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Capital One Reports Second Quarter Earnings per Share

July 21, 2004 at 4:08 PM EDT
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34% EPS Increase Over Year Ago Period

Company Increases 2004 Earnings Guidance

MCLEAN, Va., July 21 /PRNewswire-FirstCall/ -- Capital One Financial Corporation (NYSE: COF) today announced that its fully diluted earnings per share for the second quarter of 2004 increased by 34 percent over the second quarter of 2003. In addition, the company increased its 2004 earnings guidance to be between $5.60 to $5.90 per share (fully diluted).

Earnings for the second quarter of 2004 were $407.4 million, or $1.65 per share (fully diluted), compared with earnings of $286.2 million, or $1.23 per share, for the second quarter of 2003 and $450.8 million, or $1.84 per share, in the first quarter of 2004.

"Capital One's second quarter results provide continued evidence of our strong success as a diversified consumer financial services company," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "Our diversified businesses are delivering real earnings power. Capital One is on a trajectory to continue to deliver solid loan growth, coupled with strong credit performance, and improving operating efficiencies."

During the second quarter of 2004, Capital One grew its managed loan portfolio by $1.6 billion to $73.4 billion. The company continues to expect that the managed loan growth rate for the year will be in the mid-teens and is targeting mid-teens loan growth for 2005. In addition, the company continues to expect that its marketing expense will be somewhat higher in 2004 than the $1.1 billion in 2003.

The managed charge-off rate declined to 4.42 percent in the second quarter of 2004, from 4.83 percent in the previous quarter, and 6.32 percent in the second quarter of 2003. The company expects its quarterly charge-off rate will stabilize in the 4.0 percent to 4.5 percent range in the second half of 2004 and into 2005, with seasonal variations. Additionally, after reducing its allowance for loan losses by $170.0 million in the first half of 2004, the company expects to build its allowance for loan losses modestly in the second half of 2004. The managed delinquency rate (30+ days) declined to 3.76 percent as of June 30, 2004, from 3.80 percent as of the end of the previous quarter, and 4.95 percent as of June 30, 2003.

The company continues to diversify its portfolio and earnings beyond U.S. credit cards. As a result, Capital One's managed revenue margin declined to 12.53 percent in the second quarter of 2004 from 13.38 percent in the previous quarter and 14.85 percent in the second quarter of 2003. The company expects revenue margins to move modestly lower over time, given its diversification and bias towards lower-loss assets. Annualized operating expenses as a percentage of average managed loans declined to 5.39 percent in the second quarter of 2004, from 5.45 percent in the previous quarter, and 5.88 percent in the second quarter of 2003. As part of operating expenses, the company took a charge of $56.0 million in the second quarter of 2004 for employee termination benefits and for facility consolidations related to corporate-wide cost reduction initiatives. The company expects to take additional $60 to $100 million of charges in the second half of 2004 for reorganizations and facility consolidations. These charges are accounted for in the company's revised guidance for 2004.

"Improvements in efficiency and credit have more than offset reduced revenue margin," said Gary L. Perlin, Capital One's Chief Financial Officer. "This leads us to expect an average return on managed assets for the full year of 2004 of around 1.6 percent as compared with a return on managed assets of 1.52 percent in 2003. We are targeting a similar average return on managed assets of around 1.6 percent in 2005."

The company generates earnings from its managed loan portfolio, which includes both on-balance sheet loans and securitized 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.

The company cautions that its current expectations in this release, in the presentation slides available on the company's website (http://www.capitalone.com), and on its Form 10-K for the fiscal year ended December 31, 2003, for 2004 earnings, charge-off rates, revenue margins, return on assets, allowance for loan losses, expenses, loan growth rates, and the composition of loan growth are forward-looking statements and actual results could differ materially from current expectations due to a number of factors, including: continued intense competition from numerous providers of products and services which compete with our businesses; changes in our aggregate accounts and balances, and the growth rate and composition thereof; the company's ability to continue to diversify its assets; the company's ability to access the capital markets at attractive rates and terms to fund its operations and future growth; the company's ability to execute on its strategic and operating plans; and general economic conditions affecting consumer income and spending, which may affect consumer bankruptcies, defaults, and charge-offs.

A discussion of these and other factors can be found in Capital One's annual report and other reports filed with the Securities and Exchange Commission, including, but not limited to, Capital One's report on Form 10-K for the fiscal year ended December 31, 2003.

About Capital One

Headquartered in McLean, Virginia, Capital One Financial Corporation (http://www.capitalone.com) is a holding company whose principal subsidiaries, Capital One Bank and Capital One, F.S.B., offer consumer lending products and Capital One Auto Finance, Inc., offers automobile and other motor vehicle financing products. Capital One's subsidiaries collectively had 46.6 million accounts and $73.4 billion in managed loans outstanding as of June 30, 2004. Capital One, a Fortune 500 company, is one of the largest providers of MasterCard and Visa credit cards in the world. Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 500 index.

NOTE: Second quarter 2004 financial results, SEC Filings, and second quarter earnings conference call slides are accessible on Capital One's home page (http://www.capitalone.com). Choose "Investors" on the bottom right corner of the home page to view and download the earnings press release, slides, and other financial information. Additionally, a webcast of today's 5:00pm (EDT) earnings conference call is accessible through the same link.



                   CAPITAL ONE FINANCIAL CORPORATION (COF)
                FINANCIAL & STATISTICAL SUMMARY REPORTED BASIS


    (in millions, except per share         2004          2004         2003
     data and as noted)                     Q2            Q1           Q2

    Earnings (Reported Basis)
    Net Interest Income                   $711.0        $732.0       $682.3
    Non-Interest Income                  1,396.1       1,443.1      1,310.6
    Total Revenue(1)                     2,107.1       2,175.1      1,992.9
    Provision for Loan Losses              242.3         243.7        387.1
    Marketing Expenses                     253.8         255.1        270.6
    Operating Expenses                     975.0 (2)     969.7        881.0
    Income Before Taxes
     and Accounting Change                 636.0         706.6        454.2
    Tax Rate                                36.0 %        36.2 %       37.0 %
    Net Income                            $407.4        $450.8       $286.2

    Common Share Statistics
    Basic EPS                              $1.74         $1.94        $1.28
    Diluted EPS                            $1.65         $1.84        $1.23
    Dividends Per Share                    $0.03         $0.03        $0.03
    Book Value Per Share (period end)     $29.90        $28.54       $23.37
    Stock Price Per Share (period end)    $68.38        $75.43       $49.18
    Total Market Capitalization
     (period end)                      $16,514.5     $18,084.9    $11,170.0
    Shares Outstanding (period end)        241.5         239.8        227.1
    Shares Used to Compute Basic EPS       234.7         232.0        223.7
    Shares Used to Compute Diluted EPS     247.6         245.4        232.6

    Reported Balance Sheet Statistics
     (period avg.)
    Average Loans                        $33,290       $32,878      $27,101
    Average Earning Assets               $45,705       $44,112      $36,298
    Average Assets                       $50,020       $47,699      $39,678
    Average Equity                        $6,943        $6,443       $5,148
    Return on Average Assets (ROA)          3.26 %        3.78 %       2.89 %
    Return on Average Equity (ROE)         23.47 %       27.99 %      22.24 %

    Reported Balance Sheet Statistics
     (period end)
    Loans                                $34,551       $33,172      $26,849
    Total Assets                         $50,070       $49,146      $40,367
    Capital(3)                            $8,057        $7,675       $6,130
    Loan growth                           $1,379          $321        $(785)
    % Loan Growth Q Over Q
     (annualized)                             17 %           4 %        (11)%
    % Loan Growth Y Over Y                    29 %          20 %         10 %
    Capital to Assets Ratio                16.09 %       15.62 %      15.19 %
    Capital plus Allowance
     to Assets Ratio                       18.94 %       18.66 %      19.12 %

    Revenue & Expense Statistics
     (Reported)
    Net Interest Income Growth
     (annualized)                            (11)%          41 %        (29)%
    Non Interest Income Growth
     (annualized)                            (13)%           2 %          2 %
    Revenue Growth (annualized)              (13)%          14 %         (9)%
    Net Interest Margin                     6.22 %        6.64 %       7.52 %
    Revenue Margin                         18.44 %       19.72 %      21.96 %
    Risk Adjusted Margin(4)                15.73 %       16.62 %      17.16 %
    Operating Expense as a
     % of Revenues                         46.27 %       44.58 %      44.21 %
    Operating Expense as a
     % of Avg Loans (annualized)           11.72 %       11.80 %      13.00 %

    Asset Quality Statistics
     (Reported)
    Allowance                             $1,425        $1,495       $1,590
    30+ Day Delinquencies                 $1,351        $1,266       $1,507
    Net Charge-Offs                         $310          $342         $436
    Allowance as a
     % of Reported Loans                    4.12 %        4.51 %       5.92 %
    Delinquency Rate (30+ days)             3.91 %        3.82 %       5.61 %
    Net Charge-Off Rate                     3.72 %        4.17 %       6.43 %

    (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 2004 - $263.5 million, Q1 2004 -
        $285.5 million, Q4 2003 - $454.8 million, Q3 2003 - $481.0 million,
        and Q2 2003 - $497.3 million.
    (2) Includes $56.0 million in employee termination benefits and charges
        for facility consolidation related to corporate-wide cost reduction
        initiatives.
    (3) Includes preferred interests and mandatory convertible securities.
    (4) Risk adjusted margin is total revenue less net charge-offs as a
        percentage of average earning assets.

    Note:  Additional historical financial and statistical information can be
           found on Capital One's home page (http://www.capitalone.com).
           Choose "Investor Overview" under "About Capital One" on the right
           side of the page to view and download the earnings press release.



                   CAPITAL ONE FINANCIAL CORPORATION (COF)
               FINANCIAL & STATISTICAL SUMMARY MANAGED BASIS(1)


    (in millions, except per share          2004         2004        2003
     data and as noted)                      Q2           Q1          Q2

    Earnings (Managed Basis)
    Net Interest Income                   $1,585.4     $1,677.1    $1,457.5
    Non-Interest Income                    1,011.3      1,014.5     1,046.0
    Total Revenue(2)                       2,596.7      2,691.6     2,503.5
    Provision for Loan Losses                731.9        760.1       897.7
    Marketing Expenses                       253.8        255.1       270.6
    Operating Expenses                       975.0 (3)    969.7       881.0
    Income Before Taxes
     and Accounting Change                   636.0        706.6       454.2
    Tax Rate                                  36.0 %       36.2 %      37.0 %
    Net Income                              $407.4       $450.8      $286.2

    Managed Balance Sheet Statistics
     (period avg.)
    Average Loans                          $72,327      $71,148     $59,916
    Average Earning Assets                 $82,905      $80,495     $67,451
    Average Assets                         $88,473      $85,324     $71,913
    Return on Average Assets (ROA)            1.84 %       2.11 %      1.59 %

    Managed Balance Sheet Statistics
     (period end)
    Loans                                  $73,367      $71,817     $60,736
    Total Assets                           $88,317      $87,197     $73,636
    Loan Growth                             $1,550         $572      $1,522
    % Loan Growth Q over Q (annualized)          9 %          3 %        10 %
    % Loan Growth Y over Y                      21 %         21 %        14 %
    Capital to Assets Ratio                   9.12 %       8.80 %      8.33 %
    Capital plus Allowance
     to Assets Ratio                         10.74 %      10.52 %     10.48 %
    Number of Accounts (000's)              46,591       46,712      45,785
    % Off-Balance Sheet Securitizations         53 %         53 %        55 %
    % at Introductory Rate                       6 %          8 %        10 %

    Revenue & Expense Statistics
     (Managed)
    Net Interest Income Growth
     (annualized)                              (22)%         27 %       (13)%
    Non Interest Income Growth
     (annualized)                               (1)%        (23)%         7 %
    Revenue Growth (annualized)                (14)%          6 %        (5)%
    Net Interest Margin                       7.65 %       8.33 %      8.64 %
    Revenue Margin                           12.53 %      13.38 %     14.85 %
    Risk Adjusted Margin(4)                   8.67 %       9.11 %      9.23 %
    Operating Expense as a
     % of Revenues                           37.55 %      36.03 %     35.19 %
    Operating Expense as a
     % of Avg Loans (annualized)              5.39 %       5.45 %      5.88 %

    Asset Quality Statistics (Managed)
    30+ Day Delinquencies                   $2,756       $2,731      $3,004
    Net Charge-Offs                           $800         $859        $946
    Delinquency Rate (30+ days)               3.76 %       3.80 %      4.95 %
    Net Charge-Off Rate                       4.42 %       4.83 %      6.32 %

    (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".
    (2) 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 2004 - $263.5 million, Q1 2004 - $285.5
        million, Q4 2003 - $454.8 million, Q3 2003 - $481.0 million, and Q2
        2003 - $497.3 million.
    (3) Includes $56.0 million in employee termination benefits and charges
        for facility consolidation related to corporate-wide cost reduction
        initiatives.
    (4) Risk adjusted margin is total revenue less net charge-offs as a
        percentage of average earning assets.

    Note:  Additional historical financial and statistical information can be
           found on Capital One's home page (http://www.capitalone.com).
           Choose "Investor Overview" under "About Capital One" on the right
           side of the page to view and download the earnings press release.



                   CAPITAL ONE FINANCIAL CORPORATION (COF)
          SEGMENT FINANCIAL & STATISTICAL SUMMARY - MANAGED BASIS(1)


    (in millions, except
     per share data             2004         2004         2003
     and as noted)               Q2           Q1           Q2

    Segment Statistics
    US Card:
    Loans receivable          $45,247      $45,298      $39,318
      Net income (loss)        $384.1       $386.8       $274.2
      Net charge-off rate        5.19%        5.41%        7.63%
      Delinquency Rate
       (30+ days)                3.95%        3.99%        5.42%
    Auto Finance:
      Loans receivable         $9,383       $8,834       $7,380
      Net income (loss)         $52.7        $30.7        $44.0
      Net charge-off rate        2.53%        4.13%        4.22%
      Delinquency Rate
       (30+ days)                5.59%        5.44%        6.97%
    Global Financial
     Services:
      Loans receivable        $18,723      $17,643      $14,046
      Net income (loss)         $46.1        $50.9        $25.5
      Net charge-off
       rate                      3.43%        3.60%        3.95%
      Delinquency Rate
       (30+ days)                2.50%        2.63%        2.81%

    (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".

    Note:  Additional historical financial and statistical information can be
           found on Capital One's home page (http://www.capitalone.com).
           Choose "Investor Overview" under "About Capital One" on the right
           side of the page to view and download the earnings press release.



                      CAPITAL ONE FINANCIAL CORPORATION
                  Reconciliation to GAAP Financial Measures
                   For the Three Months Ended June 30, 2004
                      (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 add back the
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
    Net interest income             $711,017       $874,453       $1,585,470
    Non-interest income           $1,396,064      $(384,766)      $1,011,298
    Total revenue                 $2,107,081       $489,687       $2,596,768
    Provision for loan losses       $242,256       $489,687         $731,943
    Net charge-offs                 $309,787       $489,687         $799,474

    Balance Sheet Measures
    Consumer loans               $34,551,343    $38,816,009      $73,367,352
    Total assets                 $50,069,661    $38,247,397      $88,317,058
    Average consumer loans       $33,290,487    $39,036,733      $72,327,220
    Average earning assets       $45,705,396    $37,199,690      $82,905,086
    Average total assets         $50,020,115    $38,452,658      $88,472,773
    Delinquencies                 $1,350,969     $1,405,289       $2,756,258

    (1) Includes adjustments made related to the effects of securitization
        transactions qualifying as sales under GAAP and adjustments made to
        reclassify to "managed" loans outstanding the collectible portion of
        billed finance charge and fee income on the investors' interest in
        securitized loans excluded from loans outstanding on the "reported"
        balance sheet in accordance with Financial Accounting Standards Board
        Staff Position, "Accounting for Accrued Interest Receivable Related to
        Securitized and Sold Receivables under FASB Statement 140, Accounting
        for Transfers and Servicing of Financial Assets and Extinguishments of
        Liabilities", issued April 2003.

    (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.



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


                                           June 30     March 31      June 30
                                            2004         2004         2003

    Assets:
    Cash and due from banks                $346,978     $323,346     $296,551
    Federal funds sold and
     resale agreements                    1,082,939    1,257,666    2,320,658
    Interest-bearing deposits
     at other banks                         290,242      188,237      578,479
      Cash and cash equivalents           1,720,159    1,769,249    3,195,688
    Securities available for sale         8,946,836    9,149,440    5,418,817
    Consumer loans                       34,551,343   33,171,516   26,848,578
      Less: Allowance for loan losses    (1,425,000)  (1,495,000)  (1,590,000)
    Net loans                            33,126,343   31,676,516   25,258,578
    Accounts receivable from
     securitizations                      3,972,754    4,008,809    4,092,961
    Premises and equipment, net             868,203      898,802      760,376
    Interest receivable                     234,348      236,852      200,517
    Other                                 1,201,018    1,406,757    1,439,714
      Total assets                      $50,069,661  $49,146,425  $40,366,651

    Liabilities:
    Interest-bearing deposits           $24,178,756  $23,610,851  $19,821,881
    Senior and subordinated notes         7,727,810    7,224,798    5,987,125
    Other borrowings                      7,885,340    8,254,383    6,237,419
    Interest payable                        256,293      245,172      230,836
    Other                                 2,800,405    2,968,993    2,782,400
      Total liabilities                  42,848,604   42,304,197   35,059,661

    Stockholders' Equity:
    Common stock                              2,428        2,411        2,284
    Paid-in capital, net                  2,348,401    2,218,861    1,762,469
    Retained earnings and cumulative
     other comprehensive income           4,919,656    4,670,384    3,591,403
      Less:  Treasury stock, at cost        (49,428)     (49,428)     (49,166)
      Total stockholders' equity          7,221,057    6,842,228    5,306,990
      Total liabilities and
       stockholders' equity             $50,069,661  $49,146,425  $40,366,651



                      CAPITAL ONE FINANCIAL CORPORATION
                      Consolidated Statements of Income
               (in thousands, except per share data)(unaudited)


                             Three Months Ended            Six Months Ended
                      June 30     March 31    June 30    June 30      June 30
                       2004         2004       2003        2004        2003
    Interest Income:
    Consumer loans,
     including
     past-due
     fees          $1,019,076   $1,035,017   $960,124   $2,054,093  $1,973,406
    Securities
     available
     for sale          76,081       63,716     47,895      139,797      90,826
    Other              56,789       65,998     62,261      122,787     112,614
      Total
       interest
       income       1,151,946    1,164,731  1,070,280    2,316,677   2,176,846

    Interest
     Expense:
    Deposits          244,978      239,512    220,640      484,490     429,948
    Senior and
     subordinated
     notes            124,809      124,418     99,120      249,227     197,699
    Other
     borrowings        71,142       68,779     68,257      139,921     132,132
      Total
       interest
       expense        440,929      432,709    388,017      873,638     759,779
    Net interest
     income           711,017      732,022    682,263    1,443,039   1,417,067
    Provision for
     loan losses      242,256      243,668    387,097      485,924     762,948
    Net interest
     income after
     provision for
     loan losses      468,761      488,354    295,166      957,115     654,119

    Non-Interest
     Income:
    Servicing and
     securitizations  868,041      917,669    742,696    1,785,710   1,472,385
    Service charges
     and other
     customer-related
     fees             368,469      354,493    402,970      722,962     844,196
    Interchange       117,329      105,595     89,141      222,924     174,492
    Other              42,225       65,377     75,815      107,602     124,152
      Total
       non-interest
       income       1,396,064    1,443,134  1,310,622    2,839,198   2,615,225

    Non-Interest
     Expense:
    Salaries and
     associate
     benefits         419,695      424,392    374,245      844,087     772,712
    Marketing         253,838      255,147    270,555      508,985     512,251
    Communications
     and data
     processing       108,191      117,106    112,456      225,297     224,508
    Supplies
     and equipment     74,582       88,321     87,680      162,903     171,492
    Occupancy          70,494       38,719     42,755      109,213      86,329
    Other             302,012      301,211    263,865      603,223     558,196
      Total
       non-interest
       expense      1,228,812    1,224,896  1,151,556    2,453,708   2,325,488
    Income before
     income taxes     636,013      706,592    454,232    1,342,605     943,856
    Income taxes      228,626      255,786    168,066      484,412     349,227
    Net income       $407,387     $450,806   $286,166     $858,193    $594,629

    Basic earnings
     per share          $1.74        $1.94      $1.28        $3.68       $2.66

    Diluted earnings
     per share          $1.65        $1.84      $1.23        $3.48       $2.58

    Dividends paid
     per share          $0.03        $0.03      $0.03        $0.05       $0.05



                      CAPITAL ONE FINANCIAL CORPORATION
     Statements of Average Balances, Income and Expense, Yields and Rates
                      (dollars in thousands)(unaudited)


    Reported                                     Quarter Ended 6/30/04

                                             Average       Income/    Yield/
                                             Balance       Expense     Rate
    Earning assets:
      Consumer loans                       $33,290,487   $1,019,076   12.24%
      Securities available for sale          9,291,237       76,081    3.28%
      Other                                  3,123,672       56,789    7.27%
    Total earning assets                   $45,705,396   $1,151,946   10.08%

    Interest-bearing liabilities:
      Deposits                             $23,948,154     $244,978    4.09%
      Senior and subordinated notes          7,380,437      124,809    6.76%
      Other borrowings                       8,488,027       71,142    3.35%
    Total interest-bearing liabilities     $39,816,618     $440,929    4.43%

    Net interest spread                                                5.65%

    Interest income to average
     earning assets                                                   10.08%
    Interest expense to average
     earning assets                                                    3.86%
    Net interest margin                                                6.22%



    Reported                                     Quarter Ended 3/31/04

                                             Average       Income/    Yield/
                                             Balance       Expense     Rate
    Earning assets:
      Consumer loans                       $32,877,525   $1,035,017   12.59%
      Securities available for sale          7,098,951       63,716    3.59%
      Other                                  4,135,065       65,998    6.38%
    Total earning assets                   $44,111,541   $1,164,731   10.56%

    Interest-bearing liabilities:
      Deposits                             $22,992,712     $239,512    4.17%
      Senior and subordinated notes          7,270,889      124,418    6.84%
      Other borrowings                       7,834,046       68,779    3.51%
    Total interest-bearing liabilities     $38,097,647     $432,709    4.54%

    Net interest spread                                                6.02%

    Interest income to average
     earning assets                                                   10.56%
    Interest expense to average
     earning assets                                                    3.92%
    Net interest margin                                                6.64%



    Reported                                      Quarter Ended 6/30/03

                                             Average       Income/    Yield/
                                             Balance       Expense     Rate
    Earning assets:
      Consumer loans                       $27,101,042     $960,124   14.17%
      Securities available for sale          5,386,070       47,895    3.56%
      Other                                  3,810,810       62,261    6.54%
    Total earning assets                   $36,297,922   $1,070,280   11.79%

    Interest-bearing liabilities:
      Deposits                             $19,178,154     $220,640    4.60%
      Senior and subordinated notes          5,533,693       99,120    7.16%
      Other borrowings                       6,682,797       68,257    4.09%
    Total interest-bearing liabilities     $31,394,644     $388,017    4.94%

    Net interest spread                                                6.85%

    Interest income to average
     earning assets                                                   11.79%
    Interest expense to average
     earning assets                                                    4.27%
    Net interest margin                                                7.52%



                      CAPITAL ONE FINANCIAL CORPORATION
     Statements of Average Balances, Income and Expense, Yields and Rates
                      (dollars in thousands)(unaudited)


    Managed(1)                                    Quarter Ended 6/30/04

                                             Average       Income/    Yield/
                                             Balance       Expense     Rate
    Earning assets:
      Consumer loans                       $72,327,220   $2,314,957   12.80%
      Securities available for sale          9,291,237       76,081    3.28%
      Other                                  1,286,629        9,517    2.96%
    Total earning assets                   $82,905,086   $2,400,555   11.58%

    Interest-bearing liabilities:
      Deposits                             $23,948,154     $244,978    4.09%
      Senior and subordinated notes          7,380,437      124,809    6.76%
      Other borrowings                       8,488,027       71,142    3.35%
      Securitization liability              38,514,533      374,156    3.89%
    Total interest-bearing liabilities     $78,331,151     $815,085    4.16%

    Net interest spread                                                7.42%

    Interest income to average
     earning assets                                                   11.58%
    Interest expense to average
     earning assets                                                    3.93%
    Net interest margin                                                7.65%

    (1) The information in this table reflects the adjustment to add back the
        effect of securitized loans.



    Managed(1)                                   Quarter Ended 3/31/04

                                             Average       Income/    Yield/
                                             Balance       Expense     Rate
    Earning assets:
      Consumer loans                       $71,148,287   $2,405,738   13.53%
      Securities available for sale          7,098,951       63,716    3.59%
      Other                                  2,247,996       13,056    2.32%
    Total earning assets                   $80,495,234   $2,482,510   12.34%

    Interest-bearing liabilities:
      Deposits                             $22,992,712     $239,512    4.17%
      Senior and subordinated notes          7,270,889      124,418    6.84%
      Other borrowings                       7,834,046       68,779    3.51%
      Securitization liability              37,669,211      372,723    3.96%
    Total interest-bearing liabilities     $75,766,858     $805,432    4.25%

    Net interest spread                                                8.09%

    Interest income to average
     earning assets                                                   12.34%
    Interest expense to average
     earning assets                                                    4.01%
    Net interest margin                                                8.33%

    (1) The information in this table reflects the adjustment to add back the
        effect of securitized loans.



    Managed(1)                                    Quarter Ended 6/30/03

                                             Average       Income/    Yield/
                                             Balance       Expense     Rate
    Earning assets:
      Consumer loans                       $59,915,797   $2,110,859   14.09%
      Securities available for sale          5,386,070       47,895    3.56%
      Other                                  2,148,972       12,802    2.38%
    Total earning assets                   $67,450,839   $2,171,556   12.88%

    Interest-bearing liabilities:
      Deposits                             $19,178,154     $220,640    4.60%
      Senior and subordinated notes          5,533,693       99,120    7.16%
      Other borrowings                       6,682,797       68,257    4.09%
      Securitization liability              32,249,105      326,022    4.04%
    Total interest-bearing liabilities     $63,643,749     $714,039    4.49%

    Net interest spread                                                8.39%

    Interest income to average
     earning assets                                                   12.88%
    Interest expense to average
     earning assets                                                    4.24%
    Net interest margin                                                8.64%

    (1) The information in this table reflects the adjustment to add back the
        effect of securitized loans.

SOURCE Capital One Financial Corporation

CONTACT: Paul Paquin, V.P., Investor Relations, +1-703-720-2456, or
Tatiana Stead, Director, Corporate Media, +1-703-720-2352, both of Capital One
Financial Corporation
Web site: http://www.capitalone.com
(COF)