SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the fiscal year ended December 31, 1997
Commission file number 1-13300
CAPITAL ONE FINANCIAL CORPORATION ASSOCIATE SAVINGS PLAN
2980 Fairview Park Drive
Suite 1300
Falls Church, Virginia 22042-4525
-----------------------------
CAPITAL ONE FINANCIAL CORPORATION
2980 Fairview Park Drive
Suite 1300
Falls Church, Virginia 22042-4525
Financial Statements and Exhibits
(a) Financial Statements
The Capital One Financial Corporation Associate Savings Plan (the "Plan") became
effective as of January 1, 1995. Filed as a part of this report on Form 11-K are
the audited financial statements of the Plan as of and for the years ended
December 31, 1997 and 1996.
(b) Exhibit
(1) Consent of Independent Auditors
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
CAPITAL ONE FINANCIAL
CORPORATION ASSOCIATE
SAVINGS PLAN
--------------------------------
(Name of Plan)
By: /s/James M. Zinn
-----------------------------
Name: James M. Zinn
on behalf of the Benefits
Committee, as Plan
Administrator
Dated: June 23, 1998
Financial Statements
and Supplemental Schedules
Capital One Financial Corporation
Associate Savings Plan
Years Ended December 31, 1997 and 1996
with Report of Independent Auditors
Capital One Financial Corporation Associate Savings Plan
Financial Statements
and Supplemental Schedules
Years Ended December 31, 1997 and 1996
Contents
Report of Independent Auditors........................................................1
Audited Financial Statements
Statements of Net Assets Available for Benefits, with Fund Information................2
Statements of Changes in Net Assets Available for Benefits, with Fund Information.....6
Notes to Financial Statements........................................................10
Supplemental Schedules
Schedule of Assets Held for Investment Purposes......................................15
Schedule of Reportable Transactions..................................................16
Report of Independent Auditors
Benefits Committee
Capital One Financial Corporation
We have audited the accompanying statements of net assets available for benefits
of Capital One Financial Corporation Associate Savings Plan ("Plan") as of
December 31, 1997 and 1996, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1997 and 1996, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1997, and reportable
transactions for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974 and are not
a required part of the basic financial statements. The fund information in the
statements of net assets available for benefits and the statements of changes in
net assets available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for benefits and
changes in net assets available for benefits of each fund. The supplemental
schedules and fund information have been subjected to the auditing procedures
applied in our audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ERNST & YOUNG LLP
Washington, DC
June 23, 1998
Capital One Financial Corporation Associate Savings Plan
Statement of Net Assets Available for Benefits,
with Fund Information
December 31, 1997
-------------------------------------------------------
American American
Capital Express Express
One Trust Trust
Pooled Money Equity
Company Market Index
Stock Fund Fund II Fund II
-------------------------------------------------------
Assets
Investments, at fair value:
Units of Capital One Pooled Company Stock Fund $21,795,608
Shares of registered investment companies $10,220,258 $9,181,548
Participant notes receivable
-------------------------------------------------------
Total investments 21,795,608 10,220,258 9,181,548
Receivables:
Employer's contributions 290,641 396,276 201,992
Participants' contributions 107,182 53,562 71,316
Accrued income 43,671
-------------------------------------------------------
Total receivables 397,823 493,509 273,308
Cash and cash equivalents
-------------------------------------------------------
Total assets 22,193,431 10,713,767 9,454,856
-------------------------------------------------------
Liabilities
Administrative expenses payable
-------------------------------------------------------
Net assets available for benefits $22,193,431 $10,713,767 $9,454,856
=======================================================
2
Fund Information
- ---------------------------------------------------------------------------------------------------------------------------
IDS Y IDS Y IDS Y
(American (American (American
Express) Express) Express) AIM Templeton
Federal Mutual Stock Constellation Foreign Participant
Income Fund Fund Fund Fund Fund Notes Other Total
- ------------------------------------------------------------------------------------------------------------------------------------
$21,795,608
$1,641,552 $1,483,047 $5,353,113 $7,944,122 $2,246,183 38,069,823
$2,679,032 2,679,032
- ------------------------------------------------------------------------------------------------------------------------------------
1,641,552 1,483,047 5,353,113 7,944,122 2,246,183 2,679,032 62,544,463
35,510 62,821 118,103 203,987 88,409 1,397,739
12,054 19,673 40,976 75,635 32,411 412,809
43,671
- ------------------------------------------------------------------------------------------------------------------------------------
47,564 82,494 159,079 279,622 120,820 1,854,219
$ 2,542 2,542
- ------------------------------------------------------------------------------------------------------------------------------------
1,689,116 1,565,541 5,512,192 8,223,744 2,367,003 2,679,032 2,542 64,401,224
- ------------------------------------------------------------------------------------------------------------------------------------
37,641 37,641
- ------------------------------------------------------------------------------------------------------------------------------------
$1,689,116 $1,565,541 $5,512,192 $8,223,744 $2,367,003 $2,679,032 $(35,099) $64,363,583
====================================================================================================================================
See accompanying notes.
3
Capital One Financial Corporation Associate Savings Plan
Statement of Net Assets Available for Benefits,
with Fund Information
December 31, 1996
--------------------------------------------------------------------
Capital American American
One Express Express
Pooled Signet Trust Trust
Company Stock Money Equity
Stock Pooled Market Index
Fund Fund Fund II Fund II
--------------------------------------------------------------------
Assets
Investments, at fair value:
Units of Capital One Pooled Company Stock Fund $11,444,971
Units of Signet Stock Pooled Fund $2,612,609
Shares of registered investment companies $5,718,747 $4,028,636
Participant notes receivable
--------------------------------------------------------------------
Total investments 11,444,971 2,612,609 5,718,747 4,028,636
Receivables:
Employer's contributions 215,017 373,249 111,063
Participants' contributions 72,485 41,885 35,858
Accrued income 24,824
--------------------------------------------------------------------
Total receivables 287,502 439,958 146,921
Cash and cash equivalents
--------------------------------------------------------------------
Total assets 11,732,473 2,612,609 6,158,705 4,175,557
Liabilities
Administrative expenses payable
--------------------------------------------------------------------
Net assets available for benefits $11,732,473 $2,612,609 $6,158,705 $4,175,557
====================================================================
4
Fund Information
- -----------------------------------------------------------------------------------------------------------------------
IDS Y IDS Y IDS Y
(American (American (American
Express) Express) Express) AIM Templeton
Federal Mutual Stock Constellation Foreign Participant
Income Fund Fund Fund Fund Fund Notes Other Total
- ------------------------------------------------------------------------------------------------------------------------------------
$11,444,971
2,612,609
$829,434 $334,200 $2,874,448 $4,499,932 $792,575 19,077,972
$1,877,469 1,877,469
- -----------------------------------------------------------------------------------------------------------------------------------
829,434 334,200 2,874,448 4,499,932 792,575 1,877,469 35,013,021
26,009 27,066 73,258 146,336 39,026 1,011,024
7,754 7,763 22,582 46,682 12,197 247,206
24,824
- ------------------------------------------------------------------------------------------------------------------------------------
33,763 34,829 95,840 193,018 51,223 1,283,054
$ 5,485 5,485
- ------------------------------------------------------------------------------------------------------------------------------------
863,197 369,029 2,970,288 4,692,950 843,798 1,877,469 5,485 36,301,560
- ------------------------------------------------------------------------------------------------------------------------------------
36,749 36,749
- ------------------------------------------------------------------------------------------------------------------------------------
$863,197 $369,029 $2,970,288 $4,692,950 $843,798 $1,877,469 $(31,264) $36,264,811
====================================================================================================================================
See accompanying notes.
5
Capital One Financial Corporation Employee Savings Plan
Statement of Changes in Net Assets Available for Benefits, with Fund
Information
Year Ended December 31, 1997
------------------------------------------------------------------------
Capital American American
One Express Express
Pooled Trust Trust
Company Signet Money Equity
Stock Stock Market Index
Fund Pooled Fund Fund II Fund II
------------------------------------------------------------------------
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in
fair value of investments $ 7,050,683 $1,761,316 $1,743,505
Interest 1,208 $ 18,064
Dividends 112,900 47,206 385,261
------------------------------------------------------------------------
7,164,791 1,808,522 403,325 1,743,505
Contributions:
Employer's 2,288,892 2,432,529 1,453,419
Participants' 1,776,664 921,620 1,357,883
Rollovers 74,461 173,568 163,251
------------------------------------------------------------------------
4,140,017 3,527,717 2,974,553
------------------------------------------------------------------------
Total additions 11,304,808 1,808,522 3,931,042 4,718,058
Deductions from net assets attributed to:
Benefits paid to participants (811,273) (162,651) (769,566) (319,056)
Administrative expenses (113,560)
------------------------------------------------------------------------
Total deductions (811,273) (162,651) (883,126) (319,056)
Net increase (decrease) prior to interfund transfers 10,493,535 1,645,871 3,047,916 4,399,002
Interfund transfers, net (32,577) (4,258,480) 1,507,146 880,297
------------------------------------------------------------------------
Net increase (decrease) 10,460,958 (2,612,609) 4,555,062 5,279,299
Net assets available for benefits:
Beginning of year 11,732,473 2,612,609 6,158,705 4,175,557
------------------------------------------------------------------------
End of year $22,193,431 $10,713,767 $9,454,856
========================================================================
6
Fund Information
- -------------------------------------------------------------------------------------------------------------------
IDS Y
(American IDS Y IDS Y
Express) (American (American
Federal Express) Express) AIM Templeton
Income Mutual Stock Constellation Foreign Participant
Fund Fund Fund Fund Fund Notes Other Total
- ------------------------------------------------------------------------------------------------------------------------------------
$ 19,111 $ (50,070) $ 193,513 $ 153,142 $ (188,738)
$10,682,462
17 $ 168,265 187,554
68,449 196,734 735,823 562,179 230,571 2,339,123
- ------------------------------------------------------------------------------------------------------------------------------------
87,577 146,664 929,336 715,321 41,833 168,265 13,209,139
268,261 358,384 836,427 1,625,877 574,758 9,838,547
210,747 309,149 703,951 1,528,205 578,575 7,386,794
11,267 64,794 114,858 170,477 70,775 843,451
- ------------------------------------------------------------------------------------------------------------------------------------
490,275 732,327 1,655,236 3,324,559 1,224,108 18,068,792
- ------------------------------------------------------------------------------------------------------------------------------------
577,852 878,991 2,584,572 4,039,880 1,265,941 168,265 31,277,931
(53,088) (39,400) (225,927) (307,652) (62,149) (277,196) (3,027,958)
$(37,641) (151,201)
- ------------------------------------------------------------------------------------------------------------------------------------
(53,088) (39,400) (225,927) (307,652) (62,149) (277,196) (37,641) (3,179,159)
524,764 839,591 2,358,645 3,732,228 1,203,792 (108,931) (37,641) 28,098,772
301,155 356,921 183,259 (201,434) 319,413 910,494 33,806
- ------------------------------------------------------------------------------------------------------------------------------------
825,919 1,196,512 2,541,904 3,530,794 1,523,205 801,563 (3,835) 28,098,772
863,197 369,029 2,970,288 4,692,950 843,798 1,877,469 (31,264) 36,264,811
- ------------------------------------------------------------------------------------------------------------------------------------
$1,689,116 $1,565,541 $5,512,192 $8,223,744 $2,367,003 $2,679,032 $(35,099) $64,363,583
====================================================================================================================================
See accompanying notes.
7
Capital One Financial Corporation Associate Savings Plan
Statement of Changes in Net Assets Available for Benefits,
with Fund Information
Year Ended December 31, 1996
-----------------------------------------------------------------------
Capital American American
One Express Express
Pooled Trust Trust
Company Signet Money Equity
Stock Stock Market Index
Fund Pooled Fund Fund II Fund II
-----------------------------------------------------------------------
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in
fair value of investments $ 3,147,315 $ 651,232 $ 405,569
Interest 40,372 24,673 $ 22,299
Dividends 69,965 58,329 212,548
-----------------------------------------------------------------------
3,257,652 734,234 234,847 405,569
Contributions:
Employer's 1,759,386 2,075,115 854,296
Participants' 1,378,472 824,757 812,712
Rollovers 170,899 89,028 105,678
-----------------------------------------------------------------------
3,308,757 2,988,900 1,772,686
-----------------------------------------------------------------------
Total additions 6,566,409 734,234 3,223,747 2,178,255
Deductions from net assets attributed to:
Benefits paid to participants (359,567) (124,125) (417,154) (199,490)
Administrative expenses (83,922)
-----------------------------------------------------------------------
Total deductions (359,567) (124,125) (501,076) (199,490)
Net increase (decrease) prior to interfund transfers 6,206,842 610,109 2,722,671 1,978,765
Interfund transfers, net (964,120) (653,057) 3,436,034 2,196,792
-----------------------------------------------------------------------
Net increase (decrease) 5,242,722 (42,948) 6,158,705 4,175,557
Net assets available for benefits:
Beginning of year 6,489,751 2,655,557
-----------------------------------------------------------------------
End of year $11,732,473 $2,612,609 $6,158,705 $4,175,557
=======================================================================
8
Fund Information
- ----------------------------------------------------------------------------------------------------------------------
IDS Y IDS Y IDS Y Virtus
(American (American (American Virtus Treasury
Express) Express) Express) AIM Templeton Style Money
Federal Mutual Stock Constellation Foreign Manager Market
Income Fund Fund Fund Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------------------
$(83,088) $ (1,937) $ 43,234 $ 127,856 $ 34,822 $ (13,008)
2,283 16 49 1,392 22 $ 8,397
44,762 27,249 183,260 150,458 28,600
- ----------------------------------------------------------------------------------------------------------------------
(36,043) 25,328 226,543 279,706 63,444 (13,008) 8,397
205,863 97,720 481,757 968,835 138,873
163,153 81,118 370,321 886,159 123,489
40,495 43,212 123,541 173,157 47,156
- ----------------------------------------------------------------------------------------------------------------------
409,511 222,050 975,619 2,028,151 309,518
- ----------------------------------------------------------------------------------------------------------------------
373,468 247,378 1,202,162 2,307,857 372,962 (13,008) 8,397
(18,723) (12,234) (106,350) (106,058) (8,908) (5,970)
- ----------------------------------------------------------------------------------------------------------------------
(18,723) (12,234) (106,350) (106,058) (8,908) (5,970)
354,745 235,144 1,095,812 2,201,799 364,054 (13,008) 2,427
508,452 133,885 1,874,476 2,491,151 479,744 (1,609,564) (3,887,710)
- ----------------------------------------------------------------------------------------------------------------------
863,197 369,029 2,970,288 4,692,950 843,798 (1,622,572) (3,885,283)
1,622,572 3,885,283
- ----------------------------------------------------------------------------------------------------------------------
$863,197 $369,029 $2,970,288 $4,692,950 $843,798
======================================================================================================================
- ----------------------------------------------------------------
American
Century- Vanguard
Twentieth Index
Century Trust
Ultra 500 Participant
Fund Portfolio Notes Other Total
- -------------------------------------------------------------------------------
$ (76,724) $ (29,826) $ 44 $ 4,205,489
$ 103,512 5,485 208,500
6 1,659 776,836
- -------------------------------------------------------------------------------
(76,718) (29,826) 103,512 7,188 5,190,825
6,581,845
4,640,181
793,166
- -------------------------------------------------------------------------------
12,015,192
- -------------------------------------------------------------------------------
(76,718) (29,826) 103,512 7,188 17,206,017
(56,975) (1,415,554)
(36,749) (120,671)
- -------------------------------------------------------------------------------
(56,975) (36,749) (1,536,225)
(76,718) (29,826) 46,537 (29,561) 15,669,792
(2,071,319) (2,056,537) 741,577 (619,804)
- -------------------------------------------------------------------------------
(2,148,037) (2,086,363) 788,114 (649,365) 15,669,792
2,148,037 2,086,363 1,089,355 618,101 20,595,019
- -------------------------------------------------------------------------------
$1,877,469 $ (31,264) $36,264,811
===============================================================================
See accompanying notes.
9
Capital One Financial Corporation Associate Savings Plan
Notes to Financial Statements
December 31, 1997
Note 1--Description of Plan
Effective January 1, 1995, Capital One Financial Corporation (the "Corporation")
established and adopted the Capital One Financial Corporation Associate Savings
Plan (the "Plan") for the benefit of its eligible associates. The Plan is a
continuation of the Signet Banking Corporation ("Signet") Employee Savings Plan
for participants who transferred employment from Signet to the Corporation on or
within twelve months after the date of distribution of the Corporation's stock
to shareholders of Signet on February 28, 1995.
The following description of the Plan provides only general information.
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
General
The Plan is a defined contribution plan covering substantially all associates of
the Corporation and provides for pension, disability, death and termination
benefits. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
Contributions
Each year, participants may contribute 1% to 15% of pre-tax annual compensation,
as defined in the Plan. Such contributions may be pre-tax dollars, or a
combination of pre- and after-tax dollars. Participants may also contribute
amounts representing distributions from other qualified plans ("rollover
contributions"). The Corporation contributes 50% of the first 6% of the
participant's annual compensation that a participant contributes to the Plan.
Beginning January 1, 1996, the Corporation contributes 3% of participants'
eligible salaries, regardless of participation in the Plan. Additional amounts
equal to 3% of the participants' eligible salaries for those participants making
pre-tax contributions to the Plan at year end may be contributed at the option
of the Corporation's Board of Directors.
10
Participant Accounts
Each participant's account is credited with the participant's contributions and
allocations of the Corporation's contributions and Plan earnings. Allocations
are based upon the number of units of the Plan in each participant's account.
Forfeited balances of terminated participants' nonvested accounts are used to
pay administrative expenses of the Plan, to the extent available. Plan expenses
in excess of forfeitures, if any, are absorbed by the Corporation. Excess
forfeitures, if any, are applied as employer contributions made in advance, and
reduce the Corporation's future contributions. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's account.
Vesting
Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Corporation's contribution portion of their
accounts plus actual earnings thereon is based on years of continuous service. A
participant is 100% vested after two years of service.
Investment Options
Upon enrollment in the Plan, a participant may direct employer and employee
contributions in any of eight investment options. Participants may change their
investment options at any time. Current investment options, as well as options
previously available through the former investment manager, are described below.
Current Options:
Capital One Pooled Company Stock Fund (previously Capital One Stock
Unitized Investment Fund) - Monies are invested by the Trustee in a
unitized trust fund which invests in shares of the Corporation's common
stock. The Trustee shall also be permitted to invest in short-term
temporary investments, including pooled funds which bear interest at
market rates.
American Express Trust Money Market Fund II - Monies are invested
primarily in short-term debt securities.
American Express Trust Equity Index Fund II - Ninety percent of the
monies held by this fund are invested in common stock and the balance
is invested in S&P 500 stock index futures.
IDS Y (American Express) Federal Income Fund - Monies are invested in
U.S. government agency securities.
11
IDS Y (American Express) Mutual Fund - Monies are invested in common
stocks and senior securities, such as bonds and preferred stocks.
IDS Y (American Express) Stock Fund - Monies are invested in large
capitalization, blue chip stocks and investment grade bonds.
AIM Constellation Fund - Monies are invested in the common stock of
primarily small and medium-sized companies.
Templeton Foreign Fund - Monies are invested primarily in the common
stock of companies outside the U.S.
Previous Options:
----------------
Signet Stock Pooled Fund (previously Signet Stock Unitized Investment
Fund) - Monies were invested in a unitized trust fund that invested in
shares of Signet's common stock. Prior to December 15, 1997,
participants were able to hold this investment; however, additional
investment in the Fund was prohibited. On December 15, 1997, this fund
was liquidated and the balance was transferred to the American Express
Trust Money Market Fund II.
Participant Notes Receivable
Participants may elect to borrow from their fund accounts a minimum of
$1,000; up to a maximum of the lesser of $50,000, or 50% of their account
balance. Loan transactions are treated as a transfer from (to) the investment
fund to (from) the loan fund. Loan terms range from 1 to 5 years or up to 10
years for the purchase of a primary residence. The loans are secured by the
balance in the participant's account and bear interest at a rate commensurate
with local prevailing rates as determined by the Benefits Committee. Principal
and interest are paid ratably through monthly payroll deductions.
Payment of Benefits
On termination of service, a participant may elect to receive an amount equal to
the vested value of his or her account through a lump-sum distribution or equal,
or nearly equal, payments made at least annually for a period not to exceed 15
years. If the participant has invested in the Capital One or Signet Stock pooled
funds, he or she may elect to receive distributions of whole shares of common
stock with fractional shares paid in cash.
Note 2--Summary of Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared under the accrual method of
accounting.
12
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Valuation and Income Recognition
The Plan's investments are stated at fair value. Units in the Capital One and
Signet Stock pooled funds are valued based upon the stock price at the last
reported sales price on the last business day of the plan year. The shares of
registered investment companies are valued at quoted market prices which
represent the net asset values of shares held by the Plan as of year-end. Money
market funds and participant notes receivable are valued at cost, which
approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
Note 3--Investments
The Plan's investments are held in a trust fund administered by American Express
Trust Company. The fair values of the following individual investments
represented 5% or more of the Plan's net assets as of December 31, 1997 or 1996:
December 31,
1997 1996
-----------------------------------
Capital One Pooled Company Stock Fund $21,795,608 $11,444,971
American Express Trust Money Market Fund II 10,220,258 5,718,747
American Express Trust Equity Index Fund II 9,181,548 4,028,636
AIM Constellation Fund 7,944,122 4,499,932
IDS Y (American Express) Stock Fund 5,353,113 2,874,448
Participant Notes 2,679,032 1,877,469
Signet Stock Pooled Fund 2,612,609
Note 4--Plan Termination
Although it has not expressed any intent to do so, the Corporation has the right
to terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100% vested in their accounts.
Note 5--Tax Status
The Internal Revenue Service ruled on April 10, 1997 that the Plan qualifies
under Section 401(a) of the Internal Revenue Code (IRC)and, therefore, the
related trust is not
13
subject to tax under present income tax law. Once qualified, the Plan is
required to operate in conformity with the IRC to maintain its qualification.
The Benefits Committee is not aware of any course of action or events that have
occurred that might adversely affect the Plan's qualified status.
Note 6-- Transactions with Parties-in-Interest
Effective January 1, 1996, American Express Trust Company was named trustee
of the Plan and investment manager of the Plan assets. During January 1996,
investments held by the previous trustee Signet Trust Company, and managed by
Virtus Capital Management, Inc., ("Virtus"), were transferred to American
Express Trust Company. The market value of the assets attributable to those
participant accounts transferred from the Signet Trust Company was $19,223,330.
Cash transferred from Signet to American Express Trust Company was invested
temporarily in short-term interest-bearing investments until purchases of
registered investment companies were made. Interest earned on these investments
was allocated pro rata to all funds.
During 1997 and 1996, certain Plan investments included shares of mutual funds
managed by American Express. In addition, the Plan had invested $21,795,608 and
$11,444,971, at fair value, in the Capital One Pooled Company Stock Fund and $0
and $2,612,609, at fair value, in the Signet Stock Pooled Fund as of December
31, 1997 and 1996, respectively.
14
Supplemental Schedules
Capital One Financial Corporation Associate Savings Plan
Schedule of Assets Held for Investment Purposes
December 31, 1997
Units/ Fair
Shares Cost value
--------------------------------------------------
Capital One Pooled Company Stock Fund 999,936 $13,119,981 $21,795,608
Registered Investment Companies:
American Express Trust Money Market Fund II 10,220,258 10,220,258 10,220,258
American Express Trust Equity Index Fund II 354,746 7,189,974 9,181,548
IDS Y (American Express) Federal Income Fund 324,674 1,631,783 1,641,552
IDS Y (American Express) Mutual Fund 108,031 1,552,091 1,483,047
IDS Y (American Express) Stock Fund 219,516 5,054,652 5,353,113
AIM Constellation Fund 301,142 7,601,400 7,944,122
Templeton Foreign Fund 225,748 2,457,867 2,246,183
-------------------------------
35,708,025 38,069,823
Participant Notes 2,679,032 2,679,032 2,679,032
-------------------------------
Total $51,507,038 $62,544,463
===============================
15
Capital One Financial Corporation Associate Savings Plan
Schedule of Reportable Transactions
Year Ended December 31, 1997
Purchase Selling
Description of assets Units/Share price price Cost
- ------------------------------------------------------ ---------------- ------------- ------------- -----------
Category (i) - individual transactions in excess of 5 percent of plan assets:
- ----------------------------------------------------------------------------
American Express Trust Money Market Fund II 1,944,973 $1,944,973
Signet Stock Pooled Fund 44,034 $2,219,570 $1,370,466
Category (iii) - series of transactions in excess of 5 percent of plan assets:
- -----------------------------------------------------------------------------
American Express Trust Money Market Fund II 9,811,589 $9,811,589
American Express Trust Money Market Fund II 5,394,090 $5,394,090 $5,394,090
Capital One Pooled Company Stock Fund 125,482 4,812,452
American Express Trust Equity Index Fund II 219,551 5,065,722
IDS Y (American Express) Stock Fund 118,260 2,948,717
AIM Constellation Fund 178,042 4,762,940
Participant Notes 1,903,830 1,903,830
Templeton Foreign Fund 266,292 2,954,789
Signet Stock Pooled Fund 88,613 4,344,178 2,587,828
Fair value Net gain
- ------------ -----------
$2,219,570 $849,104
$5,394,090
4,344,178 $1,756,350
All transactions were made on the market.
There were no category (ii) or (iv) reportable transactions during 1997.
16
EXHIBITS INDEX
Exhibit
Number Description
- ------ -----------
23 Consent of Independent Auditors
17
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in the following Registration
Statements of our report dated June 23, 1998, with respect to the financial
statements and schedules of the Capital One Financial Corporation Associate
Savings Plan included in this Annual Report (Form 11-K) for the year ended
December 31, 1997.
Registration Statement
Number Form Description
--------------------- ---------- --------------------------------
33-80263 Form S-8 Marketing and Management
Services Agreement
33-86874 Form S-8 Employee Stock Purchase Plan
33-86876 Form S-8 Employee Savings Plan
33-86986 Form S-8 1994 Stock Incentive Plan
33-91790 Form S-8 1995 Non-Employee Directors
Stock Incentive Plan
33-97032 Form S-8 Amendment to 1994 Stock
Incentive Plan
33-99748 Form S-3 Dividend Reinvestment and
Stock Purchase Plan
333-3580 Form S-3 Debt Securities, Preferred Stock
and Common Stock in the
amount of $200 million
333-42853 Form S-8 1994 Stock Incentive Plan
333-45453 Form S-8 Associate Savings Plan
333-51637 Form S-8 1994 Stock Incentive Plan
333-51639 Form S-8 1994 Stock Incentive Plan
333-57317 Form S-8 1994 Stock Incentive Plan
/s/ERNST & YOUNG LLP
Washington, D.C.
June 23, 1998
18
