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Capital One Reports Record Second Quarter Results

July 16, 2002 at 4:39 PM EDT
FALLS CHURCH, Va., Jul 16, 2002 /PRNewswire-FirstCall via COMTEX/ --

Raises 2002 Earnings per Share Growth Target to 30%

Capital One Financial Corporation (NYSE: COF) today announced its 20th consecutive quarter of record earnings, driven by a 42 percent year-over-year increase in total revenues. The company also announced that it was raising its target for earnings per share growth for 2002 to 30 percent, up from the previous guidance of 20 percent. The company now expects to report earnings per share of approximately $3.79 for the year ending December 31, 2002. Consistent with its historical financial performance since 1995, the company expects to report earnings per share growth in 2003 of 20 percent or more. The company expects to release specific guidance on its 2003 earnings in October 2002.

Earnings for the second quarter of 2002 were $213.1 million, or $0.92 per share, versus earnings of $155.3 million, or $0.70 per share, for the comparable period in the prior year. Earnings in the first quarter of 2002 were $188.0 million, or $0.83 per share.

Capital One also announced that following a routine regulatory review in connection with a pending application and the normal examination cycle, the company and its subsidiaries, Capital One Bank and Capital One, F.S.B., expect to enter into an informal memorandum of understanding with bank regulators addressing certain regulatory matters as described below. The company's new earnings targets take into account the expected understandings with the regulatory authorities.

"Capital One's earnings power allowed us to increase our 2002 earnings per share growth target to 30 percent," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "The actions we have taken have strengthened our balance sheet with additional capital and loss allowances at our bank subsidiaries and will make us a stronger company as we position ourselves for future growth."

The managed net charge-off rate increased to 4.36 percent for the second quarter of 2002 compared with 4.00 percent for the first quarter of 2002, consistent with the company's expectations for increasing charge-offs for Capital One and the industry in 2002. The managed delinquency rate (30+ days) decreased to 4.54 percent as of June 30, 2002, compared with 4.80 percent as of March 31, 2002. The company further strengthened its balance sheet in the second quarter by increasing its allowance for loan losses by $247.0 million.

"Revenue grew at a 42 percent annualized rate in the second quarter, a testament to the power of our information based strategy to identify and meet customer needs," said Nigel W. Morris, Capital One's President and Chief Operating Officer. "I'm equally pleased that once again our credit risk management practices enabled us to achieve strong credit performance for the quarter."

Second quarter 2002 revenue, defined as managed net interest income and non-interest income, rose to $2.3 billion versus $2.1 billion in the first quarter of 2002. The company's managed consumer loan balances increased by $4.6 billion in the second quarter to $53.2 billion. In the second quarter, Capital One added 2.0 million net new accounts, bringing total accounts to 48.6 million. The company's managed revenue margin increased to 16.55 percent in the second quarter of 2002 from 16.47 percent in the first quarter of 2002.

The company also announced that, during the second quarter, it sold $1.0 billion of auto loans, with servicing retained by Capital One, and recorded a $17.3 million gain. The sale completely removes these loans from Capital One's managed consumer loan portfolio. Capital One plans to sell auto loans on an ongoing basis.

Marketing expense for the second quarter of 2002 was $320.4 million, down from $353.5 million in the first quarter of 2002. Other non-interest expenses (excluding marketing) for the second quarter of 2002 were $833.2 million versus $806.4 million for the first quarter of 2002. Annualized operating expenses per account decreased to $70 for the second quarter of 2002 from $71 in the prior quarter and from $77 in the second quarter of last year.

Bank regulatory authorities have recently completed a routine review of Capital One Bank and Capital One, F.S.B. in connection with a pending application and the normal examination cycle. Regulators have informed the company that they intend to request the company, Capital One Bank and Capital One, F.S.B., to enter into an informal memorandum of understanding with respect to capital, allowance for loan losses and other regulatory requirements. Further details regarding the expected memorandum of understanding and the company's business outlook can be found in Capital One's report on Form 8-K filed today with the Securities and Exchange Commission and available on the company's website (http://www.capitalone.com ).

The company cautioned that its current expectations for 2002 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, 2001.

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 48.6 million accounts and $53.2 billion in managed loans outstanding as of June 30, 2002. 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 and a live Webcast of today's 5:00pm (EDT) analyst conference call is accessible on the Internet on Capital One's home page (http://www.capitalone.com ). Choose "Investors" 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

                                                        2002       2002
     (in millions, except per share data                 Q2          Q1
      and as noted)
     Earnings (Managed Basis)
     Net Interest Income                            $ 1,185.2  $  1,120.9
     Non-Interest Income                              1,113.9       959.9
     Total Revenue                                    2,299.0     2,080.7
     Provision for Loan Losses                          801.6       617.6
     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

     Managed Loan Statistics (period avg.)
     Average Loans                                  $  51,343  $   46,688
     Average Earning Assets                         $  55,559  $   50,538
     Average Assets                                 $  59,989  $   54,258
     Average Equity                                 $   4,021  $    3,572
     Net Interest Margin                                 8.53%       8.87%
     Revenue Margin                                     16.55%      16.47%
     Risk Adjusted Margin(1)                            12.53%      12.78%
     Return on Average Assets (ROA)                      1.42%       1.39%
     Return on Average Equity (ROE)                     21.20%      21.06%
     Net Charge-Off Rate                                 4.36%       4.00%
     Net Charge-Offs                                $   559.1  $    466.7
     Cost Per Account (in dollars)                  $   69.99  $    71.33

     Managed Loan Statistics (period end)
     Reported Loans                                 $  24,965  $   24,428
     Securitized Loans                                 28,243      24,136
     Total 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(3)                                     $ 4,823.6  $  3,778.4
     Capital to Managed Assets Ratio                     7.78%       6.82%

     (1) Risk adjusted margin is total revenue less net charge-offs as a
         percentage of average earning assets.
     (2) Includes one-time charges of $38.8 million.
     (3) Includes preferred interests and mandatory convertible securities.


                      CAPITAL ONE FINANCIAL CORPORATION (COF)
                          FINANCIAL & STATISTICAL SUMMARY

                                                        2001        2001
     (in millions, except per share data                 Q4          Q3
      and as noted)
     Earnings (Managed Basis)
     Net Interest Income                            $   982.9   $   926.7
     Non-Interest Income                                941.5       852.5
     Total Revenue                                    1,924.5     1,779.2
     Provision for Loan Losses                          563.3       437.6
     Marketing Expenses                                 301.2       281.9
     Operating Expenses                                 773.4       793.0 (2)
     Income Before Taxes                                286.6       266.7
     Tax Rate                                            38.0%       38.0%
     Net Income                                     $   177.7   $   165.3

     Common Share Statistics
     Basic EPS                                      $    0.83   $    0.78
     Diluted EPS                                    $    0.80   $    0.75
     Dividends Per Share                            $    0.03   $    0.03
     Book Value Per Share (period end)              $   15.33   $   14.14
     Stock Price Per Share (period end)             $   53.95   $   46.03
     Total Market Capitalization (period end)       $11,695.2   $ 9,710.1
     Shares Outstanding (period end)                    216.8       211.0
     Shares Used to Compute Basic EPS                   214.7       210.8
     Shares Used to Compute Diluted EPS                 223.4       219.9

     Managed Loan Statistics (period avg.)
     Average Loans                                  $  41,352   $  37,017
     Average Earning Assets                         $  45,295   $  39,994
     Average Assets                                 $  48,906   $  43,363
     Average Equity                                 $   3,223   $   2,935
     Net Interest Margin                                 8.68%       9.27%
     Revenue Margin                                     17.00%      17.79%
     Risk Adjusted Margin(1)                            12.96%      14.17%
     Return on Average Assets (ROA)                      1.45%       1.53%
     Return on Average Equity (ROE)                     22.05%      22.53%
     Net Charge-Off Rate                                 4.42%       3.92%
     Net Charge-Offs                                $   456.9   $   362.7
     Cost Per Account (in dollars)                  $   73.69   $   81.03

     Managed Loan Statistics (period end)
     Reported Loans                                 $  20,921   $  17,480
     Securitized Loans                                 24,343      21,009
     Total Loans                                    $  45,264   $  38,489
     Delinquency Rate (30+ days)                         4.95%       5.20%
     Number of Accounts (000's)                        43,815      40,145
     Total Assets                                   $  52,506   $  44,497
     Capital(3)                                     $ 3,422.2   $ 3,081.9
     Capital to Managed Assets Ratio                     6.52%       6.93%

     (1) Risk adjusted margin is total revenue less net charge-offs as a
         percentage of average earning assets.
     (2) Includes one-time charges of $38.8 million.
     (3) Includes preferred interests and mandatory convertible securities.


                      CAPITAL ONE FINANCIAL CORPORATION (COF)
                          FINANCIAL & STATISTICAL SUMMARY

                                                        2001
     (in millions, except per share data                 Q2
      and as noted)
     Earnings (Managed Basis)
     Net Interest Income                            $   823.7
     Non-Interest Income                                796.3
     Total Revenue                                    1,620.0
     Provision for Loan Losses                          379.1
     Marketing Expenses                                 268.7
     Operating Expenses                                 721.6
     Income Before Taxes                                250.5
     Tax Rate                                            38.0%
     Net Income                                     $   155.3

     Common Share Statistics
     Basic EPS                                      $    0.74
     Diluted EPS                                    $    0.70
     Dividends Per Share                            $    0.03
     Book Value Per Share (period end)              $   13.02
     Stock Price Per Share (period end)             $   60.15
     Total Market Capitalization (period end)       $12,666.5
     Shares Outstanding (period end)                    210.6
     Shares Used to Compute Basic EPS                   209.1
     Shares Used to Compute Diluted EPS                 221.2

     Managed Loan Statistics (period avg.)
     Average Loans                                  $  33,440
     Average Earning Assets                         $  36,180
     Average Assets                                 $  38,820
     Average Equity                                 $   2,608
     Net Interest Margin                                 9.11%
     Revenue Margin                                     17.91%
     Risk Adjusted Margin(1)                            14.23%
     Return on Average Assets (ROA)                      1.60%
     Return on Average Equity (ROE)                     23.83%
     Net Charge-Off Rate                                 3.98%
     Net Charge-Offs                                $   332.8
     Cost Per Account (in dollars)                  $   77.38

     Managed Loan Statistics (period end)
     Reported Loans                                 $  16,327
     Securitized Loans                                 18,956
     Total Loans                                    $  35,283
     Delinquency Rate (30+ days)                         4.92%
     Number of Accounts (000's)                        38,146
     Total Assets                                   $  40,587
     Capital(3)                                     $ 2,840.1
     Capital to Managed Assets Ratio                     7.00%

     (1) Risk adjusted margin is total revenue less net charge-offs as a
         percentage of average earning assets.
     (2) Includes one-time charges of $38.8 million.
     (3) Includes preferred interests and mandatory convertible securities.


                         CAPITAL ONE FINANCIAL CORPORATION
                            Consolidated Balance Sheets
                             (in thousands)(unaudited)

                                                            June 30
                                                              2002

     Assets:
     Cash and due from banks                              $    244,857
     Federal funds sold and resale agreements                  432,124
     Interest-bearing deposits at other banks                  448,363
       Cash and cash equivalents                             1,125,344
     Securities available for sale                           4,538,223
     Consumer loans                                         24,965,210
       Less:  Allowance for loan losses                     (1,237,000)
     Net loans                                              23,728,210
     Accounts receivable from securitizations                2,417,775
     Premises and equipment, net                               808,972
     Interest receivable                                       151,828
     Other                                                   1,064,127
        Total assets                                      $ 33,834,479


     Liabilities:
     Interest-bearing deposits                            $ 16,014,392
     Senior notes                                            6,069,719
     Other borrowings                                        4,590,716
     Interest payable                                          235,108
     Other                                                   2,910,638
        Total liabilities                                   29,820,573

     Stockholders' Equity:
     Common stock                                                2,222
     Paid-in capital, net                                    1,600,489
     Retained earnings and cumulative
       other comprehensive income                            2,446,147
        Less: Treasury stock, at cost                          (34,952)
        Total stockholders' equity                           4,013,906
        Total liabilities and stockholders' equity        $ 33,834,479


                         CAPITAL ONE FINANCIAL CORPORATION
                            Consolidated Balance Sheets
                             (in thousands)(unaudited)

                                                            March 31
                                                              2002

     Assets:
     Cash and due from banks                              $    350,738
     Federal funds sold and resale agreements                   13,260
     Interest-bearing deposits at other banks                  105,063
       Cash and cash equivalents                               469,061
     Securities available for sale                           3,175,366
     Consumer loans                                         24,427,642
       Less:  Allowance for loan losses                       (990,000)
     Net loans                                              23,437,642
     Accounts receivable from securitizations                2,218,472
     Premises and equipment, net                               789,572
     Interest receivable                                       148,547
     Other                                                   1,026,051
        Total assets                                      $ 31,264,711


     Liabilities:
     Interest-bearing deposits                            $ 14,633,871
     Senior notes                                            5,422,896
     Other borrowings                                        4,879,427
     Interest payable                                          173,659
     Other                                                   2,475,226
        Total liabilities                                   27,585,079

     Stockholders' Equity:
     Common stock                                                2,214
     Paid-in capital, net                                    1,532,034
     Retained earnings and cumulative
       other comprehensive income                            2,180,336
        Less: Treasury stock, at cost                          (34,952)
        Total stockholders' equity                           3,679,632
        Total liabilities and stockholders' equity        $ 31,264,711


                         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
     Accounts receivable from securitizations                1,708,055
     Premises and equipment, net                               729,525
     Interest receivable                                        79,089
     Other                                                     672,338
        Total assets                                      $ 21,660,329


     Liabilities:
     Interest-bearing deposits                            $ 10,029,736
     Senior notes                                            4,757,481
     Other borrowings                                        2,320,734
     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 Statements of Income
                 (in thousands, except per share data)(unaudited)

                                                        Three Months Ended
                                                       June 30     March 31
                                                         2002        2002

     Interest Income:
     Consumer loans, including fees                  $  925,257  $  836,955
     Securities available for sale                       45,815      42,344
     Other                                               28,754      27,931
       Total interest income                            999,826     907,230

     Interest Expense:
     Deposits                                           203,112     178,163
     Senior notes                                       109,687      93,904
     Other Borrowings                                    57,450      51,056
       Total interest expense                           370,249     323,123
     Net interest income                                629,577     584,107
     Provision for loan losses                          501,780     347,212
     Net interest income after
       provision for loan losses                        127,797     236,895

     Non-Interest Income:
     Servicing and securitizations                      718,347     626,147
     Service charges and other
      customer-related fees                             513,886     502,007
     Interchange                                        137,353      98,096
       Total non-interest income                      1,369,586   1,226,250

     Non-Interest Expense:
     Salaries and associate benefits                    379,363     380,735
     Marketing                                          320,446     353,536
     Communications and data processing                 101,601      92,193
     Supplies and equipment                              88,844      84,507
     Occupancy                                           38,275      33,381
     Other                                              225,117     215,543
       Total non-interest expense                     1,153,646   1,159,895
     Income before income taxes                         343,737     303,250
     Income taxes                                       130,620     115,235
     Net Income                                      $  213,117  $  188,015

     Basic earnings per share                        $     0.97  $     0.86
     Diluted earnings per share                      $     0.92  $     0.83
     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
                                                               2001

     Interest Income:
     Consumer loans, including fees                         $620,866
     Securities available for sale                            33,942
     Other                                                     2,408
       Total interest income                                 657,216

     Interest Expense:
     Deposits                                                155,479
     Senior notes                                             87,842
     Other Borrowings                                         43,825
       Total interest expense                                287,146
     Net interest income                                     370,070
     Provision for loan losses                               202,900
     Net interest income after provision for loan losses     167,170

     Non-Interest Income:
     Servicing and securitizations                           594,584
     Service charges and other customer-related fees         385,419
     Interchange                                              93,673
       Total non-interest income                           1,073,676

     Non-Interest Expense:
     Salaries and associate benefits                         342,076
     Marketing                                               268,709
     Communications and data processing                       72,906
     Supplies and equipment                                   74,780
     Occupancy                                                31,349
     Other                                                   200,496
       Total non-interest expense                            990,316
     Income before income taxes                              250,530
     Income taxes                                             95,203
     Net income                                             $155,327

     Basic earnings per share                               $   0.74
     Diluted earnings per share                             $   0.70
     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
                                                         2002        2001

     Interest Income:
     Consumer loans, including fees                  $1,762,212  $1,238,755
     Securities available for sale                       88,159      62,176
     Other                                               56,685       6,158
       Total interest income                          1,907,056   1,307,089

     Interest Expense:
     Deposits                                           381,275     302,440
     Senior notes                                       203,591     171,135
     Other Borrowings                                   108,506      87,725
       Total interest expense                           693,372     561,300
     Net interest income                              1,213,684     745,789
     Provision for loan losses                          848,992     453,514
     Net interest income after
       provision for loan losses                        364,692     292,275

     Non-Interest Income:
     Servicing and securitizations                    1,344,494   1,148,121
     Service charges and other customer-related fees  1,015,893     781,807
     Interchange                                        235,449     168,524
       Total non-interest income                      2,595,836   2,098,452

     Non-Interest Expense:
     Salaries and associate benefits                    760,098     667,792
     Marketing                                          673,982     499,909
     Communications and data processing                 193,794     148,198
     Supplies and equipment                             173,351     148,383
     Occupancy                                           71,656      62,651
     Other                                              440,660     381,630
       Total non-interest expense                     2,313,541   1,908,563
     Income before income taxes                         646,987     482,164
     Income taxes                                       245,855     183,224
     Net Income                                      $  401,132  $  298,940

     Basic earnings per share                        $     1.83  $     1.44
     Diluted earnings per share                      $     1.75  $     1.36
     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 6/30/02

                                                Average     Income/   Yield/
                                                Balance     Expense   Rate
     Earning assets:
       Consumer loans                       $ 51,342,764 $1,789,516  13.94%
       Securities available for sale           3,662,832     45,815   5.00
       Other                                     553,595      2,110   1.52
     Total earning assets                   $ 55,559,191 $1,837,441  13.23%

     Interest-bearing liabilities:
       Deposits                             $ 15,276,514 $  203,112   5.32%
       Senior notes                            5,959,240    109,687   7.36
       Other borrowings                        5,946,983     57,450   3.86
       Securitization liability               25,965,894    282,041   4.34
     Total interest-bearing liabilities     $ 53,148,631 $  652,290   4.91%

     Net interest spread                                              8.32%

     Interest income to average earning assets                       13.23%
     Interest expense to average earning assets                       4.70
     Net interest margin                                              8.53%

     (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 $1,672,655  14.33%
       Securities available for sale           3,367,786     42,344   5.03
       Other                                     482,290      2,358   1.96
     Total earning assets                   $ 50,537,654 $1,717,357  13.59%

     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                                              8.63%

     Interest income to average earning assets                       13.59%
     Interest expense to average earning assets                       4.72
     Net interest margin                                              8.87%

     (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 6/30/01

                                                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%
       Senior notes                            4,899,045     87,842   7.17
       Other borrowings                        2,915,245     43,825   6.01
       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.


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SOURCE Capital One Financial Corporation

CONTACT:          Paul Paquin, V.P., Investor Relations, +1-703-205-1039, or
                  Tatiana Stead, Director, Corporate Media, +1-703-205-1070, both of Capital One
                  Financial Corporation

URL:              http://www.capitalone.com
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