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Capital One Reports Third Quarter Earnings

October 20, 2005 at 4:41 PM EDT
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MCLEAN, Va., Oct. 20 /PRNewswire-FirstCall/ -- Capital One Financial Corporation (NYSE: COF) today announced that its earnings for the third quarter of 2005 were $491.1 million, or $1.81 per share (diluted), compared with $490.2 million, or $1.97 per share (diluted), for the third quarter of 2004, and $531.1 million, or $2.03 per share (diluted), for the second quarter of 2005.

The results for the quarter include the impact of two one-time events: First, a $44 million impact related to the Gulf Coast hurricanes; and second, a $75 million impact from the unprecedented number of bankruptcy filings made last week immediately in advance of the new legislation, effective October 17, 2005. As a result of these two events, the company expects its 2005 earnings to be on the lower end of its range of between $6.60 and $7.00 per share (diluted), including the expected impact of completing the acquisition of Hibernia Corporation.

"Capital One had another solid quarter of revenue growth and profitability," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer. "The strength and resilience of our diversified businesses positions us well to weather one-time events, such as the temporary spike in bankruptcy filings, while continuing to deliver strong results and profitable growth."

Managed loans grew to $84.8 billion as of September 30, 2005, up $1.8 billion, or 9 percent annualized, from the previous quarter, and up $9.3 billion, or 12 percent, from the third quarter of 2004. The company currently expects that managed loans will grow at a rate of approximately 12 percent during 2005, excluding the impact of the Hibernia transaction. The company continues to expect its US Card loan growth rate to be in the low single digits, and its Auto Finance and Global Financial Services businesses to grow at a faster rate than US Card.

The managed charge-off rate increased to 4.14 percent in the third quarter of 2005 from 4.10 percent in the previous quarter, and from 4.05 percent in the third quarter of 2004. Due to the unprecedented volume of bankruptcy filings made in October, management estimates the impact of the increased bankruptcy filings on its managed net charge-off rate in the fourth quarter of 2005 to be approximately 50 to 100 basis points. As a result, the company now expects its managed net charge-off rate for the fourth quarter of 2005 to be approximately five percent, excluding the impact of the Hibernia transaction.

The company increased its allowance for loan losses in the third quarter of 2005 by $42.0 million. The increase was driven by strong growth in auto loans, the increase in bankruptcy filings, and a build in allowance for loan losses related to the impact of the Gulf Coast hurricanes. The company expects a net build in allowance for the full year of 2005, excluding the impact of the Hibernia transaction.

The managed delinquency rate (30+ days) increased to 3.73 percent as of September 30, 2005 from 3.49 percent as of the end of the previous quarter. The managed delinquency rate as of September 30, 2004 was 3.90 percent.

Capital One's managed revenue margin decreased to 12.54 percent in the third quarter of 2005 from 12.65 percent in the previous quarter, and from 13.03 percent in the third quarter of 2004. The company continues to expect a modest decline in managed revenue margin over time due to its diversification and bias towards lower loss assets.

Marketing expenses for the third quarter of 2005 were $343.7 million, up $66.7 million from the $277.0 million spent in the second quarter of 2005. Marketing expenses were $317.7 million in the comparable quarter of the prior year. The company expects annual marketing spend for 2005 to be approximately $1.4 billion, excluding the impact of the Hibernia transaction.

Annualized operating expenses as a percentage of average managed loans decreased to 4.88 percent in the third quarter of 2005, down from 5.13 percent in the previous quarter and down from 5.35 percent in the third quarter of 2004.

The company continues to expect a return on managed assets of between 1.7 and 1.8 percent in 2005, with some quarterly variability, excluding the impact of the Hibernia transaction.

"These results keep us on track to deliver diluted earnings of between $6.60 and $7.00 per share in 2005, including the expected impact of completing the acquisition of Hibernia Corporation, albeit more likely at the lower end of the range," said Gary L. Perlin, Capital One's Chief Financial Officer. "While the anticipated closing of the acquisition has been delayed, it is not expected to have a material impact on the integration costs or synergies that Capital One expects to realize from the acquisition."

The acquisition of Hibernia is scheduled to close two business days following the special meeting of Hibernia shareholders, which is scheduled for November 14, 2005, subject to Hibernia shareholders' approval of the amended merger agreement.

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

The company cautions that its current expectations in this release, in the presentation slides available on the company's website and on its Form 8-K dated October 20, 2005 for 2005 earnings, charge-off rates, revenue margins, return on assets, allowance for loan losses, loan growth rates, marketing, the composition of loan growth, restructuring charges, the benefits of the business combination transaction involving Capital One and Hibernia, including future financial and operating results, and the new company's plans, objectives, expectations and intentions are forward-looking statements and actual results could differ materially from current expectations due to a number of factors, including: 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; changes in the reputation of the credit card industry and/or the company with respect to practices or products; the success of the company's marketing efforts; the company's ability to execute on its strategic and operating plans; and general economic conditions affecting interest rates and consumer income and spending, which may affect consumer bankruptcies, defaults, and charge-offs; the failure of Hibernia stockholders to approve the Capital One -- Hibernia transaction; the risk that the Hibernia businesses will not be integrated successfully; the risk that the cost savings and any other synergies from the Hibernia transaction may not be fully realized or may take longer to realize than expected; disruption from the Hibernia transaction making it more difficult to maintain relationships with customers, employees or suppliers; the impact of property, credit and other losses expected as the result of Hurricane Katrina and Hurricane Rita; the amount of government, private and philanthropic investment, including deposits, in the geographic regions impacted by Hurricane Katrina and Hurricane Rita; the pace and magnitude of economic recovery in the region impacted by Hurricane Katrina and Hurricane Rita; and the potential impact of damages from future hurricanes and other storms.

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, 2004.

Additional Information About the Hibernia Transaction

Hibernia shareholders are urged to read the definitive proxy statement/prospectus regarding the proposed merger of Capital One Financial Corp. ("Capital One") and Hibernia Corporation ("Hibernia"), which was first mailed to Hibernia shareholders on or about October 1, 2005 because it contains important information. You may obtain a free copy of the definitive proxy statement/prospectus and other related documents filed by Capital One and Hibernia with the Securities and Exchange Commission ("SEC") at the SEC's website at http://www.sec.gov. The definitive proxy statement/prospectus and the other documents may also be obtained for free by accessing Capital One's website at http://www.capitalone.com under the tab "Investors" and then under the heading "SEC & Regulatory Filings" or by accessing Hibernia's website at http://www.hibernia.com under the tab "About Hibernia" and then under the heading "Investor Relations-SEC Filings."

Capital One, Hibernia and their respective directors, executive officers and certain other members of management and employees may be soliciting proxies from Hibernia stockholders in favor of the merger. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the Hibernia stockholders in connection with the proposed merger is set forth in the definitive proxy statement/prospectus filed with the SEC. You can find information about Capital One's executive officers and directors in its definitive proxy statement filed with the SEC on March 21, 2005. You can find information about Hibernia's executive officers and directors in its definitive proxy statement filed with the SEC on March 15, 2005. You can obtain free copies of these documents from Capital One and Hibernia using the contact information above.

About Capital One

Headquartered in McLean, Virginia, Capital One Financial Corporation (http://www.capitalone.com) is a financial holding company whose principal subsidiaries, Capital One Bank, Capital One, F.S.B. and Capital One Auto Finance, Inc. offer a variety of consumer lending products. Capital One's subsidiaries collectively had 49.2 million accounts and $84.8 billion in managed loans outstanding as of September 30, 2005. Capital One is a Fortune 500 company and, through its subsidiaries, 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 2005 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 pm (EDT) earnings conference call is accessible through the same link.



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

                                        2005          2005          2004
    (in millions, except per share
     data and as noted)                  Q3            Q2            Q3
    Earnings (Reported Basis)
    Net Interest Income                 $910.2        $872.5        $775.4
    Non-Interest Income                1,594.6 (2)   1,582.0       1,539.4 (1)
    Total Revenue(3)                   2,504.8       2,454.5       2,314.8
    Provision for Loan Losses            374.2 (2)     291.6         267.8
    Marketing Expenses                   343.7         277.0         317.7
    Operating Expenses(4)              1,021.9       1,058.6         994.3
    Income Before Taxes                  765.0         827.3         735.0
    Tax Rate                              35.8 %        35.8 %        33.3 %
    Net Income                          $491.1        $531.1        $490.2
    Common Share Statistics
    Basic EPS                            $1.88         $2.10         $2.07
    Diluted EPS                          $1.81         $2.03         $1.97
    Dividends Per Share                  $0.03         $0.03         $0.03
    Book Value Per Share (period
     end)                               $41.40        $39.51        $32.67
    Stock Price Per Share (period
     end)                               $79.52        $80.01        $73.90
    Total Market Capitalization
     (period end)                    $21,200.0     $21,082.6     $17,936.8
    Shares Outstanding (period end)      266.6         263.5         242.7
    Shares Used to Compute Basic EPS     260.9         252.6         236.4
    Shares Used to Compute Diluted
     EPS                                 270.7         261.7         249.0
    Reported Balance Sheet
     Statistics (period avg.)
    Average Loans                      $38,556       $38,237       $34,772
    Average Earning Assets             $53,453       $51,694       $47,267
    Average Assets                     $59,204       $56,963       $51,496
    Average Equity                     $10,802        $8,925        $7,561
    Return on Average Assets (ROA)        3.32 %        3.73 %        3.81 %
    Return on Average Equity (ROE)       18.19 %       23.80 %       25.93 %
    Reported Balance Sheet
     Statistics (period end)
    Loans                              $38,852       $38,611       $35,161
    Total Assets                       $60,425       $56,996       $51,960
    Capital (5)                        $11,137       $10,511        $8,769
    Loan growth                           $241          $652          $610
    % Loan Growth Q Over Q
     (annualized)                            2 %           7 %           7 %
    % Loan Growth Y Over Y                  10 %          12 %          15 %
    Capital to Assets Ratio              18.43 %       18.44 %       16.88 %
    Capital plus Allowance to Assets
     Ratio                               20.83 %       20.91 %       19.56 %
    Revenue & Expense Statistics
     (Reported)
    Net Interest Income Growth
     (annualized)                           17 %           6 %          36 %
    Non Interest Income Growth
     (annualized)                            3 %          17 %          41 %
    Revenue Growth (annualized)              8 %          13 %          39 %
    Net Interest Margin                   6.81 %        6.75 %        6.56 %
    Revenue Margin                       18.74 %       18.99 %       19.59 %
    Risk Adjusted Margin (6)             16.18 %       16.49 %       17.07 %
    Operating Expense as a % of
     Revenues                            40.80 %       43.13 %       42.95 %
    Operating Expense as a % of Avg
     Loans (annualized)                  10.60 %       11.07 %       11.44 %
    Asset Quality Statistics
     (Reported)
    Allowance                           $1,447 (2)    $1,405        $1,395
    30+ Day Delinquencies               $1,497        $1,400        $1,407
    Net Charge-Offs                       $342          $324          $298
    Allowance as a % of Reported
     Loans                                3.72 %        3.64 %        3.97 %
    Delinquency Rate (30+ days)           3.85 %        3.62 %        4.00 %
    Net Charge-Off Rate                   3.55 %        3.39 %        3.43 %

    (1) Includes a $41.1 million gain resulting from the sale of the French
        loan portfolio in Q4 2004 and a $31.5 million gain resulting from the
        sale of a joint venture investment in South Africa in Q3 2004.
    (2) Includes a $15.6 million write-down for retained interests and a $28.5
        million build in the allowance for loan losses related to the impact
        of the Gulf Coast Hurricanes.
    (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 2005 - $255.6, Q2 2005 - $259.8, Q1
        2005 - $243.9, Q4 2004 - $276.8, and Q3 2004 - $269.7.
    (4) Includes employee termination benefits and charges for facility
        consolidation related to corporate-wide cost reduction initiatives of
        $16.2 million, $26.0 million, $23.7 million, $42.1 million, and $26.7
        million for Q3 2005, Q2 2005, Q1 2005, Q4 2004, and Q3 2004,
        respectively. In addition, Q1 2005 includes an $18.8 million reversal
        of a previously recognized impairment related to the sale of the
        Tampa, FL facility and Q3 2004 had charges of $20.6 million related to
        a change in the fixed asset capitalization thresholds and $15.8
        million related to impairment of internally developed software.
    (5) Includes preferred interests for all periods presented and mandatory
        convertible securities for all periods prior to Q2 2005.
    (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)

                                          2005         2005         2004
    (in millions)                          Q3           Q2           Q3
    Earnings (Managed Basis)
    Net Interest Income                 $1,931.2     $1,830.3     $1,670.4
    Non-Interest Income                  1,099.8 (3)  1,144.8      1,099.8 (2)
    Total Revenue(4)                     3,031.0      2,975.1      2,770.2
    Provision for Loan Losses              900.4 (3)    812.2        723.2
    Marketing Expenses                     343.7        277.0        317.7
    Operating Expenses(5)                1,021.9      1,058.6        994.3
    Income Before Taxes                    765.0        827.3        735.0
    Tax Rate                                35.8 %       35.8 %       33.3 %
    Net Income                            $491.1       $531.1       $490.2
    Managed Balance Sheet Statistics
     (period avg.)
    Average Loans                        $83,828      $82,472      $74,398
    Average Earning Assets               $96,696      $94,075      $85,045
    Average Assets                      $103,913     $100,640      $90,543
    Return on Average Assets (ROA)          1.89 %       2.11 %       2.17 %
    Managed Balance Sheet Statistics
     (period end)
    Loans                                $84,768      $82,951      $75,457
    Total Assets                        $105,743     $100,757      $91,665
    Loan Growth                           $1,817       $1,359       $2,090
    % Loan Growth Q over Q (annualized)        9 %          7 %         11 %
    % Loan Growth Y over Y                    12 %         13 %         12 %
    Capital to Assets Ratio                10.53 %      10.43 %       9.57 %
    Capital plus Allowance to Assets
     Ratio                                 11.90 %      11.83 %      11.09 %
    Number of Accounts (000's)            49,192       48,861       47,224
    % Off-Balance Sheet Securitizations       54 %         53 %         53 %
    % at Introductory Rate                     6 %          6 %          6 %
    Revenue & Expense Statistics
     (Managed)
    Net Interest Income Growth
     (annualized)                             22 %          3 %         21 %
    Non Interest Income Growth
     (annualized)                            (16)%         27 %         35 %
    Revenue Growth (annualized)                8 %         12 %         27 %
    Net Interest Margin                     7.99 %       7.78 %       7.86 %
    Revenue Margin                         12.54 %      12.65 %      13.03 %
    Risk Adjusted Margin (6)                8.95 %       9.06 %       9.48 %
    Operating Expense as a % of
     Revenues                              33.71 %      35.58 %      35.89 %
    Operating Expense as a % of Avg
     Loans (annualized)                     4.88 %       5.13 %       5.35 %
    Asset Quality Statistics (Managed)
    30+ Day Delinquencies                 $3,164       $2,893       $2,944
    Net Charge-Offs                         $868         $845         $754
    Delinquency Rate (30+ days)             3.73 %       3.49 %       3.90 %
    Net Charge-Off Rate                     4.14 %       4.10 %       4.05 %

    (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 $41.1 million gain resulting from the sale of the French
        loan portfolio in Q4 2004 and a $31.5 million gain resulting from the
        sale of a joint venture investment in South Africa in Q3 2004.
    (3) Includes a $15.6 million write-down for retained interests and a $28.5
        million build in the allowance for loan losses related to the impact
        of the Gulf Coast Hurricanes.
    (4) 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 2005 - $255.6, Q2 2005 - $259.8, Q1
        2005 - $243.9, Q4 2004 - $276.8, and Q3 2004 - $269.7.
    (5) Includes employee termination benefits and charges for facility
        consolidation related to corporate-wide cost reduction initiatives of
        $16.2 million, $26.0 million, $23.7 million, $42.1 million, and $26.7
        million for Q3 2005, Q2 2005, Q1 2005, Q4 2004, and Q3 2004,
        respectively.
        In addition, Q1 2005 includes an $18.8 million reversal of a
        previously recognized impairment related to the sale of the Tampa, FL
        facility and Q3 2004 had charges of $20.6 million related to a change
        in the fixed asset capitalization thresholds and $15.8 million related
        to impairment of internally developed software.
    (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)

                                            2005         2005         2004
    (in thousands)                           Q3           Q2           Q3
    Segment Statistics
    US Card:
      Net interest income                $1,207,832   $1,151,692   $1,172,447
      Non-interest income                   851,036      846,720      811,465
      Provision for loan losses             483,759      539,211      503,179
      Non-interest expenses                 833,925      794,012      833,183
      Income tax provision (benefit)        259,414      232,816      233,118
      Net income (loss)                    $481,770     $432,373     $414,432

      Loans receivable                  $46,291,468  $46,408,912  $46,081,967
      Net charge-off rate                     4.69%        4.90%        4.68%
      Delinquency Rate (30+ days)             3.86%        3.60%        4.14%

    Auto Finance:
      Net interest income                  $300,102     $285,744     $205,385
      Non-interest income                     3,005        6,964       20,926
      Provision for loan losses             185,219       20,330       56,483
      Non-interest expenses                 129,719      124,584       83,401
      Income tax provision (benefit)         (4,141)      51,728       31,114
      Net income (loss)                     $(7,690)     $96,066      $55,313

      Loans receivable                  $15,730,713  $14,520,216   $9,734,254
      Net charge-off rate                     2.54%        1.74%        2.63%
      Delinquency Rate (30+ days)             4.65%        4.09%        5.54%

    Global Financial Services:
      Net interest income                  $423,629     $411,825     $361,165
      Non-interest income                   273,067      265,499      240,597
      Provision for loan losses             217,032      256,766      150,921
      Non-interest expenses                 356,254      378,278      322,552
      Income tax provision (benefit)         41,521       15,621       41,445
      Net income (loss)                     $81,889      $26,659      $86,844

      Loans receivable                  $22,770,803  $22,053,145  $19,614,693
      Net charge-off rate                     4.09%        3.89%        3.26%
      Delinquency Rate (30+ days)             2.93%        2.93%        2.65%

    Other:
      Net interest income                     $(368)    $(18,959)    $(68,630)
      Non-interest income                   (27,301)      25,577       26,785
      Provision for loan losses              14,324       (4,144)      12,593
      Non-interest expenses                  45,740       38,743       72,848
      Income tax provision (benefit)        (22,913)      (4,001)     (60,858)
      Net income (loss)                    $(64,820)    $(23,980)    $(66,428)

      Loans receivable                     $(25,301)    $(30,921)     $25,917

    Total:
      Net interest income                $1,931,195   $1,830,302   $1,670,367
      Non-interest income                 1,099,807    1,144,760    1,099,773
      Provision for loan losses             900,334      812,163      723,176
      Non-interest expenses               1,365,638    1,335,617    1,311,984
      Income tax provision (benefit)        273,881      296,164      244,819
      Net income (loss)                    $491,149     $531,118     $490,161

      Loans receivable                  $84,767,683  $82,951,352  $75,456,831
      Net charge-off rate                     4.14%        4.10%        4.05%
      Delinquency Rate (30+ days)             3.73%        3.49%        3.90%

    (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, 2005
     (dollars in thousands)(unaudited)

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

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

                                          Total                       Total
                                        Reported   Adjustments(1)   Managed(2)
    Income Statement Measures
    Net interest income                   $910,219   $1,020,976    $1,931,195
    Non-interest income                 $1,594,616    $(494,809)   $1,099,807
    Total revenue                       $2,504,835     $526,167    $3,031,002
    Provision for loan losses             $374,167     $526,167      $900,334
    Net charge-offs                       $341,821     $526,167      $867,988
    Balance Sheet Measures
    Consumer loans                     $38,851,763  $45,915,920   $84,767,683
    Total assets                       $60,424,517  $45,318,131  $105,742,648
    Average consumer loans             $38,555,575  $45,271,890   $83,827,465
    Average earning assets             $53,452,923  $43,243,421   $96,696,344
    Average total assets               $59,203,532  $44,709,269  $103,912,801
    Delinquencies                       $1,496,713   $1,667,064    $3,163,777

     (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
                                            2005         2005         2004

    Assets:
    Cash and due from banks                $812,330     $581,267     $454,843
    Federal funds sold and resale
     agreements                           2,409,392    1,283,015      449,700
    Interest-bearing deposits at other
     banks                                1,380,880      721,806      538,324
      Cash and cash equivalents           4,602,602    2,586,088    1,442,867
    Securities available for sale         9,436,667    9,522,515    9,519,089
    Consumer loans                       38,851,763   38,610,787   35,160,635
      Less:  Allowance for loan losses   (1,447,000)  (1,405,000)  (1,395,000)
    Net loans                            37,404,763   37,205,787   33,765,635
    Accounts receivable from
     securitizations                      6,126,282    4,890,933    4,955,739
    Premises and equipment, net             768,198      782,372      812,724
    Interest receivable                     367,757      274,547      232,808
    Goodwill                                736,058      739,889      352,157
    Other                                   982,190      993,836      878,536
      Total assets                      $60,424,517  $56,995,967  $51,959,555


    Liabilities:
    Interest-bearing deposits           $26,772,538  $26,521,031  $25,354,323
    Senior and subordinated notes         6,651,891    6,692,311    6,968,182
    Other borrowings                     11,613,179    9,692,941    8,490,631
    Interest payable                        350,842      252,677      250,227
    Other                                 3,998,840    3,425,226    2,966,132
      Total liabilities                  49,387,290   46,584,186   44,029,495

    Stockholders' Equity:
    Common stock                              2,682        2,650        2,440
    Paid-in capital, net                  3,979,525    3,783,074    2,463,629
    Retained earnings and cumulative
     other comprehensive income           7,124,900    6,695,753    5,513,694
      Less:  Treasury stock, at cost        (69,880)     (69,696)     (49,703)
      Total stockholders' equity         11,037,227   10,411,781    7,930,060
      Total liabilities and
       stockholders' equity             $60,424,517  $56,995,967  $51,959,555



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


                                                  Three Months Ended
                                         September 30  June 30   September 30
                                             2005      2005(1)      2004(1)


    Interest Income:
    Consumer loans, including
     past-due fees                        $1,228,160  $1,190,098   $1,083,286
    Securities available for sale             87,978      91,245       84,492
    Other                                     88,477      70,557       60,635
       Total interest income               1,404,615   1,351,900    1,228,413

    Interest Expense:
    Deposits                                 285,611     279,438      257,349
    Senior and subordinated notes             98,309     104,593      121,166
    Other borrowings                         110,476      95,366       74,523
       Total interest expense                494,396     479,397      453,038
    Net interest income                      910,219     872,503      775,375
    Provision for loan losses                374,167     291,600      267,795
    Net interest income after provision
     for loan losses                         536,052     580,903      507,580

    Non-Interest Income:
    Servicing and securitizations            993,788     996,043      940,246
    Service charges and other customer-
     related fees                            381,381     383,280      385,648
    Interchange                              125,454     132,068      117,043
    Other                                     93,993      70,605       96,447
       Total non-interest income           1,594,616   1,581,996    1,539,384

    Non-Interest Expense:
    Salaries and associate benefits          414,348     442,101      415,988
    Marketing                                343,708     277,034      317,653
    Communications and data processing       144,321     138,916      112,191
    Supplies and equipment                    86,866      83,661       94,190
    Occupancy                                 39,426      40,209       41,407
    Other                                    336,969     353,696      330,555
       Total non-interest expense          1,365,638   1,335,617    1,311,984
    Income before income taxes               765,030     827,282      734,980
    Income taxes                             273,881     296,164      244,819
    Net income                              $491,149    $531,118     $490,161


    Basic earnings per share                   $1.88       $2.10        $2.07

    Diluted earnings per share                 $1.81       $2.03        $1.97

    Dividends paid per share                   $0.03       $0.03        $0.03

    (1) Certain prior period amounts have been reclassified to conform to the
    current period presentation.



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

                                                      Nine Months Ended
                                               September 30       September 30
                                                   2005              2004(1)

    Interest Income:
    Consumer loans, including past-due
     fees                                       $3,602,294         $3,137,379
    Securities available for sale                  269,387            224,289
    Other                                          221,102            183,422
       Total interest income                     4,092,783          3,545,090

    Interest Expense:
    Deposits                                       829,074            741,839
    Senior and subordinated notes                  317,382            370,393
    Other borrowings                               303,084            214,444
       Total interest expense                    1,449,540          1,326,676
    Net interest income                          2,643,243          2,218,414
    Provision for loan losses                      925,398            753,719
    Net interest income after provision
     for loan losses                             1,717,845          1,464,695

    Non-Interest Income:
    Servicing and securitizations                2,923,768          2,724,605
    Service charges and other customer-
     related fees                                1,179,857          1,108,610
    Interchange                                    380,962            339,967
    Other                                          208,004            205,400
       Total non-interest income                 4,692,591          4,378,582

    Non-Interest Expense:
    Salaries and associate benefits              1,289,950          1,260,075
    Marketing                                      932,501            826,638
    Communications and data processing             426,056            337,488
    Supplies and equipment                         256,973            257,093
    Occupancy                                       97,536            150,620
    Other                                        1,026,071            933,778
       Total non-interest expense                4,029,087          3,765,692
    Income before income taxes                   2,381,349          2,077,585
    Income taxes                                   852,520            729,231
    Net income                                  $1,528,829         $1,348,354


    Basic earnings per share                         $6.05              $5.75

    Diluted earnings per share                       $5.82              $5.45

    Dividends paid per share                         $0.08              $0.08

    (1) Certain prior period amounts have been reclassified to conform to the
    current period presentation.



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

    Reported                                    Quarter Ended 9/30/05
                                            Average       Income/    Yield/
                                            Balance       Expense     Rate
    Earning assets:
     Consumer loans                        $38,555,575   $1,228,160   12.74%
     Securities available for sale           9,535,858       87,978    3.69%
     Other                                   5,361,490       88,477    6.60%
    Total earning assets                   $53,452,923   $1,404,615   10.51%

    Interest-bearing liabilities:
     Deposits                              $26,618,472     $285,611    4.29%
     Senior and subordinated notes           6,683,533       98,309    5.88%
     Other borrowings                       10,698,216      110,476    4.13%
    Total interest-bearing liabilities     $44,000,221     $494,396    4.49%

    Net interest spread                                                6.02%

    Interest income to average earning
     assets                                                           10.51%
    Interest expense to average earning
     assets                                                            3.70%
    Net interest margin                                                6.81%


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

    Reported                                    Quarter Ended 6/30/05
                                            Average       Income/    Yield/
                                            Balance       Expense     Rate
    Earning assets:
     Consumer loans                        $38,237,463   $1,190,098   12.45%
     Securities available for sale           9,592,645       91,245    3.80%
     Other                                   3,863,822       70,557    7.30%
    Total earning assets                   $51,693,930   $1,351,900   10.46%

    Interest-bearing liabilities:
     Deposits                              $26,391,233     $279,438    4.24%
     Senior and subordinated notes           6,987,888      104,593    5.99%
     Other borrowings                       10,838,955       95,366    3.52%
    Total interest-bearing liabilities     $44,218,076     $479,397    4.34%

    Net interest spread                                                6.12%

    Interest income to average earning
     assets                                                           10.46%
    Interest expense to average earning
     assets                                                            3.71%
    Net interest margin                                                6.75%


     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)

    Managed (1)                                 Quarter Ended 9/30/05
                                            Average       Income/    Yield/
                                            Balance       Expense     Rate
    Earning assets:
     Consumer loans                        $83,827,465   $2,784,301   13.29%
     Securities available for sale           9,535,858       87,978    3.69%
     Other                                   3,333,021       35,496    4.26%
    Total earning assets                   $96,696,344   $2,907,775   12.03%

    Interest-bearing liabilities:
     Deposits                              $26,618,472     $285,611    4.29%
     Senior and subordinated notes           6,683,533       98,309    5.88%
     Other borrowings                       10,698,216      110,476    4.13%
     Securitization liability               44,814,893      482,184    4.30%
    Total interest-bearing liabilities     $88,815,114     $976,580    4.40%

    Net interest spread                                                7.63%

    Interest income to average earning
     assets                                                           12.03%
    Interest expense to average earning
     assets                                                            4.04%
    Net interest margin                                                7.99%


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


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

    Managed (1)                                 Quarter Ended 6/30/05
                                            Average       Income/    Yield/
                                            Balance       Expense     Rate
    Earning assets:
     Consumer loans                        $82,471,828   $2,652,370   12.86%
     Securities available for sale           9,592,645       91,245    3.80%
     Other                                   2,010,296       22,503    4.48%
    Total earning assets                   $94,074,769   $2,766,118   11.76%

    Interest-bearing liabilities:
     Deposits                              $26,391,233     $279,438    4.24%
     Senior and subordinated notes           6,987,888      104,593    5.99%
     Other borrowings                       10,838,955       95,366    3.52%
     Securitization liability               43,810,547      456,419    4.17%
    Total interest-bearing liabilities     $88,028,623     $935,816    4.25%

    Net interest spread                                                7.51%

    Interest income to average earning
     assets                                                           11.76%
    Interest expense to average earning
     assets                                                            3.98%
    Net interest margin                                                7.78%


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


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

    Managed (1)                                 Quarter Ended 9/30/04
                                            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%


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

SOURCE Capital One Financial Corporation

CONTACT: Investor Relations: Mike Rowen, +1-703-720-2455, Media Relations: Tatiana Stead, +1-703-720-2352, or Julie Rakes, +1-804-284-5800, all of Capital One Financial Corporation