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Capital One Reports Second Quarter Earnings Per Share (diluted) of $1.21

July 17, 2008 at 4:07 PM EDT

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

http://www.capitalone.com