rate
------- ------- ----
Earning assets:
Loans held for
investment $146,586,152 $3,808,363 10.39%
Investment Securities
(3) 28,961,247 367,902 5.08%
Other 7,112,807 29,558 1.66%
--------- ------ ----
Total earning assets $182,660,206 $4,205,823 9.21%
============ ==========
Interest-bearing
liabilities:
Interest-bearing
deposits
NOW accounts $9,874,696 $28,460 1.15%
Money market deposit
accounts 28,556,264 171,891 2.41%
Savings accounts 7,275,816 11,774 0.65%
Other consumer time
deposits 33,712,504 337,651 4.01%
Public fund CD's of
$100,000 or more 1,213,364 7,323 2.41%
CD's of $100,000 or more 9,508,463 104,134 4.38%
Foreign time deposits 3,002,402 23,523 3.13%
--------- ------ ----
Total interest-bearing
deposits $93,143,509 $684,756 2.94%
Senior and subordinated
notes 8,034,423 92,519 4.61%
Other borrowings 16,428,096 189,149 4.61%
Securitization liability 45,610,272 471,517 4.14%
---------- ------- ----
Total interest-bearing
liabilities $163,216,300 $1,437,941 3.52%
============ ==========
Net interest spread 5.69%
====
Interest income to
average earning assets 9.21%
Interest expense to
average earning assets 3.15%
----
Net interest margin 6.06%
====
(1) The information in this table reflects the adjustment to add back
the effect of securitized loans.
(2) Average balances, income and expenses, yields and rates are based
on continuing operations.
(3) Includes securities available for sale and securities held to
maturity.
(4) Amounts have been recast to reflect the impact of purchase
accounting adjustments from the Chevy Chase Bank acquisition as if
those adjustments had been recorded at the acquisition date as the
purchase accounting has been finalized during Q4 2009.
CAPITAL ONE FINANCIAL CORPORATION (COF)
LENDING INFORMATION AND STATISTICS
MANAGED BASIS (1) (9)
2009 2009 2008
---- ---- ----
Q4 Q3(10) Q4
--- ------ ---
Period end loans held
for investment
(in thousands)
Domestic credit card $60,299,827 $61,891,573 $70,944,581
International credit
card 8,223,835 8,477,236 8,720,642
--------- --------- ---------
Total Credit Card $68,523,662 $70,368,809 $79,665,223
----------- ----------- -----------
Commercial and multi-
family real estate $13,843,158 $13,977,873 $13,303,081
Middle market 10,061,819 10,022,822 10,081,823
Specialty lending 3,554,563 3,399,432 3,547,287
--------- --------- ---------
Total Commercial
Lending $27,459,540 $27,400,127 $26,932,191
Small ticket
commercial real
estate 2,153,510 (11) 2,412,400 2,609,123
--------- --------- ---------
Total Commercial
Banking $29,613,050 $29,812,527 $29,541,314
----------- ----------- -----------
Automobile $18,186,064 $19,295,218 $21,494,436
Mortgages 14,893,187 15,638,974 10,098,430
Retail banking 5,135,242 5,215,155 5,603,696
--------- --------- ---------
Total Consumer Banking $38,214,493 $40,149,347 $37,196,562
----------- ----------- -----------
Other loans (8) $451,697 $659,008 $533,65
-------- -------- -------
Total $136,802,902 $140,989,691 $146,936,754
============ ============ ============
Average loans held for
investment
(in thousands)
Domestic credit card $60,443,441 $63,298,525 $69,643,290
International credit
card 8,299,895 8,609,235 9,440,972
--------- --------- ---------
Total Credit Card $68,743,336 $71,907,760 $79,084,262
----------- ----------- -----------
Commercial and multi-
family real estate $13,926,098 $13,938,037 $13,082,096
Middle market 10,052,406 9,911,314 10,093,083
Specialty lending 3,534,537 3,753,054 3,584,963
--------- --------- ---------
Total Commercial
Lending $27,513,041 $27,602,405 $26,760,142
Small ticket
commercial real
estate 2,354,204 2,470,961 2,655,883
--------- --------- ---------
Total Commercial
Banking $29,867,245 $30,073,366 $29,416,025
----------- ----------- -----------
Automobile $18,767,555 $19,635,979 $21,967,154
Mortgages 15,345,635 15,926,662 10,201,024
Retail banking 5,000,933 5,513,230 5,366,737
--------- --------- ---------
Total Consumer Banking $39,114,123 $41,075,871 $37,534,915
----------- ----------- -----------
Other loans (8) $459,477 $482,905 $550,950
-------- -------- --------
Total $138,184,181 $143,539,902 $146,586,152
============ ============ ============
Net Charge-off Rates
Domestic credit card 9.59% 9.64% 7.08%
International credit
card 9.52% 9.19% 5.84%
---- ---- ----
Total Credit Card 9.58% 9.59% 6.93%
---- ---- ----
Commercial and multi-
family real estate
(5) 3.02% 1.37% 1.16%
Middle market (5) 0.75% 0.56% 0.47%
Specialty lending 1.85% 1.39% 0.47%
---- ---- ----
Total Commercial
Lending (5) 2.04% 1.08% 0.81%
Small ticket
commercial real
estate 13.08% (11) 5.19% 0.90%
----- ---- ----
Total Commercial
Banking (5) 2.91% 1.42% 0.82%
---- ---- ----
Automobile 4.55% 4.38% 5.67%
Mortgages (5) 0.71% 0.69% 0.46%
Retail banking (5) 3.03% 2.44% 2.15%
---- ---- ----
Total Consumer Banking
(5) 2.85% 2.69% 3.75%
---- ---- ----
Other loans 28.26% 28.53% 21.65%
----- ----- -----
Total 6.33% 6.00% 4.98%
==== ==== ====
30+ day performing
delinquency rate
Domestic credit card 5.78% 5.38% 4.78%
International credit
card 6.55% 6.63% 5.51%
---- ---- ----
Total Credit Card 5.88% 5.53% 4.86%
---- ---- ----
Automobile (7) 10.03% 9.52% 9.90%
Mortgages (5) 1.26% 1.17% 1.57%
Retail banking (5) 1.23% 1.26% 1.06%
---- ---- ----
Total Consumer Banking
(5) 5.43% 5.19% 6.31%
==== ==== ====
Non Performing Asset
Rates (2) (6)
Commercial and multi-
family real estate
(5) 3.25% 2.66% 1.21%
Middle market (5) 1.09% 1.25% 0.43%
Specialty lending 2.25% 2.12% 1.05%
---- ---- ----
Total Commercial
Lending (5) 2.33% 2.08% 0.89%
Small ticket
commercial real
estate 4.87% (11) 11.39% 6.67%
---- ----- ----
Total Commercial
Banking (5) 2.52% 2.84% 1.41%
---- ---- ----
Automobile (8) 0.92% 0.87% 1.06%
Mortgages (5) 2.24% 1.83% 1.28%
Retail banking (5) 2.11% 1.98% 1.51%
---- ---- ----
Total Consumer Banking
(5) 1.60% 1.39% 1.19%
==== ==== ====
CAPITAL ONE FINANCIAL CORPORATION (COF)
CREDIT CARD SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING
OPERATIONS
MANAGED BASIS (1) (9)
2009 2009 2008
(in thousands) Q4 Q3 Q4
-------------- --- --- ---
Credit Card:
------------
Earnings
Net interest income $2,029,221 $2,024,250 $1,816,484
Non-interest income 897,006 966,862 1,138,220
------- ------- ---------
Total revenue $2,926,227 $2,991,112 $2,954,704
Provision for loan and lease
losses 1,204,693 1,643,721 2,164,529
Non-interest expenses 942,428 897,578 1,075,446
------- ------- ---------
Income (loss) before taxes 779,106 449,813 (285,271)
Income taxes (benefit) 269,182 158,074 (98,053)
------- ------- -------
Net income (loss) $509,924 $291,739 $(187,218)
======== ======== =========
Selected Metrics
Period end loans held for
investment $68,523,662 $70,368,809 $79,665,223
Average loans held for
investment $68,743,336 $71,907,760 $79,084,262
Loans held for investment
yield 14.21% 13.75% 12.56%
Revenue margin 17.03% 16.64% 14.94%
Net charge-off rate 9.58% 9.59% 6.93%
30+ day performing
delinquency rate 5.88% 5.53% 4.86%
Purchase Volume (3) $26,865,498 $25,982,259 $27,564,750
Domestic Card Sub-segment
Earnings
Net interest income $1,781,573 $1,797,173 $1,608,705
Non-interest income 793,934 855,571 1,018,689
------- ------- ---------
Total revenue $2,575,507 $2,652,744 $2,627,394
Provision for loan and lease
losses 1,033,341 1,436,959 2,000,928
Non-interest expenses 832,878 769,995 897,687
------- ------- -------
Income (loss) before taxes 709,288 445,790 (271,221)
Income taxes (benefit) 248,251 156,027 (94,928)
------- ------- -------
Net income (loss) $461,037 $289,763 $(176,293)
======== ======== =========
Selected Metrics
Period end loans held for
investment $60,299,827 $61,891,573 $70,944,581
Average loans held for
investment $60,443,441 $63,298,525 $69,643,290
Loans held for investment
yield 14.08% 13.74% 12.52%
Revenue margin 17.04% 16.76% 15.09%
Net charge-off rate 9.59% 9.64% 7.08%
30+ day performing
delinquency rate 5.78% 5.38% 4.78%
Purchase Volume (3) $24,592,679 $23,760,963 $25,217,781
International Card Sub-
segment
Earnings
Net interest income $247,648 $227,077 $207,779
Non-interest income 103,072 111,291 119,531
------- ------- -------
Total revenue $350,720 $338,368 $327,310
Provision for loan and lease
losses 171,352 206,762 163,601
Non-interest expenses 109,550 127,583 177,759
------- ------- -------
Income (loss) before taxes 69,818 4,023 (14,050)
Income taxes (benefit) 20,931 2,047 (3,125)
------ ----- ------
Net income (loss) $48,887. $1,976 $(10,925)
======== ====== ========
Selected Metrics
Period end loans held for
investment $8,223,835 $8,477,236 $8,720,642
Average loans held for
investment $8,299,895 $8,609,235 $9,440,972
Loans held for investment
yield 15.19% 13.81% 12.84%
Revenue margin 16.90% 15.72% 13.87%
Net charge-off rate 9.52% 9.19% 5.84%
30+ day performing
delinquency rate 6.55% 6.63% 5.51%
Purchase Volume (3) $2,272,819 $2,221,296 $2,346,969
CAPITAL ONE FINANCIAL CORPORATION (COF)
COMMERCIAL BANKING SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR
CONTINUING OPERATIONS
MANAGED BASIS (1) (9)
2009 2009 2008
(in thousands) Q4 Q3 (10) Q4
-------------- --- ------- ---
Commercial Banking:
-------------------
Earnings
Net interest income $318,576 $301,308 $248,913
Non-interest income 37,992 43,299 42,803
------ ------ ------
Total revenue $356,568 $344,607 $291,716
Provision for loan and lease
losses 368,493 375,095 133,154
Non-interest expenses 197,355 166,043 121,420
------- ------- -------
Income (loss) before taxes (209,280) (196,531) 37,142
Income taxes (benefit) (73,248) (68,786) 13,000
------- ------- ------
Net income (loss) $(136,032) $(127,745) $24,142
========= ========= =======
Selected Metrics
Period end loans held for
investment $29,613,050 $29,812,527 $29,541,314
Average loans held for
investment $29,867,245 $30,073,366 $29,416,025
Loans held for investment
yield 5.11% 5.06% 5.72%
Period end deposits $20,480,297 $18,617,112 $16,483,361
Average deposits $19,420,005 $17,760,860 $15,103,199
Deposit interest expense
rate 0.80% 0.75% 1.42%
Core deposit intangible
amortization $13,847 $9,664 $9,353
Net charge-off rate (5) 2.91% 1.42% 0.82%
Non-performing loans as a
percentage of loans held
for investment (5) 2.37% 2.65% 1.31%
Non-performing asset rate
(5) 2.52% 2.84% 1.41%
CAPITAL ONE FINANCIAL CORPORATION (COF)
CONSUMER BANKING SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR
CONTINUING OPERATIONS
MANAGED BASIS (1) (9)
2009 2009 2008
(in thousands) Q4 Q3 (10) Q4
-------------- --- ------- ---
Consumer Banking:
-----------------
Earnings
Net interest income $833,369 $847,651 $759,716
Non-interest income 153,099 212,704 159,831
------- ------- -------
Total revenue $986,468 $1,060,355 $919,547
Provision for loan and lease
losses 249,309 156,052 518,572
Goodwill impairment (4) - - 810,876
Non-interest expenses 749,021 680,970 629,257
------- ------- -------
Income (loss) before taxes (11,862) 223,333 (1,039,158)
Income taxes (benefit) (4,152) 78,166 (86,457)
------ ------ -------
Net income (loss) $(7,710) $145,167 $(952,701)
======= ======== =========
Selected Metrics
Period end loans held for
investment $38,214,493 $40,149,347 $37,196,562
Average loans held for
investment $39,114,123 $41,075,871 $37,534,915
Loans held for investment
yield 8.83% 8.89% 9.22%
Auto loan originations 1,018,125 1,512,707 1,476,136
Period end deposits $74,144,805 $72,252,596 $61,763,503
Average deposits $72,975,666 $73,284,397 $60,747,850
Deposit interest expense
rate 1.41% 1.58% 2.45%
Core deposit intangible
amortization $39,974 $45,856 $36,615
Net charge-off rate (5) 2.85% 2.69% 3.75%
Non-performing loans as a
percentage of loans held
for investment (5) (8) 1.45% 1.26% 0.93%
Non-performing asset rate
(5) (7) 1.60% 1.39% 1.19%
30+ day performing
delinquency rate (5) (7) 5.43% 5.19% 6.31%
Period end loans serviced
for others $30,283,326 $30,659,074 $22,926,037
CAPITAL ONE FINANCIAL CORPORATION (COF)
OTHER AND TOTAL SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR
CONTINUING OPERATIONS
MANAGED BASIS (1) (9)
(in thousands) 2009 2009 2008
-------------- ---- ---- ----
Q4 Q3(10) Q4
--- ------ ---
Other:
------
Earnings
Net interest income $(11,051) $38,828 $(57,233)
Non-interest income 110,829 149,802 (157,674)
------- ------- --------
Total revenue $99,778 $188,630 $(214,907)
Provision for loan and lease
losses 24,309 25,508 63,043
Restructuring expenses 32,036 26,356 52,839
Non-interest expenses 27,152 31,111 68,105
------ ------ ------
Income (loss) before taxes 16,281 105,655 (398,894)
Income taxes (benefit) (21,423) (22,242) (118,346)
------- ------- --------
Net income (loss) $37,704 $127,897 $(280,548)
======= ======== =========
Selected Metrics
Period end loans held for
investment (8) $451,697 $659,008 $533,655
Average loans held for
investment (8) $459,477 $482,905 $550,950
Period end deposits $21,183,994 $23,633,403 $30,373,925
Average deposits $22,201,746 $24,837,483 $28,242,075
Total:
------
Earnings
Net interest income $3,170,115 $3,212,037 $2,767,880
Non-interest income 1,198,926 1,372,667 1,183,180
--------- --------- ---------
Total revenue $4,369,041 $4,584,704 $3,951,060
Provision for loan and lease
losses 1,846,804 2,200,376 2,879,298
Restructuring expenses 32,036 26,356 52,839
Goodwill impairment (4) - - 810,876
Non-interest expenses 1,915,956 1,775,702 1,894,228
--------- --------- ---------
Income (loss) before taxes 574,245 582,270 (1,686,181)
Income taxes (benefit) 170,359 145,212 (289,856)
------- ------- --------
Net income (loss) $403,886 $437,058 $(1,396,325)
======== ======== ===========
Selected Metrics
Period end loans held for
investment $136,802,902 $140,989,691 $146,936,754
Average loans held for
investment $138,184,181 $143,539,902 $146,586,152
Period end deposits $115,809,096 $114,503,111 $108,620,789
Average deposits $114,597,417 $115,882,740 $104,093,124
CAPITAL ONE FINANCIAL CORPORATION (COF)
LOAN DISCLOSURES AND SEGMENT
FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS NOTES
(1) The information in this report reflects the adjustment to add back
the effect of securitization transactions qualifying as sales under
generally accepted accounting principles. See accompanying schedule -
''Reconciliation to GAAP Financial Measures".
(2) Non performing assets is comprised of non performing loans and other
real estate owned (OREO). The non performing asset rate equals non
performing assets divided by the sum of loans held for investment and
OREO.
(3) Includes all purchase transactions net of returns and excludes cash
advance transactions.
(4) In the fourth quarter of 2008 the Company recorded impairment of
goodwill in its automobile business of $810.9 million.
(5) Net charge-off rates and 30+ day performing delinquency rates
include period end loans held for investment and average loans held for
investment acquired as part of the Chevy Chase Bank, FSB (CCB)
acquisition. The period end and average loans held for investment and
metrics excluding such loans are as follows. Net charge-off dollars
were unchanged.
Q4 2009 Q3 2009(10)
------- -----------
CCB period end acquired loan portfolio (in
millions) $7,250.5 $7,885.0
CCB average acquired loan portfolio (in
millions) $7,511.9 $8,028.8
Net charge-off rate
Commercial and Multi-Family Real Estate 3.05% 1.38%
Middle Market 0.75% 0.56%
---- ----
Total Commercial Lending 2.05% 1.08%
---- ----
Total Commercial Banking 2.93% 1.43%
Mortgage 1.24% 1.24%
Retail Banking 3.20% 2.57%
---- ----
Total Consumer Banking 3.45% 3.28%
30+ day performing delinquency rate
Mortgage 2.18% 2.06%
Retail Banking 1.30% 1.33%
---- ----
Total Consumer Banking 6.56% 6.27%
Non performing asset rate
Commercial and Multi-Family Real Estate 3.34% 2.79%
Middle Market 1.13% 1.30%
---- ----
Total Commercial Lending 2.39% 2.15%
---- ----
Total Commercial Banking 2.62% 2.95%
Mortgage 3.88% 3.24%
Retail Banking 2.23% 2.09%
---- ----
Total Consumer Banking 1.93% 1.68%
Non performing loans as a percentage of loans
held for investment
Commercial Banking 2.43% 2.73%
Consumer Banking 1.75% 1.53%
(6) The Company's policy is not to reclassify credit card loans as
nonperforming loans. Credit card loans continue to accrue finance
charges and fees until charged off. The amount of finance charges
and fees considered uncollectible are suppressed and are not
recognized in income.
(7) Includes non accrual consumer auto loans 90+ days past due.
(8) Other loans held for investment includes unamortized premiums
and discounts on loans acquired in the North Fork and Hibernia
acquisitions.
(9) During the third quarter of 2009, the Company realigned its
business segment reporting structure to better reflect the manner
in which the performance of the Company's operations are
evaluated. The Company now reports the results of its business
through three operating segments: Credit Card, Commercial Banking,
and Consumer Banking. Segment and certain sub
-- Credit Card includes the Company's domestic consumer and small
business card lending, domestic national small business lending,
national closed end installment lending and the international card
lending businesses in Canada and the United Kingdom.
-- Commercial Banking includes the Company's lending, deposit
gathering and treasury management services to commercial real
estate and middle market customers. The Commercial segment also
includes the financial results of a national portfolio of small
ticket commercial real estate loans that are in run-off mode.
-- Consumer Banking includes the Company's branch based lending
and deposit gathering activities for small business customers as
well as its branch-based consumer deposit gathering and lending
activities, national deposit gathering, consumer mortgage lending
and servicing activities and national automobile lending.
The segment reorganization includes the allocation of Chevy Chase
Bank to the appropriate segments. Chevy Chase Bank's operations
are included in the Commercial Banking and Consumer Banking
segments beginning in the second quarter 2009. Chevy Chase Bank's
operations for the first quarter of 2009 remain in the Other
category. Chevy Chase Bank's operations are impacted by the
Company's analysis of the fair values and purchase price
allocation of Chevy Chase Bank's assets and liabilities which was
finalized during the fourth quarter of 2009.
(10) Results and balances have been recast to reflect the impact
of purchase accounting adjustments from the Chevy Chase Bank
acquisition as if those adjustments had been recorded at the
acquisition date as the purchase accounting has been finalized
during Q4 2009. The following highlights the changes to key line
items from what was previously disclosed.
Commercial Banking Consumer Banking Other
------------------ ---------------- -----
(in millions) Q3 2009 Q3 2009 Q3 2009
------- ------- -------
Net income increase (decrease) $2.5 $(39.4) $4.8
Loans held for investment increase
(decrease) $(49.8) $(330.4) $311.5
(11) During Q4 2009, the Company reclassified $127.5 million of
small ticket commercial real estate from loans held for investment
to loans held for sale and recognized charge-offs of $79.5 million.
SOURCE Capital One Financial Corporation