Capital One Reports Second Quarter Earnings Per Share (diluted) of $1.21
Increases readily available liquidity by $3 billion to $33 billion Generates excess capital, increasing TCE ratio 15 basis points to 6.18 percent
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MCLEAN, Va., July 17, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Capital One Financial Corporation (NYSE: COF) today announced earnings for the second quarter of 2008 were $452.9 million, or $1.21 per share (diluted). Earnings from continuing operations in the second quarter of 2008 were $462.5 million, or $1.24 per share. In the second quarter of 2007, the company reported earnings of $750.4 million, or $1.89 per share (diluted), and earnings from continuing operations of $767.6 million, or $1.93 per share (diluted). Earnings from continuing operations exclude the loss from discontinued operations related to the shutdown of GreenPoint Mortgage in August 2007.
HIGHLIGHTS
-- Credit performance in the quarter was largely in line with previous expectations and reflects expected continued weakening as suggested by US economic indicators.
-- Available liquidity increased in the quarter by $3.0 billion to $33.0 billion.
-- Includes the investment portfolio of $24.7 billion. The portfolio is
comprised of primarily high quality, liquid, AAA-rated securities.
-- Tangible common equity to total managed assets ratio (TCE) increased to 6.18 percent, above the high end of the company's target range of 5.5 to 6.0 percent, as the company continued to generate excess capital.
-- Deposits grew $4.7 billion in the second quarter of 2008 to $92.4 billion at June 30, 2008.
-- Managed loans declined $0.8 billion in the second quarter of 2008 as a result of tighter underwriting.
"Despite cyclical economic headwinds, the company continues to deliver profits and generate excess capital," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "We remain well-positioned to navigate the near-term economic challenges and to deliver strong shareholder value through the cycle."
Total Company Results
-- Total deposits were up $4.7 billion, or 5.4 percent, to $92.4 billion at June 30, 2008 relative to March 31, 2008 and $6.9 billion, or 8.1 percent relative to June 30, 2007.
-- Managed loans held for investment of $147.2 billion decreased from the first quarter of 2008 by $790 million, or 0.53 percent, but increased from the year ago quarter by $3.7 billion, or 2.6 percent.
-- Managed revenue margin of 9.12 percent in the second quarter of 2008 was down 131 basis points compared to 10.43 percent in the first quarter of 2008, and down 36 basis points from 9.48 percent in the second quarter of 2007.
-- Managed provision expense was $1.6 billion. The company added $37.6 million to its allowance in the second quarter of 2008. This allowance build has the capacity to absorb the equivalent of $7.0 billion of managed charge- offs over the next 12 months, ending June 30, 2009.
-- Excluding the first quarter reversal for $91 million in legal reserves related to the VISA initial public offering, operating expenses decreased $44.8 million relative to the first quarter of 2008. The managed efficiency ratio for the second quarter of 2008 was 44.16 percent, up from 38.61 percent in the first quarter of 2008.
"During the quarter, we added to the considerable strength of our balance sheet by generating excess capital and increasing our already strong liquidity position," said Gary L. Perlin, Capital One's Chief Financial Officer. "Going forward, we will continue our 37.5 cent quarterly dividend while at the same time maintaining our TCE ratio above our long-term target range."
Segment Results
Local Banking Segment highlights
Results in the Local Banking segment remain solid, however, profits declined as the economy continued to weaken during the quarter. On a sequential quarter basis, loan and deposit growth were essentially flat. Rising provision expense in the current economic downturn is the largest factor in both the sequential quarter and year-over-year decline. The company expects loan growth to remain flat for the remainder of the year, but expects stronger deposit growth in the second half of the year.
-- Net income of $67.1 million was down $8.7 million from $75.8 million in the first quarter of 2008.
-- Loans held for investment were up $73.6 million relative to the first quarter of 2008 to $44.3 billion.
-- Local Banking deposits increased $858.5 million from the first quarter of 2008 to $74.2 billion.
-- The net charge-off rate of 34 basis points increased from 31 basis points in the first quarter of 2008, and non-performing loans as a percent of loans held for investment of 81 basis points increased from 56 basis points in the first quarter of 2008.
National Lending Segment
The U.S. Card subsegment contains the results of the company's domestic credit card business, as well as small business lending and the installment loan business. The Other National Lending subsegment contains the results of the company's auto finance business and the company's international lending businesses. Components of the Other National Lending subsegment are separately disclosed.
-- Profits for the National Lending segment were down 7.8 percent compared to the first quarter of 2008, and down 37.2 percent relative to the second quarter of 2007.
-- The managed charge-off rate for the National Lending segment increased 33 basis points to 5.67 percent in the second quarter of 2008 from 5.34 percent in the first quarter of 2008.
-- The delinquency rate of 4.87 percent in the second quarter of 2008 for the National Lending segment increased from 4.73 percent as of March 31, 2008.
U.S. Card highlights
U.S. Card results in the second quarter reflect continued cyclical credit worsening and the company's actions to navigate the downturn. The business remains cautious on loan growth and continues to focus its marketing and originations on the parts of the U.S. Card market that the company believes provide the best combination of risk-adjusted returns and losses. The U.S. Card business remains well positioned to successfully navigate near-term challenges and to deliver solid results through the economic cycle.
-- U.S. Card reported net income of $340.4 million, a 30.7 percent decrease relative to the first quarter of 2008 and a 42.6 percent decrease relative to the second quarter of 2007.
-- Total revenues decreased $280.7 million, or 10.0 percent, compared to the first quarter of 2008 but increased $126.1 million, or 5.2 percent, over the prior year's same quarter.
-- Non-interest expenses declined 3.0 percent over the previous quarter and 5.7 percent relative to the second quarter of 2007.
-- Managed loans increased from the first quarter of 2008 by 1.0 percent, or $678.0 million, to $68.1 billion at June 30, 2008, and increased 2.3 percent from the year ago quarter.
-- Charge-offs rose in the second quarter of 2008 to 6.26 percent from 5.85 percent in the first quarter of 2008, and from 3.56 percent in the second quarter of 2007. The company expects the charge-off rate to be in the low six percent range in the third quarter, rising to around seven percent in the fourth quarter.
-- Delinquencies improved in the second quarter of 2008 to 3.85 percent from 4.04 percent in the previous quarter but rose from 2.98 percent in the year ago quarter.
Auto Finance highlights
The Auto Finance subsegment return to profitability this quarter was driven by the seasonal improvement in charge-offs, solid revenue margins, and continuing reductions in operating costs. Beyond this second quarter, the significant cyclical economic challenges facing the auto finance industry continue to be the longer term driver of performance in the Auto Finance business.
-- Auto Finance posted net income of $33.6 million in the quarter, compared to a loss of $82.4 million last quarter, and a profit of $38.0 million in the second quarter of 2007.
-- Total revenues decreased $12.4 million, or 3.0 percent, compared to the first quarter of 2008 but increased $7.9 million, or 2.0 percent, over the prior year's same quarter.
-- Non-interest expenses declined 9.7 percent over the previous quarter and 21.7 percent relative to the second quarter of 2007.
-- Net charge-offs of 3.84 percent declined slightly from 3.98 percent in the first quarter of 2008 while delinquencies increased 120 basis points from the prior quarter to 7.62 percent.
-- Originations in the first quarter of $1.5 billion were down 38.0 percent, or $926.5 million, compared to the prior quarter.
-- Managed loans of $23.4 billion as of June 30, 2008 were down 5.0 percent relative to the first quarter of 2008 and down 2.8 percent from the second quarter of 2007.
International highlights
Continued strong performance in Canada offset trends in the UK, where the credit environment grew more challenging in the second quarter. Modestly lower revenue, combined with an increase in provision expense, pressured UK profits in the quarter. The Canadian credit card business continues to perform well, with stable credit performance and solid returns.
-- International's net income of $33.6 million was relatively flat compared to $33.3 million in the first quarter of 2008, but increased $15.4 million from $18.2 million in the year ago quarter.
-- Charge-offs of 6.07 percent increased 77 basis points from 5.30 percent in the first quarter of 2008, and 68 basis points from 5.39 percent in the second quarter of 2007.
-- Delinquencies increased 23 basis points to 5.35 percent from 5.12 percent in the prior quarter and 53 basis points from 4.82 percent in the year ago quarter.
The company generates earnings from its managed loan portfolio, which includes both on-balance sheet loans and securitized (off-balance sheet) loans. For this reason, the company believes managed financial measures to be useful to stakeholders. In compliance with 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 (GAAP). Please see the schedule titled "Reconciliation to GAAP Financial Measures" attached to this release for more information.
Forward looking statements
The company cautions that its current expectations in this release, in the presentation slides available on the company's website and in its Form 8-K dated July 17, 2008 for 2008 revenue growth, loan and deposit growth, return on equity, the projected charge-off rate and revenue margin in the U.S. Card subsegment for 2008, estimated loss levels for the 12 months ending June 30, 2009 underlying the provision expense in the second quarter of 2008, credit performance and trends, operating efficiencies, operating expense reductions, and dividends, including future financial and operating results, and the company's plans, objectives, expectations, and intentions, are forward-looking statements and actual results could differ materially from current expectations due to a number of factors, including: general economic conditions in the U.S., the UK, or the company's local markets, including conditions affecting interest rates and consumer income and confidence, spending, and savings which may affect consumer bankruptcies, defaults, charge-offs and deposit activity; changes in the labor and employment market; changes in the credit environment; the company's ability to execute on its strategic and operational plans; competition from providers of products and services that compete with the company's businesses; increases or decreases in the company's aggregate accounts and balances, or the growth rate or composition thereof; the risk that the benefits of the company's cost savings initiative may not be fully realized; changes in the reputation of or expectations regarding the financial services industry or the company with respect to practices, products or financial condition; financial, legal, regulatory, tax or accounting changes or actions, including with respect to any litigation matter involving the company; and the success of the company's marketing efforts in attracting or retaining customers. A discussion of these and other factors can be found in the company's annual report and other reports filed with the Securities and Exchange Commission, including, but not limited to, the company's report on Form 10-K for the fiscal year ended December 31, 2007 and report on Form 10-Q for the quarter ended March 31, 2008.
About Capital One
Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries collectively had $92.4 billion in deposits and $147.2 billion in managed loans outstanding as of June 30, 2008. Headquartered in McLean, VA, Capital One has 740 locations in New York, New Jersey, Connecticut, Texas, and Louisiana. It is a diversified financial services company whose principal subsidiaries, Capital One, N.A., Capital One Bank (USA), N. A., and Capital One Auto Finance, Inc., offer a broad spectrum of financial products and services to consumers, small businesses and commercial clients. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.
NOTE: Second quarter 2008 financial results, SEC Filings, and second quarter earnings conference call slides are accessible on Capital One's home page (www.capitalone.com). Choose "Investors" on the bottom of the home page to view and download the earnings press release, slides, and other financial information. Additionally, a podcast and webcast of today's 5:00 pm (ET) earnings conference call is accessible through the same link.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY
REPORTED BASIS
(in millions, except
per share 2008 2008 2007
data and as noted) Q2 Q1 Q2
Earnings (Reported
Basis)
Net Interest Income $1,727.8 $1,811.9 $1,538.6 (7)
Non-Interest Income 1,622.3 (2)(13) 2,056.5 (2)(10)(11) 1,971.9
Total Revenue (1) 3,350.1 3,868.4 3,510.5
Provision for Loan
Losses 829.1 1,079.1 396.7
Marketing Expenses 288.1 297.8 326.1
Restructuring Expenses 13.6 52.8 91.1
Operating Expenses (3) 1,517.9 1,471.7 (4) 1,617.4 (8)
Income Before Taxes 701.4 967.0 1,079.2
Tax Rate 34.1% 34.6% 28.9%(5)
Income From Continuing
Operations, Net of Tax $462.5 $632.6 $767.6
Loss From Discontinued
Operations, Net
of Tax (6) (9.6) (84.1)(12) (17.2)
Net Income (Loss) $452.9 $548.5 $750.4
Common Share Statistics
Basic EPS:
Income From Continuing
Operations $1.24 $1.71 $1.96
Loss From Discontinued
Operations $(0.03) $(0.23) $(0.04)
Net Income (Loss) $1.21 $1.48 $1.92
Diluted EPS:
Income From Continuing
Operations $1.24 $1.70 $1.93
Loss From Discontinued
Operations $(0.03) $(0.23) $(0.04)
Net Income (Loss) $1.21 $1.47 $1.89
Dividends Per Share $0.375 $0.375 $0.03
Tangible Book Value
Per Share (period end) $30.77 $29.94 $29.11
Stock Price Per Share
(period end) $38.01 $49.22 $78.44
Total Market
Capitalization
(period end) $14,280.4 $18,442.7 $30,701.4
Shares Outstanding
(period end) 375.7 374.7 391.4
Shares Used to
Compute Basic EPS 372.3 370.7 390.8
Shares Used to Compute
Diluted EPS 373.7 372.3 397.5
Reported Balance Sheet
Statistics
(period average)(A)
Average Loans Held for
Investment $97,950 $99,819 $91,145
Average Earning Assets $131,629 $127,820 $119,430
Average Assets $154,288 $149,460 $142,690
Average Interest
Bearing Deposits $78,675 $74,167 $75,024
Total Average Deposits $89,522 $84,779 $86,525
Average Equity $24,839 $24,569 $25,128
Return on Average
Assets (ROA) 1.20% 1.69% 2.15%
Return on Average
Equity (ROE) 7.45% 10.30% 12.22%
Reported Balance Sheet
Statistics (period
end) (A)
Loans Held for
Investment $97,065 $98,356 $90,930
Total Assets $150,978 $150,428 $141,917
Interest Bearing
Deposits $81,655 $76,624 $74,235
Total Deposits $92,407 $87,695 $85,471
Performance Statistics
(Reported) (A)
Net Interest Income
Growth
(annualized) (19)% 11% (16)%
Non Interest Income Growth
(annualized) (84)% (19)% 45%
Revenue Growth (annualized) (54)% (5)% 16%
Net Interest Margin 5.25% 5.67% 5.15%
Revenue Margin 10.18% 12.11% 11.76%
Risk Adjusted Margin (B) 7.77% 9.71% 10.41%
Non Interest Expense as
a % of Average Loans
Held for Investment
(annualized) 7.43% 7.30% 8.93%
Efficiency Ratio (C) 53.91% 45.74% 55.36%
Asset Quality Statistics
(Reported) (A)
Allowance $3,311 $3,273 $2,113
Allowance as a % of
Reported Loans Held
for Investment 3.41% 3.33% 2.32%
Net Charge-Offs $793 $767 $401
Net Charge-Off Rate 3.24% 3.07% 1.76%(9)
Full-time equivalent
employees
(in thousands) 24.0 25.4 29.5
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY
MANAGED BASIS (*)
2008 2008 2007
(in millions) Q2 Q1 Q2
Earnings (Managed
Basis)
Net Interest Income $2,788.0 $2,976.8 $2,613.3 (7)
Non-Interest Income 1,302.0 (2)(13) 1,606.7 (2)(10)(11) 1,387.5
Total Revenue (1) 4,090.0 4,583.5 4,000.8
Provision for Loan
Losses 1,569.0 1,794.2 887.1
Marketing Expenses 288.1 297.8 326.1
Restructuring Expenses 13.6 52.8 91.1
Operating Expenses (3) 1,517.9 1,471.7 (4) 1,617.4 (8)
Income Before Taxes 701.4 967.0 1,079.1
Tax Rate 34.1% 34.6% 28.9 (5)
Income From Continuing
Operations, Net of Tax $462.5 $632.6 $767.6
Loss From Discontinued
Operations, Net of
Tax (6) (9.6) (84.1)(12) (17.2)
Net Income (Loss) $452.9 $548.5 $750.4
Managed Balance Sheet
Statistics (period
average) (A)
Average Loans Held for
Investment $147,716 $149,719 $142,616
Average Earning Assets $179,421 $175,709 $168,841
Average Assets $203,308 $198,516 $193,446
Return on Average
Assets (ROA) 0.91% 1.27% 1.59%
Managed Balance Sheet
Statistics (period
end) (A)
Loans Held for
Investment $147,247 $148,037 $143,498
Total Assets $200,420 $199,362 $193,682
Tangible Assets(D) $187,059 $185,962 $179,888
Tangible Common
Equity (E) $11,560 $11,220 $11,393
Tangible Common
Equity to Tangible
Assets Ratio 6.18% 6.03% 6.33%
% Off-Balance Sheet
Securitizations 34% 34% 37%
Performance Statistics
(Managed) (A)
Net Interest Income Growth
(annualized) (25)% (3)% 47%
Non Interest Income Growth
(annualized) (76)% 10% 59%
Revenue Growth (annualized) (43)% 1% 51%
Net Interest Margin 6.22% 6.78% 6.19%
Revenue Margin 9.12% 10.43% 9.48%
Risk Adjusted Margin (B) 5.70% 7.06% 7.37%
Non Interest Expense as
a % of Average Loans
Held for Investment
(annualized) 4.93% 4.87% 5.71%
Efficiency Ratio (C) 44.16% 38.61% 48.58%
Asset Quality Statistics
(Managed) (A)
Net Charge-Offs $1,533 $1,482 $891
Net Charge-Off Rate 4.15% 3.96% 2.50%(9)
(*) The information in this statistical summary reflects the adjustment to add back the effect of securitization transactions qualifying as sales under generally accepted accounting principles. See accompanying schedule - "Reconciliation to GAAP Financial Measures".
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY NOTES
(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: Q2 2008 - $476.0 million, Q1 2008 - $407.6 million, and Q2 2007 - $236.3 million.
(2) In Q2 2008 the Company recorded a decrease to its interest-only strips of $71.0 million. In Q1 2008 the Company recorded an increase of $42.8 million to its interest-only strips.
(3) Includes core deposit intangible amortization expense of $48.5 million in Q2 2008, $49.8 million in Q1 2008, and $53.7 million in Q2 2007 and integration costs of $31.4 million in Q2 2008, $29.6 million in Q1 2008, and $24.5 million in Q2 2007.
(4) In Q1 2008, the Company, in connection with the Visa initial public offering (IPO), reversed approximately $91 million of these legal liabilities.
(5) Includes a $69.0 million benefit in Q2 2007 resulting from changes in the Company's international tax position and tax benefits from resolution of tax issues.
(6) In Q3 2007, the Company shutdown the mortgage origination operations of its wholesale mortgage banking unit, GreenPoint Mortgage, realizing an after tax loss of $898.0 million. The results of the mortgage origination operation of GreenPoint have been accounted for as a discontinued operation and have been removed from the Company's results of continuing operations for all periods presented. The results of GreenPoint's mortgage servicing business are reported in continuing operations for all periods presented. Effective Q4 2007, GreenPoint's held for investment commercial and consumer loan portfolio results are included in continuing operations.
(7) Includes a $17.4 million gain from the early extinguishment of Trust Preferred Securities in Q2 2007 included as a component of interest expense.
(8) Includes a charge of $39.8 million as a result of the accelerated vesting of equity awards made in connection with the transition of the management team for Capital One's Local Banking business following the acquisition of North Fork.
(9) Managed and reported net charge-off rate for Q2 2007 was positively impacted 11 and 17 basis points, respectively, due to the implementation of a change in customer statement generation from 30 to 25 days grace. The change did not have a material impact on provision for loan losses for Q2 2007.
(10) In Q1 2008 the Company recorded a gain of $109.0 million in non- interest income from the redemption of 2.5 million shares related to the Visa IPO.
(11) In Q1 2008 the Company repurchased approximately $1.0 billion of certain senior unsecured debt, recognizing a gain of $52.0 million in non- interest income. The Company initiated the repurchases to take advantage of the current rate environment and replaced the borrowings with lower-rate unsecured funding.
(12) In Q1 2008 the Company recorded a pre-tax expense of $104.2 million in discontinued operations to cover expected future claims made under representations and warranties provided by the Company on loans previously sold to third parties by GreenPoint's mortgage origination operation. See also note (6) above.
(13) In Q2 2008 the Company elected to convert and sell 154,991 shares of MasterCard class B common stock. The Company recognized gains of $44.9 million in non-interest income from this transaction.
STATISTICS / METRIC DEFINITIONS
(A) Based on continuing operations. Average equity and return on equity are based on the Company's stockholders' equity.
(B) Risk adjusted margin equals total revenue less net charge-offs as a percentage of average earning assets.
(C) Efficiency ratio equals non-interest expense less restructuring expense divided by total revenue.
(D) Tangible assets include managed assets less intangible assets.
(E) Includes stockholders' equity and preferred interests less intangible assets and related deferred tax liabilities. Tangible Common Equity on a reported and managed basis is the same.
CAPITAL ONE FINANCIAL CORPORATION (COF)
SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS
MANAGED BASIS (1)
2008 2008 2007
(in thousands) Q2 Q1 Q2 (7)
Local Banking:
Interest Income $1,489,612 $1,575,325 $1,731,833
Interest Expense 899,907 1,008,371 1,143,674
Net interest income $589,705 $566,954 $588,159
Non-interest income 192,758 215,469 254,401
Provision for loan losses 92,043 60,394 23,929
Other non-interest expenses 587,211 605,351 580,788
Income tax provision 36,123 40,837 83,046
Net income $67,086 $75,841 $154,797
Loans Held for Investment $44,270,734 $44,197,085 $41,919,645
Average Loans Held for
Investment $44,250,451 $43,887,387 $42,110,537
Core Deposits(2) $63,407,571 $62,811,696 $63,619,337
Total Deposits $74,245,677 $73,387,227 $74,273,736
Loans Held for Investment
Yield 6.35% 6.75% 7.03%
Net Interest Margin -
Loans (3) 1.99% 1.92% 1.88%
Net Interest Margin -
Deposits (4) 2.04% 1.93% 2.01%
Efficiency Ratio (6) 75.05% 77.37% 68.93%
Net charge-off rate 0.34% 0.31% 0.19%
Non Performing Loans $359,017 $249,055 $80,781
Non Performing Loans as a %
of Loans Held for
Investment 0.81% 0.56% 0.19%
Non-Interest Expenses as a
% of Average Loans Held
for Investment 5.31% 5.52% 5.52%
Number of Active ATMs 1,303 1,297 1,253
Number of Locations 740 745 724
National Lending (10):
Interest Income $3,181,773 $3,530,017 $3,253,448
Interest Expense 1,014,244 1,121,434 1,193,205
Net interest income $2,167,529 $2,408,583 $2,060,243
Non-interest income 1,164,810 1,226,114 1,133,318
Provision for loan losses 1,470,642 1,677,220 869,149
Other non-interest expenses 1,236,567 1,279,171 1,333,956
Income tax provision 217,496 236,203 341,323
Net income $407,634 $442,103 $649,133
Loans Held for Investment $102,201,802 $103,003,402 $101,590,039
Average Loans Held for
Investment $102,629,246 $104,973,633 $100,520,138
Core Deposits(2) $1,954 $2,171 $1,124
Total Deposits $1,644,241 $1,774,690 $2,411,435
Loans Held for Investment
Yield 12.40% 13.45% 12.95%
Net Interest Margin 8.45% 9.18% 8.20%
Revenue Margin 12.99% 13.85% 12.71%
Risk Adjusted Margin 7.31% 8.51% 9.24%
Non-Interest Expenses as a
% of Average Loans Held
for Investment 4.82% 4.87% 5.31%
Efficiency Ratio (6) 37.11% 35.19% 41.77%
Net charge-off rate 5.67% 5.34% 3.47% (5)
Delinquency Rate (30+ days) 4.87% 4.73% 3.89%
Number of Loan Accounts
(000s) 45,812 48,065 48,536
Other:
Net interest income $30,761 $1,313 $(35,057)
Non-interest income (55,594) 165,102 (248)
Provision for loan losses 6,342 56,598 (5,981)
Restructuring expenses 13,560 52,759 91,074
Other non-interest expenses (17,737) (115,004) 28,717
Income tax provision
(benefit) (14,776) 57,451 (112,797)
Net income (loss) $(12,222) $114,611 $(36,318)
Loans Held for Investment $774,424 $836,041 $(11,928)
Core Deposits(2) $14,800,701 $10,729,004 $6,937,760
Total Deposits $16,517,143 $12,533,025 $8,786,315
Total:
Interest Income $4,270,571 $4,628,257 $4,380,376
Interest Expense 1,482,577 1,651,407 1,767,031
Net interest income $2,787,994 $2,976,850 $2,613,345
Non-interest income 1,301,974 1,606,685 1,387,471
Provision for loan losses 1,569,027 1,794,212 887,097
Restructuring expenses 13,560 52,759 91,074
Other non-interest expenses 1,806,041 1,769,518 1,943,461
Income tax provision 238,843 334,491 311,572
Net Income $462,497 $632,555 $767,612
Loans Held for Investment $147,246,960 $148,036,528 $143,497,756
Core Deposits(2) $78,210,226 $73,542,871 $70,558,221
Total Deposits $92,407,061 $87,694,942 $85,471,486
CAPITAL ONE FINANCIAL CORPORATION (COF)
LOCAL BANKING SEGMENT FINANCIAL & STATISTICAL INFORMATION
2008 2008 2007
(in thousands) Q2 Q1 Q4
Loans Held for Investment:
Commercial Lending
Commercial and Multi-Family Real
Estate $12,706,320 $12,501,332 $12,381,563
Middle Market 9,215,511 8,891,537 8,377,834
Small Ticket Commercial Real
Estate 2,770,249 2,879,933 2,956,785
Specialty Lending 3,684,688 3,514,267 3,391,604
Total Commercial Lending $28,376,768 $27,787,069 $27,107,786
Small Business Lending $4,833,514 $4,890,459 $4,964,959
Consumer Lending
Mortgages $7,654,722 $8,092,105 $8,409,821
Branch Based Home Equity & Other
Consumer 3,475,649 3,524,261 3,621,516
Total Consumer Lending $11,130,371 $11,616,366 $12,031,337
Other $(69,919) $(96,809) $(131,287)
Total Loans Held for Investment $44,270,734 $44,197,085 $43,972,795
Non Performing Asset Rates(1):
Commercial Lending
Commercial and Multi-Family Real
Estate 0.89% 0.47% 0.24%
Middle Market 0.30% 0.41% 0.41%
Small Ticket Commercial Real
Estate 2.71% 1.59% 0.54%
Specialty Lending 0.25% 0.18% 0.18%
Total Commercial Lending 0.79% 0.53% 0.32%
Small Business Lending 1.10% 0.94% 0.99%
Consumer Lending
Mortgages 1.25% 0.82% 0.54%
Branch Based Home Equity & Other
Consumer 0.43% 0.39% 0.34%
Total Consumer Lending 0.99% 0.69% 0.48%
Total Non Performing Asset Rate 0.88% 0.62% 0.44%
Net Charge Off Rates:
Commercial Lending
Commercial and Multi-Family Real
Estate 0.10% 0.02% 0.02%
Middle Market 0.05% 0.15% 0.12%
Small Ticket Commercial Real
Estate 0.00% 0.31% 0.20%
Specialty Lending 0.04% 0.01% 0.04%
Total Commercial Lending 0.08% 0.09% 0.09%
Small Business Lending 0.91% 0.97% 0.63%
Consumer Lending
Mortgages 0.36% 0.11% 0.18%
Branch Based Home Equity & Other
Consumer 1.15% 1.34% 1.17%
Total Consumer Lending 0.60% 0.48% 0.48%
Total Net Charge Off Rate 0.34% 0.31% 0.28%
(1) Non performing asset rates include foreclosed assets of $30 million for Q2 2008, $20 million for Q1 2008 and $15 million for Q4 2007
CAPITAL ONE FINANCIAL CORPORATION (COF)
NATIONAL LENDING SUBSEGMENT FINANCIAL & STATISTICAL SUMMARY FOR
CONTINUING OPERATIONS
MANAGED BASIS (1), (10)
2008 2008 2007
(in thousands) Q2 Q1 Q2 (7)
US Card:
Interest Income $2,132,284 $2,433,665 $2,214,408
Interest Expense 608,655 689,951 778,576
Net interest income $1,523,629 $1,743,714 $1,435,832
Non-interest income 1,010,177 1,070,831 971,894
Provision for loan losses 1,099,453 1,120,025 538,379
Non-interest expenses 910,619 938,860 965,556
Income tax provision 183,307 264,481 310,904
Net income $340,427 $491,179 $592,887
Loans Held for Investment $68,059,998 $67,382,004 $66,539,623
Average Loans Held for
Investment $67,762,384 $68,544,190 $65,639,360
Loans Held for Investment
Yield 12.59% 14.20% 13.49%
Net Interest Margin 8.99% 10.18% 8.75%
Revenue Margin 14.96% 16.42% 14.67%
Risk Adjusted Margin 8.70% 10.58% 11.11%
Non-Interest Expenses as a %
of Average Loans Held for
Investment 5.38% 5.48% 5.88%
Efficiency Ratio (6) 35.94% 33.36% 40.10%
Net charge-off rate 6.26% 5.85% 3.56% (9)
Delinquency Rate (30+ days) 3.85% 4.04% 2.98%
Purchase Volume (8) $26,738,213 $24,543,082 $26,940,397
Number of Loan Accounts (000s) 38,415 40,611 41,174
Auto Finance:
Interest Income $666,499 $690,919 $651,821
Interest Expense 276,911 289,357 277,783
Net interest income $389,588 $401,562 $374,038
Non-interest income 15,672 16,110 23,273
Provision for loan losses 230,614 408,251 182,278
Non-interest expenses 123,021 136,169 157,044
Income tax (benefit) provision 18,069 (44,362) 19,948
Net (loss) income $33,556 $(82,386) $38,041
Loans Held for Investment $23,401,160 $24,633,665 $24,067,760
Average Loans Held for
Investment $24,098,881 $25,047,501 $23,898,070
Loans Held for Investment
Yield 11.06% 11.03% 10.91%
Net Interest Margin 6.47% 6.41% 6.26%
Revenue Margin 6.73% 6.67% 6.65%
Risk Adjusted Margin 2.88% 2.69% 4.30%
Non-Interest Expenses as a %
of Average Loans Held for
Investment 2.04% 2.17% 2.63%
Efficiency Ratio (6) 30.36% 32.60% 39.53%
Net charge-off rate 3.84% 3.98% 2.35%
Delinquency Rate (30+ days) 7.62% 6.42% 6.00%
Auto Loan Originations $1,513,686 $2,440,227 $2,992,427
Number of Loan Accounts (000s) 1,710 1,763 1,771
International:
Interest Income $382,990 $405,433 $387,219
Interest Expense 128,678 142,126 136,846
Net interest income $254,312 $263,307 $250,373
Non-interest income 138,961 139,173 138,151
Provision for loan losses 140,575 148,944 148,492
Non-interest expenses 202,927 204,142 211,356
Income tax provision 16,120 16,084 10,471
Net income $33,651 $33,310 $18,205
Loans Held for Investment $10,740,644 $10,987,733 $10,982,656
Average Loans Held for
Investment $10,767,981 $11,381,942 $10,982,708
Loans Held for Investment
Yield 14.23% 14.25% 14.10%
Net Interest Margin 9.45% 9.25% 9.12%
Revenue Margin 14.61% 14.14% 14.15%
Risk Adjusted Margin 8.54% 8.84% 8.77%
Non-Interest Expenses as a %
of Average Loans Held for
Investment 7.54% 7.17% 7.70%
Efficiency Ratio (6) 51.60% 50.72% 54.40%
Net charge-off rate 6.07% 5.30% 5.39%
Delinquency Rate (30+ days) 5.35% 5.12% 4.82%
Purchase Volume (8) $2,879,223 $2,716,060 $2,094,280
Number of Loan Accounts (000s) 5,687 5,691 5,591
CAPITAL ONE FINANCIAL CORPORATION (COF)
SEGMENT AND NATIONAL LENDING SUBSEGMENT
FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS
NOTES
(1) The information in this statistical summary reflects the adjustment to add back the effect of securitization transactions qualifying as sales under generally accepted accounting principles. See accompanying schedule - "Reconciliation to GAAP Financial Measures." In Q3 2007, the Company shutdown the mortgage origination operations of its wholesale mortgage banking unit, GreenPoint Mortgage. The results of the mortgage origination operation of GreenPoint have been accounted for as a discontinued operation and have been removed from the Company's results of continuing operations for all periods presented. The results of GreenPoint's mortgage servicing business are reported in continuing operations for all periods presented. Effective Q4 2007, GreenPoint's held for investment commercial and consumer loan portfolio results are included in continuing operations.
(2) Includes domestic non-interest bearing deposits, NOW accounts, money market deposit accounts, savings accounts, certificates of deposit of less than $100,000 and other consumer time deposits.
(3) Net Interest Margin - Loans equals net interest income earned on loans divided by average managed loans.
(4) Net Interest Margin - Deposits equals net interest income earned on deposits divided by average retail deposits.
(5) Net charge-off rate for Q2 2007 was positively impacted by 16 basis points due to the implementation of a change in customer statement generation from 30 to 25 days grace. This change did not have a material impact on the provision for the quarter.
(6) Efficiency Ratio equals non-interest expenses divided by total managed revenue.
(7) Certain prior period amounts have been reclassified to conform with current period presentation.
(8) Includes all purchase transactions net of returns and excludes cash advance transactions.
(9) Net charge-off rate for Q2 2007 was positively impacted by 31 basis points due to the implementation of a change in customer statement generation from 30 to 25 days grace. This change did not have a material impact on the provision for the quarter.
(10) In Q1 2008 the Company reorganized its National Lending subsegments from U.S. Card, Auto Finance and Global Financial Services to U.S. Card and Other National Lending. The U.S. Card subsegment contains the results of the Company's domestic credit card business, small business lending and the installment loan business. The Other National Lending subsegment contains the results of the Company's auto finance business and the Company's international lending businesses. Components of the Other National Lending subsegment are separately disclosed. Segment and subsegment results have been restated for all periods presented.
CAPITAL ONE FINANCIAL CORPORATION
Reconciliation to GAAP Financial Measures
For the Three Months Ended June 30, 2008
(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, servicing fees, finance charges, and other fees, net of charge-offs, and interest paid to investors of securitizations are recognized as servicing and securitizations income on the "reported" income statement.
The Company's "managed" consolidated financial statements reflect adjustments made related to 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. The Company's "managed" income statement takes the components of the servicing and securitizations income generated from the securitized portfolio and distributes the revenue and expense 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 Total
Reported Adjustments(1) Managed(2)
Income Statement Measures(3)
Net interest income $1,727,756 $1,060,238 $2,787,994
Non-interest income 1,622,316 (320,341) 1,301,975
Total revenue 3,350,072 739,897 4,089,969
Provision for loan and lease
losses 829,130 739,897 1,569,027
Net charge-offs $793,048 $739,897 $1,532,945
Balance Sheet Measures
Loans held for investment $97,065,238 $50,182,022 $147,247,260
Total assets $151,114,271 $49,442,148 $200,556,419
Average loans held for investment $97,949,572 $49,766,121 $147,715,693
Average earning assets $131,681,294 $47,791,504 $179,472,798
Average total assets $154,706,392 $49,020,229 $203,726,621
Delinquencies $3,330,151 $2,031,479 $5,361,630
(1) Income statement adjustments reclassify the net of finance charges of $1,385.3 million, past-due fees of $229.2 million, other interest income of $(35.8) million and interest expense of $518.5 million; and net charge-offs of $739.9 million from non-interest income to net interest income and provision for loan and lease losses, respectively.
(2) The managed loan portfolio does not include auto loans which have been sold in whole loan sale transactions where the Company has retained servicing rights.
(3) Based on continuing operations.
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income
(in thousands, except per share data)(unaudited)
Three Months Ended
June 30 March 31 June 30
2008 2008 2007 (1)
Interest Income:
Loans held for investment, including
past-due fees $2,297,709 $2,508,393 $2,255,573
Securities available for sale 281,089 257,747 237,978
Other 113,059 113,385 145,135
Total interest income 2,691,857 2,879,525 2,638,686
Interest Expense:
Deposits 592,576 610,389 749,603
Senior and subordinated notes 114,797 140,970 134,061
Other borrowings 256,728 316,249 216,441
Total interest expense 964,101 1,067,608 1,100,105
Net interest income 1,727,756 1,811,917 1,538,581
Provision for loan and lease losses 829,130 1,079,072 396,713
Net interest income after provision
for loan and lease losses 898,626 732,845 1,141,868
Non-Interest Income:
Servicing and securitizations 834,740 1,083,062 1,226,896
Service charges and other customer-
related fees 524,209 574,061 482,979
Mortgage servicing and other 16,552 35,255 103,653
Interchange 132,730 151,902 125,979
Other 114,085 212,198 32,344
Total non-interest income 1,622,316 2,056,478 1,971,851
Non-Interest Expense:
Salaries and associate benefits 578,572 611,280 667,904
Marketing 288,100 297,793 326,067
Communications and data processing 195,102 187,243 192,620
Supplies and equipment 131,937 130,931 116,434
Occupancy 80,137 88,080 75,843
Restructuring expense 13,560 52,759 91,074
Other 532,193 454,191 564,593
Total non-interest expense 1,819,601 1,822,277 2,034,535
Income from continuing operations
before income taxes 701,341 967,046 1,079,184
Income taxes 238,843 334,491 311,572
Income from continuing operations, net
of tax 462,498 632,555 767,612
Loss from discontinued operations, net
of tax(2) (9,593) (84,051) (17,240)
Net income $452,905 $548,504 $750,372
Basic earnings per share
Income from continuing operations $1.24 $1.71 $1.96
Loss from discontinued operations (0.03) (0.23) (0.04)
Net income $1.21 $1.48 $1.92
Diluted earnings per share
Income from continuing operations $1.24 $1.70 $1.93
Loss from discontinued operations (0.03) (0.23) (0.04)
Net income $1.21 $1.47 $1.89
Dividends paid per share $0.375 $0.375 $0.03
Six Months Ended
June 30 June 30
2008 2007(1)
Interest Income:
Loans held for investment, including
past-due fees $4,806,102 $4,582,253
Securities available for sale 538,836 442,058
Other 226,444 326,684
Total interest income 5,571,382 5,350,995
Interest Expense:
Deposits 1,202,965 1,480,086
Senior and subordinated notes 255,767 272,607
Other borrowings 572,977 455,178
Total interest expense 2,031,709 2,207,871
Net interest income 3,539,673 3,143,124
Provision for loan and lease losses 1,908,202 746,758
Net interest income after provision
for loan and lease losses 1,631,471 2,396,366
Non-Interest Income:
Servicing and securitizations 1,917,802 2,214,978
Service charges and other customer-
related fees 1,098,270 962,446
Mortgage servicing and other 51,807 155,103
Interchange 284,632 244,090
Other 326,283 169,604
Total non-interest income 3,678,794 3,746,221
Non-Interest Expense:
Salaries and associate benefits 1,189,852 1,343,075
Marketing 585,893 656,961
Communications and data processing 382,345 374,854
Supplies and equipment 262,868 250,332
Occupancy 168,217 153,238
Restructuring expense 66,319 91,074
Other 986,384 1,139,048
Total non-interest expense 3,641,878 4,008,582
Income from continuing operations
before income taxes 1,668,387 2,134,005
Income taxes 573,334 680,269
Income from continuing operations,
net of tax 1,095,053 1,453,736
Loss from discontinued operations,
net of tax(2) (93,644) (28,314)
Net income $1,001,409 $1,425,422
Basic earnings per share
Income from continuing operations $2.95 $3.64
Loss from discontinued operations (0.25) (0.07)
Net income $2.70 $3.57
Diluted earnings per share
Income from continuing operations $2.94 $3.58
Loss from discontinued operations (0.25) (0.07)
Net income $2.69 $3.51
Dividends paid per share $0.75 $0.05
(1) Certain prior period amounts have been reclassified to conform to the current period presentation.
(2) In Q3 2007, the Company shutdown the mortgage origination operations of its wholesale mortgage banking unit, GreenPoint Mortgage. The results of the mortgage origination operation of GreenPoint have been accounted for as a discontinued operation and have been removed from the Company's results of continuing operations for all periods presented.
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Balance Sheets
(in thousands)(unaudited)
As of As of As of
June 30 March 31 June 30
2008 2008 2007 (1)
Assets:
Cash and due from banks $2,280,244 $2,324,079 $2,354,393
Federal funds sold and resale
agreements 1,526,799 1,842,775 3,940,269
Interest-bearing deposits at
other banks 717,572 663,150 753,160
Cash and cash equivalents 4,524,615 4,830,004 7,047,822
Securities available for sale 25,028,853 22,190,739 20,203,381
Mortgage loans held for sale 111,824 192,584 2,732,044
Loans held for investment 97,065,238 98,356,088 91,617,353
Less: Allowance for loan and
lease losses (3,311,003) (3,273,355) (2,120,000)
Net loans held for investment 93,754,235 95,082,733 89,497,353
Accounts receivable from
securitizations 5,301,906 5,396,943 5,481,686
Premises and equipment, net 2,321,487 2,316,233 2,260,928
Interest receivable 778,595 750,319 768,617
Goodwill 12,826,738 12,826,419 13,612,005
Other 6,466,018 7,022,553 4,334,121
Total assets $151,114,271 $150,608,527 $145,937,957
Liabilities:
Non-interest-bearing deposits $10,752,059 $11,071,116 $11,236,110
Interest-bearing deposits 81,655,001 76,623,826 74,235,376
Senior and subordinated notes 8,506,339 9,834,392 9,222,506
Other borrowings 19,302,185 21,673,670 20,890,258
Interest payable 621,489 509,278 543,805
Other 5,355,733 6,276,718 4,623,241
Total liabilities 126,192,806 125,989,000 120,751,296
Stockholders' Equity:
Common stock 4,223 4,213 4,174
Paid-in capital, net 15,966,810 15,918,230 15,682,009
Retained earnings and
cumulative other
comprehensive income 12,115,480 11,860,288 11,386,625
Less: Treasury stock, at
cost (3,165,048) (3,163,204) (1,886,147)
Total stockholders' equity 24,921,465 24,619,527 25,186,661
Total liabilities and
stockholders' equity $151,114,271 $150,608,527 $145,937,957
(1) Certain prior period amounts have been reclassified to conform to
the current period presentation.
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Reported Quarter Ended 6/30/08
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans held for investment $97,949,572 $2,297,709 9.38%
Securities available for sale 24,165,577 281,089 4.65%
Other 9,513,873 113,059 4.75%
Total earning assets (2) $131,629,022 $2,691,857 8.18%
Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts $1,550,149 $5,921 1.53%
Money market deposit accounts 32,100,584 184,752 2.30%
Savings accounts 8,191,586 19,521 0.95%
Other Consumer Time Deposits 22,676,841 243,921 4.30%
Public Fund CD's of $100,000 or
more 1,476,155 10,313 2.79%
CD's of $100,000 or more 9,124,586 98,516 4.32%
Foreign time deposits 3,555,189 29,632 3.33%
Total Interest-bearing deposits $78,675,090 $592,576 3.01%
Senior and subordinated notes 9,125,017 114,797 5.03%
Other borrowings 24,851,821 256,728 4.13%
Total interest-bearing
liabilities (2) $112,651,928 $964,101 3.42%
Net interest spread 4.76%
Interest income to average earning
assets 8.18%
Interest expense to average earning
assets 2.93%
Net interest margin 5.25%
Reported Quarter Ended 3/31/08
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans held for investment $99,818,867 $2,508,393 10.05%
Securities available for sale 21,211,356 257,747 4.86%
Other 6,789,537 113,385 6.68%
Total earning assets (2) $127,819,760 $2,879,525 9.01%
Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts $3,958,482 $17,714 1.79%
Money market deposit accounts 29,636,896 211,436 2.85%
Savings accounts 8,064,412 24,008 1.19%
Other Consumer Time Deposits 18,429,463 204,942 4.45%
Public Fund CD's of $100,000 or
more 1,671,936 15,718 3.76%
CD's of $100,000 or more 8,756,978 99,264 4.53%
Foreign time deposits 3,648,797 37,307 4.09%
Total Interest-bearing deposits $74,166,964 $610,389 3.29%
Senior and subordinated notes 10,099,878 140,970 5.58%
Other borrowings 25,449,240 316,249 4.97%
Total interest-bearing
liabilities(2) $109,716,082 $1,067,608 3.89%
Net interest spread 5.12%
Interest income to average earning
assets 9.01%
Interest expense to average earning
assets 3.34%
Net interest margin 5.67%
Reported Quarter Ended 6/30/07 (1)
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans held for investment 91,144,738 2,255,573 9.90%
Securities available for sale 19,349,938 237,978 4.92%
Other 8,935,393 145,135 6.50%
Total earning assets (2) $119,430,069 $2,638,686 8.84%
Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts $5,115,994 $36,764 2.87%
Money market deposit accounts 27,418,203 276,038 4.03%
Savings accounts 8,409,684 36,294 1.73%
Other Consumer Time Deposits 18,494,150 217,700 4.71%
Public Fund CD's of $100,000 or
more 1,981,883 24,290 4.90%
CD's of $100,000 or more 9,609,949 107,491 4.47%
Foreign time deposits 3,994,639 51,026 5.11%
Total Interest-bearing deposits $75,024,502 $749,603 4.00%
Senior and subordinated notes 9,336,130 134,061 5.74%
Other borrowings 17,318,770 216,441 5.00%
Total interest-bearing
liabilities(2) $101,679,402 $1,100,105 4.33%
Net interest spread 4.51%
Interest income to average earning
assets 8.84%
Interest expense to average earning
assets 3.68%
Net interest margin 5.15%
(1) Prior period amounts have been reclassified to conform with current period presentation.
(2) Average balances, income and expenses, yields and rates are based on continuing operations.
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Managed (1) Quarter Ended 6/30/08
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans held for investment $147,715,693 $3,929,069 10.64%
Securities available for sale 24,165,577 281,089 4.65%
Other 7,539,256 60,414 3.21%
Total earning assets (3) $179,420,526 $4,270,572 9.52%
Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts $1,550,149 $5,921 1.53%
Money market deposit accounts 32,100,584 184,752 2.30%
Savings accounts 8,191,586 19,521 0.95%
Other Consumer Time Deposits 22,676,841 243,921 4.30%
Public Fund CD's of $100,000 or
more 1,476,155 10,313 2.79%
CD's of $100,000 or more 9,124,586 98,516 4.32%
Foreign time deposits 3,555,189 29,632 3.33%
Total Interest-bearing deposits $78,675,090 $592,576 3.01%
Senior and subordinated notes 9,125,017 114,797 5.03%
Other borrowings 24,851,821 256,728 4.13%
Securitization liability 49,317,336 518,477 4.21%
Total interest-bearing liabilities(3) $161,969,264 $1,482,578 3.66%
Net interest spread 5.86%
Interest income to average earning
assets 9.52%
Interest expense to average earning
assets 3.30%
Net interest margin 6.22%
Managed (1) Quarter Ended 3/31/08
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans held for investment $149,719,498 $4,316,294 11.53%
Securities available for sale 21,211,356 257,747 4.86%
Other 4,777,704 54,215 4.54%
Total earning assets (3) $175,708,558 $4,628,256 10.54%
Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts $3,958,482 $17,714 1.79%
Money market deposit accounts 29,636,896 211,436 2.85%
Savings accounts 8,064,412 24,008 1.19%
Other Consumer Time Deposits 18,429,463 204,942 4.45%
Public Fund CD's of $100,000 or
more 1,671,936 15,718 3.76%
CD's of $100,000 or more 8,756,978 99,264 4.53%
Foreign time deposits 3,648,797 37,307 4.09%
Total Interest-bearing deposits $74,166,964 $610,389 3.29%
Senior and subordinated notes 10,099,878 140,970 5.58%
Other borrowings 25,449,240 316,249 4.97%
Securitization liability 49,270,231 583,798 4.74%
Total interest-bearing liabilities(3) $158,986,313 $1,651,406 4.15%
Net interest spread 6.39%
Interest income to average earning
assets 10.54%
Interest expense to average earning
assets 3.76%
Net interest margin 6.78%
Managed (1) Quarter Ended 6/30/07 (2)
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans held for investment $142,616,011 $4,055,689 11.38%
Securities available for sale 19,349,938 237,978 4.92%
Other 6,875,429 86,709 5.04%
Total earning assets (3) $168,841,378 $4,380,376 10.38%
Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts $5,115,994 $36,764 2.87%
Money market deposit accounts 27,418,203 276,038 4.03%
Savings accounts 8,409,684 36,294 1.73%
Other Consumer Time Deposits 18,494,150 217,700 4.71%
Public Fund CD's of $100,000 or
more 1,981,883 24,290 4.90%
CD's of $100,000 or more 9,609,949 107,491 4.47%
Foreign time deposits 3,994,639 51,026 5.11%
Total Interest-bearing deposits $75,024,502 $749,603 4.00%
Senior and subordinated notes 9,336,130 134,061 5.74%
Other borrowings 17,318,770 216,441 5.00%
Securitization liability 50,841,894 666,926 5.25%
Total interest-bearing liabilities(3) $152,521,296 $1,767,031 4.63%
Net interest spread 5.74%
Interest income to average earning
assets 10.38%
Interest expense to average earning
assets 4.19%
Net interest margin 6.19%
(1) The information in this table reflects the adjustment to add back the effect of securitized loans.
(2) Prior period amounts have been reclassified to conform with current period presentation.
(3) Average balances, income and expenses, yields and rates are based on continuing operations.
SOURCE Capital One Financial Corporation