Capital One Reports Third Quarter 2011 Net Income of $813 million, or $1.77 per share
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MCLEAN, Va., Oct 20, 2011 /PRNewswire via COMTEX/ --
- Estimated Tier 1 Common Equity Ratio of approximately 10.0 percent at September 30, 2011, up 60 basis points from 9.4 percent at June 30, 2011
- End of period loan balances up $1.0 billion to $130.0 billion
- Net Interest Margin expanded 19 basis points to 7.4 percent compared to second quarter 2011
- Revenue Margin 9.4 percent, up 18 basis points compared to second quarter 2011
- Charge-off Rate of 2.52 percent, down 39 basis points compared to second quarter 2011
Capital One Financial Corporation (NYSE: COF) today announced net income for the third quarter of 2011 of $813 million, or $1.77 per diluted common share, compared with net income of $911 million, or $1.97 per diluted common share, for the second quarter of 2011, and net income of $803 million, or $1.76 per diluted common share, for the third quarter of 2010.
"Our strong third quarter results demonstrate that we remain well-positioned to win in the marketplace and deliver shareholder value, " said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "We expect that the acquisitions of ING Direct and the HSBC US Card Business will deliver attractive financial results in the near-term, and put us in an even stronger position to enhance and sustain the value we can deliver to our customers, our communities and our shareholders."
All comparisons in the following paragraphs are for third quarter 2011 compared to second quarter 2011 unless otherwise noted.
Loan and Deposit Balances
Period-end loan balances increased $987 million to $130.0 billion driven by growth in Auto Finance and Commercial Banking. Excluding the expected decline in loan balances in the company's run-off portfolios, loan balances increased $2.0 billion.
Period-end total deposits increased $2.2 billion to $128.3 billion, driven by growth in branch and direct deposits.
Revenues
Total revenue in the third quarter of 2011 was $4.2 billion, up $161 million, or 4.0 percent. Net interest income drove the majority of the increase in revenue, increasing $147 million to $3.3 billion. Approximately half of this growth resulted from a decline in the level of revenue suppression in the Credit Card segment. This lower level of suppression was driven by an increase in the estimated collectability of billed finance charges and fees on existing credit card balances.
In addition, there were two largely offsetting revenue items related to the company's balance sheet repositioning ahead of the pending acquisition of ING Direct. The company recognized $239 million of gains from the sale of $6.4 billion of securities, which were predominately agency mortgage backed securities. Additionally, at the end of the quarter, the company recognized a $266 million mark-to-market loss on the previously announced pay-fixed swap executed in early August 2011.
Margins
Net interest margin expanded 19 basis points in the quarter to 7.39 percent as average asset yield rose 13 basis points combined with a decline of six basis points in the cost of funds. The decline was a result of a decline in deposit rates and a reduction in wholesale funding.
Revenue margin for the third quarter was 9.35 percent, up 18 basis points. The expansion of revenue margin resulted from the same factors that drove the increase in revenues in the quarter.
Non-Interest Expense
Operating expense for the third quarter increased $59 million primarily due to higher staffing costs as well as accruals against an earn-out agreement related to a previous acquisition. Marketing expense decreased $17 million, mostly driven by the timing of several large marketing programs which impacted expenses in the second quarter. In line with usual historical patterns, the company expects marketing expense to rise in the fourth quarter.
Pre-Provision Income (before tax)
An increase in revenue in the quarter was partially offset by a modest increase in non-interest expenses.
Provision Expense
As overall credit trends are stabilizing after almost two years of rapidly declining charge-offs, quarterly credit metrics are increasingly driven by seasonal patterns. Charge-offs continued to fall in the quarter, but a significantly smaller allowance release associated with stabilizing credit trends caused provision expense to increase to $622 million. The charge-off rate improved 39 basis points to 2.52 percent, while the coverage ratio of allowance to loans came down by only 19 basis points to 3.29 percent.
Representation & Warranty
The company's reserve for representation and warranty claims was $892 million as of September 30, 2011, up from $869 million as of June 30, 2011. The company added $72 million in additional reserves and paid $49 million in claims. As a result of some generally increased activity by investors in the non-GSE and non-insured securitization category, the company now believes that the upper end of the reasonably possible future losses from representation and warranty claims beyond current accrual levels could be as high as $1.5 billion. This estimate continues to be subject to the significant uncertainty and numerous factors described in the company's quarterly reports filed with the Securities and Exchange Commission.
Net Income
Net income decreased $98 million as higher pre-provision earnings were more than offset by higher provision expense.
Capital Ratios
The company's estimated Tier 1 common equity ratio rose to 10.0 percent as of September 30, 2011, up 60 basis points from June 30, 2011. The increase was driven by strong business performance as well as the expected continued decline of deferred tax assets disallowed in the regulatory capital calculation. "We continue to be comfortable with our strong capital levels and our underlying trajectory," said Gary L. Perlin, Capital One's Chief Financial Officer. "Using known Basel III definitions, our Tier 1 common equity ratio would have been approximately 10 basis points higher in the quarter, or 10.1 percent."
Tier 1 common equity ratio, as used throughout this release, is a non-GAAP financial measure. For additional information, see Table 12 in the Financial Supplement.
Credit Card Highlights
For more lending information and statistics on the segment results, please refer to the Financial Supplement.
The Domestic Card business delivered another quarter of strong returns. The net charge-off rate improved 82 basis points in the quarter with approximately half of the improvement resulting from expected seasonal patterns and the remaining improvement driven by underlying credit performance. The company continues to see declining loss severity and strong credit performance in its newer vintages and portfolio seasoning as older vintages mature.
Domestic Card loan balances declined modestly in the quarter, but excluding the Installment Loan run-off, revolving credit card loans grew $276 million in the quarter, up approximately 0.5 percent sequentially, and up about 4.4 percent compared to the third quarter of 2010.
Purchase volume increased in the quarter to $34.9 billion, reflecting third quarter seasonality and continued strong growth in purchase volume across the company's Domestic Card business. Purchase volume grew 17 percent from the third quarter of 2010, excluding the impact of the Kohl's portfolio.
Commercial Banking Highlights
For more lending information and statistics on the segment results, please refer to the Financial Supplement.
The Commercial Banking segment delivered its third consecutive quarter of strong profitability and continued loan growth. Commercial deposits and commercial customer relationships continued to grow in the quarter.
Ending loans were up 2.9 percent from the prior quarter and up 8.7 percent from the third quarter of 2010. Growth in loan commitments, an early indicator of future loan growth, was even stronger. Commercial & Industrial and Commercial Real Estate businesses experienced the strongest growth in both loans and loan commitments.
Commercial Banking credit metrics have stabilized and improved modestly over the last five quarters. At a rate of 0.37 percent, net charge-offs for Commercial Banking are at their lowest levels since the third quarter of 2008.
Consumer Banking Highlights
For more lending information and statistics on the segment results, please refer to the Financial Supplement.
In Consumer Banking, loan balances were up modestly as strong growth in auto loans was partially offset by expected runoff of the Home Loan portfolio. Auto Finance originations were $3.4 billion, up 17 percent from the second quarter and 40 percent from the third quarter of 2010.
In the Auto Finance business, charge-off and delinquency rates increased in the quarter, consistent with expected seasonal patterns. Year-over-year, charge-offs and delinquencies improved 102 basis points and 108 basis points, respectively.
Auto Finance credit performance remains strong, with originations continuing to perform better than originations from 2007 and 2008. In fact, Auto Finance credit metrics are near their all-time lows, driven by the actions the company took to retrench and reposition the business, tight underwriting and loss mitigation actions through the recession, and continued strength in used car auction prices.
The charge-off rate improved in the Home Loan portfolio, while the delinquency rate increased modestly.
Consumer Banking deposits were up $1.3 billion in the third quarter as the Consumer Banking segment continued to grow retail banking customer relationships.
Forward-looking statements
The company cautions that its current expectations in this release dated October 20, 2011, and the company's plans, objectives, expectations and intentions, are forward-looking statements which speak only as of the date hereof. The company does not undertake any obligation to update or revise any of the information contained herein whether as a result of new information, future events or otherwise.
Certain statements in this release are forward-looking statements, including those that discuss, among other things, strategies, goals, outlook or other non-historical matters; projections, revenues, income, returns, accruals for claims in litigation and for other claims against the company, earnings per share or other financial measures for the company; future financial and operating results; the company's plans, objectives, expectations and intentions; the projected impact and benefits of the pending transactions involving the company, HSBC and ING Direct (the "transactions"); and the assumptions that underlie these matters. To the extent that any such information is forward-looking, it is intended to fit within the safe harbor for forward-looking information provided by the Private Securities Litigation Reform Act of 1995. Numerous factors could cause the company's actual results to differ materially from those described in such forward-looking statements, including, among other things: general economic and business conditions in the U.S., the U.K., Canada or the company's local markets, including conditions affecting employment levels, interest rates, consumer income and confidence, spending and savings that may affect consumer bankruptcies, defaults, charge-offs and deposit activity; an increase or decrease in credit losses (including increases due to a worsening of general economic conditions in the credit environment); the possibility that regulatory and other approvals and conditions to either of the transactions are not received or satisfied on a timely basis or at all; the possibility that modifications to the terms of either of the transactions may be required in order to obtain or satisfy such approvals or conditions; the possibility that the company will not receive third-party consents necessary to fully realize the anticipated benefits of the transactions; the possibility that the company may not fully realize the projected cost savings and other projected benefits of the transactions; changes in the anticipated timing for closing either of the transactions; difficulties and delays in integrating the assets and businesses acquired in the transactions; business disruption during the pendency of or following the transactions; the inability to sustain revenue and earnings growth; diversion of management time on issues related to the transactions; reputational risks and the reaction of customers and counterparties to the transactions; disruptions relating to the transactions negatively impacting the company's ability to maintain relationships with customers, employees and suppliers; changes in asset quality and credit risk as a result of the transactions; financial, legal, regulatory, tax or accounting changes or actions, including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder; developments, changes or actions relating to any litigation matter involving the company; increases or decreases in interest rates; the company's ability to access the capital markets at attractive rates and terms to capitalize and fund its operations and future growth; the success of the company's marketing efforts in attracting and retaining customers; increases or decreases in the company's aggregate loan balances or the number of customers and the growth rate and composition thereof, including increases or decreases resulting from factors such as shifting product mix, amount of actual marketing expenses the company incurs and attrition of loan balances; the level of future repurchase or indemnification requests the company may receive, the actual future performance of mortgage loans relating to such requests, the success rates of claimants against the company, any developments in litigation and the actual recoveries the company may make on any collateral relating to claims against the company; the amount and rate of deposit growth; changes in the reputation of or expectations regarding the financial services industry or the company with respect to practices, products or financial condition; any significant disruption in the company's operations or technology platform; the company's ability to maintain a compliance infrastructure suitable for its size and complexity; the company's ability to control costs; the amount of, and rate of growth in, the company's expenses as its business develops or changes or as it expands into new market areas; the company's ability to execute on its strategic and operational plans; any significant disruption of, or loss of public confidence in, the United States Mail service affecting the company's response rates and consumer payments; the company's ability to recruit and retain experienced personnel to assist in the management and operations of new products and services; changes in the labor and employment markets; fraud or misconduct by the company's customers, employees or business partners; competition from providers of products and services that compete with the company's businesses; and other risk factors set forth from time to time in reports that the company files with the Securities and Exchange Commission (the "SEC"), including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2010, and Exhibit 99.5 to the Current Report on Form 8-K filed on July 13, 2011.
About Capital One
Capital One Financial Corporation (http://www.capitalone.com/) is a financial holding company whose subsidiaries, which include Capital One, N.A. and Capital One Bank (USA), N. A., had $128.3 billion in deposits and $200.1 billion in total assets outstanding as of September 30, 2011. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients. Capital One, N.A. has approximately 1,000 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia. 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.
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Exhibit 99.2 |
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Capital One Financial Corporation |
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Financial Supplement |
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Third Quarter 2011(1) |
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Table of Contents |
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Page |
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Capital One Financial Consolidated |
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Table 1: |
Financial & Statistical Summary -- Consolidated |
1 |
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Table 2: |
Notes to Consolidated Financial & Statistical Summary (Table 1) |
2 |
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Table 3: |
Consolidated Statements of Income |
3 |
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Table 4: |
Consolidated Balance Sheets |
4 |
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Table 5: |
Average Balances, Net Interest Income and Net Interest Margin |
5 |
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Table 6: |
Loan Information and Performance Statistics |
6 |
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Business Segment Detail |
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Table 7: |
Financial & Statistical Summary -- Credit Card Business |
7 |
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Table 8: |
Financial & Statistical Summary -- Consumer Banking Business |
8 |
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Table 9: |
Financial & Statistical Summary -- Commercial Banking Business |
9 |
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Table 10: |
Financial & Statistical Summary -- Other and Total |
10 |
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Table 11: |
Notes to Loan and Business Segment Disclosures (Tables 6 -- 10) |
11 |
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Other |
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Table 12: |
Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures |
12 |
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(1) |
The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation, and investors should refer to our Quarterly Report on Form 10-Q once it is filed with the Securities and Exchange Commission. |
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CAPITAL ONE FINANCIAL CORPORATION (COF) |
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Table 1: Financial & Statistical Summary--Consolidated |
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2011 |
2011 |
2011 |
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(Dollars in millions, except per share data and as noted) (unaudited) |
Q3 |
Q2 |
Q1 |
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Earnings |
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Net interest income |
$ 3,283 |
$ 3,136 |
$ 3,140 |
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Non-interest income (1)(2) |
871 |
857 |
942 |
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Total revenue (3) |
$ 4,154 |
$ 3,993 |
$ 4,082 |
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Provision for loan and lease losses |
622 |
343 |
534 |
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Marketing expenses |
312 |
329 |
276 |
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Operating expenses (4) |
1,985 |
1,926 |
1,886 |
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Income from continuing operations before income taxes |
$ 1,235 |
$ 1,395 |
$ 1,386 |
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Income tax provision |
370 |
450 |
354 |
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Income from continuing operations, net of tax |
865 |
945 |
1,032 |
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Loss from discontinued operations, net of tax (2) |
(52) |
(34) |
(16) |
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Net income |
$ 813 |
$ 911 |
$ 1,016 |
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Common Share Statistics |
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Basic EPS: |
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Income from continuing operations, net of tax |
$ 1.90 |
$ 2.07 |
$ 2.27 |
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Loss from discontinued operations, net of tax |
(0.12) |
(0.07) |
(0.03) |
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Net income per common share |
$ 1.78 |
$ 2.00 |
$ 2.24 |
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Diluted EPS: |
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Income from continuing operations, net of tax |
$ 1.88 |
$ 2.04 |
$ 2.24 |
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Loss from discontinued operations, net of tax |
(0.11) |
(0.07) |
(0.03) |
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Net income per common share |
$ 1.77 |
$ 1.97 |
$ 2.21 |
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Weighted average common shares outstanding (in millions): |
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Basic EPS |
456.0 |
455.6 |
454.1 |
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Diluted EPS |
460.4 |
462.2 |
460.3 |
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Common shares outstanding (period end) |
456.1 |
455.8 |
455.2 |
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Dividends per common share |
$ 0.05 |
$ 0.05 |
$ 0.05 |
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Tangible book value per common share (period end) (5) |
33.82 |
32.20 |
29.70 |
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Stock price per common share (period end) |
39.63 |
51.67 |
51.96 |
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Total market capitalization (period end) |
18,075 |
23,551 |
23,652 |
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Balance Sheet (Period End) |
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Loans held for investment (6) |
$ 129,952 |
$ 128,965 |
$ 124,092 |
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Interest-earning assets |
174,308 |
174,302 |
172,849 |
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Total assets |
200,148 |
199,753 |
199,300 |
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Tangible assets (7) |
185,891 |
185,715 |
184,928 |
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Interest-bearing deposits |
110,777 |
109,278 |
109,097 |
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Total deposits |
128,318 |
126,117 |
125,446 |
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Borrowings |
34,315 |
37,735 |
39,797 |
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Stockholders' equity |
29,378 |
28,681 |
27,550 |
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Tangible common equity (TCE) (8) |
15,425 |
14,675 |
13,520 |
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Balance Sheet (Quarterly Average Balances) |
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Average loans held for investment (6) |
$ 129,043 |
$ 127,916 |
$ 125,077 |
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Average interest-earning assets |
177,710 |
174,143 |
173,540 |
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Average total assets |
201,611 |
199,229 |
198,075 |
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Average interest-bearing deposits |
110,750 |
109,251 |
108,633 |
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Average total deposits |
128,268 |
125,834 |
124,158 |
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Average borrowings |
37,366 |
39,451 |
40,538 |
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Average stockholders' equity |
29,316 |
28,255 |
27,009 |
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Performance Metrics |
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Net interest income growth (quarter over quarter) |
5 |
% |
(0) |
% |
4 |
% |
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Non-interest income growth (quarter over quarter) |
2 |
(9) |
0 |
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Revenue growth (quarter over quarter) |
4 |
(2) |
3 |
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Revenue margin (9) |
9.35 |
9.17 |
9.41 |
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Net interest margin 10) |
7.39 |
7.20 |
7.24 |
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Return on average assets (11) |
1.72 |
1.90 |
2.08 |
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Return on average equity (12) |
11.80 |
13.38 |
15.28 |
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Return on average tangible common equity (13) |
22.58 |
26.57 |
31.73 |
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Non-interest expense as a % of average loans held for investment (14) |
7.12 |
7.05 |
6.91 |
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Efficiency ratio (15) |
55.30 |
56.47 |
52.96 |
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Effective income tax rate |
30.0 |
32.3 |
25.5 |
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Full-time equivalent employees (in thousands) |
29.5 |
28.2 |
27.9 |
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Credit Quality Metrics (16) |
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Allowance for loan and lease losses |
$ 4,280 |
$ 4,488 |
$ 5,067 |
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Allowance as a % of loans held for investment |
3.29 |
% |
3.48 |
% |
4.08 |
% |
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Net charge-offs |
$ 812 |
$ 931 |
$ 1,145 |
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Net charge-off rate (17)(18) |
2.52 |
% |
2.91 |
% |
3.66 |
% |
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30+ day performing delinquency rate |
3.13 |
2.90 |
3.07 |
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Capital Ratios |
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Tier 1 risk-based capital ratio (19) |
12.4 |
% |
11.8 |
% |
10.9 |
% |
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Tier 1 common equity ratio (20) |
10.0 |
9.4 |
8.4 |
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Total risk-based capital ratio (21) |
15.4 |
15.0 |
14.2 |
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Tangible common equity (TCE) ratio (22) |
8.3 |
7.9 |
7.3 |
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CAPITAL ONE FINANCIAL CORPORATION (COF) |
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Table 2: Notes to Consolidated Financial & Statistical Summary (Table 1) |
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(1) |
Includes the impact from the change in fair value of retained interests, including interest-only strips, which totaled $12 million in Q3 2011, $16 million in Q2 2011, and $7 million in Q1 2011. |
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(2) |
The mortgage representation and warranty reserve increased to $892 million as of September 30, 2011, from $869 million as of June 30, 2011. We recorded a provision for repurchase losses of $72 million in Q3 2011, $37 million in Q2 2011, and $44 million in Q1 2011. The majority of the provision for repurchase losses is included in discontinued operations, with the remaining portion included in non-interest income. |
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(3) |
The estimated uncollectible amount of billed finance charges and fees excluded from revenue totaled $24 million in Q3 2011, $112 million in Q2 2011, and $105 million in Q1 2011. In the third quarter of 2011, we made a change to the way we estimate recoveries in determining the uncollectible amount of finance charges and fees, which significantly reduced the uncollectible amount of billed finance charges and fees excluded from revenue in Q3 2011. |
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(4) |
Includes core deposit intangible amortization expense of $42 million in Q3 2011, $44 million in Q2 2011, and $45 million in Q1 2011 and integration costs of $1 million in Q3 2011, $0 million in Q2 2011, and $2 million in Q1 2011. |
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(5) |
Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of tangible common equity. |
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(6) |
Amounts for Q3 2011 and Q2 2011 reflect the impact of the April 1, 2011 acquisition of the existing private-label credit card loan portfolio of Kohl's, which had an outstanding principal and interest balance of approximately $3.7 billion at acquisition. |
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(7) |
Tangible assets is a non-GAAP measure consisting of total assets less assets from discontinued operations and intangible assets. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this measure. |
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(8) |
Tangible common equity is a non-GAAP measure consisting of total stockholders' equity less intangible assets. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this measure. |
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(9) |
Calculated based on annualized total revenue for the period divided by average interest-earning assets for the period. |
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(10) |
Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period. |
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(11) |
Calculated based on annualized income from continuing operations, net of tax, for the period divided by average total assets for the period. |
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(12) |
Calculated based on annualized income from continuing operations, net of tax, for the period divided by average stockholders' equity for the period. |
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(13) |
Calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible common equity for the period. |
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(14) |
Calculated based on annualized non-interest expense for the period divided by average loans held for investment for the period. |
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(15) |
Calculated based on non-interest expense for the period divided by total revenue for the period. |
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(16) |
Purchased credit impaired ("PCI") loans acquired as part of the Chevy Chase Bank ("CCB") acquisition are included in the denominator used in calculating the credit quality metrics presented in Table 1. These metrics excluding the impact of loans acquired from CCB from the denominator are presented below: |
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2011 |
2011 |
2011 |
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(Dollars in millions) (unaudited) |
Q3 |
Q2 |
Q1 |
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CCB period-end acquired loan portfolio |
$ 4,873 |
$ 5,181 |
$ 5,351 |
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CCB average acquired loan portfolio |
4,998 |
5,112 |
5,305 |
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Allowance as a % of loans held for investment, excluding CCB loans |
3.42 |
% |
3.63 |
% |
4.27 |
% |
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Net charge-off rate, excluding CCB loans |
2.62 |
3.03 |
3.82 |
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30+ day performing delinquency rate, excluding CCB loans |
3.32 |
3.08 |
3.25 |
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(17) |
In accordance with our loss-sharing agreement with Kohl's, charge-offs for the portfolio are reported net of any reimbursement of credit losses from Kohl's, which has the impact of lowering the overall charge-off rate. |
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(18) |
Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period. |
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(19) |
Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this ratio. |
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(20) |
Tier 1 common equity ratio is a non-GAAP measure calculated based on Tier 1 common equity divided by risk-weighted assets. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this ratio and non-GAAP reconciliation. |
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(21) |
Total risk-based capital ratio is a regulatory capital measure calculated based on total risk-based capital divided by risk-weighted assets. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this ratio. |
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(22) |
Tangible common equity ratio ("TCE ratio") is a non-GAAP measure calculated based on tangible common equity divided by tangible assets. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this ratio and non-GAAP reconciliation. |
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|
CAPITAL ONE FINANCIAL CORPORATION (COF) |
||||||||||||||||
|
Table 3: Consolidated Statements of Income |
||||||||||||||||
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||
|
(Dollars in millions, except per share data) |
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|||||||||||
|
(unaudited) |
2011 |
2011 |
2010 |
2011 |
2010 |
|||||||||||
|
Interest income: |
||||||||||||||||
|
Loans held for investment, including past-due fees |
$ 3,550 |
$ 3,367 |
$ 3,447 |
$ 10,334 |
$ 10,582 |
|||||||||||
|
Investment securities |
264 |
313 |
347 |
893 |
1,037 |
|||||||||||
|
Cash equivalents and other |
21 |
19 |
21 |
59 |
60 |
|||||||||||
|
Total interest income |
3,835 |
3,699 |
3,815 |
11,286 |
11,679 |
|||||||||||
|
Interest expense: |
||||||||||||||||
|
Deposits |
294 |
307 |
358 |
923 |
1,125 |
|||||||||||
|
Securitized debt obligations |
89 |
113 |
191 |
342 |
644 |
|||||||||||
|
Senior and subordinated notes |
84 |
63 |
72 |
211 |
211 |
|||||||||||
|
Other borrowings |
85 |
80 |
85 |
251 |
265 |
|||||||||||
|
Total interest expense |
552 |
563 |
706 |
1,727 |
2,245 |
|||||||||||
|
Net interest income |
3,283 |
3,136 |
3,109 |
9,559 |
9,434 |
|||||||||||
|
Provision for loan and lease losses |
622 |
343 |
867 |
1,499 |
3,069 |
|||||||||||
|
Net interest income after provision for loan and lease losses |
2,661 |
2,793 |
2,242 |
8,060 |
6,365 |
|||||||||||
|
Non-interest income: |
||||||||||||||||
|
Servicing and securitizations |
12 |
12 |
13 |
35 |
(3) |
|||||||||||
|
Service charges and other customer-related fees |
542 |
460 |
496 |
1,527 |
1,577 |
|||||||||||
|
Interchange |
321 |
331 |
346 |
972 |
991 |
|||||||||||
|
Net other-than-temporary impairment losses recognized in earnings |
(6) |
(6) |
(5) |
(15) |
(62) |
|||||||||||
|
Other |
2 |
60 |
57 |
151 |
272 |
|||||||||||
|
Total non-interest income |
871 |
857 |
907 |
2,670 |
2,775 |
|||||||||||
|
Non-interest expense: |
||||||||||||||||
|
Salaries and associate benefits |
750 |
715 |
641 |
2,206 |
1,937 |
|||||||||||
|
Marketing |
312 |
329 |
250 |
917 |
650 |
|||||||||||
|
Communications and data processing |
178 |
162 |
178 |
504 |
512 |
|||||||||||
|
Supplies and equipment |
143 |
124 |
129 |
402 |
381 |
|||||||||||
|
Occupancy |
122 |
118 |
135 |
359 |
371 |
|||||||||||
|
Other |
792 |
807 |
663 |
2,326 |
1,992 |
|||||||||||
|
Total non-interest expense |
2,297 |
2,255 |
1,996 |
6,714 |
5,843 |
|||||||||||
|
Income from continuing operations before income taxes |
1,235 |
1,395 |
1,153 |
4,016 |
3,297 |
|||||||||||
|
Income tax provision |
370 |
450 |
335 |
1,174 |
948 |
|||||||||||
|
Income from continuing operations, net of tax |
865 |
945 |
818 |
2,842 |
2,349 |
|||||||||||
|
Loss from discontinued operations, net of tax |
(52) |
(34) |
(15) |
(102) |
(303) |
|||||||||||
|
Net income |
$ 813 |
$ 911 |
$ 803 |
$ 2,740 |
$ 2,046 |
|||||||||||
|
Basic earnings per common share: |
||||||||||||||||
|
Income from continuing operations |
$ 1.90 |
$ 2.07 |
$ 1.81 |
$ 6.24 |
$ 5.19 |
|||||||||||
|
Loss from discontinued operations |
(0.12) |
(0.07) |
(0.03) |
(0.22) |
(0.66) |
|||||||||||
|
Net income per common share |
$ 1.78 |
$ 2.00 |
$ 1.78 |
$ 6.02 |
$ 4.53 |
|||||||||||
|
Diluted earnings per common share: |
||||||||||||||||
|
Income from continuing operations |
$ 1.88 |
$ 2.04 |
$ 1.79 |
$ 6.17 |
$ 5.15 |
|||||||||||
|
Loss from discontinued operations |
(0.11) |
(0.07) |
(0.03) |
(0.22) |
(0.66) |
|||||||||||
|
Net income per common share |
$ 1.77 |
$ 1.97 |
$ 1.76 |
$ 5.95 |
$ 4.49 |
|||||||||||
|
Weighted average common shares outstanding (in millions): |
||||||||||||||||
|
Basic EPS |
456.0 |
455.6 |
452.5 |
455.2 |
451.9 |
|||||||||||
|
Diluted EPS |
460.4 |
462.2 |
456.6 |
461.0 |
456.0 |
|||||||||||
|
Dividends per common share |
$ 0.05 |
$ 0.05 |
$ 0.05 |
$ 0.15 |
$ 0.15 |
|||||||||||
|
CAPITAL ONE FINANCIAL CORPORATION (COF) |
||||||||
|
Table 4: Consolidated Balance Sheets |
||||||||
|
September 30, |
December 31, |
September 30, |
||||||
|
(Dollars in millions)(unaudited) |
2011 |
2010 |
2010 |
|||||
|
Assets: |
||||||||
|
Cash and due from banks |
$ 1,794 |
$ 2,067 |
$ 2,015 |
|||||
|
Interest-bearing deposits with banks |
3,238 |
2,776 |
2,391 |
|||||
|
Federal funds sold and repurchase agreements |
1,326 |
406 |
536 |
|||||
|
Cash and cash equivalents |
6,358 |
5,249 |
4,942 |
|||||
|
Restricted cash for securitization investors |
984 |
1,602 |
2,686 |
|||||
|
Securities available for sale, at fair value |
38,400 |
41,537 |
39,926 |
|||||
|
Loans held for investment: |
||||||||
|
Unsecuritized loans held for investment, at amortized cost |
83,010 |
71,921 |
74,719 |
|||||
|
Restricted loans for securitization investors |
46,942 |
54,026 |
51,615 |
|||||
|
Total loans held for investment |
129,952 |
125,947 |
126,334 |
|||||
|
Less: Allowance for loan and lease losses |
(4,280) |
(5,628) |
(6,175) |
|||||
|
Net loans held for investment |
125,672 |
120,319 |
120,159 |
|||||
|
Loans held for sale, at lower-of-cost-or-fair-value |
312 |
228 |
197 |
|||||
|
Accounts receivable from securitizations |
101 |
118 |
127 |
|||||
|
Premises and equipment, net |
2,785 |
2,749 |
2,722 |
|||||
|
Interest receivable |
958 |
1,070 |
1,025 |
|||||
|
Goodwill |
13,593 |
13,591 |
13,593 |
|||||
|
Other |
10,985 |
11,040 |
11,556 |
|||||
|
Total assets |
$ 200,148 |
$ 197,503 |
$ 196,933 |
|||||
|
Liabilities: |
||||||||
|
Interest payable |
$ 401 |
$ 488 |
$ 464 |
|||||
|
Customer deposits: |
||||||||
|
Non-interest bearing deposits |
17,541 |
15,048 |
14,471 |
|||||
|
Interest-bearing deposits |
110,777 |
107,162 |
104,741 |
|||||
|
Total customer deposits |
128,318 |
122,210 |
119,212 |
|||||
|
Securitized debt obligations |
17,120 |
26,915 |
29,504 |
|||||
|
Other debt: |
||||||||
|
Federal funds purchased and securities loaned or sold under agreements to repurchase |
1,441 |
1,517 |
947 |
|||||
|
Senior and subordinated notes |
11,051 |
8,650 |
9,083 |
|||||
|
Other borrowings |
4,703 |
4,714 |
4,799 |
|||||
|
Total other debt |
17,195 |
14,881 |
14,829 |
|||||
|
Other liabilities |
7,736 |
6,468 |
6,863 |
|||||
|
Total liabilities |
170,770 |
170,962 |
170,872 |
|||||
|
Stockholders' equity: |
||||||||
|
Common stock |
5 |
5 |
5 |
|||||
|
Paid-in capital, net |
19,234 |
19,084 |
19,059 |
|||||
|
Retained earnings and accumulated other comprehensive income |
13,382 |
10,654 |
10,199 |
|||||
|
Less: Treasury stock, at cost |
(3,243) |
(3,202) |
(3,202) |
|||||
|
Total stockholders' equity |
29,378 |
26,541 |
26,061 |
|||||
|
Total liabilities and stockholders' equity |
$ 200,148 |
$ 197,503 |
$ 196,933 |
|||||
|
CAPITAL ONE FINANCIAL CORPORATION (COF) |
||||||||||||||||||||||
|
Table 5: Average Balances, Net Interest Income and Net Interest Margin |
||||||||||||||||||||||
|
Quarter Ended 09/30/11 |
Quarter Ended 06/30/11 |
Quarter Ended 09/30/10 |
||||||||||||||||||||
|
(Dollars in millions) |
Average |
Interest Income/ |
Yield/ |
Average |
Interest |
Yield/ |
Average |
Interest |
Yield/ |
|||||||||||||
|
(unaudited) |
Balance |
Expense |
Rate |
Balance |
Expense |
Rate |
Balance |
Expense |
Rate |
|||||||||||||
|
Interest-earning assets: |
||||||||||||||||||||||
|
Loans held for investment |
$ 129,043 |
$ 3,550 |
11.00 |
% |
$ 127,916 |
$ 3,367 |
10.53 |
% |
$ 126,307 |
$ 3,447 |
10.92 |
% |
||||||||||
|
Investment securities |
37,189 |
264 |
2.84 |
40,381 |
313 |
3.10 |
39,872 |
347 |
3.48 |
|||||||||||||
|
Cash equivalents and other |
11,478 |
21 |
0.73 |
5,846 |
19 |
1.30 |
6,294 |
21 |
1.33 |
|||||||||||||
|
Total interest-earning assets |
$ 177,710 |
$ 3,835 |
8.63 |
% |
$ 174,143 |
$ 3,699 |
8.50 |
% |
$ 172,473 |
$ 3,815 |
8.85 |
% |
||||||||||
|
Interest-bearing liabilities: |
||||||||||||||||||||||
|
Interest-bearing deposits |
||||||||||||||||||||||
|
NOW accounts |
$ 12,602 |
$ 9 |
0.29 |
% |
$ 13,186 |
$ 9 |
0.27 |
% |
$ 11,333 |
$ 10 |
0.35 |
% |
||||||||||
|
Money market deposit accounts |
47,483 |
100 |
0.84 |
45,527 |
99 |
0.87 |
43,260 |
104 |
0.96 |
|||||||||||||
|
Savings accounts |
30,944 |
56 |
0.72 |
29,329 |
60 |
0.82 |
22,572 |
49 |
0.87 |
|||||||||||||
|
Other consumer time deposits |
13,530 |
84 |
2.48 |
14,330 |
91 |
2.54 |
18,726 |
133 |
2.84 |
|||||||||||||
|
Public fund CD's of $100,000 or more |
92 |
1 |
4.35 |
110 |
1 |
3.64 |
220 |
1 |
1.82 |
|||||||||||||
|
CD's of $100,000 or more |
5,407 |
43 |
3.18 |
5,867 |
46 |
3.14 |
7,256 |
59 |
3.25 |
|||||||||||||
|
Foreign time deposits |
692 |
1 |
0.58 |
902 |
1 |
0.44 |
819 |
2 |
0.98 |
|||||||||||||
|
Total interest-bearing deposits |
$ 110,750 |
$ 294 |
1.06 |
% |
$ 109,251 |
$ 307 |
1.12 |
% |
$ 104,186 |
$ 358 |
1.37 |
% |
||||||||||
|
Securitized debt obligations |
18,478 |
89 |
1.93 |
22,191 |
113 |
2.04 |
30,750 |
191 |
2.48 |
|||||||||||||
|
Senior and subordinated notes |
10,519 |
84 |
3.19 |
8,093 |
63 |
3.11 |
8,677 |
72 |
3.32 |
|||||||||||||
|
Other borrowings |
8,369 |
85 |
4.06 |
9,167 |
80 |
3.49 |
6,483 |
85 |
5.24 |
|||||||||||||
|
Total interest-bearing liabilities |
$ 148,116 |
$ 552 |
1.49 |
% |
$ 148,702 |
$ 563 |
1.51 |
% |
$ 150,096 |
$ 706 |
1.88 |
% |
||||||||||
|
Net interest income/spread |
$ 3,283 |
7.14 |
% |
$ 3,136 |
6.99 |
% |
$ 3,109 |
6.96 |
% |
|||||||||||||
|
Interest income to average interest-earning assets |
8.63 |
% |
8.50 |
% |
8.85 |
% |
||||||||||||||||
|
Interest expense to average interest-earning assets |
1.24 |
1.30 |
1.64 |
|||||||||||||||||||
|
Net interest margin |
7.39 |
% |
7.20 |
% |
7.21 |
% |
||||||||||||||||
|
CAPITAL ONE FINANCIAL CORPORATION (COF) |
||||||||
|
Table 6: Loan Information and Performance Statistics(1) |
||||||||
|
2011 |
2011 |
2011 |
||||||
|
(Dollars in millions)(unaudited) |
Q3 |
Q2 |
Q1 |
|||||
|
Period-end loans held for investment |
||||||||
|
Credit card: |
||||||||
|
Domestic credit card(2) |
$ 53,820 |
$ 53,994 |
$ 50,570 |
|||||
|
International credit card |
8,210 |
8,711 |
8,735 |
|||||
|
Total credit card |
62,030 |
62,705 |
59,305 |
|||||
|
Consumer banking: |
||||||||
|
Automobile |
20,422 |
19,223 |
18,342 |
|||||
|
Home loan |
10,916 |
11,323 |
11,741 |
|||||
|
Retail banking |
4,014 |
4,046 |
4,223 |
|||||
|
Total consumer banking |
35,352 |
34,592 |
34,306 |
|||||
|
Commercial banking: |
||||||||
|
Commercial and multifamily real estate |
14,389 |
14,035 |
13,543 |
|||||
|
Middle market |
11,924 |
11,404 |
10,758 |
|||||
|
Specialty lending |
4,221 |
4,122 |
3,936 |
|||||
|
Total commercial lending |
30,534 |
29,561 |
28,237 |
|||||
|
Small-ticket commercial real estate |
1,571 |
1,642 |
1,780 |
|||||
|
Total commercial banking |
32,105 |
31,203 |
30,017 |
|||||
|
Other loans(3) |
465 |
465 |
464 |
|||||
|
Total |
$ 129,952 |
$ 128,965 |
$ 124,092 |
|||||
|
Average loans held for investment |
||||||||
|
Credit card: |
||||||||
|
Domestic credit card(2) |
$ 53,668 |
$ 53,868 |
$ 51,889 |
|||||
|
International credit card |
8,703 |
8,823 |
8,697 |
|||||
|
Total credit card |
62,371 |
62,691 |
60,586 |
|||||
|
Consumer banking: |
||||||||
|
Automobile |
19,757 |
18,753 |
18,025 |
|||||
|
Home loan |
11,126 |
11,534 |
11,960 |
|||||
|
Retail banking |
3,979 |
4,154 |
4,251 |
|||||
|
Total consumer banking |
34,862 |
34,441 |
34,236 |
|||||
|
Commercial banking: |
||||||||
|
Commercial and multifamily real estate |
14,021 |
13,597 |
13,345 |
|||||
|
Middle market |
11,572 |
10,979 |
10,666 |
|||||
|
Specialty lending |
4,154 |
4,014 |
3,964 |
|||||
|
Total commercial lending |
29,747 |
28,590 |
27,975 |
|||||
|
Small-ticket commercial real estate |
1,598 |
1,726 |
1,818 |
|||||
|
Total commercial banking |
31,345 |
30,316 |
29,793 |
|||||
|
Other loans(3) |
465 |
468 |
462 |
|||||
|
Total |
$ 129,043 |
$ 127,916 |
$ 125,077 |
|||||
|
Net charge-off rates |
||||||||
|
Credit card: |
||||||||
|
Domestic credit card(4) |
3.92 |
% |
4.74 |
% |
6.20 |
% |
||
|
International credit card |
6.15 |
7.02 |
5.74 |
|||||
|
Total credit card |
4.23 |
% |
5.06 |
% |
6.13 |
% |
||
|
Consumer banking: |
||||||||
|
Automobile(5) |
1.69 |
% |
1.11 |
% |
1.98 |
% |
||
|
Home loan(6) |
0.53 |
0.60 |
0.71 |
|||||
|
Retail banking(6) |
1.67 |
1.73 |
2.24 |
|||||
|
Total consumer banking(6) |
1.32 |
% |
1.01 |
% |
1.57 |
% |
||
|
Commercial banking: |
||||||||
|
Commercial and multifamily real estate(6) |
0.12 |
% |
0.39 |
% |
0.56 |
% |
||
|
Middle market (6) |
0.41 |
0.13 |
0.18 |
|||||
|
Specialty lending |
0.44 |
0.47 |
0.30 |
|||||
|
Total commercial lending(6) |
0.28 |
% |
0.30 |
% |
0.38 |
% |
||
|
Small-ticket commercial real estate |
2.19 |
3.77 |
7.14 |
|||||
|
Total commercial banking(6) |
0.37 |
% |
0.50 |
% |
0.79 |
% |
||
|
Other loans |
6.39 |
% |
10.57 |
% |
19.91 |
% |
||
|
Total |
2.52 |
% |
2.91 |
% |
3.66 |
% |
||
|
30+ day performing delinquency rates |
||||||||
|
Credit card: |
||||||||
|
Domestic credit card |
3.65 |
% |
3.33 |
% |
3.59 |
% |
||
|
International credit card |
5.35 |
5.30 |
5.55 |
|||||
|
Total credit card |
3.87 |
% |
3.60 |
% |
3.88 |
% |
||
|
Consumer banking: |
||||||||
|
Automobile |
6.34 |
% |
6.09 |
% |
5.79 |
% |
||
|
Home loan(6) |
0.78 |
0.70 |
0.61 |
|||||
|
Retail banking(6) |
0.89 |
0.76 |
0.93 |
|||||
|
Total consumer banking(6) |
4.01 |
% |
3.70 |
% |
3.42 |
% |
||
|
Nonperforming asset rates(7) (8) |
||||||||
|
Consumer banking: |
||||||||
|
Automobile |
0.53 |
% |
0.49 |
% |
0.39 |
% |
||
|
Home loan(6) |
4.74 |
4.40 |
4.34 |
|||||
|
Retail banking(6) |
2.37 |
2.45 |
2.44 |
|||||
|
Total consumer banking(6) |
2.04 |
% |
2.00 |
% |
2.00 |
% |
||
|
Commercial banking: |
||||||||
|
Commercial and multifamily real estate(6) |
2.16 |
% |
2.35 |
% |
2.63 |
% |
||
|
Middle market (6) |
1.04 |
1.19 |
1.14 |
|||||
|
Specialty lending |
0.87 |
0.95 |
1.19 |
|||||
|
Total commercial lending(6) |
1.54 |
% |
1.71 |
% |
1.86 |
% |
||
|
Small-ticket commercial real estate |
1.58 |
0.75 |
3.39 |
|||||
|
Total commercial banking(6) |
1.55 |
% |
1.66 |
% |
1.95 |
% |
||
|
CAPITAL ONE FINANCIAL CORPORATION (COF) |
||||||||
|
Table 7: Financial & Statistical Summary - Credit Card Business |
||||||||
|
2011 |
2011 |
2011 |
||||||
|
(Dollars in millions) (unaudited) |
Q3 |
Q2 |
Q1 |
|||||
|
Credit Card |
||||||||
|
Earnings: |
||||||||
|
Net interest income |
$ 2,042 |
$ 1,890 |
$ 1,941 |
|||||
|
Non-interest income |
678 |
619 |
674 |
|||||
|
Total revenue |
$ 2,720 |
$ 2,509 |
$ 2,615 |
|||||
|
Provision for loan and lease losses |
511 |
309 |
450 |
|||||
|
Non-interest expense |
1,188 |
1,238 |
1,178 |
|||||
|
Income from continuing operations before taxes |
1,021 |
962 |
987 |
|||||
|
Income tax provision |
358 |
344 |
344 |
|||||
|
Income from continuing operations, net of tax |
$ 663 |
$ 618 |
$ 643 |
|||||
|
Selected metrics: |
||||||||
|
Period end loans held for investment |
$ 62,030 |
$ 62,705 |
$ 59,305 |
|||||
|
Average loans held for investment |
62,371 |
62,691 |
60,586 |
|||||
|
Average yield on loans held for investment |
14.84 |
% |
13.83 |
% |
14.68 |
% |
||
|
Revenue margin |
17.44 |
16.01 |
17.26 |
|||||
|
Net charge-off rate |
4.23 |
5.06 |
6.13 |
|||||
|
30+ day delinquency rate(9) |
3.87 |
3.60 |
3.88 |
|||||
|
Purchase volume(10) |
$ 34,918 |
$ 34,226 |
$ 27,797 |
|||||
|
Domestic Card |
||||||||
|
Earnings: |
||||||||
|
Net interest income |
$ 1,753 |
$ 1,607 |
$ 1,651 |
|||||
|
Non-interest income |
588 |
584 |
583 |
|||||
|
Total revenue |
$ 2,341 |
$ 2,191 |
$ 2,234 |
|||||
|
Provision for loan and lease losses |
381 |
187 |
230 |
|||||
|
Non-interest expense |
972 |
1,008 |
990 |
|||||
|
Income from continuing operations before taxes |
988 |
996 |
1,014 |
|||||
|
Income tax provision |
351 |
354 |
360 |
|||||
|
Income from continuing operations, net of tax |
$ 637 |
$ 642 |
$ 654 |
|||||
|
Selected metrics: |
||||||||
|
Period end loans held for investment |
$ 53,820 |
$ 53,994 |
$ 50,570 |
|||||
|
Average loans held for investment |
53,668 |
53,868 |
51,889 |
|||||
|
Average yield on loans held for investment |
14.62 |
% |
13.52 |
% |
14.42 |
% |
||
|
Revenue margin |
17.45 |
16.27 |
17.22 |
|||||
|
Net charge-off rate(4) |
3.92 |
4.74 |
6.20 |
|||||
|
30+ day delinquency rate(9) |
3.65 |
3.33 |
3.59 |
|||||
|
Purchase volume(10) |
$ 31,686 |
$ 31,070 |
$ 25,024 |
|||||
|
International Card |
||||||||
|
Earnings: |
||||||||
|
Net interest income |
$ 289 |
$ 283 |
$ 290 |
|||||
|
Non-interest income |
90 |
35 |
91 |
|||||
|
Total revenue |
$ 379 |
$ 318 |
$ 381 |
|||||
|
Provision for loan and lease losses |
130 |
122 |
220 |
|||||
|
Non-interest expense |
216 |
230 |
188 |
|||||
|
Income (loss) from continuing operations before taxes |
33 |
(34) |
(27) |
|||||
|
Income tax provision (benefit) |
7 |
(10) |
(16) |
|||||
|
Income (loss) from continuing operations, net of tax |
$ 26 |
$ (24) |
$ (11) |
|||||
|
Selected metrics: |
||||||||
|
Period end loans held for investment |
$ 8,210 |
$ 8,711 |
$ 8,735 |
|||||
|
Average loans held for investment |
8,703 |
8,823 |
8,697 |
|||||
|
Average yield on loans held for investment |
16.24 |
% |
15.77 |
% |
16.28 |
% |
||
|
Revenue margin |
17.42 |
14.42 |
17.52 |
|||||
|
Net charge-off rate |
6.15 |
7.02 |
5.74 |
|||||
|
30+ day delinquency rate(9) |
5.35 |
5.30 |
5.55 |
|||||
|
Purchase volume(10) |
$ 3,232 |
$ 3,156 |
$ 2,773 |
|||||
|
CAPITAL ONE FINANCIAL CORPORATION (COF) |
|||||||||
|
Table 8: Financial & Statistical Summary - Consumer Banking Business |
|||||||||
|
2011 |
2011 |
2011 |
|||||||
|
(Dollars in millions) (unaudited) |
Q3 |
Q2 |
Q1 |
||||||
|
Consumer Banking |
|||||||||
|
Earnings: |
|||||||||
|
Net interest income |
$ 1,097 |
$ 1,051 |
$ 983 |
||||||
|
Non-interest income |
188 |
194 |
186 |
||||||
|
Total revenue |
$ 1,285 |
$ 1,245 |
$ 1,169 |
||||||
|
Provision for loan and lease losses |
136 |
41 |
95 |
||||||
|
Non-interest expense |
853 |
758 |
740 |
||||||
|
Income from continuing operations before taxes |
296 |
446 |
334 |
||||||
|
Income tax provision |
106 |
159 |
119 |
||||||
|
Income from continuing operations, net of tax |
$ 190 |
$ 287 |
$ 215 |
||||||
|
Selected metrics: |
|||||||||
|
Period end loans held for investment |
$ 35,352 |
$ 34,592 |
$ 34,306 |
||||||
|
Average loans held for investment |
34,862 |
34,441 |
34,236 |
||||||
|
Average yield on loans held for investment |
9.83 |
% |
9.51 |
% |
9.60 |
% |
|||
|
Auto loan originations |
$ 3,409 |
$ 2,910 |
$ 2,571 |
||||||
|
Period end deposits |
88,589 |
87,282 |
86,355 |
||||||
|
Average deposits |
88,266 |
86,926 |
83,884 |
||||||
|
Deposit interest expense rate |
0.95 |
% |
1.00 |
% |
1.06 |
% |
|||
|
Core deposit intangible amortization |
$ 32 |
$ 34 |
$ 35 |
||||||
|
Net charge-off rate(5)(6) |
1.32 |
% |
1.01 |
% |
1.57 |
% |
|||
|
Nonperforming loans as a percentage of loans held for investment(5)(6) |
1.88 |
1.83 |
1.84 |
||||||
|
Nonperforming asset rate(6)(7) |
2.04 |
2.00 |
2.00 |
||||||
|
30+ day performing delinquency rate(6)(7) |
4.01 |
3.70 |
3.42 |
||||||
|
Period end loans serviced for others |
$ 18,624 |
$ 19,226 |
$ 19,956 |
||||||
|
CAPITAL ONE FINANCIAL CORPORATION (COF) |
|||||||||
|
Table 9: Financial & Statistical Summary - Commercial Banking Business |
|||||||||
|
2011 |
2011 |
2011 |
|||||||
|
(Dollars in millions) (unaudited) |
Q3 |
Q2 |
Q1 |
||||||
|
Commercial Banking |
|||||||||
|
Earnings: |
|||||||||
|
Net interest income |
$ 353 |
$ 333 |
$ 321 |
||||||
|
Non-interest income |
62 |
62 |
71 |
||||||
|
Total revenue |
$ 415 |
$ 395 |
$ 392 |
||||||
|
Provision for loan and lease losses |
(10) |
(18) |
(15) |
||||||
|
Non-interest expense |
200 |
192 |
177 |
||||||
|
Income from continuing operations before taxes |
225 |
221 |
230 |
||||||
|
Income tax provision |
80 |
79 |
82 |
||||||
|
Income from continuing operations, net of tax |
$ 145 |
$ 142 |
$ 148 |
||||||
|
Selected metrics: |
|||||||||
|
Period end loans held for investment |
$ 32,105 |
$ 31,203 |
$ 30,017 |
||||||
|
Average loans held for investment |
31,345 |
30,316 |
29,793 |
||||||
|
Average yield on loans held for investment |
4.69 |
% |
4.74 |
% |
4.80 |
% |
|||
|
Period end deposits |
$ 25,282 |
$ 24,304 |
$ 24,244 |
||||||
|
Average deposits |
25,227 |
24,282 |
24,138 |
||||||
|
Deposit interest expense rate |
0.48 |
% |
0.52 |
% |
0.55 |
% |
|||
|
Core deposit intangible amortization |
$ 10 |
$ 10 |
$ 11 |
||||||
|
Net charge-off rate(6) |
0.37 |
% |
0.50 |
% |
0.79 |
% |
|||
|
Nonperforming loans as a percentage of loans held for investment(6) |
1.43 |
1.54 |
1.84 |
||||||
|
Nonperforming asset rate(6) |
1.55 |
1.66 |
1.95 |
||||||
|
Risk category:(11) |
|||||||||
|
Noncriticized |
$ 29,374 |
$ 28,459 |
$ 27,008 |
||||||
|
Criticized performing |
1,781 |
1,765 |
1,924 |
||||||
|
Criticized nonperforming |
459 |
481 |
553 |
||||||
|
Total non-PCI loans |
31,614 |
30,705 |
29,485 |
||||||
|
Total PCI loans |
491 |
498 |
532 |
||||||
|
Total |
$ 32,105 |
$ 31,203 |
$ 30,017 |
||||||
|
% of period end held for investment commercial loans: |
|||||||||
|
Noncriticized |
91.49 |
% |
91.21 |
% |
89.98 |
% |
|||
|
Criticized performing |
5.55 |
5.66 |
6.41 |
||||||
|
Criticized nonperforming |
1.43 |
1.54 |
1.84 |
||||||
|
Total non-PCI loans |
98.47 |
98.40 |
98.23 |
||||||
|
Total PCI loans |
1.53 |
1.60 |
1.77 |
||||||
|
Total |
100.00 |
% |
100.00 |
% |
100.00 |
% |
|||
|
CAPITAL ONE FINANCIAL CORPORATION (COF) |
||||||||
|
Table 10: Financial & Statistical Summary - Other and Total |
||||||||
|
2011 |
2011 |
2011 |
||||||
|
(Dollars in millions) (unaudited) |
Q3 |
Q2 |
Q1 |
|||||
|
Other |
||||||||
|
Earnings: |
||||||||
|
Net interest expense |
$ (209) |
$ (138) |
$ (105) |
|||||
|
Non-interest income (expense) |
(57) |
(18) |
11 |
|||||
|
Total revenue |
$ (266) |
$ (156) |
$ (94) |
|||||
|
Provision for loan and lease losses |
(15) |
11 |
4 |
|||||
|
Non-interest expense |
56 |
67 |
67 |
|||||
|
Loss from continuing operations before taxes |
(307) |
(234) |
(165) |
|||||
|
Income tax benefit |
(174) |
(132) |
(191) |
|||||
|
Income (loss) from continuing operations, net of tax |
$ (133) |
$ (102) |
$ 26 |
|||||
|
Selected metrics: |
||||||||
|
Period end loans held for investment(4) |
$ 465 |
$ 465 |
$ 464 |
|||||
|
Average loans held for investment(4) |
465 |
468 |
462 |
|||||
|
Period end deposits |
14,447 |
14,531 |
14,847 |
|||||
|
Average deposits |
14,775 |
14,626 |
16,136 |
|||||
|
Total |
||||||||
|
Earnings: |
||||||||
|
Net interest income |
$ 3,283 |
$ 3,136 |
$ 3,140 |
|||||
|
Non-interest income |
871 |
857 |
942 |
|||||
|
Total revenue |
$ 4,154 |
$ 3,993 |
$ 4,082 |
|||||
|
Provision for loan and lease losses |
622 |
343 |
534 |
|||||
|
Non-interest expense |
2,297 |
2,255 |
2,162 |
|||||
|
Income from continuing operations before taxes |
1,235 |
1,395 |
1,386 |
|||||
|
Income tax provision |
370 |
450 |
354 |
|||||
|
Income from continuing operations, net of tax |
$ 865 |
$ 945 |
$ 1,032 |
|||||
|
Selected metrics: |
||||||||
|
Period-end loans held for investment |
$ 129,952 |
$ 128,965 |
$ 124,092 |
|||||
|
Average loans held for investment |
129,043 |
127,916 |
125,077 |
|||||
|
Period end deposits |
128,318 |
126,117 |
125,446 |
|||||
|
Average deposits |
128,268 |
125,834 |
124,158 |
|||||
|
CAPITAL ONE FINANCIAL CORPORATION (COF) |
||||||||||
|
Table 11: Notes to Loan and Segment Disclosures (Tables 6 -- 10) |
||||||||||
|
(1) |
Certain prior period amounts have been reclassified to conform to the current period presentation. |
|||||||||
|
(2) |
Amounts for Q3 2011 and Q2 2011 reflect the impact of the April 1, 2011 acquisition of the existing private-label credit card loan portfolio of Kohl's Department Stores ("Kohl's"), which had an outstanding principal and interest balance of approximately $3.7 billion at acquisition. |
|||||||||
|
(3) |
Other loans held for investment includes unamortized premiums and discounts on loans acquired as part of the North Fork and Hibernia acquisitions. |
|||||||||
|
(4) |
In accordance with our loss-sharing agreement with Kohl's, charge-offs for the portfolio are reported net of any reimbursement of credit losses from Kohl's, which has the impact of lowering the overall Domestic Card charge-off rate. |
|||||||||
|
(5) |
The third quarter 2011 annualized net charge-off rate for Auto reflects the impact of a true-up of recoveries for certain bankruptcy-related Auto loans that were previously charged-off, which resulted in a decrease in the annualized net charge off rate of 19 basis points in the Q3 2011. |
|||||||||
|
(6) |
PCI loans acquired as part of the CCB acquisition are included in the denominator used in calculating the credit quality ratios presented in Tables 6-10. These metrics excluding the impact of loans acquired from CCB from the denominator are presented below: |
|||||||||
|
2011 |
2011 |
2011 |
||||||||
|
(Dollars in millions) (unaudited) |
Q3 |
Q2 |
Q1 |
|||||||
|
CCB period end acquired loan portfolio |
$ 4,873 |
$ 5,181 |
$ 5,351 |
|||||||
|
CCB average acquired loan portfolio |
4,998 |
5,112 |
5,305 |
|||||||
|
Net charge-off rates |
||||||||||
|
Consumer banking: |
||||||||||
|
Home loan |
0.87 |
% |
0.98 |
% |
1.16 |
% |
||||
|
Retail banking |
1.69 |
1.76 |
2.32 |
|||||||
|
Total consumer banking |
1.51 |
% |
1.17 |
% |
1.82 |
% |
||||
|
Commercial banking: |
||||||||||
|
Commercial and multifamily real estate |
0.12 |
% |
0.40 |
% |
0.57 |
% |
||||
|
Middle market |
0.42 |
0.13 |
0.18 |
|||||||
|
Total commercial lending |
0.28 |
% |
0.31 |
% |
0.38 |
% |
||||
|
Total commercial banking |
0.38 |
% |
0.51 |
% |
0.80 |
% |
||||
|
30+ day performing delinquency rates |
||||||||||
|
Consumer banking: |
||||||||||
|
Home loan |
1.28 |
% |
1.18 |
% |
1.02 |
% |
||||
|
Retail banking |
0.90 |
0.77 |
0.93 |
|||||||
|
Total consumer banking |
4.57 |
% |
4.29 |
% |
3.98 |
% |
||||
|
Nonperforming asset rates |
||||||||||
|
Consumer banking: |
||||||||||
|
Home loan |
7.80 |
% |
7.38 |
% |
7.24 |
% |
||||
|
Retail banking |
2.40 |
2.48 |
2.44 |
|||||||
|
Total consumer banking |
2.33 |
% |
2.32 |
% |
2.32 |
% |
||||
|
Commercial banking: |
||||||||||
|
Commercial and multifamily real estate |
2.18 |
% |
2.39 |
% |
2.68 |
% |
||||
|
Middle market |
1.07 |
1.22 |
1.17 |
|||||||
|
Total commercial lending |
1.57 |
% |
1.73 |
% |
1.90 |
% |
||||
|
Total commercial banking |
1.57 |
% |
1.68 |
% |
1.99 |
% |
||||
|
Nonperforming loans as a percentage of loans held for investment |
||||||||||
|
Consumer banking |
2.15 |
% |
2.12 |
% |
2.14 |
% |
||||
|
Commercial banking |
1.45 |
1.56 |
1.88 |
|||||||
|
(7) |
Nonperforming assets consist of nonperforming loans, real estate owned ("REO") and foreclosed assets. The nonperforming asset ratios are calculated based on nonperforming assets for each segment divided by the combined total of loans held for investment, REO and foreclosed assets for each respective segment. |
|||||||||
|
(8) |
As permitted by regulatory guidance, our policy is generally to exempt delinquent credit card loans from being classified as nonperforming. We continue to accrue finance charges and fees on credit card loans until the loan is charged off, typically when the account becomes 180 days past due. Billed finance charges and fees considered uncollectible are not recognized in income. |
|||||||||
|
(9) |
The September 30, 2011 30+ day delinquency rate for Domestic Card reflects the impact of a change in the way we estimate recoveries in determining the uncollectible amount of finance charges and fees, which resulted in an increase of 11 basis points as of September 30, 2011. For International Card, the change did not have a significant impact on the 30+ day delinquency rate as of September 30, 2011. |
|||||||||
|
(10) |
Includes credit card purchase transactions net of returns. Excludes cash advance transactions. |
|||||||||
|
(11) |
Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by banking regulatory authorities. |
|||||||||
|
CAPITAL ONE FINANCIAL CORPORATION (COF) |
|||||||||||
|
Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures |
|||||||||||
|
In addition to disclosing required regulatory capital measures, we also report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include average tangible common equity, tangible common equity (TCE), TCE ratio, Tier 1 common equity and Tier 1 common equity ratio. The table below provides the details of the calculation of each of these measures. While these non-GAAP capital measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies. |
|||||||||||
|
2011 |
2011 |
2011 |
|||||||||
|
(Dollars in millions)(unaudited) |
Q3 |
Q2 |
Q1 |
||||||||
|
Average Equity to Non-GAAP Average Tangible Common Equity |
|||||||||||
|
Average total stockholders' equity |
$ 29,316 |
$ 28,255 |
$ 27,009 |
||||||||
|
Less: Average intangible assets (1) |
(13,990) |
(14,025) |
(14,001) |
||||||||
|
Average tangible common equity |
$ 15,326 |
$ 14,230 |
$ 13,008 |
||||||||
|
Stockholders' Equity to Non-GAAP Tangible Common Equity |
|||||||||||
|
Total stockholders' equity |
$ 29,378 |
$ 28,681 |
$ 27,550 |
||||||||
|
Less: Intangible assets (1) |
(13,953) |
(14,006) |
(14,030) |
||||||||
|
Tangible common equity |
$ 15,425 |
$ 14,675 |
$ 13,520 |
||||||||
|
Total Assets to Tangible Assets |
|||||||||||
|
Total assets |
$ 200,148 |
$ 199,753 |
$ 199,300 |
||||||||
|
Less: Assets from discontinued operations |
(304) |
(32) |
(342) |
||||||||
|
Total assets from continuing operations |
199,844 |
199,721 |
198,958 |
||||||||
|
Less: Intangible assets (1) |
(13,953) |
(14,006) |
(14,030) |
||||||||
|
Tangible assets |
$ 185,891 |
$ 185,715 |
$ 184,928 |
||||||||
|
Non-GAAP TCE Ratio |
|||||||||||
|
Tangible common equity |
$ 15,425 |
$ 14,675 |
$ 13,520 |
||||||||
|
Tangible assets |
185,891 |
185,715 |
184,928 |
||||||||
|
TCE ratio(2) |
8.3 |
% |
7.9 |
% |
7.3 |
% |
|||||
|
Non-GAAP Tier 1 Common Equity and Regulatory Capital Ratios |
|||||||||||
|
Total stockholders' equity |
$ 29,378 |
$ 28,681 |
$ 27,550 |
||||||||
|
Less: Net unrealized (gains) losses on AFS securities recorded in AOCI (3) |
(401) |
(482) |
(314) |
||||||||
|
Net (gains) losses on cash flow hedges recorded in AOCI(3) |
54 |
71 |
95 |
||||||||
|
Disallowed goodwill and other intangible assets |
(13,899) |
(13,954) |
(13,993) |
||||||||
|
Disallowed deferred tax assets |
(227) |
(647) |
(1,377) |
||||||||
|
Other |
(2) |
(2) |
(2) |
||||||||
|
Tier 1 common equity |
$ 14,903 |
$ 13,667 |
$ 11,959 |
||||||||
|
Plus: Tier 1 restricted core capital items(4) |
3,636 |
3,636 |
3,636 |
||||||||
|
Tier 1 capital |
$ 18,539 |
$ 17,303 |
$ 15,595 |
||||||||
|
Plus: Long-term debt qualifying as Tier 2 capital |
2,438 |
2,727 |
2,827 |
||||||||
|
Qualifying allowance for loan and lease losses |
1,897 |
1,864 |
1,825 |
||||||||
|
Other Tier 2 components |
24 |
28 |
20 |
||||||||
|
Tier 2 capital |
$ 4,359 |
$ 4,619 |
$ 4,672 |
||||||||
|
Total risk-based capital(5) |
$ 22,898 |
$ 21,922 |
$ 20,267 |
||||||||
|
Risk-weighted assets(6) |
$ 149,050 |
$ 146,201 |
$ 142,495 |
||||||||
|
Tier 1 common equity ratio (7) |
10.0 |
% |
(10) |
9.4 |
% |
8.4 |
% |
||||
|
Tier 1 risk-based capital ratio (8) |
12.4 |
(10) |
11.8 |
10.9 |
|||||||
|
Total risk-based capital ratio (9) |
15.4 |
(10) |
15.0 |
14.2 |
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|
___________________ |
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|
(1) |
Includes impact from related deferred taxes. |
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|
(2) |
Calculated based on tangible common equity divided by tangible assets. |
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|
(3) |
Amounts presented are net of tax. |
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|
(4) |
Consists primarily of trust preferred securities. |
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|
(5) |
Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital. |
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|
(6) |
Calculated based on prescribed regulatory guidelines. |
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|
(7) |
Tier 1 common equity ratio is a non-GAAP measure calculated based on Tier 1 common equity divided by risk-weighted assets. |
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|
(8) |
Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighed assets. |
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|
(9) |
Total risk-based capital ratio is a regulatory capital measure calculated based on total risk-based capital divided by risk-weighed assets. |
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|
(10) |
Capital ratios as of the end of Q3 2011 are preliminary and therefore subject to change once the calculations have been finalized. |
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SOURCE Capital One Financial Corporation