Capital One Reports Record Second Quarter Earnings
FALLS CHURCH, Va., July 17 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced its 16th consecutive quarter of record earnings, driven by a 39 percent year-over-year increase in total revenues, and another quarter of the best credit performance of any of the major credit card institutions in the country.
Earnings for the second quarter of 2001 were $155.3 million, or $0.70 per share, versus earnings of $112.5 million, or $0.54 per share, for the comparable period in the prior year. Earnings in the first quarter of 2001 were $143.6 million, or $0.66 per share.
"Capital One achieved its 16th consecutive quarter of record-breaking earnings driven by a 39 percent increase in total revenues," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "Our focus on the superprime sector resulted in robust loan growth -- a 47 percent annualized increase in managed loans. We remain firmly on track to deliver this year's target of 30 percent earnings per share growth."
Second quarter 2001 revenue, defined as managed net interest income and non-interest income, rose to $1.6 billion versus $1.5 billion in the first quarter of 2001 and $1.2 billion for the comparable period in the prior year. For the quarter, Capital One added 1.7 million net new accounts, bringing total accounts to 38.1 million. The company's managed consumer loan balances increased by $3.7 billion in the second quarter to $35.3 billion.
"This quarter's outstanding performance once again proves the strength of our unique information-based strategy and our ability to consistently deliver value to our more than 38 million customers," said Nigel W. Morris, Capital One's President and Chief Operating Officer. "Our stringent risk management practices again resulted in the best credit performance of any of the major credit card institutions -- 3.98 percent."
The managed net charge-off rate increased to 3.98 percent for the second quarter of 2001 compared with 3.75 percent for the first quarter of 2001. The managed delinquency rate (30+ days) increased slightly to 4.92 percent as of June 30, 2001, compared with 4.72 percent as of March 31, 2001.
The company's managed net interest margin was 9.11 percent in the second quarter of 2001 versus 9.21 percent in the first quarter of 2001 and 10.88 percent in the comparable period of 2000, reflecting strong growth in the superprime portfolio and the success of the company's 0% purchase teaser offer.
Marketing expense for the second quarter of 2001 increased $37.5 million to $268.7 million from $231.2 million in the first quarter of 2001, and increased $57.1 million over the $211.6 million spent in the comparable period of the prior year. Other non-interest expenses (excluding marketing) for the second quarter of 2001 were $721.6 million versus $687 million for the first quarter of 2001 and $530.7 million in the comparable period of the prior year. Annualized operating expenses per account decreased to $77.38 for the second quarter of 2001 from $78.26 for the first quarter of 2001 and $80.97 from the comparable period in the prior year.
The company cautioned that its current expectations for 2001 earnings 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, 2000.
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 38.1 million customers and $35.3 billion in managed loans outstanding as of June 30, 2001. 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.
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CAPITAL ONE FINANCIAL CORPORATION (COF) FINANCIAL & STATISTICAL SUMMARY
2001 2001 (in millions, except per share data and as noted) Q2 Q1 Earnings (Managed Basis) Net Interest Income $ 823.7 $ 759.3 Non-Interest Income 796.3 747.1 Total Revenue 1,620.0 1,506.4 Provision for Loan Losses 379.1 356.5 Marketing Expenses 268.7 231.2 Operating Expenses 721.6 687.0 Income Before Taxes 250.5 231.6 Tax Rate 38.0% 38.0% Net Income $ 155.3 $ 143.6 Common Share Statistics Basic EPS $ 0.74 $ 0.70 Diluted EPS $ 0.70 $ 0.66 Dividends Per Share $ 0.03 $ 0.03 Book Value Per Share (period end) $ 13.02 $ 11.81 Stock Price Per Share (period end) $ 60.15 $ 55.50 Total Market Capitalization (period end) $ 12,666.5 $ 11,509.1 Shares Outstanding (period end) 210.6 207.4 Shares Used to Compute Basic EPS 209.1 204.8 Shares Used to Compute Diluted EPS 221.2 217.8 Managed Loan Statistics (period avg.) Average Loans $ 33,440 $ 30,505 Average Earning Assets $ 36,180 $ 32,983 Average Assets $ 38,820 $ 35,303 Average Equity $ 2,608 $ 2,347 Net Interest Margin 9.11% 9.21% Risk Adjusted Margin(1) 14.23% 14.80% Return on Average Assets (ROA) 1.60% 1.63% Return on Average Equity (ROE) 23.83% 24.47% Net Charge-Off Rate 3.98% 3.75% Net Charge-Offs $ 332.8 $ 285.9 Cost Per Account (in dollars) $ 77.38 $ 78.26 Managed Loan Statistics (period end) Reported Loans $ 16,327 $ 15,572 Securitized Loans 18,956 15,979 Total Loans $ 35,283 $ 31,551 Delinquency Rate (30+ days) 4.92% 4.72% Number of Accounts (000's) 38,146 36,462 Total Assets $ 40,587 $ 36,749 Capital, Including Preferred Interests $ 2,840.1 $ 2,547.7 Capital to Managed Assets Ratio 7.00% 6.93%
(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) 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 (in millions, except per share data and as noted) Q2 Earnings (Managed Basis) Net Interest Income $ 614.4 Non-Interest Income 554.4 Total Revenue 1,168.8 Provision for Loan Losses 245.0 Marketing Expenses 211.6 Operating Expenses 530.7 Income Before Taxes 181.5 Tax Rate 38.0% Net Income $ 112.5 Common Share Statistics Basic EPS $ 0.57 Diluted EPS $ 0.54 Dividends Per Share $ 0.03 Book Value Per Share (period end) $ 8.39 Stock Price Per Share (period end) $ 44.63 Total Market Capitalization (period end) $ 8,747.4 Shares Outstanding (period end) 196.0 Shares Used to Compute Basic EPS 196.0 Shares Used to Compute Diluted EPS 208.6 Managed Loan Statistics (period avg.) Average Loans $ 20,915 Average Earning Assets $ 22,581 Average Assets $ 24,567 Average Equity $ 1,626 Net Interest Margin 10.88% Risk Adjusted Margin(1) 17.03% Return on Average Assets (ROA) 1.83% Return on Average Equity (ROE) 27.68% Net Charge-Off Rate 3.97% Net Charge-Offs $ 207.6 Cost Per Account (in dollars) $ 80.97 Managed Loan Statistics (period end) Reported Loans $ 11,383 Securitized Loans 10,500 Total Loans $ 21,883 Delinquency Rate (30+ days) 5.35% Number of Accounts (000's) 27,133 Total Assets $ 25,610 Capital, Including Preferred Interests $ 1,743.9 Capital to Managed Assets Ratio 6.81%
(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 2001 Assets: Cash and due from banks $ 134,918 Federal funds sold and resale agreements 39,770 Interest-bearing deposits at other banks 62,050 Cash and cash equivalents 236,738 Securities available for sale 2,554,967 Consumer loans 16,326,617 Less: Allowance for loan losses (647,000) Net loans 15,679,617 Premises and equipment, net 729,525 Interest receivable 79,089 Accounts receivable from securitizations 1,708,055 Other 672,338 Total assets $ 21,660,329 Liabilities: Interest-bearing deposits $ 10,029,736 Other borrowings 2,320,734 Senior notes 4,757,481 Interest payable 151,429 Other 1,659,412 Total liabilities 18,918,792 Stockholders' Equity: Common stock 2,118 Paid-in capital, net 1,089,582 Retained earnings and cumulative other comprehensive income 1,695,468 Less: Treasury stock, at cost (45,631) Total stockholders' equity 2,741,537 Total liabilities and stockholders' equity $ 21,660,329 CAPITAL ONE FINANCIAL CORPORATION Consolidated Balance Sheets (in thousands)(unaudited)
March 31 2001 Assets: Cash and due from banks $ 49,842 Federal funds sold and resale agreements 247,676 Interest-bearing deposits at other banks 492,390 Cash and cash equivalents 789,908 Securities available for sale 2,112,180 Consumer loans 15,571,754 Less: Allowance for loan losses (597,000) Net loans 14,974,754 Premises and equipment, net 709,207 Interest receivable 108,944 Accounts receivable from securitizations 1,492,818 Other 614,194 Total assets $ 20,802,005 Liabilities: Interest-bearing deposits $ 9,390,524 Other borrowings 1,845,509 Senior notes 5,040,761 Interest payable 135,863 Other 1,940,103 Total liabilities 18,352,760 Stockholders' Equity: Common stock 2,086 Paid-in capital, net 974,503 Retained earnings and cumulative other comprehensive income 1,519,855 Less: Treasury stock, at cost (47,199) Total stockholders' equity 2,449,245 Total liabilities and stockholders' equity $ 20,802,005 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 Statements of Income (in thousands, except per share data)(unaudited)
Three Months Ended June 30 March 31 2001 2001 Interest Income: Consumer loans, including fees $ 620,866 $617,889 Securities available for sale 33,942 28,234 Other 2,408 3,750 Total interest income 657,216 649,873 Interest Expense: Deposits 155,479 146,961 Other borrowings 43,825 43,900 Senior notes 87,842 83,293 Total interest expense 287,146 274,154 Net interest income 370,070 375,719 Provision for loan losses 202,900 250,614 Net interest income after provision for loan losses 167,170 125,105 Non-Interest Income: Servicing and securitizations 572,591 543,791 Service charges and other customer-related fees 407,412 406,134 Interchange 93,673 74,851 Total non-interest income 1,073,676 1,024,776 Non-Interest Expense: Salaries and associate benefits 342,076 325,716 Marketing 268,709 231,200 Communications and data processing 72,906 75,292 Supplies and equipment 74,780 73,603 Occupancy 31,349 31,302 Other 200,496 181,134 Total non-interest expense 990,316 918,247 Income before income taxes 250,530 231,634 Income taxes 95,203 88,021 Net Income $ 155,327 $ 143,613 Basic earnings per share $ 0.74 $ 0.70 Diluted earnings per share $ 0.70 $ 0.66 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 2000 Interest Income: Consumer loans, including fees $ 511,886 Securities available for sale 22,845 Other 1,776 Total interest income 536,507 Interest Expense: Deposits 63,619 Other borrowings 46,914 Senior notes 62,016 Total interest expense 172,549 Net interest income 363,958 Provision for loan losses 151,010 Net interest income after provision for loan losses 212,948 Non-Interest Income: Servicing and securitizations 282,640 Service charges and other customer-related fees 374,706 Interchange 53,461 Total non-interest income 710,807 Non-Interest Expense: Salaries and associate benefits 236,618 Marketing 211,560 Communications and data processing 72,933 Supplies and equipment 58,167 Occupancy 27,250 Other 135,736 Total non-interest expense 742,264 Income before income taxes 181,491 Income taxes 68,966 Net income $ 112,525 Basic earnings per share $ 0.57 Diluted earnings per share $ 0.54 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 2001 2000 Interest Income: Consumer loans, including fees $ 1,238,755 $ 1,000,823 Securities available for sale 62,176 47,579 Other 6,158 3,552 Total interest income 1,307,089 1,051,954 Interest Expense: Deposits 302,440 115,739 Other borrowings 87,725 88,368 Senior notes 171,135 130,392 Total interest expense 561,300 334,499 Net interest income 745,789 717,455 Provision for loan losses 453,514 277,535 Net interest income after provision for loan losses 292,275 439,920 Non-Interest Income: Servicing and securitizations 1,116,382 553,398 Service charges and other customer-related fees 813,546 715,938 Interchange 168,524 96,531 Total non-interest income 2,098,452 1,365,867 Non-Interest Expense: Salaries and associate benefits 667,792 471,454 Marketing 499,909 413,498 Communications and data processing 148,198 143,755 Supplies and equipment 148,383 110,441 Occupancy 62,651 52,542 Other 381,630 260,494 Total non-interest expense 1,908,563 1,452,184 Income before income taxes 482,164 353,603 Income taxes 183,224 134,369 Net Income $ 298,940 $ 219,234 Basic earnings per share $ 1.44 $ 1.11 Diluted earnings per share $ 1.36 $ 1.05 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 06/30/01 Average Income/ Yield/ Balance Expense Rate Earning assets: Consumer loans $33,439,690 $1,307,819 15.64% Securities available for sale 2,344,047 33,942 5.79 Other 396,659 2,408 2.43 Total earning assets $36,180,396 $1,344,169 14.86% Interest-bearing liabilities: Deposits $ 9,685,882 $ 155,479 6.42% Other borrowings 2,915,245 43,825 6.01 Senior notes 4,899,045 87,842 7.17 Securitization liability 16,741,276 233,322 5.57 Total interest-bearing liabilities $34,241,448 $ 520,468 6.08% Net interest spread 8.78% Interest income to average earning assets 14.86% Interest expense to average earning assets 5.75 Net interest margin 9.11%
(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 03/31/01 Average Income/ Yield/ Balance Expense Rate Earning assets: Consumer loans $30,505,450 $1,235,002 16.19% Securities available for sale 1,913,357 28,234 5.90 Other 564,592 3,750 2.66 Total earning assets $32,983,399 $1,266,986 15.37% Interest-bearing liabilities: Deposits $ 8,996,414 $ 146,961 6.53% Other borrowings 2,442,200 43,900 7.19 Senior notes 4,678,452 83,293 7.12 Securitization liability 14,948,262 233,524 6.25 Total interest-bearing liabilities $31,065,328 $ 507,678 6.54% Net interest spread 8.83% Interest income to average earning assets 15.37% Interest expense to average earning assets 6.16 Net interest margin 9.21%
(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 06/30/00 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. MAKE YOUR OPINION COUNT - Click Here http://tbutton.prnewswire.com/prn/11690X41763746
SOURCE Capital One Financial Corporation
CONTACT: Paul Paquin, V.P., Investor Relations, +1-703-205-1039, or Tatiana Stead, Corporate Media, +1-703-205-1070, both of Capital One Financial Corporation/