Capital One Financial Corporation · NYSE:COF

Capital One Financial — Q4 2005 Earnings Presentation

14 slides from Capital One Financial's earnings presentation, Jan 19, 2006

  1. Slide 1: January 19, 2006

    Exhibit 99.2 January 19, 2006

  2. Slide 2: Forward looking statements

    Forward looking statements Forward-Looking Information Please note that the following materials containing information regarding Capital One’s financial performance speak only as of the particular date or dates indicated in these materials. Capital One does not undertake any obligation to update or

  3. Slide 3: Our strong results in 2005 position Capital One for success in 2006

    Our strong results in 2005 position Capital One for success in 2006 • 2005 diluted EPS of $6.73 – Q405 diluted EPS of $0.97 • 2005 loan growth of $25.7B – Q405 loan growth of $20.8B, including $16.3B from Hibernia – Excluding Hibernia, 2005 loan growth of 12% • Strong credit quality and margins – Q4

  4. Slide 4: Annual ROA remained stable as the decline in revenue margin was offset by operating efficiency gains

    Annual ROA remained stable as the decline in revenue margin was offset by operating efficiency gains Managed Income Statement ($Millions except per share data) Change 2005 2004 $ %/bps Net Interest Income $ 7,655.5 $ 6,634.7 $ 1,020.8 15 % Non-Interest Income 4,559.4 4,224.6 334.8 8 % Total Revenue

  5. Slide 5: Q405 ROA reflected seasonal allowance build to support reported loan growth

    Q405 ROA reflected seasonal allowance build to support reported loan growth Managed Income Statement ($Millions except per share data) Change Q405 Q404 $ %/bps Net Interest Income $ 2,075.2 $ 1,701.8 $ 373.4 22 % Non-Interest Income 1,243.4 1,099.0 144.4 13 % Total Revenue 3,318.6 2,800.8 517.8 18 %

  6. Slide 6: The completion of the Hibernia acquisition in the 4th quarter affects a number of metrics

    th The completion of the Hibernia acquisition in the 4 quarter affects a number of metrics • Income Statement: 6 weeks of revenues and costs, net income of $31M Impact on Q405 • Balance Sheet: $16.3B in loans, allowance addition of $216M • $2.2B in cash deployed resulting in tangible capital ratio a

  7. Slide 7: The Q405 bankruptcy filing spike affected a number of metrics, but remains in-line with expectations

    The Q405 bankruptcy filing spike affected a number of metrics, but remains in-line with expectations • Managed BK charge-offs of $494M, in-line with expectations; fully allowed for in prior quarters • No P&L impact at top of the house in Q405 Impact on Q405 • Q305 provision fully posted to segment r

  8. Slide 8: Q405 Allowance build was driven by Q405 loan growth

    Q405 Allowance build was driven by Q405 loan growth Allowance for Loan Losses ($Millions) Change Q405 Q305 $ %/bps Managed Net Charge-offs $ 1,066.6 $ 868.0 $ 198.6 23 % Allowance Build/(Release) 126.6 42.0 84.6 201 % Other (11.4) (9.6) (1.8) n/a Managed Provision for Loan Losses 1,181.8 900.4 281.4

  9. Slide 9: Credit quality remains strong despite the impacts of the one-time bankruptcy spike

    Credit quality remains strong despite the impacts of the one-time bankruptcy spike Monthly Managed Monthly Managed $30+ Day 8% Net Charge-off Rate Delinquency Rate 8% 7% Bankruptcy 7% Filing Spike 6% 6% 5% 5% 4% 4% 3% 3% 3.24% 2% 2% 1% 1% 0% 0% Quarterly Charge-off Rate 4.83% 4.42% 4.05% 4.37% 4.13%

  10. Slide 10: Capital and liquidity remain strong

    Capital and liquidity remain strong Managed Balance Sheet Highlights ($Millions) Change Q405 Q404 $ %/bps Loans $ 105,527 $ 79,861 $ 25,666 32 % Tangible Assets $ 129,484 $ 94,440 $ 35,044 37 % (1) Tangible Capital 9,994 8,730 1,264 14 % Tangible Capital to Tangible Assets Ratio 7.72 % 9.24 % n/a (1

  11. Slide 11: US Card delivered steady performance and 16% profit growth in 2005

    US Card delivered steady performance and 16% profit growth in 2005 Net Income After Tax (1) ($M) $600 $458.2 $481.8 $500 $414.4 $432.4 Highlights $400 • 2005 NIAT of $1.6B, up 16% $300 $237.0 $201.9 • Managed loans of $49.5B, up 1.8% in $200 2005 $100 • $21b in purchase volume in Q405 (up $0 19% ove

  12. Slide 12: Global Financial Services results reflect strong performance in North America and a challenging UK environment

    Global Financial Services results reflect strong performance in North America and a challenging UK environment Net Income After Tax (1) ($M) $100 $90 $86.8 $81.9 Highlights $80 $70.5 $70 • 2005 NIAT of $186M, down $27M $60 from 2004: $50 – Decline in UK profits due to credit $40 $29.2 pressure $26.7

  13. Slide 13: Auto Finance is poised to continue growing loans and profits

    Auto Finance is poised to continue growing loans and profits Net Income After Tax (1) ($M) $120 $96.1 $100 $80 Highlights $60 $55.3 • $2.6B originations in Q405, $6.4B $35.6 loan growth in 2005 $40 $25.1 $20 • 2005 NIAT of $132M, down 19% $8.1 from 2004: $0 Q304 Q404 Q105 Q205 ($7.7) Q305 Q405 – Inc

  14. Slide 14: Integration of Hibernia is on track, and the franchise remains strong

    Integration of Hibernia is on track, and the franchise remains strong • $21.7B deposits on 12/31/2005 • $16.3B managed loans on 12/31/2005 Q4 Results • $31M NIAT (Includes 6 weeks of results, integration and closing costs) • Hibernia’s $175M storm-related provision in Q3 appears appropriate thus far

Capital One Financial — Q4 2005 Earnings Presentation on 6ix