Capital One Financial Corporation · NYSE:COF
Capital One Financial — Q2 2009 Earnings Presentation
15 slides from Capital One Financial's earnings presentation, Jul 23, 2009
Slide 1: Second Quarter 2009 Results
Exhibit 99.2 Second Quarter 2009 Results July 23, 2009
Slide 2: Forward looking statements
Forward looking statements 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 revise any of the informatio
Slide 3: Capital One earned $224MM, or $0.53 per share, in the second quarter of 2009
Capital One earned $224MM, or $0.53 per share, in the second quarter of 2009, excluding the impact of TARP preferred shares redeemed in the quarter 1 2 Q109 Q209 Change Revenue excl. Retained Interest & Suppression 4,402 4,847 445 Retained Interests Valuation Changes (128) (127) 1 Revenue Suppressio
Slide 4: We continued to increase allowance coverage ratios
We continued to increase allowance coverage ratios Allowance as % of National Lending Allowance as % of Reported Loans Reported 30+ Delinquencies US Card US Card 10% 9.50% 200% 208% 9% 9.20% 8% International 172% 150% 150% 7% 133% 6.30% International 6% 5.80% Auto 5% 100% 4.80% 4% 4.30% 57% 54% 3% 5
Slide 5: Margins improved in the second quarter
Margins improved in the second quarter Margins as % of Managed Assets Efficiency Ratio 12% 70% Revenue 60% 10% 9.38% Margin 9.12% 8.65% 8.65% 8.03% 50% 47.9% 46.3% 8% 44.2% 45.3% 42.6% 40% 6% 6.43% 6.22% 6.06% 6.17% 5.87% Net Interest 30% Margin 4% 20% 2% 10% 0% 0% Q208 Q308 Q408 Q109 Q209 Q208 Q308
Slide 6: Average cost of funds fell while asset yields remained constant
Average cost of funds fell while asset yields remained constant Average Earning Asset Type Average Funding Mix $B $200 $191.8 100% $186.8 $182.6 9% 9% 10% Other 6.4 Other 5.9 $180 7.8 90% 37.5 Securities 34.2 $160 29.0 80% 26% 26% 29% Securitization 3.2 9.3 CCB 70% $140 44.8 44.8 $120 60% 44.1 Bank
Slide 7: Our low risk investment portfolio provides balance sheet flexibility
Our low risk investment portfolio provides balance sheet flexibility March 31, 2009 June 30, 2009 Book Net Unrealized Book Net Unrealized $MM Value Gain/(Loss) Value Gain/(Loss) Treasuries/Agencies $1,514 56 $ 892 38 Agency MBS 25,908 528 26,414 547 Non-Agency MBS 3,533 (997) 3,263 (924) ABS 4,475 (
Slide 8: Our capital ratios remain strong
Our capital ratios remain strong Tangible Common Equity to Tier 1 Capital to Tangible Managed Assets Risk Weighted Assets 6% 14% 5.7% 12% 11.3% 11.4% 5% 4.8% 4.6% 10% TARP 9.7% 4% 8.5% 8.5% 8% Other 3% Well 6% Capitalized 2% 4% Common 1% 2% 0% 0% Q408 Pro-forma Q109 Q209 Q408 Pro-forma Q109 Q209 Jul
Slide 9: Capital One delivered a profit from continuing operations of $230MM
Capital One delivered a profit from continuing operations of $230MM Net Income from Continuing Operations ($Millions) Q408 Q109 Q209 National Lending US Card $ (175.6) $ 2.4 $ 168.4 Auto Finance (924.6) 71.4 97.2 International (11.2) 2.0 5.2 SUBTOTAL (1,111.4) 75.8 270.8 Local Banking (6.5) (36.2) (
Slide 10: Rising delinquency and loss trends across most of our consumer lending businesses
The worsening economy and denominator impacts drove rising delinquency and loss trends across most of our consumer lending businesses US Card ($64.8 B) International ($8.6 B) 10% 9.23% 10% 9.32% 9% 8.39% 9% 8% 7.08% 8% 7.30% Managed Net Managed Net Charge-off Rate 7% 6.26% 6.13% Charge-off Rate 7% 6
Slide 11: Rising delinquency and loss trends across our commercial lending businesses
The worsening economy and denominator impacts drove rising delinquency and loss trends across our commercial lending businesses Total Bank Segment ($43.7 B) 5% 4% Non Performing Asset Rate 3% 2.51% 1.91% 2% 1.39% 0.88% 1.05% 1% 1.10% 0.90% 0.76% Charge-off 0.34% Rate 0% 0.46% Q208 Q308 Q408 Q109 Q20
Slide 12: The new law on credit card practices will bring significant change to the industry
The new law on credit card practices will bring significant change to the industry Potential Impacts on CARD Act US Credit Card Business • Repricing • Near Term: • Payment Allocation – Transitional risks – Potential profit pressures at the • Fees confluence of “The Great Recession” and implementatio
Slide 13: The "level playing field" following the CARD law could create opportunities
The “level playing field” following the implementation of the CARD law could create opportunities for Capital One % of Mail with 0% Long Teasers Capital One Share of U.S. Card 12 Months+ Industry Outstandings 100% 9% 8% 80% 6.8% 7% 6% 60% 5% 4% 40% 3% 2% 20% 1% 0% 0% *1H 2009 includes mail through M
Slide 14: We continue to decisively and aggressively manage the company through the downturn
We continue to decisively and aggressively manage the company through the downturn for the benefit of shareholders Weather the Storm Deliver Long-Term Value • Decisive actions • Positioned to grow when the time is right – Tightened underwriting – Shift earning assets back to higher-margin – Retrench
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