Capital One Financial Corporation · NYSE:COF
Capital One Financial — Q3 2012 Earnings Presentation
14 slides from Capital One Financial's earnings presentation, Oct 18, 2012
Slide 1: Third Quarter 2012 Results
Exhibit 99.3 Third Quarter 2012 Results October 18, 2012
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: Third quarter net income was $1.18B, or $2.01 per common share
Third quarter net income was $1.18B, or $2.01 per common share, including a full quarter of acquisitions and reduced credit impacts • Continued strong results evident in all three business segments • Relatively less impact from acquisition-related credit accounting – HSBC-related allowance build of
Slide 4: Third quarter results reflect continued solid business performance
Third quarter results reflect continued solid business performance 1 Q3’12 Q2’12 Q1’12 2 Q3 vs. Q2 highlights $MM Net interest income 4,646 4,001 3,414 Non-interest income 1,136 1,054 1,521 A. Increase in pre- Total net revenue 5,782 5,055 4,935 provision earnings Marketing 316 334 321 driven largel
Slide 5: The impact of acquisitions on NIM has largely played through
The impact of acquisitions on NIM has largely played through Average Balances & Margin Highlights Q3’12 Q2’12 Q1’12 Q4’11 Average Yield/ Average Yield/ Average Yield/ Average Yield/ (Dollars in millions) Balance Rate Balance Rate Balance Rate Balance Rate Interest-earning assets: Loans held for inve
Slide 6: Our capacity to generate capital is strong
Our capacity to generate capital is strong 1 Tier 1 Common Ratio (Basel I) 14.0% 11.9% 12.0% 10.7% 10.0% 9.7% 9.9% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% ($B) Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Tier 1 common capital excluding disallowed DTA 15.1 15.6 22.6 22.3 23.5 Disallowed DTA (0.2) (0.5) (0.9) (0.8) (0.2) Ti
Slide 7: We expect to meet an assumed Basel III capital target of 8% in 2013
We expect to meet an assumed Basel III capital target of 8% in 2013 • We expect the Basel II rules will apply to us no earlier than January of 2016 but are assumed to be fully implemented in our Basel III estimates – We expect to trigger Basel II status at the end of 2012 – We will enter parallel ru
Slide 8: Our businesses continue to deliver solid results
Our businesses continue to deliver solid results Domestic Card Consumer Banking Commercial Banking • Ending loans declined by 0.2% • Modest decline in ending loan • Steady growth continued with in the quarter balances ending loans up 3% in the – Excluding expected HSBC – $2.0B expected run-off of qu
Slide 9: Despite strong underlying growth, we expect significant run-off to drive declining average loan balances in 2013
Despite strong underlying growth, we expect significant run-off will drive declining average loan balances in 2013 Portfolio Run-off Underlying Growth (expected 2013 run-off, ending loan balances) • Consumer Banking (~$9 billion) • Solid growth where we’re investing to grow: – Home Loans inherited i
Slide 10: Third quarter Domestic Card revenue margin is seasonally high
Third quarter Domestic Card revenue margin is seasonally high Domestic Card Revenue Margin Q3’12 19% 18% 0.63% 17.08% 17.26% 17% (0.45%) 16% 15% 14% 13% 12% 11% 10% Q3'12 Removal of Purchase Removal of Adjusted Q3'12 Accounting Impacts Seasonality October 18, 2012 10
Slide 11: We expect Domestic Card revenue margin to decline from Q3 levels
We expect Domestic Card revenue margin to decline from Q3 levels Estimated Quarterly Revenue Margin Impacts (cumulative basis point impact from Q3’12) Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Franchise Enhancements (10) (30) (40) (40) (50) Align HSBC practices, payment protection runoff, other Mix Shift / Runo
Slide 12: Expected 2013 trends for non-interest expense items are emerging in the second half of 2012
Expected 2013 trends for non-interest expense items are emerging in the second half of 2012 Operating Expense Integration and Purchase Synergies Investments Marketing Accounting • Integration costs • Majority of expected • Infrastructure and • 2013 marketing and purchase synergies already customer e
Slide 13: We remain focused on delivering sustained shareholder value
We remain focused on delivering sustained shareholder value Solid Business Results Sure-footed Strong Returns and in a Challenging Integrations Capital Generation Environment October 18, 2012 13
Slide 14: October 18, 2012
October 18, 2012 14
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