Capital One Reports Third Quarter 2003 Earnings per Share Increase Over Third Quarter 2002
Capital One Reports Third Quarter 2003 Earnings per Share Increase Over Third Quarter 2002
MCLEAN, Va., Oct 22, 2003 /PRNewswire-FirstCall via COMTEX/ -- Capital One Financial Corporation (NYSE: COF) today announced that its earnings for the third quarter of 2003 were $276.3 million, or $1.17 per share (fully diluted), compared with earnings of $258.8 million, or $1.13 per share, for the comparable period of the prior year and $286.8 million, or $1.23 per share, in the previous quarter. Also, the company maintained its 2003 earnings guidance of at least $4.55 per share and announced that it expects managed loan growth of around 20 percent in 2003. The company expects to release its 2004 earnings guidance on October 29, 2003.
During the third quarter of 2003, Capital One grew its managed loan portfolio by $6.5 billion to $67.3 billion. The managed charge-off rate declined to 5.44 percent in the third quarter of 2003, from 6.32 percent in the previous quarter. The managed delinquency rate (30+ days) declined to 4.65 percent from 4.95 percent at the end of the previous quarter.
"Our loan growth was broadly based across products and geographies, and was largely fueled by growth in superprime assets," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "We are also pleased by our continued strong credit performance."
The company continues to diversify its portfolio and shift its product mix upmarket. As a result, Capital One's managed revenue margin declined to 14.36 percent in the third quarter of 2003 from 14.85 percent in the previous quarter. The managed risk-adjusted margin rose to 9.48 percent from 9.23 percent in the previous quarter due to lower charge-offs in the third quarter. As the company continues its asset diversification and its shift upmarket, management expects revenue margins and charge-offs to continue to trend generally downward, after a slight seasonal increase in charge-offs in the fourth quarter of 2003.
Marketing expenses for the third quarter of 2003 increased $45.4 million to $316.0 million from $270.6 million in the previous quarter. Marketing expenses were $185.8 million in the comparable quarter of the prior year. Other non-interest expenses (excluding marketing) for the third quarter of 2003 were $924.6 million versus $880.0 million for the second quarter and $965.2 million in the comparable period of the prior year. The company's accounts increased by 621 thousand to 46.4 million at the end of the third quarter.
In July 2003, the company adopted the provisions of FASB Interpretation No. 46 ("FIN 46"), Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51. The company has consolidated all Variable Interest Entities (VIEs) for which the company is the primary beneficiary, as defined by FIN 46. The VIEs relate to certain office building operating leases. This consolidation resulted in a $15.0 million ($23.9 million pre- tax) charge for a cumulative effect of a change in accounting principle.
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. Please see the schedule entitled "Reconciliation to GAAP Financial Measures" attached to this release for more information. The company cautioned that its current expectations in this release, in the presentation slides available on the company's website (www.capitalone.com) and on its Form 8-K dated October 22, 2003, for 2003 earnings, charge-off rates, margins, and future loan growth are forward-looking statements and actual results could differ materially from current expectations due to a number of factors, including: competition in the credit card industry; the actual account and balance growth achieved by the company; the company's ability to access the capital markets at attractive rates and terms to fund its operations and future growth; and general economic conditions affecting consumer income and spending, which may affect consumer bankruptcies, defaults and charge-offs.
A discussion of these and other factors can be found in Capital One's annual and other reports filed with the Securities and Exchange Commission, including, but not limited to, Capital One's report on Form 10-Q for the quarter ended June 30, 2003.
Headquartered in McLean, Virginia, Capital One Financial Corporation (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., which offers auto loan products. Capital One's subsidiaries collectively had 46.4 million managed accounts and $67.3 billion in managed loans outstanding as of September, 2003. 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: Third quarter 2003 financial results, SEC Fillings, and third quarter earnings conference call slides are accessible on Capital One's home page (www.capitalone.com). Choose "About Capital One" to access the Investor Center to view and download the earnings press release, slides, and other financial information (http://www.capitalone.com/about/invest/financials). Additionally, a webcast of today's 5:00pm (EDT) earnings conference call is accessible through the company's home page.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY REPORTED BASIS
2002 2002
(in millions, except per share data Q4 Q3
and as noted)
Earnings (Reported Basis)
Net Interest Income $ 731.0 $ 722.4
Non-Interest Income 1,320.3 1,520.2
Total Revenue(1) 2,051.4 2,242.6
Provision for Loan Losses 543.8 674.1
Marketing Expenses 210.8 185.8
Operating Expenses 910.2 965.2(2)
Income Before Taxes and Accounting
Change 386.6 417.5
Tax Rate 38.0 % 38.0 %
Cumulative Effect of Accounting
Change, net of tax(3) - -
Net Income $ 239.7 $ 258.8
Common Share Statistics
Basic EPS $ 1.08 $ 1.17
Diluted EPS $ 1.05 $ 1.13
Dividends Per Share $ 0.03 $ 0.03
Book Value Per Share (period end) $ 20.44 $ 19.55
Stock Price Per Share (period end) $ 29.72 $ 34.92
Total Market Capitalization (period
end) $ 6,722.5 $ 7,744.2
Shares Outstanding (period end) 226.2 221.8
Shares Used to Compute Basic EPS 221.8 220.6
Shares Used to Compute Diluted EPS 228.2 228.4
Reported Balance Sheet Statistics
(period avg.)
Average Loans $ 27,260 $ 26,058
Average Earning Assets $ 34,075 $ 32,449
Average Assets $ 37,208 $ 35,470
Average Equity $ 4,568 $ 4,418
Net Interest Margin 8.58 % 8.91 %
Revenue Margin 24.08 % 27.64 %
Risk Adjusted Margin (4) 19.18 % 23.90 %
Return on Average Assets (ROA) 2.58 % 2.92 %
Return on Average Equity (ROE) 20.99 % 23.44 %
Net Charge-Off Rate 6.13 % 4.66 %
Net Charge-Offs $ 417.7 $ 303.9
Reported Balance Sheet Statistics
(period end)
Loans $ 27,344 $ 27,598
Delinquency Rate (30+ days) 6.12 % 5.71 %
Total Assets $ 37,382 $ 36,910
Allowance as a % of reported loans 6.29 % 5.78 %
Capital (5) $ 5,440.4 $ 5,149.6
Capital to Assets Ratio 14.55 % 13.95 %
Capital plus Allowance to Assets
Ratio 19.15 % 18.27 %
(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: Q3 2003 - $481.0 million, Q2 2003 -
$497.3 million, Q1 2003 - $519.7 million, Q4 2002 - $675.7 million and
Q3 2002 - $489.6 million.
(2) Includes $110.0 million of one-time charges in Q3 2002.
(3) Net charge from the adoption of FASB Interpretation No. 46,
Consolidation of Variable Interest Entities.
(4) Risk adjusted margin is total revenue less net charge-offs as a
percentage of average earning assets.
(5) Includes preferred interests and mandatory convertible securities.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUPPLEMENT REPORTED BASIS
2003 2003 2003
(in millions, except per share data Q3 Q2 Q1
and as noted)
Revenue & Expense Statistics
(Reported)
Net interest income growth
(annualized) 13 % (29)% 2 %
Non interest income growth
(annualized) 16 % 2 % (5)%
Revenue growth (annualized) 15 % (9)% (2)%
Loan revenue margin(1) 28.51 % 29.46 % 29.73 %
Loan risk adjusted margin(2) 23.22 % 23.03 % 22.97 %
Operating expense as a % of revenues 44.73 % 44.16 % 45.66 %
Operating expense as a % of average
loans (annualized) 12.78 % 12.99 % 13.64 %
Per Account Statistics (Reported)
Net interest income per account
(annualized) $ 61.08 $ 59.19 $ 62.68
Non interest income per account
(annualized) $ 118.29 $ 113.71 $ 111.28
Revenue per account (annualized) $ 179.38 $ 172.90 $ 173.95
Growth Statistics (Reported)
Consumer loan growth $ 3,769 $ (785) $ 290
% loan growth Q over Q (annualized) 56 % (11)% 4 %
% loan growth Y over Y 11 % 10 % 15 %
(1) Loan revenue margin is total loan revenue, loan interest income less
interest expense plus non-interest income, as a percent of average
loans outstanding for the period. Loan interest expense is calculated
using the cost of funds rate applied to the average consumer loan
balance.
(2) Loan risk adjusted margin is total loan revenue, loan net interest
income and non-interest income, less net charge-offs as a percentage
of average loans outstanding for the period.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUPPLEMENT REPORTED BASIS
2002 2002
(in millions, except per share data Q4 Q3
and as noted)
Revenue & Expense Statistics
(Reported)
Net interest income growth
(annualized) 5 % 42 %
Non interest income growth
(annualized) (53)% 39 %
Revenue growth (annualized) (34)% 40 %
Loan revenue margin(1) 29.95 % 34.18 %
Loan risk adjusted margin(2) 23.82 % 29.52 %
Operating expense as a % of revenues 44.37 % 43.04 %
Operating expense as a % of average
loans (annualized) 13.36 % 14.82 %
Per Account Statistics (Reported)
Net interest income per account
(annualized) $ 61.22 $ 59.72
Non interest income per account
(annualized) $ 110.57 $ 125.67
Revenue per account (annualized) $ 171.78 $ 185.39
Growth Statistics (Reported)
Consumer loan growth $ (254) $ 3,102
% loan growth Q over Q (annualized) (4)% 51 %
% loan growth Y over Y 31 % 58 %
(1) Loan revenue margin is total loan revenue, loan interest income less
interest expense plus non-interest income, as a percent of average
loans outstanding for the period. Loan interest expense is calculated
using the cost of funds rate applied to the average consumer loan
balance.
(2) Loan risk adjusted margin is total loan revenue, loan net interest
income and non-interest income, less net charge-offs as a percentage
of average loans outstanding for the period.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY MANAGED BASIS(1)
2003 2003 2003
(in millions, except per share data Q3 Q2 Q1
and as noted)
Earnings (Managed Basis)
Net Interest Income $ 1,500.8 $ 1,457.5 $ 1,508.0
Non-Interest Income 1,049.2 1,046.0 1,027.9
Total Revenue(2) 2,550.0 2,503.5 2,535.9
Provision for Loan Losses 847.0 897.7 872.3
Marketing Expenses 316.0 270.6 241.7
Operating Expenses 924.6 880.0 931.2
Income Before Taxes and Accounting
Change 462.4 455.2 490.6
Tax Rate 37.0 % 37.0 % 37.0 %
Cumulative Effect of Accounting
Change, net of tax(4) 15.0 - -
Net Income $ 276.3 $ 286.8 $ 309.1
Managed Balance Sheet Statistics
(period avg.)
Average Loans $ 63,691 $ 59,916 $ 59,250
Average Earning Assets $ 71,022 $ 67,451 $ 64,602
Average Assets $ 75,831 $ 71,913 $ 69,670
Net Interest Margin 8.45 % 8.64 % 9.34 %
Revenue Margin 14.36 % 14.85 % 15.70 %
Risk Adjusted Margin (5) 9.48 % 9.23 % 9.77 %
Return on Average Assets (ROA) 1.46 % 1.60 % 1.77 %
Net Charge-Off Rate 5.44 % 6.32 % 6.47 %
Net Charge-Offs $ 866.1 $ 946.3 $ 957.9
Cost Per Account (in dollars) $ 80.23 $ 76.35 $ 79.43
Managed Balance Sheet Statistics
(period end)
Loans $ 67,260 $ 60,736 $ 59,214
Delinquency Rate (30+ days) 4.65 % 4.95 % 4.97 %
Number of Accounts (000's) 46,406 45,785 46,423
Total Assets $ 79,465 $ 73,636 $ 68,927
Capital to Assets Ratio 8.12 % 8.33 % 8.34 %
Capital plus Allowance to Assets Ratio 10.09 % 10.48 % 10.71 %
(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: Q3 2003 - $481.0 million, Q2 2003 -
$497.3 million, Q1 2003 - $519.7 million, Q4 2002 - $675.7 million and
Q3 2002 - $489.6 million.
(3) Includes $110.0 million of one-time charges in Q3 2002.
(4) Net charge from the adoption of FASB Interpretation No. 46,
Consolidation of Variable Interest Entities.
(5) Risk adjusted margin is total revenue less net charge-offs as a
percentage of average earning assets.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUMMARY MANAGED BASIS(1)
2002 2002
(in millions, except per share data Q4 Q3
and as noted)
Earnings (Managed Basis)
Net Interest Income $ 1,442.2 $ 1,435.3
Non-Interest Income 1,086.9 1,189.1
Total Revenue(2) 2,529.1 2,624.4
Provision for Loan Losses 1,021.5 1,055.9
Marketing Expenses 210.8 185.8
Operating Expenses 910.2 965.2 (3)
Income Before Taxes and Accounting
Change 386.6 417.5
Tax Rate 38.0 % 38.0 %
Cumulative Effect of Accounting
Change, net of tax(4) - -
Net Income $ 239.7 $ 258.8
Managed Balance Sheet Statistics
(period avg.)
Average Loans $ 57,669 $ 55,350
Average Earning Assets $ 62,789 $ 60,016
Average Assets $ 67,037 $ 64,193
Net Interest Margin 9.19 % 9.57 %
Revenue Margin 16.11 % 17.49 %
Risk Adjusted Margin (5) 10.41 % 12.92 %
Return on Average Assets (ROA) 1.43 % 1.61 %
Net Charge-Off Rate 6.21 % 4.96 %
Net Charge-Offs $ 895.5 $ 685.7
Cost Per Account (in dollars) $ 76.22 $ 79.79
Managed Balance Sheet Statistics
(period end)
Loans $ 59,747 $ 56,883
Delinquency Rate (30+ days) 5.60 % 5.31 %
Number of Accounts (000's) 47,369 48,163
Total Assets $ 69,205 $ 65,614
Capital to Assets Ratio 7.86 % 7.85 %
Capital plus Allowance to Assets
Ratio 10.35 % 10.28 %
(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: Q3 2003 - $481.0 million, Q2 2003 -
$497.3 million, Q1 2003 - $519.7 million, Q4 2002 - $675.7 million and
Q3 2002 - $489.6 million.
(3) Includes $110.0 million of one-time charges in Q3 2002.
(4) Net charge from the adoption of FASB Interpretation No. 46,
Consolidation of Variable Interest Entities.
(5) Risk adjusted margin is total revenue less net charge-offs as a
percentage of average earning assets.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUPPLEMENT MANAGED BASIS(1)
2003 2003 2003
(in millions, except per share data Q3 Q2 Q1
and as noted)
Revenue & Expense Statistics
(Managed)
Net interest income growth
(annualized) 12 % (13)% 18 %
Non interest income growth
(annualized) 1 % 7 % (22)%
Revenue growth (annualized) 7 % (5)% 1 %
Loan revenue margin(2) 16.15 % 16.87 % 17.20 %
Loan risk adjusted margin(3) 10.71 % 10.56 % 10.73 %
Operating expense as a % of revenues 36.26 % 35.15 % 36.72 %
Operating expense as a % of average
loans (annualized) 5.81 % 5.87 % 6.29 %
Per Account Statistics (Managed)
Net interest income per account
(annualized) $ 130.23 $ 126.45 $ 128.62
Non interest income per account
(annualized) $ 91.05 $90.75 $ 87.68
Revenue per account (annualized) $ 221.28 $ 217.21 $ 216.30
Net income per account (annualized) $ 23.98 $ 24.88 $ 26.37
Growth Statistics (Managed)
Average accounts (000's) 46,096 46,104 46,896
Net new accounts per quarter (000's) 621 (638) (946)
% account growth Q over Q
(annualized) 5 % (5)% (8)%
% account growth Y over Y (4)% (6)% - %
Consumer loan growth $ 6,524 $ 1,522 $ (533)
% loan growth Q over Q (annualized) 43 % 10 % (4)%
% loan growth Y over Y 18 % 14 % 22 %
Balance Sheet Measures
% off-balance sheet securitizations 54 % 55 % 53 %
% at introductory rate 11 % 10 % 9 %
Segment Statistics
Consumer Lending:
Loans receivable $ 52,545 $ 47,182 $ 45,963
Net income (loss) $ 290.7 $ 289.8 $ 309.2
Net charge-off rate 5.74 % 6.95 % 7.12 %
Delinquency rate 4.41 % 4.83 % 4.99 %
Auto Finance:
Loans receivable $ 8,008 $ 7,380 $ 7,742
Net income (loss) $ 27.3 $ 44.0 $ (6.5)
Net charge-off rate 5.10 % 4.22 % 4.91 %
Delinquency rate 7.07 % 6.97 % 5.37 %
International:
Loans receivable $ 6,562 $ 6,061 $ 5,390
Net income (loss) $ 21.5 $ 13.6 $ 18.1
Net charge-off rate 4.01 % 4.48 % 4.28 %
Delinquency rate 4.08 % 3.92 % 4.22 %
(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) Loan revenue margin is total loan revenue, loan interest income less
interest expense plus non-interest income, as a percent of average
loans outstanding for the period. Loan interest expense is calculated
using the cost of funds rate applied to the average consumer loan
balance.
(3) Loan risk adjusted margin is total loan revenue, loan net interest
income and non-interest income, less net charge-offs as a percentage
of average loans outstanding for the period.
CAPITAL ONE FINANCIAL CORPORATION (COF)
FINANCIAL & STATISTICAL SUPPLEMENT MANAGED BASIS(1)
2002 2002
(in millions, except per share data Q4 Q3
and as noted)
Revenue & Expense Statistics
(Managed)
Net interest income growth
(annualized) 2 % 65 %
Non interest income growth
(annualized) (34)% 15 %
Revenue growth (annualized) (15)% 41 %
Loan revenue margin(2) 17.58 % 19.01 %
Loan risk adjusted margin(3) 11.37 % 14.06 %
Operating expense as a % of revenues 35.99 % 36.78 %
Operating expense as a % of average
loans (annualized) 6.31 % 6.98 %
Per Account Statistics (Managed)
Net interest income per account
(annualized) $ 120.77 $ 118.65
Non interest income per account
(annualized) $ 91.02 $ 98.30
Revenue per account (annualized) $ 211.79 $ 216.95
Net income per account (annualized) $ 20.07 $ 21.39
Growth Statistics (Managed)
Average accounts (000's) 47,766 48,388
Net new accounts per quarter (000's) (794) (449)
% account growth Q over Q
(annualized) (7)% (4)%
% account growth Y over Y 8 % 20 %
Consumer loan growth $ 2,864 $ 3,675
% loan growth Q over Q (annualized) 20 % 28 %
% loan growth Y over Y 32 % 48 %
Balance Sheet Measures
% off-balance sheet securitizations 53 % 51 %
% at introductory rate 10 % 11 %
Segment Statistics
Consumer Lending:
Loans receivable $ 47,290 $ 45,021
Net income (loss) $ 183.1 $ 291.3
Net charge-off rate 6.45 % 5.16 %
Delinquency rate 5.54 % 5.41 %
Auto Finance:
Loans receivable $ 6,992 $ 6,496
Net income (loss) $ 8.8 $ (3.4)
Net charge-off rate 4.83 % 3.97 %
Delinquency rate 7.15 % 6.30 %
International:
Loans receivable $ 5,331 $ 5,255
Net income (loss) $ (6.2) $ (1.1)
Net charge-off rate 3.92 % 3.61 %
Delinquency rate 4.18 % 3.78 %
(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) Loan revenue margin is total loan revenue, loan interest income less
interest expense plus non-interest income, as a percent of average
loans outstanding for the period. Loan interest expense is calculated
using the cost of funds rate applied to the average consumer loan
balance.
(3) Loan risk adjusted margin is total loan revenue, loan net interest
income and non-interest income, less net charge-offs as a percentage
of average loans outstanding for the period.
CAPITAL ONE FINANCIAL CORPORATION
Reconciliation to GAAP Financial Measures
For the Three Months Ended September 30, 2003
(dollars in thousands)(unaudited)
Total Adjustments(1) Total
Reported Managed(2)
Income Statement Measures
Net interest income $ 703,921 $ 796,843 $ 1,500,764
Non-interest income $ 1,363,208 $ (313,997) $ 1,049,211
Total revenue $ 2,067,129 $ 482,846 $ 2,549,975
Provision for loan losses $ 364,144 $ 482,846 $ 846,990
Balance Sheet Measures
Consumer loans $30,617,843 $36,642,030 $67,259,873
Total assets $43,446,337 $36,018,801 $79,465,138
Average consumer loans $28,949,372 $34,741,889 $63,691,261
Average earning assets $38,133,054 $32,889,060 $71,022,114
Average total assets $41,704,153 $34,126,592 $75,830,745
Delinquencies $ 1,539,761 $ 1,586,061 $ 3,125,822
(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.
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, interest income,
interchange, fees and recoveries generated from the securitized loan
portfolio net of charge-offs in excess of the interest paid to investors
of asset-backed securitizations are recognized as non-interest 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 non-
interest income generated from the securitized portfolio and distributes
the revenue 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.
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Balance Sheets(1)
(in thousands)(unaudited)
September 30 June 30 September 30
2003 2003 2002
Assets:
Cash and due from banks $ 250,514 $ 296,551 $ 316,010
Federal funds sold and resale
agreements 889,106 2,320,658 304,782
Interest-bearing deposits at other
banks 163,025 578,479 112,248
Cash and cash equivalents 1,302,645 3,195,688 733,040
Securities available for sale 5,408,671 5,418,817 4,290,441
Consumer loans 30,617,843 26,848,578 27,597,872
Less: Allowance for loan losses (1,570,000) (1,590,000) (1,595,000)
Net loans 29,047,843 25,258,578 26,002,872
Accounts receivable from
securitizations 5,204,170 4,092,961 3,090,842
Premises and equipment, net 898,997 760,376 789,726
Interest receivable 201,783 200,517 182,300
Other 1,382,228 1,439,714 1,820,749
Total assets $43,446,337 $40,366,651 $36,909,970
Liabilities:
Interest-bearing deposits $20,936,517 $19,821,881 $16,885,553
Senior notes 6,338,772 5,987,125 5,561,489
Other borrowings 7,519,770 6,237,419 6,638,560
Interest payable 231,365 230,836 214,220
Other 2,796,719 2,782,400 3,274,637
Total liabilities 37,823,143 35,059,661 32,574,459
Stockholders' Equity:
Common stock 2,305 2,284 2,227
Paid-in capital, net 1,833,520 1,762,469 1,636,738
Retained earnings and cumulative
other comprehensive income 3,836,535 3,591,403 2,731,498
Less: Treasury stock, at cost (49,166) (49,166) (34,952)
Total stockholders' equity 5,623,194 5,306,990 4,335,511
Total liabilities and
stockholders' equity $43,446,337 $40,366,651 $36,909,970
(1) Certain prior period amounts have been reclassified to conform to the
current period presentation for the Financial Accounting Standards
Board Staff Position, "Accounting for Accrued Interest Receivable
Related to Securitized and Sold Receivables under FASB Statement No.
140, Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities", that was issued in April 2003.
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income(1)
(in thousands, except per share data)(unaudited)
Three Months Ended
September 30 June 30 September 30
2003 2003 2002
Interest Income:
Consumer loans, including past-due
fees $ 989,318 $ 960,124 $1,003,988
Securities available for sale 49,440 47,895 45,965
Other 64,267 62,261 58,126
Total interest income 1,103,025 1,070,280 1,108,079
Interest Expense:
Deposits 224,078 220,640 215,470
Senior notes 114,989 106,151 110,464
Other borrowings 60,037 61,226 59,716
Total interest expense 399,104 388,017 385,650
Net interest income 703,921 682,263 722,429
Provision for loan losses 364,144 387,097 674,111
Net interest income after provision
for loan losses 339,777 295,166 48,318
Non-Interest Income:
Servicing and securitizations 820,515 742,696 815,267
Service charges and other customer-
related fees 405,063 402,970 535,732
Interchange 95,879 89,141 118,203
Other 41,751 75,815 50,976
Total non-interest income 1,363,208 1,310,622 1,520,178
Non-Interest Expense:
Salaries and associate benefits 387,653 373,257 417,189
Marketing 316,026 270,555 185,795
Communications and data processing 107,385 112,456 106,128
Supplies and equipment 88,753 87,680 88,639
Occupancy 47,205 42,755 86,942
Other 293,575 263,865 266,327
Total non-interest expense 1,240,597 1,150,568 1,151,020
Income before income taxes and
cumulative
effect of accounting change 462,388 455,220 417,476
Income taxes 171,084 168,431 158,641
Income before cumulative effect of
accounting
change 291,304 286,789 258,835
Cumulative effect of accounting
change, net of
taxes of $8,832 15,037 - -
Net income $ 276,267 $ 286,789 $ 258,835
Basic earnings per share before
cumulative effect
of accounting change $ 1.30 $ 1.28 $ 1.17
Basic earnings per share after
cumulative effect
of accounting change $ 1.23 $ 1.28 $ 1.17
Diluted earnings per share before
cumulative effect
of accounting change $ 1.23 $ 1.23 $ 1.13
Diluted earnings per share after
cumulative effect
of accounting change $ 1.17 $ 1.23 $ 1.13
Dividends paid per share $ 0.03 $ 0.03 $ 0.03
(1) Certain prior period amounts have been reclassified to conform to the
current period presentation for the Financial Accounting Standards
Board Staff Position, "Accounting for Accrued Interest Receivable
Related to Securitized and Sold Receivables under FASB Statement No.
140, Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities", that was issued April 2003.
CAPITAL ONE FINANCIAL CORPORATION
Consolidated Statements of Income(1)
(in thousands, except per share data)(unaudited)
Nine Months Ended
September 30 September 30
2003 2002
Interest Income:
Consumer loans, including past-due
fees $ 2,962,724 $ 2,779,280
Securities available for sale 140,266 134,124
Other 176,881 153,698
Total interest income 3,279,871 3,067,102
Interest Expense:
Deposits 654,026 596,745
Senior notes 325,237 314,055
Other borrowings 179,620 168,222
Total interest expense 1,158,883 1,079,022
Net interest income 2,120,988 1,988,080
Provision for loan losses 1,127,092 1,605,570
Net interest income after provision
for loan losses 993,896 382,510
Non-Interest Income:
Servicing and securitizations 2,292,900 2,159,761
Service charges and other customer-
related fees 1,249,259 1,462,350
Interchange 270,371 353,652
Other 165,903 170,751
Total non-interest income 3,978,433 4,146,514
Non-Interest Expense:
Salaries and associate benefits 1,158,359 1,177,287
Marketing 828,277 859,777
Communications and data processing 331,893 299,922
Supplies and equipment 260,245 261,990
Occupancy 133,534 158,598
Other 851,771 706,987
Total non-interest expense 3,564,079 3,464,561
Income before income taxes and
cumulative
effect of accounting change 1,408,250 1,064,463
Income taxes 521,053 404,496
Income before cumulative effect of
accounting
change 887,197 659,967
Cumulative effect of accounting
change, net of
taxes of $8,832 15,037 -
Net income $ 872,160 $ 659,967
Basic earnings per share before
cumulative effect
of accounting change $ 3.97 $ 3.00
Basic earnings per share after
cumulative effect
of accounting change $ 3.90 $ 3.00
Diluted earnings per share before
cumulative effect
of accounting change $ 3.82 $ 2.88
Diluted earnings per share after
cumulative effect
of accounting change $ 3.75 $ 2.88
Dividends paid per share $ 0.08 $ 0.08
(1) Certain prior period amounts have been reclassified to conform to the
current period presentation for the Financial Accounting Standards
Board Staff Position, "Accounting for Accrued Interest Receivable
Related to Securitized and Sold Receivables under FASB Statement No.
140, Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities", that was issued April 2003.
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates(1)
(dollars in thousands)(unaudited)
Reported Quarter Ended 9/30/03
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $28,949,372 $ 989,318 13.67 %
Securities available for sale 5,702,955 49,440 3.47
Other 3,480,727 64,267 7.39
Total earning assets $38,133,054 $ 1,103,025 11.57 %
Interest-bearing liabilities:
Deposits $20,302,524 $ 224,078 4.41 %
Senior notes 6,065,935 114,989 7.58
Other borrowings 6,891,889 60,037 3.48
Total interest-bearing liabilities $33,260,348 $ 399,104 4.80 %
Net interest spread 6.77 %
Interest income to average earning
assets 11.57 %
Interest expense to average earning
assets 4.19
Net interest margin 7.38 %
(1) Certain prior period amounts have been reclassified to conform to the
current period presentation for the Financial Accounting Standards
Board Staff Position, "Accounting for Accrued Interest Receivable
Related to Securitized and Sold Receivables under FASB Statement No.
140, Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities", that was issued April 2003.
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates(1)
(dollars in thousands)(unaudited)
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 notes 5,533,693 106,151 7.67
Other borrowings 6,682,797 61,226 3.66
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 %
(1) Certain prior period amounts have been reclassified to conform to the
current period presentation for the Financial Accounting Standards
Board Staff Position, "Accounting for Accrued Interest Receivable
Related to Securitized and Sold Receivables under FASB Statement No.
140, Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities", that was issued April 2003.
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates(1)
(dollars in thousands)(unaudited)
Reported Quarter Ended 9/30/02
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $26,057,884 $ 1,003,988 15.41 %
Securities available for sale 3,877,119 45,965 4.74
Other 2,514,445 58,126 9.25
Total earning assets $32,449,448 $ 1,108,079 13.66 %
Interest-bearing liabilities:
Deposits 16,519,572 215,470 5.22 %
Senior notes 5,718,548 110,464 7.73
Other borrowings 5,631,470 59,716 4.24
Total interest-bearing liabilities $27,869,590 $ 385,650 5.54 %
Net interest spread 8.12 %
Interest income to average earning
assets 13.66 %
Interest expense to average earning
assets 4.75
Net interest margin 8.91 %
(1) Certain prior period amounts have been reclassified to conform to the
current period presentation for the Financial Accounting Standards
Board Staff Position, "Accounting for Accrued Interest Receivable
Related to Securitized and Sold Receivables under FASB Statement No.
140, Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities", that was issued April 2003.
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Managed (1) Quarter Ended 9/30/03
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $63,691,261 $ 2,180,109 13.69 %
Securities available for sale 5,702,955 49,440 3.47
Other 1,627,898 9,501 2.33
Total earning assets $71,022,114 $ 2,239,050 12.61 %
Interest-bearing liabilities:
Deposits $20,302,524 $ 224,078 4.41 %
Senior notes 6,065,935 114,989 7.58
Other borrowings 6,891,889 60,037 3.48
Securitization liability 34,156,144 339,182 3.97
Total interest-bearing liabilities $67,416,492 $ 738,286 4.38 %
Net interest spread 8.23 %
Interest income to average earning
assets 12.61 %
Interest expense to average earning
assets 4.16
Net interest margin 8.45 %
(1) The information in this table reflects the adjustment to add back the
effect of securitized loans.
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Managed (1) Quarter Ended 6/30/03
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 notes 5,533,693 106,151 7.67
Other borrowings 6,682,797 61,226 3.66
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.
CAPITAL ONE FINANCIAL CORPORATION
Statements of Average Balances, Income and Expense, Yields and Rates
(dollars in thousands)(unaudited)
Managed (1) Quarter Ended 9/30/02
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Consumer loans $55,350,137 $ 2,081,399 15.04 %
Securities available for sale 3,877,119 45,965 4.74
Other 788,347 5,122 2.60
Total earning assets $60,015,603 $ 2,132,486 14.21 %
Interest-bearing liabilities:
Deposits $16,519,572 $ 215,470 5.22 %
Senior notes 5,718,548 110,464 7.73
Other borrowings 5,631,470 59,716 4.24
Securitization liability 28,740,188 311,562 4.34
Total interest-bearing liabilities $56,609,778 $ 697,212 4.93 %
Net interest spread 9.28 %
Interest income to average earning
assets 14.21 %
Interest expense to average earning
assets 4.64
Net interest margin 9.57 %
(1) The information in this table reflects the adjustment to add back the
effect of securitized loans
SOURCE Capital One Financial Corporation
Paul Paquin, V.P., Investor Relations, +1-703-720-2456, orTatiana Stead, Corporate Media, +1-703-720-2352, both of Capital One Financial Corporation