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Press release from PR Newswire

Capital One Reports First Quarter 2011 Net Income of $1.0 billion, or $2.21 Per Share

Thursday, April 21, 2011

Capital One Reports First Quarter 2011 Net Income of $1.0 billion, or $2.21 Per Share07:00 EDT Thursday, April 21, 2011Net Income improved $380 million, or 60 percent, from Q1 2010 and $319 million, or 46 percent, from Q4 2010 Results driven by positive credit trends and strong revenues Card loan volumes declined consistent with historical seasonal trends; purchase volumes and account originations remain strong Growth emerging in Auto and Commercial Continued strong deposit growth Strong capital generation: TCE increased to 7.3 percent from 6.9 percent; Tier 1 common dipped to 8.4 percent from 8.8 percent with the final phase-in of FAS 166/167MCLEAN, Va., April 21, 2011 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the first quarter of 2011 of $1.0 billion, or $2.21 per common share, compared with net income of $636 million, or $1.40 per common share, in the first quarter of 2010 and net income of $697 million, or $1.52 per common share, in the fourth quarter of 2010."We are gaining momentum across our businesses, and the period of shrinking loans through the Great Recession came to an end in the first quarter," said Richard D. Fairbank, Capital One's Chairman and Chief Executive Officer.  "Our solid first quarter results and our strong and resilient balance sheet put us in a good position to continue to generate capital and deliver strong and sustainable returns to our shareholders."Total Company ResultsTotal revenue in the first quarter of 2011 of $4.1 billion increased $120 million, or 3.0 percent, from the fourth quarter of 2010, as a result of increasing margins and relatively stable average loans. Net interest income increased $117 million, or 3.9 percent, from the prior quarter.Net interest margin increased to 7.24 percent from 6.95 percent, driven by higher asset yields in the company?s Card and Auto businesses and a nine basis point decrease in the company?s cost of funds. The cost of funds decreased to 1.41 percent in the first quarter from 1.50 percent in the prior quarter, driven by the mix shift toward lower-cost deposits.  Non-interest expense of $2.2 billion in the first quarter of 2011 increased $71 million, or 3.4 percent, from the prior quarter. One-time operating costs were partially offset by seasonally lower marketing expense.Provision expense of $534 million in the first quarter decreased $305 million from the prior quarter, driven by a $249 million reduction in net charge-offs. Net charge-offs as a percentage of average loans was 3.66 percent in the first quarter of 2011 compared with 4.45 percent in the prior quarter and 6.02 percent in first quarter of 2010.Period-end loans held for investment declined $1.9 billion, or 1.5 percent, in the first quarter to $124.1 billion at March 31, 2011.Excluding the expected run-off in the company?s Installment Loan portfolio in Domestic Card, Home Loan portfolio in Consumer Banking and Small-Ticket Commercial Real Estate portfolio in Commercial Banking, total company loan balances declined approximately $824 million in the first quarter of 2011. Average total deposits increased $2.4 billion, or 2.0 percent, during the quarter to $124.2 billion. Period-end total deposits increased by $3.2 billion, or 2.6 percent, to $125.4 billion.The company?s Tier 1 common equity ratio of 8.4 percent dipped 40 basis points from 8.8 percent in the prior quarter. The first quarter of 2011 marked the final quarter of the regulatory phase-in of the implementation of FAS 166/167. The tangible common equity (TCE) ratio increased to 7.3 percent in the first quarter from 6.9 percent in the fourth quarter of 2010.?We expect that our strong capital and capital generation will enable us to deploy substantial capital for the benefit of our shareholders," said Gary L. Perlin, Capital One?s Chief Financial Officer. Segment ResultsThe company reports the results of its business through three operating segments: Credit Card, Commercial Banking and Consumer Banking. Please refer to the Financial Supplement for additional details. Credit Card HighlightsFor more lending information and statistics on the segment results, please refer to the Financial Supplement.Period-end loans in the Domestic Card segment were $50.6 billion in the first quarter, a decline of 6.1 percent from the prior quarter, as a result of the expected run-off of the Installment Loan portfolio and seasonal declines. Average loan balances in the quarter declined by 2.4 percent.Excluding the run-off of the Installment Loans, loans declined $2.7 billion, or 5.3 percent, in Domestic Card compared to the fourth quarter of 2010. First quarter Domestic Card purchase volumes grew $3.0 billion, or 13.8 percent, from the first quarter of 2010 but declined by $2.0 billion, or 7.3 percent, compared to the fourth quarter of 2010 due to seasonal patterns.Domestic Card revenue margin increased 56 basis points to 17.22 percent in the first quarter from 16.66 percent in the prior quarter driven by continued favorable credit impacts and mix shifts within the portfolio.Domestic Card provision expense decreased $275 million in the first quarter from the prior quarter. Strong underlying credit improvement trends, lower bankruptcy losses and higher recoveries more than offset expected seasonal headwinds.  International Card results were driven primarily by the acquisition of the Hudson?s Bay Company (HBC) private label credit card portfolio in the quarter. Credit card loans increased by $1.2 billion, or 16.1 percent, to $8.7 billion Inclusion of HBC drove non-interest expense higher by approximately $30 million for the quarterHigher provision was due primarily to a one-time allowance build for the HBC portfolio of $105 millionNet charge-off rates relative to the prior quarter:Domestic Card ? improved 108 basis points to 6.20 percent from 7.28 percentInternational Card ? improved 94 basis points to 5.74 percent from 6.68 percentDelinquency rates relative to the prior quarter:  Domestic Card ? improved 50 basis points to 3.59 percent from 4.09 percentInternational Card ? improved 20 basis points to 5.55 percent from 5.75 percentCommercial Banking HighlightsFor more lending information and statistics on the segment results, please refer to the Financial Supplement.The Commercial Banking segment consists of commercial and multi-family real-estate, middle market lending and specialty lending. Revenues of $392 million and period-end loans of $30.0 billion grew modestly compared to the fourth quarter.Provision expense decreased $49 million from the fourth quarter to a negative provision of $15 million as a result of an allowance release and improving net charge-offs in the quarter. Period-end deposits grew $1.6 billion, or 7.1 percent, from the fourth quarter to $24.2 billion. The deposit interest expense rate improved 6 basis points to 55 basis points.Net charge-off rate relative to the prior quarter: Total Commercial Banking ? improved 64 basis points to 0.79 percent from 1.43 percentCommercial lending ? improved 62 basis points to 0.38 percent from 1.0 percent Nonperforming asset rate relative to the prior quarter: Total Commercial Banking ? 1.95 percent, an increase of 15 basis points Commercial lending ? 1.86 percent, an increase of 10 basis pointsConsumer Banking HighlightsFor more lending information and statistics on the segment results, please refer to the Financial Supplement.Revenues increased $23 million in the first quarter to $1.2 billion, driven by higher margins in the Auto Finance business. Non-interest expense decreased $30 million during the quarter, due primarily to reduced marketing expenditures. Provision expense decreased $94 million, or nearly 50 percent, from the prior quarter as a result of better credit performance in Auto Finance, Home Loans and Retail Banking.Net charge-off rates relative to the prior quarter:Auto ? 1.98 percent, a decline of 67 basis pointsHome Loans ? 0.71 percent, a decline of 18 basis pointsRetail Banking ?  2.24 percent, a decline of 16 basis pointsPeriod-end loans were relatively stable in the first quarter with an increase in auto loans offset by continued run-off in home loans.  Period-end loans relative to the prior quarter: Auto ? growth of $475 million, or 2.7 percent, to $18.3 billion Home Loans ? a decline of $362 million, or 3.0 percent, to $11.7 billion, due to continued run-off of the portfolio Retail Banking ? a decline of $190 million, or 4.3 percent, to $4.2 billionDeposits in Consumer Banking showed strong growth in the quarter, with period-end deposits increasing $3.4 billion, or 4.1 percent from the fourth quarter, to $86.4 billion. Tier 1 common equity ratio and related ratios, as used throughout this release, are non-GAAP financial measures.  For additional information, see Table 12 in the Financial Supplement.Forward looking statements  The company cautions that its current expectations in this release dated April 21, 2011, and the company's plans, objectives, expectations, and intentions, are forward-looking statements which speak only as of the date hereof. The company does not undertake any obligation to update or revise any of the information contained herein whether as a result of new information, future events or otherwise.   Actual results could differ materially from current expectations due to a number of factors, including: general economic conditions in the U.S., the UK, Canada or the company's local markets, including conditions affecting consumer income, confidence, spending, and savings which may affect consumer bankruptcies, defaults, charge-offs, deposit activity, and interest rates; financial, legal, regulatory, tax or accounting changes or actions, including the impact of the Dodd-Frank Act and the regulations promulgated thereunder; developments, changes or actions relating to any litigation matter involving the company; increases or decreases in interest rates; the success of the company's marketing efforts in attracting or retaining customers; changes in the credit environment; increases or decreases in the company's aggregate loan balances or the number of customers and the growth rate and composition thereof; the level of future repurchase or indemnification requests the company may receive, the actual future performance of mortgage loans relating to such requests, the success rates of claimants against the company, any developments in litigation and the actual recoveries the company may make on any collateral relating to claims against it; changes in the reputation of or expectations regarding the financial services industry or the company with respect to practices, products, or financial condition; any significant disruption in the company?s operations or technology platform; the company's ability to execute on its strategic and operational plans; changes in the labor and employment market; and competition from providers of products and services that compete with the company's businesses. A discussion of these and other factors can be found in the company's annual report and other reports filed with the Securities and Exchange Commission, including, but not limited to, the company's report on Form 10-K for the fiscal year ended December 31, 2010.About Capital OneCapital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A. and Capital One Bank (USA), N. A., had $125.4 billion in deposits and $199.3 billion in total assets outstanding as of March 31, 2011. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients. Capital One, N.A. has approximately 1,000 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index. NOTE: First quarter 2011 financial results, SEC Filings, and earnings conference call slides are accessible on Capital One?s home page (www.capitalone.com). Choose ?Investors? on the bottom of the home page to view and download the earnings press release, slides and other financial information. Additionally, a podcast and webcast of the earnings conference call is accessible through the same link.Exhibit 99.2Capital One Financial CorporationFinancial SupplementFirst Quarter 2011Table of Contents Page Capital One Financial ConsolidatedTable   1:   Financial & Statistical Summary--Consolidated1Table   2:Notes to Consolidated Financial & Statistical Summary (Table 1)2Table   3:Consolidated Statements of Income3Table   4:Consolidated Balance Sheets4Table   5:Average Balances, Net Interest Income and Net Interest Margin 5Table   6:Loan Information and Performance Statistics6Business Segment DetailTable   7:Financial & Statistical Summary--Credit Card Business7Table   8:Financial & Statistical Summary--Consumer Banking Business8Table   9:Financial & Statistical Summary--Commercial Banking Business9Table 10:Financial & Statistical Summary--Other and Total10Table 11:Notes to Loan and Business Segment Disclosures (Tables 6 ? 10)11OtherTable 12:Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures12CAPITAL ONE FINANCIAL CORPORATION (COF)Table 1:  Financial & Statistical Summary?Consolidated201120102010(Dollars in millions, except per share data and as noted) (unaudited)Q1Q4Q1EarningsNet interest income$                   3,140$                   3,023$                   3,228Non-interest income (1)(2)9429391,061(3)Total revenue (4)$                   4,082$                   3,962$                   4,289Provision for loan and lease losses5348391,478Marketing expenses276308180Operating expenses (5)1,8861,7831,667Income from continuing operations before income taxes $                   1,386$                   1,032$                      964Income tax provision354331244Income from continuing operations, net of tax1,032701720Loss from discontinued operations, net of tax (2)(16)(4)(84)Net income$                   1,016$                      697$                      636Common Share StatisticsBasic EPS:   Income from continuing operations, net of tax$                     2.27$                     1.55$                     1.59   Loss from discontinued operations, net of tax(0.03)(0.01)(0.18)   Net income per common share $                     2.24$                     1.54$                     1.41Diluted EPS:   Income from continuing operations, net of tax$                     2.24$                     1.53$                     1.58   Loss from discontinued operations, net of tax(0.03)(0.01)(0.18)   Net income per common share$                     2.21$                     1.52$                     1.40Weighted average common shares outstanding:   Basic EPS454.1452.7451.0   Diluted EPS460.3457.2455.4Common shares outstanding (period end)455.2452.8451.9Dividends per common share$                     0.05$                     0.05$                     0.05Tangible book value per common share (period end) (6)                   29.70                   27.73                   22.86Stock price per common share (period end)                   51.96                   42.56                   41.41Total market capitalization (period end)                 23,652                 19,271                 18,713Balance Sheet (Period End)Loans held for investment$               124,092$               125,947$               130,115Interest-earning assets              172,849               172,024               174,237Total assets               199,300              197,503               200,708Tangible assets (7)               184,928               183,158               186,647Interest-bearing deposits               109,097               107,162               104,013Total deposits               125,446               122,210               117,787Borrowings                 39,797                 41,796                 52,672Stockholders' equity                 27,550                 26,541                 24,374Tangible common equity (TCE) (8)                 13,520                 12,558                 10,330Balance Sheet (Quarterly Average Balances)Average loans held for investment$               125,077$               125,441$               134,206Average interest-earning assets               173,540               173,992               181,902Average total assets               198,075               197,704               207,232Average interest-bearing deposits               108,633               106,597               104,018Average total deposits               124,158               121,736               117,530Average borrowings                 40,538                 42,428                 59,973Average stockholders' equity                 27,009                 26,255                 23,681Performance MetricsNet interest income growth (quarter over quarter) 4%(3)%65 % Non-interest income growth (quarter over quarter)04(25)Revenue growth (quarter over quarter)3(1)27Revenue margin (9)9.419.119.43Net interest margin (10)7.246.957.10Risk-adjusted margin (11)6.775.904.99Return on average assets (12)2.081.421.39Return on average equity (13)15.2810.6812.16Return on average tangible common equity (14)31.7322.9029.98Non-interest expense as a % of average loans held for investment (15)6.916.675.50Efficiency ratio (16)52.9652.7843.06Effective income tax rate25.532.125.3Full-time equivalent employees (in thousands)27.925.725.9Credit Quality Metrics (17)Allowance for loan and lease losses$                   5,067$                   5,628$                   7,752Allowance as a % of loans held for investment 4.08%4.47%5.96 % Net charge-offs $                   1,145$                   1,394$                   2,018Net charge-off rate (18)3.66%4.45%6.02 %  30+ day performing delinquency rate 3.113.604.22Capital RatiosTier 1 risk-based capital ratio (19)10.9%11.6%9.6 %  Tier 1 common equity ratio (20)8.48.86.5Total risk-based capital ratio (21)14.216.816.9Tangible common equity (TCE) ratio (22)7.36.95.5CAPITAL ONE FINANCIAL CORPORATION (COF) Table 2:  Notes to Consolidated Financial & Statistical Summary (Table 1)(1)Includes the impact from the change in fair value of retained interests, including interest-only strips, which totaled $7 million in Q1 2011, $8 million in Q4 2010, and $(36) million in Q1 2010.(2)The mortgage representation and warranty reserve increased to $846 million as of March 31, 2011, from $816 million as of December 31, 2010.    We recorded a provision for repurchase losses of $44 million in Q1 2011, $(7) million in Q4 2010, and $224 million in Q1 2010.  The majority of the provision for repurchase losses is included in discontinued operations, with the remaining portion included in non-interest income.  (3)During Q1 2010, certain mortgage trusts were deconsolidated as a result of the sale of interest-only bonds associated with the trusts. The net effect of the deconsolidation resulted in a gain of $128 million, which is included in non-interest income.(4)The estimated uncollectible portion of billed finance charges and fees excluded from revenue totaled $105 million in Q1 2011, $144 million in Q4 2010, and $354 million in Q1 2010.(5)Includes core deposit intangible amortization expense of $45 million in Q1 2011, $47 million in Q4 2010, and $52 million in Q1 2010 and integration costs of $2 million in Q1 2011, $15 million in Q4 2010, and $17 million in Q1 2010.(6)Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this measure.(7)Tangible assets is a non-GAAP measure consisting of total assets less assets from discontinued operations and intangible assets. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this measure.(8)Tangible common equity is a non-GAAP measure consisting of total stockholders' equity less intangible assets. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this measure.(9)Calculated based on annualized total revenue for the period divided by average interest-earning assets for the period.(10)Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.(11)Calculated based on annualized total revenue less net charge-offs for the period divided by average interest-earning assets for the period.(12)Calculated based on annualized income from continuing operations, net of tax, for the period divided by average total assets for the period. (13)Calculated based on annualized income from continuing operations, net of tax, for the period divided by average stockholders' equity for the period. (14)Calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible common equity for the period. (15)Calculated based on annualized non-interest expense, excluding restructuring and goodwill impairment charges, for the period divided by average loans held for investment for the period.(16)Calculated based on non-interest expense, excluding restructuring and goodwill impairment charges, for the period divided by total revenue for the period. (17)Purchased credit impaired (PCI) loans acquired as part of the Chevy Chase Bank (CCB) acquisition are included in the denominator used in calculating the credit quality metrics presented in Table 1.  These metrics excluding the impact of loans acquired from CCB from the denominator are presented below:201120102010(Dollars in millions) (unaudited)Q1Q4Q1CCB period-end acquired loan portfolio$        5,351$        5,532$        6,799CCB average acquired loan portfolio5,3055,6337,037Allowance as a % of loans held for investment, excluding CCB loans4.27%4.67%6.29%Net charge-off rate, excluding CCB loans3.824.656.3530+ day performing delinquency rate (Reported), excluding CCB3.253.764.46(18)Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.  Average loans held for investment include purchased credit impaired loans acquired as part of the Chevy Chase Bank acquisition. (19)Tier 1 risk-based capital ratio is a regulatory measure calculated based on Tier 1 capital divided by risk-weighted assets. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this ratio.(20)Tier 1 common equity ratio is a non-GAAP measure calculated based on Tier 1 common equity divided by risk-weighted assets. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this ratio and non-GAAP reconciliation.(21)Total risk-based capital ratio is regulatory capital measure calculated based on total risk-based capital divided by risk-weighted assets. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this ratio.(22)Tangible common equity ratio ("TCE ratio") is a non-GAAP measure calculated based on tangible common equity divided by tangible assets. See "Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for the calculation of this ratio and non-GAAP reconciliation.CAPITAL ONE FINANCIAL CORPORATION (COF)Table 3:  Consolidated Statements of IncomeThree Months EndedMarch 31,December 31,March 31,(Dollars in millions, except per share data) (unaudited)201120102010Interest income:Loans held for investment, including past-due fees$                 3,417$                 3,352$                 3,658Investment securities316305349Other191723Total interest income3,7523,6744,030Interest expense:Deposits322340399Securitized debt obligations146165242Senior and subordinated notes646568Other borrowings808193Total interest expense612651802Net interest income3,1403,0233,228Provision for loan and lease losses5348391,478Net interest income after provision for loan and lease losses2,6062,1841,750Non-interest income:Servicing and securitizations1112(36)Service charges and other customer-related fees525496585Interchange320350311Net other-than-temporary impairment losses recognized in earnings(3)(3)(31)Other8984232Total non-interest income9429391,061Non-interest expense:Salaries and associate benefits741657646Marketing276308180Communications and data processing164182169Supplies and equipment135139124Occupancy119114120Other727691608Total non-interest expense2,1622,0911,847Income from continuing operations before income taxes1,3861,032964Income tax provision354331244Income from continuing operations, net of tax1,032701720Loss from discontinued operations, net of tax(16)(4)(84)Net income$                 1,016$                    697$                    636Basic earnings per common share:  Income from continuing operations, net of tax$                   2.27$                   1.55$                   1.59  Loss from discontinued operations, net of tax(0.03)(0.01)(0.18)  Net income per common share$                   2.24$                   1.54$                   1.41Diluted earnings per common share:  Income from continuing operations$                   2.24$                   1.53$                   1.58  Loss from discontinued operations(0.03)(0.01)(0.18)  Net income per common share$                   2.21$                   1.52$                   1.40Weighted average common shares outstanding (in millions):   Basic EPS454.1452.7451.0   Diluted EPS460.3457.2455.4Dividends per common share$                   0.05$                   0.05$                   0.05CAPITAL ONE FINANCIAL CORPORATION (COF) Table 4:  Consolidated Balance SheetsMarch 31,December 31,March 31,(Dollars in millions)(unaudited)201120102010Assets:Cash and due from banks$                 2,028$                 2,067$                 2,929Interest-bearing deposits with banks5,3972,7764,092Federal funds sold and repurchase agreements546406477Cash and cash equivalents7,9715,2497,498Restricted cash for securitization investors2,5561,6023,286Securities available for sale, at fair value41,56641,53738,251Loans held for investment:Unsecuritized loans held for investment, at amortized cost75,18471,92172,592Restricted loans for securitization investors48,90854,02657,523Total loans held for investment124,092125,947130,115    Less: Allowance for loan and lease losses(5,067)(5,628)(7,752)Net loans held for investment119,025120,319122,363Loans held for sale, at lower-of-cost-or-fair-value117228248Accounts receivable from securitizations112118206Premises and equipment, net2,7392,7492,735Interest receivable1,0251,0701,135Goodwill13,59713,59113,589Other10,59211,04011,397Total assets$             199,300$             197,503$             200,708Liabilities:Interest payable$                    411$                    488$                    522Customer deposits:Non-interest bearing deposits16,34915,04813,773Interest-bearing deposits109,097107,162104,013Total customer deposits125,446122,210117,786Securitized debt obligations24,50626,91537,830Other debt:Federal funds purchased and securities loaned or sold under agreements to repurchase1,9701,517840Senior and subordinated notes8,5458,6509,134Other borrowings4,7764,7144,868Total other debt15,29114,88114,842Other liabilities6,0966,4685,353Total liabilities171,750170,962176,333Stockholders' equity:Common stock555Paid-in capital, net19,14119,08418,991Retained earnings and accumulated other comprehensive income11,64410,6548,577Less:  Treasury stock, at cost(3,240)(3,202)(3,198)Total stockholders' equity27,55026,54124,375Total liabilities and stockholders' equity$             199,300$             197,503$             200,708CAPITAL ONE FINANCIAL CORPORATION (COF)  Table 5:  Average Balances, Net Interest Income and Net Interest MarginQuarter Ended 03/31/11Quarter Ended 12/31/10Quarter Ended 03/31/10(Dollars in millions)(unaudited)AverageBalanceInterest Income/Expense Yield/ RateAverageBalanceInterest Income/Expense Yield/ RateAverageBalanceInterest Income/Expense Yield/ RateInterest-earning assets:Loans held for investment$       125,077$        3,41710.93%$       125,441$        3,35210.69%$       134,206$        3,65810.90%Investment securities 41,5323163.0441,0043052.9838,0873493.67Other6,931191.107,547170.909,609230.96Total interest-earning assets $       173,540$        3,7528.65%$       173,992$        3,6748.45%$       181,902$        4,0308.86%Interest-bearing liabilities:Interest-bearing depositsNOW accounts$         13,648$               90.26%$         12,918$               80.25%$         12,276$             160.52%Money market deposit accounts45,6131100.9643,8221101.0039,364960.98Savings accounts26,801550.8225,121540.8618,627420.90Other consumer time deposits15,344992.5816,9411122.6424,2531742.87Public fund CD's of $100,000 or more14912.6820411.9640022.00CD's of $100,000 or more6,097473.086,696543.238,180683.33Foreign time deposits98110.4189510.4591810.44Total interest-bearing deposits$       108,633$           3221.19%$       106,597$           3401.28%$       104,018$           3991.53%Securitized debt obligations25,5151462.2927,7081652.3845,5812422.12Senior and subordinated notes8,090643.168,096653.218,757683.11Other borrowings6,933804.626,624814.895,634936.60Total interest-bearing liabilities$       149,171$           6121.64%$       149,025$           6511.75%$       163,990$           8021.96%Net interest income/spread$        3,1407.01%$        3,0236.70%$        3,2286.90%Interest income to average interest-earning assets8.65%8.45%8.86%Interest expense to average interest-earning assets1.411.501.76Net interest margin7.24%6.95%7.10%CAPITAL ONE FINANCIAL CORPORATION (COF) Table 6: Lending Information and Statistics201120102010(Dollars in millions)(unaudited)Q1Q4Q1Period-end loans held for investmentCredit card:   Domestic credit card$                    50,570$                    53,849$                    56,228   International credit card8,7357,5227,578      Total credit card59,30561,37163,806Consumer banking:   Automobile18,34217,86717,446   Home loan11,74112,10313,967   Retail banking4,2234,4134,970      Total consumer banking34,30634,38336,383Commercial banking:   Commercial and multifamily real estate13,54313,39613,618   Middle market10,75810,48410,310   Specialty lending3,9364,0203,619      Total commercial lending28,23727,90027,547   Small-ticket commercial real estate1,7801,8422,065      Total commercial banking30,01729,74229,612Other loans (1)464451464     Total $                  124,092$                  125,947$                  130,265Average loans held for investmentCredit card:   Domestic credit card$                    51,889$                    53,189$                    58,108   International credit card8,6977,4197,814      Total credit card60,58660,60865,922Consumer banking:   Automobile18,02517,76317,769   Home loan11,96012,52215,434   Retail banking4,2514,4665,042      Total consumer banking34,23634,75138,245Commercial banking:   Commercial and multifamily real estate13,34513,32313,716   Middle market10,66610,46010,324   Specialty lending3,9643,9473,609      Total commercial lending27,97527,73027,649   Small-ticket commercial real estate1,8181,8872,074      Total commercial banking29,79329,61729,723Other loans (1)462465489      Total$                  125,077$                  125,441$                  134,379Net charge-off ratesCredit card:   Domestic credit card6.20%7.28%10.48%   International credit card5.746.688.83      Total credit card6.13%7.21%10.29%Consumer banking:   Automobile1.98%2.65%2.97%   Home loan(2)0.710.890.94   Retail banking(2)2.242.402.11      Total consumer banking(2)1.57%1.98%2.03%Commercial banking:   Commercial and multifamily real estate(2)0.56%1.15%1.45%   Middle market (2)0.180.940.82   Specialty lending0.300.630.90      Total commercial lending(2)0.38%1.00%1.14%   Small-ticket commercial real estate7.147.724.43      Total commercial banking(2)0.79%1.43%1.37%Other loans19.91%21.11%18.82%      Total3.66%4.45%6.01%30+ day performing delinquency ratesCredit card:   Domestic credit card3.59%4.09%5.30%   International credit card5.555.756.39      Total credit card3.88%4.29%5.43%Consumer banking:   Automobile5.79%7.58%7.10%   Home loan(2)0.610.640.93   Retail banking(2)0.930.931.02      Total consumer banking(2)3.42%4.28%3.90%Nonperforming asset rates(3) (4)Consumer banking:   Automobile0.39%0.64%0.55%   Home loan(2)4.344.253.17   Retail banking(2)2.442.662.07      Total consumer banking(2)2.00%2.17%1.76%Commercial banking:   Commercial and multifamily real estate(2)2.63%2.23%3.65%   Middle market (2)1.141.331.15   Specialty lending1.191.302.18      Total commercial lending(2)1.86%1.76%2.52%   Small-ticket commercial real estate3.392.384.18      Total commercial banking(2)1.95%1.80%2.64%CAPITAL ONE FINANCIAL CORPORATION (COF) Table 7:  Financial & Statistical Summary - Credit Card Business201120102010(Dollars in millions) (unaudited)Q1Q4Q1Credit CardEarnings:  Net interest income$                      1,941$                      1,870$                      2,113  Non-interest income674672718  Total revenue$                      2,615$                      2,542$                      2,831  Provision for loan and lease losses4505891,175  Non-interest expense1,1781,056914  Income from continuing operations before taxes987897742  Income tax provision344311253  Income from continuing operations, net of tax$                         643$                         586$                         489Selected metrics:  Period end loans held for investment$                    59,305$                    61,371$                    63,806  Average loans held for investment60,58660,60865,922  Loans held for investment yield14.93%13.97%14.88%  Revenue margin17.2616.7817.18  Net charge-off rate6.137.2110.29  30+ day performing delinquency rate3.884.295.43  Purchase volume (5)$                    27,797$                    29,379$                    23,924Domestic CardEarnings:  Net interest income$                      1,651$                      1,621$                      1,865  Non-interest income583594618  Total revenue$                      2,234$                      2,215$                      2,483  Provision for loan and lease losses2305051,096  Non-interest expense990935809  Income from continuing operations before taxes1,014775578  Income tax provision360276206  Income from continuing operations, net of tax$                         654$                         499$                         372Selected metrics:  Period end loans held for investment$                    50,570$                    53,849$                    56,228  Average loans held for investment51,88953,18958,108  Loans held for investment yield14.65%13.57%14.78%  Revenue margin17.2216.6617.09  Net charge-off rate6.207.2810.48  30+ day performing delinquency rate3.594.095.30  Purchase volume (5)$                    25,024$                    26,985$                    21,988International CardEarnings:  Net interest income$                         290$                         249$                         248  Non-interest income9178100  Total revenue$                         381$                         327$                         348  Provision for loan and lease losses2208479  Non-interest expense188121105  Income (loss) from continuing operations before taxes(27)122164  Income tax provision (benefit)(16)3547  Income (loss) from continuing operations, net of tax$                         (11)$                           87$                         117Selected metrics:  Period end loans held for investment$                      8,735$                      7,522$                      7,578  Average loans held for investment8,6977,4197,814  Loans held for investment yield16.65%16.82%15.66%  Revenue margin17.5217.6317.81  Net charge-off rate5.746.688.83  30+ day performing delinquency rate5.555.756.39  Purchase volume (5)$                      2,773$                      2,394$                      1,936CAPITAL ONE FINANCIAL CORPORATION (COF) Table 8:  Financial & Statistical Summary - Consumer Banking Business201120102010(Dollars in millions) (unaudited)Q1Q4Q1Consumer BankingEarnings:Net interest income$                         983$                         950$                         896Non-interest income186196316Total revenue$                      1,169$                      1,146$                      1,212Provision for loan and lease losses9518950Non-interest expense740770688Income from continuing operations before taxes334187474Income tax provision11967169Income from continuing operations, net of tax$                         215$                         120$                         305Selected metrics:Period end loans held for investment$                    34,306$                    34,383$                    36,383Average loans held for investment34,23634,75138,245Loans held for investment yield9.60%9.20%8.96%Auto loan originations$                      2,571$                      2,217$                      1,343Period end deposits86,35582,95976,883Average deposits83,88481,83475,115Deposit interest expense rate1.06%1.13%1.27%Core deposit intangible amortization$                           35$                           34$                           38Net charge-off rate (2)1.57%1.98%2.03%Nonperforming loans as a percentage of loans held for investment (2)(3)1.841.971.62Nonperforming asset rate (2) (3)2.002.171.7630+ day performing delinquency rate (2) (3)3.424.283.90Period end loans serviced for others$                    19,956$                    20,689$                    26,778CAPITAL ONE FINANCIAL CORPORATION (COF) Table 9:  Financial & Statistical Summary - Commercial Banking Business201120102010(Dollars in millions) (unaudited)Q1Q4Q1Commercial BankingEarnings:Net interest income$                         321$                         336$                         312Non-interest income714942Total revenue$                         392$                         385$                         354Provision for loan and lease losses(15)34238Non-interest expense177207192Income (loss) from continuing operations before taxes230144(76)Income tax provision (benefit)8251(27)Income (loss) from continuing operations, net of tax$                         148$                           93$                         (49)Selected metrics:Period end loans held for investment$                    30,017$                    29,742$                    29,612Average loans held for investment29,79329,61729,723Loans held for investment yield4.80%5.13%5.03%Period end deposits$                    24,244$                    22,630$                    21,605Average deposits24,13822,80821,859Deposit interest expense rate0.55%0.61%0.72%Core deposit intangible amortization$                           11$                           13$                           14Net charge-off rate (2)0.79%1.43%1.37%Nonperforming loans as a percentage of loans held for investment (2)1.841.662.48Nonperforming asset rate (2)1.951.802.64Internal risk ratings criticized loans: (6)Noncriticized$                    26,983$                    26,663$                    25,519Criticized performing1,9192,0252,483Criticized nonperforming553494735Total non-PCI loans29,45529,18228,737Total PCI loans562560875Total$                    30,017$                    29,742$                    29,612% of period end held for investment commercial loans:Noncriticized89.89%89.65%86.18%Criticized performing6.396.818.39Criticized nonperforming1.841.662.48Total non-PCI loans98.13%98.12%97.05%Total PCI loans1.871.882.95Total100.00%100.00%100.00%CAPITAL ONE FINANCIAL CORPORATION (COF) Table 10:  Financial & Statistical Summary - Other and Total Segment  201120102010(Dollars in millions) (unaudited)Q1Q4Q1OtherEarnings:Net interest income (expense)$                       (105)$                       (133)$                         (91)Non-interest income (expense)1122(14)Total revenue$                         (94)$                       (111)$                       (105)Provision for loan and lease losses42718Non-interest expense675853Income (loss) from continuing operations before taxes(165)(196)(176)Income tax benefit(191)(98)(151)Income (loss) from continuing operations, net of tax$                           26$                         (98)$                         (25)Selected metrics:Period end loans held for investment (1)$                         464$                         451$                         464Average loans held for investment (1)462465489Period end deposits14,84716,62119,299Average deposits16,13617,09420,556TotalEarnings:Net interest income$                      3,140$                      3,023$                      3,230Non-interest income9429391,062Total revenue$                      4,082$                      3,962$                      4,292Provision for loan and lease losses5348391,481Non-interest expense2,1622,0911,847Income from continuing operations before taxes1,3861,032964Income tax provision354331244Income from continuing operations, net of tax$                      1,032$                         701$                         720Selected metrics:  Period end loans held for investment$                  124,092$                  125,947$                  130,265  Average loans held for investment125,077125,441134,379  Period end deposits125,446122,210117,787  Average deposits124,158121,736117,530CAPITAL ONE FINANCIAL CORPORATION (COF) Table 11:  Notes to Loan and Segment Disclosures (Tables 6 ? 10)(1)Other loans held for investment includes unamortized premiums and discounts on loans acquired as part of the North Fork and Hibernia acquisitions.(2)Purchased credit impaired loans acquired as part of the Chevy Chase Bank (CCB) acquisition are included in the denominator used in calculating the credit quality ratios presented in Tables 6-10.  These metrics excluding the impact of loans acquired from CCB from the denominator are presented below:201120102010(Dollars in millions) (unaudited) Q1Q4Q1CCB period end acquired loan portfolio$            5,351$            5,532$            6,799CCB average acquired loan portfolio            5,305            5,633            7,037Net charge-off rates  Consumer banking:      Home loan1.16%1.46%1.02%     Retail banking2.322.492.22         Total consumer banking1.82%2.32%2.28%Commercial banking:     Commercial and multifamily real estate0.57%1.17%1.48%     Middle market0.180.970.87         Total commercial lending0.38%1.02%1.48%         Total commercial banking0.80%1.45%1.41%30+ day performing delinquency rates  Consumer banking:     Home loan1.02%1.06%1.58%     Retail banking0.930.971.07         Total consumer banking3.98%5.01%4.67%Nonperforming asset rates  Consumer banking:     Home loan7.24%7.05%5.36%     Retail banking2.442.772.17         Total consumer banking2.32%2.54%2.11%  Commercial banking:     Commercial and multifamily real estate2.68%2.28%3.71%     Middle market1.171.361.23         Total commercial lending1.90%1.79%2.60%         Total commercial banking1.99%1.83%2.72%Nonperforming loans as a percentage of loans held for investment  Consumer banking2.14%2.30%1.93%  Commercial banking1.881.692.55(3)Nonperforming assets consist of nonperforming loans and real estate owned ("REO") and foreclosed assets. The nonperforming asset ratios are calculated based on nonperforming assets for each segment divided by the combined total of loans held for investment, REO and foreclosed assets for each respective segment.(4)As permitted by regulatory guidance, our policy is generally to exempt delinquent credit card loans from being classified as nonperforming. We continue to accrue finance charges and fees on credit card loans until the loan is charged off, typically when the account becomes 180 days past due.  Billed finance charges and fees considered uncollectible are not recognized in income.(5)Includes credit card purchase transactions net of returns.  Excludes cash advance transactions.(6)Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by banking regulatory authorities.CAPITAL ONE FINANCIAL CORPORATION (COF)Table 12: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital MeasuresIn addition to disclosing required regulatory capital measures, we also report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include average tangible common equity, tangible common equity (TCE), TCE ratio, Tier 1 common equity and Tier 1 common equity ratio. The table below provides the details of the calculation of each of these measures. While these non-GAAP capital measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies. (Dollars in millions)(unaudited)2011Q12010Q42010Q1Average Equity to Non-GAAP Average Tangible Common EquityAverage total stockholders' equity$          27,009$          26,255$          23,681Less:  Average intangible assets (1)(14,001)(14,008)(14,075)Average tangible common equity$          13,008$          12,247$            9,606Stockholders' Equity to Non-GAAP Tangible Common EquityTotal stockholders' equity$          27,550$          26,541$          24,374Less:  Intangible assets (1)(14,030)(13,983)(14,044)Tangible common equity$          13,520$          12,558$          10,330Total Assets to Tangible AssetsTotal assets$        199,300$        197,503$        200,708Less:  Assets from discontinued operations(342)(362)(16)Total assets from continuing operations198,958197,141200,692Less:  Intangible assets (1)(14,030)(13,983)(14,044)Tangible assets$        184,928$        183,158$        186,648Non-GAAP TCE RatioTangible common equity$          13,520$          12,558$          10,330Tangible assets184,928183,158186,648TCE ratio(2)7.3%6.9%5.5%Non-GAAP Tier 1 Common Equity and Regulatory Capital RatiosTotal stockholders' equity$          27,550$          26,541$          24,374Less:  Net unrealized (gains) losses on AFS securities recorded in AOCI (3)(314)(368)(319)     Net (gains) losses on cash flow hedges recorded in AOCI(3)958680     Disallowed goodwill and other intangible assets(13,993)(13,953)(14,078)     Disallowed deferred tax assets(1,377)(1,150)(2,183)     Other (2)(2)(1)Tier 1 common equity$          11,959$          11,154$            7,873Plus:  Tier 1 restricted core capital items(4)3,6363,6363,638Tier 1 capital$          15,595$          14,790$          11,511Plus:  Long-term debt qualifying as Tier 2 capital2,8272,8273,018     Qualifying allowance for loan and lease losses1,8253,7485,802     Other Tier 2 components20294Tier 2 capital$            4,672$            6,604$            8,824Total risk-based capital(5)$          20,267$          21,394$          20,335Risk-weighted assets(6)$        142,495$        127,043$        120,330Tier 1 common equity ratio (7)8.4%(10)8.8%6.5%Tier 1 risk-based capital ratio (8)10.9%(10)11.6%9.6%Total risk-based capital ratio (9)14.2%(10)16.8%16.9%(1)  Includes impact from related deferred taxes.   (2)  Calculated based on tangible common equity divided by tangible assets.     (3)  Amounts presented are net of tax.   (4)  Consists primarily of trust preferred securities.   (5)  Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital.   (6)  Calculated based on prescribed regulatory guidelines.   (7)  Tier 1 common equity ratio is a non-GAAP measure calculated based on Tier 1 common equity divided by risk-weighted assets.   (8)  Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighed assets. (9)  Total risk-based capital ratio is a regulatory capital measure calculated based on total risk-based capital divided by risk-weighed assets.   (10)  Regulatory capital ratios as of the end of Q1 2011 are preliminary and therefore subject to change once the calculations have been finalized.    SOURCE Capital One Financial CorporationFor further information: Jeff Norris, Investor Relations, +1-703-720-2455, Danielle Dietz, Investor Relations, +1-703-720-2455, Tatiana Stead, Media Relations, +1-703-720-2352, or Julie Rakes, Media Relations, +1-804-284-5800