Capital One Reports Record Earnings for 2000
FALLS CHURCH, Va., Jan. 16 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced 30 percent earnings per share growth for the year 2000. Earnings were $469.6 million, or $2.24 per share, in 2000 compared with earnings of $363.1 million, or $1.72 per share, in 1999. For the fourth quarter of 2000, earnings were $128.3 million, or $.61 per share, versus earnings of $97.9 million, or $.47 per share for the comparable period in the prior year.
"Capital One has posted a strong finish for 2000, delivering on our stated goal of 30 percent earnings per share growth," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "We have targeted another year of 30 percent earnings growth and at least 20 percent return on equity in 2001."
During the fourth quarter, Capital One added 4.3 million net new accounts, bringing total accounts to 33.8 million. Managed consumer loan balances increased by a record $5.4 billion during the quarter to $29.5 billion. Total managed revenue increased during the quarter at a 40 percent annualized rate, compared with 40 percent in the third quarter of 2000 and 20 percent in the fourth quarter of 1999. The managed net charge-off ratio was 3.98 percent for the three months ended December 31, 2000. In addition, the company added $70 million to the allowance for loan losses during the fourth quarter, increasing the allowance to $527 million, or 3.49 percent of reported consumer loans, as of December 31, 2000.
"Strong financial performance and robust growth in the fourth quarter have been hallmarks of Capital One," said Nigel W. Morris, Capital One's President and Chief Operating Officer. "We are firing on all cylinders, with loan growth in all segments, 40 percent revenue growth, and more than four million net new customers added."
Cost per account declined in the fourth quarter to $78 from $83 in the third quarter of 2000 and $86 in the fourth quarter of 1999. Contributing to the strong account and managed loan growth during the quarter was an increase in marketing expense to a record $259 million compared to $233 million in the third quarter of 2000 and $202 million in the comparable period of the prior year. Online account originations and online account servicing for the full year surpassed the company's previously stated goals of one million originations and two million accounts serviced online.
The company cautioned that its current expectations for 2001 earnings and return on equity are forward-looking statements and actual results could differ materially from current expectations due to a number of factors, including: competition in the credit card industry; the actual account and balance growth achieved by the company; the company's ability to access the capital markets at attractive rates and terms to fund its operations and future growth; and general economic conditions affecting consumer income and spending, which may affect consumer bankruptcies, defaults and charge-offs. A discussion of these and other factors can be found in Capital One's annual 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 year ended December 31, 1999.
Headquartered in Falls Church, Virginia, Capital One Financial Corporation (http://www.CapitalOne.com ) is a holding company whose principal subsidiaries, Capital One Bank and Capital One, F.S.B., offer consumer lending products. Capital One's subsidiaries collectively had 33.8 million customers and $29.5 billion in managed loans outstanding as of December 31, 2000. Capital One is one of the major financial service providers on the Internet, with online account decisioning, real-time account numbering, online retail deposits and a growing number of customers serviced online. Capital One is a FORTUNE 500 company that trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 500 index.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY
2000 2000
(in millions, except per share data and as noted) Q4 Q3
Earnings (Managed Basis)
Net Interest Income $ 716.1 $ 665.1
Non-Interest Income 696.5 619.9
Total Revenue 1,412.5 1,285.0
Provision for Loan Losses 329.1 269.0
Marketing Expenses 259.5 233.2
Operating Expenses 617.1 585.8
Income Before Taxes 206.9 197.0
Tax Rate 38.0% 38.0%
Net Income $ 128.3 $ 122.1
Common Share Statistics
Basic EPS $ 0.65 $ 0.62
Diluted EPS $ 0.61 $ 0.58
Dividends Per Share $ 0.03 $ 0.03
Book Value Per Share (period end) $ 9.94 $ 9.02
Stock Price Per Share (period end) $ 65.81 $ 70.06
Total Market Capitalization (period end) $ 12,989.3 $ 13,783.1
Shares Outstanding (period end) 197.4 196.7
Shares Used to Compute Basic EPS 197.0 196.3
Shares Used to Compute Diluted EPS 210.4 210.1
Managed Loan Statistics (period avg.)
Average Loans $ 26,377 $ 23,020
Average Earning Assets $ 28,188 $ 24,749
Average Assets $ 30,234 $ 27,015
Average Equity $ 1,865 $ 1,743
Net Interest Margin 10.16% 10.75%
Risk Adjusted Margin(1) 16.32% 17.24%
Return on Average Assets (ROA) 1.70% 1.81%
Return on Average Equity (ROE) 27.51% 28.02%
Net Charge-Off Rate 3.98% 3.80%
Net Charge-Offs $ 262.3 $ 218.4
Cost Per Account (in dollars) $ 78.09 $ 82.84
Managed Loan Statistics (period end)
Reported Loans $ 15,113 $ 12,331
Securitized Loans 14,411 11,821
Total Loans $ 29,524 $ 24,152
Delinquency Rate (30+ days) 5.23% 5.32%
Number of Accounts (000's) 33,774 29,437
Total Assets $ 33,286 $ 28,185
Capital, Including Preferred Interests $ 2,061.0 $ 1,873.8
Capital to Managed Assets Ratio 6.19% 6.65%
(1) Risk adjusted margin is total revenue less net charge-offs as a
percentage of average earning assets.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY
2000 2000
(in millions, except per share data and as noted) Q2 Q1
Earnings (Managed Basis)
Net Interest Income $ 614.4 $ 618.9
Non-Interest Income 554.4 489.3
Total Revenue 1,168.8 1,108.2
Provision for Loan Losses 245.0 226.1
Marketing Expenses 211.6 201.9
Operating Expenses 530.7 508.0
Income Before Taxes 181.5 172.1
Tax Rate 38.0% 38.0%
Net Income $ 112.5 $ 106.7
Common Share Statistics
Basic EPS $ 0.57 $ 0.54
Diluted EPS $ 0.54 $ 0.51
Dividends Per Share $ 0.03 $ 0.03
Book Value Per Share (period end) $ 8.39 $ 7.93
Stock Price Per Share (period end) $ 44.63 $ 47.94
Total Market Capitalization (period end) $ 8,747.4 $ 9,376.5
Shares Outstanding (period end) 196.0 195.6
Shares Used to Compute Basic EPS 196.0 196.6
Shares Used to Compute Diluted EPS 208.6 208.7
Managed Loan Statistics (period avg.)
Average Loans $ 20,915 $ 20,181
Average Earning Assets $ 22,581 $ 22,038
Average Assets $ 24,567 $ 23,497
Average Equity $ 1,626 $ 1,567
Net Interest Margin 10.88% 11.23%
Risk Adjusted Margin(1) 17.03% 16.57%
Return on Average Assets (ROA) 1.83% 1.82%
Return on Average Equity (ROE) 27.68% 27.24%
Net Charge-Off Rate 3.97% 3.87%
Net Charge-Offs $ 207.6 $ 195.3
Cost Per Account (in dollars) $ 80.97 $ 82.93
Managed Loan Statistics (period end)
Reported Loans $ 11,383 $ 9,449
Securitized Loans 10,500 10,850
Total Loans $ 21,883 $ 20,299
Delinquency Rate (30+ days) 5.35% 5.26%
Number of Accounts (000's) 27,133 25,302
Total Assets $ 25,610 $ 23,361
Capital, Including Preferred Interests $ 1,743.9 $ 1,649.3
Capital to Managed Assets Ratio 6.81% 7.06%
(1) Risk adjusted margin is total revenue less net charge-offs as a
percentage of average earning assets.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY
1999
(in millions, except per share data and as noted) Q4
Earnings (Managed Basis)
Net Interest Income $ 574.8
Non-Interest Income 473.6
Total Revenue 1,048.4
Provision for Loan Losses 218.0
Marketing Expenses 202.4
Operating Expenses 478.8
Income Before Taxes 149.2
Tax Rate 34.4%
Net Income $ 97.9
Common Share Statistics
Basic EPS $ 0.50
Diluted EPS $ 0.47
Dividends Per Share $ 0.03
Book Value Per Share (period end) $ 7.69
Stock Price Per Share (period end) $ 48.19
Total Market Capitalization (period end) $ 9,495.2
Shares Outstanding (period end) 197.0
Shares Used to Compute Basic EPS 197.3
Shares Used to Compute Diluted EPS 210.3
Managed Loan Statistics (period avg.)
Average Loans $ 18,974
Average Earning Assets $ 21,323
Average Assets $ 22,714
Average Equity $ 1,493
Net Interest Margin 10.78%
Risk Adjusted Margin(1) 16.24%
Return on Average Assets (ROA) 1.72%
Return on Average Equity (ROE) 26.22%
Net Charge-Off Rate 3.86%
Net Charge-Offs $ 182.9
Cost Per Account (in dollars) $ 85.98
Managed Loan Statistics (period end)
Reported Loans $ 9,914
Securitized Loans 10,323
Total Loans $ 20,237
Delinquency Rate (30+ days) 5.23%
Number of Accounts (000's) 23,705
Total Assets $ 23,638
Capital, Including Preferred Interests $ 1,613.7
Capital to Managed Assets Ratio 6.83%
(1) Risk adjusted margin is total revenue less net charge-offs as a
percentage of average earning assets.
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Balance Sheets
(in thousands)(unaudited)
December 31
2000
Assets:
Cash and due from banks $ 74,493
Federal funds sold and resale agreements 60,600
Interest-bearing deposits at other banks 101,614
Cash and cash equivalents 236,707
Securities available for sale 1,696,815
Consumer loans 15,112,712
Less: Allowance for loan losses (527,000)
Net loans 14,585,712
Premises and equipment, net 664,461
Interest receivable 82,675
Accounts receivable from securitizations 1,143,902
Other 479,069
Total assets $ 18,889,341
Liabilities:
Interest-bearing deposits $ 8,379,025
Other borrowings 2,925,938
Senior notes 4,050,597
Interest payable 122,658
Other 1,448,609
Total liabilities 16,926,827
Stockholders' Equity:
Common stock 1,997
Paid-in capital, net 575,179
Retained earnings and cumulative
other comprehensive income 1,474,024
Less: Treasury stock, at cost (88,686)
Total stockholders' equity 1,962,514
Total liabilities and stockholders' equity $ 18,889,341
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Balance Sheets
(in thousands)(unaudited)
September 30
2000
Assets:
Cash and due from banks $ 81,403
Federal funds sold and resale agreements 12,688
Interest-bearing deposits at other banks 128,377
Cash and cash equivalents 222,468
Securities available for sale 1,652,330
Consumer loans 12,331,088
Less: Allowance for loan losses (457,000)
Net loans 11,874,088
Premises and equipment, net 560,974
Interest receivable 93,817
Accounts receivable from securitizations 1,403,377
Other 571,771
Total assets $ 16,378,825
Liabilities:
Interest-bearing deposits $ 6,323,924
Other borrowings 2,820,533
Senior notes 4,119,101
Interest payable 109,842
Other 1,230,037
Total liabilities 14,603,437
Stockholders' Equity:
Common stock 1,997
Paid-in capital, net 559,595
Retained earnings and cumulative
other comprehensive income 1,322,744
Less: Treasury stock, at cost (108,948)
Total stockholders' equity 1,775,388
Total liabilities and stockholders' equity $ 16,378,825
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Balance Sheets
(in thousands)(unaudited)
December 31
1999
Assets:
Cash and due from banks $ 134,065
Federal funds sold and resale agreements
Interest-bearing deposits at other banks 112,432
Cash and cash equivalents 246,497
Securities available for sale 1,856,421
Consumer loans 9,913,549
Less: Allowance for loan losses (342,000)
Net loans 9,571,549
Premises and equipment, net 470,732
Interest receivable 64,637
Accounts receivable from securitizations 661,922
Other 464,685
Total assets $ 13,336,443
Liabilities:
Interest-bearing deposits $ 3,783,809
Other borrowings 2,780,466
Senior notes 4,180,548
Interest payable 116,405
Other 959,608
Total liabilities 11,820,836
Stockholders' Equity:
Common stock 1,997
Paid-in capital, net 613,590
Retained earnings and cumulative
other comprehensive income 991,034
Less: Treasury stock, at cost (91,014)
Total stockholders' equity 1,515,607
Total liabilities and stockholders' equity $ 13,336,443
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income
(in thousands, except per share data)(unaudited)
Three Months Ended
December 31 September 30
2000 2000
Interest Income:
Consumer loans, including fees $ 679,079 $ 606,872
Securities available for sale 25,608 23,367
Other 1,548 1,474
Total interest income 706,235 631,713
Interest Expense:
Deposits 118,072 90,197
Other borrowings 57,699 55,967
Senior notes 71,904 72,679
Total interest expense 247,675 218,843
Net interest income 458,560 412,870
Provision for loan losses 247,226 193,409
Net interest income after provision
for loan losses 211,334 219,461
Non-Interest Income:
Servicing and securitizations 291,634 307,343
Service charges and other fees 504,239 424,087
Interchange 76,207 65,039
Total non-interest income 872,080 796,469
Non-Interest Expense:
Salaries and associate benefits 287,742 264,171
Marketing 259,461 233,188
Communications and data processing 74,436 78,064
Supplies and equipment 76,171 66,325
Occupancy 29,404 30,721
Other 149,302 146,488
Total non-interest expense 876,516 818,957
Income before income taxes 206,898 196,973
Income taxes 78,621 74,850
Net income $ 128,277 $ 122,123
Basic earnings per share $ 0.65 $ 0.62
Diluted earnings per share $ 0.61 $ 0.58
Dividends paid per share $ 0.03 $ 0.03
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income
(in thousands, except per share data)(unaudited)
Three Months Ended
December 31
1999
Interest Income:
Consumer loans, including fees $ 417,384
Securities available for sale 31,437
Other 1,783
Total interest income 450,604
Interest Expense:
Deposits 49,409
Other borrowings 32,820
Senior notes 72,569
Total interest expense 154,798
Net interest income 295,806
Provision for loan losses 120,000
Net interest income after provision
for loan losses 175,806
Non-Interest Income:
Servicing and securitizations 310,321
Service charges and other fees 297,717
Interchange 46,585
Total non-interest income 654,623
Non-Interest Expense:
Salaries and associate benefits 207,457
Marketing 202,405
Communications and data processing 75,592
Supplies and equipment 54,580
Occupancy 22,863
Other 118,288
Total non-interest expense 681,185
Income before income taxes 149,244
Income taxes 51,372
Net income $ 97,872
Basic earnings per share $ 0.50
Diluted earnings per share $ 0.47
Dividends paid per share $ 0.03
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income
(in thousands, except per share data)(unaudited)
Year Ended
December 31 December 31
2000 1999
Interest Income:
Consumer loans, including fees $2,286,774 $1,482,371
Securities available for sale 96,554 105,438
Other 6,574 5,675
Total interest income 2,389,902 1,593,484
Interest Expense:
Deposits 324,008 137,792
Other borrowings 202,034 100,392
Senior notes 274,975 302,698
Total interest expense 801,017 540,882
Net interest income 1,588,885 1,052,602
Provision for loan losses 718,170 382,948
Net interest income after provision
for loan losses 870,715 669,654
Non-Interest Income:
Servicing and securitizations 1,152,375 1,187,098
Service charges and other fees 1,644,264 1,040,944
Interchange 237,777 144,317
Total non-interest income 3,034,416 2,372,359
Non-Interest Expense:
Salaries and associate benefits 1,023,367 780,160
Marketing 906,147 731,898
Communications and data processing 296,255 264,897
Supplies and equipment 252,937 181,663
Occupancy 112,667 72,275
Other 556,284 434,103
Total non-interest expense 3,147,657 2,464,996
Income before income taxes 757,474 577,017
Income taxes 287,840 213,926
Net income $ 469,634 $ 363,091
Basic earnings per share $ 2.39 $ 1.84
Diluted earnings per share $ 2.24 $ 1.72
Dividends paid per share $ 0.11 $ 0.11
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Managed (1) Quarter Ended 12/31/00
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $ 26,377,427 $1,146,056 17.38%
Securities available for sale 1,688,092 25,608 6.07
Other 122,192 1,548 5.07
Total earning assets $ 28,187,711 $1,173,212 16.65%
Interest-bearing liabilities:
Deposits $ 7,155,771 $ 118,072 6.60%
Other borrowings 3,290,499 57,699 7.01
Senior notes 4,084,761 71,904 7.04
Securitization liability 12,274,193 209,481 6.83
Total interest-bearing liabilities $ 26,805,224 $ 457,156 6.82%
Net interest spread 9.83%
Interest income to average earning assets 16.65%
Interest expense to average earning assets 6.49
Net interest margin 10.16%
(1) Information in this table reflects the adjustment to add back the
effect of securitized loans.
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Managed (1) Quarter Ended 9/30/00
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $ 23,020,158 $1,039,473 18.06%
Securities available for sale 1,557,088 23,367 6.00
Other 171,881 1,474 3.43
Total earning assets $ 24,749,127 $1,064,314 17.20%
Interest-bearing liabilities:
Deposits $ 5,787,748 $ 90,197 6.23%
Other borrowings 3,084,407 55,967 7.26
Senior notes 4,139,665 72,679 7.02
Securitization liability 10,908,397 180,412 6.62
Total interest-bearing liabilities $ 23,920,217 $ 399,255 6.68%
Net interest spread 10.52%
Interest income to average earning assets 17.20%
Interest expense to average earning assets 6.45
Net interest margin 10.75%
(1) Information in this table reflects the adjustment to add back the
effect of securitized loans.
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Managed (1) Quarter Ended 12/31/99
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $ 18,974,409 $ 848,176 17.88%
Securities available for sale 2,175,963 31,437 5.78
Other 172,370 2,557 5.93
Total earning assets $ 21,322,742 $ 882,170 16.55%
Interest-bearing liabilities:
Deposits $ 3,648,919 $ 49,409 5.42%
Other borrowings 2,037,805 32,820 6.44
Senior notes 4,258,661 72,569 6.82
Securitization liability 10,329,929 152,572 5.91
Total interest-bearing liabilities $ 20,275,314 $ 307,370 6.06%
Net interest spread 10.49%
Interest income to average earning assets 16.55%
Interest expense to average earning assets 5.77
Net interest margin 10.78%
(1) Information in this table reflects the adjustment to add back the
effect of securitized loans. SOURCE Capital One Financial Corporation
CONTACT: Paul Paquin, V.P., Investor Relations, 703-205-1039, or Tatiana Stead, Media Relations, 703-205-1070, both of Capital One Financial Corporation/