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Capital One Reports Third Quarter Earnings Per Share

October 20, 2004 at 4:08 PM EDT
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Company Increases 2004 Earnings Guidance Company Sets 2005 Earnings Guidance

MCLEAN, Va., Oct 20, 2004 /PRNewswire-FirstCall via COMTEX/ -- Capital One Financial Corporation (NYSE: COF) today announced that earnings for the third quarter of 2004 were $490.2 million, or $1.97 per share (fully diluted), compared with earnings of $275.5 million, or $1.17 per share, for the third quarter of 2003 and $407.4 million, or $1.65 per share, in the second quarter of 2004. In addition, the company increased its 2004 earnings guidance to be between $6.10 and $6.40 per share (fully diluted) and announced its 2005 earnings guidance to be between $6.60 and $7.00 per share (fully diluted).

"Capital One's third quarter results demonstrate the sustained earnings power of our US credit card and diversified businesses," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "Today, 39 percent of our loans and 29 percent of our earnings are generated from our businesses beyond our US credit card segment."

During the third quarter of 2004, Capital One grew its managed loan portfolio by $2.1 billion to $75.5 billion. The company expects that the managed loan growth rate for the year will be in the 10-13 percent range. The company expects a managed loan growth range of 12-15 percent for 2005.

Marketing expense for the third quarter of 2004 increased $63.9 million to $317.7 million from $253.8 million in the previous quarter. Marketing expenses were $316.0 million in the comparable quarter of the prior year. The company expects to make a significantly higher investment in marketing in the fourth quarter leading to a marketing expense for the full year of 2004 that will be somewhat higher than the $1.1 billion in 2003. Additionally, the company expects annual marketing spend for 2005 to be similar to 2004.

The managed charge-off rate declined to 4.05 percent in the third quarter of 2004, from 4.42 percent in the previous quarter, and 5.44 percent in the third quarter of 2003. The company continues to expect its quarterly managed charge-off rate to range between 4.0 and 4.5 percent through the end of 2005, with normal seasonal variations. Additionally, after reducing its allowance for loan losses this year by $200 million through the third quarter of 2004, the company expects that fourth quarter loan growth will drive a substantial increase in its allowance for loan losses in the fourth quarter of 2004. The managed delinquency rate (30+ days) increased to 3.90 percent as of September 30, 2004, from 3.76 percent as of the end of the previous quarter. The managed delinquency rate at September 30, 2003 was 4.65 percent.

Capital One's managed revenue margin increased to 13.03 percent in the third quarter of 2004, from 12.53 percent in the previous quarter. The company's managed revenue margin was 14.36 percent in the third quarter of 2003. The company expects revenue margin to move modestly lower over time, given its continued diversification and bias towards lower-loss assets.

Annualized operating expenses as a percentage of average managed loans declined to 5.35 percent in the third quarter of 2004, from 5.39 percent in the previous quarter and 5.81 percent in the third quarter of 2003. As part of operating expenses, the company took charges totaling $63.1 million in the third quarter of 2004 for asset write-offs and a combination of employee termination benefits and continued facility consolidations. The latter charges result from an ongoing review of operational expenses to ensure business lines are operating in the most efficient manner possible to continuously position the company for success. The company expects to take an additional $30 to $50 million of charges in the fourth quarter of 2004 for continued corporate-wide cost reduction efforts. Additionally, as part of its ongoing review of operations, the company sold its interest in a South African joint venture, recording a gain of $31.5 million in the third quarter of 2004. In October of 2004, the company sold its French loan portfolio and expects to record an estimated gain on sale of $43 million in the fourth quarter.

"We expect a return on managed assets of around 1.7 percent in 2004," said Gary L. Perlin, Capital One's Chief Financial Officer. "Although we expect to see a modest decline in our revenue margin going forward as we continue to diversify, we expect to continue to improve our operating efficiency in order to position our company for sustained success. We also expect a stable return on managed assets of around 1.7 percent in 2005, with quarterly variability."

The company generates earnings from its managed loan portfolio, which includes both on-balance sheet loans and securitized loans. For this reason, the company believes managed financial measures to be useful to stakeholders. In compliance with Regulation G of the Securities and Exchange Commission, the company is providing a numerical reconciliation of managed financial measures to comparable measures calculated on a reported basis using generally accepted accounting principles (GAAP). Please see the schedule titled "Reconciliation to GAAP Financial Measures" attached to this release for more information.

The company cautions that its current expectations in this release, in the presentation slides available on the company's website (http://www.capitalone.com), and on its Form 10-K for the fiscal year ended December 31, 2003, for 2004 and 2005 earnings, charge-off rates, revenue margins, return on assets, allowance for loan losses, expenses, loan growth rates, marketing, and the composition of loan growth are forward-looking statements and actual results could differ materially from current expectations due to a number of factors, including: continued intense competition from numerous providers of products and services which compete with our businesses; changes in our aggregate accounts and balances, and the growth rate and composition thereof; the company's ability to continue to diversify its assets; the company's ability to access the capital markets at attractive rates and terms to fund its operations and future growth; the company's ability to execute on its strategic and operating plans; and general economic conditions affecting consumer income and spending, which may affect consumer bankruptcies, defaults, and charge-offs.

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

About Capital One

Headquartered in McLean, Virginia, Capital One Financial Corporation (http://www.capitalone.com) is a holding company whose principal subsidiaries, Capital One Bank and Capital One, F.S.B., offer consumer lending products and Capital One Auto Finance, Inc., offers automobile and other motor vehicle financing products. Capital One's subsidiaries collectively had 47.2 million accounts and $75.5 billion in managed loans outstanding as of September 30, 2004. Capital One, a Fortune 500 company, is one of the largest providers of MasterCard and Visa credit cards in the world. Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 500 index.

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



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

                                          2004          2004          2003
    (in millions, except per share
    data and as noted)                     Q3            Q2            Q3

    Earnings (Reported Basis)
    Net Interest Income                  $775.4        $711.0        $703.9
    Non-Interest Income                 1,539.4 (1)   1,396.1       1,363.2
    Total Revenue(2)                    2,314.8       2,107.1       2,067.1
    Provision for Loan Losses             267.8         242.3         364.1
    Marketing Expenses                    317.7         253.8         316.0
    Operating Expenses                    994.3 (3)     975.0 (3)     925.8
    Income Before Taxes and
     Accounting Change                    735.0         636.0         461.2
    Tax Rate                               33.3 %        36.0 %        37.0 %
    Cumulative Effect of Accounting
     Change, net of tax(4)                  -             -            15.0
    Net Income                           $490.2        $407.4        $275.5

    Common Share Statistics
    Basic EPS                             $2.07         $1.74         $1.23
    Diluted EPS                           $1.97         $1.65         $1.17
    Dividends Per Share                   $0.03         $0.03         $0.03
    Book Value Per Share (period end)    $32.67        $29.90        $24.53
    Stock Price Per Share (period end)   $73.90        $68.38        $57.04
    Total Market Capitalization
     (period end)                     $17,936.8     $16,514.5     $13,073.6
    Shares Outstanding (period end)       242.7         241.5         229.2
    Shares Used to Compute Basic EPS      236.4         234.7         224.6
    Shares Used to Compute Diluted EPS    249.0         247.6         236.3

    Reported Balance Sheet Statistics
     (period avg.)
    Average Loans                       $34,772       $33,290       $28,949
    Average Earning Assets              $47,267       $45,705       $38,133
    Average Assets                      $51,496       $50,020       $41,704
    Average Equity                       $7,561        $6,943        $5,424
    Return on Average Assets (ROA)         3.81 %        3.26 %        2.64 %
    Return on Average Equity (ROE)        25.93 %       23.47 %       20.32 %

    Reported Balance Sheet Statistics
     (period end)
    Loans                               $35,161       $34,551       $30,618
    Total Assets                        $51,960       $50,070       $43,446
    Capital (5)                          $8,769        $8,057        $6,450
    Loan growth                            $610        $1,379        $3,769
    % Loan Growth Q Over Q (annualized)       7 %          17 %          56 %
    % Loan Growth Y Over Y                   15 %          29 %          11 %
    Capital to Assets Ratio               16.88 %       16.09 %       14.85 %
    Capital plus Allowance to Assets
     Ratio                                19.56 %       18.94 %       18.46 %

    Revenue & Expense Statistics
     (Reported)
    Net Interest Income Growth
     (annualized)                            36 %         (11)%          13 %
    Non Interest Income Growth
     (annualized)                            41 %         (13)%          16 %
    Revenue Growth (annualized)              39 %         (13)%          15 %
    Net Interest Margin                    6.56 %        6.22 %        7.38 %
    Revenue Margin                        19.59 %       18.44 %       21.68 %
    Risk Adjusted Margin (6)              17.07 %       15.73 %       17.66 %
    Operating Expense as a % of
     Revenues                             42.95 %       46.27 %       44.79 %
    Operating Expense as a % of Avg
     Loans (annualized)                   11.44 %       11.72 %       12.79 %

    Asset Quality Statistics
     (Reported)
    Allowance                            $1,395        $1,425        $1,570
    30+ Day Delinquencies                $1,407        $1,351        $1,540
    Net Charge-Offs                        $298          $310          $383
    Allowance as a % of Reported Loans     3.97 %        4.12 %        5.13 %
    Delinquency Rate (30+ days)            4.00 %        3.91 %        5.03 %
    Net Charge-Off Rate                    3.43 %        3.72 %        5.30 %


    (1) Includes a $31.5 million gain resulting from the sale of a joint
        venture investment in South Africa.

    (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 2004 -  $269.7,
        Q2 2004 - $263.5 million, Q1 2004 - $285.5 million, Q4 2003 - $454.8
        million, and Q3 2003 - $481.0 million.

    (3) Includes employee termination benefits and charges for facility
        consolidation related to corporate-wide cost reduction initiatives of
        $26.7 million and $56.0 million for Q3 2004 and Q2 2004, respectively.
        In addition, Q3 2004 had charges of $20.6 million related to a change
        in fixed asset capitalization thresholds and $15.8 million related to
        impairment of internally developed software.

    (4) Net charge from the adoption of FASB Interpretation No. 46,
        Consolidation of Variable Interest Entities.

    (5) Includes preferred interests and mandatory convertible securities.

    (6) 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)

                                           2004         2004         2003
    (in millions, except per share data
    and as noted)                           Q3           Q2           Q3

    Earnings (Managed Basis)
    Net Interest Income                  $1,670.4     $1,585.4     $1,500.8
    Non-Interest Income                   1,099.8 (2)  1,011.3      1,049.2
    Total Revenue(3)                      2,770.2      2,596.7      2,550.0
    Provision for Loan Losses               723.2        731.9        847.0
    Marketing Expenses                      317.7        253.8        316.0
    Operating Expenses                      994.3 (4)    975.0 (4)    925.8
    Income Before Taxes and Accounting
     Change                                 735.0        636.0        461.2
    Tax Rate                                 33.3 %       36.0 %       37.0 %
    Cumulative Effect of Accounting
     Change, net of tax(5)                    -            -           15.0
    Net Income                             $490.2       $407.4       $275.5

    Managed Balance Sheet Statistics
     (period avg.)
    Average Loans                         $74,398      $72,327      $63,691
    Average Earning Assets                $85,045      $82,905      $71,022
    Average Assets                        $90,543      $88,473      $75,831
    Return on Average Assets (ROA)           2.17 %       1.84 %       1.45 %

    Managed Balance Sheet Statistics
     (period end)
    Loans                                 $75,457      $73,367      $67,260
    Total Assets                          $91,665      $88,317      $79,465
    Loan Growth                            $2,090       $1,550       $6,524
    % Loan Growth Q over Q (annualized)        11 %          9 %         43 %
    % Loan Growth Y over Y                     12 %         21 %         18 %
    Capital to Assets Ratio                  9.57 %       9.12 %       8.12 %
    Capital plus Allowance to Assets
     Ratio                                  11.09 %      10.74 %      10.09 %
    Number of Accounts (000's)             47,224       46,591       46,406
    % Off-Balance Sheet Securitizations        53 %         53 %         54 %
    % at Introductory Rate                      6 %          6 %         11 %

    Revenue & Expense Statistics
     (Managed)
    Net Interest Income Growth
     (annualized)                              21 %        (22)%         12 %
    Non Interest Income Growth
     (annualized)                              35 %         (1)%          1 %
    Revenue Growth (annualized)                27 %        (14)%          7 %
    Net Interest Margin                      7.86 %       7.65 %       8.45 %
    Revenue Margin                          13.03 %      12.53 %      14.36 %
    Risk Adjusted Margin (6)                 9.48 %       8.67 %       9.48 %
    Operating Expense as a % of Revenues    35.89 %      37.55 %      36.31 %
    Operating Expense as a % of Avg
     Loans (annualized)                      5.35 %       5.39 %       5.81 %

    Asset Quality Statistics (Managed)
    30+ Day Delinquencies                  $2,944       $2,756       $3,126
    Net Charge-Offs                          $754         $800         $866
    Delinquency Rate (30+ days)              3.90 %       3.76 %       4.65 %
    Net Charge-Off Rate                      4.05 %       4.42 %       5.44 %


    (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) Includes a $31.5 million gain resulting from the sale of a joint
        venture investment in South Africa.

    (3) 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 2004 - $269.7 million, Q2 2004 -
        $263.5 million, Q1 2004 - $285.5 million,  Q4 2003 - $454.8
        million, and Q3 2003 - $481.0 million.

    (4) Includes employee termination benefits and charges for facility
        consolidation related to corporate-wide cost reduction initiatives of
        $26.7 million and $56.0 million for Q3 2004 and Q2 2004, respectively.
        In addition, Q3 2004 had charges of $20.6 million related to a change
        in fixed asset capitalization thresholds and $15.8 million related to
        impairment of internally developed software.

    (5) Net charge from the adoption of FASB Interpretation No. 46,
        Consolidation of Variable Interest Entities.

    (6) Risk adjusted margin is total revenue less net charge-offs as a
        percentage of average earning assets.



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

                                             2004        2004        2003
    (in millions, except per share data
    and as noted)                             Q3          Q2          Q3

    Segment Statistics
    US Card:
      Loans receivable                     $46,082     $45,247     $44,300
      Net income (loss)                     $414.4      $384.1      $276.2
      Net charge-off rate                     4.68 %      5.19 %      6.16 %
      Delinquency Rate (30+ days)             4.14 %      3.95 %      4.88 %
    Auto Finance:
      Loans receivable                      $9,734      $9,383      $8,008
      Net income (loss)                      $55.3       $52.7       $27.3
      Net charge-off rate                     2.63 %      2.53 %      5.10 %
      Delinquency Rate (30+ days)             5.54 %      5.59 %      7.07 %
    Global Financial Services:
      Loans receivable                     $19,615     $18,723     $14,960
      Net income (loss)                      $86.8       $46.1       $21.0
      Net charge-off rate                     3.26 %      3.43 %      3.78 %
      Delinquency Rate (30+ days)             2.65 %      2.50 %      2.87 %


    (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."



                      CAPITAL ONE FINANCIAL CORPORATION
                  Reconciliation to GAAP Financial Measures
                For the Three Months Ended September 30, 2004
                      (dollars in thousands)(unaudited)

The Company's consolidated financial statements prepared in accordance with generally accepted accounting principles ("GAAP") are referred to as its "reported" financial statements. Loans included in securitization transactions which qualified as sales under GAAP have been removed from the Company's "reported" balance sheet. However, servicing fees, finance charges, and other fees, net of charge-offs, and interest paid to investors of securitizations are recognized as servicing and securitizations income on the "reported" income statement.

The Company's "managed" consolidated financial statements add back the effects of securitization transactions qualifying as sales under GAAP. The Company generates earnings from its "managed" loan portfolio which includes both the on-balance sheet loans and off-balance sheet loans. The Company's "managed" income statement takes the components of the servicing and securitizations income generated from the securitized portfolio and distributes the revenue and expense to appropriate income statement line items from which it originated. For this reason the Company believes the "managed" consolidated financial statements and related managed metrics to be useful to stakeholders.

                                           Total    Adjustments(1)  Total
                                         Reported                  Managed(2)

    Income Statement Measures
    Net interest income                   $775,375     $894,992   $1,670,367
    Non-interest income                 $1,539,384    $(439,611)  $1,099,773
    Total revenue                       $2,314,759     $455,381   $2,770,140
    Provision for loan losses             $267,795     $455,381     $723,176
    Net charge-offs                       $298,317     $455,381     $753,698

    Balance Sheet Measures
    Consumer loans                     $35,160,635  $40,296,196  $75,456,831
    Total assets                       $51,959,555  $39,705,803  $91,665,358
    Average consumer loans             $34,772,489  $39,625,812  $74,398,301
    Average earning assets             $47,267,410  $37,777,187  $85,044,597
    Average total assets               $51,495,580  $39,047,286  $90,542,866
    Delinquencies                       $1,407,297   $1,537,166   $2,944,463

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

    (2) The Managed loan portfolio does not include auto loans which have been
        sold in whole loan sale transactions where the Company has retained
        servicing rights.



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


                                       September 30    June 30   September 30
                                           2004         2004         2003

    Assets:
    Cash and due from banks                $454,843     $346,978     $250,514
    Federal funds sold and resale
     agreements                             449,700    1,082,939      889,106
    Interest-bearing deposits at other
     banks                                  538,324      290,242      163,025
      Cash and cash equivalents           1,442,867    1,720,159    1,302,645
    Securities available for sale         9,519,089    8,946,836    5,408,671
    Consumer loans                       35,160,635   34,551,343   30,617,843
      Less:  Allowance for loan losses   (1,395,000)  (1,425,000)  (1,570,000)
    Net loans                            33,765,635   33,126,343   29,047,843
    Accounts receivable from
     securitizations                      4,955,739    3,972,754    5,204,170
    Premises and equipment, net             812,724      868,203      898,997
    Interest receivable                     232,808      234,348      201,783
    Other                                 1,230,693    1,201,018    1,382,228
      Total assets                      $51,959,555  $50,069,661  $43,446,337


    Liabilities:
    Interest-bearing deposits           $25,354,323  $24,178,756  $20,936,517
    Senior and subordinated notes         6,968,182    7,727,810    6,338,772
    Other borrowings                      8,490,631    7,885,340    7,519,770
    Interest payable                        250,227      256,293      231,365
    Other                                 2,966,132    2,800,405    2,796,719
      Total liabilities                  44,029,495   42,848,604   37,823,143

    Stockholders' Equity:
    Common stock                              2,440        2,428        2,305
    Paid-in capital, net                  2,463,629    2,348,401    1,835,519
    Retained earnings and cumulative
     other comprehensive income           5,513,694    4,919,656    3,834,536
      Less:  Treasury stock, at cost        (49,703)     (49,428)     (49,166)
      Total stockholders' equity          7,930,060    7,221,057    5,623,194
      Total liabilities and
       stockholders' equity             $51,959,555  $50,069,661  $43,446,337



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


                                                   Three Months Ended
                                           September 30  June 30  September 30
                                               2004        2004       2003


    Interest Income:
    Consumer loans, including past-due fees $1,083,286  $1,019,076   $989,318
    Securities available for sale               84,492      76,081     49,440
    Other                                       60,635      56,789     64,267
      Total interest income                  1,228,413   1,151,946  1,103,025

    Interest Expense:
    Deposits                                   257,349     244,978    224,078
    Senior and subordinated notes              121,166     124,809    108,336
    Other borrowings                            74,523      71,142     66,690
      Total interest expense                   453,038     440,929    399,104
    Net interest income                        775,375     711,017    703,921
    Provision for loan losses                  267,795     242,256    364,144
    Net interest income after provision for
     loan losses                               507,580     468,761    339,777

    Non-Interest Income:
    Servicing and securitizations              942,587     868,041    820,515
    Service charges and other customer-
     related fees                              385,648     368,469    405,063
    Interchange                                117,043     117,329     95,879
    Other                                       94,106      42,225     41,751
      Total non-interest income              1,539,384   1,396,064  1,363,208

    Non-Interest Expense:
    Salaries and associate benefits            415,988     419,695    388,819
    Marketing                                  317,653     253,838    316,026
    Communications and data processing         112,191     108,191    107,385
    Supplies and equipment                      94,190      74,582     88,753
    Occupancy                                   41,407      70,494     47,205
    Other                                      330,555     302,012    293,575
      Total non-interest expense             1,311,984   1,228,812  1,241,763
    Income before income taxes and
     cumulative effect of accounting
     change                                    734,980     636,013    461,222
    Income taxes                               244,819     228,626    170,653
    Income before cumulative effect
     of accounting change                      490,161     407,387    290,569
    Cumulative effect of accounting
     change, net of taxes of $8,832                  -                 15,037
    Net income                                $490,161    $407,387   $275,532


    Basic earnings per share before
     cumulative effect of accounting
     change                                      $2.07       $1.74      $1.29
    Basic earnings per share after
     cumulative effect of accounting
     change                                      $2.07       $1.74      $1.23

    Diluted earnings per share before
     cumulative effect of accounting
     change                                      $1.97       $1.65      $1.23
    Diluted earnings per share after
     cumulative effect of accounting
     change                                      $1.97       $1.65      $1.17

    Dividends paid per share                     $0.03       $0.03      $0.03


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


                                                     Nine Months Ended
                                               September 30      September 30
                                                   2004              2003

    Interest Income:
    Consumer loans, including past-due fees     $3,137,379        $2,962,724
    Securities available for sale                  224,289           140,266
    Other                                          183,422           176,881
      Total interest income                      3,545,090         3,279,871

    Interest Expense:
    Deposits                                       741,839           654,026
    Senior and subordinated notes                  370,393           306,035
    Other borrowings                               214,444           198,822
      Total interest expense                     1,326,676         1,158,883
    Net interest income                          2,218,414         2,120,988
    Provision for loan losses                      753,719         1,127,092
    Net interest income after provision
     for loan losses                             1,464,695           993,896

    Non-Interest Income:
    Servicing and securitizations                2,728,297         2,292,900
    Service charges and other customer-
     related fees                                1,108,610         1,249,259
    Interchange                                    339,967           270,371
    Other                                          201,708           165,903
      Total non-interest income                  4,378,582         3,978,433

    Non-Interest Expense:
    Salaries and associate benefits              1,260,075         1,161,531
    Marketing                                      826,638           828,277
    Communications and data processing             337,488           331,893
    Supplies and equipment                         257,093           260,245
    Occupancy                                      150,620           133,534
    Other                                          933,778           851,771
      Total non-interest expense                 3,765,692         3,567,251
    Income before income taxes and
     cumulative effect of accounting
     change                                      2,077,585         1,405,078
    Income taxes                                   729,231           519,880
    Income before cumulative effect of
     accounting change                           1,348,354           885,198
    Cumulative effect of accounting
     change, net of taxes of $8,832                      -            15,037
    Net income                                  $1,348,354          $870,161


    Basic earnings per share before
     cumulative effect of accounting
     change                                          $5.75             $3.96
    Basic earnings per share after
     cumulative effect of accounting
     change                                          $5.75             $3.89

    Diluted earnings per share before
     cumulative effect of accounting
     change                                          $5.45             $3.81
    Diluted earnings per share after
     cumulative effect of accounting
     change                                          $5.45             $3.74

    Dividends paid per share                         $0.08             $0.08



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

    Reported                                     Quarter Ended 9/30/04
                                             Average       Income/    Yield/
                                             Balance       Expense     Rate
    Earning assets:
     Consumer loans                        $34,772,489   $1,083,286   12.46%
     Securities available for sale           9,372,713       84,492    3.61%
     Other                                   3,122,208       60,635    7.77%
    Total earning assets                   $47,267,410   $1,228,413   10.40%

    Interest-bearing liabilities:
     Deposits                              $24,713,924     $257,349    4.17%
     Senior and subordinated notes           7,218,916      121,166    6.71%
     Other borrowings                        8,674,298       74,523    3.44%
    Total interest-bearing liabilities     $40,607,138     $453,038    4.46%

    Net interest spread                                                5.94%

    Interest income to average earning
     assets                                                           10.40%
    Interest expense to average earning
     assets                                                            3.84%
    Net interest margin                                                6.56%



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

    Reported                                     Quarter Ended 6/30/04
                                             Average       Income/    Yield/
                                             Balance       Expense     Rate
    Earning assets:
     Consumer loans                        $33,290,487   $1,019,076   12.24%
     Securities available for sale           9,291,237       76,081    3.28%
     Other                                   3,123,672       56,789    7.27%
    Total earning assets                   $45,705,396   $1,151,946   10.08%

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

    Net interest spread                                                5.65%

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



     CAPITAL ONE FINANCIAL CORPORATION
     Statements of Average Balances, Income and Expense, Yields and Rates
     (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 and subordinated notes           6,065,935      108,336    7.14%
     Other borrowings                        6,891,889       66,690    3.87%
    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%



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

    Managed(1)                                   Quarter Ended 9/30/04
                                             Average       Income/    Yield/
                                             Balance       Expense     Rate
    Earning assets:
     Consumer loans                        $74,398,301   $2,419,685   13.01%
     Securities available for sale           9,372,713       84,492    3.61%
     Other                                   1,273,583       12,587    3.95%
    Total earning assets                   $85,044,597   $2,516,764   11.84%

    Interest-bearing liabilities:
     Deposits                              $24,713,924     $257,349    4.17%
     Senior and subordinated notes           7,218,916      121,166    6.71%
     Other borrowings                        8,674,298       74,523    3.44%
     Securitization liability               39,101,228      393,359    4.02%
    Total interest-bearing liabilities     $79,708,366     $846,397    4.25%

    Net interest spread                                                7.59%

    Interest income to average earning
     assets                                                           11.84%
    Interest expense to average earning
     assets                                                            3.98%
    Net interest margin                                                7.86%



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

    Managed(1)                                   Quarter Ended 6/30/04
                                             Average       Income/    Yield/
                                             Balance       Expense     Rate
    Earning assets:
     Consumer loans                        $72,327,220   $2,314,957   12.80%
     Securities available for sale           9,291,237       76,081    3.28%
     Other                                   1,286,629        9,517    2.96%
    Total earning assets                   $82,905,086   $2,400,555   11.58%

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

    Net interest spread                                                7.42%

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



     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 and subordinated notes           6,065,935      108,336    7.14%
     Other borrowings                        6,891,889       66,690    3.87%
     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.

SOURCE Capital One Financial Corporation

Paul Paquin, V.P., Investor Relations, +1-703-720-2456, or
Tatiana Stead, Director, Corporate Media, +1-703-720-2352, both of Capital One
Financial Corporation

http://www.capitalone.com