Capital One Reports Fourth Quarter 2009 Net Income of $375.6 million, or $0.83 per share (diluted)

Earnings for full year 2009 of $319.9 million, or $0.74 per share (diluted) including the ($563.9) million, or ($1.31) per share, impact to net income from the repayment of the government’s TARP preferred share investment

Jan 21, 2010, 16:26 ET from Capital One Financial Corporation

MCLEAN, Va., Jan. 21 /PRNewswire-FirstCall/ --

Highlights

  • Managed net interest margin of 6.90 percent and revenue margin of 9.50 percent remained stable in the fourth quarter relative to the prior quarter.
  • Managed provision expense decreased $353.5 million from the prior quarter and was essentially flat in 2009 as compared to 2008 at $8.0 billion.
  • Non-interest expenses were up 8.1 percent in the quarter as marketing began to increase from unusually low levels earlier in 2009, and operating expenses increased as expected.
  • Tangible common equity to tangible managed assets, or “TCE ratio,” increased to 6.3 percent, up 10 basis points from the September 30, 2009 ratio of 6.2 percent, and Tier 1 capital to risk-weighted assets, or Tier 1 ratio, rose to 13.8 percent.

Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2009 of $375.6 million, or $0.83 per common share (diluted), versus third quarter 2009 net income of $393.5 million, or $0.88 per common share (diluted). For the full year of 2009, net income was $319.9 million, or $0.74 per share (diluted), including the ($563.9) million, or ($1.31) per share, impact to net income from the repayment of the government’s TARP preferred share investment. This compares to a loss in 2008 of $78.7 million, or ($0.21) per share (diluted), which included a pre-tax goodwill impairment charge of $810.9 million in the automobile business.

“Capital One posted solid results as our domestic credit card and auto finance businesses delivered strong profits and resilience during the quarter despite challenging economic and credit headwinds,” said Richard D. Fairbank, Capital One’s Chairman and Chief Executive Officer.  “Given our balance sheet strength and the stabilizing economy, we are well-positioned to take advantage of emerging opportunities to deliver value to our shareholders and customers."

Total Company Results

  • Total managed revenue in the fourth quarter of 2009 declined $215.7 million, or 4.7 percent, to $4.4 billion. The main driver of lower revenue was fewer gains from securities sales compared to the prior quarter. Managed non-interest income decreased $173.8 million in the fourth quarter, or 12.7 percent, relative to the prior quarter, while net interest income decreased $41.9 million, or 1.3 percent. Managed revenue in 2009 was flat compared to 2008 at approximately $16.8 billion as a 2.9 percent decrease in average loans year over year was offset by slightly higher margins.
  • Managed provision expense decreased $353.5 million from the prior quarter.  A $386.1 million allowance release in the quarter more than offset an increase in charge-offs, driving the decrease in provision expense. The fourth quarter allowance releases in both Credit Card and Auto more than offset the allowance builds in Commercial and Consumer Banking.    
  • Allowance as a percentage of reported loans was 4.55 percent in the fourth quarter of 2009 as compared to 4.67 percent in the prior quarter.
  • Average total deposits decreased by $1.3 billion, or 1.1 percent, over the prior quarter, to $114.6 billion. Period-end total deposits increased by $1.3 billion to $115.8 billion as a result of the increase in deposits late in the quarter.
  • The cost of managed interest-bearing liabilities decreased to 2.16 percent from 2.28 percent in the prior quarter as the company replaced higher-cost time deposits with money market and savings accounts, and increased the amount of non-interest bearing deposits. The overall cost of funds declined 12 basis points to 2.00 percent in the fourth quarter.
  • Average managed assets decreased $4.2 billion, or 2.0 percent, relative to the prior quarter, to $210.4 billion, driven primarily by reductions in loans held for investment. Period-end total managed assets increased by 1.2 percent over the prior quarter to $212.1 billion.
  • Non-interest expenses increased $145.9 million in the fourth quarter of 2009 from the prior quarter, driven primarily by increased marketing. Marketing increased $84.3 million, or 81.3 percent from the prior quarter. The managed efficiency ratio of 43.85 percent in the fourth quarter of 2009 was up 5.1 percentage points from 38.73 percent in the prior quarter.  
  • Non-interest expenses for the full year 2009 were essentially flat compared to 2008 at $7.4 billion, excluding goodwill impairment. In response to lower loan demand and economic uncertainty, the company decreased marketing spend in 2009. This decrease was offset by the addition of Chevy Chase Bank operating expenses.
  • The company’s TCE ratio increased to 6.3 percent on December 31, 2009, from 6.2 percent in the prior quarter. The Tier 1 risk-based capital ratio of approximately 13.8 percent increased 200 basis points relative to the prior quarter, and continues to be well above the regulatory well-capitalized minimum.

"We navigated a very challenging 2009, produced solid results and strengthened our position with additional capital and historically high allowance coverage ratios," said Gary Perlin. “The strength of our balance sheet will continue to enable us to make the investments necessary to generate profitable growth into the future."  

Segment Results

The 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 Highlights

For details on the sub-segments’ results, please refer to the Financial Supplement.

The Credit Card segment reported net income in the fourth quarter of $509.9 million, an increase of $218.2 million, or 74.8 percent, from the prior quarter’s net income of $291.7 million. Lower provision expense in the quarter was the key driver of the improved profitability.  

  • Revenues of $2.9 billion were down $64.9 million, or 2.2 percent, relative to the prior quarter.
    • Domestic Card – revenues down $77.2 million, or 2.9 percent.
    • International Card – revenues up $12.4 million, or 3.7 percent.
  • Revenue margin in the Domestic Card sub-segment improved to approximately 17.0 percent in the fourth quarter, up from 16.8 percent in the prior quarter. In 2010, we expect quarterly revenue margin to moderate, but remain close to its fourth quarter 2009 level.
  • Period-end loans in the Credit Card segment were $68.5 billion, a decline of $1.8 billion, or 2.6 percent, from the prior quarter.
    • Domestic Card – loans declined $1.6 billion, or 2.6 percent, to $60.3 billion at the end of the fourth quarter. Approximately $1.0 billion of the decline came from the continued run-off of the company’s nationally-originated Installment Loans.
    • International Card – loans declined $0.3 billion, or 3.0 percent, to $8.2 billion.
  • The managed net charge-off rate for the Credit Card segment remained essentially flat at 9.58 percent in the fourth quarter of 2009.
    • Domestic Card – net charge-offs decreased 5 basis points to 9.59 percent in the fourth quarter from 9.64 percent in the prior quarter.
    • International Card – net charge-offs increased 33 basis points to 9.52 percent from 9.19 percent in the prior quarter.      
  • The 30+ day performing delinquency rate for the Credit Card segment increased 35 basis points to 5.88 percent in the fourth quarter of 2009 from 5.53 percent in the prior quarter.
    • Domestic Card – delinquencies increased 40 basis points to 5.78 percent from 5.38 percent in the prior quarter.
    • International Card – delinquencies decreased 8 basis points to 6.55 percent from 6.63 percent in the prior quarter.

Commercial Banking Highlights

For 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, which are summarized under Commercial Lending, and small ticket commercial real estate. The total segment reported a net loss of $136.0 million in the fourth quarter, relative to a net loss of $127.7 million in the prior quarter. Commercial Banking revenue increased $12.0 million, or 3.5 percent, to $356.6 million in the fourth quarter of 2009, while non-interest expense increased $31.3 million, or 18.9 percent, to $197.4 million. Increases in non-interest expense were driven by rising costs associated with managing loss mitigation and continuing infrastructure investments.

  • Average loans of $29.9 billion declined $206.1 million, or 0.7 percent, during the fourth quarter from $30.1 billion during the prior quarter.
    • Commercial lending – declined $89.4 million, or 0.3 percent, to $27.5 billion.
    • Small ticket commercial real estate – declined $116.8 million, or 4.7 percent, to $2.4 billion.
  • Average deposits increased $1.7 billion, or 9.3 percent, to $19.4 billion during the fourth quarter from $17.8 billion during the prior quarter, while the deposit interest expense rose to 80 basis points.
  • Provision expense decreased $6.6 million relative to the prior quarter.
  • The managed net charge-off rate for Commercial Banking increased 149 basis points in the fourth quarter of 2009 to 2.91 percent from 1.42 percent in the prior quarter.
    • Commercial lending – 2.04 percent, an increase of 96 basis points over the prior quarter.
    • Small ticket commercial real estate – 13.08 percent, an increase of 789 basis points over the prior quarter. The increase in the charge-of rate is primarily related to the write-down of a portfolio of small ticket CRE non-performing loans as the company moved them to held-for-sale. This move also resulted in a drop in the non-performing asset rate for small ticket CRE from 11.39 percent in the third quarter to 4.87 percent in the fourth quarter.
    • Non-performing loans as a percentage of loans held for investment for Commercial Banking was 2.37 percent, a decrease of 28 basis points from 2.65 percent at the end of the prior quarter.

Consumer Banking highlights

For more lending information and statistics on the segment’s results, please refer to the Financial Supplement.

Consumer Banking reported a net loss for the fourth quarter of $7.7 million compared to net income of $145.2 million in the third quarter. Revenue declined $73.9 million in the quarter.  Provision expense increased $93.3 million, driven by seasonal increases in Auto Finance and continued deterioration in mortgage and home equity credit trends.  Non-interest expense increased $68.1 million, or 10 percent relative to the prior quarter, as a result of several factors including planned expenses related to the integration of Chevy Chase Bank and investments to build a scalable banking infrastructure to ensure that the company is well positioned to take advantage of opportunities to grow our banking business.  

  • Average loans declined $2.0 billion, or 4.8 percent, to $39.1 billion compared to average loans of $41.1 billion in the prior quarter. Auto finance loans declined as a result of the company’s earlier efforts to retrench the auto finance business.  Mortgage loans declined as the company continued to experience expected run off in the portfolio.
    • Auto – declined $868.4 million, or 4.4 percent, to $18.8 billion.
    • Mortgage – declined $581.0 million, or 3.6 percent, to $15.3 billion.
    • Retail banking – declined $512.3 million, or 9.3 percent, to $5.0 billion.
  • Average deposits in the Consumer Banking segment declined $0.3 billion, or 0.4 percent, to $73.0 billion during the fourth quarter from $73.3 billion in the prior quarter. Improved deposit mix and favorable interest rates drove a 17 basis point improvement in the deposit interest expense rate in the fourth quarter.
  • The managed net charge-off rate for Consumer Banking increased 16 basis points in the fourth quarter of 2009 to 2.85 percent from 2.69 percent in the prior quarter. The increase in Auto charge-offs resulted primarily from expected seasonal patterns and the impact of the decline in the denominator. Mortgage charge-offs were essentially flat.
    • Auto – 4.55 percent, an increase of 17 basis points
    • Mortgage – 0.71 percent, an increase of 2 basis points
    • Retail banking –  3.03 percent, an increase of 59 basis points

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.

Forward looking statements  

The company cautions that its current expectations in this release dated January 21, 2010; and the company’s plans, objectives, expectations, and intentions, are forward-looking statements. Actual results could differ materially from current expectations due to a number of factors, including: general economic conditions in the U.S., the UK, 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; changes in the labor and employment market; changes in the credit environment; the company’s ability to execute on its strategic and operational plans; competition from providers of products and services that compete with the company’s businesses; increases or decreases in the company’s aggregate accounts and balances, or the growth rate and/or composition thereof; changes in the reputation of or expectations regarding the financial services industry or the company with respect to practices, products or financial condition; financial, legal, regulatory, tax or accounting changes or actions, including with respect to any litigation matter involving the company; and the success of the company’s marketing efforts in attracting or retaining customers. 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 reports on Form 10-K for the fiscal year ended December 31, 2008 and reports on Form 10-Q for the quarters ended March 31, 2009, June 30, 2009, and September 30, 2009.

About Capital One

Capital 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 $115.8 billion in deposits and $212.0 billion in total managed assets outstanding as of December 31, 2009. 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: Fourth quarter 2009 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 today’s 4:30 pm (ET) earnings conference call is accessible through the same link.

CAPITAL ONE FINANCIAL CORPORATION (COF)

FINANCIAL & STATISTICAL SUMMARY

REPORTED BASIS

(in millions, except per share data and as noted)

2009

Q4

2009

Q3 (8)

2008

Q4

Earnings (Reported Basis)

Net Interest Income

$   1,954.2   

$   2,005.2   

$   1,802.4   

Non-Interest Income (2)

1,411.7   

1,552.4   

1,368.3   

Total Revenue (1)

3,365.9   

3,557.6   

3,170.7   

Provision for Loan Losses

843.7   

1,173.2   

2,098.9   

Marketing Expenses

188.0   

103.7   

264.9   

Restructuring Expenses

32.0   

26.4   

52.8   

Goodwill Impairment Charge

-   

-   

810.9   

    (5)

Operating Expenses (3)

1,728.0   

1,672.0   

1,629.3   

Income (Loss) Before Taxes

574.2   

582.3   

(1,686.1)  

Tax Rate

29.7   

%

24.9   

%

17.2   

Income (Loss) From Continuing Operations, Net of Tax

$   403.9   

$   437.1   

$ (1,396.3)  

Loss From Discontinued Operations, Net of Tax

(28.3)  

(43.6)  

(25.2)  

Net Income (Loss)

$   375.6   

$   393.5   

$   (1,421.5)  

Net Income (Loss) Available to Common Shareholders (F)

$   375.6   

$   393.5   

$   (1,454.3)  

Common Share Statistics

Basic EPS: (G)

  Income (Loss) From Continuing Operations

$   0.90   

$   0.97   

$   (3.67)  

  Loss From Discontinued Operations

$   (0.07)  

$   (0.09)  

$   (0.07)  

  Net Income (Loss)

$   0.83   

$   0.88   

$   (3.74)  

Diluted EPS: (G)

  Income (Loss) From Continuing Operations

$   0.89   

$   0.96   

$   (3.67)  

  Loss From Discontinued Operations

$   (0.06)  

$   (0.09)  

$   (0.07)  

  Net Income (Loss)

$   0.83   

$   0.87   

$   (3.74)  

Dividends Per Common Share

$   0.05   

$    0.05   

$    0.375   

Tangible Book Value Per Common Share (period end)

$   27.72   

$   26.86   

$   28.23   

Stock Price Per Common Share (period end)

$   38.34   

$   35.73   

$   31.89   

Total Market Capitalization (period end)

$   17,268.3   

$   16,064.2   

$   12,411.6   

Common Shares Outstanding (period end)

450.4   

449.6   

389.2   

Shares Used to Compute Basic EPS

450.0   

449.4   

389.0   

Shares Used to Compute Diluted EPS

454.9   

453.7   

389.0   

Reported Balance Sheet Statistics (period average) (A)

Average Loans Held for Investment

$   94,732   

$   99,354   

$   99,335   

Average Earning Assets

$   143,663   

$   145,280   

$   137,799   

Average Assets

$   169,856   

$   173,428   

$   161,968   

Average Interest Bearing Deposits

$   101,144   

$   103,105   

$   93,144   

Total Average Deposits

$   114,597   

$   115,883   

$   104,093   

Average Equity

$   26,518   

$   26,002   

$   26,658   

   (7)

Return on Average Assets (ROA)

0.95   

%

1.01   

%

(3.45)  

%

Return on Average Equity (ROE)

6.09   

%

6.72   

%

(20.95)  

%

Reported Balance Sheet Statistics (period end) (A)

Loans Held for Investment

$   90,619   

$   96,714   

$   101,018   

Total Assets

$   169,376   

$   168,432   

$   165,878   

Interest Bearing Deposits

$   102,370   

$   101,769   

$   97,327   

Total Deposits

$   115,809   

$   114,503   

$   108,621   

Performance Statistics (Reported) (A)

Net Interest Income Growth (annualized)

(10)  

%

12   

%

(1)  

%

Non Interest Income Growth (annualized)

(36)  

%

104   

%

(77)  

%

Revenue Growth (annualized)

(22)  

%

48   

%

(38)  

%

Net Interest Margin

5.44   

%

5.52   

%

5.23   

%

Revenue Margin

9.37   

%

9.80   

%

9.20   

%

Risk Adjusted Margin (B)

6.07   

%

6.69   

%

6.17   

%

Non Interest Expense as a % of Average Loans Held for Investment (annualized)

8.23   

%

7.26   

%

7.84   

%(6)

Efficiency Ratio (C)

56.92   

%

49.91   

%

59.74   

%(6)

Asset Quality Statistics (Reported) (A)

Allowance

$   4,127   

$   4,513   

$   4,524   

Allowance as a % of Reported Loans Held for Investment

4.55   

%(4)

4.67   

%(4)

4.48   

%

Net Charge-Offs

$   1,185   

   (4)

$   1,127   

   (4)

$   1,045   

Net Charge-Off Rate

5.00   

%(4)

4.54   

%(4)

4.21   

%

30+ day performing delinquency rate

4.13   

%(4)

4.12   

%(4)

4.37   

%

Full-time equivalent employees (in thousands)

25.9   

26.0   

23.7   

CAPITAL ONE FINANCIAL CORPORATION (COF)

FINANCIAL & STATISTICAL SUMMARY

MANAGED BASIS (*)

(in millions)

2009 Q4

2009 Q3 (8)

2008 Q4

Earnings (Managed Basis)

Net Interest Income

$3,170.1   

$3,212.0   

$2,767.9   

Non-Interest Income (2)

1,198.9   

1,372.7   

1,183.2   

Total Revenue (1)

4,369.0   

4,584.7   

3,951.1   

Provision for Loan Losses

1,846.8   

2,200.3   

2,879.3   

Marketing Expenses

188.0   

103.7   

264.9   

Restructuring Expenses

32.0   

26.4   

52.8   

Goodwill Impairment Charge

-   

-   

810.9   

   (5)

Operating Expenses (3)

1,728.0   

1,672.0   

1,629.3   

Income (Loss) Before Taxes

574.2   

582.3   

(1,686.1)  

Tax Rate

29.7   

%

24.9   

%

17.2   

%

Income (Loss) From Continuing Operations, Net of Tax

$403.9   

$437.1   

$ (1,396.3)  

Loss From Discontinued Operations, Net of Tax

(28.3)  

(43.6)  

(25.2)  

Net Income (Loss)

$375.6   

$393.5   

$ (1,421.5)  

Net Income (Loss) Available to Common Shareholders (F)

$375.6   

$393.5   

$ (1,454.3)  

Managed Balance Sheet Statistics (period average) (A)

Average Loans Held for Investment

$138,184   

$143,540   

$146,586   

Average Earning Assets

$183,899   

$185,874   

$182,660   

Average Assets

$210,425   

$214,654   

$207,232   

Return on Average Assets (ROA)

0.77   

%

0.81   

%

(2.70)  

%

Managed Balance Sheet Statistics (period end) (A)

Loans Held for Investment

$136,803   

$140,990   

$146,937   

Total Assets

$212,143   

$209,683   

$209,840   

Tangible Assets(D)

$198,037   

$195,566   

$197,337   

Tangible Common Equity (E)

$12,483   

$12,075   

$10,988   

Tangible Common Equity to Tangible Assets Ratio (H)

6.30   

%

6.17   

%

5.57   

%

% Off-Balance Sheet Securitizations

34   

%

31   

%

31   

%

Performance Statistics (Managed) (A)

Net Interest Income Growth (annualized)

(5)  

%

34   

%

(17)  

%

Non Interest Income Growth (annualized)

(51)  

%

62   

%

(43)  

%

Revenue Growth (annualized)

(19)  

%

42   

%

(25)  

%

Net Interest Margin

6.90   

%

6.91   

%

6.06   

%

Revenue Margin

9.50   

%

9.87   

%

8.65   

%

Risk Adjusted Margin (B)

4.74   

%

5.23   

%

4.65   

%

Non Interest Expense as a % of Average Loans Held for Investment (annualized)

5.64   

%

5.02   

%

5.31   

%(6)

Efficiency Ratio (C)

43.85   

%

38.73   

%

47.94   

%(6)

Asset Quality Statistics (Managed) (A)

Net Charge-Offs

$2,188   

   (4)

$2,155   

   (4)

$1,826   

Net Charge-Off Rate

6.33   

%(4)

6.00   

%(4)

4.98   

%

30+ day performing delinquency rate

4.73   

%(4)

4.55   

%(4)

4.49   

%

(*) 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 (COF)

FINANCIAL & STATISTICAL SUMMARY NOTES

(1) 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: Q4 2009 - $490.4 million, Q3 2009 - $517.0 million, and Q4 2008 - $591.0 million.

(2) Includes the impact from the change in fair value of retained interests, including the interest-only strips, of increases of $55.3 million in Q4 2009 and $37.3 million in Q3 2009, and a decrease of $158.2 million in Q4 2008.

(3) Includes core deposit intangible amortization expense of $53.8 million in Q4 2009, $55.5 million in Q3 2009 and $46.0 million in Q4 2008, and integration costs of $22.1 million in Q4 2009, $10.7 million in Q3 2009, and $3.2 million in Q4 2008.

(4) Allowance as a % of Reported Loans Held for Investment, Net Charge-off Rate and 30+ Day Performing Delinquency Rate on both a Reported and Managed basis include period end loans held for investment and average loans held for investment acquired as part of the Chevy Chase Bank, FSB (CCB) acquisition. The reported and managed metrics excluding such loans are as follows. The net charge-off dollars were unchanged.

Q4 2009

Q3 2009(8)

CCB period end acquired loan portfolio (in millions)

$  7,250.5

$  7,885.0

CCB average acquired loan portfolio (in millions)

$  7,511.9

$  8,028.8

Allowance as a % of reported loans held for investment

4.95%

5.08%

Net charge-off rate (Reported)

5.44%

4.94%

Net charge-off rate (Managed)

6.70%

6.36%

30+ day performing delinquency rate (Reported)

4.49%

4.48%

30+ day performing delinquency rate (Managed)

4.99%

4.82%

(5) In Q4 2008 the Company recorded impairment of goodwill in its automobile business of $810.9 million.

(6) Excludes the impact of the goodwill impairment of $810.9 million.

(7) Average equity includes the impact of the Company's participation in the U.S. Treasury's Capital Purchase Program. On November 14, 2008, the Company issued 3,555,199 preferred shares and 12,657,960 warrants to purchase common shares at $42.13 per share, while receiving proceeds of $3.56 billion.  The allocated fair value for the preferred shares and the warrants to purchase common shares was $3.06 billion and $491.5 million, respectively. On June 17, 2009, the Company repurchased all 3,555,199 preferred shares issued in Q4 2008 for approximately $3.57 billion, including accrued dividends. The warrants to purchase common shares were sold by the U.S. Treasury on December 11, 2009 at a price of $11.75 per warrant. The sale by the US Treasury had no impact on the company's equity. The warrants remain outstanding and are included in paid-in capital on the balance sheet.

(8) Results and balances have been recast to reflect the impact of purchase accounting adjustments from the Chevy Chase Bank acquisition as if those adjustments had been recorded at the acquisition date as the purchase accounting has been finalized during Q4 2009.  The following highlights the changes to key line items from what was previously disclosed.

(in millions)

Q3 2009

Net income increase (decrease)

$   (32.1)

Loans held for investment (decrease)

(68.7)

Goodwill increase

40.0 

Other assets (including deferred taxes) increase

25.7 

STATISTICS / METRIC DEFINITIONS

(A)  Based on continuing operations.  Average equity and return on equity are based on the Company's stockholders' equity.

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

(C)  Efficiency ratio equals non-interest expense less restructuring expense divided by total revenue.

(D)  Tangible assets include managed assets less intangible assets and is considered a non-GAAP measure.  See accompanying schedule Reconciliation to GAAP Financial Measures for a reconciliation of tangible assets

(E)  Includes stockholders' equity less preferred shares less intangible assets and related deferred tax liabilities.  Tangible Common Equity on a reported and managed basis is the same and is considered a non-GAAP measure.  See accompanying schedule Reconciliation To GAAP Financial Measures for a reconciliation of tangible common equity.

(F)  Net income (loss) available to common shareholders equals net income (loss) less dividends on preferred shares.

(G)  Earnings per share is based on net income (loss) available to common shareholders.

(H)  Tangible Common Equity to Tangible Assets Ratio ("TCE Ratio") is considered a non-GAAP measure. See accompanying schedule Reconciliation To GAAP Financial Measures for a reconciliation of the TCE Ratio.

CAPITAL ONE FINANCIAL CORPORATION

Reconciliation to GAAP Financial Measures

(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 they originated.  For this reason the Company believes the "managed" consolidated financial statements and related managed metrics to be useful to stakeholders.

For the Three Months Ended December 31, 2009

Total Reported

Adjustments(1)

Total Managed(2)

Income Statement Measures(3)

Net interest income

$1,954,213 

$1,215,901 

$3,170,114 

Non-interest income

1,411,752 

(212,824)

1,198,928 

Total revenue

3,365,965 

1,003,077 

4,369,042 

Provision for loan and lease losses

843,728 

1,003,077 

1,846,805 

Net charge-offs

$1,184,894

$1,003,077 

$2,187,971

Balance Sheet Measures

Loans held for investment

$90,618,999 

$46,183,903 

$136,802,902 

Total assets

$169,400,094 

$42,767,131 

$212,167,225 

Total liabilities

$142,810,684 

$42,767,131 

$185,577,815 

Average loans held for investment

$94,731,990 

$43,452,191 

$138,184,181 

Average earning assets

$143,682,608 

$40,236,099 

$183,918,707 

Average total assets

$169,885,959 

$40,568,925 

$210,454,884 

Average total liabilities

$143,368,047 

$40,568,925 

$183,936,972 

Delinquencies

$3,746,264 

$2,718,895 

$6,465,159 

The table below presents a reconciliation of tangible common equity and tangible assets, which are the components used to calculate the tangible common equity "TCE" ratio.  The Company believes the TCE ratio is an important financial measure of capital strength to our investors and readers even though it is considered to be a non-GAAP measure.

2009

2009

2008

(dollars in millions)(unaudited)

Q4

Q3(5)

Q4

Equity

$26,589 

$26,192

$26,612

Less: preferred stock

(3,120)

Less: intangible assets (4)

(14,106)

(14,117)

(12,503)

Tangible common equity

$12,483 

$12,075

$10,989 

Total assets

212,167 

209,714 

209,875 

Less: discontinued ops assets

(24)

(31)

(35)

Total assets- continuing ops

212,143 

209,683 

209,840 

Less: intangible assets (4)

(14,106)

(14,117)

(12,503)

Tangible assets

$198,037 

$195,566 

$197,337 

TCE ratio

6.30 

6.17 

5.57 

(1) Income statement adjustments reclassify the net of finance charges of $1,320.8 million, past-due fees of $193.5 million, other interest income of $(50.7) million and interest expense of $247.7 million; and net charge-offs of $1,003.1 million from non-interest income to net interest income and provision for loan and lease losses, respectively.

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

(3) Based on continuing operations.

(4) Includes impact from related deferred taxes.

(5) Amounts have been recast to reflect the impact of purchase accounting adjustments from the Chevy Chase Bank acquisition as if those adjustments had been recorded at the acquisition date as the purchase accounting has been completed during Q4 2009.

CAPITAL ONE FINANCIAL CORPORATION

Consolidated Balance Sheets

(in thousands)(unaudited)

As of

December 31

2009

As of

September 30

2009(1)

As of

December 31

2008

Assets:

Cash and due from banks

$3,100,110 

$2,719,100 

$2,047,839 

Federal funds sold and resale agreements

541,570 

544,793 

636,752 

Interest-bearing deposits at other banks

5,042,944 

863,310 

4,806,752 

   Cash and cash equivalents

8,684,624 

4,127,203 

7,491,343 

Securities available for sale

38,829,562 

37,693,001 

31,003,271 

Securities held to maturity

80,577 

83,608 

Loans held for sale

268,307 

141,158 

68,462 

Loans held for investment

90,618,999 

96,714,341 

101,017,771 

   Less:  Allowance for loan and lease losses

(4,127,395)

(4,513,493)

(4,523,960)

Net loans held for investment

86,491,604 

92,200,848 

96,493,811 

Accounts receivable from securitizations

7,629,597 

6,985,200 

6,342,754 

Premises and equipment, net

2,735,623 

2,773,173 

2,313,106 

Interest receivable

936,146 

910,642 

827,909 

Goodwill

13,596,368 

13,564,807 

11,964,487 

Other

10,147,686 

9,983,892 

9,408,309 

   Total assets

$169,400,094

$168,463,532

$165,913,452

Liabilities:

Non-interest-bearing deposits

$13,438,659 

$12,734,589 

$11,293,852 

Interest-bearing deposits

102,370,437 

101,768,522 

97,326,937 

Senior and subordinated notes

9,045,470 

9,208,769 

8,308,843 

Other borrowings

11,968,461 

12,126,181 

14,869,648 

Interest payable

509,105 

582,969 

676,398 

Other

5,478,552 

5,850,124 

6,825,341 

   Total liabilities

142,810,684 

142,271,154 

139,301,019 

Stockholders' Equity:

Preferred stock

3,096,466 

Common stock

5,024 

5,021 

4,384 

Paid-in capital, net

18,954,823 

18,928,719 

17,278,102 

Retained earnings and cumulative other comprehensive income

10,810,022 

10,431,005 

9,399,368 

   Less:  Treasury stock, at cost

(3,180,459)

(3,172,367)

(3,165,887)

   Total stockholders' equity

26,589,410 

26,192,378 

26,612,433 

   Total liabilities and stockholders' equity

$169,400,094 

$168,463,532 

$165,913,452 

(1) Amounts have been recast to reflect the impact of purchase accounting adjustments from Chevy Chase Bank acquisition as if those adjustments had been recorded at the acquisition date as the purchase accounting has been finalized during Q4 2009.

CAPITAL ONE FINANCIAL CORPORATION

Consolidated Statements of Income

(in thousands, except per share data)(unaudited)

Three Months Ended

Year Ended

December 31

September 30

December 31

December 31

December 31

2009

2009(2)

2008

2009

2008

Interest Income:

Loans held for investment, including past-due fees

$

2,108,325 

$

2,220,208 

$

2,306,796 

$

8,757,066 

$

9,460,378 

Investment securities

403,750 

398,835 

367,902 

1,610,210 

1,224,012 

Other

83,013 

83,195 

94,123 

297,309 

427,609 

   Total interest income

2,595,088 

2,702,238 

2,768,821 

10,664,585 

11,111,999 

Interest Expense:

Deposits

426,415 

479,178 

684,756 

2,093,019 

2,512,040 

Senior and subordinated notes

71,093 

74,032 

92,519 

260,282 

444,854 

Other borrowings

143,367 

143,860 

189,149 

614,169 

1,006,390 

   Total interest expense

640,875 

697,070 

966,424 

2,967,470 

3,963,284 

Net interest income

1,954,213 

2,005,168 

1,802,397 

7,697,115 

7,148,715 

Provision for loan and lease losses

843,728 

1,173,208 

2,098,921 

4,230,111 

5,101,040 

Net interest income (loss) after provision for loan and lease losses

1,110,485 

831,960 

(296,524)

3,467,004 

2,047,675 

Non-Interest Income:

Servicing and securitizations

743,075 

720,698 

590,948 

2,279,826 

3,384,468 

Service charges and other customer-related fees

502,721 

496,392 

557,331 

1,997,013 

2,232,363 

Mortgage servicing and other

(30,470)

8,656 

14,048 

14,729 

105,038 

Interchange

112,421 

122,585 

129,409 

501,798 

562,117 

Net impairment losses recognized in earnings(1)

(10,384)

(11,173)

(4,808)

(31,951)

(10,916)

Other

94,389 

215,210 

81,358 

524,737 

470,901 

   Total non-interest income

1,411,752 

1,552,368 

1,368,286 

5,286,152 

6,743,971 

Non-Interest Expense:

Salaries and associate benefits

641,225 

648,180 

574,199 

2,477,655 

2,335,737 

Marketing

187,958 

103,698 

264,943 

588,338 

1,118,208 

Communications and data processing

171,286 

175,575 

196,924 

740,543 

755,989 

Supplies and equipment

129,422 

122,777 

130,038 

499,582 

519,687 

Occupancy

121,822 

113,913 

112,492 

450,871 

377,192 

Restructuring expense

32,037 

26,357 

52,839 

119,395 

134,464 

Goodwill impairment charge

810,876 

810,876 

Other

664,243 

611,558 

615,632 

2,540,670 

2,157,874 

   Total non-interest expense

1,947,993 

1,802,058 

2,757,943 

7,417,054 

8,210,027 

Income from continuing operations before income taxes

574,244 

582,270 

(1,686,181)

1,336,102 

581,619 

Income taxes

170,359 

145,212 

(289,856)

349,485 

497,102 

Income from continuing operations, net of tax

403,885 

437,058 

(1,396,325)

986,617 

84,517 

Loss from discontinued operations, net of tax

(28,293)

(43,587)

(25,221)

(102,836)

(130,515)

Net income

$

375,592 

$

393,471 

$

(1,421,546)

$

883,781 

$

(45,998)

Net income (loss) available to common shareholders

$

375,592 

$

393,471 

$

(1,454,269)

$

319,873 

$

(78,721)

Basic earnings per common share

Income (loss) from continuing operations

$

0.90 

$

0.97 

$

(3.67)

$

0.99 

$

0.14 

Loss from discontinued operations

(0.07)

(0.09)

(0.07)

(0.24)

(0.35)

Net Income (loss) per common share

$

0.83 

$

0.88 

$

(3.74)

$

0.75 

$

(0.21)

Diluted earnings per common share

Income (loss) from continuing operations

$

0.89 

$

0.96 

$

(3.67)

$

0.98 

$

0.14 

Loss from discontinued operations

(0.06)

(0.09)

(0.07)

(0.24)

(0.35)

Net Income (loss) per common share

$

0.83 

$

0.87 

$

(3.74)

$

0.74 

$

(0.21)

Dividends paid per common share

$

0.05 

$

0.05 

$

0.375 

$

0.525 

$

1.50 

(1) For the three months and year ended December 31, 2009, the Company recorded other-than-temporary impairment losses of $10.4 million and $31.6 million, respectively. Total unrealized losses on these securities recognized in other comprehensive income as a component of stockholders' equity at December 31, 2009 was $181.3 million.

(2) Amounts have been recast to reflect the impact of purchase accounting adjustments from the Chevy Chase Bank acquisition as if those adjustments had been recorded at the acquisition date as the purchase accounting has been finalized during Q4 2009.

CAPITAL ONE FINANCIAL CORPORATION

Statements of Average Balances, Income and Expense, Yields and Rates (1)

(dollars in thousands)(unaudited)

Reported

Quarter Ended 12/31/09

Quarter Ended 09/30/09(3)

Quarter Ended 12/31/08

Average

Income/

Yield/

Average

Income/

Yield/

Average

Income/

Yield/

Balance

Expense

Rate

Balance

Expense

Rate

Balance

Expense

Rate

Earning assets:

Loans held for investment

$   94,731,990   

$ 2,108,325   

8.90%

$   99,354,028   

$ 2,220,208   

8.94%

$   99,334,890   

$ 2,306,796   

9.29%

Investment Securities (2)

38,486,624   

403,750   

4.20%

37,376,895   

398,835   

4.27%

28,961,247   

367,902   

5.08%

Other

10,444,494   

83,013   

3.18%

8,548,610   

83,195   

3.89%

9,502,781   

94,123   

3.96%

Total earning assets

$ 143,663,108   

$ 2,595,088   

7.23%

$ 145,279,533   

$ 2,702,238   

7.44%

$ 137,798,918   

$ 2,768,821   

8.04%

Interest-bearing liabilities:

Interest-bearing deposits

NOW accounts

10,587,851   

13,696   

0.52%

10,418,557   

12,745   

0.49%

$     9,874,696   

$      28,460   

1.15%

Money market deposit accounts

37,460,109   

96,583   

1.03%

36,036,826   

96,477   

1.07%

28,556,264   

171,891   

2.41%

Savings accounts

15,416,242   

35,326   

0.92%

12,266,254   

22,772   

0.74%

7,275,816   

11,774   

0.65%

Other consumer time deposits

27,273,129   

200,499   

2.94%

32,075,905   

248,272   

3.10%

33,712,504   

337,651   

4.01%

Public fund CD's of $100,000 or more

753,764   

2,201   

1.17%

1,061,134   

2,789   

1.05%

1,213,364   

7,323   

2.41%

CD's of $100,000 or more

8,633,998   

76,692   

3.55%

9,764,172   

92,681   

3.80%

9,508,463   

104,134   

4.38%

Foreign time deposits

1,019,090   

1,418   

0.56%

1,482,519   

3,442   

0.93%

3,002,402   

23,523   

3.13%

Total interest-bearing deposits

$ 101,144,183   

$    426,415   

1.69%

$ 103,105,367   

$    479,178   

1.86%

$   93,143,509   

$    684,756   

2.94%

Senior and subordinated notes

8,759,304   

71,093   

3.25%

9,553,950   

74,032   

3.10%

8,034,423   

92,519   

4.61%

Other borrowings

14,156,503   

143,367   

4.05%

13,480,527   

143,860   

4.27%

16,428,096   

189,149   

4.61%

Total interest-bearing liabilities

$ 124,059,990   

$    640,875   

2.07%

$ 126,139,844   

$    697,070   

2.21%

$ 117,606,028   

$    966,424   

3.29%

Net interest spread

5.16%

5.23%

4.75%

Interest income to average earning assets

7.23%

7.44%

8.04%

Interest expense to average earning assets

1.78%

1.92%

2.81%

Net interest margin

5.44%

5.52%

5.23%

(1) Average balances, income and expenses, yields and rates are based on continuing operations.

(2) Includes securities available for sale and securities held to maturity.

(3) Amounts have been recast to reflect the impact of purchase accounting adjustments from the Chevy Chase Bank acquisition as if those adjustments had been recorded at the acquisition date as the purchase accounting has been finalized during Q4 2009.

CAPITAL ONE FINANCIAL CORPORATION

Statements of Average Balances, Income and Expense, Yields and Rates (2)

(dollars in thousands)(unaudited)

Managed (1)

Quarter Ended 12/31/09

Quarter Ended 09/30/09(4)

Quarter Ended 12/31/08

Average

Income/

Yield/

Average

Income/

Yield/

Average

Income/

Yield/

Balance

Expense

Rate

Balance

Expense

Rate

Balance

Expense

Rate

Earning assets:

Loans held for investment

$ 138,184,181   

$ 3,638,071   

10.53%

$ 143,539,902   

$ 3,749,876   

10.45%

$ 146,586,152  

$ 3,808,363   

10.39%

Investment Securities (3)

38,486,624   

403,750   

4.20%

37,376,895   

398,835   

4.27%

28,961,247   

367,902   

5.08%

Other

7,228,402   

16,832   

0.93%

4,957,393   

18,038   

1.46%

7,112,807   

29,558   

1.66%

Total earning assets

$ 183,899,207   

$ 4,058,653   

8.83%

$ 185,874,190   

$ 4,166,749   

8.97%

$ 182,660,206  

$ 4,205,823   

9.21%

Interest-bearing liabilities:

Interest-bearing deposits

NOW accounts

$ 10,587,851   

$      13,696   

0.52%

$   10,418,557   

$      12,745   

0.49%

$  9,874,696   

$      28,460   

1.15%

Money market deposit accounts

37,460,109   

96,583   

1.03%

36,036,826   

96,477   

1.07%

28,556,264   

171,891   

2.41%

Savings accounts

15,416,242   

35,326   

0.92%

12,266,254   

22,772   

0.74%

7,275,816   

11,774   

0.65%

Other consumer time deposits

27,273,129   

200,499   

2.94%

32,075,905   

248,272   

3.10%

33,712,504   

337,651   

4.01%

Public fund CD's of $100,000 or more

753,764   

2,201   

1.17%

1,061,134   

2,789   

1.05%

1,213,364   

7,323   

2.41%

CD's of $100,000 or more

8,633,998   

76,692   

3.55%

9,764,172   

92,681   

3.80%

9,508,463   

104,134   

4.38%

Foreign time deposits

1,019,090   

1,418   

0.56%

1,482,519   

3,442   

0.93%

3,002,402   

23,523   

3.13%

Total interest-bearing deposits

$ 101,144,183   

$    426,415   

1.69%

$ 103,105,367   

$  479,178   

1.86%

$   93,143,509  

$    684,756   

2.94%

Senior and subordinated notes

8,759,304   

71,093   

3.25%

9,553,950   

74,032   

3.10%

8,034,423   

92,519   

4.61%

Other borrowings

14,156,503   

143,367   

4.05%

13,480,527   

143,860   

4.27%

16,428,096   

189,149   

4.61%

Securitization liability

40,588,015   

247,664   

2.44%

41,251,788   

257,642   

2.50%

45,610,272   

471,517   

4.14%

Total interest-bearing liabilities

$ 164,648,005   

$   888,539   

2.16%

$ 167,391,632   

$  954,712   

2.28%

$ 163,216,300   

$ 1,437,941   

3.52%

Net interest spread

6.67%

6.69%

5.69%

Interest income to average earning assets

8.83%

8.97%

9.21%

Interest expense to average earning assets

1.93%

2.05%

3.15%

Net interest margin

6.90%

6.91%

6.06%

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

(2) Average balances, income and expenses, yields and rates are based on continuing operations.

(3) Includes securities available for sale and securities held to maturity.

(4) Amounts have been recast to reflect the impact of purchase accounting adjustments from the Chevy Chase Bank acquisition as if those adjustments had been recorded at the acquisition date as the purchase accounting has been finalized during Q4 2009.

CAPITAL ONE FINANCIAL CORPORATION (COF)

LENDING INFORMATION AND STATISTICS

MANAGED BASIS (1) (9)

2009

Q4

2009

Q3(10)

2008

Q4

Period end loans held for investment

(in thousands)

Domestic credit card

$60,299,827   

$61,891,573   

$70,944,581   

International credit card

8,223,835   

8,477,236   

8,720,642   

 Total Credit Card

$68,523,662   

$70,368,809   

$79,665,223   

Commercial and multi-family real estate

$13,843,158   

$13,977,873   

$13,303,081   

Middle market

10,061,819   

10,022,822   

10,081,823   

Specialty lending

3,554,563   

3,399,432   

3,547,287   

 Total Commercial Lending

$27,459,540   

$27,400,127   

$26,932,191   

Small ticket commercial real estate

2,153,510   

(11)  

2,412,400   

2,609,123   

 Total Commercial Banking

$29,613,050   

$29,812,527   

$29,541,314   

Automobile

$18,186,064   

$19,295,218   

$21,494,436   

Mortgages

14,893,187   

15,638,974   

10,098,430   

Retail banking

5,135,242   

5,215,155   

5,603,696   

 Total Consumer Banking

$38,214,493   

$40,149,347   

$37,196,562   

Other loans (8)

$451,697   

$659,008   

$533,65   

    Total

$136,802,902   

$140,989,691   

$146,936,754   

Average loans held for investment

(in thousands)

Domestic credit card

$60,443,441   

$63,298,525   

$69,643,290   

International credit card

8,299,895   

8,609,235   

9,440,972   

 Total Credit Card

$68,743,336   

$71,907,760   

$79,084,262   

Commercial and multi-family real estate

$13,926,098   

$13,938,037   

$13,082,096   

Middle market

10,052,406   

9,911,314   

10,093,083   

Specialty lending

3,534,537   

3,753,054   

3,584,963   

 Total Commercial Lending

$27,513,041   

$27,602,405   

$26,760,142   

Small ticket commercial real estate

2,354,204   

2,470,961   

2,655,883   

 Total Commercial Banking

$29,867,245   

$30,073,366   

$29,416,025   

Automobile

$18,767,555   

$19,635,979   

$21,967,154   

Mortgages

15,345,635   

15,926,662   

10,201,024   

Retail banking

5,000,933   

5,513,230   

5,366,737   

 Total Consumer Banking

$39,114,123   

$41,075,871   

$37,534,915   

Other loans (8)

$459,477   

$482,905   

$550,950   

    Total

$138,184,181   

$143,539,902   

$146,586,152   

Net Charge-off Rates

Domestic credit card

9.59%

9.64%

7.08%

International credit card

9.52%

9.19%

5.84%

 Total Credit Card

9.58%

9.59%

6.93%

Commercial and multi-family real estate (5)

3.02%

1.37%

1.16%

Middle market (5)

0.75%

0.56%

0.47%

Specialty lending

1.85%

1.39%

0.47%

 Total Commercial Lending (5)

2.04%

1.08%

0.81%

Small ticket commercial real estate

13.08%

(11)  

5.19%

0.90%

 Total Commercial Banking (5)

2.91%

1.42%

0.82%

Automobile

4.55%

4.38%

5.67%

Mortgages (5)

0.71%

0.69%

0.46%

Retail banking (5)

3.03%

2.44%

2.15%

 Total Consumer Banking (5)

2.85%

2.69%

3.75%

Other loans

28.26%

28.53%

21.65%

    Total

6.33%

6.00%

4.98%

30+ day performing delinquency rate

Domestic credit card

5.78%

5.38%

4.78%

International credit card

6.55%

6.63%

5.51%

 Total Credit Card

5.88%

5.53%

4.86%

Automobile (7)

10.03%

9.52%

9.90%

Mortgages (5)

1.26%

1.17%

1.57%

Retail banking (5)

1.23%

1.26%

1.06%

 Total Consumer Banking (5)

5.43%

5.19%

6.31%

Non Performing Asset Rates (2) (6)

Commercial and multi-family real estate (5)

3.25%

2.66%

1.21%

Middle market (5)

1.09%

1.25%

0.43%

Specialty lending

2.25%

2.12%

1.05%

 Total Commercial Lending (5)

2.33%

2.08%

0.89%

Small ticket commercial real estate

4.87%

(11)  

11.39%

6.67%

 Total Commercial Banking (5)

2.52%

2.84%

1.41%

Automobile (8)

0.92%

0.87%

1.06%

Mortgages (5)

2.24%

1.83%

1.28%

Retail banking (5)

2.11%

1.98%

1.51%

 Total Consumer Banking (5)

1.60%

1.39%

1.19%

CAPITAL ONE FINANCIAL CORPORATION (COF)

CREDIT CARD SEGMENT FINANCIAL & STATISTICAL SUMMARY FOR CONTINUING OPERATIONS

MANAGED BASIS (1) (9)

2009

2009

2008

(in thousands)

Q4

Q3

Q4

Credit Card:

Earnings

 Net interest income

$2,029,221   

$2,024,250   

$1,816,484   

 Non-interest income

897,006   

966,862   

1,138,220   

 Total revenue

$2,926,227   

$2,991,112   

$2,954,704   

 Provision for loan and lease losses

1,204,693   

1,643,721   

2,164,529   

 Non-interest expenses

942,428   

897,578   

1,075,446   

 Income (loss) before taxes

779,106   

449,813   

(285,271)  

 Income taxes (benefit)

269,182   

158,074   

(98,053)  

 Net income (loss)

$509,924   

$291,739   

$(187,218)  

Selected Metrics

 Period end loans held for investment

$68,523,662   

$70,368,809   

$79,665,223   

 Average loans held for investment

$68,743,336   

$71,907,760   

$79,084,262   

 Loans held for investment yield

14.21%

13.75%

12.56%

 Revenue margin

17.03%

16.64%

14.94%

 Net charge-off rate

9.58%

9.59%

6.93%

 30+ day performing delinquency rate

5.88%

5.53%

4.86%

 Purchase Volume (3)