Capital One Reports Record First Quarter Earnings Per Share
MCLEAN, Va., Apr 21, 2003 /PRNewswire-FirstCall via COMTEX/ -- Capital One Financial Corporation (NYSE: COF) today announced record earnings for the first quarter of 2003, driven primarily by improving credit quality in the company's managed loan portfolio.
Earnings for the first quarter of 2003 were $309.1 million, or $1.35 per share (fully diluted), compared with earnings of $188.0 million, or $0.83 per share, for the first quarter of 2002. Earnings in the fourth quarter of 2002 were $239.7 million, or $1.05 per share.
"I'm pleased that we have seen the peak in the charge-off rate and I'm confident we will achieve our earnings target of at least $4.55 for the year," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "The charge-off rate came in at the low end of our indicated range in the first quarter of 2003. We expect somewhat lower charge-offs in the second quarter and lower still in the second half of the year, ending the year in the low six percent range."
The managed charge-off rate increased to 6.47 percent in the first quarter from 6.21 percent in the previous quarter. The managed delinquency rate declined to 4.97 percent from 5.60 percent at the end of the previous quarter. The improving outlook for charge-offs led the company to lower its Allowance for Loan Losses by $85 million to $1.635 billion, in the first quarter.
Capital One's managed revenue margin declined to 15.70 percent in the first quarter of 2003 from 16.11 percent in the previous quarter. The managed risk-adjusted margin declined to 9.77 percent from 10.41 percent in the previous quarter. The risk-adjusted margin is expected to remain around ten percent over the next few quarters, as the charge-off rate declines.
The company's managed loan balances declined by $533 million to $59.2 billion at the end of the first quarter. The number of its accounts declined by 946 thousand to 46.4 million at the end of the first quarter.
"Seasonally, we would expect to experience little or no growth in loan balances in the first quarter," said Nigel W. Morris, Capital One's President and Chief Operating Officer. "For the year we're now looking for 15 to 20 percent growth in managed loans and, because of our shift up-market, we expect little to no growth in accounts."
Marketing expense for the first quarter of 2003 increased $30.9 million to $241.7 million from $210.8 million in the fourth quarter of 2002. Marketing expenses were $353.5 million in the comparable period of the prior year. Other non-interest expenses (excluding marketing) for the first quarter of 2003 were $931.2 million versus $910.2 million for the fourth quarter of 2002 and $806.4 million in the comparable period of the prior year. Annualized operating cost per account increased to $79 for the first quarter of 2003 from $76 in the prior quarter.
The company generates earnings from its managed loan portfolio which includes both the on-balance sheet loans and off-balance sheet loans for which the company has retained significant risk and rewards. For this reason the company believes the managed financial measures to be useful to stakeholders. In compliance with newly adopted 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. Please see the schedule entitled "Reconciliation to GAAP Financial Measures" attached to this release for more information.
The company cautioned that its current expectations for 2003 earnings, risk-adjusted margin, charge-off rates, and future growth 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, 2002.
Headquartered in McLean, Virginia, Capital One Financial Corporation (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 46.4 million managed accounts and $59.2 billion in managed loans outstanding as of March 31, 2003. Capital One, a Fortune 500 company, is one of the largest providers of MasterCard and Visa credit cards in the world. Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 500 index.
Note: This release, financial information, including non-GAAP financial information reconciliation, and a live Webcast of today's 5:00pm (EDT) analyst conference call are accessible on the Internet on Capital One's home page (http://www.capitalone.com). Choose "About Capital One" to access the Investor Center to view and download the earnings press release and other financial information.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY REPORTED BASIS
2003 2002 2002
(in millions, except per share data
and as noted) Q1 Q4 Q3
Earnings (Reported Basis)
Net Interest Income $734.8 $731.0 $722.4
Non-Interest Income 1,304.6 1,320.3 1,520.2
Total Revenue(1) 2,039.4 2,051.4 2,242.6
Provision for Loan Losses 375.9 543.8 674.1
Marketing Expenses 241.7 210.8 185.8
Operating Expenses 931.2 910.2 965.2 (3)
Income Before Taxes 490.6 386.6 417.5
Tax Rate 37.0 % 38.0 % 38.0 %
Net Income $309.1 $239.7 $258.8
Common Share Statistics
Basic EPS $1.39 $1.08 $1.17
Diluted EPS $1.35 $1.05 $1.13
Dividends Per Share $0.03 $0.03 $0.03
Book Value Per Share (period end) $21.78 $20.44 $19.55
Stock Price Per Share (period end) $30.01 $29.72 $34.92
Total Market Capitalization (period
end) $6,791.8 $6,722.5 $7,744.2
Shares Outstanding (period end) 226.3 226.2 221.8
Shares Used to Compute Basic EPS 223.0 221.8 220.6
Shares Used to Compute Diluted EPS 228.4 228.2 228.4
Reported Balance Sheet Statistics
(period avg.)
Average Loans $27,824 $27,766 $26,566
Average Earning Assets $34,144 $34,075 $32,449
Average Assets $38,318 $37,208 $35,470
Average Equity $4,823 $4,568 $4,418
Net Interest Margin 8.61 % 8.58 % 8.91 %
Revenue Margin 23.89 % 24.08 % 27.64 %
Risk Adjusted Margin (2) 18.49 % 19.18 % 23.90 %
Return on Average Assets (ROA) 3.23 % 2.58 % 2.92 %
Return on Average Equity (ROE) 25.64 % 20.99 % 23.44 %
Net Charge-Off Rate 6.63 % 6.02 % 4.58 %
Net Charge-Offs $461.5 $417.7 $303.9
Reported Balance Sheet Statistics
(period end)
Loans $28,115 $27,854 $28,104
Delinquency Rate (30+ days) 5.72 % 6.51 % 6.23 %
Total Assets $37,911 $37,382 $36,910
Allowance as a % of reported loans 5.82 % 6.18 % 5.68 %
Capital (4) $5,749.0 $5,440.4 $5,149.6
Capital to Assets Ratio 15.16 % 14.55 % 13.95 %
Capital plus Allowance to Assets Ratio 19.48 % 19.15 % 18.27 %
(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: Q1 2003 - $519.7 million, Q4 2002 - $675.7 million, Q3 2002 - $489.6 million, Q2 2002 - $574.4 million, and Q1 2002 - $508.9 million.
(2) Risk adjusted margin is total revenue less net charge-offs as a percentage of average earning assets.
(3) Includes $110.0 million of one-time charges in Q3 2002.
(4) Includes preferred interests and mandatory convertible securities.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY REPORTED BASIS
2002 2002
(in millions, except per share data
and as noted) Q2 Q1
Earnings (Reported Basis)
Net Interest Income $654.4 $611.2
Non-Interest Income 1,384.8 1,241.5
Total Revenue(1) 2,039.2 1,852.8
Provision for Loan Losses 541.8 389.6
Marketing Expenses 320.4 353.5
Operating Expenses 833.2 806.4
Income Before Taxes 343.7 303.3
Tax Rate 38.0 % 38.0 %
Net Income $213.1 $188.0
Common Share Statistics
Basic EPS $0.97 $0.86
Diluted EPS $0.92 $0.83
Dividends Per Share $0.03 $0.03
Book Value Per Share (period end) $18.13 $16.69
Stock Price Per Share (period end) $61.05 $63.85
Total Market Capitalization (period
end) $13,512.9 $14,079.3
Shares Outstanding (period end) 221.3 220.5
Shares Used to Compute Basic EPS 220.0 217.5
Shares Used to Compute Diluted EPS 231.7 226.6
Reported Balance Sheet Statistics
(period avg.)
Average Loans $25,353 $22,405
Average Earning Assets $30,678 $27,300
Average Assets $34,040 $29,996
Average Equity $4,021 $3,572
Net Interest Margin 8.53 % 8.96 %
Revenue Margin 26.59 % 27.15 %
Risk Adjusted Margin (2) 22.69 % 23.65 %
Return on Average Assets (ROA) 2.50 % 2.51 %
Return on Average Equity (ROE) 21.20 % 21.06 %
Net Charge-Off Rate 4.72 % 4.26 %
Net Charge-Offs $299.4 $238.7
Reported Balance Sheet Statistics
(period end)
Loans $24,965 $24,428
Delinquency Rate (30+ days) 5.10 % 4.44 %
Total Assets $33,834 $31,265
Allowance as a % of reported loans 4.95 % 4.05 %
Capital (4) $4,823.6 $3,778.4
Capital to Assets Ratio 14.26 % 12.09 %
Capital plus Allowance to Assets
Ratio 17.91 % 15.25 %
(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: Q1 2003 - $519.7 million, Q4 2002 - $675.7 million, Q3 2002 - $489.6 million, Q2 2002 - $574.4 million, and Q1 2002 - $508.9 million.
(2) Risk adjusted margin is total revenue less net charge-offs as a percentage of average earning assets.
(3) Includes $110.0 million of one-time charges in Q3 2002.
(4) Includes preferred interests and mandatory convertible securities.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUPPLEMENT REPORTED BASIS
2003 2002 2002
(in millions, except per share data
and as noted) Q1 Q4 Q3
Revenue & Expense Statistics (Reported)
Net interest income growth
(annualized) 2 % 5 % 42 %
Non interest income growth
(annualized) (5)% (53)% 39 %
Revenue growth (annualized) (2)% (34)% 40 %
Revenue margin (average loans) 29.32 % 29.55 % 33.77 %
Risk adjusted margin (average loans) 22.68 % 23.53 % 29.19 %
Ops cost as a % of revenues 45.66 % 44.37 % 43.04 %
Ops cost as a % of average loans
(annualized) 13.39 % 13.11 % 14.53 %
Per Account Statistics (Reported)
Net interest income per account
(annualized) $62.68 $61.22 $59.72
Non interest income per account
(annualized) $111.28 $110.57 $125.67
Revenue per account (annualized) $173.95 $171.78 $185.39
Growth Statistics (Reported)
Net new loans $261 $(250) $3,139
% loan growth Q over Q (annualized) 4 % (4)% 50 %
% loan growth Y over Y 15 % 33 % 61 %
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUPPLEMENT REPORTED BASIS
2002 2002
(in millions, except per share data
and as noted) Q2 Q1
Revenue & Expense Statistics (Reported)
Net interest income growth
(annualized) 28 % 78 %
Non interest income growth
(annualized) 46 % 18 %
Revenue growth (annualized) 40 % 36 %
Revenue margin (average loans) 32.17 % 33.08 %
Risk adjusted margin (average loans) 27.45 % 28.82 %
Ops cost as a % of revenues 40.86 % 43.52 %
Ops cost as a % of average loans
(annualized) 13.15 % 14.40 %
Per Account Statistics (Reported)
Net interest income per account
(annualized) $54.97 $54.07
Non interest income per account
(annualized) $116.33 $109.82
Revenue per account (annualized) $171.30 $163.89
Growth Statistics (Reported)
Net new loans $537 $3,507
% loan growth Q over Q (annualized) 9 % 67 %
% loan growth Y over Y 53 % 57 %
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY MANAGED BASIS(4)
2003 2002 2002
(in millions, except per share data
and as noted) Q1 Q4 Q3
Earnings (Managed Basis)
Net Interest Income $1,508.0 $1,442.2 $1,435.3
Non-Interest Income 1,027.9 1,086.9 1,189.1
Total Revenue(1) 2,535.9 2,529.1 2,624.4
Provision for Loan Losses 872.3 1,021.5 1,055.9
Marketing Expenses 241.7 210.8 185.8
Operating Expenses 931.2 910.2 965.2 (3)
Income Before Taxes 490.6 386.6 417.5
Tax Rate 37.0 % 38.0 % 38.0 %
Net Income $309.1 $239.7 $258.8
Managed Balance Sheet Statistics
(period avg.)
Average Loans $59,250 $57,669 $55,350
Average Earning Assets $64,602 $62,789 $60,016
Average Assets $69,670 $67,037 $64,193
Net Interest Margin 9.34 % 9.19 % 9.57 %
Revenue Margin 15.70 % 16.11 % 17.49 %
Risk Adjusted Margin (2) 9.77 % 10.41 % 12.92 %
Return on Average Assets (ROA) 1.77 % 1.43 % 1.61 %
Net Charge-Off Rate 6.47 % 6.21 % 4.96 %
Net Charge-Offs $957.9 $895.5 $685.7
Cost Per Account (in dollars) $79.43 $76.22 $79.79
Managed Balance Sheet Statistics
(period end)
Loans $59,214 $59,747 $56,883
Delinquency Rate (30+ days) 4.97 % 5.60 % 5.36 %
Number of Accounts (000's) 46,423 47,369 48,163
Total Assets $68,927 $69,205 $65,614
Capital to Assets Ratio 8.34 % 7.86 % 7.85 %
Capital plus Allowance to Assets Ratio 10.71 % 10.35 % 10.28 %
(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: Q1 2003 - $519.7 million, Q4 2002 - $675.7 million, Q3 2002 - $489.6 million, Q2 2002 - $574.4 million, and Q1 2002 - $508.9 million.
(2) Risk adjusted margin is total revenue less net charge-offs as a percentage of average earning assets.
(3) Includes $110.0 million of one-time charges in Q3 2002.
(4) The information in this statistical summary reflects the adjustment to add back the effect of securitized loans. See accompanying schedule - "Reconciliation to GAAP Financial Measures".
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY MANAGED BASIS(4)
2002 2002
(in millions, except per share data
and as noted) Q2 Q1
Earnings (Managed Basis)
Net Interest Income $1,234.3 $1,172.5
Non-Interest Income 1,145.0 990.2
Total Revenue(1) 2,379.3 2,162.7
Provision for Loan Losses 881.9 699.5
Marketing Expenses 320.4 353.5
Operating Expenses 833.2 806.4
Income Before Taxes 343.7 303.3
Tax Rate 38.0 % 38.0 %
Net Income $213.1 $188.0
Managed Balance Sheet Statistics
(period avg.)
Average Loans $51,343 $46,688
Average Earning Assets $55,559 $50,538
Average Assets $59,989 $54,258
Net Interest Margin 8.89 % 9.28 %
Revenue Margin 17.13 % 17.12 %
Risk Adjusted Margin (2) 12.53 % 12.78 %
Return on Average Assets (ROA) 1.42 % 1.39 %
Net Charge-Off Rate 4.98 % 4.70 %
Net Charge-Offs $639.4 $548.6
Cost Per Account (in dollars) $69.99 $71.33
Managed Balance Sheet Statistics
(period end)
Loans $53,208 $48,564
Delinquency Rate (30+ days) 4.54 % 4.80 %
Number of Accounts (000's) 48,612 46,623
Total Assets $62,022 $55,381
Capital to Assets Ratio 7.78 % 6.82 %
Capital plus Allowance to Assets Ratio 9.77 % 8.61 %
(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: Q1 2003 - $519.7 million, Q4 2002 - $675.7 million, Q3 2002 - $489.6 million, Q2 2002 - $574.4 million, and Q1 2002 - $508.9 million.
(2) Risk adjusted margin is total revenue less net charge-offs as a percentage of average earning assets.
(3) Includes $110.0 million of one-time charges in Q3 2002.
(4) The information in this statistical summary reflects the adjustment to add back the effect of securitized loans. See accompanying schedule - "Reconciliation to GAAP Financial Measures".
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUPPLEMENT MANAGED BASIS (1)
2003 2002 2002
(in millions, except per share data
and as noted) Q1 Q4 Q3
Revenue & Expense Statistics (Managed)
Net interest income growth (annualized) 18 % 2 % 65 %
Non interest income growth (annualized) (22)% (34)% 15 %
Revenue growth (annualized) 1 % (15)% 41 %
Revenue margin (average loans) 17.12 % 17.54 % 18.97 %
Risk adjusted margin (average loans) 10.65 % 11.33 % 14.01 %
Ops cost as a % of revenues 36.72 % 35.99 % 36.78 %
Ops cost as a % of average loans
(annualized) 6.29 % 6.31 % 6.98 %
Per Account Statistics (Managed)
Net interest income per account
(annualized) $128.62 $120.77 $118.65
Non interest income per account
(annualized) $87.68 $91.02 $98.30
Revenue per account (annualized) $216.30 $211.79 $216.95
Net income per account (annualized) $26.37 $20.07 $21.39
Growth Statistics (Managed)
Average accounts (000's) 46,896 47,766 48,388
Net new accounts per quarter (000's) (946) (794) (449)
% account growth Q over Q (annualized) (8)% (7)% (4)%
% account growth Y over Y (0)% 8 % 20 %
Net new loans $(533) $2,864 $3,675
% loan growth Q over Q (annualized) (4)% 20 % 28 %
% loan growth Y over Y 22 % 32 % 48 %
Balance Sheet Measures
% off-balance sheet securitizations 53 % 53 % 51 %
% at introductory rate 9 % 10 % 11 %
Segment Statistics
Consumer Lending:
Loans receivable $45,963 $47,290 $45,021
Net income (loss) $309.2 $183.1 $291.3
Net charge-off rate 7.12 % 6.45 % 5.16 %
Delinquency rate 4.99 % 5.54 % 5.41 %
Auto Finance:
Loans receivable $7,742 $6,992 $6,496
Net income (loss) $(6.5) $8.8 $(3.4)
Net charge-off rate 4.91 % 4.83 % 3.97 %
Delinquency rate 5.37 % 7.15 % 6.30 %
International:
Loans receivable $5,390 $5,331 $5,255
Net income (loss) $18.1 $(6.2) $(1.1)
Net charge-off rate 4.28 % 3.92 % 3.61 %
Delinquency rate 4.22 % 4.18 % 3.78 %
(1) The information in this statistical summary supplement reflects the adjustment to add back the effect of securitized loans. See accompanying schedule - "Reconciliation to GAAP Financial Measures".
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUPPLEMENT MANAGED BASIS (1)
2002 2002
(in millions, except per share data
and as noted) Q2 Q1
Revenue & Expense Statistics (Managed)
Net interest income growth (annualized) 21 % 59 %
Non interest income growth (annualized) 63 % 11 %
Revenue growth (annualized) 40 % 36 %
Revenue margin (average loans) 18.54 % 18.53 %
Risk adjusted margin (average loans) 13.55 % 13.83 %
Ops cost as a % of revenues 35.02 % 37.28 %
Ops cost as a % of average loans
(annualized) 6.49 % 6.91 %
Per Account Statistics (Managed)
Net interest income per account
(annualized) $103.69 $103.72
Non interest income per account
(annualized) $96.18 $87.59
Revenue per account (annualized) $199.87 $191.31
Net income per account (annualized) $17.90 $16.63
Growth Statistics (Managed)
Average accounts (000's) 47,618 45,219
Net new accounts per quarter (000's) 1,989 2,808
% account growth Q over Q (annualized) 17 % 26 %
% account growth Y over Y 27 % 28 %
Net new loans $4,644 $3,300
% loan growth Q over Q (annualized) 38 % 29 %
% loan growth Y over Y 51 % 54 %
Balance Sheet Measures
% off-balance sheet securitizations 53 % 50 %
% at introductory rate 12 % 13 %
Segment Statistics
Consumer Lending:
Loans receivable $42,819 $39,252
Net income (loss) $296.6 $272.0
Net charge-off rate 5.46 % 5.00 %
Delinquency rate 4.51 % 4.98 %
Auto Finance:
Loans receivable $5,354 $5,215
Net income (loss) $14.9 $(10.0)
Net charge-off rate 2.84 % 3.38 %
Delinquency rate 5.38 % 3.97 %
International:
Loans receivable $4,985 $4,233
Net income (loss) $(19.8) $(8.5)
Net charge-off rate 3.91 % 3.58 %
Delinquency rate 3.78 % 4.08 %
(1) The information in this statistical summary supplement reflects the adjustment to add back the effect of securitized loans. See accompanying schedule - "Reconciliation to GAAP Financial Measures".
CAPITAL ONE FINANCIAL CORPORATION
Reconciliation to GAAP Financial Measures
For the Three Months Ended March 31, 2003
(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, interest income, interchange, fees and recoveries generated from the securitized loan portfolio net of charge-offs in excess of the interest paid to investors of asset-backed securitizations are recognized as non-interest income on the "reported" income statement.
The Company's "managed" consolidated financial statements add back the 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 for which the Company has retained significant risk and rewards. The Company's "managed" income statement takes the components of the non-interest income generated from the securitized portfolio and distributes the revenue to appropriate income statement line items from which it originated. For this reason the Company believes the "managed" consolidated financial statements and related managed metrics to be useful to stakeholders.
Total Securitization Total
Reported Adjustments Managed
Income Statement Measures
Net interest income $734,804 $773,147 $1,507,951
Non-interest income $1,304,603 $(276,670) $1,027,933
Total revenue $2,039,407 $496,477 $2,535,884
Provision for loan losses $375,851 $496,477 $872,328
Balance Sheet Measures
Consumer loans $28,115,061 $31,098,638 $59,213,699
Total assets $37,910,967 $31,016,516 $68,927,483
Average consumer loans $27,824,350 $31,425,348 $59,249,698
Average earning assets $34,144,482 $30,457,136 $64,601,618
Average total assets $38,318,125 $31,351,435 $69,669,560
Delinquencies $1,608,812 $1,332,695 $2,941,507
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Balance Sheets
(in thousands)(unaudited)
March 31 December 31 March 31
2003 2002 2002
Assets:
Cash and due from banks $328,791 $277,509 $350,738
Federal funds sold and resale
agreements 864,036 373,828 13,260
Interest-bearing deposits at other
banks 247,560 267,441 105,063
Cash and cash equivalents 1,440,387 918,778 469,061
Securities available for sale 4,817,322 4,423,677 3,175,366
Consumer loans 28,115,061 27,853,652 24,427,642
Less: Allowance for loan losses (1,635,000) (1,720,000) (990,000)
Net loans 26,480,061 26,133,652 23,437,642
Accounts receivable from
securitizations 2,897,972 3,096,827 2,218,472
Premises and equipment, net 769,112 770,326 789,572
Interest receivable 208,998 217,512 148,547
Other 1,297,115 1,821,608 1,026,051
Total assets $37,910,967 $37,382,380 $31,264,711
Liabilities:
Interest-bearing deposits $18,489,388 $17,325,965 $14,633,871
Senior notes 5,116,591 5,565,615 5,422,896
Other borrowings 6,576,876 6,365,075 4,879,427
Interest payable 194,629 236,081 173,659
Other 2,604,818 3,266,473 2,475,226
Total liabilities 32,982,302 32,759,209 27,585,079
Stockholders' Equity:
Common stock 2,275 2,271 2,214
Paid-in capital, net 1,730,883 1,704,470 1,532,034
Retained earnings and cumulative
other comprehensive income 3,244,673 2,951,382 2,180,336
Less: Treasury stock, at cost (49,166) (34,952) (34,952)
Total stockholders' equity 4,928,665 4,623,171 3,679,632
Total liabilities and
stockholders' equity $37,910,967 $37,382,380 $31,264,711
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income
(in thousands, except per share data)(unaudited)
Three Months Ended
March 31 December 31 March 31
2003 2002 2002
Interest Income:
Consumer loans, including fees $1,028,891 $1,031,675 $864,086
Securities available for sale 42,931 50,283 42,344
Other 34,744 31,706 27,931
Total interest income 1,106,566 1,113,664 934,361
Interest Expense:
Deposits 209,308 215,144 178,163
Senior notes 104,097 108,474 93,904
Other borrowings 58,357 59,014 51,056
Total interest expense 371,762 382,632 323,123
Net interest income 734,804 731,032 611,238
Provision for loan losses 375,851 543,758 389,617
Net interest income after provision for
loan losses 358,953 187,274 221,621
Non-Interest Income:
Servicing and securitizations 729,689 645,740 626,147
Service charges and other customer-
related fees 441,226 475,384 494,799
Interchange 85,351 94,095 98,096
Other 48,337 105,103 22,482
Total non-interest income 1,304,603 1,320,322 1,241,524
Non-Interest Expense:
Salaries and associate benefits 397,449 380,600 380,735
Marketing 241,696 210,847 353,536
Communications and data processing 112,052 106,149 92,193
Supplies and equipment 83,812 95,963 84,507
Occupancy 43,574 46,933 33,381
Other 294,331 280,528 215,543
Total non-interest expense 1,172,914 1,121,020 1,159,895
Income before income taxes 490,642 386,576 303,250
Income taxes 181,538 146,899 115,235
Net income $309,104 $239,677 $188,015
Basic earnings per share $1.39 $1.08 $0.86
Diluted earnings per share $1.35 $1.05 $0.83
Dividends paid per share $0.03 $0.03 $0.03
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Reported Quarter Ended 3/31/03
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $27,824,350 $1,028,891 14.79%
Securities available for sale 4,417,538 42,931 3.89%
Other 1,902,594 34,744 7.30%
Total earning assets 34,144,482 1,106,566 12.96%
Interest-bearing liabilities:
Deposits $17,940,058 $209,308 4.67%
Senior notes 5,309,690 104,097 7.84%
Other borrowings 7,009,915 58,357 3.33%
Total interest-bearing liabilities $30,259,663 $371,762 4.91%
Net interest spread 8.05%
Interest income to average earning assets 12.96%
Interest expense to average earning assets 4.35%
Net interest margin 8.61%
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Reported Quarter Ended 12/31/02
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $27,765,815 $1,031,675 14.86%
Securities available for sale 4,571,735 50,283 4.40%
Other 1,736,961 31,706 7.30%
Total earning assets $34,074,511 $1,113,664 13.07%
Interest-bearing liabilities:
Deposits $17,076,822 $215,144 5.04%
Senior notes 5,563,574 108,474 7.80%
Other borrowings 6,332,192 59,014 3.73%
Total interest-bearing liabilities $28,972,588 $382,632 5.28%
Net interest spread 7.79%
Interest income to average earning assets 13.07%
Interest expense to average earning assets 4.49%
Net interest margin 8.58%
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Reported Quarter Ended 3/31/02
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $22,404,942 $864,086 15.43%
Securities available for sale 3,367,786 42,344 5.03%
Other 1,527,455 27,931 7.31%
Total earning assets $27,300,183 $934,361 13.69%
Interest-bearing liabilities:
Deposits $13,505,586 $178,163 5.28%
Senior notes 5,429,992 93,904 6.92%
Other borrowings 4,925,669 51,056 4.15%
Total interest-bearing liabilities $23,861,247 $323,123 5.42%
Net interest spread 8.27%
Interest income to average earning assets 13.69%
Interest expense to average earning assets 4.73%
Net interest margin 8.96%
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Managed (1) Quarter Ended 3/31/03
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $59,249,698 $2,148,419 14.50%
Securities available for sale 4,417,538 42,931 3.89%
Other 934,382 5,323 2.28%
Total earning assets $64,601,618 $2,196,673 13.60%
Interest-bearing liabilities:
Deposits $17,940,058 $209,308 4.67%
Senior notes 5,309,690 104,097 7.84%
Other borrowings 7,009,915 58,357 3.33%
Securitization liability 31,361,051 316,960 4.04%
Total interest-bearing liabilities $61,620,714 $688,722 4.47%
Net interest spread 9.13%
Interest income to average earning assets 13.60%
Interest expense to average earning assets 4.26%
Net interest margin 9.34%
(1) The information in this table reflects the adjustment to add back the effect of securitized loans.
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Managed (1) Quarter Ended 12/31/02
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $57,669,078 $2,085,069 14.46%
Securities available for sale 4,571,735 50,283 4.40%
Other 548,443 5,470 3.99%
Total earning assets $62,789,256 $2,140,822 13.64%
Interest-bearing liabilities:
Deposits $17,076,822 $215,144 5.04%
Senior notes 5,563,574 108,474 7.80%
Other borrowings 6,332,192 59,014 3.73%
Securitization liability 29,840,224 315,968 4.24%
Total interest-bearing liabilities $58,812,812 $698,600 4.75%
Net interest spread 8.89%
Interest income to average earning assets 13.64%
Interest expense to average earning assets 4.45%
Net interest margin 9.19%
(1) The information in this table reflects the adjustment to add back the effect of securitized loans.
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Managed (1) Quarter Ended 3/31/02
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $46,687,578 $1,724,323 14.77%
Securities available for sale 3,367,786 42,344 5.03%
Other 482,290 2,358 1.96%
Total earning assets $50,537,654 $1,769,025 14.00%
Interest-bearing liabilities:
Deposits $13,505,586 $178,163 5.28%
Senior notes 5,429,992 93,904 6.92%
Other borrowings 4,925,669 51,056 4.15%
Securitization liability 24,262,546 273,366 4.51%
Total interest-bearing liabilities $48,123,793 $596,489 4.96%
Net interest spread 9.04%
Interest income to average earning assets 14.00%
Interest expense to average earning assets 4.72%
Net interest margin 9.28%
(1) The information in this table reflects the adjustment to add back the effect of securitized loans.
SOURCE Capital One Financial Corporation
Paul Paquin, V.P., Investor Relations, +1-703-720-2456, or Tatiana Stead, Corporate Media, +1-703-720-2352, both of Capital One Financial Corporation