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Capital One Reports Record Earnings for 2000

January 16, 2001 at 4:36 PM EST

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/