Capital One Reports Record Second Quarter Earnings
FALLS CHURCH, Va., July 12 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced record second quarter 2000 earnings of $0.54 per share, or $112.5 million, versus earnings of $0.41 per share, or $87.5 million, for the comparable period in the prior year, an increase of 32 percent.
"Our results reflect the power of our information-based strategy in providing each of our more than 27 million customers with a unique and tailored journey through Capital One," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "Our ability to deliver the right product to the right customer has allowed us to add 20,000 net new customers a day and grow our managed loans by an annualized rate of more than 30 percent during the quarter."
During the second quarter, Capital One added 1.8 million net new accounts, bringing total accounts to 27.1 million. For the quarter, Capital One's managed consumer loan balances increased by $1.6 billion to $21.9 billion. "This robust growth generates the earnings power to deliver a strong bottom line while investing heavily in our future," said Fairbank. On the Internet, online account originations and online account servicing increased to 410 thousand and 640 thousand, respectively, as of the end of the second quarter.
"Relentless scientific testing has fueled spectacular performance across the board and will be a springboard to continued stellar results," said Nigel W. Morris, Capital One's President and Chief Operating Officer. "A key to measuring this success is our risk-adjusted margin which reached an all time record of 17.03 percent, up from the previous record of 16.57 percent set last quarter."
The managed net charge-off rate remained under four percent for the sixth straight quarter and was 3.97 percent for the three months ending June 30, 2000. In addition, the Company added $35 million to the allowance for loan losses during the second quarter of 2000, increasing the allowance to $407 million or 3.58 percent of reported consumer loans, as of June 30, 2000.
Contributing to the strong account and managed loan growth during the quarter was an increase in marketing expense to a record $212 million compared to $202 million in the first quarter of 2000 and $178 million in the comparable period of the prior year. Other non-interest expenses (excluding marketing) for the second quarter of 2000 were $531 million, resulting in an annualized operating cost per account of $80.97, down from $82.93 for the first quarter of 2000 and $91.93 for the comparable period in the prior year.
Headquartered in Falls Church, 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 27.1 million accounts and $21.9 billion in managed loans outstanding as of June 30, 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.
| Note: | This release, financial information and a live webcast of today's |
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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 1999
(in millions, except per share data
and as noted) Q4 Q3
Earnings (Managed Basis)
Net Interest Income $574.8 $558.9
Non-Interest Income 473.6 438.6
Total Revenue 1,048.4 997.5
Provision for Loan Losses 218.0 214.3
Marketing Expenses 202.4 175.2
Operating Expenses 478.8 454.3
Income Before Taxes 149.2 153.8
Tax Rate 34.4% 38.0%
Net Income $97.9 $95.4
Common Share Statistics
Basic EPS $0.50 $0.48
Diluted EPS $0.47 $0.45
Dividends Per Share $0.03 $0.03
Book Value Per Share (period end) $7.69 $7.29
Stock Price Per Share (period end) $48.19 $39.00
Total Market Capitalization (period end) $9,495.2 $7,686.9
Shares Outstanding (period end) 197.0 197.1
Shares Used to Compute Basic EPS 197.3 197.4
Shares Used to Compute Diluted EPS 210.3 210.1
Managed Loan Statistics (period avg.)
Average Loans $18,974 $18,162
Average Earning Assets $21,323 $20,060
Average Assets $22,714 $21,563
Average Equity $1,493 $1,461
Net Interest Margin 10.78% 11.14%
Risk Adjusted Margin(1) 16.24% 16.38%
Return on Average Assets (ROA) 1.72% 1.77%
Return on Average Equity (ROE) 26.22% 26.12%
Net Charge-Off Rate 3.86% 3.88%
Net Charge-Offs $182.9 $176.0
Cost Per Account (in dollars) $85.98 $90.72
Managed Loan Statistics (period end)
Reported Loans $9,914 $8,286
Securitized Loans 10,323 10,231
Total Loans $20,237 $18,517
Delinquency Rate (30+ days) 5.23% 5.06%
Number of Accounts (000's) 23,705 20,845
Total Assets $23,638 $21,577
Capital, Including Preferred Interests $1,613.7 $1,535.3
Capital to Managed Assets Ratio 6.83% 7.12%
(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) Q2
Earnings (Managed Basis)
Net Interest Income $527.1
Non-Interest Income 398.5
Total Revenue 925.6
Provision for Loan Losses 178.3
Marketing Expenses 178.2
Operating Expenses 427.9
Income Before Taxes 141.1
Tax Rate 38.0%
Net Income $87.5
Common Share Statistics
Basic EPS $0.44
Diluted EPS $0.41
Dividends Per Share $0.03
Book Value Per Share (period end) $7.11
Stock Price Per Share (period end) $55.69
Total Market Capitalization (period end) $10,991.3
Shares Outstanding (period end) 197.4
Shares Used to Compute Basic EPS 197.6
Shares Used to Compute Diluted EPS 211.5
Managed Loan Statistics (period avg.)
Average Loans $17,598
Average Earning Assets $19,428
Average Assets $20,714
Average Equity $1,374
Net Interest Margin 10.85%
Risk Adjusted Margin(1) 15.68%
Return on Average Assets (ROA) 1.69%
Return on Average Equity (ROE) 25.47%
Net Charge-Off Rate 3.73%
Net Charge-Offs $164.0
Cost Per Account (in dollars) $91.93
Managed Loan Statistics (period end)
Reported Loans $7,427
Securitized Loans 10,433
Total Loans $17,860
Delinquency Rate (30+ days) 4.72%
Number of Accounts (000's) 19,213
Total Assets $20,985
Capital, Including Preferred Interests $1,501.0
Capital to Managed Assets Ratio 7.15%
(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)
June 30
2000
Assets:
Cash and due from banks $100,999
Federal funds sold and resale agreements 10,000
Interest-bearing deposits at other banks 78,226
Cash and cash equivalents 189,225
Securities available for sale 1,507,770
Consumer loans 11,382,780
Less: Allowance for loan losses (407,000)
Net loans 10,975,780
Premises and equipment, net 545,262
Interest receivable 51,799
Accounts receivable from securitizations 1,302,424
Other 554,631
Total assets $15,126,891
Liabilities:
Interest-bearing deposits $5,288,927
Other borrowings 2,773,050
Senior notes 4,176,394
Interest payable 96,493
Other 1,146,451
Total liabilities 13,481,315
Stockholders' Equity:
Common stock 1,997
Paid-in capital, net 578,915
Retained earnings and cumulative
other comprehensive income 1,197,370
Less: Treasury stock, at cost (132,706)
Total stockholders' equity 1,645,576
Total liabilities and
stockholders' equity $15,126,891
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Balance Sheets
(in thousands)(unaudited)
March 31
2000
Assets:
Cash and due from banks $84,084
Federal funds sold and resale agreements 18,000
Interest-bearing deposits at other banks 96,491
Cash and cash equivalents 198,575
Securities available for sale 1,519,027
Consumer loans 9,449,498
Less: Allowance for loan losses (372,000)
Net loans 9,077,498
Premises and equipment, net 501,238
Interest receivable 81,967
Accounts receivable from securitizations 666,972
Other 479,781
Total assets $12,525,058
Liabilities:
Interest-bearing deposits $4,096,241
Other borrowings 1,955,978
Senior notes 3,818,936
Interest payable 88,438
Other 1,014,384
Total liabilities 10,973,977
Stockholders' Equity:
Common stock 1,997
Paid-in capital, net 598,012
Retained earnings and cumulative
other comprehensive income 1,092,021
Less: Treasury stock, at cost (140,949)
Total stockholders' equity 1,551,081
Total liabilities and
stockholders' equity $12,525,058
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Balance Sheets
(in thousands)(unaudited)
June 30
1999
Assets:
Cash and due from banks $25,582
Federal funds sold and resale agreements
Interest-bearing deposits at other banks 72,616
Cash and cash equivalents 98,198
Securities available for sale 1,615,422
Consumer loans 7,426,974
Less: Allowance for loan losses (266,000)
Net loans 7,160,974
Premises and equipment, net 347,168
Interest receivable 60,858
Accounts receivable from securitizations 886,680
Other 411,324
Total assets $10,580,624
Liabilities:
Interest-bearing deposits $2,414,933
Other borrowings 1,454,422
Senior notes 4,539,776
Interest payable 101,150
Other 667,407
Total liabilities 9,177,688
Stockholders' Equity:
Common stock 1,997
Paid-in capital, net 626,796
Retained earnings and cumulative
other comprehensive income 852,105
Less: Treasury stock, at cost (77,962)
Total stockholders' equity 1,402,936
Total liabilities and
stockholders' equity $10,580,624
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income
(in thousands, except per share data)(unaudited)
Three Months Ended
June 30 March 31
2000 2000
Interest Income:
Consumer loans, including fees $511,886 $488,937
Securities available for sale 22,845 24,734
Other 1,776 1,776
Total interest income 536,507 515,447
Interest Expense:
Deposits 63,619 52,120
Other borrowings 46,914 41,454
Senior notes 62,016 68,376
Total interest expense 172,549 161,950
Net interest income 363,958 353,497
Provision for loan losses 151,010 126,525
Net interest income after
provision for loan losses 212,948 226,972
Non-Interest Income:
Servicing and securitizations 282,640 270,758
Service charges and other fees 374,706 341,232
Interchange 53,461 43,070
Total non-interest income 710,807 655,060
Non-Interest Expense:
Salaries and associate benefits 236,618 234,836
Marketing 211,560 201,938
Communications and data processing 72,933 70,822
Supplies and equipment 58,167 52,274
Occupancy 27,250 25,292
Other 135,736 124,758
Total non-interest expense 742,264 709,920
Income before income taxes 181,491 172,112
Income taxes 68,966 65,403
Net income $112,525 $106,709
Basic earnings per share $0.57 $0.54
Diluted earnings per share $0.54 $0.51
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
June 30
1999
Interest Income:
Consumer loans, including fees $353,193
Securities available for sale 23,522
Other 1,058
Total interest income 377,773
Interest Expense:
Deposits 26,438
Other borrowings 21,196
Senior notes 80,654
Total interest expense 128,288
Net interest income 249,485
Provision for loan losses 74,301
Net interest income after
provision for loan losses 175,184
Non-Interest Income:
Servicing and securitizations 293,606
Service charges and other fees 244,874
Interchange 33,567
Total non-interest income 572,047
Non-Interest Expense:
Salaries and associate benefits 194,461
Marketing 178,242
Communications and data processing 62,478
Supplies and equipment 42,303
Occupancy 16,381
Other 112,272
Total non-interest expense 606,137
Income before income taxes 141,094
Income taxes 53,616
Net income $87,478
Basic earnings per share $0.44
Diluted earnings per share $0.41
Dividends paid per share $0.03
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income
(in thousands, except per share data)(unaudited)
Six Months Ended
June 30 June 30
2000 1999
Interest Income:
Consumer loans, including fees $1,000,823 $678,260
Securities available for sale 47,579 49,745
Other 3,552 2,839
Total interest income 1,051,954 730,844
Interest Expense:
Deposits 115,739 50,380
Other borrowings 88,368 46,748
Senior notes 130,392 153,149
Total interest expense 334,499 250,277
Net interest income 717,455 480,567
Provision for loan losses 277,535 148,887
Net interest income after
provision for loan losses 439,920 331,680
Non-Interest Income:
Servicing and securitizations 553,398 565,560
Service charges and other fees 715,938 467,327
Interchange 96,531 63,786
Total non-interest income 1,365,867 1,096,673
Non-Interest Expense:
Salaries and associate benefits 471,454 373,655
Marketing 413,498 354,330
Communications and data processing 143,755 120,550
Supplies and equipment 110,441 79,007
Occupancy 52,542 30,295
Other 260,494 196,553
Total non-interest expense 1,452,184 1,154,390
Income before income taxes 353,603 273,963
Income taxes 134,369 104,106
Net income $219,234 $169,857
Basic earnings per share $1.11 $0.86
Diluted earnings per share $1.05 $0.80
Dividends paid per share $0.05 $0.05
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Managed (1) Quarter Ended 06/30/00
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $20,915,125 $937,935 17.94
Securities available
for sale 1,519,369 22,845 6.01
Other 146,760 1,776 4.84
Total earning assets $22,581,254 $962,556 17.05%
Interest-bearing liabilities:
Deposits $4,495,242 $63,619 5.66%
Other borrowings 2,687,569 46,914 6.98
Senior notes 3,659,603 62,016 6.78
Securitization liability 10,870,733 175,655 6.46
Total interest-bearing
liabilities $21,713,147 $348,204 6.41%
Net interest spread 10.64%
Interest income to
average earning assets 17.05%
Interest expense to
average earning assets 6.17
Net interest margin 10.88%
(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 03/31/00
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $20,181,373 $911,418 18.06%
Securities available
for sale 1,681,537 24,734 5.88
Other 174,658 1,776 4.07
Total earning assets $22,037,568 $937,928 17.02%
Interest-bearing liabilities:
Deposits $3,894,250 $52,120 5.35%
Other borrowings 2,504,724 41,454 6.62
Senior notes 4,019,484 68,376 6.80
Securitization liability 10,458,226 157,124 6.01
Total interest-bearing
liabilities $20,876,684 $319,074 6.11%
Net interest spread 10.91%
Interest income to average
earning assets 17.02%
Interest expense to average
earning assets 5.79
Net interest margin 11.23%
(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 06/30/99
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $17,597,571 $766,595 17.43%
Securities available
for sale 1,673,433 23,522 5.62
Other 157,425 1,058 2.69
Total earning assets $19,428,429 $791,175 16.29%
Interest-bearing liabilities:
Deposits $2,270,769 $26,438 4.66%
Other borrowings 1,599,977 21,196 5.30
Senior notes 4,620,921 80,654 6.98
Securitization liability 10,161,421 135,788 5.35
Total interest-bearing
liabilities $18,653,088 $264,076 5.66%
Net interest spread 10.63%
Interest income to average
earning assets 16.29%
Interest expense to average
earning assets 5.44
Net interest margin 10.85%
(1) The 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, 703-289-6872, both of Capital One Financial Corporation/